HCA Healthcare, Inc.

Welcome to the HCA Healthcare Third 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 premier remarks and then we'll 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 will make 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 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, good morning. Thank you for joining the call. The business fundamentals for the company were solid in the quarter, with broad-based volume growth on a same facility basis across our footprint and various service lines. These results reflected continued strong demand for our services and healthy operating margins on a same facility basis. Across most areas of our business, we maintained the operational momentum that we experienced over the past three quarters, including continued progress with our labor agenda. Unfortunately, our results were unfavorably impacted by our Valesco hospital-based physician venture. Bill will give additional detail on this impact in a moment. We are continuing our efforts to integrate this venture and anticipate implementing additional actions that should improve its operational results over the next few quarters, including less pressure for the company in the fourth quarter. Because of this issue primarily, we have lowered the top side of our earnings guidance for the year to reflect the effects of these losses. It is important to understand that we believe the decision to consolidate Valesco was strategically imperative in maintaining the overall competitive positioning and capacity offerings of the company. As has been the case historically with our teams, I am confident that we will find a pathway forward to mitigate the impact it has had on our results. For the third quarter, diluted earnings per share were $3.91. Same facility admissions grew 3.4% year over year. Inpatient volumes were supported by continued strong acuity and a favorable payer mix with SANE facility commercial admissions growing an impressive 7%. SANE facility equivalent admissions increased 4.1%. This growth was driven by emergency room visits, which grew 3.5%. We are encouraged by our ER revitalization program and the results it is producing for our patients. Outpatient surgeries on a same facility basis grew approximately 1% year over year. Other outpatient categories also grew, including outpatient cardiology procedures, which increased almost 5%. These factors contributed to an increase in same facility revenue of 7.9% as compared to the prior year. In the quarter, we continued to invest significantly in our people with additional investments in orientation programs, Jalen College of Nursing, and clinical education facilities. Turnover was stable in the quarter, and nurse hiring was the strongest it has been all year. These positive results helped reduce contract labor costs 12.5% as compared to the third quarter last year, and 11% sequentially. During the quarter, we maintained available bed capacity. Instances where we could not accept patients from other hospitals represented only 0.9% of total admissions, which is consistent with the rate in the second 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 service offerings, and deliver higher quality care to our patients with greater accessibility. I'm proud of our people for what they do every day to deliver on our purpose. I want to thank them for their dedication and their overall great work. HCA Healthcare has a disciplined operating culture that we will maintain into the future. This focused approach, which benefits all stakeholders, enhances our ability to execute clinically, strategically, and financially. So let me close with this. We look forward to our upcoming investor day on November 9th, when we will provide more details about the company's approach to driving sustained long-term growth and shareholder value. We will also provide some early perspectives on the upcoming year, as well as longer-term thinking on growth targets. With that, I will turn the call to Bill for more details on the quarter's results.