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Source: Nashville Business Journal
Author: Nikki Ross
Date: July 25, 2024
HCA Healthcare Inc.’s revenue so far this year is exceeding where the company was one year ago.
The health system operator announced its second-quarter earnings this week. CEO Sam Hazen said during Tuesday's earnings call that the second half of the year should be even better.
“The company's results for the second quarter were positive across the board and reflected strong demand for our services,” Hazen said.
HCA (NYSE: HCA) is Nashville’s largest publicly traded company by revenue, generating $64.9 billion in 2023, according to Business Journal research. The hospital system operates 186 hospitals and 2,400 ambulatory sites of care across 20 states and the United Kingdom.
Revenue for the second quarter hit nearly $17.5 billion, compared to almost $15.9 billion this time last year. Year-to-date, revenue stands at $34.8 billion, compared to nearly $31.5 billion this time last year.
As of June 30, HCA Healthcare had nearly $40.9 billion in debt, over $57.4 billion in assets and $831 million in cash or cash equivalents.
The company plans to spend roughly $5.1 billion to $5.3 billion on capital expenditures in 2024, not including acquisitions.
Here are three things brought up during the earnings call that Hazen responded to.
Investments
HCA is set to invest $5.2 billion this year, “which is significantly up over the last couple of years," Hazen said.
“We are investing heavily in who we are. We're investing in our network. We're investing in our people. We're investing in clinical technology for our physicians, and we're finding ways to use our capital to make our services better and produce better outcomes for our patients,” Hazen said.
The company is also looking at opportunities outside of its typical operations. Other areas the company is targeting for investments include leadership, capacity and technology.
“We put our care transformation and innovation team inside of our ER processes to help them think about different approaches,” Hazen said. “Our patient satisfaction has improved in our emergency room, and I want to say over eight out of 10 patients would highly recommend or recommend an HCA emergency room.”
Entering new markets
“Will we enter new markets? Hopefully, yes, but those opportunities haven't necessarily presented themselves,” Hazen said. “I don't know that we'll deviate from our model. Our model is more centered on making … our local system work better ... for the community, work better for our patients and work better for other stakeholders that are connected to it," Hazen said. "We obviously could do that, but we don't think that's the best answer for the company.”
Volume declines for outpatient surgeries
The reason for the decline in outpatient surgery numbers are because of changes in Medicaid and uninsured self-payers.
Outpatient surgeries declined 2.1% in the second quarter compared to the same period in 2023.
“There's a thesis inside of our company, it's not proven yet, that patients who migrated from Medicaid into the exchanges through the redetermination process may be in a different seasonality category with respect to when they access services,” Hazen said. “We'll have to see how that plays out as we move through the balance of the year.”
While that number is declining, Hazen said it’s important to look at the revenue growth and the service level growth the company has seen.
“The service level growth that we've seen in our outpatient surgery business has been solid and produced a pretty good financial outcome for the company,” Hazen said. “And if, in fact, our thesis is accurate, it should be better in the second half of the year than the first half of the year.”
Shares in HCA were trading Thursday afternoon at $354.24, just shy of its 52-week high of $356.30.