HCA Healthcare, Inc. Wells Fargo 21st Annual Healthcare Conference

Yeah, I think, clearly, Steve, thank you for having us. We are dealing with a unique year when it comes to policy implications. The enhanced premium tax credits, which we advocated strongly for in 2025, expired, and it had a more pronounced impact on our business and on people than, I think, a lot of estimates that were out there. For us, that has been the biggest dynamic, and I was trying to give some earlier groups some context around all of that. Through the first six months of this year, we have seen about 2.1 million adjusted admissions inside of HCA. The discussion has really revolved around 22,000.

Those 22,000 adjusted admissions that were the adjusted admissions that migrated from a fairly profitable situation inside of the exchanges to a completely loss situation now and an uninsured status has had the impact that we shared on our call. But setting all that aside, 99% of our business has performed as we expected and actually better than it did in 2025. So in the context of what is going on from a macro standpoint, you have got the policy implications that have been negative with respect to the enhanced premium tax credits. But actually for us this year, it has been positive when it comes to the One Big Beautiful Bill Act and the fact that the supplemental payment programs and the grandfathering provisions Yeah have allowed certain states to get their funding for Medicaid to a higher level, and that has benefited us in 2026 and somewhat offset some of the challenges with the enhanced premium tax credits.

But when you look more broadly at the business, our belief is that demand for healthcare, especially in our communities, because we are in the Southeast and the Southwest, and there is still this continued migration of people from the Northeast, Pacific Northwest, California, Midwest to the Southeast and the Southwest, gives us a confidence that demand for healthcare is going to continue to grow. We have scored that in the 2%-3%, and we think that is a reasonable scoring as we look to the future. That is a really positive backdrop. The second piece, I would say, with respect to our company, is that our ability to meet that demand with our strategy is getting better.

We continue to add capabilities to our company with more outpatient facilities. We will approach roughly 3,000 outpatient facilities broadly across the organization that are part of what we call the hospital ecosystem within each of our communities. That extension of our reach to make it more convenient for our patients, and then creating the capacity downstream if they need acute care, is allowing us to meet that demand. We continue to see modest growth in our market share, and as the markets continue to grow and as we get better at executing our network strategy, we think we can meet that demand even more effectively. The third piece of what is going on in our company is this set of initiatives that we have undertaken to enhance what I call the enterprise capabilities to support our networks.

What I mean by that is we have a one system opportunity inside of HCA, and that is connecting the local systems that we have in Dallas or Denver or Miami to the national system. We have a number of initiatives that are enterprise-oriented initiatives that we think are going to complement what our people do on the ground, what our facilities can provide, and enhance their overall capabilities, make them safer for our patients, a better place to work for our physicians and employees, and in a more efficient environment by leveraging our scale even more than we have done in the past. I think for HCA broadly, we are at the greatest inflection point with creating enterprise capabilities to support our individual networks in ways that we have never been able to do.

Some of that is being enhanced by artificial intelligence and what the digital tools can do for our business. Some of it is advantaged by the Global Capability Center that we put forward, and we are finding ways, because of both of those, to leverage our shared services platform even more than we have done in the past. We think that is going to create value across a number of areas in the organization. Pretty exciting. All that results in, I think, a tremendous amount of capital production in our company. Our cash flow continues to grow and be very strong, and we have a lot of optionality to invest in the business, and then also allocate to our capital allocation plan.

Sure. I think both of those are really about some of the evolution that I just mentioned. As we've advanced our ambulatory network to the point, again, of roughly 3,000 physician clinics, urgent care centers, freestanding emergency rooms, ambulatory surgery centers, even affiliates that are outside the HCA network, we've seen an opportunity to coalesce them into a more coordinated function. They do a pretty good job of integrating into each of our markets.

Yeah. We see opportunities corporately to pull them together, create some synergy, create some consistency in how we think about growing them on the upside, if you will, and have forward-facing growth strategies for each of the individual units, and then tighter integration into the system downstream.

Charles Gressle, who is moving from our East Florida division in Miami, is going to lead the Ambulatory Operations Group and bring that together and then integrate, again, organizationally into some of the other corporate functions in ways that I think are going to create value for this large platform that we've built over the past few years. We've added to that platform significantly this year. Just recently announced an urgent care center acquisition in Texas. We've done some other outpatient facility acquisitions across our networks this year. We continue to add significantly to the ambulatory network.

On the digital side, Michael Schlosser led our digital transformation and innovation agenda. His background, he's a neurosurgeon by trade and went to MIT, and he started our digital agenda. Previously, he was one of our chief medical officers for the national group, one of our hospitals in Nashville. Neurosurgeon by training, as I mentioned. The last 2 or 3 years, he's been separated and building up digital capabilities.

The holy grail for our AI agenda is inside, I'll call it, the clinical world. If we can make the work environment better for our employees and for our physicians, then we can extend that broadly into patient safety, quality, more consistency, eliminating unnecessary work. I felt it important that we integrate now that we've matured our digital thinking and capabilities into the clinical teams, where when our clinical teams are talking, the digital people are in the room with them. When the digital team is talking, the clinical people are in the room with them. That's going to create organizational alignment, some synergies. We still have an opportunity administratively to do some digital things, and they'll own that as well. Those two realignments are really about just sort of the natural evolution of some key initiatives for the company.