HCA Holdings 2012 Annual Report Download - page 75

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HCA HOLDINGS, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (continued)
Critical Accounting Policies and Estimates (continued)
Income Taxes (continued)
liability for unrecognized tax benefits from uncertain tax positions taken or expected to be taken in our income
tax return. During each reporting period, we assess the facts and circumstances related to uncertain tax positions.
If the realization of unrecognized tax benefits is deemed probable based upon new facts and circumstances, the
estimated liability and the provision for income taxes are reduced in the current period. Final audit results may
vary from our estimates.
Results of Operations
Revenue/Volume Trends
Our revenues depend upon inpatient occupancy levels, the ancillary services and therapy programs ordered
by physicians and provided to patients, the volume of outpatient procedures and the charge and negotiated
payment rates for such services. Gross charges typically do not reflect what our facilities are actually paid. Our
facilities have entered into agreements with third-party payers, including government programs and managed
care health plans, under which the facilities are paid based upon the cost of providing services, predetermined
rates per diagnosis, fixed per diem rates or discounts from gross charges. We do not pursue collection of amounts
related to patients who meet our guidelines to qualify for charity care; therefore, they are not reported in
revenues. We provide discounts to uninsured patients who do not qualify for Medicaid or charity care that are
similar to the discounts provided to many local managed care plans.
Revenues increased 11.2% to $33.013 billion for 2012 from $29.682 billion for 2011 and increased 5.9% for
2011 from $28.035 billion for 2010. The increase in revenues in 2012 can be primarily attributed to the combined
impact of a 2.0% increase in revenue per equivalent admission and a 9.1% increase in equivalent admissions
compared to the prior year. The increase in revenues in 2011 can be primarily attributed to the combined impact
of a 0.7% increase in revenue per equivalent admission and a 5.2% increase in equivalent admissions compared
to 2010. The increase in revenues (and volume metrics) for 2012 compared to 2011 related primarily to the
impact of the financial consolidation of the HCA-HealthONE LLC venture for periods subsequent to our
acquisition of controlling interests during October 2011 (HealthONE revenues and related volume metrics are not
included in our same facility amounts). HealthONE revenues included in our consolidated revenues increased
from $347 million for 2011 to $2.203 billion in 2012.
Same facility revenues increased 4.5% for the year ended December 31, 2012 compared to the year ended
December 31, 2011 and increased 3.3% for the year ended December 31, 2011 compared to the year ended
December 31, 2010. The 4.5% increase for 2012 can be primarily attributed to the combined impact of a 0.3%
increase in same facility revenue per equivalent admission and a 4.1% increase in same facility equivalent
admissions. The 3.3% increase for 2011 can be primarily attributed to the combined impact of a 0.3% increase in
same facility revenue per equivalent admission and a 3.0% increase in same facility equivalent admissions.
Consolidated admissions increased 7.4% in 2012 compared to 2011 and increased 4.2% in 2011 compared
to 2010. Consolidated inpatient surgeries increased 4.5% and consolidated outpatient surgeries increased 9.3%
during 2012 compared to 2011. Consolidated inpatient surgeries declined 0.5% and consolidated outpatient
surgeries increased 2.0% during 2011 compared to 2010. Consolidated emergency room visits increased 12.5%
during 2012 compared to 2011 and increased 7.7% during 2011 compared to 2010.
Same facility admissions increased 3.0% in 2012 compared to 2011 and increased 2.3% in 2011 compared
to 2010. Same facility inpatient surgeries declined 0.1% and same facility outpatient surgeries increased 0.9%
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