For a company raising its financial guidance for the second consecutive quarter, the numbers from Tenet Healthcare Corp. were striking:
- Same-store hospital admissions grew 5.2 percent from a year earlier and revenue per adjusted admission jumped 5.7 percent
- Adjusted EBITDA from Tenet’s USPI surgery center division popped 21 percent as same-facility revenues rose more than 7 percent
- Chairman and CEO Saum Sutaria was able to tell investors that Tenet leaders have added $300 million to the midpoint of their full-year adjusted EBITDA target
Sutaria and his team aren’t alone among hospital operators in their ebullience. Their peers at HCA Healthcare Inc. and Community Health Systems Inc.—combined, the companies run about 320 hospitals and more than 4,000 other sites of care—also reported strong second-quarter numbers and said there’s more to come.
The main cause: “Uncharted territory for growth in demand in a normal environment,” HCA CEO Sam Hazen said, as more consumers re-engage with the healthcare system with COVID-19 just about out of the picture.
Here are some nuggets on those trends, pulled from the conference calls with analysts each management team held the week of July 22:
• Volumes have come back in force. In addition to Tenet’s numbers above, HCA rang up same-facility admissions growth of 5.8 percent and CHS saw growth of 3.0 percent. None of the executive teams think it’s blip, either: Sutaria and his team have hiked their 2024 forecast for inpatient admissions to a range of 3 percent to 4 percent—a large increase of 1.5 percentage points.
Hazen made it a point to tell analysts that HCA’s good first-half numbers weren’t influenced by any one-time factors but instead reflected “a solid operational performance supported by strong volume.” At CHS, CEO Tim Hingtgen credited his team’s numbers to work done in recent years to recruit doctors, invest in capacity expansions and improved efficiency.
“We believe the fundamentals are solid and something we can build upon in upcoming quarters,” Hingtgen said.
Among the solidifying fundamentals driving demand growth is the record number of people with health insurance: The U.S. Census Bureau reported last year that only 7.9 percent of Americans didn’t have coverage in 2022, matching the all-time low from 2017.
