HCA, CHS execs 'hopeful' deferred care will trickle back to hospitals in 2022

Major hospital chain executives say they’re confident revenue growth and volume recovery are on the horizon, although whether business will pick up in the short term is largely up to whether the country will see another major surge before the end of the year.

Speaking at the Bank of America Securities Healthcare Conference this week, executives from Community Health Systems (CHS) and HCA Healthcare pointed to first-quarter high acuity volumes, such as surgeries, that were roughly on par or above 2019 numbers.

CHS CEO Tim Hingtgen said much of his system’s high acuity volume during the first quarter was concentrated in March, suggesting that these services were deferred during January’s omicron surge but are still in high enough demand to be rescheduled whenever capacity permits—a trend he said the system has seen consistently across the pandemic’s surges.

However, Hingtgen also acknowledged that some deferred care has not returned to the system as quickly as anticipated. He said the system has now accepted that certain visits delayed by COVID—routine screens, physician practice visits or other low-acuity needs—aren’t waiting around the corner to compensate for years of lost volume growth.

“We now see that the deferred care is likely going to be sprinkled through [the coming months] because … our physician practices run pretty full schedules,” he said during the conference session. “That’s our current theory. Some of it is probably foregone but we still feel very opportunistic in terms of what’s to come in subsequent quarters because people need orthopedic surgeries, they need cardiac procedures, [and they] deferred screenings that maybe [lead to] more advanced cancers.”

Executives from HCA, the country’s largest hospital chain, said they were pleased with the system’s “non-COVID admission activity” during the first quarter but need a few more months to determine whether the volumes are a lasting turnaround or temporary relief of demand before the start of another surge.

Still, CEO Sam Hazen conveyed an optimistic mindset for the coming months, noting that so far “there’s nothing to suggest” that volume recovery will take another dive before the end of the year.

“We’ve literally for two years only had two months post a surge where we didn’t get into another surge,” he said. “2022—I guess I can say this, I’m gonna say it—we’re three months into a period where we haven’t had a surge. It’s the first time we’ve had three months, so I’m hopeful.”

Hingtgen said his system is reaching out to patients who might have deferred their care, “because sometimes [deferred care] won’t come back as quickly as we thought it would without those efforts.”

Executives from each company also said they aren’t concerned that a bump in lower acuity volumes would have a negative impact on margins due to their expense reduction efforts and investments in lower-cost outpatient sites of care they pursued during the past few years.

But while 2022 was still something of a question mark for CHS and HCA—especially when taking into account the year's contract labor crunch—the health system executives were unflinchingly bullish on their growth opportunities in 2023 and beyond.

Both hospital chains pointed to the aging baby boomer population and population growth within their local markets as surefire drivers of demand in the coming years. They also highlighted investments into new outpatient facilities, partnerships and other means to capture and funnel more patients into their networks.

“I fully anticipate between the next five to seven years that we will possibly even double the [roughly 2,500] outpatient facilities that we have supporting the inpatient platform and making it more convenient for the patient, a better price point for the patient and then better networked with our hospital facilities to drive business,” Hazen said. “One of our greatest growth opportunities is keeping patients internalized in the HCA system. We don’t do as good a job as we possibly can to make it easy to navigate for our patients, and if we can do that we think we can drive some growth inside of what already churns, if you will, inside of our systems.”