HCA Healthcare Inc. (HCA) Q2 2023 Earnings Call Transcript

For the period ending June 30, 2023

July 27, 2023 10:00 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Welcome to the HCA Healthcare Second Quarter 2023 Earnings Conference Call. Today's call is being recorded.

At this time, for opening remarks and introductions, I would like to turn the call over to Vice President of Investor Relations, Mr. Frank Morgan. Please go ahead, sir.

Frank Morgan

Good morning, and welcome to everyone on today's call. With me this morning is our CEO, Sam Hazen; and CFO, Bill Rutherford. Sam and Bill will provide some prepared remarks, and then we will take questions.

Before I turn it over to Sam, let me remind everyone that should today's call contain any forward-looking statements, they are based on management's current expectations. Numerous risks, uncertainties and other factors may cause actual results to differ materially from those that might be expressed today. More information on forward-looking statements and these factors are listed in today's press release and in our various SEC filings.

On this morning's call, we may reference measures such as adjusted EBITDA, which is a non-GAAP financial measure. A table providing supplemental information on adjusted EBITDA and reconciling net income attributable to HCA is included in today's press release. This morning's call is being recorded, and a replay of the call will be available later today.

With that, I'll now turn the call over to Sam.

Sam Hazen

Good morning. Thank you for joining the call. The company produced solid earnings in the second quarter. These results reflected continued strong demand for our services and healthy operating margins. Across most areas of our business, we maintain the operational momentum that we experienced over the past 3 quarters. We believe this strength should continue into the second half of the year. Accordingly, we updated our earnings guidance for 2023 to reflect this outlook.

Against the difficult comparison to the second quarter of 2022, diluted earnings per share increased to $4.29. Same-facility volumes across the company were strong. Admissions grew 2.2% year-over-year, inpatient surgeries increased 1.8%, same facility equivalent admissions increased 3.7%. This growth was driven by emergency room visits, which grew 3.7% and outpatient surgeries which grew 3.3%. Other outpatient categories also grew, including outpatient cardiology procedures, with increased 5%. The growth in volumes was broad-based across the company's divisions and diversified within most service lines.

Additionally, volumes were supported by strong acuity growth of 1.6% and a favorable payer mix from commercial adjusted admissions growth of 5%. These factors drove an increase in same facility revenue of 6.3% as compared to the prior year. In the quarter, we continued to invest in our people, and as a result, we saw improvements across virtually all key labor metrics. Turnover continued to decline for nurses and trended at an annualized rate of 17%. Nurse hiring remained strong in the quarter and for the year has increased by 9% as compared to last year. These positive results helped reduce contract labor costs 20% compared to the second quarter last year.