Image by Kevin Schneider from PixabayOutpatient revenue outpaced inpatient gains at HCA Healthcare (NYSE: HCA) in the first quarter of 2025. Company leaders said ambulatory surgery centers (ASCs) are helping drive that trend as HCA ramps up capital investment in lower-cost settings.
After a rough Q4 with the impact of hurricanes Milton and Helene, the Nashville, Tennessee-based health care giant’s revenue was $18.32 billion for Q1, slightly above the expected $18.26 billion.
For context, HCA reported revenues of $17.34 billion during last year’s first quarter.
“We’re really pleased in the first quarter with our outpatient revenue growth, which even when you take it in total, grew at a rate a bit higher than our inpatient revenue,” CFO Mike Marks said April 25 during HCA’s Q1 earnings call. “All four of our outpatient categories had revenue growth over the prior year quarter.”
HCA categorizes outpatient revenue across emergency services, outpatient surgery (both hospital-based care and ASCs), physician clinics and urgent care, and other services such as diagnostics and observation.
As of March 31, HCA operated 192 hospitals and about 2,500 ambulatory sites of care. The company noted having 125 freestanding outpatient surgery centers at the end of Q1 2025, four more than the same period a year ago.
While overall case volume for outpatient surgery declined slightly, HCA reported earnings growth in the outpatient category, thanks in part to strong performance from its ASC portfolio. Outpatient revenues as a percentage of patient revenues climbed from 36.9% in Q1 2024 to 37.3% in Q1 2025, according to the company.
“On outpatient surgery specifically, we continue to see a slight decline in case volumes, driven by lower-acuity cases, and by Medicaid and self-pay,” Marks said. “However, we had good growth in net revenue and earnings overall, inclusive of both hospital and the ambulatory surgery center categories.”
The decline in case volume was also impacted by the calendar, Marks said.
“The Leap-Year effect did impact the stated volume declines,” he said. “If you think about outpatient surgery at a 2.1% same-facility decline, on a per business day basis, that’s about a 1% decline.”
Despite that dip, the company said it remains bullish on outpatient care and is putting capital behind its ASC strategy.
“We have a very significant facility and ambulatory development strategy,” CEO Sam Hazen said during the earnings call. “Fortunately, the capital requirements for most of those [ambulatory] facilities are small by comparison to what it takes to build out inpatient capacity.”
HCA currently has about $6.2 billion in capital approved and in the construction or development phase across the enterprise, Hazen said. That includes investments in both inpatient and outpatient capacities.
“We have outpatient capacity that includes outpatient facilities, emergency room capacity, cath lab capacity, ambulatory capacity from a surgery standpoint – those are smaller dollars in the overall scheme of what it takes to build out those types of facilities,” he said.
The company’s approach to outpatient growth also includes expanding its medical staff, leveraging clinical technology and improving operational efficiency to support surgeons.
“We continue to build our medical staff, which [is] critically important,” Hazen said. “We’re adding facilities where we need to, adding technology, and we’ve got a robust workforce development agenda to support our surgical services.”
And demand for surgical care remains stable, even amid shifting payer dynamics and higher cost-sharing in exchange plans, Hazen said.
“Our surgical volumes were up on a per business day basis,” he said. “So as we normalize calendar effects, … we expect our surgical volumes to recover to levels that we think are in line with market share gains that we have expected.”
HCA reaffirmed its guidance for the full year, and Hazen said he is confident in the volume outlook.
“We believe we can continue that,” Hazen said. “The labor market, in general, is stable, and we have initiatives inside the organization and outside, with our Galen School of Nursing and other workforce development initiatives, to deliver the people that we need to serve the demand.”
As HCA continues to invest in ambulatory growth, ASCs are positioned as an increasingly central part of its care delivery model, he added.
“We feel … that we can leverage, again, the fixed costs that we have in our system to drive efficiencies, if we can grow the volumes,” Hazen said.
While industry stakeholders on the call did ask about the impact of the Trump administration’s tariffs on the company’s revenue outlook, HCA executives said it is too soon to know how the tariffs will impact the business.
“We’re in a really dynamic and fluid environment right now with tariffs,” Marks said. “Until we really have better clarity about the final status by country, which goods are included or excluded, [and we know] what the final tariff rates will be.”
