HCA Healthcare Raises 2025 Guidance Amid Strong Q3 Performance and Supplemental Payment Boost

HCA Healthcare, one of the largest for-profit hospital operators in the United States, has raised its full-year 2025 guidance following a robust third-quarter performance. The company's financial results, bolstered by newly approved state supplemental payment programs and improved payer mix, have exceeded Wall Street expectations and signaled continued strength in the healthcare sector.

Q3 Financial Highlights and Updated Guidance

HCA reported a 9.6% year-over-year increase in revenue to $19.2 billion for the third quarter of 2025. Net income attributable to HCA surged by 29% to $1.64 billion, or $6.96 per diluted share. Based on these strong results, the company has revised its full-year 2025 outlook:

• Revenue is now expected to be between $75 billion and $76.5 billion
• Net income attributable to HCA is projected to range from $6.5 billion to $6.72 billion
• Adjusted EBITDA is forecasted to be between $15.25 billion and $15.65 billion
• Earnings per diluted share are anticipated to fall between $27 and $28

The updated guidance reflects the company's confidence in its operational performance and financial stability for the remainder of the year.

Drivers of Growth and Operational Performance

Several factors contributed to HCA's strong quarterly performance:

1. State Supplemental Payment Programs: Finalized Medicaid state supplemental payment programs in Tennessee, Kansas, and Texas added $240 million to HCA's adjusted EBITDA during the quarter. These funds, designed to offset the shortfall between Medicaid reimbursement rates and actual care costs, accounted for approximately half of HCA's year-over-year growth in inpatient revenue per equivalent admission.

2. Improved Payer Mix: HCA experienced positive shifts in its payer mix, with commercial and Medicare visits showing notable increases. On a same-facility basis, commercial equivalent admissions rose 3.7%, while Medicare admissions grew by 3.4%.

3. Volume Growth: The company recorded mild increases in patient volumes, with same-facility equivalent admissions rising 2.4% year-over-year. Emergency room visits, inpatient surgeries, and outpatient surgeries all saw growth of about 1%.

4. Expense Management: HCA successfully managed its operating expenses, with contract labor spending remaining flat compared to the previous year and representing 4.2% of total labor costs.

Potential Headwinds and Future Considerations

While HCA's current performance is strong, the company faces potential challenges in the near future:

1. ACA Subsidy Uncertainty: The possible expiration of enhanced Affordable Care Act subsidies at the end of 2025 could impact patient coverage and utilization. HCA executives have expressed caution about predicting the potential effects of this policy uncertainty on future financial performance.

2. Government Shutdown Impact: The ongoing government shutdown may delay the approval of additional state supplemental payment programs, which could affect future revenue growth.

3. Respiratory Season: Management noted a slow start to the respiratory season, which could influence patient volumes in the coming months.

Despite these potential headwinds, HCA's management remains confident in the company's ability to navigate challenges and maintain its growth trajectory. The company continues to advocate for the extension of ACA subsidies and is prepared to assist patients in navigating coverage options should policy changes occur.

As HCA Healthcare looks ahead to 2026, executives anticipate demand to remain within the company's 2% to 3% volume growth range, with operating costs expected to follow stable trends consistent with recent years. The company's resilience plan is positioned to provide relief against potential cost pressures in certain areas.