Four of the nation’s largest for-profit health systems recently reported third-quarter results, and patient volumes grew at all four. But exchange coverage losses, a shifting payer mix and pending Medicaid changes weighed on results, with HCA Healthcare offering an early look at 2027.
Here is what Nashville, Tenn.-based HCA Healthcare, Dallas-based Tenet Healthcare, Franklin, Tenn.-based Community Health Systems and King of Prussia, Pa.-based Universal Health Services said.
The 2027 outlook
HCA CEO Sam Hazen gave the most direct look at next year.
“We anticipate our earnings in 2027 will be generally consistent with 2026,” he said during the system’s Oct. 27 earnings call. “Beyond 2027, we anticipate performance more in line with our long-term growth targets.” HCA expects volume growth of 2% to 3% in 2027 and will release full guidance in January. It expects to finish 2026 in the upper half of its guidance ranges.
Mr. Hazen said the return to long-term growth depends on three things: moving past the worst of the exchange-driven payer mix shift, no material policy changes beyond HR 1, and the system’s strategic initiatives generating “significant value.” CFO Mike Marks said HCA has “great line of sight now going into ‘27 and into ‘28 and beyond” on cost savings. Mr. Hazen said the system is deep into 2027 commercial contracting.
Tenet raised its full-year 2026 adjusted EBITDA outlook by $195 million at the midpoint. Chairman and CEO Saum Sutaria, MD, credited “sustained strength in same-store revenue growth and effective expense management.” Third-quarter results include a $147 million net favorable impact tied to the early transition of revenue cycle services that Tenet’s Conifer Health Solutions subsidiary provides to Chicago-based CommonSpirit Health, an arrangement set to conclude by Dec. 31.
CHS CEO Kevin Hammons pointed to a tougher environment.
“While volume trends and cash flow improved sequentially in the third quarter, payer mix and acuity did not develop as expected due to the challenging macro environment, negatively impacting financial results for the third quarter and our expectations for the remainder of the year,” he said. He added that he remains “confident these investments” in quality outcomes, patient satisfaction, physician experience and employee satisfaction “will lead to improved financial performance.”
In its earnings release, UHS said provisions of HR 1 “may be expected to reduce our revenues and likely increase the level of uncompensated care provided by our facilities” as they take effect “over the next several years.”
Payer mix
HCA, Tenet and CHS each cited unfavorable payer mix in the quarter. Same-facility admissions still rose at all four systems, from 2.2% at CHS to 3.9% at UHS’ acute care hospitals.
HCA estimated that a shift toward uninsured patients reduced its income before income taxes by about $400 million in the quarter. Uninsured patients made up about 10.5% of equivalent admissions, up from 8.5% a year earlier.
At Tenet, same-hospital net patient service revenue per adjusted admission rose 0.2%, as strength in commercial employer revenue was offset by unfavorable payer mix tied to lower exchange admissions.
UHS did not cite payer mix, but its same-facility acute care net revenue per adjusted admission fell 1.7% year over year. In its behavioral health business, the same measure rose 1.7%.
Exchange losses
HCA expects fewer people to lose exchange coverage in 2027 than in 2026, but Mr. Hazen said the shift will still have a “meaningful impact on payer mix.” Patients losing exchange coverage are becoming uninsured “almost one for one,” Mr. Marks said. HCA’s exchange equivalent admissions fell 19% year over year, and Mr. Marks said the system will know more after open enrollment ends.
Tenet attributed the unfavorable payer mix in its hospital segment to lower exchange admissions. UHS cited the elimination of certain exchange premium tax credits beyond 2025 among the federal provisions it expects to reduce revenues.
Medicaid changes
HCA expects $550 million to $650 million less in Medicaid supplemental payment net benefits in 2027. Its 2026 total was boosted by grandfathered state program approvals that paid for services from prior years. UHS recorded a $47 million favorable impact from Medicaid supplemental payments that it said was not included in its 2026 forecast. Tenet recognized $32 million in supplemental revenues tied to prior years.
HCA and UHS also addressed Medicaid work requirements. Mr. Marks said the requirements under HR 1 would apply to 15% to 20% of HCA’s total Medicaid volumes and expects a “modest impact” in 2027. UHS said the requirements “will have the effect of limiting Medicaid enrollment and expenditures.”
What it signals for the year ahead
- HCA is planning for a flat 2027. It said a return to growth depends on moving past the worst of the exchange-driven payer mix shift, no material policy changes beyond HR 1 and its strategic initiatives delivering value.
- Volumes grew, but payer mix weighed on results. Admissions rose at all four systems, while HCA, Tenet and CHS each said payer mix pressured results.
- Exchange-related pressure is expected to continue. HCA expects fewer coverage losses in 2027 but still a meaningful payer mix impact.
- Some 2026 Medicaid gains may not last. HCA’s 2026 supplemental payments include payments for prior years, and the system expects them to decline in 2027. Tenet’s quarterly supplemental revenue also related to prior years, and UHS said its $47 million gain was not in its forecast.
- Business mix is shaping results. Commercial employer strength helped Tenet’s hospital segment counter exchange pressure, and UHS’ behavioral health business outperformed its acute care business on revenue per adjusted admission.
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