HCA's Sam Hazen addresses class action lawsuit from data breach

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HCA Healthcare CEO Sam Hazen addressed what he called the "multiple class action lawsuits" against the healthcare system due to a recent data breach.

"On July 10, we announced that we had recently discovered a list of certain information with respect to some of our patients was made available by an unknown and unauthorized party on an online forum," Hazen said during a Q2 earnings call on Thursday. "We have confirmed that the list does not include clinical information, payment information or other sensitive information like passwords, driver's license or social security numbers. Our forensic investigation is ongoing, but this event appears to be a theft from an external storage location that was exclusively used to format e-mail messages.

"We are in the process of notifying all affected patients in accordance with our legal and regulatory obligations. And not unexpectedly, we have been named as a defendant in multiple class action lawsuits. This incident has not caused any disruption to our day-to-day operations nor do we believe it will materially impact our business or financial results. HCA Healthcare believes the privacy of its patients is a vital part of its mission and remains committed to maintaining the security of their personal information."

WHAT HAPPENED

Gary Silvers of Florida brought a lawsuit on July 12 in federal court in Nashville on behalf of himself and others. Silvers is seeking monetary damages from what he called HCA's failure to safeguard his personally identifiable information.

On or about July 5, an unauthorized party obtained from an HCA external storage location that is exclusively used to automate the formatting of email messages a list of information pertaining to patients and made it available on an online forum, according to the lawsuit.

Information stolen and released included names, cities, states, zip codes, email addresses, phone numbers, dates of birth, genders and appointment information, the complaint said. The HCA investigation concluded that the private information compromised in the data breach included the information of approximately 11 million patients, across 27 rows of data.

"Plaintiffs and Class members now face a lifetime risk of identity theft due to the nature of the information lost, and a diminishment in the value of their private data," the lawsuit said.

HCA Florida Woodmont Hospital, where Silvers was a patient, is one of the affected facilities listed in HCA's Data Security Incident Report, the lawsuit said.

FINANCIALS

Net income attributable to HCA Healthcare, Inc. totaled $1.193 billion for Q2, what Hazen called "solid earnings."

HCA has updated its earnings guidance for 2023 to reflect the strong outlook.

"These results reflected continued strong demand for our services and healthy operating margins," Hazen said. "Across most areas of our business, we maintain the operational momentum that we experienced over the past three quarters. We believe this strength should continue into the second half of the year."

Admissions grew 2.2% year-over-year; inpatient surgeries increased 1.8%; and same facility equivalent admissions increased 3.7%. 

"This growth was driven by emergency room visits, which grew 3.7% and outpatient surgeries which grew 3.3%," Hazen said. "Other outpatient categories also grew, including outpatient cardiology procedures, which increased 5%. The growth in volumes was broad-based across the company's divisions and diversified within most service lines."

Volumes were supported by a favorable payer mix from commercial adjusted admissions growth of 5%. Turnover has continued to decline for nurses. Nurse hiring remained strong in the quarter and for the year has increased by 9% as compared to last year. These positive results helped reduce contract labor costs 20% compared to the second quarter last year, the company said. Bed capacity has increased.

"As we look to the future, we remain encouraged by both the backdrop of strong demand that we expect in our markets and our overall competitive positioning within them," Hazen said.

THE LARGER TREND

Despite reporting better-than-expected financials for Q2, HCA Healthcare traded lower in the pre-market Thursday after it issued a full-year guidance that was in line with forecasts, according to Seeking Alpha. HCA's rivals, Community Health Systems, Surgery Partners, Tenet Healthcare, Universal Health Services and Select Medical Holdings traded lower after the results, the report said.

HCA is headquartered in Nashville, Tennessee, is made up of 182 hospitals and more than 2,300 ambulatory care centers in 20 U.S. states and the United Kingdom.

Twitter: @SusanJMorse
Email the writer: SMorse@himss.org