All right. Well, thanks everybody, for joining us here. I'm Ryan Langston. I'm the Healthcare Services Analyst at TD Cowen. Day two of our conference. Appreciate you all making the time. Very excited to have HCA here. We have Mike Marks up here, EVP and Chief Financial Officer. Got Frank Morgan, Investor Relations up front too. real quick, probably don't need much of an intro, but HCA, the largest U.S. hospital provider, 190 hospitals, 2,500 ambulatory sites of care, surgery centers, EDs, urgent cares, you name it, operates in 19 states in the U.K. Mike, thanks for being here. My pleasure. Thank you. Appreciate it. Maybe a good place to start for us. You know, on the fourth quarter call, you sized this resiliency program at least for 2026, I think around a $400 million benefit offset, some of the headwinds from the APTC expiration. Maybe help us within that 400, 'cause we've been getting this question a bit, just maybe some of the components of that, you know, maybe between variable or fixed or rev, you know, revenue cycle, rev integrity. Just how do we think about it maybe between revenue expense? Any way you can bifurcate that would be helpful? Let me start by just providing the context. You know, we have four focus areas for our resiliency program. Revenue integrity is number one. Asset optimization, which is throughput, which would be number two, and then fixed and variable cost. Within those four areas, we're really building enterprise-wide multi-year capabilities. This resiliency program for the company is, as you know, we've been working on for a number of years. Coming into 2026, over the last, call it, 12 - 18 months, we went forward a really strenuous effort to both enhance and accelerate our resiliency program overall to do our very best to offset as much of the headwinds that we thought could happen with the Affordable Care Act as possible. That's what you saw with the $400 million. It really reflects those work streams that we had enough visibility into their implementation status, their execution, their tracking, that we had confidence to put a number on for our guidance for 2026. When I think about resiliency, I think about this idea of multi-year and being a program. Resiliency will be a key strategic imperative for HCA Healthcare over the next many years as we go through the back half of this decade. It involves a number of work streams, hundreds of work streams across those four focus areas. Think about the 2026 component related to $400 million as being those components of the work streams that were far enough along that we had confidence or implementation that we could size and track. That's how I would size it. You know, we're not giving kind of breakouts into the four focus areas, but that's generally the way to think about the $400 million. We're gonna continue to work on this through the back half of the decade. Got it. You know, obviously, you also talk about size, the APTC expiration, 'cause $600 million-$900 million headwind. Yeah ... for 2026. You're not looking for intra-quarter updates in particular, but just any insight you can give us in terms of what you're seeing on that population so far. I know we're only a couple of months in, but anything you can give us there on that sizing. Not intra-quarter financial updates. Well, let me stick with because, you know, to your note, we're not gonna give current quarter viewpoints, but when I think about that modeling assumption, I always start, and we said this on the call, always like to remind everyone, it is the component of our guidance that involved the most significant judgments. Our modeling team has been working on this for, you know, 12 - 18 months, both looking at our past experience with our exchange population and movements between exchange populations and Medicaid and ESI populations over time, and a lot of external data from other, you know, modeling sources. There are two or three really key assumptions that we are watching very carefully here in first quarter. Let me go through those to give you a sense of what we're watching, and then we'll give everyone updates as we go to first quarter and second quarter and third quarter. The biggest one is the effectuation rate or the attrition rate. You know, here, in first quarter, really going through even April and May, we're gonna start getting a better sense of the number of people who don't pay their premiums and leave the exchanges. That attrition rate is one of the modeling assumptions that we're watching carefully here. Again, we'll give what we can on our first quarter call about what we're seeing. The second area of modeling that's important is this shift between metal tiers. You know, what happens, how many people, in effect, go from Silver to Bronze or from Silver to Gold? Likely more Silver to Bronze. You know, that we're watching in a couple of ways. You know, what happens to utilization on that population, and then what happens to collectibility of patients amounts due. Those are key components of the model. The third one that we're watching carefully is for the folks that leave or don't end up being covered with the exchanges. You know, we are estimating that 15%-20% of those become covered by employee-sponsored insurance, with the balance going to uninsured. That movement's really important to the overall model. Validating here as we go through first and second quarter, you know, did we get that movement back to ESI at 15%-20% of those that left exchanges is gonna be an important part of the models. All of that we're studying, and we'll give an update in first quarter. It sounds like at least at the first quarter, you might have a little bit more updates to give us. We'll have more. It's gonna take time. You know, really getting a sense of this year and, you know, I think everyone in the audience knows this. We issue annual guidance, not quarterly guidance. Our guidance for 2026 is full year. You know, keep that in mind. We're gonna have to just see how that matures over the next several quarters. We will give what information we can on first quarter. Yeah. Another thing you mentioned on the fourth quarter, I think Medicaid, lower acuity ENT, I think you called out specifically kind of a little bit softer on the outpatient side in the fourth quarter. Yeah ... but still sort of an attractive revenue stream for you. I guess, is that just more shift towards higher acuity, or there's something else in those lower acuity, procedure, you know, categories that's maybe driving a little bit of that softness? It's really interesting. When I pull up and think about outpatient, as a, as a component of our business, our revenue growth in fourth quarter on outpatient was actually higher, stronger than our inpatient revenues. You know, broadly, we're still seeing good activity across all four of the segments of outpatient that we track. You know, emergency room, diagnostics, our ambulatory platform, and surgery. Surgery would be both hospital-based and our surgery center platform. When I think about our surgery center platform specifically, we really saw two components that impacted the case counts versus the overall revenue production. One of them is acuity, and we are seeing declines in some of our lower acuity categories of surgery. The one that we called out was ENT, and that's one of the drivers. The other is payer mix, where we are seeing a decline in Medicaid volume in our outpatient surgery platform, and good growth in the rest of the payer mix components, which has a, you know, as you, as you can imagine, has a positive impact on revenue. Our outpatient surgery platform continues to perform well when I think about revenue, when I think about profits. I think those two dynamics just impacted the case counts a bit, for the year. On lower acuity, you know, I think it's the, it's the puts and the takes, and the lower acuity has a little more impact on the surgery centers than it does hospital-based outpatient. That would be the only other clarifying context I could give. Got it. On the inpatient surgery side, fourth quarter, I think roughly flat volumes kinda year-over-year there. If you look at occupancy on the inpatient side running really all-time highs, I think it's around 73%. Yeah. Is that a capacity constraint issue, or is that a mix issue, or just this continued shift from inpatient to outpatient, or anything you're seeing there? You know, over the last several years, we've put a lot of effort into maintaining our surgical capacity. You know, like you've seen us do for inpatient beds, we have had a multiyear effort to both invest in our operating room platform, so we've added operating rooms to our hospitals over the last several years, and we've had a pretty serious significant efficiency play where we're trying to manage things like turnaround times and efficiency. The combined effect of adding capacity and managing our operating rooms really have prevented a capacity block. We did not see in 2025, and we do not expect for 2026 to have capacity being an issue relative to our ability to grow surgical volume, which is great, and that's reflective of the work that we're doing. I do think over time, there are shifts that occur on inpatient and outpatient. We're used to that. We're used to as well is that with new technologies and kind of the aging of the population and chronic diseases, that you do tend to see a backfill on the inpatient side as well over time. I think those trends that we've seen over the last many years continue. On the occupancy, you know, you're sort of hitting again those all-time highs. Yeah. Like, what's sort of the rev limiter there before you really have to maybe make sort of a step investment? I mean, you're always investing in beds and building new hospitals and things. Is there sort of an average occupancy we should think of where you're gonna have to make those investments in another inpatient wing or something so you don't run into? Yeah ... capacity constraints? It's a great question. We have a multi-year capital planning approach. We are looking out because, you know, building inpatient beds is you don't fund a project, and it opens, you know, this year in the hospital business six months later, you know. We look at a multi-year approach to both adding beds, and we've been adding, call it 600 - 700 beds a year, in our inpatient units, and our length of stay management routines, through our resiliency plan, where, you know, we've had really good results the last couple of years, in managing length of stay. Length of stay is also a big part of our resiliency plan into the future. The combined effect of adding beds and reducing length of stay have allowed us to, even with the volume growth we've had the last several years, to keep our inpatient occupancy in this 70%-75% range. Our plans for the future include a planning component to try to manage that occupancy level by adding beds and continuing to reduce length of stay. There's not a perfect number that you would say above which you have a trouble. We have 191 hospitals that have different levels of occupancy, right? 73 is the blended average. When you get to 80%-90% full, it does start challenging your operations. We try to make sure at a hospital level that we're looking at those units and hospitals that are running hot and that those generate the funding request and frankly, even the enhanced effort on length of stay. Yeah. Unadjusted admissions guiding to 2%-3%. Again, look back through our model. I think it's been a decade ex-COVID that they haven't been in that level. You know, we do get some questions occasionally, so I'll just ask it. What gives you sort of that confidence that you're gonna hit that 2%-3% again in 2026? Well, I mean, the first thing would be the momentum of the company. You know, I think the HIX reforms are noted, and we took those into account with our guidance. When you just kinda look at the track record of our 43 markets and what we see from both demand growth and our ability to take market share as we've invested into our networks and continue to invest into our networks, that there's some durability there that we see in demand over time, that's important. The other thing I would just note is you just think about those payer categories underneath that, is that, you know, I think, you know, we still think Medicare, based on what we've seen in the past, should be 2%-3%, if not even on the top end of that range, from the, you know, from our past trends and from the number of people aging into that program, in 2026 and beyond. Number two would be Medicaid, whereas in the past, you know, we've gone through a couple of years here with Medicaid redeterminations where our Medicaid volumes were running below prior year levels. Those seem to have recovered if you look at the back half of 2025, and I'm expecting 2%-3% growth in Medicaid, in 2026, kind of on par with our average. HIX will go down 15%-20% as we noted on the call. I do think that our commercial population excluding exchanges will be 2%-3%, in that range. It's kinda built into our assumption of our overall range. You know, with this movement out of exchanges into uninsured, our uninsured volumes will be hotter in 2026 with that conversion. It could even be 10% or so. You know, I think on balance, this idea of 2%-3% still makes sense to us. It feels durable from our past, it feels durable from the investments we continue to make and have been making, and then you see the trends that you see by payer. Yeah. Inpatient Only List going away, you know, how do you think about that given your sort of very heavy bend to inpatient? You know, does your sort of 50% of the business in Florida, Texas, have any sort of impact on that? Just maybe general thoughts on that kind of as that phases in, how you'll sort of approach that. Sure. Well, the Inpatient Only List is Medicare, so keep that in mind. It's phased out over three years. When we look at the modeling of this reform, if you will, of the Inpatient Only List going away, I think about this as each year a set of procedures where now the surgeon, the physician, gets to make the decision. You know, in the past, being on the Inpatient Only List means that you had to do that case as inpatient. The physicians are gonna be making a patient-by-patient assessment on what that patient needs. Do they need inpatient level of care? Do they need hospital-based outpatient surgery or procedures, or is that patient appropriate to go to a surgery center? You know, we will see some shifting of that over time. Our modeling suggests it is pretty manageable for the company. It does highlight, I think, the value of HCA's network model. If you just think about our network model, we invest every year into our inpatient facilities to handle the capacity challenges we just talked about on the previous question. We're also adding outpatient facilities pretty significantly. I mean, we added over 100 outpatient facilities last year. By the end of the decade, we intend to have about 20 outpatient facilities for every hospital. We're at about 14 as we close 2025. We believe that network model will give us the network access and the convenient of care sites for patients to access close to where they live. When they need more acute care, an optimized system to help them get to our acute care settings. In that model, I think this expansion of our outpatient footprint will be helpful. It'll give us the capacity as things move around between inpatient and outpatient, and it'll help us continue to build our competitiveness and take market share as we give patients more access to care across the spectrum, from inpatient all the way to ambulatory. Got it. The Medicaid supplemental payments expected to be sort of a net headwind this year if nothing changes. You had mentioned the Texas ATLAS program- Yeah ...... I think on the call. You know, I guess anything there or even on anything you're hearing from your state program partners on some of these pending programs. Obviously, everybody's focused on Florida. There's a couple other ones, but anything there? Let's talk about the grandfathered applications first. you know, there's approximately 5 states that are meaningful, with Florida being the most to your point. you know, we continue to be aware of review and conversations between CMS and those states specifically, even over the last few weeks, which is encouraging. The review activity seems to be continuing. I am a little encouraged over the last three-five months that certain programs have gotten approved, so it's not as if all approval activity has ceased. I can't sit here today, though, and predict when or if those 5 programs will get approved. you know, we're watching it carefully. We're advocating, as you can imagine. we're all gonna just have to wait and see the status of that. On Atlas, really nothing new to report. You know, the new commissioner has started, their review in the program, and we're waiting to see if the new commissioner will take that program off pause and reinstate it or not. You know, just to be clear, when I think about our guidance for 2026, it assumed that Atlas goes away. Just in that $250 million-$450 million is the assumption that Atlas does not get restarted. We don't get to see the back and forth with CMS on these programs. They just post them to the website for the most part. Yeah. There's sort of a general rule of thumb, because we do get this question about, is there a date or sort of a soft date where if these programs are not approved by X, that may be a sort of a leading indicator that these programs may not be approved? You know, I don't really think so. I mean, I think what we'll see is they're going through an active review process. They're being very deliberate. There's no question about that. Some of this makes sense within the context of the One Big Beautiful Bill. I mean, if you think about the grandfathering rules that were part of that bill, frankly, it was one of the components of that bill that was favorable to hospitals, right? If you just think about the give and the take in that bill between the Medicaid reform, the Affordable Care Act reforms, one positive for hospitals was the states could still pursue grandfathering. CMS is clearly still working through the rules of how grandfathering is gonna work. They issued a couple of guidance letters last year. I think there'll be rulemaking to this end. I think what this reflects is them being deliberate and trying to get the structures set appropriately for grandfathered applications. I certainly have not given up hope, and I don't have a date on a calendar that says, "If they don't get approved by here, then, you know, then they're gone." I think what we've got to continue to watch is that there's an active review process and that they're working through their administrative processes in a, in a normal fashion. That's what we're watching. Capital outlays. I think you increased the CapEx spending a little bit, $5 billion-$5.5 billion, $10 billion share repo program. Just thinking about sort of, you know, it's a positive, but where the share price is at, does that change your approach to share buybacks versus as you talked about sort of heavily investing in your markets on the capital spending side, especially given, you know, your ability and opportunity to take market share from maybe some of your competitors? we try to be pretty disciplined allocators of capital, and it's one of the hallmarks of HCA over time. We look every year, and frankly inter year as well, but we look every year, and we try to think about what's the right balance in allocation of capital. Is, I think, about 2026 in the guidance we just updated. You know, first it was clear to us that we continue to see good opportunities in the hospitals in our markets to fund CapEx for organic growth. That's what led us to increase our capital spending from call it just short of $5 billion to 2025 to, you know, $5.25 billion-$5.5 billion next year. That's good. That's positive signaling that the opportunities, the pipeline of projects that we continue to see that come up from the field, warrant incremental increases in our investments there. We did a reasonable update on our dividend, and then, you know, we'll likely talk about that here. Then the balance is share repurchase. So, you know, I think share repurchase has been, you know, a good component of our capital allocation strategy over the last many years to return shareholder value. We look at it carefully. We do intrinsic stock analysis and all the things that you would expect a company like us to do. But we're comfortable that for 2026, that this idea of, you know, a $10 billion authorization, with the intent to complete a majority of that is the right allocation for us this year. When I think about the future of the company, we continue to be encouraged. We encouraged to see the opportunities in our markets for network development. I continue to be excited about our opportunities with AI and automation to drive long-term value. This building of enterprise capabilities, I think, will continue to help us leverage the scale and scope of the company into the future. I'm a believer. You see that reference in our kind of balanced and disciplined approach to capital allocation. Skip ahead to M&A. You know, you guys, I mean, if you look back over the past few decades, you've not been afraid to take some bigger swings. I think Mission Health was probably the most recent example of that from a larger. Mm-hmm. asset. You tried for a few hospitals in Utah, didn't work out. Yeah. I guess the question becomes, it's been almost a decade now since you've done a very sort of larger deal like Mission. What's the opportunity going forward, thinking political, regulatory, but also just sort of opportunity of assets? Yeah, I mean, if you go back and look at the call it the last decade, our average M&A, you know, capital allocation's been, you know, call it $600 million a year in that zone. It's meaningful. I will tell you that in our past, what you've seen is a lot more activity on the outpatient side in market. The good news with outpatient is they're a little more economic, right? In other words, you can buy a number of outpatient assets for the same spend as one hospital. You pick up this ability to really invest in your networks and expand your networks by doing M&A a little bit more on the outpatient side. We do inpatient acquisitions when they're available, and last year's a good example of that. I mean, we acquired two acute care hospitals in 2025, one in Florida and one in New Hampshire. When we find, especially, in-market opportunities that we can execute, we tend to be aggressive at that and try to make sure that we take advantage of those opportunities. I think over time, you will continue to see us be interested in M&A to build out our networks, both on the inpatient and the outpatient side. I do think that, you know, for, on the inpatient side, it has to be for sale, which, you know, 85% of the hospitals in America are not-for-profit or academic. You know, those come for sale when they come for sale, and we're gonna have to watch that over time. You know, M&A is an important part of our balance of capital allocation. I think what you find with HCA is we tend to be disciplined, and so we try to find acquisitions that fit our model, that fit our market strategy, and that we think we can integrate into our system in an effective way. Within that semblance of balance and disciplined approaches, we're interested in M&A. In our January hospital survey, we had a fairly large health system respond and say that denials activity from a year-over-year perspective was pretty rough for them, to be honest. Where are you guys seeing sort of that activity from the payer side, you know, just in terms of denials or medical necessity or whatnot? Just anything from the payer side, you know, versus what you're seeing maybe historically. Yeah, I mean, the ramp up in let's just stick with denials, but the ramp up with denials over the last several years have increased. And they increased again in 2025 from an activity level. I've not seen the payers change their approach towards medical management. And I agree, I do continue to see that. What's different with HCA is our response. You know, over the last several years, we've been investing heavily to be able to manage and mitigate denials in a more effective way. That's resources, that's systems. A large component of our AI and automation strategy that within revenue cycle are really pointed towards denial mitigation. When I look at 2025, and I'll use 2025 as our most recent period, we were able to mitigate the year-over-year impact of denials on earnings through our response. Even though the activity levels have increased a bit, I think our response has allowed us to manage those. They're still too high. In other words, the denial write-offs are way still high, and there's a lot of effort that we're putting in to try to clear that cache. That leads me to this important part about partnerships. I mean, one of the things that you've heard us talking about is this idea of building strategic partnerships with our payers. Within that, this idea of digital integration, and reducing administrative costs for them and for us. I'm actually hopeful when I look at the status of some of our engagements with, you know, several of our really key payers, that there's an opportunity here to help the industry, both parties, us and them, do a better job at, of data, of digital and reducing administrative costs. Part of that, I think, has an opportunity to get to this notion of friction or disputes. That's my sense of things. From the commercial payer side, you know, obviously during COVID, you know, salaries, wages went up, not keeping pace with that. Post-COVID, I think you were successful, you and some of your competitors, in getting maybe a little bit more of a yield on the commercial side. We're sort of coming into that sort of every three year now renegotiation period. The question is: Are you able to, or do you foresee the ability to sort of keep that sort of maybe call it 100 basis points extra yield versus maybe historically where you've gotten on the commercial payer side? Well, for context, let me give you an update of where we are. you know, we're at, call it 90% plus contracted for 2026, as you can imagine, and we're about a third contracted for 2027. I'm pleased with our access to lives. Our in-network status continues to improve across our products, categories. Generally speaking, for the contracts we've completed, we're still in that mid-single digits range that our targets have been. I do think, as we've headed into 2026, we are operating in a bit more of a stable operating environment from labor standpoint, which was really challenged during the pandemic years, as you know. I am continuing to see inflation in the physician call side, and we've talked about that. I mean, I think we're better today than we were in 2024 and 2025. As we head into 2026, I mean, we're still expecting to see high single digits, cost inflation, here. Broadly, when I think about things like tariffs, and the potential impact on supply costs, we're monitoring that carefully. I don't know what inflation, broadly will look like over the next three to five years yet. We're still trying to get a beat on that. In the meantime, we continue to work with our payers to try to, you know, land our contracts appropriately. I think the fact that we're generally moving through our contract renewal cycles in a rational way is a good sign. Yeah. A couple of minutes left. You touched on AI. It's always the big buzzword now. Maybe give us a sense where you think those opportunities, I know you've sort of sized it for this year, but is this like a two to four year opportunity? Is this like a two to 10 year opportunity? Maybe how you think that paces as we move through the years. Yeah, it's a great question. It's not short-term. This is a long-term capability build for the company. We have, we've been building our team, so we have an organization, a company called Digital Transformation and Innovation that we've been building up over the last two years, going on three years now. Data scientists, engineers, AI, process people and the like. We've been really organized about building long-term inventories of use cases. We're trying to find practical, real problems that if we solve, will help really change our business, help us administratively with things like revenue cycle and supply chain and IT and human resources. It'll help us operationally manage our hospitals, it'll help us clinically. It's more like 5 to 7 to 10 in terms of the full weight of getting all of those digital products, you know, designed, piloted, built, and scaled across the company. A little bit quicker in administrative. You know, the administrative for us is shared service platforms with centralized management and more standardized data. I think over the next two to four years, you're gonna see a lot of activity in the administrative work. Operational is a little bit longer 'cause of change management. You know, it's, we've learned the hard way that, you know, implementing digital products across 100,000 nurses and 50,000 doctors is harder than designing them. It takes longer, and you have to implement and then iterate, implement, then iterate. Three to five to six on the operational side, clinical takes the longest because of the risk, we're gonna be very diligent to ensure that our clinical use cases are managed appropriately, and it will take a bit longer to see those come all the way through to fruition. Great. I think that's all the time we have. We'll leave it there. Thanks very much and thanks everybody. Enjoy day two of the conference