HCA Holdings Inc HCA
Q2 2012 Earnings Call Transcript

Operator: Ralph Giacobbe, Credit Suisse.

Ralph Giacobbe - Credit Suisse: So the 8.8% ER increase was particularly strong, especially in a non-flu quarter. Maybe just remind us your initiatives there and maybe have there been any closures of competing hospitals or EDs that can help explain some of that increase and then just along those lines, bad debt was up a fair amount so is that also a function of sort of the increase in ED and then just related to that the use of ACEP that you talked about I think that’s been in place for a while maybe just some context there?

Samuel N. Hazen - President of Operations: I will start with – this is Sam, I’ll start with the emergency room growth. I think the emergency room growth that we're seeing is a function of a significant effort that the Company has made over many, many years to improve our emergency room operation and that effort I think, if I could categorically answer, it would really come down to four, five major efforts. One, is clearly improving our operations and how we take care of our patients when they enter the emergency room and I think we’ve done an incredible job at dropping out time to see a patient from maybe 45 to 50 minutes to somewhere around 22 minutes on average across the company and that's clearly enhancing the service level and the satisfaction that we are seeing in the emergency room. The second thing that I would add that I think is having a tremendous impact is the fact that we're adding a lot program capability and by program capability I mentioned that in my comments earlier, we've added a number of trauma programs where it adds the level of sophistication to our emergency room, creates a better destination point for EMS services and so forth. On top of that, trauma development we've developed sophisticated stroke capabilities in the number of our emergency rooms, as well as a cardiac capability and I think again the combination of those program developments are adding volume as well. In the third piece and there is one more after this one that I would point to that I think is having a positive impact is capacity. I mean we have clearly added capacity in our emergency rooms where we have had compression we monitor our utilization per bed on a routine basis and where we've started to see capacity constraints we add capital either on our campus or in some cases off our campuses in locations that need emergency capabilities. Then finally marketing, I think we've marketed our emergency rooms in a way that showcases the performance and the capabilities and the combination of those would be the figure really driving the activity in our markets. We have not seen any particular closures that have yielded market share gains or anything of that nature in the emergency services, so that's really not a factor in what we're seeing in our markets.

Richard M. Bracken - Chairman and CEO: Milton, do you want to do the bad debt.

R. Milton Johnson - President and CFO: Sure. I'd be happy too. The primary reason for the increase in bad debt expense relates to increase in uninsured revenue. So, we basically have reserve for that. The remaining bad debt increase is really related to co-pay and deductibles, and there we're up about – the bad debts up about 10% or roughly about $25 million, and that's related to higher managed care volumes that we've reported. Sam mentioned the new trauma programs in the ED, those trauma programs do result in some higher co-pays, and so that's contributing to a piece of that, and then just a normal plan increases that we're seeing in co-pay and deductibles to our patients driving the remaining parts. So, it's not any one thing, it's the – but it's primarily the uninsured revenue growth, it's for driving bad debt.