AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-2: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 4/6 · 18/10/2026
Moat—
Insufficient evidence for every rubric criterion; no category score is inferred.
structural advantage · — · Shared purchasing and some regulatory entry protection are disclosed, but their comparative economic benefit and materiality are unresolved. The moat verdict remains uncertain.
durability · — · The evidence cannot establish the persistence of an HCA-specific advantage. Entry restrictions can change, and the supplied passages do not quantify protected markets.
customer dependency · — · No demonstrated patient switching friction, indispensable local capacity or payer dependence is supplied. Insurer network arrangements alone do not establish dependence on HCA.
erosion resilience · — · Continued profits coexist with outpatient competition and reimbursement constraints, but resilience of a particular competitive advantage cannot be established.
Pricing power—
Insufficient evidence for every rubric criterion; no category score is inferred.
realized pricing · 1/4 · Disclosed Medicaid payments, including supplements and related financing costs, generally fail to cover care costs, demonstrating weak realized reimbursement economics in that segment. Company-wide realized price changes are not isolated. Revenue growth and the proponent's alleged Mission price increase do not establish broad pricing power.
retention · — · Aggregate revenue growth does not distinguish repeat demand from volume, mix, reimbursement or acquisitions. Payer renewal results and patient continuity evidence are absent; the Mission allegations are insufficient to establish group-wide retention.
margin resilience · 2/4 · First-half 2026 revenue rose from $36.926 billion to $39.339 billion while pretax income increased only from $4.742 billion to $4.781 billion, indicating continued profitability with margin compression. This is mixed operating resilience and does not identify pricing as its cause.
contractual freedom · 1/4 · In-network reimbursement is contractually negotiated, insurers demand discounts, and payer consolidation strengthens their bargaining position. Government payment limitations further constrain terms. Some commercial negotiation exists, but broad unilateral price-setting freedom is not demonstrated.
Predictability100
Five consecutive annual periods. Equal weights: nondeclining revenue frequency; revenue-growth volatility (5–40pp); positive FCF frequency; FCF-margin volatility (3–20pp). Stability indicator, not a growth forecast.
- Nondeclining revenue years (%)
- 100.00
- Revenue growth volatility (pp)
- 2.38
- Positive FCF years (%)
- 100.00
- FCF margin volatility (pp)
- 1.24
Financial strength27
Equal-weight grades: debt/FCF (1–8x), net debt/earnings before interest and tax (0–5x), interest service (1–12x), current ratio (0.75–2x). Earnings use reported operating income, or reported pretax profit plus reported interest expense when operating income is unavailable. Interest service uses earnings/interest expense; if unavailable, it uses reported operating cash flow/cash interest paid, without relabeling cash paid as accrued expense. Nonpositive cash flow/earnings score 0 for their service component; reported zero interest with a positive numerator scores 100. Net cash scores 100 for net leverage. Missing disclosures remain unavailable. General nonfinancial-company rubric, not a credit rating; exceptional and nonoperating gains are not normalized out. IFRS finance-cost and cash-flow classifications retain their reported scope.
- debtFcfGrade
- 27.94
- netDebtEbitGrade
- 24.75
- interestCoverageGrade
- 39.76
- currentRatioGrade
- 17.23
- Debt / FCF (x)
- 6.04
- Net debt / operating income (x)
- 3.76
- Current ratio (x)
- 0.97
Capital allocation100
Three-year equal-weight indicators: pretax return on average invested capital (0–25%; equity + debt − cash, each year and its prior year), share-count growth (0–5%, lower better), share-based cost/revenue (2–20%, lower better), consolidated FCF/net income (0–1x). Return uses reported operating income or, if unavailable, EBIT calculated from reported pretax profit plus reported interest expense; exceptional/nonoperating gains are not normalized out. Share-based cost uses the reported cash-flow add-back or, if absent, separately reported recognized compensation expense; the latter never becomes an FCF adjustment. Nonpositive net income scores 0 for cash conversion; absent income/FCF stays unavailable. Nonpositive invested capital has no defined return and remains unavailable. Does not establish acquisition quality or buyback timing.
- 3-year pre-tax operating return (%)
- 26.59
- 3-year average dilution (%)
- -6.61
- 3-year average SBC / revenue (%)
- 0.48
- cashConversionGrade
- 100.00
Management50
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
capital discipline · 2/4 · Operating cash generation grew through 2025 and HCA continued investing. In first-half 2026, operating cash flow declined to $4.349 billion, while capital spending was $2.350 billion, acquisitions $386 million and cash repurchases $3.635 billion; indebtedness increased by $3.065 billion. Actual investment and capital returns are demonstrated, but the financing balance and substantial construction commitments limit the assessment. Repurchase value creation is unproven.
incentive alignment · 2/4 · The adopted 2025 incentive program includes financial and quality measures, and 2023 performance shares actually vested against a three-year EPS target. Recoupment provisions and director ownership compliance add alignment evidence. Financial measures dominate annual incentives, and adjusted EPS permits exclusions and can benefit from repurchases. These establish meaningful but mixed alignment, without assuming executive ownership or future award vesting.
execution · 2/4 · Multi-year cash generation and sustained first-half 2026 profits demonstrate operating execution indirectly. Recent cash conversion weakened and profits grew much more slowly than revenues. The shareholder proponent's Mission care-quality allegations raise unresolved acquisition-execution concerns; the board's oversight assertion is not proof of clinical outcomes.
governance · 2/4 · Annual director elections, adopted proxy access and compensation recoupment provide concrete accountability mechanisms. Approximately 31% Frist-affiliated ownership and contractual director nomination rights create concentrated influence. These support a mixed assessment; shareholder proposals and board recommendations are not treated as adopted changes.
Evidence
At December 31, 2025, we operated 190 hospitals, comprised of 179 general acute care hospitals, seven behavioral hospitals, and four rehabilitation hospitals.
Item 1, Business — General · Filed 10/02/2026
Certain of our affiliates provide a variety of management services to our health care facilities, including patient safety programs, ethics and compliance programs, national supply contracts, equipment purchasing and leasing contracts, accounting, financial and clinical systems, governmental reimbursement assistance, construction planning and coordination, information technology systems and solutions, legal counsel, human resources services and internal audit services.
Item 1, Business — centralized management services · Filed 10/02/2026
Risks related to human capital: • Our results of operations may be adversely affected by competition for staffing, the shortage of experienced nurses and other health care professionals and labor union activity.
Principal risks — human capital · Filed 10/02/2026
Our hospitals compete with specialty hospitals and with freestanding ASCs and other outpatient providers with regard to certain high margin services and for quality physicians and personnel.
Risk factors — specialty hospitals and outpatient competition · Filed 10/02/2026
At June 30, 2026, there were projects under construction which had estimated additional costs to complete and equip over the next five years of approximately $8.6 billion.
MD&A — Liquidity and Capital Resources, construction commitments · Filed 28/07/2026
State certificate of need (“CON”) laws, which place limitations on a health care facility’s ability to expand services and facilities, make capital expenditures and otherwise make changes in operations, may also have the effect of restricting competition.
Business — Competition, certificate-of-need laws · Filed 10/02/2026
We currently operate health care facilities in a number of states with CON laws or that require other types of approvals for the establishment or expansion of certain facility types or services.
Business — Competition, facilities subject to approval requirements · Filed 10/02/2026
Some states that have historically imposed CON or similar prior approval requirements have removed or are considering removing these requirements, which may reduce barriers to entry and increase competition in our service areas.
Risk factors — removal of entry restrictions · Filed 10/02/2026
In those states that do not require state approval or that set relatively high levels of expenditures before they become reviewable by state authorities, competition in the form of new services, facilities and capital spending is more prevalent.
Business — Competition, entry without state approval · Filed 10/02/2026
Reimbursement rates are set forth by contract when our facilities are in-network, and payers utilize plan structures to encourage or require the use of in-network providers.
Risk factors — contractual reimbursement and insurer networks · Filed 14/02/2025
Private third-party payers, including managed care plans and payers participating in the Exchanges, continue to demand discounted fee structures, and the ongoing trend toward consolidation among payers tends to increase their bargaining power over fee structures.
Risk factors — insurer discounts and payer consolidation · Filed 14/02/2025
SDP arrangements and other additional payments supplement Medicaid base rates, which combined are generally insufficient to cover the cost of care provided to Medicaid beneficiaries after accounting for the costs of financing the non-federal share of Medicaid payments, such as the state or local provider taxes levied.
MD&A — Revenue/Volume Trends, Medicaid reimbursement adequacy · Filed 10/02/2026
CONDENSED CONSOLIDATED INCOME STATEMENTS FOR THE QUARTERS AND SIX MONTHS ENDED JUNE 30, 2026 AND 2025 Unaudited (Dollars in millions, except per share amounts) Quarter Six Months 2026 2025 2026 2025 Revenues $ 20,230 $ 18,605 $ 39,339 $ 36,926 Salaries and benefits 8,290 8,138 16,573 16,135 Supplies 2,886 2,844 5,739 5,608 Other operating expenses 5,043 3,793 9,223 7,638 Equity in earnings of affiliates (16 ) (19 ) (25 ) (37 ) Depreciation and amortization 944 863 1,874 1,723 Interest expense 599 568 1,183 1,115 Losses (gains) on sales of facilities (10 ) 3 (9 ) 2 17,736 16,190 34,558 32,184 Income before income taxes 2,494 2,415 4,781 4,742 Provision for income taxes 564 524 994 1,026 Net income 1,930 1,891 3,787 3,716 Net income attributable to noncontrolling interests 231 238 468 453 Net income attributable to HCA Healthcare, Inc.
Condensed Consolidated Income Statements — quarter and six months ended June 30, 2026 and 2025 · Filed 28/07/2026
Cash provided by operating activities totaled $12.636 billion in 2025 compared to $10.514 billion in 2024 and $9.431 billion in 2023.
MD&A — Liquidity and Capital Resources, operating cash flows · Filed 10/02/2026
6 HCA HEALTHCARE, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 2026 AND 2025 Unaudited (Dollars in millions) 2026 2025 Cash flows from operating activities: Net income $ 3,787 $ 3,716 Adjustments to reconcile net income to net cash provided by operating activities: Increase (decrease) in cash from operating assets and liabilities: Accounts receivable (1,417 ) 320 Inventories and other assets (26 ) (427 ) Accounts payable and accrued expenses (439 ) (676 ) Depreciation and amortization 1,874 1,723 Income taxes 269 880 Losses (gains) on sales of facilities (9 ) 2 Amortization of debt issuance costs and discounts 23 25 Share-based compensation 171 197 Other 116 101 Net cash provided by operating activities 4,349 5,861 Cash flows from investing activities: Purchase of property and equipment (2,350 ) (2,167 ) Acquisition of hospitals and health care entities (386 ) (326 ) Sales of hospitals and health care entities 21 167 Change in investments (120 ) 41 Other (4 ) 2 Net cash used in investing activities (2,839 ) (2,283 ) Cash flows from financing activities: Issuance of long-term debt 2,994 5,233 Net change in short-term borrowings and revolving credit facility 2,679 1,768 Repayment of long-term debt (2,608 ) (5,660 ) Distributions to noncontrolling interests (334 ) (394 ) Payment of debt issuance costs (17 ) (57 ) Payment of dividends (354 ) (351 ) Repurchase of common stock (3,635 ) (5,011 ) Other (259 ) (112 ) Net cash used in financing activities (1,534 ) (4,584 ) Effect of exchange rate changes on cash and cash equivalents (3 ) 12 Change in cash and cash equivalents (27 ) (994 ) Cash and cash equivalents at beginning of period 1,040 1,933 Cash and cash equivalents at end of period $ 1,013 $ 939 Interest payments $ 1,163 $ 1,074 Income tax payments, net $ 725 $ 146 The accompanying notes are an integral part of the condensed consolidated financial statements.
Condensed Consolidated Statements of Cash Flows — six months ended June 30, 2026 and 2025 · Filed 28/07/2026
During the first six months of 2026, net cash flows used in financing activities included a net increase of $3.065 billion in our indebtedness, payment of dividends of $354 million, repurchase of common stock of $3.635 billion and distributions to noncontrolling interests of $334 million.
MD&A — Liquidity and Capital Resources, financing activity · Filed 28/07/2026
Our debt totaled $49.718 billion at June 30, 2026.
MD&A — Liquidity and Capital Resources, outstanding debt · Filed 28/07/2026
Step 2 Calculation of Financial (80%) and Quality and Care (20%) Performance The actual award amount is determined based upon Company performance on financial and quality and care performance measures.
Executive Compensation — 2025 PEP, financial and quality weighting · Filed 13/03/2026
The PSUs granted in 2023 (the “2023 PSUs”) vested based on achievement of a cumulative Target EPS for fiscal years 2023 – 2025, subject to the PSU vesting schedule set forth above.
Executive Compensation — vesting of 2023 performance share units · Filed 13/03/2026
Cumulative EPS is defined for purposes of the PSUs as the sum of the Company’s “diluted earnings per share” of each of the three fiscal years of the Company within the performance period as reported in the Company’s audited financial statements for each such year, adjusted to exclude the effects of: (a) gains or losses on sales of facilities, (b) gains or losses on extinguishment of debt, (c) asset or investment impairment charges, (d) legal claim costs or benefits (disclosed as separate line item in consolidated income statement), (e) expenses, or adjustments to expenses, for share-based compensation recognized under FASB ASC 718 related to the PSUs that result from EPS performance above or below the Target EPS during the performance period, (f) the impact of Accounting Standards Update (“ASU”) 2016-09: Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”) that results in EPS performance above or below the Target EPS during the performance period, (g) gains or losses on acquisition or disposition of controlling interests in equity investments or consolidated entities, and (h) any other gains, expenses or losses resulting from significant, unusual and/or nonrecurring events, as described in management’s discussion and analysis of financial condition and results of operations appearing in the Company’s annual report for the applicable fiscal year, as determined in good faith by the Board or the Committee.
Executive Compensation — cumulative EPS definition and adjustments · Filed 13/03/2026
In addition to the Compensation Recoupment Policy, pursuant to the terms of our PEP, the Company can also recoup (or “clawback”) incentive compensation paid pursuant to our PEP that was based on (i) achievement of financial results that were subsequently the subject of a restatement due to material noncompliance with any financial reporting requirement under either GAAP or the federal securities laws, other than as a result of changes to accounting rules and regulations, regardless of individual fault; (ii) a subsequent finding that the financial information or performance metrics used by the Committee to determine the amount of the incentive compensation were materially inaccurate, regardless of individual fault; or (iii) a Participant’s conduct which is not in good faith and which materially disrupts, damages, impairs or interferes with the business of the Company and its affiliates.
Executive Compensation — additional PEP recoupment provisions · Filed 13/03/2026
All directors are elected for one-year terms without staggered terms, and each year, all directors must be nominated and stand for election for another year.
Corporate Governance — annual director elections · Filed 13/03/2026
The Company has also adopted a proxy access right that permits a stockholder, or a group of up to 20 stockholders, owning continuously for at least three years shares of our stock representing an aggregate of at least 3% of the voting power entitled to vote in the election of directors, to nominate and include in our proxy materials director nominees, provided that the stockholder(s) and the nominee(s) satisfy the requirements in our bylaws.
Corporate Governance — adopted proxy access right · Filed 13/03/2026
Through their investment in Hercules Holding II, Frisco Holding II and other holdings, certain of the Frist-affiliated investors continue to hold a significant interest in our outstanding common stock (approximately 31% as of January 31, 2026).
Risk factors — Frist-affiliated ownership as of January 31, 2026 · Filed 10/02/2026
In addition, pursuant to a stockholders’ agreement we entered into with Hercules Holding II, Frisco Holding II and the Frist-affiliated investors, certain representatives of these investors have the continued right to nominate certain of the members of our Board of Directors.
Risk factors — investor director nomination rights · Filed 10/02/2026
In addition, almost immediately, HCA allegedly raised prices by 10%, started charging patients surprise fees4 and reduced the number of staff per occupied bed at the flagship Mission Hospital from 6 full time equivalents pre-sale to 3.7 (average across North Carolina is 5.1).5 Patient satisfaction ratings declined precipitously from 4’s and 5’s pre-sale to 1 in 2025,6 and there were significant staff reductions and/or departures in nursing staff and services such as chaplaincy, pharmacy, rehabilitation, sterile processing, laboratory, and environmental services.7 Since 2019, 1 https://www.advisory.com/daily-briefing/2024/04/29/hospital-mergers 2 https://d18rn0p25nwr6d.cloudfront.net/CIK-0000860730/b8ab85b0-3a86-4f3b-b91b-71dcb3124683.pdf 3 https://avlwatchdog.org/how-many-doctors-have-left-mission-hca-wont-say/ 4 https://www.economicliberties.us/our-work/the-harms-of-hospital-mergers-and-how-to-stop-them/#_ftnref3 5 https://hlp.law.wfu.edu/wp-content/uploads/sites/11/2024/08/HCA-Mission-Changes-in-Patient-Care-Following-HCAs-Purchase-working-draft-WFU.pdf; https://avlwatchdog.org/hca-arrived-with-plans-to-cut-800-staff-as-soon-as-it-bought-mission-new-court-filings-in-antitrust-case-show/ 6 https://www.medicare.gov/care-compare/details/hospital/340002/view-all?city=Candler&state=NC&zipcode=28715 7 https://hlp.law.wfu.edu/wp-content/uploads/sites/11/2024/08/HCA-Mission-Changes-in-Patient-Care-Following-HCAs-Purchase-working-draft-WFU.pdf; https://avlwatchdog.org/former-mission-chaplain-the-moral-injury-that-is-happening-there-daily-is-staggering/ 41 Table of Contents Mission has been cited five times for Immediate Jeopardy (IJ) due to multiple patient deaths and two Emergency Medical Treatment and Labor Act (EMTALA) violations and referred for a third EMTALA violation.8 Nursing shortages correlate with at least one IJ citation.9 Prior to HCA’s acquisition, Mission was the only health system designated as one of the nation’s Top 15 Health Systems in six of seven years by IBM/Watson Health (2012-2015; 2017-2018).
Proposal 4 — shareholder proponent's supporting statement concerning Mission · Filed 13/03/2026
Further, the Board is actively engaged, both as a whole and through its committees, in overseeing the Company’s policies and procedures relating to the delivery of quality medical care to patients and human capital management strategies, as well as the alignment between its commitments to patients and colleagues and its strategic actions.
Proposal 4 — board response concerning oversight · Filed 13/03/2026
For example, as mandated by the FBA, CMS has proposed revisions to regulations governing SDP arrangements, tying caps on payment rates paid by Medicaid managed care organizations to Medicare payment rates instead of average commercial rates.
MD&A — Medicaid directed payments, proposed regulatory revisions · Filed 28/07/2026
The payment limitations for SDPs for services specified by the FBA will apply to SDP arrangements made for services furnished in the rating periods beginning on or after July 4, 2025.
MD&A — Medicaid directed payments, applicability of payment limitations · Filed 28/07/2026
Our revenues by primary third-party payer classification and other (including uninsured patients) for the years ended December 31, 2025, 2024 and 2023 are summarized in the following table (dollars in millions): Years Ended December 31, 2025 Ratio 2024 Ratio 2023 Ratio Medicare $ 11,273 14.9 % $ 10,780 15.3 % $ 10,585 16.3 % Managed Medicare 13,435 17.8 11,987 17.0 10,496 16.2 Medicaid 5,909 7.8 4,678 6.6 3,606 5.6 Managed Medicaid 3,693 4.9 3,980 5.6 3,879 6.0 Managed care and other insurers 36,968 48.9 34,954 49.5 31,819 49.0 International (managed care and other insurers) 1,864 2.5 1,682 2.4 1,509 2.3 Other 2,458 3.2 2,542 3.6 3,074 4.6 Revenues $ 75,600 100.0 % $ 70,603 100.0 % $ 64,968 100.0 % Medicare is a federal program that provides certain hospital and medical insurance benefits to persons age 65 and over, some disabled persons, persons with end-stage renal disease and persons with amyotrophic lateral sclerosis.
Business — Sources of Revenue, payer revenue mix · Filed 10/02/2026
As of December 31, 2025, all of our directors with more than five years of service met these share ownership guidelines.
Director Compensation — compliance with director ownership guidelines · Filed 13/03/2026
