HCA Holdings 2012 Annual Report Download - page 50

on our ability to negotiate reimbursement increases. If we are unable to retain and negotiate favorable contracts
with managed care plans or experience reductions in payment increases or amounts received from
nongovernment payers, our revenues may be reduced.
Our performance depends on our ability to recruit and retain quality physicians.
The success of our hospitals depends in part on the number and quality of the physicians on the medical
staffs of our hospitals, the admitting and utilization practices of those physicians, maintaining good relations with
those physicians and controlling costs related to the employment of physicians. Although we employ some
physicians, physicians are often not employees of the hospitals at which they practice and, in many of the
markets we serve, most physicians have admitting privileges at other hospitals in addition to our hospitals. Such
physicians may terminate their affiliation with our hospitals at any time. If we are unable to provide adequate
support personnel or technologically advanced equipment and hospital facilities that meet the needs of those
physicians and their patients, they may be discouraged from referring patients to our facilities, admissions may
decrease and our operating performance may decline.
Our hospitals face competition for staffing, which may increase labor costs and reduce profitability.
Our operations are dependent on the efforts, abilities and experience of our management and medical
support personnel, such as nurses, pharmacists and lab technicians, as well as our physicians. We compete with
other health care providers in recruiting and retaining qualified management and support personnel responsible
for the daily operations of each of our hospitals, including nurses and other nonphysician health care
professionals. In some markets, the availability of nurses and other medical support personnel has been a
significant operating issue to health care providers. We may be required to continue to enhance wages and
benefits to recruit and retain nurses and other medical support personnel or to hire more expensive temporary or
contract personnel. As a result, our labor costs could increase. We also depend on the available labor pool of
semi-skilled and unskilled employees in each of the markets in which we operate. Certain proposed changes in
federal labor laws and the NLRB’s modification of its election procedures could increase the likelihood of
employee unionization attempts. To the extent a significant portion of our employee base unionizes, it is possible
our labor costs could increase materially. When negotiating collective bargaining agreements with unions,
whether such agreements are renewals or first contracts, there is the possibility that strikes could occur during the
negotiation process, and our continued operation during any strikes could increase our labor costs. In addition,
the states in which we operate could adopt mandatory nurse-staffing ratios or could reduce mandatory nurse
staffing ratios already in place. State-mandated nurse-staffing ratios could significantly affect labor costs and
have an adverse impact on revenues if we are required to limit admissions in order to meet the required ratios. If
our labor costs increase, we may not be able to raise rates to offset these increased costs. Because a significant
percentage of our revenues consists of fixed, prospective payments, our ability to pass along increased labor costs
is constrained. Our failure to recruit and retain qualified management, nurses and other medical support
personnel, or to control labor costs, could have a material, adverse effect on our results of operations.
If we fail to comply with extensive laws and government regulations, we could suffer penalties or be required
to make significant changes to our operations.
The health care industry is required to comply with extensive and complex laws and regulations at the
federal, state and local government levels relating to, among other things:
• billing and coding for services and properly handling overpayments;
• classification of level of care provided, including proper classification of inpatient admissions,
observation services and outpatient care;
• relationships with physicians and other referral sources;
• necessity and adequacy of medical care;
46