HCA Healthcare (HCA) investor relations material

Industry environment and policy impacts

• Hospital industry faces dynamic challenges, notably from the expiration of enhanced tax credits and payer mix shifts, but demand for healthcare services remains strong in key markets.

• Policy reforms, such as the One Big Beautiful Bill, have both negative and positive effects, with recent approvals in five states providing significant supplemental payment benefits.

• Medicaid reform and the start of work requirements in 2027 are expected to bring further changes, but are considered manageable.

Financial guidance and performance

• Guidance for the second half of the year reflects a $1B–$1.2B negative impact from exchanges, offset by $300M–$500M in net supplemental payment benefits.

• Volume growth rebounded in Q2, with 2.5% admission growth and strong insured business performance, expected to continue through year-end.

• Cost management and resiliency initiatives are delivering results, with expectations for further improvement in the back half of the year.

Payer mix and volume trends

• Migration from exchanges to uninsured is impacting elective surgery volumes, while Medicare, Medicaid, and commercial segments show durable growth.

• Long-term volume growth target remains at 2%–3% CAGR, supported by capital investments and network optimization across 43 markets.

• Elective surgery softness is primarily attributed to exchange coverage loss, Medicare policy changes, and some consumer deferral due to macroeconomic factors.