Lower labor costs helped boost HCA Healthcare’s profits in Q2 2023, the company reported in its earnings call last week.
HCA reported $15.86 billion in revenue for the quarter, up from $14.82 billion in Q2 in 2022. The company’s fiscal year ends on Dec. 31.
The Nashville-based hospital operator continued the previous quarter’s trend of improving nurse hiring and retention rates. At the same time, contract labor costs were down 20% compared to Q2 2022, HCA CEO Sam Hazen said in the call. Contract labor represented less than 7% of Q2’s salaries, wages, and benefits expenses, HCA CFO and EVP Bill Rutherford added.
“In the quarter, we continued to invest in our people and as a result, we saw improvements across virtually all key labor metrics,” Hazen said.
HCA executives also focused on three elements during the July 27 call.
Redeterminations: Medicaid redeterminations began April 1, which means up to 14 million people could lose their healthcare coverage if they’re kicked off the rolls. So far, HCA has not seen “any negative or any material impact” from this, Rutherford said. Redeterminations could curb hospital revenues, Healthcare Dive reported in January.
“Nothing in our guidance is assumed for Medicaid redeterminations. We believe over the long run, there could be some positive trends from this, but we’ll just have to wait to see how that plays out,” Rutherford said.
Artificial intelligence (AI): More healthcare organizations are starting to incorporate AI across all functions, and HCA is no exception. For example, HCA partnered with healthcare technology company Augmedix to transcribe patient-provider conversations using AI and embed the notes into the electronic health record, Augmedix announced in April.
“We believe we have opportunities to improve care processes, eliminate a lot of the variation that exists today in our company, create better quality, and at the same time, more efficiencies. Artificial intelligence, we believe, will play a huge part in that,” Hazen said.
Cybersecurity incident: Last month, HCA reported a data breach that exposed the personal information of 11 million patients across 20 states. The company is in the process of notifying affected patients, and HCA has been “named as a defendant in multiple class action lawsuits,” Hazen said.
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