HCA 4Q15 Earnings Call Notes

HCA Holdings (HCA) R. Milton Johnson on Q4 2015 Results

big acquisitions are hard to find because most come from the non-profit sector

“Of course, we do a lot of in-market acquisitions. But as far as the big ones you’re speaking to, things like say Kansas City that happened in 2003, those opportunities are really hard to find. They’re going to come out of the not-for-profit sector. And typically, we may engage in conversation, but many times, these organizations decide ultimately not to sell.”

Samuel N. Hazen – Chief Operating Officer

Strong markets yield 2% growth just from population

“when you think about HCA’s growth strategy, and we’ve spoken to this numerous times, we think, first and foremost, we have incredible markets where we do business. And those markets are yielding, on a composite basis, across the company approximately 2% increase in demand growth just coming from population growth, as well as aging baby boomers, increasing employment and so forth.”

Don’t generate as many downstream referrals from urgent care as ER

“we do generate downstream referrals from our urgent care centers to both our physicians who are connected to HCA system as well as our emergency room and then on into the inpatient activity. The volume of downstream referrals is not nearly as large as our freestanding emergency room, which produce a larger downstream flow to our hospitals. But the components that we’re trying to build here between physician clinics, urgent care centers, freestanding emergency room and then hospital-based emergency room is all part of having a system-wide approach to creating convenience, ease of access, user-friendly solutions for our patients, and then building out the geographical footprint of the HCA network”

William B. Rutherford – Chief Financial Officer & Executive Vice President

We are seeing some exchange volume move to uninsured

“Well, first, put in perspective that our exchange volume is roughly 2% of the total company volume. So the exchange activity by itself is relatively small going forward on that. So, as we look at kind of the activity within the exchanges, we did mention in the third quarter we were seeing some previous exchange volume move to uninsured. It was 400 admissions for HCA in the third quarter. It was roughly the same in the fourth. That’s on 460,000 admissions for the company.”