HCA Healthcare CEO prepares for potential policy changes

Business Journals

25-04-2025

During HCA Healthcare's first quarter earnings call, CEO Sam Hazen said the company is preparing for potential impacts of federal policy changes. Here's what he had to say and what HCA is watching.
HCA Healthcare Inc. CEO Sam Hazen is preparing for the potential fallout of federal policy changes.
While Hazen was hesitant to outline any specifics during the company's first quarter earnings call Friday morning, he said the company is developing contingency plans in case there are negative impacts.
'We just do not have enough insight into what might happen. When we gain a better understanding, we will share more information as part of our quarterly earnings process,' Hazen said during the call. 'It is unclear how these efforts might be carried out and what effects they may have on our business. We are in a very fluid situation.'
Health systems across the county, and in Nashville, are bracing themselves for policy changes and funding cuts. Vanderbilt University Medical Center slashed its budget by $250 million in anticipation of National Institutes of Health cuts, which includes layoffs. Meharry Medical College has lost over $11 million in NIH funding that supported research, infrastructure and Ph.D. students. There's still a lot undecidedm, like tariffs and potential cuts to Medicaid, but HCA doesn't want to be caught unprepared.
'We are very engaged in advocacy as it relates to health policy. Our general approach is to support reasonable reforms,' Hazen said. 'However, we do not support reforms that harm coverage for families or individuals, nor do we support policies that compromise the ability for hospitals across the country to care for people in their times of utmost need.'
Hazen said all the planning HCA Healthcare (NYSE: HCA) is doing to brace itself comes from its experiences during the Covid-19 pandemic.
'As part of this planning process, we will maintain a long-term horizon and move forward with a sense of calm, steadiness, and confidence,' Hazen said.
HCA, which is Nashville's largest publicly traded company by revenue, reported $70.6 billion in revenue in 2024, up from the $64.9 billion it reported in 2023, according to the company's annual report. The company reported $18.3 billion in revenue for its first quarter compared to $17.3 billion in 2024, according to HCA's first quarter report.
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Hazen said he hasn't seen any significant changes in how HCA's competitors interact with the market, but that could change down the road.
"Now obviously, if NIH funding continues to be challenging for certain academic medical centers that may influence their behaviors and spending, if there are other policy adjustments that take place that could play out, we do think with our scale and with our diversification across the portfolio of markets, that provides a different level of capability than a lot of our local competitors who tend to only be in one particular market,' Hazen said. 'But our competitors in many instances have solid balance sheets, and we have to be able to anticipate their behaviors and their spending.'
On the topic of tariffs, Hazen and Mark Marks, HCA's chief financial officer, were hesitant to quantify any potential impacts to the organization.
'Until we really have better clarity about the final status by country, which goods are included or excluded, what the final tariff rates will be, it's really difficult to size the impact to HCA,' Marks said during the call.
The company's HealthTrust organization has been working to figure out what those impacts might be and ways to avoid significant issues, according to Marks.
'Seventy-five percent of our supply expense comes from either the United States, Canada or Mexico, or from products that currently have broad exemption from tariffs, such as pharmaceuticals,' Marks said. 'They're working on this to continue to secure fixed price contracting. They're continuing their work around supply chain mapping and risk assessments, and they're also deep in the middle of rationalizing suppliers' products as needed to deal with this tariff risk environment.'
HCA is also working with its key suppliers and partners to de-risk and diversify its supply chains, specifically away from China, according to Marks.
'I do believe that our tariff risk for 2025 is manageable, but I'll reiterate with Sam's opening comment that the environment is extremely fluid, and we are continuing to closely monitor as each day goes forward,' Marks said.