HCA Holdings 2011 Annual Report Download - page 37

General Economic and Demographic Factors
The United States economy has weakened significantly in recent years. Depressed consumer spending and
higher unemployment rates continue to pressure many industries. During economic downturns, governmental
entities often experience budget deficits as a result of increased costs and lower than expected tax collections.
These budget deficits have forced federal, state and local government entities to decrease spending for health and
human service programs, including Medicare, Medicaid and similar programs, which represent significant payer
sources for our hospitals. Other risks we face from general economic weakness include potential declines in the
population covered under managed care agreements, increased patient decisions to postpone or cancel elective
and nonemergency health care procedures, increases in the uninsured and underinsured populations, increased
adoption of health plan structures that shift financial responsibility to patients and further difficulties in our
collecting patient copayment and deductible receivables. The Health Reform Law seeks to decrease over time the
number of uninsured individuals, by among other things requiring employers to offer, and individuals to carry,
health insurance or be subject to penalties. However, it is difficult to predict the full impact of the Health Reform
Law due to the law’s complexity, lack of implementing regulations or interpretive guidance, gradual and
potentially delayed implementation, pending court challenges, and possible amendment or repeal.
The health care industry is impacted by the overall United States economy. The federal deficit, the growing
magnitude of Medicare expenditures and the aging of the United States population will continue to place pressure
on federal health care programs.
Compliance Program
We maintain a comprehensive ethics and compliance program that is designed to meet or exceed applicable
federal guidelines and industry standards. The program is intended to monitor and raise awareness of various
regulatory issues among employees and to emphasize the importance of complying with governmental laws and
regulations. As part of the ethics and compliance program, we provide annual ethics and compliance training to
our employees and encourage all employees to report any violations to their supervisor, an ethics and compliance
officer or a toll-free telephone ethics line. The Health Reform Law requires providers to implement core
elements of compliance program criteria to be established by HHS, on a timeline to be established by HHS, as a
condition of enrollment in the Medicare or Medicaid programs, and we may have to modify our compliance
programs to comply with these new criteria.
Antitrust Laws
The federal government and most states have enacted antitrust laws that prohibit certain types of conduct
deemed to be anti-competitive. These laws prohibit price fixing, concerted refusal to deal, market monopolization,
price discrimination, tying arrangements, acquisitions of competitors and other practices that have, or may have, an
adverse effect on competition. Violations of federal or state antitrust laws can result in various sanctions, including
criminal and civil penalties. Antitrust enforcement in the health care industry is currently a priority of the Federal
Trade Commission. We believe we are in compliance with such federal and state laws, but courts or regulatory
authorities may reach a determination in the future that could adversely affect our operations.
Environmental Matters
We are subject to various federal, state and local statutes and ordinances regulating the discharge of
materials into the environment. We do not believe that we will be required to expend any material amounts in
order to comply with these laws and regulations.
Insurance
As is typical in the health care industry, we are subject to claims and legal actions by patients in the ordinary
course of business. Subject to a $5 million per occurrence self-insured retention, our facilities are insured by our
wholly-owned insurance subsidiary for losses up to $50 million per occurrence. The insurance subsidiary has
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