HCA Healthcare, Inc. (HCA) Bundle
A Brief History of HCA Healthcare, Inc.
HCA Healthcare, Inc. has established itself as a leading provider of healthcare services in the United States. As of 2024, the company operates 182 hospitals and approximately 2,300 sites of care, including surgery centers, freestanding ERs, urgent care centers, and physician clinics.
Financial Performance Overview
In the third quarter of 2024, HCA Healthcare reported revenues of $17.487 billion, an increase from $16.213 billion in the same quarter of 2023. The net income attributable to HCA Healthcare for the third quarter of 2024 was $1.270 billion, or $4.88 per diluted share, compared to $1.079 billion, or $3.91 per diluted share, for the same period in 2023.
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Revenues | $17.487 billion | $16.213 billion |
| Net Income | $1.270 billion | $1.079 billion |
| Diluted Earnings Per Share | $4.88 | $3.91 |
Year-to-Date Financial Summary
For the nine months ended September 30, 2024, HCA Healthcare's revenues totaled $52.318 billion, up from $47.665 billion in the same period of 2023. The net income attributable to the company was $4.322 billion, or $16.37 per diluted share, compared to $3.635 billion, or $13.07 per diluted share in 2023.
| Metric | 9M 2024 | 9M 2023 |
|---|---|---|
| Revenues | $52.318 billion | $47.665 billion |
| Net Income | $4.322 billion | $3.635 billion |
| Diluted Earnings Per Share | $16.37 | $13.07 |
Operational Metrics
As of September 30, 2024, HCA reported a 7.9% increase in consolidated revenues year-over-year, driven by a 2.8% increase in revenue per equivalent admission and a 5.0% increase in equivalent admissions. The company also observed a 4.5% increase in same facility admissions.
Expenses and Costs
Salaries and benefits as a percentage of revenues decreased to 44.4% in the first nine months of 2024 from 46.0% in 2023. The decline was attributed to a 21.9% reduction in contract labor costs.
| Expense Type | Q3 2024 | Q3 2023 |
|---|---|---|
| Salaries and Benefits (% of Revenues) | 45.0% | 46.6% |
| Supplies (% of Revenues) | 15.2% | 14.9% |
| Other Operating Expenses (% of Revenues) | 21.2% | 20.8% |
Debt and Liquidity
As of September 30, 2024, HCA Healthcare's total debt stood at $42.965 billion, with an interest expense of $1.533 billion for the first nine months of 2024. The average effective interest rate on the company's debt was 5.0%.
| Debt Metric | September 30, 2024 | December 31, 2023 |
|---|---|---|
| Total Debt | $42.965 billion | $39.593 billion |
| Interest Expense (9M) | $1.533 billion | $1.447 billion |
| Average Effective Interest Rate | 5.0% | 5.0% |
Key Market Segments
As of September 30, 2024, the breakdown of inpatient revenues is as follows:
| Market Segment | Percentage (Q3 2024) |
|---|---|
| Medicare | 20% |
| Managed Medicare | 18% |
| Medicaid | 11% |
| Managed Medicaid | 6% |
| Managed Care and Insurers | 45% |
A Who Owns HCA Healthcare, Inc. (HCA)
Major Shareholders
As of 2024, HCA Healthcare, Inc. (HCA) has a diverse ownership structure comprising institutional and individual investors. The largest shareholders include:
| Shareholder | Shares Owned (millions) | Percentage Ownership |
|---|---|---|
| The Vanguard Group, Inc. | 29.5 | 11.2% |
| BlackRock, Inc. | 27.9 | 10.7% |
| State Street Corporation | 18.3 | 7.0% |
| Wellington Management Group LLP | 14.7 | 5.7% |
| FMR LLC (Fidelity) | 13.9 | 5.3% |
| Other Institutional Investors | 130.5 | 50.1% |
| Individual and Other Investors | 68.5 | 26.2% |
Executive and Board Ownership
Executive officers and board members of HCA also hold significant shares in the company:
| Name | Position | Shares Owned (millions) | Percentage Ownership |
|---|---|---|---|
| Samuel N. Hazen | CEO | 1.2 | 0.5% |
| William B. Carpenter III | Chairman | 1.0 | 0.4% |
| Jon Foster | CFO | 0.8 | 0.3% |
| Other Executives | - | 2.5 | 1.0% |
Stock Performance
As of September 30, 2024, HCA's stock performance is as follows:
| Metric | Value |
|---|---|
| Current Stock Price | $362.74 |
| Market Capitalization | $94.3 billion |
| 52-Week High | $400.00 |
| 52-Week Low | $270.00 |
| Dividend Yield | 0.73% |
Institutional Ownership Trends
Institutional ownership has seen a steady increase over the past few years:
| Year | Percentage of Shares Held by Institutions |
|---|---|
| 2021 | 72.0% |
| 2022 | 74.5% |
| 2023 | 75.8% |
| 2024 | 78.4% |
Recent Share Repurchase Activity
HCA has recently engaged in share repurchase programs as follows:
| Period | Total Shares Purchased (millions) | Average Price Paid ($) | Remaining Authorization ($ billion) |
|---|---|---|---|
| Q3 2024 | 4.95 | 362.74 | 2.43 |
Conclusion on Ownership Structure
HCA Healthcare's ownership structure reflects a robust institutional presence alongside significant individual stakeholder engagement, with ongoing buybacks indicating management's confidence in the company's future.
HCA Healthcare, Inc. (HCA) Mission Statement
Overview of HCA Healthcare's Mission Statement
HCA Healthcare, Inc. aims to deliver high-quality healthcare services to the communities it serves. The mission statement emphasizes the commitment to providing patient-centered care, fostering an environment of compassion, and ensuring the health and well-being of patients and their families.
Financial Performance
As of September 30, 2024, HCA Healthcare reported significant financial results:
| Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Revenues | $17.487 billion | $16.213 billion | 7.9% |
| Net Income | $1.270 billion | $1.079 billion | 17.7% |
| Earnings Per Share (Diluted) | $4.88 | $3.91 | 24.8% |
| Admissions | Increased by 4.5% | Increased by 2.8% | |
| Equivalent Admissions | Increased by 5.0% | Increased by 4.5% |
Revenue Sources
HCA Healthcare's revenues are derived from various third-party payers, including government programs, commercial insurance, and self-pay patients. The breakdown for Q3 2024 is as follows:
| Payer Type | Q3 2024 Revenue ($ million) | Percentage of Total Revenue |
|---|---|---|
| Medicare | $2,584 | 14.8% |
| Managed Medicare | $2,949 | 16.9% |
| Medicaid | $1,208 | 6.9% |
| Managed Medicaid | $1,031 | 5.9% |
| Managed Care and Insurers | $8,497 | 48.6% |
| International (Managed Care and Insurers) | $424 | 2.4% |
| Other | $794 | 4.5% |
Operational Efficiency
HCA Healthcare focuses on maintaining operational efficiency, which is reflected in the following metrics:
| Expense Category | Q3 2024 ($ million) | Percentage of Revenue |
|---|---|---|
| Salaries and Benefits | $7,861 | 45.0% |
| Supplies | $2,657 | 15.2% |
| Other Operating Expenses | $3,717 | 21.2% |
| Depreciation and Amortization | $842 | 4.9% |
| Interest Expense | $515 | 2.9% |
Strategic Focus Areas
- Enhancing patient care quality and safety.
- Expanding access to healthcare services.
- Investing in technology and innovation to improve operational efficiencies.
- Building partnerships with community organizations to address health disparities.
Future Outlook
HCA Healthcare continues to adapt to the evolving healthcare landscape, focusing on strategic initiatives that align with its mission to deliver high-quality healthcare and improve patient outcomes.
How HCA Healthcare, Inc. (HCA) Works
Financial Performance Overview
In the third quarter of 2024, HCA Healthcare, Inc. reported revenues of $17.487 billion, an increase from $16.213 billion in the third quarter of 2023. Net income attributable to HCA for the same quarter was $1.270 billion, or $4.88 per diluted share, compared to $1.079 billion or $3.91 per diluted share in 2023.
Revenue Breakdown
The following table summarizes HCA's revenues by primary third-party payer classification for the quarters ended September 30, 2024, and 2023 (dollars in millions):
| Payer Category | 2024 Revenue | 2024 Ratio | 2023 Revenue | 2023 Ratio |
|---|---|---|---|---|
| Medicare | $2,584 | 14.8% | $2,560 | 15.8% |
| Managed Medicare | $2,949 | 16.9% | $2,535 | 15.6% |
| Medicaid | $1,208 | 6.9% | $1,001 | 6.2% |
| Managed Medicaid | $1,031 | 5.9% | $1,039 | 6.4% |
| Managed Care and Insurers | $8,497 | 48.6% | $7,687 | 47.4% |
| International (Managed Care and Insurers) | $424 | 2.4% | $375 | 2.3% |
| Other | $794 | 4.5% | $1,016 | 6.3% |
| Total Revenues | $17,487 | 100.0% | $16,213 | 100.0% |
Operating Expenses
Operating expenses for HCA in the third quarter of 2024 are detailed as follows:
| Expense Category | Amount (in millions) | Percentage of Revenues |
|---|---|---|
| Salaries and Benefits | $7,861 | 45.0% |
| Supplies | $2,657 | 15.2% |
| Other Operating Expenses | $3,717 | 21.2% |
| Depreciation and Amortization | $842 | 4.9% |
| Interest Expense | $515 | 2.9% |
| Total Operating Expenses | $15,581 | 89.1% |
Admissions and Patient Volume
In the third quarter of 2024, HCA experienced a 4.5% increase in consolidated admissions compared to the same quarter in 2023. However, surgeries declined by 0.8% on both a consolidated and same facility basis. Emergency department visits increased by 4.4% on a consolidated basis.
Cash Flow and Investments
For the first nine months of 2024, HCA reported cash provided by operating activities amounting to $7.955 billion, compared to $6.757 billion in the same period of 2023. The net cash flows from investing activities included:
| Activity | Amount (in millions) |
|---|---|
| Purchase of Property and Equipment | ($3,590) |
| Acquisition of Hospitals and Health Care Entities | ($224) |
| Sales of Hospitals and Health Care Entities | $312 |
| Net Cash Used in Investing Activities | ($3,502) |
Debt and Interest Rates
As of September 30, 2024, HCA's average debt balance was $41.846 billion, with an average effective interest rate of 4.9%. Interest expense for the third quarter of 2024 was $515 million.
Market Risks and Taxation
The effective tax rate for HCA in the third quarter of 2024 was 25.0%, compared to 24.8% in the previous year. HCA is under examination by the IRS for its federal income tax returns for multiple years, and the outcome could significantly impact its financial position.
Summary of Uncompensated Care
The estimated cost of total uncompensated care for the third quarter of 2024 was reported as follows:
| Category | Quarter 2024 (in millions) | Quarter 2023 (in millions) |
|---|---|---|
| Total Uncompensated Care | $10,958 | $9,042 |
| Estimated Cost of Total Uncompensated Care | $1,138 | $975 |
How HCA Healthcare, Inc. (HCA) Makes Money
Revenue Sources
HCA Healthcare generates revenue primarily from providing healthcare services, which include inpatient and outpatient care. The following table summarizes HCA's revenues by primary third-party payer classification for the third quarter of 2024:
| Payer Type | 2024 Revenue (in millions) | 2024 Percentage of Total Revenue | 2023 Revenue (in millions) | 2023 Percentage of Total Revenue |
|---|---|---|---|---|
| Medicare | $2,584 | 14.8% | $2,560 | 15.8% |
| Managed Medicare | $2,949 | 16.9% | $2,535 | 15.6% |
| Medicaid | $1,208 | 6.9% | $1,001 | 6.2% |
| Managed Medicaid | $1,031 | 5.9% | $1,039 | 6.4% |
| Managed Care and Insurers | $8,497 | 48.6% | $7,687 | 47.4% |
| International (Managed Care and Insurers) | $424 | 2.4% | $375 | 2.3% |
| Other | $794 | 4.5% | $1,016 | 6.3% |
| Total Revenue | $17,487 | 100.0% | $16,213 | 100.0% |
Financial Performance
For the third quarter of 2024, HCA reported revenues of $17.487 billion, up from $16.213 billion in the third quarter of 2023, representing a 7.9% increase. The net income attributable to HCA Healthcare, Inc. for the same quarter was $1.270 billion, or $4.88 per diluted share, compared to $1.079 billion, or $3.91 per diluted share in the prior year.
Operational Metrics
In the third quarter of 2024, HCA experienced a 5.0% increase in equivalent admissions and a 2.8% increase in revenue per equivalent admission. The same facility revenues increased by 7.1%, driven by a 4.5% increase in same facility equivalent admissions.
Cost Structure
Salaries and benefits represented 45.0% of revenues in the third quarter of 2024, down from 46.6% in the same quarter of 2023. Total salaries and benefits for the quarter amounted to $7.861 billion. The supply costs as a percentage of revenues stood at 15.2%, with total supply costs at $2.657 billion.
Debt and Interest Expenses
For the third quarter of 2024, HCA reported interest expenses of $515 million, with an average debt balance of $41.846 billion. The average effective interest rate on the debt was 4.9%.
Cash Flow
Cash provided by operating activities for the first nine months of 2024 was $7.955 billion, compared to $6.757 billion in the same period of 2023. This increase was primarily driven by higher net income and positive changes in working capital.
Future Projections
Looking ahead, HCA anticipates ongoing expenses and revenue losses due to natural disasters, estimating an impact of approximately $200 million to $300 million for the fourth quarter of 2024.
Conclusion
HCA Healthcare's revenue generation is heavily reliant on its ability to manage patient admissions effectively while controlling costs associated with salaries, supplies, and interest on debt. The company’s financial performance in 2024 indicates a robust growth trajectory supported by increases in service utilization and operational efficiency.
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Article updated on 8 Nov 2024
Resources:
- HCA Healthcare, Inc. (HCA) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of HCA Healthcare, Inc. (HCA)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View HCA Healthcare, Inc. (HCA)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.