Becker's Hospital Review

22 CFO / FINANCE Bloomberg: UnitedHealth to Acquire Advisory Board's Healthcare Arm By Morgan Haefner M innetonka, Minn.-based UnitedHealth Group plans to ac- quire The Advisory Board's healthcare division, sources familiar with the matter told Bloomberg in early July. Here are five things to know. 1. No deal has been inked. A formal announcement may not arrive for a month due to the deal's complexity, the sources said, who asked for anonymity because discussions remain private. 2. The Advisory Board's shares climbed as much as 14 percent on July 6, reaching their greatest value in two years. As of 3:51 p.m. July 6, the stock was up 4.8 percent to $54.75, making the Board's market value $2.2 billion. 3. Sales from The Advisory Board's healthcare arm fell 6.6 percent in the company's first quarter, the report states. The business pro- vides consulting and research projects spanning bill collection, pa- tient care improvements and provider strategy. 4. Spokespeople from The Advisory Board and UnitedHealth de- clined Bloomberg's request for comment. 5. UnitedHealth has recently been growing its technology, consult- ing and healthcare delivery subsidiary Optum. Deerfield, Ill.-based Surgical Care Affiliates and Optum declared their merger earlier this year. n Northwell Health to Affiliate With John T. Mather Memorial Hospital By Alyssa Rege P ort Jefferson, N.Y.-based John T. Mather Me- morial Hospital signed a letter of intent to join New Hyde Park, N.Y.-based Northwell Health July 28. The health systems will work together during the next few months to finalize an agreement, which will require approval from the boards of both hos- pitals and regulatory agencies. Officials expect to receive approval by the end of 2017. The 248-bed Mather Memorial began affiliation discussions with several health systems in early 2016, eventually deciding on Northwell Health. "Mather Hospital is known for patient-centric care both in the community and throughout the indus- try," said Michael Dowling, president and CEO of Northwell Health. "That deeply embedded sense of purpose is the type of quality we want to rep- resent Northwell Health, along with an excellent staff of medical professionals and physicians. To- gether, Mather and Northwell will play a crucial partnership role expanding world class care and innovative patient services to Suffolk County res- idents." n HCA Sees Q2 Earnings Lag, Stays Ready for More Acquisitions By Ayla Ellison N ashville, Tenn.-based HCA Health- care, which operates 172 hospitals and 119 freestanding surgery centers, saw revenue increase in the second quarter of 2017, but the company missed quarterly earnings es- timates and slashed its yearly profit forecast. HCA's revenues increased 4 percent year over year to $10.73 billion in the second quarter of 2017, which fell below analysts' estimate of $10.85 billion, according to Reuters. Weak- er-than-expected patient volumes tempered revenue growth in the second quarter. Aer accounting for a 4.2 percent increase in expenses, HCA ended the second quarter of this year with net income of $657 million, which was down slightly from $658 million in the same period of 2016. For the first half of 2017, HCA reported net income of $1.32 billion on revenues of $21.36 billion. at's compared to the first half of last year when HCA recorded net income of $1.35 billion on revenues of $20.58 billion. "Our results in the first half have been chal- lenged by, one, soer managed and exchange volumes, and, two, our London market re- sults have been negatively impacted by cur- rency conversion rates and lower admissions from Middle East embassies and private in- surance," said R. Milton Johnson, chairman and CEO of HCA, on a second quarter earn- ings call July 25. HCA has been on an acquisition spree in re- cent months, and Mr. Johnson suggested that trend may continue. "Our balance sheet and cash flow gives us the financial flexibility to invest in our existing markets to acquire new hospitals and to con- tinue to execute our share repurchase plan," he said. Regarding the share repurchase plan, Mr. Johnson said HCA repurchased 6.4 million shares during the second quarter of this year at a cost of $542 million. e company has $887 million remaining under the existing repurchase authorization. HCA said it now expects earnings per share for the year in the range of $7.00 to $7.30, down from its previous forecast of $7.20 to $7.60. n

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