What Key Factors Drive Revenue for LifePoint?



What drives LifePoint’s revenue?

Major revenue drivers for LifePoint Health (LPNT) include:

  • Equivalent admissions
  • Medicare case mix index
  • Average length of stay
  • Inpatient and outpatient surgeries
  • Emergency room visits
  • Outpatient factor

To learn more about the company’s organic growth strategy, please refer to Organic growth strategy at LifePoint Hospitals.

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Admissions on a consolidated basis

LifePoint’s consolidated admissions fell 1.7% annually to 59,000 in 4Q15 from 60,000 in 4Q14. Its equivalent admissions on a consolidated basis rose to 157,000, an annual jump of 2.4%.

The company’s net revenue per equivalent admission rose by 5.9% in 4Q15. Case mix improvement and higher reimbursements from commercial payers drove revenue.

LifePoint defines admissions as the total number of patients admitted to the hospital, which is a general measure of inpatient volume. Equivalent admissions group inpatient and outpatient volumes together.

LifePoint has grown organically as well as inorganically. It presents separate same-facility admissions data and consolidated data. The consolidated data includes same-facility performance as well as additions from recent acquisitions. Similarly, it also includes the results of hospitals that have been disposed of.

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Inpatient and outpatient surgeries

During 4Q15, there was a fall of 0.2% in total same-hospital surgeries.

Same-hospital total surgeries include inpatient and outpatient surgeries. On a same-facility basis, inpatient surgeries fell by 1%, whereas outpatient surgeries rose by 0.1% during the quarter.

Outpatient surgeries on a consolidated basis rose to 63,000 during 4Q15, reflecting a 5.4% annual jump, whereas inpatient surgeries rose by 3.9% to 17,000.

The average length of stay remained unchanged at 4.9 days in 2015. However, on a same-facility basis in 2015, the length of stay increased by 2.1%.

LifePoint’s peers include HCA Holdings (HCA), Universal Health Services (UHS), and Tenet Healthcare (THC).

LifePoint’s share price is quite susceptible to economic, industry, or company-based events. To diversify the risk of directly investing in the equity, investors may want to look into options such as the iShares S&P Mid-Cap 400 Value ETF (IJJ). The fund has 0.43% of its total holdings in LifePoint’s stock.


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