HCA 2Q17 Earnings Call Notes

R. Milton Johnson – HCA Healthcare, Inc.

Results slightly off from internal plan

“Although, we are on plan for the second quarter, it’s slightly off from our internal plan for adjusted EBITDA at midyear. Our results in the first half have been challenged by, one, softer managed and exchange volumes, and, two, our London market results have been negatively impacted by currency conversion rates and lower admissions from Middle East embassies and private insurance. ”

Seeing more opportunities for small tuck in acquisitions

“We’re seeing more opportunities in the marketplace now. I think as many health systems, again, went through the positive environment from 2015 and early 2016, and now we’re seeing some volume pressures. We’re looking, I think, to be part of the bigger system. And so we are encouraged by that. We think we have a lot to offer as far as opportunity for many of these systems. So it is opportunistic, but it is also consistent with our strategy. So, we’re pleased to see the pipeline more robust than it has been in recent years”

Bill Rutherford

Bad debts running a bit elevated

“So we know our bad debts are reading in terms of year-over-year a little elevated. And obviously, we talked about before, we think if you look at our total uncompensated care, which includes our bad debts, charity and uninsured, in any given quarter you are subject to some classification trends among these categories, but generally speaking, over time, our uncompensated care trends track with our uninsured volume trends. And as we mentioned, we’re seeing roughly a 4% to 5% growth in uninsured admissions, 4.9% in the second quarter.”

Samuel Hazen

Obstetrics volume down 2.5-3%

” I think one thing that’s really relevant here is obstetrics on the commercial side is roughly, I don’t know, 20% of overall commercial demand, give or take a few points. And with commercial obstetrics volume being down 2.5% to 3%, it weighs out to be 0.6%, so it explains half of our decline”