HCA Healthcare Inc. has invested "tens of millions of dollars" over the last several years to build a clinical data warehouse for digital medical records.
The Nashville, Tenn.-based hospital chain's data scientists are using the data — which is being updated with 30 million patient encounters annually — to help improve the safety of HCA hospitals and the quality outcomes and patient experience, as well as other parts of its business, Chairman and CEO R. Milton Johnson said May 22 at the UBS Global Healthcare Conference in New York.
"We've been able to reduce sepsis mortality rates in our hospitals significantly by using big data and data analytics. We're just scratching the surface with this," Johnson said.
He said the data analytics will enable the company to make improvements in clinical outcomes, make its hospitals safer, and improve the quality and efficiency of care. "I want to see us lead in this area and not be a follower."
Johnson did not mention a report that said the company is teaming up with private equity firm KKR & Co. LP to bid for Envision Healthcare Corp. The hospital operator plans to take over Envision Healthcare's AmSurg ambulatory surgery business, and KKR will acquire the rest of the company.
But after not seeing many opportunities to grow into new markets or make acquisitions that met its requirements, Johnson said, HCA has recently seen more opportunities to complement its existing markets.
"That's changed over the last couple of years, We're seeing more opportunities," the CEO said, citing the company's 2017 acquisition of three Texas-based hospitals from Tenet Healthcare Corp. for $750 million in cash.
Johnson described HCA's purchase of Memorial Health System in Savannah, Ga., as an opportunity to acquire a system in a "midsized market, but a growing market." He added that the system, "frankly, had not been managed very effectively. It turned a lot of CEOs and needed some direction, needed capital. So we saw an opportunity there and decided to compete and to make that acquisition."
HCA is also doing due diligence on its expected acquisition of Mission Health in Asheville, N.C., and expects to close the deal later in 2017. Johnson said Mission "is not a broken system," generating about $1.5 billion to $1.6 billion in annual revenues and is "a well-respected system clinically."
The company has increased the number of urgent care centers it operates to 125 from about 80, Johnson said on a May 1 earnings call. HCA will increase capital spending to about $10.5 billion to drive growth from 2018 through 2020. For its outpatient sector, the healthcare services provider aims to have more than 2,000 outpatient facilities and clinics by 2020.
The chain's growth, in turn, is driving the $300 million nurse retention plan announced May 4.
HCA President and COO Samuel Hazen said during the presentation that the company is investing in workforce development to enhance the competencies and capabilities of its workforce in order to have a competitive advantage.
"That's one of the things we're doing with our tax reform benefits is we're investing heavily in workforce development. As the company evolves its capital strategy and sees growth opportunities, we need a workforce that can go with us," Hazen said.
Johnson also praised the Centers for Medicare and Medicaid Services' decision to reduce the federal reimbursements that nonprofit hospitals receive for drugs they buy at a discount under the 340B program. Drug companies under the program are required to give the discounts in return for being able to sell the drugs to low-income patients under the separate Medicaid program.
Hospital groups are now challenging the cuts in federal court, which they say will harm nonprofit hospitals. But Johnson said of the redistributed funds, "we were pleased to see that invested on hospitals [that] had not been eligible to participate in 340B."
"It actually benefited all investors around and, to be honest, it benefited most hospitals in the country. There are only about 500 hospitals that ended up being hurt by that redistribution," Johnson said.
