HCA Healthcare’s finance chief told investors this month that a familiar postpandemic strength is fading. Elective surgery, long a reliable driver of hospital revenue, is slowing down at the nation’s largest for-profit system, and Nashville, Tenn.-based HCA Healthcare is pointing to a loss of insurance coverage as a primary cause.
Same-facility inpatient surgeries at HCA fell 2.3% year over year in the second quarter, outpatient surgeries dropped 3.4%, and elective inpatient procedures, which make up about a third of the system’s inpatient caseload, were down 6%, CFO Mike Marks said at the Jefferies Healthcare Services and Technology Conference on Sept. 15.
“The movement out of HICS to uninsured, as people lose exchange coverage and become uninsured, they generally lose access to elective care,” Mr. Marks said.
He called exchange coverage losses “the primary driver of the slowdown in our elective surgery volumes,” though he also pointed to broader consumer caution tied to inflation and rising costs.
HCA isn’t alone in flagging the slowdown. Community Health Systems, Tenet Healthcare and Universal Health Services all reported softer elective volumes in the second quarter, but the four systems don’t agree on the cause, and the disagreement matters for how ambulatory surgery centers should read the moment.
CHS CEO Kevin Hammons has described patients delaying care they can’t afford, even as emergency visits keep climbing.
“Those visits and screenings are not translating into surgeries,” Mr. Hammons said. “Healthcare seems to be one of the first things that people will delay or at least attempt to delay if they can.”
The math behind that caution is stark. Uninsured and self-pay visits at CHS climbed from under 5% of volume to just over 6% year over year, and Mr. Hammons has said the system collects only “a few pennies on the dollar” from those patients.
Dallas-based Tenet Healthcare and King of Prussia, Pa.-based Universal Health Services see something different in the same numbers: not lost demand, but a shift in where care happens.
UHS CFO Steve Filton attributed the softness to a “continued shift of certain elective and outpatient procedures into alternate site settings, ASCs, freestanding imaging, etc.”
Tenet CEO Saum Sutaria, MD, has made a similar case, pointing to total joint replacements at United Surgical Partners International, its ambulatory division, which were up 10% in the second quarter even as inpatient elective volume softened. Tenet’s ambulatory segment revenue grew 9.3% in the quarter, compared with a 6% gain in its hospital segment, where growth was partly offset by fewer ACA exchange admissions.
HCA has built out roughly 150 ambulatory surgery centers across 43 markets in 19 states, largely to capture the same procedures shifting out of inpatient settings as CMS phases out its inpatient-only list over a three-year transition that HCA is now two years into. That expansion means even a system warning investors about lost elective demand is simultaneously betting that some of the volume it’s losing in hospital beds will resurface in its own surgery centers.
The stakes extend beyond any one system’s earnings call. A July report from the Urban Institute and Robert Wood Johnson Foundation found 39% of U.S. hospitals were already operating at a loss before the latest round of coverage losses, and Premier has projected hospitals could lose a combined $68.6 billion in revenue over 2026 and 2027.
For now, the country’s four largest for-profit systems are reading the same volume numbers and drawing opposite conclusions about where the patients went. That disagreement may not resolve until the ACA coverage cliff plays out over the next several quarters, a timeline that will shape how aggressively ASCs court the volume both sides say could be theirs.
At the Becker’s 32nd Annual Meeting: The Business and Operations of ASCs, taking place October 29-31 in Chicago, ASC leaders, surgeons and healthcare executives will explore strategies to drive growth, enhance operational performance, navigate reimbursement challenges and prepare for the future of ambulatory surgery. Apply for complimentary registration now.
