Q3 finances at two of the nation’s biggest health systems have been taken by storm—literally.
HCA Healthcare and Community Health Systems (CHS) execs cited Hurricanes Milton and Helene as their main challenges this past quarter, leading to financial hits.
In fact, it’s how both HCA CEO Samuel Hazen and CHS CEO Tim Hingtgen kicked off their Q3 earnings calls.
HCA
Nashville, Tennessee-based HCA reported $17.5 billion in revenue this last quarter. But according to its earnings report, the country’s largest hospital system lost an estimated $50 million due to the impact of Hurricanes Helene and Milton at hospitals in Florida, Georgia, and North Carolina.
During the storms, Helene impacted 29 of HCA’s hospitals and Milton hit 34, the system’s EVP and CFO Mike Marks said on the October 25 Q3 earnings call. Hazen said two hospitals in the 186-hospital health system are still recovering from flooding, infrastructure repairs, and water supply: Mission Hospital in North Carolina and HCA Largo Hospital in Florida.
A major takeaway for the future, Hazen added, was the need to build better storm readiness and responses.
“We have used learnings from past experiences, conducted extensive training, and built strong partnerships with key vendors to create a systematic approach to preparing for and responding to major events like hurricanes,” he said. “These resources were put to use for our teams with outstanding results over these past few weeks as the hospitals were in the path of these storms.”
During Q4, Marks said the health system could take an additional $300 million hit.
“As a consequence of this storm, we anticipate incurring significant expenses and lost revenue related to these issues throughout the remainder of the year. We also expect some continued—but we think manageable—impact into 2025,” Hazen said.
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Despite the challenges, HCA execs maintained the company’s end-of-year guidance, expecting revenues between $69.8 billion and $71.8 billion this year (but “likely to be in the lower half” of the range, according to Marks).
CHS
Franklin, Tennessee-based CHS posted a net revenue of $3.09 billion in Q3, but that included a net loss of $391 million.
While revenues increased 0.1% compared to the same period last year, the health system would have had a stronger quarter if not for the hurricanes, President and CFO Kevin Hammons said during the system’s Q3 earnings call on October 25.
“The hurricanes impacted several of the communities we serve, primarily in Florida, Georgia, and east Tennessee,” Hingtgen said, noting that three of CHS’s 69 hospitals were hit and its ShorePoint Punta Gorda, Florida, hospital was still closed at the time of the call.
Hammons said he estimated about $7 million was lost due to “missed revenue and incremental costs” from the storms.
Aside from the hurricanes, Hingtgen added that the company’s finances also took a hit due to increased health plan denials.
“We are seeing some payers aggressively deny payment for medically necessary services that have been provided for our patients,” he said.
Looking ahead, CHS execs adjusted the company’s estimates for end-of-year financials due to the hurricanes, downgrading its expected adjusted EBITDA to between $1.5 billion and $1.54 billion.
“With one quarter remaining in 2024, we are adjusting our guidance range as we continue to assess the impact of Hurricane[s] Helene and Milton on our operations,” Hammons said.