Second-quarter earnings are out for some major health systems across the US, and many have performed much better than expected.
Tenet Healthcare, HCA Healthcare, Universal Health Services, and Community Health Systems all reported Q2 earnings this week, and all but one saw strong revenue growth, largely due to an increase in hospital admissions across many facilities.
The results led to stock jumps, too: Tenet Healthcare saw a two-decade high at $145.34 per share on Wednesday.
Healthcare Brew broke down how the health systems—which, all combined, operate more than 340 hospitals—performed.
HCA Healthcare
HCA Healthcare, the largest health system in the US, saw a 7% stock jump in premarket trading on Tuesday after reporting another strong quarter.
The Nashville-based company reported net income of $1.5 billion in Q2, up from $1.19 billion in the same quarter the year prior. HCA saw $17.5 billion in revenue in the second quarter, compared to $15.9 billion in Q2 last year.
The earnings report showed that the growth was led by patient demand, as inpatient admissions were up this year about 5.8% (17,600 to 18,800 visits YoY)—and emergency room visits increased by about 5.5% (2.3 million to 2.4 million YoY).
As a result, HCA adjusted its full-year guidance to project revenue between $69.8 billion and $71.8 billion, compared to previous projections of $67.8 billion to $70.3 billion.
Universal Health Services
Universal Health Services also had a better-than-expected quarter, outpacing Zacks Consensus Estimate, which averages estimates made by brokerage analysts, by 27.9%.
The Pennsylvania-based health system reported $289.2 million in net income and net revenues of $3.9 billion compared to $3.5 billion in Q2 last year.
Strong financial performance was driven by its acute care hospitals segment, per the earnings report, with net revenue per adjusted patient day up 5.5% compared to the first six months of 2023, though executives said that its behavioral health admissions decreased by 0.4%.
Navigate the healthcare industry
Healthcare Brew covers pharmaceutical developments, health startups, the latest tech, and how it impacts hospitals and providers to keep administrators and providers informed.
On the earnings call on Thursday, CFO Steve Filton attributed the behavioral health decline to labor issues.
“While we’ve made, I think, a lot of progress on filling our labor vacancies around the country, we still find in very specific markets and geographies that certain labor positions—sometimes nurses, sometimes therapists and counselors, sometimes nonprofessionals and mental health technicians—are difficult to place and can sometimes limit capacity or our ability to admit patients,” he said.
Tenet Healthcare
Dallas-based Tenet Healthcare saw a 22-year high in its stock price on Wednesday after reporting income of $259 million in its Q2 earnings on the day before.
The earnings were driven by an almost 21% increase in the health system’s ambulatory care segment, according to an earnings report. Where Tenet struggled was in hospital revenue, which fell 4.3% due to “hospital divestitures in first quarter 2024,” related to the closing of nine facilities in January and March. However, the company reported it was partially offset by hospital admissions growth, with revenue per adjusted admissions up 5.7% YoY.
Tenet revised its anticipated revenue for the year to land between $20.6 billion and $21 billion, compared to a previous projection of $20 billion to $20.4 billion.
Community Health Systems
Compared to its aforementioned competitors, Community Health Systems had a less successful quarter, reporting a $13 million loss.
The Franklin, Tennessee-based system’s poorer performance was driven by a 2.8% drop in admissions, according to an earnings report. The company did cut losses significantly, however, as it reported a $41 million loss in the first quarter of this year.
On its earnings call on Thursday, CEO Tim Hingtgen said he is “pleased with our progress, including a solid second quarter that produced both volume and earnings growth.”