IPO Costs Drive Down HCA Profits While Revenues Grow

The cost of taking Nashville-based HCA public drove down earnings for the hospital chain in the first quarter. Profits dropped 38 percent from the same period last year to $240 million.

But on a call with analysts this morning – the first since HCA’s IPO – the company reported revenue growth of more than six percent and slightly higher admissions.

HCA discussed cost-cutting plans that include buying more supplies from China. It’s opened an office in Shanghai, saving 20 percent on the items it’s getting out of China right now, says company president Milton Johnson.

Johnson says the cost-cutting move is starting with consumables like sponges and linens.

“But we continue to see the opportunity over time to continue to expand the offerings there and we think that’s going to produce some nice savings there over the next few years.”

While revenues grew in the first quarter for the country’s largest for-profit hospital chain, the company is getting squeezed by more hospital bills going unpaid and patients putting off elective surgeries.

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