HCA Healthcare (NYSE: HCA) ended 2024 with outpatient surgery cases down 1.3%.
Still, despite softer case volumes in some outpatient segments, favorable payer and service mixes contributed to sustained momentum in ambulatory operations, CEO Sam Hazen said during the company’s Q4 earnings call Friday.
“Outpatient surgery cases, while down, due to the strong payer mix and service mix, we had solid revenue growth in that service line,” he said, with overall revenue increasing by approximately 6% year-over-year in Q4.
Nashville, Tennessee-based HCA operates 188 hospitals and more than 2,400 ambulatory sites of care, which include ambulatory surgery centers (ASCs), urgent care locations, freestanding ERs and other facilities.
The resiliency of HCA’s outpatient business is closely tied to network development strategies designed to meet patients where they prefer to receive care, Hazen said.
‘“We believe the HCA way of combining our high-quality local health networks with the capabilities of a national system consistently produces better patient outcomes,” he said, adding that the system plans to continue building new ambulatory sites and refining existing ones.
These expansions, along with improvements to operating-room efficiency in both inpatient and outpatient settings, will remain key growth drivers for 2025, he said. While they didn’t provide specific information on ambulatory investment, they said their total Q4 capital expenditures were $1.29 billion.
“We believe the strength of our cash flow and balance sheet position us well for investing further in our networks to increase access, expand capacity and enhance clinical capabilities,” Hazen said. “They also allow significant investments in our people to improve training. … This financial strength creates opportunities to deliver value to our shareholders by effectively allocating capital to generate favorable returns.”
Even with the outpatient dip, HCA continued to post healthy financial results in part because of commercial and exchange patients who generated stronger revenue, CFO Mike Marks said.
Marks attributed some volume softness to hurricane-related disruptions but said that these were temporary setbacks rather than long-term indicators.
“While our operations performed well in the quarter, adjusted EBITDA margin declined 60 basis points compared to the prior year quarter,” he said. “This decline is primarily related to the impact of the hurricanes on our Largo Hospital in Tampa and the North Carolina division.”
HCA’s capital deployment will remain aggressive in 2025, he added.
“We expect capital spending to be approximately $5 billion to $5.2 billion,” he said, with a portion targeting ambulatory expansions.
HCA is opposed to site-neutral proposals that would reduce Medicare reimbursements for hospital outpatient service, Marks said during the call.
“[We don’t think] programmatically, that it makes sense to pay [outpatient facilities] the same rate for a hospital,” he said. “… If you compare that to our surgery centers, who generally operate 8 a.m. to 4 p.m., Monday through Friday, and do much less complex work. The idea of paying the same rate for those does not seem to make a lot of sense to us.”
While there is currently no single piece of legislation with enough detail for HCA to predict the exact financial impact, the company is tracking any legislative or regulatory developments closely, given the ongoing policy discussions.
“We’ve seen certain outpatient surgical procedures being considered for cuts to hospital outpatient reimbursement,” he said. “We would expect that those would have a bit more notable impact to HCA.”
*Editor’s note (March 4, 2025): A previous version of this story misstated the number of ASCs in HCA’s portfolio. The story has been updated to correct that language.
