HCA - Earnings call transcript Q3 2018

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Operator

Ladies and gentlemen, welcome to the HCA Third Quarter 2018 Earnings Conference Call. Today's call is being recorded. At this time for opening remarks and introductions, I would like to turn the call over to Senior Vice President, Mr. Vic Campbell. Please go ahead, sir.

Victor L. Campbell

much, morning, very you thank and everyone. good April, to Relations I you would Kimbrough, you today's our to and Investor Chief listening of those of Mark like Officer welcome and also webcast. the call on all With Johnson; Hazen, me and Rutherford, President Milton Officer; Sam CFO. Operating here our Chief CEO, morning Bill this Chairman, and

company's of earnings retirement income providing included cost, Healthcare, claim undertakes may on net third the as legal EBITDA of uncertainties results Before obligation future press not to everyone they Healthcare, losses to call risk, HCA today's which forward-looking significant Many statements other filings. HCA statements. are the statements, determine financial that and are gains uncertainties On In expectations. or the and factors or in losses, today's on and income reconciling new on Company facilities, our on contain materially information over call, release. a current any that future ability you might no whether forward-looking Milton, to cause should EBITDA to such supplemental call in turn reliance undue update will be information may table predict. to Inc. should I debt revise the let result Several morning's this beyond attributable expressed to the remind adjusted measures. of release management's to based are results. quarter factors control actual light the today. company is me of reference factors non-GAAP differ of inherent forward-looking statements these those measures these SEC we various or any A of as that on EBITDA in of net sales any attributable Numerous listed results company's place adjusted adjusted in to and are the Inc., and excluding from

to being With recorded be turn Milton. is available call the heard over and later will today. me let call that, you As replay the

R. Milton Johnson

Vic, the call or morning thank everyone right, good joining you, to All and the webcast. us on

operations I'd Hurricanes recently before into Before moments to Carolina in October Michael about we to which Florence response to without emergency harm. landfall the storms, our On the take work. a and our several and few after made affected Michael and landfall each made enterprise our and and events, Panama patient the about evacuated the we to South Immediately HCA our had talk like facilities communities areas our and on supported our colleagues in the serve these we Throughout Both September devastating have and go City, effect Hurricane a storms hundred U.S. affected other. Southeast XX, on Florida. and have the XX hurricane colleagues live facilities and the across colleagues patients Florida other Florence patients in where and Carolina's details in in efforts, quarter,

HCA confidence disaster like it's proud Healthcare I'm teamwork so commitment well. teamwork colleagues facing the patient-centered disasters robust give our but make this, plans professionalism. work and us of that preparedness Our and plans that those when of weather very

these billion prior the year totaled the XX comments. quarter months in ending to Revenues revised hurricanes attributable for an billion, for year diluted September $XX.XXX the we the and share and Consistent growth, EBITDA increased Adjusted increased Healthcare Overall, comments increased or which third growth favorably over in me reflect the rate third quarter. guidance on detail very waiver per resulted the from the $XXX of to Medicaid the up X.X% in $X.XX and Inc. in income provide $X.XXX $X.XX excellent results, also or solid per results. with in This some more Bill earnings remainder Now HCA management quarter. Net year's to to share third volume increase third with in of quarter solid EBITDA we quarter XX% quarter third which quarter XX% third expense adjusted saw from later are million diluted the impact Texas provide moment. negative for pleased let expectations on my nine ranges the previous compared $XXX and we of results. last in items this year's million last intensity year. to on a both included quarter. service third recent morning, payments. results will More our

Revenues from paid of $XXX range from million to we are billion now $XX million rate EBITDA is Additionally, a through dividend during morning $X.XXX $X.X This also EBITDA Oklahoma increase Adjusted the we totaling strong, Year-to-date, billion to is to earnings our range ranges of September, from $X.XXX updated repurchased retirement to our as year-end from $X.X CEO diluted estimated an at of $X.XXX guidance diluted XXXX. and in existing markets, effective in $XX X.X%. spending We Cash up totaled the and the September, of shares per January billion projected cost EBITDA estimated year. appointment billion our for in third last basis our million of the to were points In quarter billion. flows XXX from XXXX. CEO adjusted X.X per Hazen billion of estimated share XXXX. $XXX $X.XX compared third of period now XXXX, at year's by very to assets. range same announced adjusted University Sam billion. – operations as capital X, growth quarter million And an was my invested to last share. impacted a unfavorably our of sale $X.XXX from $X.XX billion $XXX

of excellence. this will and the of high-quality great you of pleasure clinical over delivery to care approximately a company. Sam's under years achieved CEO people many patient is the and the extremely I focuses it's HCA Since delivery XX to an are who company's wonderful been improving XX I've last I for accomplishments distinct to a at agenda be getting after of remain many know X, company's with high-quality patient my had January earnings we've the today satisfaction. patient operational HCA. care which participant. and this my This the quarterly future So of privilege advancing active company the as calls, as many be am the is on proud including team XXXX, talented committed of HCA about well-positioned future. excited leadership my

the over turn I'll Bill. call to Now

William B. Rutherford

pause Good moment, the a us. I you've morning you. there I recognize leadership set and for your everyone. Thank feel just all example of for should like

So basis reported of as our $X.XXX results Milton the adjusted quarter. as There third year. third an an items mentioned, that in as-reported are the would we comparisons. or billion the I company like XX% solid was reported from quarter EBITDA year-over-year a On our few increase our impacted last are billion pleased with discuss $X.XXX a to

we the both the third impacted experienced is hurricane results. where hurricane Harvey in First XXXX of quarter impact Irma our and prior-year

of recall diluted we third and or year's additional expenses in $X.XX approximately share will million of $XXX quarter. loss last revenues per estimated You a

hit all $X We million in estimate Florence Strand an Florence evacuation had third year Myrtle order the our associated approximately we hurricane evacuate to this Beach patients During that had we of of Hospital. Carolinas. impact our a the to this quarter with Due quarter. from mandatory Grand

Texas results XX, in release the Waiver or the this operating a or on the actuarial $X.XX the Program XXXX Medicaid XXXX ended $XX noted for for to And this the per receipt of share the the recorded per based Second, third to included negative settlement amounts third our liability reserves risk for results also professional share. September reduction for to diluted quarter impact approximately related third, million million as information year of we of morning, $XX final quarter. program updated of in $X.XX year's diluted a company's

Finally, quarter. negative Oklahoma as of the have in contribution in growth estimate had we of we facilities the a on XXX our EBITDA basis its impact adjusted on our approximately last previous quarters based sale noted rate the of points year

which million a quarter, which Our third quarter EBITDA of negative the the with new nine and are XXXX, first negative had those a XXXX facilities in in months of XXXX. was consistent in adjusted third $XX of primarily facilities, purchased the EBITDA

adjust the quarter. So in for we are we you these items with even when adjusted experienced growth pleased the and performance

increased payer visits me of admissions now quarter more a the So total give let admissions. increased detail Same a total driven increased X.X% compared of represented performance the compared X.X% in as facility facility ER X% quarter represent equivalent also by Managed admissions X.X% Same admissions of our of our you Medicare These to admissions Florida This ER of to on admissions visits. charity Same ER Same third both Medicare facility Same X.X% managed our class. XX% visits total metrics operating primarily ER with admissions of visits results. our solid increased of the increased total represented compared results in and self-pay declined facility visits our some period. basis continuation admissions and admissions equivalent and admissions some on the XX.X% volume admissions. the represented for XX% emergency care decline Managed XXXX prior-year starting X.X% and to Texas key on period. XX.X% same The X.X%. prior-year Medicaid Medicare. room self-pay facility facility XX.X% uninsured while about still low-acuity increased includes and facility X.X%, and in increased same charity X.X%. basis, equivalent Medicare respectively. a and and traditional was in X.X%.

admissions surgeries surgeries level declined similar saw Our admission This as X.X% X.X%. with same quarter. visits X.X% the increased inpatient our increasing the during increasing the quarter. in to the our inpatient increase same increased visits The increased X.X% primarily of Intensity acuity in continued surgeries facility Also mix service level through case facility of services four Same revenue through ER and the level increased equivalent quarter, X.X%. we X.X% intensity one what per reflecting ER second outpatient well. facility quarter same three or our approximately and is in Same but very increasing X.X%. increased the X.X%. facility in facility five

facility in hospital-only revenue equivalent care X.X% per managed Our same admission quarter. the increased

prior price year. uninsured discounts, totaled reported quarter in results. pricing $X.XXX Our which care, This and care in growth billion implicit and volume line charity (XX:XX) the $X.XXX in includes billion with same to compared was as our facility concessions, total the uncompensated

turning expenses Now operating and margin. to

XX.X% margin basis quarter XX.X% from as to points reported last year third in basis. reported Our the EBITDA adjusted XXX on an as increased

XXXX. basis labor a year's Supply percent percent salaries Overall, of costs Some an of quarter to expense relatively was XXX EBITDA the from versus quarter percent third last our as same of operating prior-year's our for and facility Other points period. be $XX basis X% stable. third revenue and in to increased revenue the estimated improvement last of expense for last adjusted as consolidated compared Same a professional new the risk facility on On facility facilities the our year compared recorded a last in in This year points Oklahoma a percent from increased third third admission with The metric third XX.X% X.X% On attributed margin as equivalent of hurricanes. million as XXX unfavorable margin per in expense the loss reduction includes quarter. sale third last equivalent our admission quarter of increased this the provision impact XX.X% had admission and same to and quarter our Adjusted This compared consolidated for salaries as increase to of points supply costs supplies year's declined the basis XX.X% expenses increased the per hurricanes. liability operating revenue line quarter. a can quarter equivalent XX.X% X.X% due of to revenues. facilities per revenue benefits benefits year's of recent in XX.X% basis for basis declined year's were is in salaries trends. quarter. to a facility prior-year prior-year a in compared XX third benefited the quarter. to and the current revenues XX.X% this, XX.X% basis, same On of third and on were impact quarter. remain the

of flow billion capital briefly Cash flow touch less almost totaled operations last from flow, $XXX is which billion cash flow. me the adjusted we quarter billion XXXX million $XXX of revolving $X.XXX in cash in increase to an from had of September $X.XXX the the of at XX%. times under million, EBITDA credit was million in dividends third X.XX XXXX. the of and for year's million and cash million $X.XXX facilities quarter quarter, to quarter, XXXX. compared end QX which compared to Let Free paid distributions third expenditures At times debt non-controlling $XXX to of interests the compared XXXX, operations was to at is on billion, to shareholders our of available $X.XXX $XXX XX, X.XX $XXX of end of

share, quarter moving from diluted of Now in totaled per third $X.XX, per our the to earnings share up the $X.XX in year. quarter last earnings

in of prior operations, of on impact by $X.XX $X.XX and discussed, negative impact facilities per well was Tax I've the impacted related a previously impact Jobs EPS items the tax the our compared to OU divestiture the the year. quarter had Also, Our with to Act. our an coupled diluted estimate as we of EPS new share approximately the as Cuts benefit as

the some to turn comments. So I'll that remarks, additional and over call for concludes Sam my

Samuel N. Hazen

Good for volume compared the quarter right. quarter more the as growth I'm morning, year. third volume with quarters going on everyone. general, to growth. performance to of In provide prior All in quarter the the was last our our two consistent detail

declined. X continued service same lines. XX on both hospital-based the X.X%. domestic comments XX%, volumes declined various down adjusted while we in continued the strong surgeries. showed down growth. and Once Bill we of room, My care centers. of generally and Urgent divisions XX emergency And and X.X% vascular of focus growth Freestanding neonatal outpatient to surgery X%. in freestanding divisions while the in of EMS Admissions to X.X% They respectively, prior electrophysiology surgeries visits grew total combined, in growth lower both acuity service facility, basis. in-patient Trauma Births quarter across were a up company down admissions divisions emergency of are were emergency up as mostly XX% driven in Behavioral in across orthopedic XX admissions X.X%. be surgeries. and same-facility X.X%. were same has lines. had visits services. X.X% reflecting Surgical however, were acuity volumes room broad-based emergency admissions. volumes, up were grew by XX in surgery the In-patient strong had XX a grew operations. by again, growth admissions ambulatory higher in Hospital-based visits visits. consecutive cardiovascular room demonstrate X.X%, growth and company's our Outpatient XX Cardiology now surgeries growth admissions X.X%. had the visits centers consistent consolidated admissions basis on seeing growth grew X.X%. and year. our growth X.X% were inpatient visits room indicated, health Rehab had on up outpatient facilities the were Additionally, divisions quarters. visits in our higher for Surgical the will number grew divisions emergency were X.X%. HCA were up reflecting and XX admissions XX by in of grown overall our procedure grew rooms. XX.X% X.X%. the with acuity through admissions

multiple the I want team career. I acknowledge growth Milton Board at of view company's company, to for service senior current leadership to the shared demonstrates and HCA our the being him about few upon near-term the of my and tremendous the result of board best a of end and thank state believe this a Also I a take great Directors, Before factors. I and future. retirement that colleague. had almost consistent year. pattern his is for finish the on him On With wish a to thoughts we share comments, XX time the his has this Milton with want my of behalf I with years the company's outstanding of

years, demand macro environment next us advantage over creates trending growth for trends fragmented, competitive and we few which we our trends favorably, stable solid into at First, our the markets given good positive, and an remain the diversification. and them mostly are and believe have scale is pricing remains visibility

yielding share Second, is agenda market these growth underneath again gains. the trends once solid macro company's

and our which in nursing result competitive more our improvements overall portfolio as outcomes, performance a quality our to third, strategic Our position capital relentlessly is will patients, appropriate employees, upcoming facilities support and adding in our that is and provide Typically, we of year felt is with year. three have a improvements along on create our in spending inpatient these conveniently. business any physicians results fortunate for But value deep HCA and it surgical of serve important capacity our management markets strong, glimpse into execution the to factors I a and this And and outpatient to in team the with delivering upcoming not shareholders. indication that patients engaged I is transition focused to continue our experienced at diversified give fully leadership, into believe do XXXX. and point. the

XXXX we our predict perform, with business the will general environment And can appears in in markets. (XX:XX-XX:XX). certainty respect how with our across specifically positive While never

planning Our for is finished. not XXXX process

full you we growth within As look details January rate growth year. EBITDA XXXX usual, we early year provide adjusted again we year's and more however range somewhere a volume of in formally an An will the guidance this solid when growth reasonable for expect that indicates at rate. currently issue expected

enhance let, care the with forward questions. as look achieve to call which our mission that to employees and to CEO. give we have to it we always I ourselves find our Vic with years next do turn the the for truly for to performance. a be is over HCA, fundamentally and they working been an As HCA challenge honor company to deserve. great opportunities at is strive patients physicians me we and I to With XX will HCA our is

Victor L. Campbell

right. Sam, you, open one I I the will All queue each because And think that you for queue. limit to questions your do the you several With April, and Thank to questions. encourage in have if everyone. of we

Operator

Thank Please you. Lake Research. We'll take question go our ahead. from Wolfe from Justin first

Justin Lake

Good Thanks. morning.

first just me for know been viewpoint. very let on you good run, First, it. I And well-deserved. thank a that It's appreciates XXXX providing Sam, role, goodbye Milton. much to say and everyone new congratulations the

my that's, to around is going So that. be question

terms growth said of range of reported XXXX. X%. bad and you of had in guys looks the XXXX parts Sam, should number Specifically, lot be good about obviously, like XXXX, a but guys, in the for moving

that we just there to of that's confirm in kind – for that's what I want EBITDA? So your focus year-over-year the on number expected should growth

William B. Rutherford

Yeah, Justin this Bill. is

Our our as you're guidance, reported year-over-year suggest a midpoint of right growth. just would under X%

Justin Lake

– range, no parts Okay. year range, you're for what a be And of X%? that's could Is that other of that there's your midpoint kind we about expect of should a (XX:XX) – moving kind implying? next

William B. Rutherford

give to I don't we don't obviously – on there. I Well, to give want percentages specific want yeah, percentage,

at look we capital together, growth, As we rate. look the of on look those the should at and look at come be growth We core around factors, trends of of a turn continue believe range at all year's the we that the the we reasonable to acquisitions online. this trend – within

Justin Lake

a I the with could – rate in if implied seems to have QX, And your the core Okay. for guidance range. X.X% just growth follow-up

there's if the next of or a bit moving and moving hurricanes weakness given parts So other QX seems difference little parts, between are in maybe there that any any a down hurricane be South for year. of I obviously, like should thinking it about kind X% I'm X.X% there, there's curious

William B. Rutherford

Yeah.

guidance year's what quarter you're couple growth at for So let call points this of then the out range a our expected when fourth is. me and looking

of quarter a the for fourth prior over remind an north the everybody, We year growth quarter. quarter XXXX just of X% strong little was that us. in posted First, extremely

when growth, exceed at that somewhat the we've guidance. sequential would We've typically Second, what our QX look and we our QX into see. the to estimate seasonality we similar, be studied factored

finally, at factor Hurricane regarding QX our our to Florida a into on the of in guidance. have see we for at the when estimate offset professional at we Michael mention, quarter reasonable impact of million we've the midpoint midpoint. uncertainty our some impact as look that had updated increased Panhandle We approximately by And really you as Third, for well. accounting I guidance Michael the into the operations. It's $XX do basically liability tried pickup this quarter some as the you quarter

that into went overall So balance that's our year. the of for really the guidance the factors

Justin Lake

thanks All all questions. the for right,

R. Milton Johnson

right, thank All Justin. you,

Justin Lake

Yes.

Victor L. Campbell

not going away. And, Milton's really

R. Milton Johnson

I am.

William B. Rutherford

not going well. was on as say the Mission. I clarified include to does that XXXX included to in not range stated, guidance to as just Sam make such be that That just is clear one thing too, acquisitions it

R. Milton Johnson

again. Thanks

Operator

we'll with our Morgan next from take And Capital ahead. RBC Please Frank go question Markets.

Frank George Morgan

on be to best I'm capital that deployment on Good affect to how I morning, that guess, you fund would to topic and wishes. any thoughts there that the with And deployment then plays year? might around transaction? out and expect acquisition follow-up capital question. just cadence of curious, congratulations, anything volume different Milton, of sort is the the your we and over just that should specifically Health regard Thanks. growth next Mission of

R. Milton Johnson

I'll with visibility that event, and Mission that process date. the latter. Frank the a We're as market be start still a evaluate acquisition. in of public Health closer Yes. we with close would have get we'll just but Likely the

impact, we'll when process that trajectory give, year of help The and when we and further obviously will Regarding the guidance with XXXX year planning specifics. company. factor give a will the talk be about that complete next growth capital capital full our we contribute

Samuel N. Hazen

we I pipeline. billion mean billion Frank. in about Sam, our have is this of $X $X.X to capital Yes,

our But have a change and at or materially it's volume. to going online as into don't we volume our up in this comes points than go think different will it the finish impacts had I we year. if trends so different year year, XXXX. in you will will We It come have in more online on little expectations next XXXX bit

mean in four in now three call, demand We my straight improving I we've quarters. for seen seeing or that our comments and are markets I roughly our as in rather, mentioned

encouraged are is to by starting I which gains we again And we're doing around So in that. see growth agenda. share as market what encouraging our marketplaces then the mention, are with we

R. Milton Johnson

right, All thank you Frank.

Operator

with our from And Wells we'll Securities. Costa Fargo next ahead. Peter go Please take question

Peter Heinz Costa

Thanks of about guys. EBITDA into question HCA growth talked You your know you X%-ish entering is for in new next on transition growth? to regarding the management. And year is talked a I the in congratulations as your being both My and the, significant phase guidance hospital and your X% next see year, starting but or markets long-term to outside that we then Ashville. looking above acquisitions be that's of some Savannah of start at acquisitions you're X% to systems, whether about, it

in we phase are new markets? a guys approaching of of growth So you for terms new

Samuel N. Hazen

This Sam. is

in Ashville to I sense believe those for offered think Both be the provider they and systems own met strategy. up Savannah criteria. that market-makers company we their uniquely can on execute our that what right are opportunities fundamentally of the system the

existing our would to is we extent go would new new to you remain see use opportunities system a going that or wherewithal if has of model. that that. we continued we will, interest but Obviously, primarily the distance would very around I interested still hope for that acquisition not those we're selective inside the presents market our to fits So be we markets. in criteria to portfolio, whether an determine that our the see a

we We opportunistic forecast they Now when will when obviously they those systems that, really come situations around continue can't those be but up. present to themselves. come up

R. Milton Johnson

Pete, thank you.

Peter Heinz Costa

now show up to over opposed Is to that, the some them there decade? last as that's causing change

Samuel N. Hazen

board a situation, Savannah and so totally as financial manage, the needed more go a decision results in thinking was least capital, down management system, their very the and physicians, path at story that needed desperate Mission, us. and to their made different. viewed are great Savannah in forth. great need so scale They a for significant Mission well Well with conversely is forth. just successful professional and very around being

very of Ashville Obviously, depends which rural market, one Savannah people rural Carolina and the market the size potential believe healthcare when consider to on about is market markets is has long-term incredible North in So combined. that million the the just it circumstances. you similar the Western we

dependent of take. circumstances and strategic of So those kind really individual are each situations that the analysis the the board's upon

there's goes. there's anything see that how know, to I to suggest be just we'll have don't So would and if going materially different more, wait that that's but today

take standpoint. is think are to healthcare I Thank the well as you. as very And on productive to company sheet company. both these time systems capacity be standpoint we for going a more think an poised from the balance organizational over

Peter Heinz Costa

you. Thank

R. Milton Johnson

Thank Pete. you,

Operator

We'll take our question from from Tanquilut go ahead. next Brian Please Jefferies.

Brian Gil Tanquilut

Hi. Good you. of just to guys. questions quick morning. congrats Bill, you both And a for couple

what As for notes the call to And to also that ticked quarter anything and one? you I just thinking Mission. the think sequentially, on DNA question of about grade? year-over-year there? for then up accrual Are funding it back unsecured And your out the are on thoughts on using investment Thanks.

William B. Rutherford

Yeah. Thanks.

at. acquisitions what we'll pretty we that factor line early the call, conditions of are, as store new look and that too and much and are we'll with well on evaluate there. at metrics, Relative On the to really market to anticipated the fueling our depreciation specific that financing the as just same is what that time, growth Mission in

of demonstrate to trends. that I In great consistent recognized a but goal strong for as investment we time we'll cash those flow performance, haven't continue we financial stated specific as pursuit our grade, that balance be terms sheet, hopefully of over think

Brian Gil Tanquilut

All right. you. Thank

R. Milton Johnson

Thanks, Brian.

William B. Rutherford

Yeah.

Operator

Evercore ahead. Newshel question from our Please go ISI. And, Michael we'll take from next

Michael Newshel

finalized the Since Thanks. the rules for last IPPS XXXX. Medicare fiscal call

was incremental than Medicare recent reimbursement guidance So, that there be how whether and calendar for you factored an could better you this the think fourth you will quantify trend the much for quarter? into just year for

R. Milton Johnson

to take going you are Bill, that?

William B. Rutherford

question. the for Thanks that. cover I'll Yeah,

Medicare X.X% favorable a to between X.X% range to now are in assess So we X% as update update approximately we getting we compared will That past. it update. in recent is received our growth our

for X.X% the incremental an have to guidance range on us be accommodated within context will perhaps Medicare overall this We and look as our the towards factor that's a well. believe So of X.X% XXXX we update. for we as

Michael Newshel

you. Thank right. All

William B. Rutherford

Thank you.

R. Milton Johnson

Michael. Thanks,

Operator

Thanks. you LLC like A.J. congratulations that's envelope, improvement this Please looks our that. Crédit and of Sam talking I supplies, in the spend few times Chairman the cost could named looking, expense years, any from for almost quarters quarter take volumes, and next remarks. the five is Wish if Credit from lot on opportunities (USA) individual Milton. A.J. were on - Rice just three the the a line there whether of so pricing. performance, prepared stock side? was the in place the Hi, go so of a We'll a was I and about everybody. quite best. I up Suisse. a where headwind Rice Securities back guys the question where know the Congratulations since a other, wonder be line. margin my that would the themselves driven run to has ahead. question of in been top you Suisse you're minute on I strong facing seeing by any is or there what's last you little guess in But strong labor it's improvement you're expenses, happening area

Samuel N. Hazen

A.J., Sam. this is

company past the very pleased with of performance We year or over the operationally the are so.

performance. equation up, Our dramatic on and human our had especially on nursing side a teams resources the stepped have of impact the

resources been Our is labor human our result nursing on as nursing contract We've of increase hiring our down year-over-year and a basis significantly. agenda able a to agenda.

front, unusual So headwinds into particular XXXX. in the as any time the calendar point labor at we turn this anticipating on not we're

done because get and growth employees for what same operating our trying yield very continue of company. to elements forward. core going dividends will the employer great the to we with we're structure fixed the the a time and we cost important volume being that grow on a some think employer that's productive simply leverage at to the we We our we that execute it's Obviously, of as get given from move

two expenses. say other the the On would the are particular item not unusual categories, We're trends at generally either other I the that consistent. anything in operating time this line on point supply or seeing

particular We physician been manage able to quarter. in costs have effectively our this

revenue the our were physician as years. think with of costs I consistent a percent previous

So seen shift as dramatic haven't any we well. there

so or cost next planning not of we'll the into XXXX we turn trends. we're have any the days all of but as material our get the So through any in again, details swing over anticipating to XX

R. Milton Johnson

Securities A.J. much. All right. very Okay. Thank (USA) you A.J., Credit you. Rice LLC - thank Suisse

Operator

on Ralph Citi. Giacobbe ahead. question go from And, to move from we'll our next Please

Ralph Giacobbe

morning. Good Thanks.

pretty the distinction make then, quickly if of I I you called managed-care. you a there number would about we the only? hospital reason X%, admission of that million out million, there? you revenue want the EBITDA rate? Just within give to percentage suggest of if back. that had don't adjusted sort commentary of I to sort admission same comment know X%. maybe hefty baseline seems an easier then Is the Mission, go the hospital-only, that revenue managed-care X.X% close you provided, per And factors in number, like was take thought just aside from adjusted up are driving $XXX $XXX it my you facility kind us the comp. run some to on Thanks. a just on, question sort to to think It wanted on really had And willing of

William B. Rutherford

yeah. right, All

practice, the Let me start hospital-only you and care number physician the care, as other. We just gets at urgent managed look affected by consolidated that. with give

that and some this hospital-based have we result the So, of that We've into impact tried pleased well as driver to as potentially, there. year clarity we well of provide There that. good with pretty recovery factor our quarter-over-quarter We're clearly some a efforts. of results, at are remain terms just consistent condition some is as XXXX as well. intensity pricing you hurricane pleased outpatient We with there you look got surgeries as experienced. when an contracting XXXX number; on as and visibility managed-care had

we've same So, the what is with number. stat consistent again, pretty year-to-date pleased. seen about That overall running that on X.X%

pretty us been on stable it's that book. managed-care for trends So

R. Milton Johnson

on did this And not? the run want or Mission point comment you rate at time in

William B. Rutherford

Yeah.

I commentary think that. too us for give honestly, some to it's early on

that we guidance be. into guidance the get get will we transaction, visibility you of what we Mission our we'll and closer As give XXXX expect into on contribution

Ralph Giacobbe

Good.

Okay.

R. Milton Johnson

Thank Ralph. you,

Operator

Steven Valiquette go from from We'll Please move Barclays. next ahead. on our question to

Steven J. Valiquette

hospital that everyone. be topic same-store question. to kind was Good somewhat this Thanks. to the industry little question common overall it I taking the strength one mean, definitely theme morning I just seems similar to stick but the revenue just guess really of with a per admission, asked, Thanks bit, a My for within is in that quarter.

reacceleration how could the greater about much some got mix perhaps us You year. driven talked to in-patient nice to, lot remind that's or raw just as shift of well. a acceleration if this setting about been again benefits you by curious some the a pricing But in mix acuity has which really

that part in on Just get particular. color want to Thanks. last more

R. Milton Johnson

want that one? you Bill

William B. Rutherford

intensity that to several as main an function past admission demand north And as clearly our It's continue on business. and why three think over we've pretty just our are that's market you our of driving of that adjusted driving the number, driver that I capital case per a we of the seen of growing And there of number That's high seen the new growth that we sometimes four, revenue to that. Well, intensity program continue consistent as is well. and we've fueling strategic as mix is that's driver of our give those the efforts quarters. strategies focus well. in grow, in focus growing too, really all in-patient that development statistic higher

Samuel N. Hazen

prepared to mentioned color. is volumes in comments This just were trauma four-plus-percent. our then some again. I And Sam that up you my give

another marrow Just HCA in up transplants the were example, to you give quarter of bone XX%. inside

higher Cardiovascular per volumes, this. surgical a average, orthopedic Our factors case revenue also were to per Those carrying which revenue significantly. contributing a higher than are services carry case. up

platform can that deliver patients, our Again on higher is cost. as acuity the in margin on more fixed increase of side up. the which that look additional that's our agenda for care look produces the as business complex you of you the very when we would revenue think then to and on us that achieving fundamentally if powerful we're cost facilities, provide And as lift what a of at well the us, the at we because same I clinical fixed take governmental our the And for create to model side. those capabilities, thought clinical component of capabilities the pricing the company. the procedures allow more same both top decent put strategic it's more company commercial we drives revenue per patient, acute of

been our that's strategy. So

headroom execute in it. to on continue We We we it. have think

of in need provide the system. And markets then our we facilities that build gateway HCA complex up we've else opens out and company. if the what past years we value believe for As in patients more to That's our six continue somewhere you we we five care adding our each outpatient the think system. or to been fundamentally that's the will an can it provider when to about them to

R. Milton Johnson

Steve. All right, thanks,

Steven J. Valiquette

Thanks. helpful That's color. Okay.

Operator

Josh Raskin take next from please go ahead. question ahead. We'll from go Please Josh Research. Nephron our

R. Milton Johnson

Josh All you're there? right.

Let's move on.

Operator

Gupte our Partners. to move go on from question We'll ahead. Ana Please next Leerink from

Ana Gupte

into ED might weak any shifting about the are specific Sam. what's urgent the ED what mix Good managed you Can potentially volumes really of care even on this surgical data Thanks. visits you At Milt. morning. Congrats various little your Your to mix positive? point, generally, Hey. market And us a And think color on? you going freestanding? talked I what payer Congrats bit stop labor the improvement. time think last the at quarter. on or then Look show which state continues three side, turn level even do the to a markets. give you inflect question is a point seasonally, as by care market about for strong kind

R. Milton Johnson

pretty that good. was Ana,

You a snuck give you break. three questions just in. We'll

William B. Rutherford

across strong broad-based Austin in in seen think But had a first performance Texas year. lot had we continuation the our particular, quarter. And a DFW we the market. We strong performance of that's market. the in markets in our of of I performance what our half Again, had we've in

were the in markets Florida very north strong quarter. Our

have it's broad-based. the service across we from powerful we reflects is provide of of and so It's this not admission encouraging results It's HCA's business market standpoint And markets. that standpoint, a line not in our services. categories in many other but wonderful from of very strength only portfolio just portfolio different that given So, which again a activities.

we room, emergency modest. for seen It's the in for As the we're have benefited I the year. growth mean to Clearly relates earlier it flu we year the up about activity. from X% year.

in a to our rooms urgent respect slowdown We care development. have emergency with seen and certain supply center in somewhat of markets freestanding

Again the business. over revenue maybe room to we emergency in long-term, elements some we volume. soft see lower could are what start rebound are So the of emergency the possibly in our room

price. visit the revenue do we levels more Our higher levels in per of acuity than lower obviously are how producing much

seen it the material is of have softness. profitability Nonetheless, And as impact as would so think. one we not some

having own if could convenience payer to what strategic of possibly offerings urgent as will by our of our capability our do Some a of we're think being which very development we that center cannibalized comprehensive patients element well trying in points be you the care provider and for in as partners. price different is system for

we think the our little business. it's capabilities And are we provider the But cannibalizing that term, so marketplace. long own may that to be be think standpoint, a necessary out building bit responsive us strategic from to we to of for

Ana Gupte

you. thank helpful, Super

R. Milton Johnson

All right.

William B. Rutherford

Ana. you Thank

Operator

Research. Raskin We'll Josh go from from Please move question to ahead. Nephron our next

R. Milton Johnson

verbal off anyone in gotten right, Josh I think there? he cause have than else is cut more must this. All

Victor L. Campbell

Go to the next one.

R. Milton Johnson

right. All

question Next

Operator

America. Bank Fischbeck on ahead. of move to Kevin Please We'll from go

Kevin Mark Fischbeck

Great, thanks.

the that trying kind back was you to QX (XX:XX) said we commentary that out, million estimating million square to the did be guess last to boost. $XX of like still, to because $XX I guidance were go include think a quarter the not Just wanted or which it's going one guidance I DISH

adjustment the hurricane. thought then point at by So the would your to I have the liability much about but minus guidance would've that that raised least

than So why isn't like million guidance million $XX number? more the the $XXX raised

William B. Rutherford

Bill. is This Kevin. Yes,

more as when the number we we're a than, I your it to it's for don't midpoint. $XX look range our to level higher percentage million, growth think seeing think million on a $XX probably us that could $XX in I think the potentially equate to that million is you million that guidance little put $XX And I at the us. to of higher do it

think I accommodate So enough range Medicare the to update. that for is wide

Kevin Mark Fischbeck

Okay.

the So you of higher kind like that could the feel you of get to range? end

William B. Rutherford

through flow again, minuses feel that looking There's factors of the we in given today think, lot where obviously, revenue. of time. all any at. comfortable a a guidance and we're we I got is pluses with our Potentially, that But given lot

R. Milton Johnson

quarter the respect mean, how business we year. as to anticipating it's encouraging we the the change to our think dynamics, over I fourth from of any have is with think I sustained the quarter. some we're dynamic themselves not third volumes go – this

So we're optimistic will into and that quarter on we fourth company the the trends like into mention. of XXXX continue the

consistent of with lot moving are business the parts we've a in how is nonetheless, and, there been elements pretty So key our but operating.

William B. Rutherford

All right.

Kevin Mark Fischbeck

Okay.

performance So guys, guidance. only an these of line of core basically an outside changes you in the is in were The metrics? this some quarter for line

William B. Rutherford

think right, Kevin. I Yeah. that's

R. Milton Johnson

that's All other remaining? right. fair. think questions Any I

R. Milton Johnson

think I to dialing to Thanks And April, we're right. for in much. I April. thank and talking everyone All you good. forward (XX:XX). very you look Thank

Operator

presentation. concludes This for participation. you thank your We today's

You may now disconnect.

Victor L. Campbell	HCA Healthcare, Inc.
R. Milton Johnson	HCA Healthcare, Inc.
William B. Rutherford	HCA Healthcare, Inc.
Samuel N. Hazen	HCA Healthcare, Inc.
Justin Lake	Wolfe Research LLC
Frank George Morgan	RBC Capital Markets LLC
Peter Heinz Costa	Wells Fargo Securities LLC
Brian Gil Tanquilut	Jefferies LLC
Michael Newshel	Evercore Group LLC
A.J. Rice	Credit Suisse Securities (NYSE:USA) LLC
Ralph Giacobbe	Citigroup Global Markets, Inc.
Steven J. Valiquette	Barclays Capital, Inc.
Ana Gupte	Leerink Partners LLC
Kevin Mark Fischbeck	Bank of America Merrill Lynch

HCA Healthcare (HCA) 30 Oct 182018 Q3 Earnings call transcript