HCA Healthcare’s earnings landed above internal and analyst expectations for the third quarter as accelerated volume growth and cost reductions blunted a weakening payer mix.
On Tuesday morning, executives at the country’s largest for-profit health system said it’s now on track to land in the upper half of its 2026 estimated guidance ranges, and in an earnings call gave an early prediction that earnings performance next year “will be generally consistent with 2026” despite expected policy and macroeconomic headwinds.
“I’ve often mentioned that HCA has strong staying power because of our scale, the important role we play in providing critical services to communities and our disciplined culture,” CEO Sam Hazen said during the call. “Despite the challenges this year brought about by federal policy changes, we have continued to move the company forward and believe we are positioned to end the year positively as we look ahead to 2027.”
HCA’s stock opened the day about 4% above Monday’s close, as Q3 revenues of $19.85 billion and earnings of $7.22 per diluted share landed above the market’s consensus estimates as well as HCA’s performance during the same period a year prior. That trading held firm until the opening commentary of the company’s earnings call, when details on the quarter and cautious forward-looking commentary presumably dropped share prices to more than 4% below open (as of noon Tuesday).
In terms of the most recent quarter, executives highlighted a 2.7% year-over-year increase in same-facility admissions and a 3% rise in adjusted same-facility admissions, as well as a 5.1% increase in same-facility emergency room visits—reflecting greater growth that HCA had seen in the year’s earlier quarters.
However, weaker surgical volumes persisted with a 1.4% year-over-year decline in same-facility inpatient surgery and 3.7% decline in same-facility outpatient surgery. Chief Financial Officer Mike Marks noted that the company continues to see “solid growth” in emergent surgical volumes but is taking hits on elective procedures, where general affordability concerns and loss of insurance coverage have reduced demand.
Such coverage reductions, primarily due to the expiration of enhanced subsidies for patients covered under the exchanges, continued to drag on HCA’s earnings. Similar to prior quarters, HCA has seen those falling off exchanges “migrate almost one-for-one into uninsured,” leading uninsured volumes in the quarter to rise from 8.5% of total equivalent admissions in 2025 to 10.5% in 2026.
The result, Marks said, is that “we estimate the payer mix shift from exchanges to uninsured resulted in an unfavorable impact on adjusted EBITDA of approximately $400 million in the quarter. We now expect the full-year unfavorable impact on adjusted EBITDA from payer mix shifts to be at or slightly above the upper end of the range of our previously updated estimates.”
Marks noted that exchange volumes did improve from the second quarter, by about 8%, though Hazen did concede that the exchange's unfavorable impact in the quarter “was a little bit higher than we estimated.” The weakened payer mix plus the slow surgical volumes held HCA to 0.6% growth in same-facility revenue per equivalent admission.
HCA also recognized about $50 million of incremental net benefit tied to Medicaid supplemental payment programs, putting the company on pace for somewhere between $600 million and $800 million for the year. Executives also touted cost reduction efforts that left same-facility cost per equivalent admission flat compared to the prior year, though they acknowledged that professional fees were up 12% and “continue to be a pressure point for the company.”
As for the future, Hazen said the company’s early expectations are for volume to grow between 2% and 3%, in line with its more longitudinal goals and driven by its increasing acute and network presence within growing markets. But among those volumes, “we believe it’s reasonable to assume for 2027 that fewer people will lose their coverage on the health insurance exchanges than we experienced in 2026. However, we do expect there still will be a meaningful impact on payer mix,” Hazen conceded, later adding that the company wants to see fourth quarter volume trends and the results of open enrollment before giving a more concrete estimate.
Further, Medicaid changes stemming from the One Big Beautiful Bill Act are expected to reduce HCA’s supplemental payment net benefit by $550 million to $650 million. These hits will be mitigated by the company’s ongoing resiliency program and the expected volume growth.
“When we aggregate these preliminary observations, we anticipate our earnings in 2027 will be generally consistent with 2026,” the CEO said. “Beyond 2027, we anticipate performance more in line with our long-term growth targets.”
Hazen added that HCA’s estimates assume that the company’s payer mix has already weathered the worst of exchange enrollment disruptions; that there will be “no material policy changes” beyond the OBBBA; and that its strategic initiatives around cost reductions, technology improvements and network development bear fruit.
Executives broadly rebuffed efforts from analysts on the call seeking more concrete numbers on those estimates and assumptions, often referencing the third quarter’s solid trajectory as a source for optimism and the need to see whether that momentum persists through the end of the year.
HCA’s earnings also included the declaration of a $0.78 per share quarterly cash dividend. Across 2025, it grew revenues 7.1% to $75.6 billion and reported $6.8 billion of net income.
It is the first major for-profit to weigh in on Q3 performance, with peers like Tenet Healthcare, Universal Health Services and Community Health Systems slated to present later this week.