HCA Healthcare, Inc. (NYSE:HCA) Q4 2022 Earnings Call Transcript

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Calvin Sternick: Hi. Good morning. It looks like another strong quarter for ER volumes. Can you talk a bit about the trends you have seen there in the last few quarters in terms of payer acuity mix, and what you are expecting for sort of full year? And as you think about the volume trends across the business over the last couple of quarters, are there any service lines or categories that have over or underperformed relative to your expectations? And any color you can give on those going into 2023? Thanks.

Sam Hazen: This is Sam. Let me speak to some of our service lines trends. During the pandemic, we felt the emergency room might be disrupted from what our previous beliefs were. And there was new uses of telemedicine alternatives that were being experienced, we thought. What we have seen is just the opposite. The resiliency of the emergency room for communities is even greater than we thought. And the demand there is very strong because our emergency rooms and other people’s emergency rooms are a solution set for people whenever healthcare is needed. So, our trends in the emergency room have been very solid over the course of the year. And when you look at them really without the COVID activity, it’s especially impressive I think.

We have seen good volume growth in our orthopedics. Our total joint business for the quarter was up 6%. In many instances, we fully absorbed, we believe, most of the shift over the last 3 years during the pandemic, with the orthopedic business moving from inpatient to outpatient. And in most instances, we believe the large majority of that is behind us. And so we don’t have that as a pressure point like we have had over the past 3 years. But nonetheless, we have grown that business in the face of the site of care shift. We have a very robust pipeline for our emergency rooms, especially our freestanding emergency room platform, a very significant development opportunity there for us across our communities, and we are investing in that. Our urgent care center platform continues to grow.

We are up to 260 urgent care centers. We will probably push through 300 in 2023. Our ambulatory surgery center platform continues to grow. Here, again, we have more de novo development inside of our ambulatory surgery center platform than we have had in the past, and we are encouraged by how that fits into our networks in a very productive way. So, we are really pretty excited about our investments in our ambulatory network, our investments in our acuity programs and our higher service lines. And we will continue to €“ we believe, be well positioned to deal with the growing demand that we see in the market.

Operator: Our next question comes from Lance Wilkes with Bernstein.

Lance Wilkes: Yes. Could you just talk a little bit about permanent nurses and understand the retention rates are getting better there. Can you talk a little bit about new hirings, what sort of growth you are seeing there? What are maybe some of the drivers of access to nurses there, where are they coming from? And then also, if you could just talk a little bit about, you said the investment spend was pressuring and the long-term plan was pressuring €˜22 a little bit. Can you talk a little bit about how €˜23 might look compared to €˜22 with that? Thanks.

Sam Hazen: Why don’t you take, Bill, the last question?

Bill Rutherford: Yes. This is Bill. On the investments, when you think about the technology investments, the investments we are making in some of the clinical transformation. And I would also say, with the expansion of our nursing schools going forward, probably is somewhere around an incremental investment of $150 million in €˜23 compared to what we ran in €˜22. Lance, we didn’t call that out, but it’s part of a long-term investment we think, that will continue to drive performance and value for us.

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