By CHRISTOPHER WEAVER
A rush of newly insured patients using health services has boosted hospital operators’ fortunes but has racked up costs that insurers didn’t anticipate, corporate filings and interviews with executives show.
People are getting more back surgeries, seeking maternity care and showing up at emergency rooms more frequently, executives say, boosting income for hospital operators.
At Tenet Healthcare Corp. THC +2.87% , patient volumes rose 4% in the second quarter compared with a year earlier, while uninsured inpatient admissions slid 22%. The Dallas-based company’s earnings before interest, taxes, depreciation and amortization rose 37%. (The company posted a net loss for the quarter in part due to expenses related to its acquisition of rival Vanguard Health Systems last year.)
Chief Executive Trevor Fetter said volume was high in maternity care, spine treatment and other procedures among people enrolling in plans offered through new health-law marketplaces, many of whom were previously uninsured and had likely delayed care. In some states, he said, hospitals got a boost from Medicaid programs that swelled under the law.
“There are still some very glaring holes in coverage, but in those states that expanded Medicaid and had a well-functioning exchange, we’re really seeing a substantial pick up,” he said. The law drove one-third of Tenet’s volume increase, he said; the rest reflected an improving economy and its own strategic investments.
The biggest publicly traded hospital company, HCA Holdings Inc., HCA +1.47% reported a 9.2% increase in second-quarter revenue.
The winners and losers in the health law’s early rounds are beginning to emerge from companies’ financial disclosures. Providers of services are in the lead for now, with some of those who pay for health care—insurers and employers—losing some ground.
More than eight million people obtained private coverage in health-law marketplaces between last fall and April, and millions more signed up for state-run Medicaid programs.
While it isn’t clear how many of those were previously uninsured, the hospitals’ boost suggests many who delayed care—likely during periods without coverage—are now seeking treatment.
