How HCA's Finances, Outlook Were Affected by Hurricanes

The hospital operator is no stranger to bouncing back from storms and will look to do it once again.

HCA Healthcare is still recovering from the operational and financial devastation recently caused by Hurricanes Helene and Milton.

The back-to-back hurricanes, which hit the Southeast in the span of two weeks, caused HCA to incur a $50 million revenue loss in the third quarter and anticipate a loss of $200 to $300 million for the fourth quarter.

Despite the drain on finances as a result of the hurricanes, HCA managed to rake in $1.3 billion in profit for the quarter, driven by $17.5 billion in revenue.

HCA also reaffirmed its full-year guidance of between $69.8 billion and $71.8 billion, but the company anticipates the final figure to be in the lower half of that range.

Overall, the health system had 29 hospitals in the path of Helene and 34 hospitals in the path of Milton, CFO Mike Marks told investors on an earnings call. All but two hospitals are back to being fully operational, with Asheville, North Carolina-based Mission Hospital and Florida Largo Hospital significantly impacted by Helene and Milton, respectively.

Mission Hospital is expected to be without potable water for several more weeks, which will cost HCA at least $13 million to create a water supply through October, Marks said. Not only will the expenses and lost revenue for the location affect finances for the remainder of the year, but they will bleed into 2025, CEO Sam Hazen told investors.

Florida Largo Hospital, meanwhile, was flooded and is currently closed and under repair for damage to the building's infrastructure. Hazen said HCA is working to reopen the facility in late December, but anticipates that the repair expenses and lost revenue will hurt fourth quarter earnings.

Pointing to HCA's previous experiences with hospitals impacted by hurricanes, Hazen said: "HCA Healthcare has numerous examples from past hurricanes where our hospitals have recovered from major storms and become more productive than pre-storm performance. I believe we can produce similar results with these two hospitals in time as we move beyond the aftereffects of these most recent storms."

HCA has faced similar challenges with hospitals needing significant repairs in the wake of hurricanes, such as Florida Fawcett Hospital. After being damaged by Hurricane Ian 2022, the location was repaired in a way that it was hardened to hurricanes, Hazen recalled.

As a health system operating in regions susceptible to hurricanes, HCA has to be prepared to respond to the natural disasters when they occur.

"We hardened our facilities as much as we possibly can, but [hurricanes] are, in fact, a way of life," Hazen said.

Nevertheless, Hazen reiterated that HCA is in those vulnerable markets for a reason and that the organization has put itself in a position where it can offset some of the unpredictable consequences.

"We believe that our portfolio of communities that we serve are very well-positioned for long-term growth, as we've indicated," he said. "We understand the risks associated with hurricanes and such. That's why we've built the capabilities that we've got and we think we're diversified enough across those communities to deal with that particular risk."