HCA 4Q14 Earnings Call Notes

This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. Full transcripts can be found at Seeking Alpha

30% EPS growth isn’t bad

“The fourth quarter performance was highlighted by strong volume metrics, favorable payer mix and excellent cost management. As a result, we produced revenue growth of 9.1%, adjusted EBITDA growth of 14.1% and diluted EPS growth of 29.3% over the prior year’s fourth quarter.”

Volume growth accelerated in 4Q

“volume growth accelerated in the fourth quarter as compared to the previous three quarters of the year. We believe this performance reflects a combination of solid execution of our growth agenda, our operating teams, improving macroeconomic trends in many of our markets, and capital spending that has been invested both to increase access to our networks and to add operational capacity.”

Huge swings in medicaid expansion states

“Our trends in Medicaid expansion states continued into the fourth quarter. In the fourth quarter, Medicaid admissions were up 51% and uninsured admissions were down 65% in expansion states. For full year 2014, Medicaid admissions and expansion states increased 40% and uninsured admissions were down 58%.”

Estimating that 42% of exchange patients are newly insured

“what we do is look back at exchange patients level we’ve seen this year, look back how we’ve previously seen them and what was their status when we saw them. And that’s what we’re coming up with our estimate of about 42% on a yearly basis of the patients we saw in exchanges who are newly insured.'”

Not factoring in more medicaid expansion but there should be some

“We do have a small physician in Indiana and it appears that Indiana is moving forward, so that’s very good moves.

Here in Tennessee you’re probably all aware that a special session of the legislature began last night. Governor Haslam is working very, very hard and many are working with him to try to help our state legislatures understand how important this is to the state of Tennessee and benefits that would accrue to many across states. So we’re hopeful and reasonably optimistically hope that that can get passed here early, but we have not put any of that into our numbers. We’ll obviously continue to watch other states and be supportive where we can be.”

Medicaid still struggles to get access to physicians, end up coming through ER

“We haven’t really seen a significant change in Medicaid activity and behavior. So the emergency room heavily, they struggle to get access to physicians in some markets. So that dynamic still exists.”

When people get commercial insurance, they have better access

“On the uninsured, who have gained access to commercial insurance products, we have seen less utilization of the emergency room and more availability to other facility opportunities or physician opportunities. And that’s been slight, but significant enough for us to notice that when they do get commercial insurance, there is different ability to access care through physician office or possibly through urgent care centers and the like and not through the emergency room.”

Investing in access points to our network

“We have numerous initiatives that should drive growth into marketplace, and Milton touched on them, it revolves around creating sufficient access points to our networks, so that patients can find it convenient to enter into an HCA network. So we have significant investments in additional outpatient access points. In 2015, that will hit the marketplace.”