What Boosted HCA Holdings’s Revenue in 4Q15?
HCA Holdings Posts Strong Earnings Results in 4Q15
Emergency room admissions
In 2015, HCA Holdings witnessed solid growth in emergency room admissions across all of its 14 divisions. However, the growth in emergency room visits was ~2% lower due to fewer seasonal flu patients.
In 4Q15, HCA Holdings’s same facility emergency room visits reached about 2 million—a rise of 3.6% YoY (year-over-year). The growth was distributed across ten of the company’s divisions. In addition to earning higher revenue per patient, emergency room visits also help increase inpatient admissions through downstream referrals. HCA Holdings also focuses on generating downstream referrals from its urgent care centers for the company’s freestanding emergency rooms as well as hospitals. To learn more about HCA Holdings’s emergency room strategy, please read HCA Holdings’ emergency room strategies.
Service mix
With HCA Holdings increasing the breadth and complexity of the services offered across its provider network, the company witnessed an increase in patients’ average length of stay. It rose by 1.1% from 4.8 days in 3Q15 to 4.9 days in 4Q15. In 4Q15, the company’s revenue per equivalent admission also rose by 2.6% and reached $13,010. Compared to 2014, ~27% more patients were treated in HCA Holdings’ trauma centers in 2015. There were about 6% more cardiovascular surgeries conducted in HCA’s hospitals. Its peers include LifePoint Hospitals (LPNT), Universal Health Services (UHS), and Tenet Healthcare (THC). They focus on improving their service mix to boost their profit margins.
You can also invest in the iShares Core S&P 500 ETF (IVV) and reduce excessive company-specific risks of investing directly in HCA Holdings. HCA Holdings accounts for about 0.13% of IVV’s total holdings.
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