HCA Healthcare reaffirmed its 2025 guidance following an opening quarter of solid care demand and better-than-expected earnings.
The country’s largest for-profit health system announced Friday morning $1.61 billion of net income attributable to the company ($6.45 per diluted share) and revenues of $18.32 billion for the first quarter. Both are improvements over the prior year’s $1.59 billion ($5.93 per diluted share) and $17.34 billion.
Adjusted EBITDA for the quarter was $3.73 billion, also up from $3.35 billion in the first quarter of 2024.
Executives during the company’s earnings call touted “solid fundamentals” and “broad improvements” across most metrics and progress toward the larger strategic goal of expanding network and inpatient capacity. That said, earnings were roughly flat in markets impacted by major hurricanes late last year.
Investors, during the call’s Q&A, sought clarity on surgical volume declines—the company’s only real stumble on volumes—negotiations with payers and the health system's exposure to policy issues like tariffs.
“We have a general sense for the new administration’s stated priorities. We do not have any specifics,” CEO Sam Hazen said Friday morning. “It is unclear how these efforts may be carried out and what effects that they have on our business.
“We’re very engaged on advocacy as it relates to health policy. Our general approach is to support reasonable reforms, however, we do not support reforms that harm coverage for families and individuals, nor do we support policies that compromise the ability for hospitals across the country to care for people in their times of utmost need.”
Executives repeatedly shied away from quantifying the potential impact from federal policies, saying they didn’t yet have enough information but would provide updates as they come in future quarterly earnings.
On tariffs, Hazen and Chief Financial Officer Mike Marks described the situation as “dynamic” and “fluid”—but also “manageable” due to most group purchasing contracts already being set for the next couple of years.
Specifically, per Marks, 70% of HCA’s finished goods are already contracted for 2025, and 60% for 2026. Three-quarters of the company’s supply expense comes from suppliers in the U.S., Canada and Mexico or are for products currently excluded, such as pharmaceuticals, to which the administration has said it intends to bring a targeted tariff. More broadly, HCA’s team is considering other suppliers and working to shift away from China, Marks said.
Executives also said they were locked in on policy developments surrounding enhanced Affordable Care Act premiums and drug pricing in outpatient settings, but again opted not to provide concrete guidance on how those issues could affect HCA’s projections.
Volumes were a point of pride for the company, which noted year-over-year same facility admissions growth of 2.6% and same facility equivalent admission growth of 2.8%.
Same facility ER visits rose 4%, though same facility inpatient surgeries rose just 0.2% while outpatient dipped 2.1%. Executives waived off the surgery comparisons, which Hazen acknowledged were “a little softer than we expected,” partially affected by 2024’s leap year and “always tough” to predict during the first quarter’s deductible resets and respiratory illnesses.
Same facility revenue per equivalent admission rose by 2.9%, with Marks outlining a “strong” payer mix and managed care contracting that’s largely settled for 2025 (over 90% contracted), 2026 (75%) and 2027 (25%). Marks said the company is so far “pleased” with contracting and now has access to more commercial and exchange lives through payer contracts than ever.
On dispute resolution, Marks said the recent uptick in payer pushback is continuing but that HCA’s investments toward combating those disputes have ensured the denials had no material impact on the company’s numbers.
Executives said HCA has generally been able to keep its expenses in line, particularly with internal and external recruitment and retention efforts and no immediate issues with the labor market in sight.
With those costs either managed or largely fixed in place, Hazen said HCA’s path toward growth will come from pursuing efficiencies while deploying capital toward increasing volumes. Here he outlined a 3.3% year-over-year rise in capacity across sites of care and a 2% bump in inpatient bed capacity and said the company will continue those efforts on the expectation of sustained demand for healthcare services.
“We’re pretty encouraged by all aspects of our operations,” Hazen said. “Our teams are doing a wonderful job in dealing with the volumes and translating that … to quality outcomes, efficiency and a great place to work for our employees.”
HCA operates 192 hospitals and roughly 2,500 ambulatory care sites. Across 2024, it logged $70.6 billion in total revenues and $5.76 billion in net income attributable to HCA. Its shares were trading about 5% below market open as of Friday afternoon.
Its numbers follow those of Community Health Systems, which similarly reported strong volumes during the first quarter, which it attributed to the heavy flu season, and fended off questions on policy changes.