HCA 2Q16 Earnings Call Notes

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HCA Holdings’ (HCA) CEO Milton Johnson on Q2 2016 Results

Health exchange admissions were a factor last year

“Sheryl, one thing I might just add and that is as we all know the health exchange admissions really grew last year, they get small piece of the company, but if you look at what they added to admission growth last year the second quarter verses this year, while we’re still so that’s also one factor to keep in mind when you start talking about last year.”

Clinical data warehouse is an area of opportunity in controlling costs

“Let me add one comment to that. I think it’s about other area of opportunity for HCA. Our clinical data warehouse, the number of our quality initiatives have sort of supply cost utilization, drug utilization, bad practice identification and so forth attached to it. As we engage our positions more than we’ve done in the past, they’re understanding of how it helps them, how it helps their facilities, how it helps their patients is another opportunity that I think we’re in the early stages of execution on our supply costs”

There’s a lot we can do with this data

” If you think about what’s happened over the last several years with electronic health records and investments that HCA and other providers have made in moving now to a digital medical record, it’s not like stealth one; now we have all this clinical information in a digital format, and what do we do with it? And there’s a lot we can do with it.”

We’re investing in data scientists to help us take advantage of this

“some things that we’re doing around acceptance care and really dropping mortality rates in our hospitals from sepsis and saving lives. It’s really happening; it’s happening today in our facilities. And so there’s examples like that. So it’s, again, we’re investing in not only in terms of the technical side of that but the human resource side of that with hiring very talented data scientists to help us take advantage of this. And then you think you move on from the structured data that we have to the unstructured data, and that’s a language processing and, where we can move the needle there is, again, something for the future that I’m very excited about.”

Samuel Hazen

Growth in visits through ER slowed

” growth in emergency rooms business in our hospital base units slowed as compared to the past few years. As a result downstream growth in inpatient admissions through the ER was not as strong as compared to recent quarters. We believe most of the softness can be explained by three factors. First, a slowing in demand growth to more normal rates, second new competition in several markets and third in a couple of our Florida we have experienced the change as how certain Medicare advantage payer classified the patients between inpatient admissions and observation status.”

Capacity constraints did not play a broad based role in softening

“I don’t think though in the second quarter, capacity constraints played a broad based role in the softening. There are pockets where we know that difficult day in and day out to manage the capacity challenge and that could in fact squeeze out few patients here or there but in total I don’t think that was a material impact in the quarter.”

William Rutherford

By recent standards wee see growth slowing

“by recent growth standards, we see it slowing. We went through over past 5 or 6 quarters that was exceptional and we saw demands in our markets growing and we suspect although as you know our market share data lacked about 6 months but we suspect we were going to see some flow in demand in many of our markets and that’s why we are seeing it show up in our numbers. That being said we still have a great outlook and a very optimistic outlook for the long term in our markets.”