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SOURCE: Nashville Post
AUTHOR: Kara Hartnett
Chief Financial Officer Bill Rutherford
HCA Healthcare
HCA Healthcare has navigated regional COVID-19 outbreaks in the third quarter without severely harming overall patient volumes and is now looking to potential growth opportunities to drive momentum going into the new year, according to a company executive.
In a moderated discussion at a Morgan Stanley investment conference, HCA CFO Bill Rutherford said the company is still navigating the pandemic and focused on further rebuilding its patient volumes. But the Nashville-based company's leaders also are beginning to assess acquisition opportunities arising from the rapidly changing health care ecosystem.
“Anytime in our history when the industry goes through disruption, it creates some opportunity for M&A,” Rutherford said. “I think that will very well be the case here.”
Rutherford said the health giant’s 186 facilities across the country saw patient volumes continue to recover from the second quarter in early July until a resurgence in COVID-19 cases hit. The returning patients were higher-acuity and commercially insured, which helped offset some of the losses associated with the elective surgery suspensions the company voluntarily implemented in some of its hardest-hit markets — including Florida and Texas — to preserve bed availability and personal protective equipment. The economic effects of those suspensions were not as severe as those imposed in April, Rutherford said, when nearly all elective surgeries were banned and their hospitals saw relatively few COVID-19 patients.
“We had a busy July,” he said. “We wanted to prove to municipalities that we could manage through these peaks and valleys of volumes and they didn’t necessarily have to issue these governmental orders suspending elective procedures.”
Due to the regional volatility caused by COVID-19 outbreaks, Rutherford said HCA's leaders are still waiting to see where admissions and patient demand settles in brainstorming new growth pushes. They have cut capital spending by nearly $800 million this year to conserve cash and paused inpatient facility acquisitions and growth activity. But Rutherford expects to begin seeing early M&A activity within the outpatient space and the possible development of new service lines such as home health, telehealth and skilled nursing.
“The demand curve will present itself," he said, adding that HCA will continue to balance M&A and organic growth with share repurchases and dividends. “We will just have to wait to see when is the right time to think about the resumption of those as we go forward over the next intermediary period of time.”