Essay on Managing Debt : An Overview

Essay on Managing Debt : An Overview

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Managing Debt: FY 2014 vs. FY 2013

HCA Holdings, Inc. is one of the leading health care services companies in the United States. At December 31, 2014, we operated 166 hospitals, comprised of 162 general, acute care hospitals, three psychiatric hospitals; and one rehabilitation hospital. In addition, we operated 113 freestanding surgery centers (HCA Holdings, Inc., 2015).

HCA Holdings, Inc. Debt Management Strategies FY 2014 versus FY 2013
Hospital Corporation of America (HCA) is the largest publicly traded for-profit hospital operator in the United States (WSJ, 2014). As such, HCA Holdings, Inc. is committed to providing the communities we serve with high quality, cost-effective health care while growing our business, increasing our profitability and creating long-term value for our stockholders (HCA Holdings, Inc, 2015). We realized revenues in excess of our goals of $36.9 billion in 2014, an 8% increase from $34.18 billion in 2013 (HCA Holdings, Inc, 2015). We achieved this by providing excellent care and increasing patient volumes while reducing the costs for providing service, a trend that management projects will continue into 2015 (HCA Holdings, Inc, 2015).
The healthcare industry is unpredictable and many healthcare facilities have succumbed to the financial pressure in recent years (Croswell & Abelson, 2012). The economy has shown improvements, but healthcare is still burdened by declining volumes, slow reimbursements, and the uncertainty of healthcare reform (Means & Olarte, 2013). Our average days in accounts receiving is 54 days (HCA Holdings, Inc, 2015). This average remained steady from 2013 to 2014 (HCA Holdings, Inc, 2015). Our second quarter results for 2015 show a 5% gain in revenues, thanks in part ...

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...future success.
HCA Holdings, Inc. has become the “leader” in a game of Follow the Leader with the healthcare industry. The financial success of HCA inspired 35 buyouts of hospitals since 2010 by private equity firms (Creswell, & Abelson, 2012). None have been able to match the revenues of HCA, though. But we cannot rest on our laurels. Our debt to capital ratio at the end of third quarter 2014 was 126 % (Patrick, 2014). Recent payoffs have brought it down to just under 94 % (Morningstar, Inc., 2015), a number that is still higher than the national average (Patrick, 2014). Our credit rating continues to falter, which could severely limit our future borrowing ability (Bordonaro, 2012). While we celebrate record revenues and sterling patient reviews, let us not forget the debt monster lurking in the closet, ready to attack at the next economic downturn.

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