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    HCA Healthcare Inc (HCA)

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    Business Description

    HCA Healthcare, Inc. is a leading healthcare provider that operates hospitals and related healthcare entities across the United States and England . The company owns and manages a network of 188 hospitals, 125 freestanding surgery centers, and 23 freestanding endoscopy centers, offering a wide range of outpatient and ancillary services . HCA's facilities include general acute care hospitals, behavioral hospitals, and various outpatient facilities, providing comprehensive medical services such as surgery, emergency care, and diagnostics . The company is structured into three geographic groups: the American, Atlantic, and National Groups, each contributing to its diversified service line approach .

    1. American Group - Operates hospitals and healthcare facilities in various states, providing a broad spectrum of medical services and contributing significantly to the company's revenue.
    2. Atlantic Group - Manages healthcare facilities across different regions, offering extensive inpatient and outpatient services, including emergency and diagnostic care.
    3. National Group - Comprises hospitals and related entities, delivering a wide range of healthcare services and supporting the company's balanced revenue mix.
    4. General Acute Care Hospitals - Provides comprehensive medical and surgical services, including intensive care, cardiac care, and emergency services.
    5. Behavioral Hospitals - Offers specialized care for mental health and behavioral disorders.
    6. Outpatient Facilities - Includes ambulatory surgery centers, emergency care facilities, urgent care facilities, and diagnostic centers, enhancing community healthcare networks.

    Key Metrics

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    Executive Team

    NamePositionStart DateShort Bio
    Samuel N. HazenChief Executive OfficerJan 2019Samuel N. Hazen has served as the CEO of HCA Healthcare since January 2019. He was appointed as a director in September 2018. Prior to becoming CEO, he served as President and COO from November 2016 through December 2018. He has been with HCA for 40 years, holding various leadership roles .
    Erol R. AkdamarPresident of the American GroupJan 2023Erol R. Akdamar is the President of the American Group at HCA Healthcare, a position he has held since January 1, 2023. He previously served as President of the North Texas Division from October 2013 to December 2022 .
    Jennifer L. BerresSenior Vice President and Chief Human Resources OfficerNov 2019Jennifer L. Berres serves as the Senior Vice President and Chief Human Resources Officer at HCA. She was appointed to this position effective November 1, 2019. Ms. Berres joined HCA in 1993 and has held various roles, including Vice President of Human Resources from April 2013 through October 2019 .
    Phillip G. BillingtonSenior Vice President of Internal Audit ServicesJan 2019Phillip G. Billington is the Senior Vice President of Internal Audit Services at HCA. He was appointed to this position effective January 1, 2019. Prior to this role, he served as Vice President of Corporate Internal Audit from June 2005 to December 2018 .
    Jeff E. CohenSenior Vice President — Government RelationsOct 2019Jeff E. Cohen serves as Senior Vice President — Government Relations at HCA. He was appointed to this position effective October 1, 2019. Before joining HCA, Mr. Cohen spent 20 years with the Federation of American Hospitals, where he most recently held the position of Executive Vice President of Public Affairs .
    Michael S. Cuffe, M.D.Executive Vice President and Chief Clinical OfficerJan 2022Michael S. Cuffe, M.D. serves as the Executive Vice President and Chief Clinical Officer at HCA Healthcare, a position he has held since January 1, 2022. Prior to this role, he was the President of the Physician Services Group from October 2011 through December 2021 .
    Jon M. FosterExecutive Vice President and Chief Operating OfficerJan 2023Jon M. Foster is the Executive Vice President and Chief Operating Officer at HCA Healthcare, a position he has held since January 1, 2023. Prior to this role, he served as President of the American Group from January 2013 to December 2022 .
    Richard A. HammettPresident — Atlantic GroupJan 2023Richard A. Hammett was appointed as President — Atlantic Group effective January 1, 2023. He previously served as President of the North Florida Division from June 2020 to December 2022 .
    Michael A. MarksExecutive Vice President and Chief Financial OfficerMay 2024Michael A. Marks serves as the Executive Vice President and Chief Financial Officer at HCA Healthcare. He was appointed to this position effective May 1, 2024 . Prior to this role, he served as Senior Vice President of Finance from January 1, 2023 .
    Michael R. McAleveySenior Vice President and Chief Legal OfficerJan 2022Michael R. McAlevey serves as the Senior Vice President and Chief Legal Officer at HCA. He was appointed to this position in January 2022. Before joining HCA, Mr. McAlevey held senior legal and executive roles at General Electric .
    Timothy M. McManusPresident — National GroupJan 2023Timothy M. McManus serves as President — National Group at HCA Healthcare. He was appointed to this position effective January 1, 2023. Prior to this role, Mr. McManus served as President of the Capital Division from August 2016 to December 2022 .
    Sammie S. MosierSenior Vice President and Chief Nurse ExecutiveDec 2021Sammie S. Mosier serves as Senior Vice President and Chief Nurse Executive at HCA. She was appointed to this position effective December 1, 2021. Dr. Mosier joined HCA in 1996 as a medical-surgical bedside nurse and has held progressive leadership roles .
    Deborah M. ReinerSenior Vice President — Marketing and CommunicationsOct 2017Deborah M. Reiner serves as Senior Vice President — Marketing and Communications at HCA. She was appointed to this position in October 2017. Prior to that, she served as Vice President of Marketing and Customer Relationship Management from August 2017 to October 2017 .
    William B. RutherfordExecutive Vice President and Chief Financial OfficerJan 2014William B. Rutherford serves as the Executive Vice President and Chief Financial Officer at HCA Healthcare. He has held this position since January 2014. Prior to this role, Mr. Rutherford served as Chief Operating Officer of the Company’s Clinical and Physician Services Group .
    Joseph A. Sowell, IIISenior Vice President and Chief Development OfficerDec 2009Joseph A. Sowell, III serves as Senior Vice President and Chief Development Officer at HCA. He was appointed to this position in December 2009. Before joining HCA, Mr. Sowell was a partner at the law firm of Waller Lansden Dortch & Davis .
    Kathryn A. TorresSenior Vice President — Payer Contracting and AlignmentJul 2016Kathryn A. Torres serves as Senior Vice President — Payer Contracting and Alignment at HCA. She was appointed to this position in July 2016. Ms. Torres joined HCA in 1993 and has served in various capacities .
    Chad J. WassermanSenior Vice President and Chief Information OfficerFeb 2024Chad J. Wasserman serves as the Senior Vice President and Chief Information Officer at HCA Healthcare, effective February 1, 2024. Prior to this role, he was the Senior Vice President and Chief Operating Officer of the Information Technology Group since July 2023 .
    Kathleen M. WhalenSenior Vice President and Chief Ethics and Compliance OfficerJan 2019Kathleen M. Whalen serves as the Senior Vice President and Chief Ethics and Compliance Officer at HCA. She was appointed to this position effective January 1, 2019. Prior to that, she served as Vice President of Ethics and Compliance .
    Christopher F. WyattSenior Vice President and Controller; Principal Accounting OfficerApr 2016Christopher F. Wyatt was appointed as Senior Vice President and Controller at HCA in April 2016. He will succeed William B. Rutherford as the Principal Accounting Officer effective May 1, 2024 . Prior to his current role, Mr. Wyatt served as Vice President and Chief Financial Officer for IT&S .

    Questions to Ask Management

    1. Given the significant impact of recent hurricanes on HCA's operations, including the closure of HCA Florida Largo Hospital and ongoing issues at HCA Mission Hospital, how do you plan to mitigate the financial and operational risks associated with natural disasters, and has this influenced your long-term capital allocation strategy?

    2. With Medicaid adjusted admissions declining by 8.5% due to redeterminations, and considering Medicaid accounts for 17%-18% of your adjusted admissions, what specific strategies are you implementing to offset this volume decline and potential revenue impact?

    3. Despite your investments in AI and technology, which are still in early stages and not yet yielding material results, can you provide more details on the expected timeline for these initiatives to significantly enhance operational efficiency and how you plan to measure their success?

    4. As wage rates have stabilized in the 2.5% to 3.5% range but labor costs remain a challenge, what additional measures are you taking to optimize labor expenses and improve your wage and compensation expense ratio?

    5. In light of pressures on Medicare Advantage plan rates and margins, how are you addressing potential reimbursement challenges in your contracts with MA plans, and what changes do you anticipate in your contracting strategy to ensure sustainable revenue growth?

    Share Repurchase Program

    Program DetailsProgram 1Program 2
    Approval DateJanuary 2023 January 2024
    End Date/DurationCompleted Q1 2024 Ongoing as of 2024-09-30
    Total Additional Amount$3 billion $6 billion
    Remaining Authorization$0 $2.433 billion
    DetailsCompleted Active

    Debt Maturity Schedule

    YearAmount Due [Billions]Debt TypeInterest Rate [%]% of Total Debt
    20244.682Short-term debtN/A10.9% = (4.682 / 42.965) * 100
    20311.750Senior unsecured notes5.4504.1% = (1.750 / 42.965) * 100
    20342.550Senior unsecured notes5.450 - 5.6005.9% = (2.550 / 42.965) * 100
    20542.500Senior unsecured notes5.950 - 6.0005.8% = (2.500 / 42.965) * 100
    20640.700Senior unsecured notes6.1001.6% = (0.700 / 42.965) * 100
    Other30.783Remaining long-term debt4.3 - 6.371.7% = (30.783 / 42.965) * 100

    Auditor

    NameStart DateEnd DateReason for Change
    Ernst & Young LLP1994 PresentCurrent auditor

    Latest news

    Recent developments and announcements about HCA.

    Financial Reporting

      Earnings Call

      ·
      Jan 24, 2025, 5:44 PM

      HCA recently held an earnings call where they discussed their financial performance and strategic initiatives. Key points from the call include:

      • Revenue and Profit Performance: HCA reported a 6% revenue growth for the quarter, with a 5.4% increase in diluted earnings per share compared to the previous year. The company experienced strong demand across most service categories, with inpatient admissions growing by 3% and emergency room visits increasing by 2.4%.

      • Management’s Forward Guidance: For 2025, HCA expects revenues to range between $72.8 billion and $75.8 billion, with net income projected between $5.85 billion and $6.29 billion. Adjusted EBITDA is expected to be between $14.3 billion and $15.1 billion. The company anticipates a 3% to 4% growth in equivalent admissions.

      • Market Conditions and Strategic Initiatives: HCA is focusing on organic growth through capital spending and network development. They plan to continue expanding their outpatient facilities and have a new hospital acquisition expected to close in Manchester, New Hampshire. The company is also investing in technology, including AI, to improve operational efficiency and patient outcomes.

      • Analyst Questions and Management Responses: Analysts inquired about various topics, including the impact of hurricanes on operations, the company's M&A strategy, and labor market conditions. HCA addressed these by highlighting their recovery efforts post-hurricanes, ongoing network expansion, and improvements in labor retention and hiring.

      • Significant Comments: HCA emphasized their strong cash flow and balance sheet, which positions them well for future investments and shareholder value creation. They also discussed the impact of Medicaid supplemental payment programs and their strategy to manage professional fees and labor costs.

      Overall, HCA appears to be in a strong financial position with a clear strategy for growth and operational improvement in 2025.

      Earnings Report

      ·
      Jan 24, 2025, 12:50 PM

      HCA Healthcare has released its fourth quarter 2024 earnings results and provided guidance for 2025. Here are the key highlights:

      • Revenues for the fourth quarter of 2024 totaled $18.285 billion, an increase from $17.303 billion in the fourth quarter of 2023.
      • Net income attributable to HCA Healthcare was $1.438 billion, or $5.63 per diluted share, which includes an estimated $0.60 per diluted share unfavorable impact from Hurricanes Helene and Milton.
      • Adjusted EBITDA for the fourth quarter was $3.712 billion, compared to $3.618 billion in the same period of the previous year.
      • Same facility admissions increased by 3.0%, and same facility equivalent admissions increased by 3.1%.
      • Same facility emergency room visits increased by 2.4%, while same facility inpatient surgeries increased by 2.8%. However, same facility outpatient surgeries declined by 1.3%.

      For 2025, HCA Healthcare has provided the following guidance:

      • Revenues are expected to be in the range of $72.8 billion to $75.8 billion.
      • Net income attributable to HCA Healthcare is projected to be between $5.85 billion and $6.29 billion.
      • Adjusted EBITDA is forecasted to range from $14.3 billion to $15.1 billion.
      • Diluted earnings per share are expected to be between $24.05 and $25.85.

      These results and projections indicate a strong financial performance and positive outlook for HCA Healthcare, despite the challenges posed by recent hurricanes. The company continues to demonstrate growth in key operational metrics, which is a positive sign for its future performance.