Ramping up a workforce development push, the leaders of HCA Healthcare Inc. plan to establish up to 18 additional campuses of the Nashville-based company’s Galen College of Nursing in the next three years.
Speaking to analysts and investors Jan. 27 after HCA reported its fourth-quarter results, HCA CEO Sam Hazen said the growth push is part of a plan to triple the number of Galen nursing graduates by 2026 and help provide vitally needed talent to HCA’s national network of more than 180 hospitals and 2,200 ambulatory care sites.
HCA acquired a majority stake in Galen in 2019, when the college ran its main campus in Louisville as well as four other sites and an online arm. Since then, Galen leaders have opened seven campuses, moved into a new, 130,000-square-foot main campus in Louisville and grown their enrollment has grown to more than 8,000 from 5,000 in 2018. Hazen noted on his team’s Jan. 27 conference call that the Austin and Nashville sites – they span 26,000 and 47,700 square feet, respectively – have seen the fastest growth in Galen’s history.
HCA, which employs tens of thousands of nurses, and other healthcare providers of all stripes are having to deal with workforce recruitment and retention issues that predated COVID-19 but have been exacerbated by the pandemic. Nursing teams have been particularly affected by having to handle various surges of the virus amid staff shortages. Many have left the industry burned out or turned to more lucrative travel work – including for HCA: CFO Bill Rutherford said the company’s use of contract labor was up about 10 percent in the fourth quarter versus late 2020 but added that he expects HCA’s utilization will shrink over the course of this year. Planning for that and taking into account HCA’s recent investments in wages and benefits, Hazen added, the company’s leaders expect the company’s average cost per full-time employee to rise between 3 percent and 3.5 percent this year.
In the fourth quarter of last year, HCA produced a profit of $2.0 billion on revenues of nearly $15.1 billion compared to $1.7 billion and $14.3 billion, respectively, in the prior-year period. Reflecting the tough labor market, the company’s spending on salaries and benefits as a share of revenues rose to 46.5 percent from 44.3 percent. (For the year, that number was 45.6 percent, down somewhat from 2020.) Same-facility admissions rose 0.6 percent from late 2020 while inpatient surgeries slipped about 1 percent and same-facility outpatient surgeries rose more than 5 percent. That last figure reflects an ongoing shift to outpatient care: HCA during 2021 grew its network of such sites 14 percent.
HCA’s executives this week also announced plans to grow their Texas footprint, which today numbers 45 hospitals and 632 other care sites, through the building of five hospitals. Two will be in the Austin market while the Dallas, Houston and San Antonio area will get one each. Hazen said most of the new hospitals will house between 50 and 75 beds and serve fast-growing areas while also funnel higher-acuity patients to HCA’s larger facilities in those markets.
With investors paying close attention to the spending on labor, shares of HCA (Ticker: HCA) were down about 5 percent to $227 in Jan. 27 trading. They have fallen about 8 percent over the past six months.
