Nashville, Tenn.-based HCA Healthcare reaffirmed its 2024 outlook on Oct. 25, but officials are now expecting its full-year results to fall on the lower end of that range due to the effects of Hurricane Helene and Hurricane Milton.
HCA raised its 2024 guidance in July, estimating a net income of $5.7 billion to $6 billion for the year ending Dec. 31.
The health system incurred additional expenses and loss of revenues estimated at $50 million in the third quarter associated with Hurricane Helene’s impact on certain facilities in Florida, Georgia and North Carolina, according to its Oct. 25 financial report. The system anticipates ongoing additional expenses and loss of revenue due to Helene's impact on its North Carolina facilities, as well as from Hurricane Milton, which affected certain facilities in Florida during October. The financial effect of the hurricanes is estimated at $200 million to $300 million. Those estimates do not include any insurance recoveries HCA might receive.
HCA CEO Sam Hazen said on the company's Oct. 25 earnings call that the system has two hospitals continuing to deal with the aftereffects of the storms.
"HCA Mission Hospital, which is the only hospital in the Asheville (N.C.) area, was affected by Hurricane Helene, and has continued to operate and provide high-quality patient care, even with significant city infrastructure in disrepair," Mr. Hazen said. "That's primarily water as a consequence of this storm. We anticipate incurring significant expenses and lost revenue related to these issues throughout the remainder of the year."
Mr. Hazen said that the Florida Largo Hospital was flooded during Hurricane Milton and remains closed because of damage to the building's infrastructure.
"We anticipate significant repair expenses will be incurred at this hospital during the fourth quarter," he said. "In addition to lost revenue, our teams, however, are working around the clock to reopen it in late December."
HCA CFO Mike Marks said that the ongoing effects of the storms in 2025 are expected to be manageable.
Mr. Hazen was asked by an investor whether hurricane activity will affect the system's long-term capital allocation and M&A strategy.
"The short answer to that is no," Mr. Hazen said, adding that HCA has "numerous examples from past hurricanes where our hospitals have recovered from major storms and become more productive than pre-storm performance."
As a specific example, Mr. Hazen said that HCA Houston Healthcare was affected by 2017's Hurricane Harvey, but has recovered and is exceeding pre-Harvey performance.
"So we still believe that the state of Florida, the Gulf Coast of Texas and so forth are very significant opportunities for our company," he said.
Mr. Hazen said HCA showed the power of the system in response to the two recent hurricanes, "but more importantly the power of its people in response to that."
"And I think we are going to be strong as a result of it in those markets," he said.