Buoyed by sturdy admissions and income development, the leaders of HCA Healthcare Inc. have boosted their 2024 capital tasks finances by about $500 million from final yr to proceed to develop their community, significantly for outpatient providers.
Nashville-based HCA plans to spend between $5.1 billion and $5.3 billion this yr, versus $4.7 billion in 2023, on inpatient, outpatient and know-how additions or upgrades. Talking after he and his group reported fourth-quarter outcomes—internet earnings of $1.86 billion on greater than $17 billion in revenues—CEO Sam Hazen had a easy message on capex: Extra of the identical.
“We’re fairly constant in our allocation of capital. It’s not disproportionately oriented to anybody class of our enterprise,” Hazen stated. “It’s allowed us to satisfy the demand expectations that exist out there and it’s additionally responded to our physicians in a manner that created the capability or allowed for the medical know-how that they want […] We’re stepping it up as a result of we’ve got a rising occupancy on the inpatient aspect after which we’ve got alternatives within the outpatient aspect to broaden our networks.”
HCA completed 2023 with 186 hospitals and 124 freestanding surgical procedure facilities in its portfolio. These services dealt with practically 975,000 equal admissions within the fourth quarter, a rise of 4.6 % from late 2022. Income per equal admissions popped much more, climbing 6.8 % yr over yr—and exhibiting the opposite aspect of the upper utilization dynamic that has dinged the outlooks of a number of well being insurers of late.
HCA’s work to construct on that momentum this yr will tilt slightly extra towards new outpatient websites. Hazen stated a big improvement pipeline there’ll result in extra spending and extra opening in 2024 and 2025 in comparison with the previous two years. On the hospital aspect, the variety of beds to be added to HCA’s system—the corporate counted practically 49,600 licensed beds on the finish of 2023—will likely be consistent with final yr’s roughly 300.
CFO Invoice Rutherford—who final week introduced he’ll retire Might 1 and be succeeded by Senior Vice President of Finance Mike Marks—stated he expects admissions development this yr will likely be between 3 % and 4 %, not fairly final yr’s tempo however nonetheless comfortably forward of HCA’s historic expertise. Serving to drive demand, he stated, had been sturdy medical insurance change enrollment development in most of the states the place HCA does a variety of enterprise.
HCA’s development final quarter outpaced that of Tenet Healthcare Corp., the place the variety of ambulatory surgical procedure circumstances climbed 3.9 % yr over yr however adjusted hospital admissions ticked up solely 0.1 % from late 2022.
Chairman and CEO Saum Sutaria, whose group lately closed on the sale of three South Carolina hospitals and signed a deal to promote 4 others in California, final week informed analysts his spending priorities haven’t modified: First up, Tenet’s USPI outpatient surgical procedure division will get some $250 million of capital and that will likely be adopted by investments in hospital development tasks.
“Particularly on USPI, we speak about traditionally $200 million to $250 million, now nearer to $250 million, in capital allocation yearly,” Sutaria stated. “However the reality is, for those who return over the past 5 years and simply take a look at what we’ve spent and common it out […] it’s been fairly a bit increased than $200 million to $250 million. We […] clearly are snug going above the $200 million to $250 million if these alternatives exist.”