Monday, September 10, 2007

HCA profits fall, since private investors acquired it.

August 3, 2007

Hospital chain HCA's profits fell dramatically during the second full quarter since private investors acquired it. While the chain's revenues for the quarter were up 5.8 percent, to $6.7 billion, its net income fell 60.7 percent during the quarter to $116 million, down from $295 million during the same quarter the previous year.

HCA's income fell primarily due to paying down debt it took on when it went private. The company spent $361 million more this year than it did last year to pay off interest on the debt it took on in going private. That's just a drop in the bucket, meanwhile, compared with the $16 billion in new debt and $11.7 billion in existing debt it faces. At the same time, the amount of revenue it set aside to cover unpaid medical bills went up to 11.2 percent from 10.6 percent last year.

On the positive side, HCA was touting the 7.1 percent increase in average price charged to patients, more money from managed care companies and higher volumes of sicker, more profitable patients.

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