HCA Healthcare, Inc.

Welcome to the HCA Healthcare First Quarter 2021 Earnings Conference Call. Today's call has been recorded. At this time, for opening remarks and introductions, I would like to turn the call over to your Vice President of Investor Relations, Mr. Mark Kinbrough. Please go ahead, sir.

All right. Thank you, Kara. Good morning, and welcome to everyone on today's call. With me this morning is our CEO, Sam Hazen, and CFO, Bill Rutherford. Sam and Bill, We'll provide some prepared remarks, and then we'll take questions afterwards. Before I turn the call over to Sam and Bill, let me remind everyone that should today's call contain any forward-looking statements, they are based on management's current expectations. Numerous risks, uncertainties, and other factors may cause actual results to differ materially from those that might be expressed today. More information on forward-looking statements and these factors are listed in today's press release as well as in our various SEC filings. On this morning's call, we may reference measures such as adjusted EBITDA, which is a non-GAAP financial measure. A table providing supplemental information on adjusted EBITDA and reconciling to net income attributable to HCA Healthcare Inc. is included in today's release. This morning's call is being recorded, and a replay of the call will be available later today. With that, I'll now turn the call over to Sam.

All right, thank you, Mark. Good morning to everyone, and thank you for joining us. As the COVID-19 pandemic continued to surge, we started the year with strong financial results in the first quarter. The results were driven by better-than-expected revenue growth and improved operating margins. revenues grew over 1.1 billion, or 8.7%, as compared to the prior year. This growth was generated by highly acute inpatient volumes, better payer mix, and a rebound in surgical and outpatient volumes in March. Generally speaking, March trends are continuing into April. Inpatient revenues increased by 12%. The acuity within our inpatient business was higher as reflected in both case mix index which increased 7% and length of stay which grew by 6%. Additionally, commercial admits inside of our domestic operations represented 29% of total admits compared to 26.5% last year. Commercial payer mix has been consistently around this level for the past four quarters. These two factors combined explain the 17% increase in inpatient revenue per admission. Total admits were down 4.2% year over year. In comparison to 2019, admits were down approximately 3%, which was in line with our expectations. In the quarter, we treated almost 50,000 COVID-19 inpatients, which represented 10% of total admissions. Throughout the quarter, the percentage of COVID-19 admits to total admits declined. January was 17%, February was 8%, and March was down to almost 5%. Outpatient revenues increased 4.7% as compared to prior year. This result is better performance than the previous two quarters in which outpatient revenue was down approximately 5%. Outpatient revenues declined in January and February, consistent with that trend, but March, which had one additional weekday this year, increased by 30% as outpatient surgery and other procedures recovered strongly. Same facility outpatient surgery volumes grew 2.3% as compared to last year. As compared to 2019, they declined 3%. ER visits declined 18%. This decrease is generally consistent with the trends we experienced in the previous two quarters. ER visits were down 19% compared to 2019. Our teams continued to focus and deliver on our operating agenda. Adjusted EBITDA margin for the company grew on a year-over-year basis and was consistent on a sequential basis with the prior quarter. Diluted earnings per share, excluding losses and gains on sales, as well as losses on debt retirement, increased 78% to $4.14. During the quarter, we announced the definitive agreement to acquire a majority stake in the home health and hospice business of Brookdale Senior Living. This business provides us with a large platform that complements our local provider systems. It will expand the services we offer across our networks and provide us with more enterprise capabilities to coordinate care for our patients and improve their experiences. Additionally, we believe the home will become a more important setting for healthcare in the future with continuing growth in demand. We anticipate this transaction will close in the third quarter, and we look forward to our new partnership with Brookdale. Also during the quarter, we open two new hospitals, one in Denver and one in Orlando. Each of these hospitals will strengthen our system offerings in these communities. In the second quarter, we expect to close on the acquisitions of two small hospitals, both of which complement our networks in Nashville and Savannah. And lastly, we continue to invest broadly across our networks to improve convenience, access, and value for patients by developing more outpatient facilities. The pipeline for development and acquisition in this category remains strong. As we look to the rest of the year, we have increased our annual guidance to reflect the first quarter's performance and better perspective on important macro factors, mainly governmental reimbursement and economic outlooks for our markets, including uninsured assumptions. Bill will provide more details on our guidance in his comments. The first quarter is yet another period where the disciplined operating culture and strong execution by our teams were on display. I want to thank our 275,000 colleagues and 50,000 physicians for their tremendous work. We could not have performed at this level without their unwavering commitment to our patients and the communities we serve. As we continue to resource and execute on our strategic agenda, we will remain true to our mission of improving lives and delivering on the responsibilities we have to all our stakeholders. And now I'll turn the call over to Bill.