HCA’s latest deals highlight quest for market dominance

HCA Healthcare has made headlines in latest months over multi-hospital offers that align with the for-profit hospital chain’s technique of being the primary or two participant in its markets.

Most lately, Nashville-based HCA announced plans to buy five hospitals throughout the Wasatch Entrance, a populated chain of cities in north-central Utah with Salt Lake Metropolis within the center. These hospitals neatly fill within the gaps between HCA’s eight present hospitals in that area.

HCA is the most important hospital chain within the nation by each income and variety of hospitals. It drew $51.5 billion in revenue in 2020 and has north of 180 hospitals.

Even because it grows in Utah, HCA has exited Georgia’s Atlanta metro, having sold five hospitals there since August.

Each strikes match with the corporate’s technique of singling out high-density, high-growth markets, stated Brian Tanquilut, a healthcare companies analyst with Jefferies.

HCA has a selected knack for purchasing in markets that weren’t but on many individuals’s radars, he stated. Salt Lake Metropolis is an effective instance.

“They’re capable of determine elements of the nation which can be poised for good development and discover property early on,” Tanquilut stated.

One other instance is HCA’s 2019 purchase of Mission Health, a six-hospital system primarily based in fast-growing Asheville, North Carolina.

HCA by no means obtained the size it needed within the Atlanta space, so it is selling four hospitals there to not-for-profit Piedmont Healthcare and another to Florida-based AdventHealth. When HCA introduced the Piedmont deal, it stated it might shift its deal with its remaining 5 hospitals in southeast Georgia. Its most up-to-date acquisition there’s a hospital in Vidalia, Georgia.

HCA’s development technique goes past hospitals. The system is investing closely in ambulatory surgical procedure facilities, pressing care clinics and doctor practices round its medical facilities to create what CEO Sam Hazen described as a “closed loop” system on the corporate’s second quarter earnings name.

“Now we have loads of capability in our spending, permitting us to take a position aggressively in our outpatient community to assist our services,” Hazen stated on the July 20 name. “So we’re including beds to our services in lots of markets as a result of we’re nonetheless operating at very excessive occupancies.”

One instance of that’s HCA’s Might buy of Alaska Surgical procedure Heart in Anchorage, Alaska. The surgical procedure middle—HCA’s largest—is lower than a mile from the corporate’s solely hospital in Alaska, Alaska Regional Hospital.

HCA’s funds have carried out remarkably nicely in the course of the COVID-19 pandemic. It grew profit 73% to nearly $3 billion in the course of the first six months of 2021 year-over-year. However unionized workers say that is as a result of it hasn’t made the mandatory investments in staffing and private protecting tools in the course of the disaster. A recent federal inspection discovered HCA did not employees sufficient nurses at one in every of its California hospitals, which nurses stated led to treatment errors and sufferers going unattended.

HCA’s steadiness sheet—flush with money and relatively low in debt—uniquely positions it to spend cash on new buildings and repair traces, one thing many not-for-profit well being programs cannot do whereas they proceed to get well from the pandemic. In July, it bought a majority stake in Brookdale Senior Dwelling’s residence well being, hospice and outpatient remedy arm.

“They’re spending extra (capital expenditure) {dollars} than anybody else,” Tanquilut stated. “That is one of many massive contributors to gaining market share.”

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