HCA Healthcare Inc.’s
decision to pay back $6 billion in federal pandemic aid and loans offers the company financial flexibility it lost when it took the infusion of cash, executives said.
HCA, one of the nation’s largest hospital chains, on Thursday said it would return the roughly $1.6 billion it received in direct relief from the government and repay its relief loans totaling $4.4 billion ahead of schedule. Chief Executive Sam Hazen called the move “appropriate and the socially responsible thing to do.”
On Friday, the company’s finance chief told analysts on a conference call the repayment would allow HCA to reconsider moves it made in the spring to conserve cash.
“We’ve historically had a very balanced allocation of capital between our internal capital spending, acquisition capital, dividends and share repurchase,” Chief Financial Officer William Rutherford said. “With the return of our Cares Act, we do see some flexibility to evaluate when is the right time to return to some of those historical allocation policies.”
Under relief packages this spring, including the Coronavirus Aid, Relief, and Economic Security Act, Congress approved $175 billion in direct aid for health-care providers and offered pandemic relief loans, which hospitals must eventually repay. Hospital revenue plunged with pandemic preparations that halted some surgeries to prepare for Covid-19 patients.
But HCA and other hospital chains rebounded more quickly than expected from spring losses, moving to restart elective procedures in late April and early May. Hospitals continued surgery through new outbreaks of the virus, though with some interruption where cases surged.
Hospital analysts said few in the sector have announced plans to return pandemic relief.
Encompass Health Corp.
, which operates rehabilitation hospitals, home care and hospice services, previously returned funds it received.
Mr. Hazen, HCA’s CEO, said in an interview the experience of managing surgery