HCA Holdings 2012 Annual Report Download - page 83

HCA HOLDINGS, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (continued)
Results of Operations (continued)
Years Ended December 31, 2011 and 2010 (continued)
were 495.943 million shares and 437.347 million shares for the years ended December 31, 2011 and 2010,
respectively. During March 2011, we completed the initial public offering of 87.719 million shares of our
common stock, and during September 2011, we repurchased 80.771 million shares of our common stock.
During 2011, consolidated admissions increased 4.2% and same facility admissions increased 2.3% for
2011, compared to 2010. Consolidated inpatient surgical volumes declined 0.5%, and same facility inpatient
surgeries declined 1.7% during 2011 compared to 2010. Consolidated outpatient surgical volumes increased
2.0%, and same facility outpatient surgeries declined 0.6% during 2011 compared to 2010. Emergency room
visits increased 7.7% on a consolidated basis and increased 6.2% on a same facility basis during 2011 compared
to 2010.
Revenues before provision for doubtful accounts increased 5.9% to $32.506 billion for 2011 from
$30.683 billion for 2010. Provision for doubtful accounts increased $176 million from $2.648 billion in 2010 to
$2.824 billion in 2011. With our adoption of ASU 2011-07, the provision for doubtful accounts has been
reclassified from an operating expense to a deduction from patient service revenues. The provision for doubtful
accounts and the allowance for doubtful accounts relate primarily to uninsured amounts due directly from
patients, including copayment and deductible amounts for patients who have health care coverage. The self-pay
revenue deductions for charity care and uninsured discounts increased $346 million and $1.066 billion,
respectively, during 2011 compared to 2010. The sum of the provision for doubtful accounts, uninsured discounts
and charity care, as a percentage of the sum of revenues, the provision for doubtful accounts, uninsured discounts
and charity care, was 27.4% for 2011 compared to 25.6% for 2010. At December 31, 2011, our allowance for
doubtful accounts represented approximately 92% of the $4.478 billion total patient due accounts receivable
balance, including accounts, net of estimated contractual discounts, related to patients for which eligibility for
Medicaid coverage or uninsured discounts was being evaluated.
Revenues increased 5.9% to $29.682 billion for 2011 from $28.035 billion for 2010. The increase in
revenues was due primarily to the combined impact of a 0.7% increase in revenue per equivalent admission and a
5.2% increase in equivalent admissions compared to 2010. Same facility revenues increased 3.3% due primarily
to the combined impact of a 0.3% increase in same facility revenue per equivalent admission and a 3.0% increase
in same facility equivalent admissions compared to 2010.
Salaries and benefits, as a percentage of revenues, were 45.3% in 2011 and 44.5% in 2010. Salaries and
benefits per equivalent admission increased 2.4% in 2011 compared to 2010. Same facility labor rate increases
averaged 2.3% for 2011 compared to 2010.
Supplies, as a percentage of revenues, were 17.4% in 2011 and 17.7% in 2010. Supply costs per equivalent
admission declined 0.7% in 2011 compared to 2010. Supply costs per equivalent admission declined 3.0% for
medical devices and 1.5% for pharmacy supplies, and increased 3.1% for general medical and surgical items in
2011 compared to 2010.
Other operating expenses, as a percentage of revenues, increased to 18.5% in 2011 from 17.9% in 2010.
Other operating expenses are primarily comprised of contract services, professional fees, repairs and
maintenance, rents and leases, utilities, insurance (including professional liability insurance) and nonincome
taxes. Each of contract services and professional fees increased 20 basis points in 2011 compared to 2010. Other
79