10-KPeriod: FY2010

HCA Healthcare, Inc. Annual Report, Year Ended Dec 31, 2010

Filed February 17, 2011For Securities:HCA

Summary

HCA Healthcare, Inc. (HCA) operates as a leading healthcare services company with 164 hospitals and 106 freestanding surgery centers across 20 states and England as of December 31, 2010. The company's primary objective is to deliver high-quality, cost-effective healthcare. HCA's revenue streams are diversified, with managed care and other insurers representing the largest portion (53%), followed by Medicare (24%), Managed Medicare (7%), Medicaid (6%), and other sources. The company's business strategy focuses on growing its presence in existing markets, achieving industry-leading clinical and satisfaction measures, recruiting physicians, leveraging its scale for profitability, and pursuing disciplined development. A significant factor influencing HCA's operations is the "Health Reform Law" (Patient Protection and Affordable Care Act), which is expected to expand health insurance coverage, potentially increasing patient volumes, but also introduces new reimbursement models and reductions in government program spending. The company is also managing substantial debt incurred during a 2006 recapitalization and is actively seeking to improve operational efficiency and financial performance.

Financial Highlights

46 data points
Beta

Revenue

$28.04B

Net Income

$1.21B

4.3% Net Margin

EPS (Diluted)

$2.76

Total Assets

$23.85B

Cash & Equivalents

$411.00M

Free Cash Flow

$1.76B

Financial Statements
Beta
Revenue$28.04B
Interest Expense$2.10B
Net Income$1.21B
EPS (Basic)$2.83
EPS (Diluted)$2.76
Shares Outstanding (Basic)426.42M
Shares Outstanding (Diluted)437.35M

Key Highlights

  • 1HCA operated 164 hospitals and 106 freestanding surgery centers across 20 states and England as of December 31, 2010.
  • 2Managed care and other insurers accounted for 53% of HCA's revenues in 2010, followed by Medicare at 24%.
  • 3The company's growth strategy includes expanding in existing markets, enhancing clinical quality, recruiting physicians, leveraging scale, and pursuing disciplined development.
  • 4The "Health Reform Law" (Patient Protection and Affordable Care Act) is a major factor, expected to increase insured patients but also bring reimbursement changes and program spending reductions.
  • 5HCA reported net income attributable to HCA Holdings, Inc. of $1.207 billion in 2010, an increase from $1.054 billion in 2009.
  • 6The company's substantial leverage is a key risk factor, with total indebtedness of $28.225 billion as of December 31, 2010.
  • 7HCA is actively managing its provision for doubtful accounts, which declined to 8.6% of revenues in 2010, down from 10.9% in 2009, partly due to increased uninsured discounts.

Frequently Asked Questions

HCA Healthcare, Inc. is a leading provider of healthcare services, operating a network of general acute care hospitals, psychiatric hospitals, rehabilitation hospitals, and freestanding surgery centers. As of December 31, 2010, HCA operated 164 hospitals and 106 freestanding surgery centers across 20 states and England.

HCA's revenue is diversified across various payers. In 2010, managed care and other insurers represented the largest portion of revenue at 53%. Medicare accounted for 24%, Managed Medicare for 7%, Medicaid for 6%, and other sources made up the remainder.

The Health Reform Law (Patient Protection and Affordable Care Act) is expected to lead to an increase in the number of insured patients using HCA's facilities. However, it also introduces significant changes to Medicare and Medicaid reimbursement, including potential reductions in program spending and the introduction of value-based purchasing programs. The overall financial impact is complex and uncertain due to various factors like state implementation, patient behavior, and potential legal challenges to the law.

A significant financial risk for HCA is its substantial leverage, with $28.225 billion in total debt as of December 31, 2010. This high level of indebtedness could impact its ability to raise capital, react to economic changes, and meet its financial obligations. Additionally, the company is exposed to changes in government reimbursement programs (Medicare and Medicaid), competition, collectibility of patient accounts, and increasing labor costs.