Updated 3-HCA quarterly performance shines, Medicaid plan payments offset the impact of uninsured patients seeking medical care

Full rewrite, analyst comments added in paragraphs 3-4, 7 and the final paragraph; updated share price information in paragraph 5

Sahil Pandey/Kamal Choudhury

Reuters, October 27 - Hospital operator HCA Healthcare (HCA.N) reported third-quarter results on Tuesday that beat Wall Street estimates, with strong patient volumes and Medicaid payments helping to offset the impact of an increase in uninsured patients.

HCA said a rise in uninsured patient numbers—mainly those who lost coverage on health insurance exchanges—changed the payer mix, reducing pre-tax earnings by about $400 million in the third quarter.

However, brokerage firms noted that unexpectedly strong supplemental Medicaid payments from state-led programs, along with tight cost controls, helped offset this negative impact.

Barclays estimated that supplemental Medicaid programs delivered around $250 million in "unexpected" gains this quarter.

The company’s share price rose more than 1% in early trading.

Although same-facility equivalent admissions grew 3.0% year on year and emergency room visits surged 5.1%, inpatient surgical procedures at the same facilities fell 1.4%, while outpatient surgeries dropped 3.7%.

Bernstein Securities noted that reduced insurance coverage continues to selectively weigh on volumes for elective surgeries.

Cost trends improved in the third quarter, with salaries and benefits as a share of revenue falling to 43.2% from 43.6% a year earlier.

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According to London Stock Exchange Group (LSEG) data, the company reported adjusted earnings per share of $7.22 for the quarter ended September 30, beating analyst estimates of $6.66. Quarterly revenue grew 3.6% to $19.85 billion, exceeding the expected $19.33 billion.

HCA now expects full-year financial results to come in at the upper half of its annual profit forecast range of $28.70 to $30.50 per share, with revenue projected between $77 billion and $79.5 billion.

Morningstar analyst Julie Utterback noted that headwinds related to the insurance exchanges are "only just beginning," adding that upcoming regulatory changes—including Medicaid work requirements and lower state payments—could dampen profit growth through 2028.

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