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Fortune Global 500

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Fortune 500

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The corporations on our annual list of the world's 500 largest companies combined to generate $41.7 trillion in revenue over the past year.

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The 300 companies on this year’s list brought in over $12.6 trillion in revenue for the latest 12 months, with the median revenue figure at $22 billion.

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The corporations on our annual list posted aggregate revenues of $41 trillion for the second year in a row.

Industries included in the sector are insurance and managed care, medical products and facilities, pharmacy services, and pharmaceutical companies.

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The Fortune 500, in its 70th year in 2024, ranks the biggest U.S. companies by revenue.

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The corporations on our annual list of the world’s largest companies delivered a record $41 trillion in aggregate revenues.

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The U.S.’s largest health care facility operator reported a decrease in profit and revenue growth in 2022 versus the year prior, partly due to the phasing out of government assistance that accompanied the pandemic. 
<ul> 
 	<li>HCA Healthcare, which operates in 20 states in the U.S., has in aggregate removed hospitals from its portfolio and added outpatient surgery centers since 2020, reflecting a broader shift to outpatient care among hospital conglomerates.</li> 
 	<li>The health care giant has struggled with staffing issues, like many in the industry, employing higher-cost temporary staffing during the pandemic’s onset. A survey conducted by union researchers found that HCA staffed its hospitals at 30% below the national average in 2020. Responding to the survey, HCA said that its staffing was “safe, appropriate," and “in line” with its industry.</li> 
 	<li>The company has repeatedly fought with the Federal Trade Commission over its acquisition of more hospitals, first in Utah in June 2022, and then in Louisiana in April 2023.</li> 
</ul>

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Aggregate sales hit $37.8 trillion last year—an increase of 19%, the highest annual growth rate in the list’s history.

This year’s Fortune 500 marks the 68th running of the list.

F500 2022-HCA Healthcare

Tennessee-based national health care facility operator HCA Healthcare retains its 2021 position after a year that saw profits rise to nearly $59 billion from $51.5 billion. The company was called into action multiple times throughout 2021 as COVID-19 waves swept the country and sent hospital visits ticking upward. HCA has faced criticism in some areas of the country from consumer advocates who contend that it has boosted profits at its hospitals during the pandemic by reducing staffing and services; HCA says that such changes haven’t affected the quality of care. In the first months of 2022, HCA has received 2.1% more same-facility admissions relative to 2021 and 14.6% more emergency room visits.

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Total revenue for the world’s biggest companies fell 4.8% to $31.7 trillion this year—the first decline in half a decade.

G500-2021-207-HCA Healthcare

<span data-sheets-value="{&quot;1&quot;:2,&quot;2&quot;:&quot;As with many other hospital companies, Nashville-based HCA Healthcare faced considerable financial pressure related to the pandemic, suspending its quarterly dividend last spring. Admissions to its hospitals dropped 4.7% for the year owing to fewer procedures and less emergency-room traffic. COVID-19 cases in 2020 made up about 8% of its hospitals’ overall admissions. But HCA finished the year strong: It brought in annual revenue of $51.5 billion, a hair above the previous year’s tally, as revenue per hospitalized patient increased 10.5%. Net income attributable to the company rose 7.1% to nearly $3.8 billion, compared with $3.5 billion in 2019.\n\n\n&quot;}" data-sheets-userformat="{&quot;2&quot;:12673,&quot;3&quot;:{&quot;1&quot;:0},&quot;10&quot;:2,&quot;11&quot;:4,&quot;15&quot;:&quot;Calibri&quot;,&quot;16&quot;:11}">As with many other hospital companies, Nashville, Tenn.-based HCA Healthcare faced considerable financial pressure related to the pandemic, suspending its quarterly dividend last spring. Admissions to its hospitals dropped 4.7% for the year owing to fewer procedures and less emergency-room traffic. COVID-19 cases in 2020 made up about 8% of its hospitals’ overall admissions. But HCA finished the year strong: It brought in annual revenue of $51.5 billion, a hair above the previous year’s tally, as revenue per hospitalized patient increased 10.5%. Net income attributable to the company rose 7.1% to nearly $3.8 billion, compared with $3.5 billion in 2019.

This year’s Fortune 500 marks the 67th running of the list.

F500-2021-62-HCA Healthcare

<span data-sheets-value="{&quot;1&quot;:2,&quot;2&quot;:&quot;As with many other hospital companies, Nashville-based HCA Healthcare faced considerable financial pressure related to the pandemic, suspending its quarterly dividend last spring. Admissions to its hospitals dropped 4.7% for the year owing to fewer procedures and less emergency-room traffic. COVID-19 cases in 2020 made up about 8% of its hospitals’ overall admissions. But HCA finished the year strong: It brought in annual revenue of $51.5 billion, a hair above the previous year’s tally, as revenue per hospitalized patient increased 10.5%. Net income attributable to the company rose 7.1% to nearly $3.8 billion, compared with $3.5 billion in 2019.\n\n\n&quot;}" data-sheets-userformat="{&quot;2&quot;:12673,&quot;3&quot;:{&quot;1&quot;:0},&quot;10&quot;:2,&quot;11&quot;:4,&quot;15&quot;:&quot;Calibri&quot;,&quot;16&quot;:11}">As with many other hospital companies, Nashville-based HCA Healthcare faced considerable financial pressure related to the pandemic, suspending its quarterly dividend last spring. Admissions to its hospitals dropped 4.7% for the year owing to fewer procedures and less emergency-room traffic. COVID-19 cases in 2020 made up about 8% of its hospitals’ overall admissions. But HCA finished the year strong: It brought in annual revenue of $51.5 billion, a hair above the previous year’s tally, as revenue per hospitalized patient increased 10.5%. Net income attributable to the company rose 7.1% to nearly $3.8 billion, compared with $3.5 billion in 2019.

For an astounding 13th straight year, Apple claims the top spot in Fortune’s annual ranking of corporate reputation, based on a survey of almost 3,800 executives, directors, and analysts.

This year's Fortune Global 500 generated $33.3 trillion in revenues and $2.1 trillion in profits.

G500-2020-219-HCA-Healthcare

HCA Healthcare, a Nashville-based hospital operator, continued its steady growth in 2019 with annual revenue of $51.3 billion, an increase of nearly $5 billion from the previous year, even as net income dipped 5%. HCA's facility admissions have increased over the past year, and it now operates 184 hospitals, up from 179 the year before. Its hospitals treated 35 million patients in 2019, a new record. And the company's goal of expanding clinical capacity has been boosted by multimillion-dollar capital investments. Like many hospital operators, HCA is facing considerable financial pressure related to the coronavirus pandemic; this spring, it suspended its quarterly dividend.

This year's Fortune 500 marks the 66th running of the list.

F500-2020-065-HCA-Healthcare

HCA Healthcare, a Nashville-based hospital operator, continued its steady growth in 2019 with annual revenue of $51.3 billion, an increase of nearly $5 billion from the previous year, even as net income dipped 5%. HCA's facility admissions have increased over the past year, and it now operates 184 hospitals, up from 179 the year prior. Its hospitals treated 35 million patients in 2019, a new record. And the company's goal of expanding clinical capacity has been boosted by multimillion-dollar capital investments. Like many hospital operators, HCA is facing considerable financial pressure related to the coronavirus pandemic; this spring, it suspended its quarterly dividend.

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Global business is back. After limping through a worldwide financial crisis and economic slowdown, the 500 largest companies ranked by revenues shattered all sorts of performance records in 2013: They racked up combined revenues of $31.1 trillion, up 2.5% from 2012, and profits soared 27% to nearly $2 trillion. China’s 95 companies (up from 89 last year) posted $5.8 trillion in revenues. The U.S. has four fewer companies on the list than last year but remains (for now) the country leader, with 128 corporations on the list—including No. 1 Wal-Mart Stores—reporting $8.6 trillion in revenues. 

Wal-Mart stayed on top as its sales crept closer to half-a-trillion dollars. Apple moved into the top five. And UnitedHealth Group continued its steady climb. 

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HCA Healthcare owns many of the largest chains of hospitals, clinics, surgery centers, medical labs, and freestanding emergency rooms in the U.S., in addition to operating locations in the U.K. The company was founded in 1968 as one of the first U.S. hospital conglomerates. Since then, along with its industry rivals, it has undergone tremendous growth, partly through acquisitions of smaller health care chains.

Q2 2026

Q1 2026

Q4 2025

Q3 2025

Q2 2025

Q1 2025

Q4 2024

HCA Healthcare (HCA): Company Profile, Stock Price, News, Rankings

legacy

HCA Healthcare

hca healthcare

you for standing by. My name is Jenny, and I will be your conference operator for today. At this time, I would like to welcome everyone to the HCA Healthcare 4th Quarter 2024 Earnings Call. All lines have been muted to prevent any background noise. After today's presentation, there will be an opportunity to ask I will now turn the call over to Frank Morgan, Vice President of Investor Relations.

Good morning and welcome to everyone on today's call. With me this morning is our CEO, Sam Hazen and CFO, Mike Marks. Sam and Mike will provide some prepared remarks and then we'll take questions. Before I turn the call over to Sam, let me remind everyone that should today's call contain any forward looking statements, they are based on management's current expectations. Numerous risks, uncertainties and other factors may cause actual results to differ materially from those that might be expressed today.

More information on forward looking statements and these factors are listed in today's press release and in our various SEC filings. On this morning's call, we may reference measures such as adjusted EBITDA, which is a non GAAP financial measure. A table providing supplemental information on adjusted EBITDA and reconciling net income attributable to HCA Healthcare, Inc. Is included in today's release. This morning's call is being recorded and a replay of the call will be available later today.

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

All right. Thank you, Frank, and good morning to everybody. The company finished the year with strong business fundamentals that were consistent with the previous quarters this year. Demand for Healthcare Services remained strong, operations were in good order and stable, and the company continued to see favorable investment opportunities. These fundamentals represent a good starting point as we enter 2025.

Our teams have done a fantastic job in remediating a number of facilities in North Carolina, Georgia and Florida that were impacted by the 2 major hurricanes we experienced a few months ago. All of these facilities, including Mission Hospital in Nashville, where the community's recovery efforts continued, and Largo Hospital in our West Florida division resumed normal operations in the quarter. As we end 2024, the first half of this decade has been another period of long term growth for the company. We have seen operational improvements across key performance indicators and we have delivered increased value for our shareholders. These accomplishments position us well for the future.

I'm grateful to our colleagues who made this happen. We believe the HCA way of combining our high quality local health networks with the capabilities of a national system consistently produces better patient outcomes, drives greater innovation and efficiency and yield stronger financial results. While gratified with these accomplishments, we will maintain our pursuit to improve outcomes further for our stakeholders. We believe the strength of our cash flow and balance sheet position us well for investing further in our networks to increase access, expand capacity and enhance clinical capabilities. They also allow significant investments in our people to improve training while also creating career growth in our company.

And finally, this financial strength creates opportunities to deliver value to our shareholders by effectively allocating capital to generate favorable returns. Diluted earnings per share as adjusted increased 5.4% in the 4th quarter as compared to the prior year. These results included the effects of the 2 major hurricanes. In the quarter, we estimate the financial impact from increased costs and lost revenue equated to approximately $0.60 per share. This was in line with the estimation we provided on our previous earnings call.

Revenue growth was approximately 6%. Demand, payer mix and acuity continued to be strong across most service categories and markets. On a same facilities basis, inpatient admissions and equivalent admissions grew 3%. Emergency room visits increased 2.4%. Inpatient surgeries were up 2.8%.

Outpatient surgery cases, while down 1.3%, again due to the strong payer mix and service mix, we had solid revenue growth in this service line. And lastly, rehab, obstetrics and cardiac procedure volumes continue to be strong. Operating costs were well managed by our teams and remained in line with our expectations. Before I close, you will see that our earnings guidance for 2025 aligns with the preliminary outlook we provided on our prior call. And with that, I'll turn the call to Mike for details.

Thank you, Sam, and good morning, everyone. I will provide additional comments on the quarter year and then discuss our 2025 guidance. Regarding the Q4, we are pleased with the results of the quarter, which demonstrates the excellence of our teams in responding to challenges and still producing solid results. As Sam noted, we estimate that the adverse hurricane impact in Q4 of 2024 was approximately $200,000,000 or $0.60 per diluted shares in line with our expectations. These estimates do not include any insurance recoveries the company may receive in the future.

Considering the hurricane impact, we had good top line growth. Sam reviewed the volume information for the quarter. Our volume in the quarter was adversely impacted by both the hurricane impact and a depressed respiratory season compared to the Q4 of 2023. Same facility net revenue per equivalent admissions increased 2.9% over prior year in line with our expectations. Consistent with our trends all year, payer mix remained strong in the Q4 of 2024 with same facility managed care admissions up 9.2% compared to the prior year quarter.

While our operations performed well in the quarter, adjusted EBITDA margin declined 60 basis points compared to the prior year quarter. This decline is primarily related to the impact of the hurricanes on our Largo Hospital in Tampa and the North Carolina division, which had a 100 basis point unfavorable impact on adjusted EBITDA margin in the quarter. Additional expenses related to these hurricanes, including repair costs for our Largo Hospital, drove the increase in other operating expenses as a percent of revenue and half of the supply increase. Adjusted EBITDA in the quarter grew 2.6% compared to the prior year quarter, which reflects the impact of the hurricanes. Diluted earnings per share as adjusted in the 4th quarter grew 5.4% over the prior year quarter, also reflecting the impact of the hurricanes.

Let me briefly highlight our full year results for 2024. We had strong top line growth of 8.7% with revenue per equivalent admission of 3.2% and equivalent admissions growing 4.5%. We posted a 10 basis point improvement in adjusted EBITDA margin for the year. Adjusted EBITDA increased 9% over prior year and diluted earnings per share increased 15.5% over the prior year. We estimate that the lost revenue and additional expenses from the hurricanes adversely impacted full year 2024 by $250,000,000 or $0.73 per diluted share.

Our full year incremental net benefit from supplemental payment programs was approximately $400,000,000 with 4th quarter being the lowest incremental net benefit of the year. This is an increase from the $100,000,000 to $200,000,000 incremental net benefit we expected largely due to one time payments and higher than expected program payments in a few states. When we consider the $250,000,000 unfavorable hurricane impact, the prior year $145,000,000 payer settlement and the incremental net Medicaid supplemental program benefit in the year, we are very pleased with the core operating performance of the company in 2024. Moving to capital allocation. We continue to deploy a balanced strategy of allocating capital for long term value creation.

Cash flow from operations was $2,600,000,000 in the quarter $10,500,000,000 for the year. This represents an 11% increase in operating cash flow in 2024 over prior year, indicative of great work by our operating and administrative teams. Capital expenditures totaled $1,290,000,000 in the quarter $4,900,000,000 in the year. And we paid $1,700,000,000 for repurchases of our outstanding shares during the quarter and $6,000,000,000 in the year. We paid $165,000,000 in dividends for the quarter and $690,000,000 for the year.

Our debt to adjusted EBITDA leverage remains at the low end of our stated guidance range, and we believe we are well positioned from a balance sheet perspective. As a result, we are lowering our targeted leverage ratio from our current 3 to 4 times to 2.75 times to 3.75 times. We believe this new range fits our profile and our anticipated use of leverage as a company, assuming no significant transactions or extraordinary events. So with that, let me speak to our 2025 guidance for a moment. As noted in our guidance this morning, we are providing full year 2025 guidance as follows.

We expect revenues to range between $72,800,000,000 $75,800,000,000 We expect net income attributable to HCA Healthcare to range between $5,850,000,000 $6,290,000,000 We expect adjusted EBITDA to range between $14,300,000,000 $15,100,000,000 We expect diluted earnings per share to range between $24.05 25.85 We expect capital spending to be approximately $5,000,000,000 to $5,200,000,000 Our guidance assumes a growth in equivalent admissions between 3% 4% and net revenue per equivalent admission between 2% 3%. Regarding the effects of the 2024 hurricanes on our earning guidance for 2025, we expect a year over year increase in adjusted EBITDA from the reopening at Largo and a year over year decline in the North Carolina division as our current assumptions in this market will have lingering effects of Hurricane Helene throughout much of 2025. The increase at Largo the decline in North Carolina are expected to offset and are not expected to produce the tailwind for us in 2025. Regarding Medicaid supplemental payment programs, as we've said in these past, these programs are complex, variable in timing and do not fully cover our cost to treat Medicaid patients. Based on current assumptions, when we aggregate the impact of all of our supplemental payment programs, our guidance contemplate the net effect of Medicaid supplemental payment programs to range from being flat to 2024 to a $250,000,000 headwind, driven by one time payments received in a few states in 2024.

The new Tennessee program is considered in this range. We expect full year margins to be consistent with 2024 and cash flow from operations to range from $10,750,000,000 to $11,250,000,000 As noted in our release this morning, our Board of Directors has authorized a new $10,000,000,000 share repurchase program and we anticipate completing a significant portion in 2025, subject to market conditions and other factors. In addition, our Board declared an increase in our quarterly dividend from $0.66 to $0.72 per share. And with that, I will turn the call over to Frank for questions.

Thank you, Mike. Janine, you may now give instructions to those who'd like to ask a question.

Thank you. Ladies and gentlemen, we will now begin the question and answer session. Our first question comes from the line of Pito Chickering from Deutsche Bank. Please go ahead.

Hey, good morning guys and thanks for taking my questions. I guess, this question will be on Medicaid Supplemental and I just want to understand a little bit on where we were in for 2024, it has been bouncing around a little bit. From Q3 to Q4, did that number change? Was that $400,000,000 that you came in on the year? I guess, gives you a bridge where you were on the last time you guided us into where it is now?

And then for 2,005, can you just sort of make sure that we bridge sort of where we are in 2,004, 2,005 on what's in the low end and high end of guidance for Medicaid's non payments? Thank you.

Hey, Tido. This is Mike. Yes, so if you think about the net incremental benefit from our supplemental payment programs for the full year 2024, it's about $400,000,000 As I noted in my comments, 4th quarter was the lowest incremental net benefit of the 4 quarters in the year. You may recall from our Q2 that the Q2 of 2024 was the highest benefit at 125,000,000 dollars And so that's kind of how it spread out. The driver was really largely related to one time payments that came in a few states and a couple of our state programs that came in a little more favorably than we expected.

So that's where we landed. And then as you start thinking about 2025, as I noted in my guidance, when we consider all the various programs, noting the complexity and the variability in the moving parts, we are projecting and estimating that our net effect of supplemental payment programs will range between flat to 2024 to upwards of a $250,000,000 headwind. That is inclusive of a pretty wide range of estimation related to the new Tennessee program. So that's how it kind of went through the year and that's the basis of our projections for 2025.

So Mike, actually just all I guess for 2024, you're saying it's $400,000,000 The highest in 2Q is $125,000,000 and lowest in 4Q. I guess can you just actually give us just the quarterly benefit because $400,000,000 with 2Q125 that seems it's not that high versus the rest of the quarter? So any color on sort of how that flow through the whole year? Thank you.

Well, I mean, I think you can take Q2, Pito, at 125 is the high watermark. And then obviously, 1st and third quarter would be a little bit higher and Q4 would be the lowest. I mean, that's the best I can give you in terms of the flow through the year.

Thank you. Our next question comes from the line of A. J. Rice from UBS. Please go ahead.

Hi, everybody. It sounds like the MA managed or managed care rather, same store, admissions were strong. I wonder, because there was so much publicity in the quarter around MCOs. Did you where you add in your pricing for 20,005, 20 6? Anything new or different you're seeing in terms of utilization review, denial rates, anything along those lines?

contracting, we are 80% contracted for 2025%, 60% contracted for 2026%, and I think it's 20% contracted for 27%. We're still in on top of our range estimates, our targets in terms of pricing. And as I think about denials and underpayments, clearly a lot of activity, but we put a lot of effort over the last couple of 2 or 3 years and really beefing up our capabilities and managing through the denial and underpayment process. I would say when we think about not only Q4, but the full year of 2024, we are not seeing growth in denials being a material impact for the company at this point.

Thank you. Our next question comes from the line of Whit Mayo from Leerink Partners. Please go ahead.

Hey, thanks. Good morning. I just wanted to hear maybe some of the internal initiatives that may be moving to the forefront this year. I feel like you guys have been talking a lot about throughput, ER optimization for a while, case mix, length of stay, all that. Anything on the back end with discharge management?

Anything around length of stay and bottlenecks that you might be seeing around post acute? Thanks.

So yes, the case management inpatient throughput has been a really strong initiative for us over the last couple of years with we even mentioned it in the Investor Day conference last year. And our work continues and continues to strengthen. Specifically, when I think about the going forward into 2025, we have a number of initiatives within our case management infrastructure focused on improving the post acute care placement and discharge process. And I might say even especially with our Medicare Advantage payers, and that work continues and it's important. But if I kind of take stock of where we are today, our length of stay performance in the year has been solid and we're forecasting another good year for length of stay management as we head into 2025.

And let me add to that Mike. So with I mean we have a number of initiatives that are progressing across the company. And when you think about our network development initiatives, we continue to add facilities. You'll see that we've got more facilities at the end of this year than we did last year. So our capital as well as some incremental acquisitions in some key markets is allowing us to expand the reach of our networks that's showcasing itself in growing market share.

What we're seeing in our market share data is really encouraging and lends it itself to sort of continued opportunities in that particular initiative. In addition to the case management operational initiative that Mike was talking about, we've had tremendous success with our emergency room operational improvement plan as well and that's yielded throughput improvements, patient satisfaction improvements and growth, allowing us again to extend the reach of that channel and meet the needs of the community in an effective way. And again, as we push into 2025, we'll see more emergency room bed supply inside of our networks as a result of the investments that we're making and then the ability to use those beds productively with our ER revitalization program. We're carrying the elements of success from that program to our operating rooms. We have an operating room optimization initiative that we think is going to be very beneficial to our surgeons and also our patients.

And it mirrors a lot of the efforts in the progress we've seen with our emergency room. And this involves turnaround time, staffing, other elements of OR efficiency that's important to our physician partners as well as our patients. And then finally, I will say that our labor agenda continues to improve. This past year, I'm really proud of our accomplishments as a company. Our employee engagement broadly across all colleagues and especially inside of nursing is at an all time high for the company.

That has allowed us to reduce turnover and really improve the capabilities of our facilities with having continuity and staffing, a more competent workforce and the necessary capacity to really meet the demand. So we have a number of what I call winning plays that are beneficial to the organization, responsive to the communities and really position our company for success. As we push forward, we've talked about our longer term initiatives. Our longer term initiatives are geared toward technology and using technology. We're on a journey.

We're already seeing early signs of success with how AI can improve aspects of our organization administratively, operationally inside of our facilities and we think clinically as well. So that's a very exciting agenda. And I know others speak of AI, but within the processes that exist for us as a healthcare provider, we see a lot of potential to drive better quality, greater efficiencies and even better management of our business. And so those things continue. I think our capital allocation is another important initiative for the company.

We're investing heavily back in the business. We'll invest somewhere between $5,000,000,000 $5,200,000,000 this year. And then we've got the ability to use the cash flow and our balance sheet to deliver even more value through shareholder programs that Mike alluded to earlier. So all of these combined, we believe to create value, value for our patients, value for our employees and value for our shareholders.

Thank you. Our next question comes from the line of Ben Hendricks from RBC Capital Markets. Please go ahead.

Great. Thank you very much. After another strong year of state exchange enrollment growth, just wanted to get your thoughts on how you see commercial mix progressing and how enrollment fared for you guys? In your opinion, how it's going to impact Florida and Texas? And then any thoughts broadly on the fate of the enhanced subsidies under the new administration, any efforts you've made with lobbyists or whatever in that regard?

All right. Thanks, Ben. Clearly, the enrollments inside the exchanges continue to strengthen. We think it's somewhere around 25,000,000 dollars at this particular juncture. So it's up 12% to 15%, I think over 24%.

And we're seeing consistent growth across a number of HCA states. So that's a positive we believe. It's a positive outcome for families. It creates greater access to care. It improves outcomes.

So all of that is a backdrop we think politically is a positive and presents an opportunity for the Trump administration we believe to sustain and ensure that families have coverage, they have affordability and they have the opportunity to achieve positive outcomes for themselves and really for their families. So we don't have any current insights into where this is going. All we know at this particular juncture is that they are due to expire at the end of next year. We think the backdrop of growth, the backdrop of satisfaction within the enrollment is a positive. And we see opportunities to work with the Trump administration to find a pathway forward to continue what's been a very positive community benefit we believe with the exchanges.

We have a very robust agenda to partner with other organizations to work within our coalition to support advocacy here to achieve the outcome that we think makes sense for the different communities that we serve. So it's too early for us to call anything on that, but we are active in the process as you would expect.

of your question about payer mix and where it landed, healthcare exchanges now represent 7.5% of our equivalent admissions in 2024 and about 9% of our revenues.

Thank you. Our next question comes from the line of Anne Hynes from Mizuho Securities. Please go ahead.

Great. Thank you. I just want to ask about the Medicare 2 Minute Rule. How much impact do you think that had on inpatient admissions in 2024? And do you think it will continue to be a benefit?

I think last earnings call you gave a stat that detailed, the difference between Medicare Advantage observation versus traditional Medicare fee for service. Can you remind us of what that stat is? And do you think over time you can close that gap? That'd be great. Thank you.

Hey, this is Mike. So in terms of the impact, if I look at the movement from observation to inpatient status, consistent with the Medicare Advantage 2 midnight rule, for the full year 2024, we estimate that it was equivalent to approximately 50 basis points of our overall admission growth. I would say that that's remained pretty consistent over the 4 quarters. So I don't think that it's going to be you'll see much more movement as you go into 2025. As to the comparison of Medicare Advantage observation mix to traditional, I would note that the Medicare Advantage observation as a percentage of total to ops to end is approximately 20% higher than traditional Medicare.

But I don't suspect at this rate that we're going to see material changes. At this point, we're really focused on collecting on that revenue and working through the denial and appeal process is associated with the Medicare Advantage Program, I don't think you'll see a material change in kind of the volume trends that we've seen so far this year as we head to 2025.

Thank you. Our next question comes from the line of Andrew Mok from Barclays. Please go ahead.

Hi, good morning. Hoping you could spike out the performance of Mission Hospital in the quarter and help us understand what impact that had on same store volumes in the quarter and the pace of recovery throughout 2025, including any explicit EBITDA assumptions around hurricanes in the guidance? Thanks.

Let me just talk about volumes overall, Andrew, as we think about 4th quarter. With 3% same facility admission and equivalent admission growth to prior year in the quarter. First thing I might mention is, it was a little bit of a tougher comparison to Q4 of 2023, which had strong growth. We did experience I mentioned this overall, and again, I'm speaking overall not just related to North Carolina division. But overall, we did experience a depressed respiratory season in Q4 of 2024 compared to Q4 of 2023.

Our estimates is that this depressed respiratory season had about a 1 point drag on same facility admission growth to prior year and about a 2 point drag on same facility emergency room visits growth to prior year. Overall, as a company, the hurricanes as well had an impact on volume growth, primarily in October, but for the whole quarter. Our estimates are somewhere between 20 40 basis

quarter related to hurricanes. Points of drag on volume in the quarter related to hurricanes. It's and that's directly attributable. I'd also mentioned that in the month of October, if you look at the rest of the state of Florida, there was clearly some lingering effects as they kind of recovered. And then we saw good recovery in November December.

So that's kind of a tale of the take on volume in the quarter.

And was there any explicit EBITDA assumption for hurricanes in the guidance?

Yes. So if you go back to my comments, Andrew, the way that we are guiding for hurricane impact into 2025 is this that, if you think about let's start with Largo. If you think about Largo Hospital, we do expect a year over year increase in adjusted EBITDA from the reopening at Largo and a year over year decline in the North Carolina division as our current assumption is this market will have lingering effects of the hurricane throughout much of 2025. The guidance really contemplates that the increase at Largo and the decline at North Carolina are expected to offset and are not expected to produce a tailwind for us in 2025. So that's the way to think about the hurricanes and their impact into 2025.

Thank you. Our next question comes from the line of Joanna Gajuk from Bank of America. Please go ahead.

Hi, good morning. Thank you for taking the question. So I guess on the somewhat related question, I guess on the cost side of things. So thanks for the color on the impact from the hurricane in the quarter in Q4 to the other OpEx line. So I want to ask about professional fees.

You've been talking about this for quite some time, but most recently, you highlighted the higher than expected professional fees to continue into 2025. So can you talk about what you're seeing there? What do you assume in your guidance? We heard maybe radiologists are the next group of doctors that are asking for higher fees. So is that what you're seeing?

And also can you help us maybe also size that line in your other OpEx line? Thank you.

So professional fees are about 24% of other operating expenses. So that's how you would size it. As we've mentioned in the last several calls, our operating teams have continued to work diligently to address the subsidy pressure from the hospital based physician group component of our business. And as we've noted as we've gone through the year, we have been to cost curve on professional fees as we move through 2024 really due to these efforts. So as I think about the guidance into 2025, I would say it like this.

We expect the cost pressures related to physician cost to moderate a bit further in 2025, but it's still going to be higher than just normal inflationary cost trends. And that's how you would think about that flow to into the next year. Maybe a double click on radiology. When you're looking at our hospital based physician categories, clearly, the emergency room and the hospital medicine segments have moved more fully through the business challenges that we see in this segment. Really especially given the significant work HCA has done with the acquisition and integration of Velasco.

With it relates to radiology, we did see pressure, as we've gone through 2024, and we expect that to continue into 2025. But keep in mind that radiology is a much lower portion of our hospital based physician subsidies. I'll just finish with this is that our teams have focused efforts between both our operating teams and our physician management teams focused on addressing radiology and we do not expect it to be a material impact in 2025.

Thank you. Our next question comes from the line of Matthew Gillmor from KeyBanc. Please go

Hey, thanks for the question. I wanted to see if there was any commentary on the California wildfires. I know you've got a couple of facilities in the L. A.

Area, but any impact there to call out? Or is it just not big enough at the consolidated level to make a real difference?

This is Sam. We had no impact at our Southern California hospitals as a result of the fires. We did have one of our facilities in Ventura County on notice so to speak in the sense that there was the Kenneth fire I think it was that was in Ventura County. The Palisades fire did not reach through the valley into Ventura County, but we were on high alert and we have fire mitigation tactics in that particular hospital due to its location and so forth. And we continue to evolve that just like we do with hurricanes and making sure that we can protect our patients and protect our colleagues and protect the asset.

And we're iterating, if you will, on our plan there to advance it even further. In Riverside, California, there's been some fires in the proximity that have produced some smoke issues in the community, but no issue whatsoever on our facility there. So we're fortunate that's a horrible event as everybody knows, but we were on the other side of the Canyon with our facility in 1,000 Oaks.

Thank you. Our next question comes from the line of Brian Tanquilut from Jefferies. Please go ahead.

Good morning, everyone. This is Megan Holtz on for Brian. As we think about Q1 EBITDA, are there any moving pieces, including some seasonality or non recurring items that we should be considering? And then just a quick clarifying question on the supplemental payments. You referred to the new Tennessee program.

Let me handle the second one first. So in the Tennessee program, we have been notified of approval of a partial year. And so we see an approval that would in effect cover July 1, 24 through December 31, 24. And then they are transitioning that to a calendar year program beginning in 2025. The 2025 calendar year program, which is new, has not been approved.

And so the new administration will be addressing that. So that's the status of the new Tennessee program. We don't give a quarter by quarter guidance. So our normal advice is just to follow our historical seasonal trends and we would stick with that. So the 2025 guidance is for the full year of 2025.

Thank you. Our next question comes from the line of Justin Lake from Wolfe Research. Please go ahead.

Hi, thanks. It's Anna on for Justin. Have you guys attempted to size the potential impact of site neutral payments? And if so, does that sort of alter your strategy at all surrounding your outpatient ASC footprint? And can you tell us where also the same store ASC revenue growth was in the quarter?

So, on-site neutral, let's start with just stating the obvious. We're against program implementations that would cut Medicare hospital outpatient reimbursement. Nor do we think that programmatically that it makes sense to pay the same rate for a hospital And I'll use surgery, but you could use all of our service that operates on a 20 fourseven basis with full capabilities of physicians and staff and equipment. If you'll compare that, for example, to our surgery centers, who generally operate 8 to 4 Monday through Friday, and do much less complex work, the idea of paying the same rate for those does not seem to make a lot of sense to us. As it relates to sizing the potential impact, we have not seen a bill yet that would give us enough information to estimate a potential impact.

In the past, as you've seen various proposals and discussions around this, there's been a range of procedures being considered for Medicare site neutral. On one end of the range would be proposals around hospital based physician clinic visits and outpatient infusion facilities. At that end

range, HCA would not be materially impacted given how we structure our physician clinics. In other draft proposals, We've seen certain outpatient surgical procedures being considered for cuts to hospital outpatient reimbursement. We would expect that those would have a bit more notable impact to HCA. But like a lot of these healthcare policy debates that are going through the government right now, we continue to monitor them closely as I'm sure you do and we'll be tracking.

HCA Healthcare (HCA) Q4 2024 Earnings Call Transcript

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