HCA Healthcare, Inc.

Welcome to the HCA Healthcare Second Quarter 2023 Earnings Conference Call. Today's call is being recorded. At this time, for opening remarks and introductions, I would like to turn the call over to Vice President of Investor Relations, Mr. Frank Morgan. Please go ahead, sir.

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 will provide some prepared remarks, and then we will take questions. Before I turn the call over to Sam, let me remind everyone that should today's call contain any forward-looking statements, they're 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 and 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 net income attributable to HCA is included in today's press 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.

Good morning. Thank you for joining the call. The company produced solid earnings in the second quarter. These results reflected continued strong demand for its services and healthy operating margins. Across most areas of our business, we maintain the operational momentum that we experienced over the past three quarters. We believe this strength should continue into the second half of the year. Accordingly, we updated our earnings guidance for 2023 to reflect this outlook. Against the difficult comparison to the second quarter of 2022, diluted earnings per share increased to $4.29. Same facility volumes across the company were strong. Admissions grew 2.2% year over year. Inpatient surgeries increased 1.8%. Same facility equivalent admissions increased 3.7%. This growth was driven by emergency room visits, which grew 3.7%, and outpatient surgeries, which grew 3.3%. Other outpatient categories also grew, including outpatient cardiology procedures, which increased 5%. The growth in volumes was broad-based across the company's divisions and diversified within most service lines. Additionally, volumes were supported by strong acuity growth of 1.6% and a favorable payer mix from commercial adjusted admissions growth of 5%. These factors drove an increase in same facility revenue of 6.3% as compared to the prior year. In the quarter, we continue to invest in our people, and as a result, we saw improvements across virtually all key labor metrics. Turnover continues to decline for nurses and trended at an annualized rate of 17%. Nurse hiring remained strong in the quarter and for the year has increased by 9% as compared to last year. These positive results help reduce contract labor costs 20% compared to the second quarter last year. During the quarter, we improved available bed capacity. Instances where we could not accept patients from other hospitals declined and represented 0.8% of total admissions, down from 1.5% in the first quarter. We believe the significant investments we are making in our networks, our people, and our technology agenda will provide us with the necessary resources to improve our services and provide even higher quality care to our patients. As we look to the future, we remain encouraged by both the backdrop of strong demand that we expect in our markets and our overall competitive positioning within them. HEA Healthcare will continue to use its disciplined operating culture to execute our strategic and capital allocation plans. I want to thank our colleagues for their dedication and their overall effectiveness. So let me close with this. I want to speak to a recent event that we take very seriously. On July 10th, we announced that we had recently discovered that a list of certain information with respect to some of our patients was made available by an unknown and unauthorized party on an online forum. We have confirmed that the list does not include clinical information, payment information, or other sensitive information like passwords, driver's license, or social security numbers. Our forensic investigation is ongoing, but this event appears to be a theft from an external storage location that was exclusively used to format email messages. We are in the process of notifying all affected patients in accordance with our legal and regulatory obligations, and not unexpectedly, we have been named as a defendant in multiple class action lawsuits. This incident has not caused any disruption to our day-to-day operations, nor do we believe it will materially impact our business or financial results. HCA Healthcare believes the privacy of its patients is a vital part of its mission and remains committed to maintaining the security of their personal information. With that, I will turn the call to Bill for more details on the quarter's results.