HCA’s $15.9 billion in 2nd quarter revenue: What does that mean for Asheville’s Mission?

ASHEVILLE – HCA Healthcare’s second quarter earnings report, disclosed in a news release earlier this summer, reveals a steadily performing company. The statistics that executives touted during a conference call discussing the results reveal how the Nashville-based company’s corporate strategy is playing out in the Mission Health system in Western North Carolina. The public for-profit company bought the Mission Health system in 2019 for $1.5 billion.

HCA brought in $15.9 billion in the second quarter of 2023 and $1.2 billion in profit. Revenue for the six-month period preceding June 30 increased by $1.7 billion from 2023 for the same period in 2022. Operating expenses maintained at roughly the same percentage of total revenue during those periods, as did expenses attributed to supplies. HCA is a Fortune 500 company with $60.2 billion in revenue, according to its most recent annual report.

“The company produced pretty solid earnings in the second quarter. These results reflected continued strong demand for services and health operating margins across most areas in our business,” Chief Executive Officer of HCA Healthcare Samuel Hazen said during the July 27 earnings call. “We believe this strength should continue into second half of the year.”

Hazen pointed to positive labor metrics for the company overall ― turnover declining for nurses at an annual rate of 17% and nurse hiring increasing by 9% during the past year, leading to a contract labor cost reduction of 20% compared to the second quarter of 2022.

Locally, labor has become a point of contention. The Citizen Times previously reported that Mission’s direct patient care staff, not counting physicians, decreased by 25% from 2019 to the 2022 fiscal year according to Medicare Cost Report data collected by the National Academy of State Health Policy. Mission Health spokesperson Nancy Lindell refuted this reduction at the time in a statement. The North Carolina Attorney General‘s office has also raised questions about HCA’s compliance with its agreement to purchase the Mission system based on the staffing level of its medical oncology department.

Statistics from cost reports indicate that HCA has reduced Mission’s contract labor staff (excluding physicians) after ballooning in the years directly following the sale. Prior to the sale, during the 2018 fiscal year, Mission Hospital contracted workers for direct patient care for 235,303 hours. That number increased to 661,593 hours in 2021, before coming back down to 249,858 hours in 2022. At Mission, the reduction in contract workers has not coincided with additional staff workers. In 2018 the hospital employed workers 7.3 million hours for direct patient care staff minus physicians. In 2022, that number dropped to 5.4 million.

Lindell reiterated in an Aug. 18 statement that “Medicare Cost Report data can’t be used to compare staffing between years,” pointing to changes in reporting between departments. Medicare Cost Reports include contract and full-time staff.

“You don’t want a large number of contract workers because they don’t have the same long-term interest in making the hospital great,” Duke Fuqua School of Business professor Campbell Harvey told the Citizen Times. He went onto explain that contractors have steeper learning curves because they must acclimate to how the hospital operates.

Salaries and benefits reduced as a proportion of total revenue for the six-month period preceding June 30 from 2023 to the same time span in 2022 from 46.1% to 45.7%, indicating that company-wide reducing contract labor cut overall labor cost.

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Lindell pointed to Mission Health adding 300 registered nurses to the staff this year, $20 million in raises for “direct patient care staff,” bonuses and additional benefits as some of the ways they have tried to add staff. She noted that Mission relies less on travel nurses than they did during the height of the pandemic and said that “our goal is to continue to reduce the number of travel nurses in favor of permanent staff.” She said that Mission Health has a turnover rate that is “a small fraction of what is being experienced across the country.”

Another success metric that HCA executives pointed to during the call is same facility equivalent admissions, which grew 3.7% during the year. Mission recently opened a burn unit, which will help HCA retain patients who would have otherwise traveled to Augusta and Winston-Salem to receive their care.

Lindell did not respond to a Citizen Times question about outpatient service expansion or about what the hospital is doing to increase same-facility admissions.

At the top of the call, Hazen mentioned the patient data breach, which occurred July 10. He reiterated the information disclosed in the initial news release, emphasizing that clinical information was not included in the breach, but other sensitive information was at risk. He noted that HCA has been named as defendant in multiple class-action lawsuits stemming from the breach, a development that he called “not (unexpected).” None of these lawsuits were filed in North Carolina federal court.

**This is an original Citizens Times article.**

Mitchell Black covers Buncombe County and healthcare for the Citizen Times.