HCA Healthcare (HCA) investor relations material

Financial outlook and APTC expiration

• Projected $600M–$900M adjusted EBITDA headwind for 2024 due to APTC expiration, with Q1 impact at $150M, tracking toward the lower end of the range so far.

• Exchange volume declined 15% in Q1, matching expectations, with most loss shifting to uninsured and some to employer-sponsored insurance.

• Key swing factors include the pace of volume decline, migration to uninsured or employer-sponsored plans, and patient payment behavior.

• Second quarter is expected to be pivotal in determining if premium sustainment issues increase the headwind.

• The company continues to monitor grace periods and metal tier shifts affecting collections.

Resiliency program and operational improvements

• $400M resiliency program for 2026 reaffirmed, focusing on revenue cycle, asset optimization, fixed, and variable cost management.

• Notable progress in benchmarking across 190 hospitals, with ongoing efforts to improve length of stay and supply/labor costs.

• Resiliency actions are ongoing and expected to provide benefits beyond 2026.

• Q1 cost improvements were muted by respiratory surges and winter storms but trended positively by quarter-end.

Volume trends and capital deployment

• Q1 same-store adjusted admits grew 1.3%, with volume recovery in February and March supporting a 2%-3% annual growth target.

• Outpatient surgeries declined 1.7% in Q1, mainly in lower acuity lines and impacted by exchange volume loss.

• Capital spending guidance is $5B–$5.5B for 2024, with $5.5B–$6B in approved projects over the next 24–30 months, focusing on inpatient beds, ER beds, and outpatient networks.

• Recent acquisitions ($260M in Q1) focused on urgent care and freestanding ERs, with outpatient opportunities outpacing inpatient.