Earnings call transcript Q4 2022

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Operator

Good morning and welcome to the HCA Healthcare Fourth Quarter 2022 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 Vice President of Investor Relations, Mr. Frank Morgan. Please go ahead, sir.

Frank Morgan

to today’s welcome and morning everyone call. on Good our Hazen; and me this Bill Sam is morning With CFO, CEO, Rutherford. few Sam prepared and a remarks some questions. and then Bill we will will provide take

today’s to turn I me that forward-looking management’s factors based the that over be are current risks, call results Before other differ Sam, expectations. factors in SEC any statements materially contain expressed may Numerous call remind might let everyone are today. on statements to should uncertainties that forward-looking various More actual release cause and press those these listed today’s our and and on information from in filings.

information call, a available attributable today’s EBITDA, may non-GAAP being release. A Inc. a HCA on this measures such is recorded and and supplemental replay Healthcare, the later in will measure. today. we reconciling of net adjusted which morning’s to is EBITDA income is This as adjusted be included financial call call On providing morning’s reference table

With that, turn to over call the Sam. I will now

Sam Hazen

morning with Alright. expected call. finished the We you solid joining growth. for as thank norms seasonality XXXX volume demand pre-pandemic and driving Good

quarter our produce to Additionally, These were helped our the progress solid guidance. with that fourth earnings labor see factors consistent in agenda. with we continue

by us outcome We well are encouraged operational position this this for and momentum should believe XXXX.

activity about XXXX was COVID a to challenges. down responding from winding first more previous tale with the years being halves, of intense and two the half X of the resulting

think impressive Healthcare the of we normalization, and work labor market. everything often general are unique, Once our and I each Healthcare our people, they their the this hard and want The forces demonstrated everyday people believe them in which delivered and special. HCA again, believe company. strong improving capability are other to face and serve for past patients, was I’ll people an year, proved again, second included in to but half stakeholders. thank they communities dynamic for more people an demand it. these for our about as more I them refer can-do I even I do and have

the Equivalent excess had mix X% growth other in revenue and payer metrics were up Admissions Non-COVID were the levels. volume quarter the remained quarter. favorable The fourth impressive X.X%, categories quarter. year-over-year. comparison X%. difficult at in in solid of the of admissions of with Same-facility in strong acuity room. a also. in company levels growth admissions increased grew factors quarter emergency XX% our volumes across the of Most These the X% growth in produced against

With respect were to numbers key XX% registered to our people the Turnover nurses improvements in down we agenda, we the quarters’ fourth quarter for as were compared the pleased previous four in metrics. average. with saw

it Employee than rate engagement above than average. is industry scores believe but is pre-pandemic the the turnover recovered still we engagement average. want, Our Again, to our is industry around we higher better levels.

opened of teams Our X% College this generate increased in for Hiring company. seventh XXXX. the recruiting to Galan year. School And we lastly, Nursing results continue our year-over-year

experienced we the hour labor labor stable utilization With respect contract declining. per quarter, of to costs during with labor cost

fight cancer deliver move we believe we plan We optimization further well Sarah executed combined Also two situations. have creating portfolio robust As the implemented have our entity. it and past, expect this joint partners; as strategic resources entities continued unable detailed ventures clinical situations to from with across community-based to We for a Institute, human providing trials patients more and even value the and quarter resources closed the research research on McKesson’s will progress in where Research services organizational country, disease. combination certain Cannon one we in we in this to better our remains we plan. XXXX. more top we make of It two into were was to capacity produce with Even quarter, with these we which the physicians experience saw the with cancer progress, a and priority. constraints,

with a We in new these achieved We on to and variety CoreTrust and connected both The offer better objectives is with strategic purchasing customers. a new to with the organization. ability second this future. deals can We our us platforms believe commercial our for solutions success our co-venture services closed Blackstone. of expand believe purchasing relationship partnership of broader

excited with both partner entities. to are We

provide joint We to better the the timelier announced transition last of execute. also also we expected, who dynamics, understand leadership HCA know strengthening corporate And are The our alignment this details for they including how market the will a believe executives, these responding to Bill we quarter functions in the our culture position while our will more of his organization year as are comments. the significant and appreciate implemented proven transition ventures. new they capital with redeploying strategy. executives to finally, from two that plan all proceeds and part in

strong As macro services believe beyond, otherwise and demand capitalize. We believe well-positioned environment. we the culturally, the ahead presents in into opportunity challenging healthcare push an for competitively to for we financially company XXXX and is HCA Healthcare

focused be following next the on agenda three Our year will areas.

in we place we and capacity the believe respond appropriate challenges. to to these. First, labor initiatives overcoming have Again,

these our continues line have we with high-quality growth pressures. with in equipment and our winning contend in inflationary our outpatient we deliver expansion. third, accelerating facilities, counter physicians to And leverage numerous capital agenda service to patients. This Again, while ensuring forces, to investments efforts clinical outcomes to place plays. Second, for continue

in agenda, XXXX optimizing better so patient development they the our transforming clinical programs; can in capabilities; a capital is are elements: is in expanding one pressuring of systems and digital networks long-term with primary models our is solutions; we offerings. top necessary second creating deliver first four our innovative the efforts for results but includes advancing in the to and workforce even we plan, are our ultimately in networks care expand is which investing our investments year, care they third making their our These are fourth, future. some platform also current believe On our

on like me into close X There I no to people strongly brighter Board, we did our right however up, people truly communities last healthcare two protect been no extraordinary and way. the through organization it teams been priorities was high-quality providing we priorities, nor challenge I of for of that our believe more pandemic experience Healthcare. other. what for we believe and these that our an continue and I and the the delivered we and our the everyone so all. shined strongly people. our to learned. X rest years serve. with went it proud proud we have The with past has The I Healthcare am HCA could our for a is am showed to protect Let caregivers and even our future years We company management at we it even because retreat this. of HCA the have

confidence Now agenda move into XXXX ability and years to our more stakeholders. value will to a purpose, deliver of and we the with for all renewed growth greater our ahead drive in with with

and guidance. Bill in and that, call more With to XXXX the the detail turn will quarter’s he our I will discuss results

Bill Rutherford

performance Okay. our year quarter ‘XX then on morning provide for Sam and the and discuss good you, everyone. will guidance. I some Thank the our additional comments

volume metrics. We with finished year the good

same increased prior quarter over the Our admissions fourth facility X.X% year.

year, For X.X%. admissions the were our full same-facility up

Excluding X.X% admissions the the COVID and grew for quarter same-facility up admissions, year. our in X.X% were

the year. our prior versus emergency Same-facility the year. For X.X% increased for X.X% year prior visits up in the full the the compared of were full to year, X.X% admissions COVID XX.X% and in admissions as accounted room for quarter

up but quarter. X.X% day basically compared Same-facility in by quarter less flat inpatient surgeries the compared the impacted third year. the to Our the Both same-facility outpatient prior surgeries in X quarter. the were year, business as to sequentially slightly were prior increased from were

was per compared X.X% by revenue per our revenue approximately in the COVID year activity. as prior equivalent from admission quarter admission same-facility Sequentially, X.X% the as non-COVID to influenced was the quarter. down third Our in drop increased this the equivalent

our sequentially under rates. mix third stable even from with quarter increased our just with inflation costs the mix and well. of management operating case as Our pleased team’s backdrop the remained We higher remain X% payer of

adjusted right at in XX% XX.X% year. margins were and for the EBITDA full the Our quarter consolidated

on pay programs. focus premium plans labor and to our continue labor our We supporting and contract managing teams, appropriately while

cost total of year. Our as labor revenue sequentially and a improved the to both percentage when prior compared

supply operating a expenses the our cost these percent XXXX. and prior subject have addition, consistent to been when the cost run of fairly some have In to year, very pressures we Other during but inflationary pleased consistent are has throughout as year compared results. trends revenue with remained

long-term a are key flow value-creation cash Our capital strategies. part growth our and and of allocation

billion $X.X was operations Our cash flow from XXXX. in

spending initial billion year, technology some higher of of paid million the was our due and expectations purchases. capital about information outstanding year. billion which dividends the slightly our and under $X just Our end stock $XXX $X.X year was to repurchased We than we real during estate for

the Xx debt Xx. of our range leverage leverage near ratio Our to was low end EBITDA adjusted to of stated

For $X.X billion full facilities year proceeds in and XXXX, we realized from approximately entities. healthcare sales of

for guidance speak So, our let to moment. a me XXXX

we our in as are year follows. this ‘XX noted morning, providing release As full guidance

range revenues $XX.X billion. $XX.X billion to We between expect and

$X.XXX Healthcare $X.XXX net and expect billion. to HCA We attributable to billion between range income

$XX.X to billion full billion. We between expect year range adjusted EBITDA and $XX.X

we expect share per year capital to the to billion approximate range full And between during $XX.XX expect spending We $XX.XX. earnings year. and diluted $X.X

So, on let additional guidance. me provide commentary our some

policy adjusted HRSA EBITDA reimbursement from $XXX cuts million COVID we several sequestration impacted recognized support guidance in for and by changes. uninsured COVID is governmental removal mainly approximately Our patients. and DRG of add-ons, XXXX, XXXX In

these improved program little for first of expect started payment was we of Also, our recognized Texas first directed and XXXX. related release, the that the of X, We on to XXXX. revenues last million September that discussed million quarter until $XX ‘XX as $XXX in the very programs X of program This XXXX. expenses not was months from quarter in revenue

$XX $XXX estimate addition, payment between In we million. and XXXB million to impact related reductions be of the the

$X.XXX admission historical to Interest items, facilities. our growth over Depreciation XXXX be X%. we facility impacted under our our estimated approximately have of rates around expectations guidance adjusted grow same will our Adjusted and both billion. draws is admissions had would expense be that EBITDA revenue to for the $X.X and we Within expense anticipated X% billion interest projected X% to of expect these middle our be be time. revolving the per grow and midpoint equivalent in guidance, about approximately our to by to X% is higher X% credit to equivalent

are expected billion. to diluted range from flow full $XXX Finally, between cash estimated for is and be about operations fully $X and to our the year billion shares million $X.X

to addition Directors morning, new release approximate under remaining our will in this previous had in a Board $X.X billion This billion noted share year. at our we Also program. $X the of the the of the authorization has repurchase program be authorized end

to In our in Board dividend $X.XX has addition, quarterly increase declared $X.XX share. per our an from

call that, I up to will and for open the With over we turn Frank it Q&A. will

Frank Morgan

who Bill. question. [Operator a ask instructions Instructions] give you, Thank you to would like to may Devin, now those

Operator

first Justin Our question Wolfe Instructions] from [Operator comes with Lake Research.

Justin Lake

morning. Good Thanks.

a here. detail all of appreciate I Just numbers have the couple questions you given.

assumed what XXXX, versus the expense us you all ‘XX first, downward So And thinking talk on labor ‘XX labor versus cost and then can estimates. and for Curious give labor? are you of delineate maybe on of a hopefully just on permanent guys. XXXX tailwind us about about as from the maybe exchange right, little redeterminations million expecting trend exchanges bit a on growth that what could has at our and have be couple been big according least payer guide mix Thanks you well? kind impacts things, to there redetermination,

Bill Rutherford

Yes.

Bill. is this Justin,

Let me start.

we ran think revenue, as it year. as a I as-reported percentage relates flat for So of the year it on of will where labor we basis, full an to with cost, this keep

cost we to of the the go through of balance as continue expect improvement the We and utilization year. labor in contract

think And mix, Relative so a good payer mostly us. remain for payer that’s think to will stable. mix output I for we now

a probably than the seeing exchanges health we in a in and bit states, what we enrollment what are insurance believe with encouraged the nation. with enrollment little are our as the we see higher are We

trends. we we think so mix that payer of context within with range, of but we And are our have contemplated the encouraged overall some the

Operator

next with Rice Suisse. Our comes from Credit question A.J.

A.J. Rice

see specifically million outlook Hi, a are forth. low at. got you little looking ‘XX spent for And of into bit ‘XX. have EBITDA is $XXX everybody. you the have top the so Thanks the maybe got much redeploy talk management, in your on much you got you about a decline are of permanent there in that the you would mind? those contract you a questions how about Can guidance How and from you Do are the versus the what what to the of in bit because factors? you some line range on Maybe open quite versus labor range labor, expense you have you get for support factors presumably commentary that as labor? end the or mainly run-rate swing saying high are to swing or baking to a

Sam Hazen

Sam. A.J., this is

a the either would and achievable got what we labor maybe side I low I think are we Those anticipate. in bit I the again, is top the begin a on it’s we pressures have sort that the if guidance, greater mean, a think big more midpoint. be variables, I side The number the of and maybe volume labor on you equation. X.X% our on will, that of big better of market. either side in of unreasonable. X.X%, happens mean, inflationary think some and not agenda fairly range little range side the range to I with than believe, if is of challenges midpoint tenuous The

be it it. of of maybe wide fully variables to to So appreciate seems very inside to some not the consider

respect We from summer, market late labor, we our we movement with yes, our investments fall, made the people. the we with resulting early adjusted competitive to have had deal in where mainly that that visibility overall year significant last our throughout With to some in wages in positioning. did

as absorbed of that made a will to, roughly bit what think that revenue reductions is have the net decisions, that already what expect even we labor around labor and at. can maintain those in be XXXX Bill cost and contract we the a little of it but just of we Some alluded percent is finished we our

that it. room to of metrics encouraging we’re And how dimensions gain to seeing our with is the agenda, more our throughout we key So we’re will we’re positive agenda thinking And that’s XXXX. about we again, hopeful that that, believe us. and across labor have continue

A.J. Rice

Okay, thanks.

Operator

question comes with Cowen. next Our from Taylor Gary

Gary Taylor

ones on the other Bill, if I double your on also just patient And I quick my down Two contract but you the was came line. line I morning. labor about basis still in didn’t XQ good for you number. the one digits. that’s comment catch that up OpEx mean Hi, me. then said know again, per a adjusted a day other disclosed is

can give about So modeling that any on help ‘XX? you thinking for us

Bill Rutherford

of labor for down quarter, contract were year. from the ran On in about XX% Gary. we Yes, we where the last fourth quarter

X.X% wages good It about So roughly our We number total benefits. area. improvement that in salary and represented before. that talked of given

trends ran where So where again, we first half especially year year the of fourth in to the we the and of in this last solid compared year. ran

subject When cost and and, inflationary higher operating we’re our the we’re some operating to general other utilities seeing the professional are in single-digit insurance growth expenses. you’re Our in expenses, fees economy. some areas, across right, think increases about addition, other of seeing that we

revenue, percentage relatively of Fortunately, the throughout see consistent year. as look across percent quarters and a revenue as operating our if you’ll a staying expenses pretty of other XXXX, for you the

the But area going other pressures, are around do labor to some guidance we and to that hopefully our to can growth think insurance in continue believe factor see Again, single-digit and is pressures, area pro utilities, fees going and some guidance. below inflationary continue forward As look higher XXXX, operating line where revenue that’s we supplies our we we we an into factored is. to forward. will in see our keep that cost that to

Operator

RBC question next comes Ben from Markets. with Capital Our Hendrix

Ben Hendrix

out initiatives And Thank commentary you. and and to Can on XQ. to to update total progress with that an to year? ease degree X% some of Thank in on management which the you. us mentioned on give then last HR this expect capacity you your more morning. your admissions support missing maybe those guidance With good then and X.X% Hi, case quarter help constraints constraints, where stands you you regard now?

Sam Hazen

as moments is patients And quarter my the that. to we for had in quarter But than bit in were still third improve I are through busier certain management into or to, come as throughput take in we continue in was X% us quarter. to as to some of were prepared patients. we using to where This We transfer in did, down these take mentioned in in our admissions the comments, Thank part our seeing start little actually the where our fourth the will we a you the facilities. to receive quarter, elevated as the were hopeful we third centers head And we’re push the to mean that proxy, count our We it. our approximately that Sam. increase I transfers unable of through opportunities alternative we so to little you case numbers had over were nonetheless, a we was take order of and XXXX. ahead this patients spoke total bit roughly, those facilities those unable care solutions find for into initiatives, that could.

Operator

Our with comes Securities. Whit Mayo next question SVB from

Whit Mayo

morning. Hey, back plan Sam, long-term go the wanted mentioned. I that you thanks. to to Good

maybe advancing be about plans may sort a or that, models. maybe of more into in how transformation anything different view care you elaborate Thanks. be talked with that the the on delivery Can playing helpful? would working of physician You MA strategy,

Sam Hazen

going understand these me on are our and Well, little thinking in bit a think we give – I backdrop investing in a to you this why categories. let long-term you with of help

and in of First serve. think portfolio themselves. are have communities of an we we incredible just and growing They foremost, we that

all demand respect. that unfortunately is population baby to a those we conditions, growth. produce the things markets. on going think averages in some growth boomers in And grow is better our invest Aging demand So front. think in portfolio our have we We chronic national little that than to opportunities

that got we’ve backdrop. a So as

I’ll opportunities, is to natural growth the in call demand. HCA walls outside it, of there So that in invest

second The inside that piece exists we is HCA. of opportunities believe

hospitals X,XXX opportunity use better what that capability call economy better outpatient have. have across support care. data, and XXX of and an to clinical better to system that big we our that opportunities We use is exist analytics facilities we And

our into exist And so with about transformation coupled that agenda, organization. inside technology really tapping agenda, of is our our the economy care opportunity

opportunities, grow continued of in then and sets efficiency, operational two to delivery from outcomes, growth machine by have the hospitals for care agenda. more analytics advanced transformation we benefit improvement better our think our we outside share markets, better in continue to and our infusing So care management market in with patient learning,

team better and we’re really our who transformation for a a agenda data outside weaving evaluating and, overall or great those, are performance supporting better company processes, engineers who people our clinical have processes our for run. other the is long encouraged analysts care and around led that we technologies, type that. our the So studying physician are by of company with again, industrial by team and that big looking into inside And

this a our out initiative our in systems, we’re excited our that around pilot clinical We major upgrades. in year clinical have about and the actually rolling that. are our obstetrics on On unit, alpha system we we’re possibilities

that start later into to we a cloud our and pilot push to This patient beta more a believe, information, be actionable able system turn can standardized insights that, that have into we will the information will this outcomes. We is year. help

And long-run it’s our geared capitalizing better patient again, HCA. about agenda. inside toward excited really opportunities on of the care, walls we’re but the So

Operator

Chickering comes Deutsche from question Pito next Bank. Our with

Pito Chickering

questions. for Thanks guys. morning, my taking Good

are outpatient easy why transfers. a via the lower surgical those I’m in-patient I about quarter, some so We’ve weak emissions med-tech on to trying report U.S. all bigger strong just and on in why understand comps, see increase seen X% fourth surgeries. you companies didn’t surgeries? growth. very Focusing surgeries talked the Were

XXXX? what just you trying surgeries surgeries So so much. to are And and grow the seeing Thanks in understand also delta? in-patient out-patient you

Bill Rutherford

is this So Bill. Peter,

there account we the X.X think than for call of out and surgical that that operating or I X surgery other points was that trends in-patient just observed less we surgical could volume, our being X day. in had And is thing our so less trend. X any day, I don’t – think or most the business other X out-patient pushed day, out or less

would longer growth. day. is flat And our been anticipate forward, would say that some volume volume fluctuate point we our other surgical Going historically that issue I which less the was there reflect X term than for around but that surgical again, somewhere the variables QX, to X was that nothing on trends, that, surgical on has

Operator

question comes Bank Fischbeck Kevin next America. with from of Our

Kevin Fischbeck

XXXX then else a is appreciate guys renegotiating breaking you in to Thanks. and maybe a a way out rate there? in you piece talk core trends how want the Great. COVID a to to little Is in pricing kind a the is how anything about I I core what today? then understand Thanks. that’s that the do there quarter. headwind thought commercial just of Obviously, the moving headwind, the growth pricing, XXXB think of about and you’re bit about guidance?

Bill Rutherford

Yes, that. let me start with Kevin,

to said I ‘XX, I items equivalent benefit That’s anticipating don’t of continue out remarks, prepared my we’ve per some as-reported in non-recurring an the we of expect called Obviously, as are next had around So those revenue basis. year. we admission revenue on X%. in

probably would X% historically, X% to X% which number, those, that’d growth. pushing we be for adjust closer you If would us to towards see be,

jump So some that trends, to of would our pricing what is are back we moves really over cohort. we what into of that having historical us just see loss pre-COVID

So that per equivalent on admission. was a a X% revenue guidance

talked about closer past. That’s If that to with is commercial both you contemplating Medicare be guidance. our adjust in we’ve which X%, long-term with I updates rate the pricing that, some think in our improved line it’d

Operator

comes Ann Our next with Mizuho Securities. Hynes from question

Ann Hynes

so, be. it the ER for I EBITDA? a that? secondly, some have that of on if XXXX. you to point on still turnover is morning. pressure while you physician the you’re your headwind you want where you Are nursing a just you especially is about services talk a merchant were to had could for good that noted not peers you And XXXX? know said And maybe Hi, you Can pre outsourcing much where where end how Thanks. seeing big QX, turnover, of where you ended pandemic, you I and improvement, know think

Sam Hazen

Excuse me.

were it’s for nursing Ann, XX% somewhere turnover. around XX% – We, or Sam. So me, pre XX% pandemic, excuse

rate That’s run right down upper XX%, a forth. mid-XXs. now average XX.X%. and think to on from We external in mid from is seen now industry We’re what XXs somewhere the benchmarks so the we’ve

encouraged in really progress teams are resources we’re right and made place area have And to in on we’ve tenuous of I’ll units for investments care the made. have to momentum by the again, and call our in is recruiting, investments market, trends. deliver we’re for we successful their in the carry training a that we sure them we’re retention employees progress The company. that making our is hand-to-hand pretty in just And to – them exists still, year, by much the be bit the leadership some encouraged that over our making in their the We patients and believe So combat the were made think it, role as great fronts. we necessary last the their but that all see we’ve those XXXX. the mentioned, initiatives into the on in X of to whatever improving months to starting have I

Bill Rutherford

than to more the it past. hospital-based in from And talked just I’ve physician Ann, brought on have we about emergency the room, emergency

around interest for room like. some and anesthesiologists increased subsidies our pressures seeing and are We the

of guidance. try I potentially single-digit bit we mentioned year-over-year in think higher counter operating number in consideration We But made in rolls have a some those expecting could for we’ve the we through, probably factored in our appropriate yes, those initiatives growth If it our question, as to a other little inside those. previous guidance. we our at pressure areas upward above categories, then into to those But revenue. that our expenses, pace of trends see are we of

Ann Hynes

Thanks. Alright.

Bill Rutherford

Yes.

Operator

Tanquilut from question with comes Brian Jefferies. next Our

Brian Tanquilut

option Sam, Envision to follow-up guys. week. that. the morning, guess, that and question to JV of I I answer you last the call Hey, good Ann’s exercise saw Bill’s and

what physicians that HCA well? sheet So operationalizing impact those Thanks. back just in-house? change about maybe thinking curious as you’re would And the you balance P&L that for how just on bring of thoughts and and as

Sam Hazen

of So we’ve that years, number and in had relationship to years ago, continues investment wonderful a had in a different Envision an company. us it we And made be facilities what an them mainly our the an physician forth. was co-venture hospitalist that. with aligned and across opportunity felt the we with over strong a more so and service, for see categories to and integrate to as medicine subspecialty that hospitals other ER our few within clinically in is opportunity we A further

think better platform we moving rooms and primarily our efficiency us And even improve of advance so and will And larger that use to we in for to are an innovative in it We then, a we our our partners within that today. better integration the where to our floors co-venture, it percentage emergency med to strategic our medical achieve maybe ways that some quality. think graduate clinical can acquire in we support give a hospitalists accomplish think little outreach improve offers on visibility necessarily to connections don’t up us how to surge ways, It believe. structure work. education opportunity in will we we have finally, we

the through that stages pushing transaction. are we final of So

I spring. close in think sometime it’s scheduled the to

able execute the more into effectively take to speak. being And anticipate get we fully so on to as will the it, we rest year then XXXX, categories. We assimilate these to of

Operator

question next Baxter from Fargo. Wells with comes Our Stephen

Stephen Baxter

Hi, good morning.

first, growth the admission XXXX? talk compared hear X.X% the bit to Any Just thinking admissions XXXX? more wanted where specifically on hoping XXXX guess, to non-COVID about how ask thinking a I’d you inpatient COVID you’re in admissions. about follow-up I a could on guidance, the implication about little being in your was are I you XXXX expectations figure you. love to Thank of goes in how

Bill Rutherford

Yes.

So that. I’ll start with

growth year, a we’re we now, they X%. our and admission prepared we my number, X% total go probably around said and about believe the and mentioned, to X% in We X.X% you’ve between that X% within to admission of represent the again, somewhere COVID of through gave right thinking admissions. X% somewhere that expect So admission decline that equivalent This I admissions. guidance remarks, our embedded as of And our inpatient year. continued that’s as will I year, continue between monitor we next total

believe strong markets, demand. to well positioned that in serve our demand that and We continue there we’re to is

grow outpatient equivalent us that thinking that’s X% then So to our to – in entails. inpatient the to get volume, mid-single-digit And X%, we’re revenue admissions helps probably continue hovering and that around that guidance level. X%

Operator

Our with Stephens. Scott comes from next question Fidel

Scott Fidel

if Hi, you you’re Interested in for for And thanks. trends XXXX? for Good just recap were non-COVID can building XXXX. and Thanks. what what then acuity case your the assumptions mix in us morning.

Bill Rutherford

Yes.

know as the I case flat, the mix, have fourth So non-COVID if quarter recall, mix don’t We’ve going case seen improved third necessarily. I mix about from right? on COVID X% the forward. Our I relatively sequentially the quarter to

equivalent flat Our roughly revenue year-over-year the admission for comparisons. per was

Scott Fidel

for on And outlook ‘XX. the then, Bill,

Bill Rutherford

For non-COVID?

Scott Fidel

Yes.

Bill Rutherford

of to I then of mentioned mix that items, the earlier, embedded would as equivalent in factors payer underneath per the... revenue well a us X%. pricing of just out acuity And about trends would our admission when combination you be revenue as factor of all that be pushes Yes, X%. I loss that closer think, and And as the

Sam Hazen

invest important we up in if are A it. farther understand I Bill you as in programs, can then think programs with to those comments. I program program, to to my of acuity get lot I an helps acute the everybody continue for are ladder, And are existing add, They will. prepared statistic. it’s more if mentioned acuity we so Strategically, more that speak, extensions program. of significant programs with move level and upper-mid our our mid-level level can programs. They we overall a into as And a or footing,

that So, our top fixed that on the are platform. part strategy, same of doing we of cost

cost So, acuity regardless the our hospitals of same the in have many instances. fixed

acuity, increase we we the operating if that. so And from get can leverage

And so take our initiative of here, take again, of our we the of important us it’s of we But to need most and in a that’s strategic strategically, these embedded that more patients So, that acute why than get organization for very be to a to care of to been services. that’s employees important The that’s instances. inside haven’t have. who all able more average real transfers initiative slightly care ours. tends across

Operator

from Our JPMorgan. Calvin Sternick next with comes question

Calvin Sternick

talk quarters, to Thanks. think Hi. service and few any going like are about in And that into trends strong for Good for sort looks as over quarters are you acuity the across trends mix, XXXX? of business give Can your It of the on in can over about another year? lines volume any expecting volumes. expectations? the have there underperformed couple of what last or payer last you relative full the ER quarter color categories those the morning. or you have there a seen terms you And you bit

Sam Hazen

This is Sam.

speak me service some lines our Let to of trends.

of we experienced, opposite. rooms resiliency solution alternatives be were that emergency because people than thought. the uses is the for are from is strong emergency previous rooms room healthcare other our needed. During what the just even room demand telemedicine very is seen and pandemic, thought. beliefs have emergency the our we is whenever might And there was a for people’s And being greater communities set we of The we felt the were. emergency there What new disrupted

have trends at when And I year. activity, over our very the really the them been course in COVID solid So, you it’s especially the impressive think. the of without emergency look room

in have orthopedics. volume We good growth our seen

instances, In we instances, up that quarter large X%. behind orthopedic over from pandemic, And absorbed, Our us. of moving believe most with in the was outpatient. of X majority we during total the the fully years joint is last shift inpatient to business the business most for we the believe, the many

pressure we so business a like of that have don’t had we But nonetheless, years. over of care the And that past the site as point face grown we shift. in have X have the

across We our our our we and significant development are emergency have very very communities, robust for a rooms, investing opportunity that. for us pipeline platform, especially a in freestanding emergency there room

urgent Our continues platform to center grow. care

We centers. are urgent up to XXX care

in XXX XXXX. probably push will We through

Our to continues ambulatory grow. surgery platform center

past, have our that in center de again, networks are in we encouraged inside of how the productive had a platform fits ambulatory Here, very development more have into we our by and way. than we novo surgery

we ambulatory with be service we in our we our to see in demand continue And deal to will growing network, we market. So, acuity lines. our excited investments and about our pretty our are well really believe, that – investments higher positioned programs the in the

Operator

Our comes Lance Wilkes from next question with Bernstein.

Lance Wilkes

coming hirings, also, you of maybe Yes. said Can about, what to talk bit. retention What a little nurses Thanks. Could might ‘XX nurses rates there? are ‘XX little long-term the are if bit then pressuring drivers there. sort a to was just how you compared of new about are talk talk understand a there, and a permanent was And growth the seeing of bit little about are you about plan the could that? pressuring the you just from? access getting little they bit you ‘XX little investment with where bit talk look spend a Can some and you better

Sam Hazen

last Why don’t you take, Bill, question? the

Bill Rutherford

Yes. is Bill. This

investments about investments, Lance, we transformation. that the call performance incremental expansion somewhere our around ran an us. investment will compared ‘XX in the think part also $XXX the are continue is didn’t drive it’s I we long-term probably in a out, investment what think, we clinical but in to to million that of we On some the value nursing technology for of and would investments, with ‘XX. forward, making when the schools of going And say, of you

Sam Hazen

our new of up in a of hires. a was north number little X%, just XXXX So, hiring huge

new that’s that’s still grads. pipeline coming in of our the There total coming that so is just a is new And as from decent from, number graduate point. starting communities. a Where nurses

that beyond are pipeline. have We Galen partnerships important with to academic that colleges different

some we We we have a we back travelers decide to for time okay, of want that, come the also and our traveled of enough, period back, organization. into to are traveled, who employees some recover seeing able been

again, year, the be our So, benefits recover adjustments and wage our components us. carry and for starting see focused XXXX of with they on other should trying education if all in are to clinical our be I with we them. recruitment think think, to more And and continue we investments we we making are the positive trends to our agenda, through function favorable that and into labor in

Lance Wilkes

Thanks.

Operator

comes Our Citigroup. with Jason from Cassorla next question

Jason Cassorla

wanted Great. priorities. ask to Thanks for more bit your taking the a I capital on just question.

wondering billion It’s footprint seeing authorization entering recently have are hospitals. your ownership just this and billion, $X of viewing in You potentially have you your divested how just you markets remaining. And are just you in to some opportunities or current in repurchases, But backdrop share increased the if M&A markets? the billion light by your $X.X you then have into year. on rough new increase $X

the thinking about how in your are repurchases Thanks. you context capital larger share Just curious priorities? deployment of

Bill Rutherford

take that. This is Yes, let me Bill.

latter the me take first. Let one

you I capital spend share allocation. overall repurchases, our part think balanced of important an

did mentioned, you As we in $X billion ‘XX.

authorization We to close $X.X will billion. have

capital would part has to on overall forward sometime this kind been a bit our present, I the afterwards. we market we plan majority of balanced of repurchase will roll of think it just program going adjust in allocation little but conditions again, year completing with calendar a And of of forward. as continue share

Sam Hazen

available, some will active those And and For our come urgent very we whether emergency to care, outpatient with it’s room, continue physician develop. market ASC, we freestanding some acquisitions, been network to those fairly forth. acquisitions are so clinics in they again pursue M&A, they when and complementary, some synergistic the have as

many acquisitions. had too We opportunities hospital not on have

of LOI clinical services system there with Worth. respect on Dallas-Fort in and that Dallas-Fort recently Worth think we Although, the our a market forth announced with is so to an just was synergistic hospital outside

pipeline So, the is to do We have we as for will because as would a robust continue end environment hospitals market Greenfield we hoped. have acquisition look those. not of maybe

those number a the Greenfield in and are projects, to So, consider works. we that need we do of have

to San currently for And land, or right when to for time XX, under one Antonio. parcels the have make hospital have want seven say investments. that future designed I are eight We in us those of we construction development is maybe

Operator

Valiquette Our question Steven comes with next Barclays. from

Steven Valiquette

morning Thanks. Good everybody.

whether exiting cases early surgical the I visibility various Thanks. or bit just the just not do curious a curious follow-up of out fourth But you more. any key little the quarter for part a get, for and both questions that So, at ‘XX might ‘XX. ‘XX into any this of of notable on topic most the any falling see least surgical related was volumes, the year just early be ‘XX guess at the that reasons, to demand just on volumes XQ for to I full addressed on you stage? pent-up

Sam Hazen

we pent-up were – who there it. patient sidelines, anecdotal It’s get physicians we quarter hard fourth okay, surgical demand. don’t in our indicate whether on point at don’t might for their information and that’s is demand mean clinic profiles in they us elective judge I the than time that, XXXX. not the to some really the see were if in know a better I precursor any or from for

higher metric XXXX. of I clinic I level that roles be in think to at are a parts and believe roles, a positive But it’s see. anecdote to and going a to previous just we positive appear have their wait than patient they were

Steven Valiquette

Thanks. great. Okay,

Operator

Perse question with comes Goldman next from Jamie Sachs. Our

Jamie Perse

Good you. morning. Thank

what locked bit take dynamics, can recently little next back contracts contracts like to And a those secondly, higher of Xst? of on on follow-up what us bump of can negotiated you reimbursement first, the years? give place rate commercial the us initial percent been you have us in rate the couple a January you. will at Just the relative for then the remind Thank escalators in are color looks that that

Sam Hazen

expectations, I contracts line contracted. the inflators. of ‘XX in closed for digit of not of tell mid-single quarters all were if in you around we the have, three We Bill, to XX% say, the maybe of XXXX I was contracts, with want our which our will last that most contracts

So, their way work of those and to on into into the the have XXXX. ‘XX portfolio contracts

those by of negotiations. encouraged are the outcomes we So,

community there for costs the think general I up. is up, that payer is recognition the in input providers a or

in those to to is respond we And so reasonably to there these are recognize received they have to And that timely. contracts close pressures, that. be a we that’s app. well, our inflationary And trying I and been think appropriate been sensitivity able given

first the will negotiated all part or over that of us get XXXX and have still we this of will of ‘XX. through year, carry so ‘XX XX% into and So,

tail of We will on we closed carry XX% contracted just some that XXXX. effect contract negotiations are the about of Again, the have achieved ‘XX. into

Operator

with Research. Raskin from Nephron comes question next Our Joshua

Joshua Raskin

taking tempering the CapEx long CapEx still it’s guidance a time, first investment? questions. for budgeting XXXX. but Thanks in and would in Hi. it would I is is that I anything if or not know you wondering long, counting know be that to time down be if January, could the changes only for strategy down slightly, I be the speak could was or any year-over-year, just there XXXX

Bill Rutherford

tempering at all. Yes. is anything Josh, I think don’t investment in the there

our is I think X.X% expectation.

mentioned initially in X.X%. expected I my comments, we As

that higher For we mentioned ‘XX, I some around estate IT. little because and came in year-end activity real had a it some some

be through about talked of whether capture freestanding growth that, opportunities campuses. it new in there It’s So, up we would marketplace. I good expectations that a quarter some as And wouldn’t development believe, to read expansion see actually we are. still compared deploy our X.X%. anything summary, whether have is EDs, the from of the fourth some to be where capital, would hospitals, But we very initial opportunities whether to down to our of

it’s So, think think of capital an and part I long-term overall I our again, important our focus on continued allocation growing. important of part an

Operator

Our with next UBS. question comes from Andrew Mok

Andrew Mok

more bit around Hi. assumptions steps take did unit for pressure a inflationary Thanks. color cost to what the you versus into are Good cost provide morning. I trends XXXX. What was increases the hoping contracts? could you – manage supply multiyear on

Sam Hazen

Well, thank you for the question.

pricing our have the inflationary with have we have months the past growth of talked XX ‘XX. trends portfolio, so was and below contracts, cost really our that on increases. and an XX% and of most to chain our supply especially growth. over cost our some And backdrop firm or for supply we of about actually supply of through seeing really Much because teams teams incredible done in contracts our the year, keep been months was positive under of the Our our XX to job revenue

in as our forward, basic our supply would cost around That good where continue is X% And to continued imply the team keep our flat this inflationary again, to expecting supply a ran is year percent full a revenue doing year, somewhere We where from of supply with backdrop we minus look as that we we of cost job. that are we a again, plus flat with positive. cost a As percent assumption keep results But ran bit. little that’s I is nice level, of think that. ‘XX. revenue pretty unit can our or per

and number identify a best initiatives have We utilization to is our that organization. of initiatives of use. benchmarking Part across our underway look teams at practices the

We also clinical product are selection, at teams. looking our with partnering

forward our a operations achieve into go number look supply So, chain underneath initiatives of those we that to results, we and helping continuing have we those are us ‘XX. as to

Operator

John Our final with Raymond question Ransom from comes James.

John Ransom

Yes. three is Hard minutes. and in my here with five it good believe question I to these questions. have be clever all question after the

let’s the it – if me, How as cost reduce your for us think say that would how does turnover, per for revenue to so into that for savings that hypothetically labor about? labor think from per or your affect factor unit? either – about, goes how XX So, algorithm does you XX, to we

Bill Rutherford

How it per unit? our revenue affects

John Ransom

affect percent of as margin? how a does either adjusted turnover? of Well. or say, admits XXX turnover about how as a that revenue, reduce No. would the salary labor salary salary I percent reducing mean you bps, If

Bill Rutherford

Well, our of in theory, labor. will contract flow through as reduction

we reinvest think is that’s would turnover I the will what on that will, one contractor And so And we been we and employee spend. level. this workforce at being the margin. to the reinvest as a say, that employed overall you labor an you I able And that an if do individual part have of look John, save if to from that, replace is margin, of our incorporated, back contract all to year labor into and able is

reducing It’s mean where the think and can finished our our result I there flat keeping that. do as And a of year. us I reinvesting us as premium and of of we to for are And employee relatively workforce we us. important So, employees we year-over-year. this we labor and for that is labor components back function allows cost revenue recognize those percent said, to think our into that’s good maintain continue into a a work lot a

John Ransom

lot. a Thanks

Bill Rutherford

Thanks John.

Operator

are call There no further now Frank this at back to I questions over Morgan. turn will the time. Mr.

Frank Morgan

great for might help to hope answer a us you you have. around call. today everyone this additional I weekend. We this thanks and afternoon, for have I Devin, on questions you Have joining can day. your thank am a great if

Operator

for That Thank concludes presentation. today’s today’s attending conference. you

You may now disconnect.

HCA Healthcare (HCA) 27 Jan 232022 Q4 Earnings call transcript