HCA Holdings plans to spend $2.7 billion this year to expand patient access in its hub markets as a two-year volume bonanza from the Affordable Care Act and improved economy starts to taper, HCA CFO Bill Rutherford told analysts Thursday at the Baird 2016 Global Healthcare Conference.
Nashville-based HCA, the nation's largest investor-owned hospital chain, is developing more than a dozen free-standing emergency rooms in its markets through 2017 to go along with the 57 already open, Rutherford said.
HCA also is adding ambulatory surgery centers, urgent-care centers, diagnostic centers and new hospital wings to provide convenience and the right setting for the severity of illnesses and injuries, he said.
HCA has grown overall volumes for nine consecutive years, Rutherford said. The company's 169 hospitals and other facilities have done a brisk business over the past two years especially, benefiting from a growing economy, Medicaid expansions in some states and the newly insured coming from the Affordable Care Act exchanges, he said.
Healthcare demand has been up 4% and more across the country. But that is likely to taper to a more traditional 2% rate, Rutherford estimates. And HCA wants to be ready to capture those patients at any point in the continuum by having the facilities in place when patients come.
Meantime, HCA has mostly eschewed hospital buying to concentrate on building out the delivery networks around its big urban hubs, which include Miami, Dallas, Houston, Tampa, San Antonio, Nashville and Richmond, Va.
Rutherford said HCA is either the market share leader in 13 of its biggest markets or the market's second-largest provider by concentrating on its hub strategy.
He said HCA last year approved a three-year capital spending budget of $7.7 billion. The company is seeing a 16% return on invested capital, while the cost of that investment is 5%, he said.