All right, good afternoon, I guess, right? It's 12:00. I want to thank everybody for being here with us. My name is Justin Lake. I cover healthcare services here at Wolfe Research. Very excited to have the HCA team here. We've got Mike Marks, company's CFO, as well as Frank Morgan, the Czar of Healthcare IR. Appreciate you guys being here with us. Maybe we could just start off, Mike, with a few reflections on the year to date, positive, negative surprises, and how you think the company is positioned for 2026. Sure. When I think about the overall work of the company, it is really taking care of patients, right? We always kind of start with that. When I look at the work of patient care, the outcomes so far this year, including our trends to the past on things like quality outcomes and patient safety, are going well. We are pleased with the work and the efforts of all of our clinical teams in that work. Engagement. We are in the people business. We are 315,000 colleagues. We had the great pleasure of serving 44 million patients last year. The engagement and satisfaction of our employees, our physicians, and our patients continue to improve. It is a huge part of our work every year. On the people side as well, I think of things like retention and reducing turnover as being really important, and workforce development, and things like the Galen School of Nursing and our physician residency program. So broadly, on the people side, we're pleased this year with our work. On growth, this may be one of the surprises. I mean, we started the year thinking we would be more like 3-4% volume growth. We're in kind of back to our long-term trends of 2-3%. So we're in the mid-twos as we're here three quarters into the year. It's kind of interesting when you think about what fell short. We were short on self-pay. We're short on Medicaid. A little less Medicare than we originally thought as we started the year. Broadly, that little bit of a shortfall in volume is really not translating into an economic issue. The payer mix is good here as we started the first three quarters. The last thing I would say just in terms of the work would be our operating leverage and the expense management capabilities of the company. We've been really working hard to improve our margins, to focus on our resiliency programs. I think our margin performance as we've gone through the first nine months has also performed well as a company. I think we're heading into 2026 with good momentum across kind of all of our pillars that we work on. I'm really proud of the colleagues and the teams in the field who do the work. They're doing a great job. That's exciting to hear. As you might expect, we get a ton of questions on what's going to happen in 2026 with provider taxes, with the exchanges. I know those are topics that we're not going to even try to pin down numbers around, right? There's just too many moving parts. I did listen to your conference presentation last week. Heard you talk about the volume discussion and the thought process that we think 2-3%, a company thinks 2-3% is the right ballpark for next year. Probably the swing factor between the high and the low end of the range will be those exchange subsidies, whether they're extended. If I just think about that as a 1% swing, I'm just curious how you think about some of the factors that could play into that in terms of the shift from exchanges to commercial to back to commercial employer, which I know is very likely to happen in your states. The order of magnitude there, how much of that volume that might move, let's say, to the uninsured, but it's still going to stick around, right? Any of those kind of moving parts that you can share with us in terms of that might be helpful to think through from an economic perspective for the company? Yeah, I think that the right way to think about it is that 2-3% long-term growth plan, including we think will hold for 2026, really kind of comes from our confidence in our markets and the work we do on the ground to spend capital, to expand our networks, to optimize our networks. That work has yielded almost 19 straight quarters now of year-over-year growth. I think that demand really starts there in our markets where we serve. I think the EPTCs, though, are a swing factor for 2026, for sure. The payer mix underneath a 2 or a 3 could look different. If EPTCs get extended, you'll get, I think you would get closer to 3, and you would have a better payer mix. If they don't get extended. A stable payer mix year- over- year, maybe a little bit better. Definitely better than if they expire, for sure. If they expire, I think you're going to see some people move back to employee-sponsored insurance. We're not sizing that yet. A lot of people have sized it, but there's clearly people that have found their ways to the exchanges that are eligible for employee-sponsored insurance. I think there'll be some movement back. I think there'll be some movement to uninsured. I think there'll be some people who stay on the exchanges as long as they can because they want and need coverage. That will kind of filter itself through. Our past experience through past recessions, as an example, is that when people go from being covered in some way to being uninsured, they still access healthcare services. They tend to do it through the emergency room at hospitals, but they tend to access it, but at a bit of a lower rate than when they had coverage. That is the way to think about that kind of movement in 2026 should EPTCs expire. Now, obviously, we're still advocating heavily that there be a potential deal, but that is the way I think about it. The demand really reflects what we see on the ground. The difference will be the payer mix of that demand in 2026, depending on what happens here. Got it. If I promise this is the only question I'm going to ask on numbers around this, I do think it's really interesting the analogy back to kind of changes in recessions, for instance. When someone loses coverage, do not need a decimal point number, but does utilization go down in your mind by 50% or 75% or 20%? Any rule of thumb that you could share with us from previous history? Yeah, it's less than 50. Let me just leave it there. It's more than zero and less than 50. It's in that range. It's so different. This is very difficult to predict. Here's why: unlike past recessions, this is a bit of a unique event. Trying to figure out, this is why I think as much as people have wanted us to size all of this, getting a beat on exactly what's going to happen here is a very difficult set of assumptions. That's why we're trying to be as patient as possible to get more information about what's going to happen before we get too close on record. Perfect. Just to be clear, I asked that question in terms of decline. Just want to make sure we're on the same wavelength. So when you said less than 50, you're saying there's a less than 50% decline in utilization? Yeah. When people go to self-pay, yeah. Got it. So then on the DPP side, right, the provider taxes, you guys have talked about that being it's going to be a headwind. Just from a timing perspective, some companies I've talked to said it could start in the back. Effectively, the legislation says fiscal 2028. Fiscal 2028 for CMS starts in the fourth quarter of the previous year. So it'll be fourth quarter of 2027. A lot of your big states like Florida and Texas start in the middle of 2027, would start in the middle of 2027, their fiscal years, like July, September type of thing. Just curious, do you know what fiscal do you think this is going to start in 2027, or do you think it's really completely a 2028 start in terms of provider tax reductions? I mean, the one big beautiful bill kind of specifies fiscal year 2028. CMS is working on guidance now. I think to get much more precise to answering that question beyond that we know it's going to start in fiscal year 2028, we're going to need to wait until CMS clarifies a lot more detail here than we have today. They're starting to work on that. We're going to need to wait to get to those kinds of really nuanced questions. I think from my seat, the good thing about this is that the way they built their reforms under the one big beautiful bill is first, they bifurcated the policy between non-expansion and expansion states. That helps HCA because the reform is not as impactful on non-expansion states. The phasing in to not start the STP reforms until fiscal year 2028 is a good thing. It gives health systems time to adjust and prepare. The third thing I would say is the phased-in nature of it. It is five to seven years likely post fiscal year 2028 before the reforms are fully in place. I think broadly, that is a good thing. I mean, when I pull way up and I think about Medicaid, as we said here today through three quarters of 2025, when all in, when you think about the revenues associated with Medicaid, the base revenues and the supplements, and all the costs, the patient care costs plus the expenses, we are still not fully covering the full direct cost and allocated cost of Medicaid. The idea of in that reform, giving health systems time to react, and then giving us this opportunity around the grandfathered applications is what really makes this bill a little more manageable for health systems. Got it. Last question on this is just there was a letter from CMS that came out on Friday. I read it. My team read it. I think we all got a headache and did not really understand if there was anything new in there. I am just curious. I know you have a lot of people who do this day minute by minute. Was there anything in that CMS letter that clarified, for instance, any changes to your view of, I know you have a few states still hanging out there, for instance. Any changes to your view there post that CMS letter, or did it clarify anything for you that we should keep in mind? We're assessed at two, just like you are. We'll need to get some questions answered before we give any specific thoughts about it. I think it is evidence that they're working on kind of the rules as we go forward. My initial read is it's a little bit more about when reform starts and how reform will be processed starting in fiscal year 2028. A little early. We're not fully through our review of it yet. Got it. Switching to kind of core operations, right? A lot of talk about AI, both from the payer side and the provider side. I know you guys are always kind of ahead of the curve here in terms of implementing this stuff. Maybe you can talk a little bit about how you've rolled it out. What are some of the details in terms of, for instance, you had a really interesting example on the last call in terms of what you're doing in terms of shift changes. You talked about it's going to both reduce time invested in a shift change, as well as the risk of errors during that shift change. Maybe you could talk a little bit about that in terms of what did a shift change used to take in terms of nursing hours versus how much you think they'll change in 2026 once you roll that out? It is live in eight hospitals now. The nurse shift handoff tool, it is a large language model. We have worked with Google to help build it. I put it in context. It is in our clinical domain. We have three domains we work on with AI. We have clinical, operational, and administrative. This is one of our first bigger clinical use cases that is kind of through alpha and beta. We are looking to start rolling it out in 2026 more broadly. It is really focused on two major objectives of the tool. The first objective is patient safety. We believe that this idea of the shift change is one of the riskiest events in healthcare when one nurse is leaving and another nurse is coming on. They're taking four, five, six patients, and they're trying to transition their way through to get the nurse coming on shift ready. This really is a more effective tool at helping our nurses go through shift changes, as we believe. It is a patient safety factor. The second is it's about administrative burden. When you watch a nurse go through a shift and all of the note-taking and all of the work they're doing as they go through those 12-hour shifts, mostly 12-hour shifts, they are spending a lot of time and a lot of manual ways preparing for shift change. This will allow them to take that time and largely reinvest it back into patient care. We haven't exactly sized publicly yet what will there be a reduction of the overlap time. I do think it's going to allow our nurses to be done with their documentation and done with shift change and be able to go home a little bit earlier, which is great. What we're really after here is patient safety and the administrative burden of nurses. In those two fronts, our alpha and beta pilots have gone really well. I assume revenue cycle management. Would that be under ops or admin? Admin. Okay. Administrative would be things like revenue cycle, supply chain, IT, human resources. In HCA, our administrative platforms have been in shared services for a long time. These are big, scaled, centralized shared services. The data is more standardized and more centralized. We believe of the three domains, we are going to be able to go fastest with the administrative domain with AI. Got it. The managed care companies I cover are all talking about the fact that hospitals are doing a better job of coding their patients, right? And they're not even—managed care is always looking to lower costs and always looking to take off. They'll point the finger when they can, but they're not pointing the finger at providers and saying, you know what, they're making stuff up, at least for the most part. They're just saying you guys, our providers are doing a better job of coding, finding more codes than they did before. The big one I hear about all the time, you probably heard about, is sepsis. A lot of managed care plans are saying sepsis diagnoses in hospitals are up 50-100% year- over- year. I'm just curious in terms of—I assume you guys are at the forefront of this. Maybe you could talk about the revenue cycle benefits here, both from a revenue and a cost side, and how far along you think you are and what the opportunities are down the other side. We're working hard in our revenue cycle work on AI. Most of our AI that we're working on in rev cycle are really pointed at things like denials and underpayments. When we started this work, the issues that we were dealing with in our rev cycle was this kind of growing level of denials and underpayments from the payers. The vast majority of our AI tools that are either in flight or already in use are really pointed there. It's things that really help us organize our effort to appeal denials, to get ready for dispute resolution should we have to go through dispute resolution, to summarize clinical records and make our revenue cycle more efficient through all of this back-end kind of payment adjudication process. That's largely where we have focused because of the pain points that we were suffering. That has paid dividends for us here. On a coding perspective, our coding processes are really stable and consistent. They have not changed. We are using the same general approach to our coding technologies and processes that we have had for the last five years plus. We use a tool from Solventum, but there are really two tools that hospitals use, Solventum or Optum. They are computer assisted, but they are not really AI. Coding for us has been really consistent, Justin. When I look at our coding audit results, which have multiple layers of audits, this is a pretty regulated space, as you know. Our coding accuracy is really good. I think you are seeing it too relative to our consistency in case mix. I mean, as we've noted, when we've gotten this question on the public calls, our case mix index is pretty consistent over the last three years. It's up a bit. I think it was up 30 basis points in third quarter, but nothing that would reflect some kind of structural or fundamental change here would be what I would say. We are rolling out ambient documentation tools. So ambient AI documentation in our ambulatory clinics and with right now, it's still a pretty limited, but small group of pilot facilities for hospitalists. I would tell you that what we are seeing, and this may be a little bit with what the payers are saying, is what we're seeing is it does help doctors get more complete, more accurate, and more timely in documentation, which is a good thing. It's a good thing for patients because those patients have to go through the continuum of care. Having a complete picture of their diagnosis, their complications, comorbidities, and the like are really helpful. Ambient is still in early innings for us, but I think that's going to be a really good thing for hospitals, for patients, and frankly, for payers. I mean, payers want and need to know the conditions and kind of treatments that their members or patients are getting. That would be the one area that I think you may be talking about. For us, we're not seeing anything from an HCA perspective that would suggest that our coding intensity has changed. Got it. You talked about outpatient and some of the AI investments you're making there. I think you also talked about recently your capital deployment. You gave a little bit of a breakdown there. You said $5 billion, $2 billion kind of into the typical maintenance of the existing facility, making sure you got the right technology, et cetera. You talked about 600 beds a year, give or take. If I throw $1 million a bed out there as an average, that gets you to kind of half of your capital deployment. What's the other half? Is it mostly just the outpatient side? I know you talked about the number of outpatient facilities that you've added over the last few years and that you expect to continue adding. Is that the right way to think about it? Let me pull up and give you the way I think about our capital spend of the company. We'll hit just right at $5 billion this year, we believe. Usually, about 40% of it is maintenance capital. These are boilers, chillers, air handlers, renovation projects, medical equipment, and the like. I mean, hospitals are a fairly capital-intensive business. That's important to make sure that you maintain really competitive hospitals. On the growth project, I would break it up. Inpatient projects tend to be more expensive. To get that 600 beds a year, that's a bit more expensive. We're always also looking at things like the number of operating rooms, and do we have sufficient capacity, cath labs, emergency rooms on the main campus, and the like. This inpatient or acute care frame is a chunk of the growth capital, for sure, because they're more expensive projects. The balance would be outpatient, and not only for our capital investments, but also for our mergers and acquisitions. I mean, we have been pretty active in acquiring outpatient facilities in our markets. The good thing with outpatient is they're a little less expensive on a per-project basis, right? If you just think about adding a surgery center, adding a physician clinic, an urgent care clinic, and the like. It's pretty efficient use of capital, and you get more units with less spend. Broadly, that's how I think about it. It's a mix of both inpatient and outpatient. Our goal is to get to 20 outpatient facilities for every hospital here by the end of the decade. I think it'll be the mix that you're seeing between urgent care, freestanding emergency rooms, surgery centers, and the like. It is important. I mean, we run a network model. We're a hospital-centric healthcare system, but we believe in our markets, we need to be relevant. By putting outpatient facilities around a marketplace where people live in the suburbs and even the outer rings, it gives patients access to our system in an outpatient setting. We try to give them a really good experience. If they need acute care, we use our networks to try to get them into our acute care hospitals across the market. Outpatient and inpatient work together as our network model to really increase our competitive positioning in our markets and continue to try to grow market share. Got it. If we had to think about a typical year of that 60%, how much do you think is inpatient versus outpatient? Is it kind of split evenly or sounded like it was more inpatient, actually? The dollars would be a little bit more inpatient. It's not exactly the same every year based on the timing of these projects. I mean, I think you have a sense of it. When you go and you're doing a significant project at a hospital campus, it can take 24-36 months. These are bigger projects on the inpatient side. Any new hospital facilities we should be thinking about? You got anything in the planning stages or in that in-flight capital number? Any new facilities or retros? There's a couple. We have one in Florida in the Gainesville area that will open. There is always one or two in planning. What we try to do is there is a time and a place to build a new hospital. They are harder. They are more expensive. It takes longer to ramp up a new hospital than people realize. You have to hire a nursing staff. You have to build out a physician staff. We try to be measured with our new hospital additions. When you look at the speed in some of our markets and how fast they are growing, from time to time, you have to do it. Absolutely. I wanted to touch on resiliency, right? It's a word that I think kind of you introduced, or at least felt to me like at the investor day, and it gets used more and more. I know you've had a lot of tailwinds to the business over the last few years, especially payer mix, et cetera, that are at least going to probably stabilize, if not moderate. Resiliency, I'm sure, will be a bigger part of the plan going forward. Can you put a little bit more color around resiliency in terms of, I guess, first, can you give us some examples? Then two, can you talk about how much kind of, let's say, the ability of the company to kind of gear it up or gear it down depending on what's going on in a given year? Yeah. The company has had a resiliency plan for a while. It is an area that I worked on a lot even before I became CFO. I mean, this is an important program for the company. If I think about the last few years, let's just use the investor day forward. We have been using our resiliency program to make and pay for a lot of our tech and innovation funding. That has been one of the ways that we use our resiliency program. The second way that we think about our resiliency programs is to help us deal with challenges when they occur. For example, if EPTCs were to expire, our resiliency program would certainly help us deal with those challenges. The third way I think about it over time is to improve our margins. That is the broad strategy around resiliency or those kind of three uses, if you will. A bit over a year ago, call it the last 12 to 18 months, kind of seeing what was coming, we started a really diligent effort to both enhance and accelerate our resiliency program to prepare. I have been really pleased. I mean, our teams have worked really hard to identify not only new work streams, but to then even improve our execution of our existing work streams and then try to accelerate that execution so that as we head into 2026, we are ready for whatever eventualities may come. I think about kind of four main areas that I like to put our resiliency efforts into. The first one is revenue integrity. This is the idea, for example, of reducing denials and underpayments or doing a better job of collecting ultimately denials and underpayments. The second area is asset utilization. We just spent a minute talking about the capital intensity of hospitals. The number of turns you get on beds in the emergency room and in the operating rooms is a super big part of our resiliency effort. You have seen that with our length of stay management even this year. Getting asset utilization is the second kind of pillar of our resiliency program. The third is variable cost. As good as HCA has been over the years with variable cost, with our benchmarking prowess, with things like digital tool development using AI, machine learning and the like, and then continuing to expand our shared service platforms, we're finding even better ways to get after our variable cost as well. Lastly is fixed cost. This would be not only our corporate platforms, but even the fixed cost in the field. We've been working really hard, definitely over the last year, to identify opportunities. Benchmarking is a key part of this. On our corporate platforms, over the last year, we've benchmarked our performance in rev cycle and supply chain and human resources and the like to the Fortune 100 through some consulting firms to really try to make sure that we go deep and find our opportunities. That's been fruitful as well. Length of stay is something that I noticed has been coming down a couple percent a year and kind of made sense early on after COVID, right? You would have thought that length of stay spiked during COVID and it's going to normalize. You're actually below pre-COVID levels now, right? It's really impressive. How much more room do you think there is on length of stay? It's been about 2% a year, it feels like, of a decline for the last few years. Yeah. I mean, we study this carefully. And this is part of the benchmarking work at the company. When you look at the bell curve distribution of our hospitals, we still have room to move here. If you think about a baseball analogy here, we may be in the middle innings, but we're not in the late innings. We continue to find significant opportunity through investing in our people, in our case management teams, through process improvement broadly, and then AI. We have some early stage use cases in inpatient throughput that I'm really excited about. We've got several more years to run here on length of stay, which is really good news. Your ability to kind of titrate it up or down, I'm talking about resiliency now, depending on what's happening. Do you feel like, I think some of the numbers, and correct me if I'm wrong because I'm doing this off memory now, but maybe it was somewhere in the neighborhood of $200 million a year, like if you kind of just averaged it out in terms of what you talked about at the investor day, do you have the ability to kind of, look, we're doing well, maybe we net a little bit less of that. But when things are going tougher, like maybe a 2026, if the subsidies go away, do you have the ability to kind of gear that up a bit? Or is it kind of more steady? We are working on a pretty robust list of resiliency efforts. These are efforts we are going to do. It is not like we are going to turn something off. We are finding great opportunities. We are going to leverage them. I think the way to think about though is a little bit more about what you do with them. Do you accelerate your tech and innovation investments? Do you deal with challenges as they occur? Or do you take it to margin? I think there will be some movement between those three depending on what happens here. If I think about the next five years of the company, digital transformation is a significant opportunity. Not just the AI machine learning, but integrations and automation and RPA and that big broad bucket of work, including the replacement of our big clinical EMR, which is in flight right now, is an area that has so much opportunity for the company. Making sure that we continue to fund that appropriately, but fund those initiatives, are also really important. Got it. I think we're at time. I want to thank Mike and the team from HCA for being here today. Thank you all as well. Hope you enjoy the rest of the day at the conference. Thanks. Thank you.