Analogy 1: Marriott for hospitals

Analogy 2: The Hilton of healthcare facilities

• Acute Care Hospital Services: Provides comprehensive medical, surgical, and emergency care within their network of hospitals.
• Outpatient and Ambulatory Services: Encompasses a variety of non-hospital settings including freestanding emergency rooms, urgent care centers, surgical centers, imaging centers, and physician clinics.
• Behavioral Health Services: Offers specialized treatment programs for mental health and substance use disorders.
• Rehabilitation Services: Delivers physical, occupational, and speech therapy aimed at recovery and improving functional abilities.

HCA Healthcare (NYSE: HCA) primarily sells its healthcare services to individuals.

The major categories of customers (patients) it serves, based on their primary payer source, include:

• Patients with Commercial Insurance: These individuals have healthcare coverage through private insurance companies. HCA Healthcare contracts with a wide range of commercial insurers (such as UnitedHealthcare, Aetna, Cigna, and Elevance Health) to provide medical services to their members.
• Patients Covered by Government Programs: This category includes individuals whose healthcare costs are primarily financed by government-sponsored programs. Key examples are Medicare (serving those aged 65 and older, and certain younger people with disabilities), Medicaid (for low-income individuals and families), and TRICARE (for military personnel and their families).
• Self-Pay Patients: These are individuals who are either uninsured or choose to pay for their medical services directly out-of-pocket, without the involvement of a third-party payer for the primary coverage.

• McKesson Corporation (MCK)
• Cardinal Health, Inc. (CAH)
• Johnson & Johnson (JNJ)
• Medtronic plc (MDT)
• Baxter International Inc. (BAX)
• Stryker Corporation (SYK)
• GE HealthCare Technologies Inc. (GEHC)

Samuel N. Hazen, Chief Executive Officer

Samuel N. Hazen is the Chief Executive Officer of HCA Healthcare, a position he assumed on January 1, 2019. He is a veteran of HCA Healthcare, having served the company for over 40 years. Prior to his CEO appointment, Hazen was president and chief operating officer since 2016. He has held various senior leadership positions within HCA, including president of operations (2011-2015) and president of HCA Healthcare's Western Group (2001-2010), where he was also its chief financial officer. Hazen began his career in 1983 in Humana's Financial Management Specialist program and has served as chief financial officer for hospitals in Georgia and Las Vegas. He serves on the boards of the Nashville Health Care Council, the Federation of American Hospitals, and the HCA Healthcare Foundation.

William B. Rutherford, Executive Vice President and Chief Financial Officer

William B. Rutherford serves as Executive Vice President and Chief Financial Officer of HCA Healthcare. He is a long-standing member of the HCA team, having joined as a staff auditor in 1986. Rutherford's roles at HCA have included Director of Operations Support and Chief Financial Officer for the Georgia Division, and Chief Financial Officer for the Eastern Group (1996-2005). In 2005, Rutherford left HCA to start his own training and education company, which also led to work with several private equity ventures. He also served as Chief Operating Officer of Psychiatric Solutions, a behavioral health services provider, from January 2006 to June 2007. Rutherford rejoined HCA in December 2008 as Chief Financial Officer of the Outpatient Services Group and later served as Chief Operating Officer of the Clinical and Physician Services Group before his appointment as CFO. He is a Certified Public Accountant.

Jon M. Foster, Executive Vice President and Chief Operating Officer

Jon M. Foster is the Executive Vice President and Chief Operating Officer of HCA Healthcare, a role he assumed on January 1, 2023. A 22-year veteran of HCA Healthcare, he previously served as president of HCA Healthcare's American Group since 2011. Prior to that, he was president and CEO of St. David's HealthCare in Austin, Texas, and executive vice president of operations for the Baptist Health System of East Tennessee. His career in healthcare began in 1986 at the Methodist Healthcare System in Houston, Texas.

Joseph A. Sowell, III, Senior Vice President and Chief Development Officer

Joseph A. Sowell, III is the Senior Vice President and Chief Development Officer for HCA Healthcare, joining the company on December 1, 2009. In this role, he is responsible for all development functions and transactions, including mergers, acquisitions, divestitures, and real estate involving hospitals, outpatient centers, and physician practices. Before joining HCA, Sowell was a partner at Waller Lansden Dortch & Davis, where his practice focused on healthcare law, mergers and acquisitions, joint ventures, private equity financing, tax law, and general corporate law. He also co-managed the firm's Corporate and Commercial Transactions practice. Earlier in his career, Sowell served as the head of development and later as chief operating officer of a healthcare company focused on developing comprehensive ambulatory care centers.

Michael S. Cuffe, M.D., M.B.A., Executive Vice President and Chief Clinical Officer

Dr. Michael S. Cuffe is the Executive Vice President and Chief Clinical Officer of HCA Healthcare, a position he has held since January 1, 2022. In this role, he is responsible for the company's clinical agenda, including clinical quality, nursing, care transformation, clinical informatics, and he continues to lead physician services, which includes urgent care operations, graduate medical education, and laboratory services. Dr. Cuffe joined HCA Healthcare in October 2011 as president and CEO of Physician Services. Prior to his time at HCA, he served as vice president for Ambulatory Services and Chief Medical Officer for Duke University Health System. He also held various leadership roles within the Duke Clinical Research Institute and served as Vice Dean for the Duke University School of Medicine. Dr. Cuffe received his MD and MBA degrees from Duke University.

The aggressive expansion and vertical integration of non-traditional healthcare providers represent a clear emerging threat. Large retail chains, technology giants, and payer-owned organizations are increasingly entering and expanding their footprint in healthcare delivery, particularly in primary care, urgent care, and specialized outpatient services.

Examples include:

• Amazon: Acquired One Medical (primary care) and has been expanding its Amazon Pharmacy and virtual care offerings.
• CVS Health: Beyond its MinuteClinic network, CVS has acquired Signify Health (home health and value-based care enabler) and has invested heavily in its HealthHUBs model, co-locating primary care with pharmacy services. They are also actively acquiring primary care groups like Oak Street Health.
• Walgreens Boots Alliance: Has made significant investments in VillageMD, integrating primary care clinics within or adjacent to its pharmacies, and expanding into specialty pharmacy services with Shields Health Solutions.
• UnitedHealth Group (Optum): As one of the largest employers of physicians in the U.S., Optum continues to acquire physician groups, urgent care centers, and specialty clinics, building out a comprehensive care delivery network often focused on value-based care models.
• Walmart: Expanding its Walmart Health centers offering primary care, dental, behavioral health, and lab services.

These entities are establishing broad networks that compete directly with HCA's outpatient facilities and emergency rooms for patient volumes, especially for lower-acuity conditions and routine care. Their models often prioritize convenience, technology integration (telehealth, digital tools), and potentially lower costs, which can attract patients away from traditional hospital systems. This trend challenges HCA's traditional fee-for-service revenue streams and ability to capture patients across the care continuum.

HCA Healthcare (symbol: HCA) primarily operates in hospital and outpatient/ambulatory healthcare services in the United States and the United Kingdom. The addressable markets for their main products and services are as follows:

• U.S. Hospital Services Market: The U.S. hospital services market was valued at approximately USD 2.48 trillion in 2024 and is projected to reach around USD 4.02 trillion by 2034, demonstrating a compound annual growth rate (CAGR) of 6.69% from 2025 to 2034. Another estimate placed the market at USD 2.32 trillion in 2023, with a projection to reach USD 3.79 trillion by 2033, growing at a CAGR of 4.85% from 2024 to 2033. In 2024, the U.S. hospital services market generated a revenue of USD 1.6014973 trillion and is expected to reach USD 2.0535116 trillion by 2030, with a CAGR of 4.2% from 2025 to 2030.

• U.S. Outpatient/Ambulatory Services Market: The U.S. ambulatory services market size was estimated at USD 289.5 billion in 2023 and is projected to grow at a CAGR of 5.38% from 2024 to 2030. Outpatient volumes in the U.S. are expected to grow by 10.6% over the next five years.

• Global Hospital Services Market: The global hospital services market size was estimated at USD 13.30 trillion in 2024 and is predicted to increase to approximately USD 24.17 trillion by 2034, expanding at a CAGR of 5.99% from 2025 to 2034.

• Global Outpatient Care Market: The global outpatient care market size is expected to be worth around USD 150.7 billion by 2034, from USD 48.1 billion in 2024, growing at a CAGR of 12.1%.

HCA Healthcare (HCA) is expected to drive future revenue growth over the next 2-3 years through several key factors:

1. Growth in Patient Volumes: HCA Healthcare consistently highlights broad-based volume growth across its markets and service lines as a primary revenue driver. This includes increases in same-facility admissions, equivalent admissions, and emergency room visits, reflecting strong demand for healthcare services, demographic trends, and the company's expanding service offerings. For instance, Q3 2025 saw 9.6% revenue growth driven by volume growth, and Q1 2024 reported a notable rise in same-facility admissions, emergency room visits, and outpatient surgeries.
2. Favorable Payer Mix and Increased Patient Acuity: The company benefits from an improved payer mix, with a higher proportion of commercial volumes, and an increase in the acuity levels of its inpatient business. These factors lead to higher revenue per equivalent admission. For example, in Q1 2024, payer mix and acuity levels improved, with commercial volumes representing approximately 36% of equivalent admissions, up from 34% in the prior year.
3. Strategic Network Development and Facility Expansion: HCA Healthcare is making significant capital investments to enhance its market position, expand its physical footprint, and increase capacity. This includes adding inpatient beds and developing new outpatient facilities, aiming to expand sites of care and improve access across its networks. HCA anticipates spending approximately $5 billion on capital expenditures for 2025, reflecting ongoing investment in infrastructure and services.
4. Price Increases and Improved Reimbursement: HCA's revenue growth is also supported by higher reimbursement rates per equivalent admission. This indicates the company's ability to negotiate favorable pricing with payers and realize increased revenue from the services provided. In Q1 2024, same-facility revenue growth was a result of volume metrics coupled with 3.5% higher reimbursement per equivalent admission.

Capital Allocation Decisions of HCA Healthcare (HCA) (Last 3-5 Years)

Share Repurchases

• HCA Healthcare's Board of Directors authorized an additional share repurchase program for up to $10 billion of the company's outstanding common stock, with no specified time limit.
• In the third quarter of 2025, HCA repurchased 6.514 million shares of common stock at a cost of $2.498 billion.
• During the fourth quarter of 2024, the company repurchased 4.739 million shares for $1.700 billion.

Outbound Investments

• HCA Healthcare spent $635 million on acquisitions in 2023, which included $229 million for four hospital facilities in Texas and $406 million for non-hospital healthcare entities.
• In the first quarter of 2023, HCA acquired 90% of Valesco in a joint venture with Envision Healthcare.
• In the first quarter of 2025, HCA finalized the acquisitions of Catholic Medical Center in New Hampshire and Lehigh Medical Center in Florida for $227 million.

Capital Expenditures

• HCA Healthcare's capital expenditures were approximately $4.7 billion in 2023.
• Expected capital expenditures for 2024 are estimated to be around $5 billion.
• For 2025, capital spending is projected to be between $5.0 billion and $5.2 billion, with a focus on upgrading facilities, technology, and service offerings, and expanding inpatient and outpatient capacity to meet growing demand. The company has approximately $6 billion worth of projects under development.