HCA, Tenet EBITDA rises as labor costs cool

Some for-profit health systems, such as Nashville, Tenn.-based HCA Healthcare and Dallas-based Tenet Healthcare — the two largest — have seen improved EBITDA in the first quarter as salary and benefit obligations softened, according to Moody's "Healthcare Quarterly" report, published July 19. 

First-quarter salaries and benefits as a percent of revenue fell for HCA and Tenet by about a percentage point each to 45.4 percent and 45 percent, respectively.

HCA's EBITDA increased by almost 8 percent to $3.2 billion, with Moody's projecting continued improvement in the coming quarters. Tenet's operating performance also improved, with EBITDA at $832 million, according to the report. 

Separately, some health systems with a substantial proportion of business focused on behavioral health — which have been less affected by increases in labor costs — also improved earnings in the early part of the year, according to Moody's. Such organizations include King of Prussia, Pa.-based Universal Health Services and Franklin, Tenn.-based Acadia Healthcare. 

All of these operators have hospitals predominantly located in urban areas, where the nursing shortage is less acute than rural areas and the payer mix is more favorable, Moody's said. 

Copyright © 2023 Becker's Healthcare. All Rights Reserved. Privacy Policy. Cookie Policy. Linking and Reprinting Policy.


Featured Whitepapers

Featured Webinars