LifePoint profit rises on new hospitals, spikes in admissions and insured
Rural hospital chain says it is seeking more joint ventures as it competes against other health systems.
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For-profit rural health system LifePoint Hospitals said its profit grew 5 percent in the first quarter of 2015, on a boost from newly-insured patients in middle America
.Net income for Brentwood, Tennessee-based LifePoint increased 5 percent year-over-year to $38.9 million, as revenue surged 25 percent to $1.2 billion.
“Our results demonstrate the effectiveness of our efforts to drive growth both organically and through acquisitions,” CEO William Carpenter said in a statement. “Improved volumes, effective cost management, and the benefits of healthcare reform were significant contributors to our results in the first quarter.”
Consolidated admissions across the company’s hospitals increased by 17.3 percent from this time last year, though same-hospital admissions declined by just under half-a-percent. Both inpatient and outpatient surgeries increased in volume, by 20 percent and 25 percent respectively. Emergency care visits have also been up considerably, by 22 percent in total and almost 9 percent on a same-hospital basis.
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Healthcare reform contributed $13 million to the company’s pre-adjusted earnings, with more commercial payers and high reimbursement. Another driver of growth has been LifePoint’s ongoing takeovers and joint venture deals.
Founded in 1999 with 23 rural hospitals, LifePoint today operates 65 hospital campuses across greater Appalachia, the South and parts of West. The company is vying with the other for-profit giants and to a greater extent Community Health Systems, another growing for-profit rural health system. Like others, particularly Tenet, LifePoint is leaning towards a joint venture strategy over traditional mergers and acquisitions.
Among recent deals, LifePoint’s joint venture with Norton Healthcare in Indiana is set to acquire the Clark Memorial Hospital, in Jeffersonville, a small city across the Ohio River from Louisville. LifePoint is also set to acquire the Watertown Regional Medical Center in central Wisconsin.
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“What we have accomplished in Western and Central Pennsylvania demonstrates how rapidly and effectively we can build these networks,” said Carpenter, referring to the work of the company’s 12 hospital joint venture with Duke University Health System, Duke LifePoint Healthcare. “In the third quarter of 2014, Duke LifePoint acquired Conemaugh Health System, the tertiary provider in Western and Central Pennsylvania. Conemaugh is performing well and our recent acquisition of Nason Hospital is the fourth hospital in the network.”
The company is eyeing more facilities, especially ambulatory surgery centers and oncology clinics, said president and CEO David Dill.
LifePoint is also making a major foray into quality improvement at its 65 hospital campuses though the Duke partnership. LifePoint is a participant in Medicare’s 2011 Hospital Engagement Network focused on reducing healthcare-acquired conditions; with Duke, the company is crafting a national program to implement best practices in hospital safety developed at the academic medical system.
In another financial realm, LifePoint is cooperating with a federal investigation and dealing with more than a dozen lawsuits stemming from inappropriate interventional cardiology practices. In February, the company told investors that it had discovered and self-reported evidence of improper use of cardiac stents by two now-former cardiologists at the Vaughan Regional Medical Center in Selma, Alabama.
Twitter: @AnthonyBrino
