Alan Condon on HCA’s Record Year, the AI Race in Revenue Cycle and Key Industry Moves

Summary

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Podcast Summary

Podcast: Becker’s Healthcare Podcast
Episode: Alan Condon on HCA’s Record Year, the AI Race in Revenue Cycle and Key Industry Moves
Date: December 5, 2025
Host: Scott Becker
Guest: Alan Condon, Editor-in-Chief at Becker’s Healthcare

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Episode Overview

This episode features Alan Condon, Editor-in-Chief at Becker’s Healthcare, discussing key headlines in the healthcare industry. The conversation focuses on HCA Healthcare's record-setting year, the evolving role of artificial intelligence (AI) in the revenue cycle, and notable industry transactions, particularly Community Health Systems’ (CHS) recent divestitures. The dialogue is fact-packed, candid, and peppered with firsthand insights on financial performance and major industry shifts.

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Key Discussion Points & Insights

1. HCA Healthcare’s Record-Breaking Year

• Stock Performance & Financial Momentum
  • HCA Healthcare's stock hit a record high of ~$515 at the end of November 2025, maintaining ~$500 by December ([00:20]).
  • This marks an approximate 35% increase over the July 2024 high of $360.
  • “That surge… really underscores investor confidence in the for-profit 190, 191 hospital system’s ability to drive sustained growth in a really challenging environment.” — Alan Condon ([00:53])
• Q3 Financial Highlights
  • Reported $1.6 billion in net income for Q3 2025, with an 8.6% margin—a ~29% jump YOY.
  • Raised full-year guidance: revenues of ~$76.5 billion, net income ~$6.7 billion, earnings per share up to $28 ([01:40]).
• Success Drivers
  • Leadership under CEO Sam Hazen, with disciplined cost control and operational consistency.
  • Market presence in “fantastic markets” and emphasis on high-quality outcomes and access ([02:29]).
  • Notable Quote: “Really fantastic leadership across the board and no doubt that is expected to continue into 2026 as well.” — Alan Condon ([03:20])
• Key Takeaway: HCA’s focus on strong financial discipline, market selection, and consistent performance sets an industry benchmark.

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2. AI in the Revenue Cycle: The ‘Arms Race’

• Payers vs. Providers
  • Payers (“insurers”) have long leveraged AI for claims processing, call centers, and utilization management. UnitedHealth Group alone has ~1,000 AI use cases and will handle over half of all consumer calls via AI by end of 2025 ([04:30]).
  • “Payers have been among the earliest adopters of AI in healthcare… deploying it across claims processing, call centers, things like utilization management.” — Alan Condon ([04:45])
• Provider Sector is “Playing Catch Up”
  • Hospitals and health systems are now racing to develop in-house AI tools (e.g., with Epic) to counteract administrative hurdles and improve claim outcomes.
  • Example: Cleveland Clinic started with over 15% of claims denied but reduced to below 2% after intensive appeals, aided by AI ([05:25]).
• Risks & Uncertainties
  • Increasing complexity and embeddedness of AI is a “double-edged sword” (quoting Cleveland Clinic CFO Dennis Laroway).
  • Major question: How will escalating AI sophistication on both sides affect financial performance and patient care?
• Host Perspectives
  • Scott Becker jokes about AI-handled payer calls causing access frustrations:
    • “That might be why we can never get through to the payer and actually ask them a question.” ([06:31])
  • He then stresses the importance of "off ramps" so customers can still reach a human:
    • “The best systems are combining the AI to take the lion’s share of stuff, but also including an off ramp so you could actually talk to a person…” ([06:52])
• Collaboration Needed
  • Alan and Scott agree: More collaboration between payers and providers is essential, with the patient at the center ([07:15]).

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3. Industry Moves: Community Health Systems (CHS) and LabCorp

• CHS Divestitures
  • CHS continues to streamline through divesting non-core assets, most recently selling lab assets in 13 states to LabCorp in a transaction just shy of $200 million ([08:02]).
  • “Really aligns with CHS’s strategic focus to focus on some of its core acute care services and some of its key markets.” — Alan Condon
• LabCorp’s Expansion
  • LabCorp has been acquiring numerous hospital lab assets, further expanding its presence and partnerships across the U.S.
  • “Really, really building a massive enterprise there on the lab front.” — Alan Condon ([08:44])

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Notable Quotes & Memorable Moments

• “That surge… really underscores investor confidence in the for-profit hospital system’s ability to drive sustained growth in a really challenging environment.” — Alan Condon ([00:53])
• “[HCA’s] real focus on high quality outcomes, really making sure that their access was better than some of its competitors…” — Alan Condon ([02:42])
• “Payers have been among the earliest adopters of AI in healthcare, deploying it across claims processing…” — Alan Condon ([04:45])
• “Trying to use AI tools, agents, automation to play catch up and try to protect our financial performance as much as possible.” — Alan Condon ([05:55])
• “That might be why we can never get through to the payer and actually ask them a question.” — Scott Becker ([06:31])
• “The best systems are combining the AI to take the lion’s share… but also including an off ramp…” — Scott Becker ([06:52])
• “Collaboration no doubt seems to be the key, but can providers and payers really get there…” — Alan Condon ([07:15])

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Timestamps for Key Segments

• 00:20 — HCA Healthcare’s 2025 performance and financial results
• 02:29 — Leadership and strategy lessons from HCA
• 04:30 — AI’s rise in the revenue cycle: payers vs. providers
• 05:25 — Cleveland Clinic’s claim denial rates and resource-intensive appeals
• 06:31 — Discussion on AI in customer service (payer call centers)
• 07:15 — Importance of payer-provider collaboration
• 08:02 — CHS’s divestiture to LabCorp and broader lab asset trends

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Summary Takeaways

• HCA Healthcare has set new records in profitability and stock price through disciplined operations and leadership, serving as a model for the sector.
• AI is reshaping the revenue cycle, with payers far ahead of providers; provider systems are racing to close the technological gap and streamline financial performance.
• Industry consolidation continues, with strategic asset divestitures (as by CHS) and aggressive expansion from companies like LabCorp.
• Key issue: Increasing sophistication of AI demands robust collaboration between all stakeholders to benefit both financial stability and patient outcomes.

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This episode offers a clear, accessible window into the rapidly changing landscape of healthcare finance, technology, and strategic operations—ideal for executives, analysts, and anyone tracking major industry trends.

Transcript

[A]

This is Scott Becker with the Becker Healthcare podcast. We're thrilled today to get to visit with Alan Condon. Alan's an editor in chief at Becker's Healthcare and just a remarkable leader. Alan joins us regularly to share with us a couple of the stories that he's watching in healthcare. Alan, take it away. Tell us a couple of the stories that you're watching currently.

[B]

Yeah, always a pleasure. Thanks so much, Scott. Hope you had a great Thanksgiving. So I think first and foremost a really interesting story. Listeners will be very familiar of course, with HCA Healthcare, largest for profit hospital operator in the country, really capping off a standout year with its stock reaching a record high last week, the last week of November of around about $515. So the latest really in a milestone run that reflects the company's really strong operational, really strong financial momentum throughout 2025 and out the back of the pandemic. So as of December 3rd time recording, HJ stock remains elevated at around about $500. Just to give a little bit of an Insight, that's almost 35% more, 35% higher than its July 2024 previous all time high record of around about $360. So that surge over the last 18 months or so really underscores investor confidence in the for profit 190, 191 hospital systems ability to drive sustained growth in a really challenging environment. We reported on HCA's third quarter results just a couple weeks ago. Quick snapshot of those was $1.6 billion in net income, around about an 8.6% margin and that's about a 29% jump year over year of what reported in the same quarter last year. So in the recent Q3 results, HC actually raised its full year 2025 guidance. Now when we think of 2025 overall, the health systems leaders are expecting revenues of around about 76.5 billion for the year, net income of around about 6.7 billion and an earnings per share of up to $28. So HCA continue to deliver really strong, strong returns in the hospital sector. And Wall street is taking notice.

[A]

Yeah, no, it's fantastic what HCA has done. They've become the clear for profit leader amongst all health systems. They're also incredibly profitable. Any lessons or other takeaways that people can take away from the HCA situation or experience?

[B]

Yeah, I think really interesting following results for quite some time, fantastic leadership from top down. I think the clear indicator in terms of its growth strategy, it's been quite not as active as it has been in recent quarters in terms of an M and a footprint. Really, really strong outpatient. It's in fantastic markets, fantastic leadership from CEO Sam Hazen. He really emphasized the real focus on high quality outcomes, really making sure that their access was better than some of its competitors and some of the markets in which they've operated. And of course first and foremost just a really, really disciplined cost control from its cost control from a CFO standpoint, all of which really resonate with Wall Street. I think with some of these record high earnings, operational consistency and a history like to your point Scott, hca a real history of delivering strong returns for its investors, all really contributing to raising its full year guidance. Some of those really record high stock prices for this year as well. Really fantastic leadership across the board and no doubt that is expected to continue into 2026 as well. The second story I wanted to touch on was not much of a story, but something we've been paying close attention to in conversations at Becker's with revenue cycle leaders, with CFOs really across the board. And that's something we report on last week. In terms of this ongoing AI arms race. Reshaping healthcare, more specifically reshaping the healthcare revenue cycle. I think playing catch up certainly in 2025. Playing catch up with pairs payers have been using AI for quite some time. Automation and revenue cycle. A lot of health systems, hospitals really playing catch up, hoping to build their own AI tools, whether that's with epic, develop their own internal tools and AI agents to really play some catch up to combat some of those headwinds we see in terms of denials, claims reviews, trying to protect our financial performance as much as possible. I think just for a quick little bit of perspective here, I think payers have been among the earliest adopters of AI in healthcare, deploying it across claims processing, call centers, things like utilization management. UnitedHealth Group alone has about a thousand AI use cases, including transcription tools, automated claims reviews. According to a recent report in the Wall Street Journal, as of the end of 2025, it's expected that UnitedHealth Group will use AI to handle over half of all consumer calls. So just a huge insight on what's going on the payer side of the spectrum. But flipping over to what's going on in providers, no doubt AI is being more more AI tools are being more sophisticated, more deeply ingrained, more deeply embedded in the revenue cycle, which is kind of a double edged sword, to put it in the words of Cleveland Clinic CFO Dennis Laroway, who recently had on the podcast and the only quick little example I'll call out here just we highlighted United Health Group's AI cases Cleveland Clinic despite some of their aggressive backend efforts to comply to align with some of these payer rules administrative burdens, Cleveland Clinic still sees more than 15% of claims initially denied only to bring that figure down to below down to below 2% after a really lengthy resource intensive appeals process. So from 15% of initials claims to light down to below 2% again. Trying to use AI tools, agents, automation to play catch up and try to protect our financial performance as much as possible. But the big question among CFOs revenue cycle leaders is as AI tools become more sophisticated, more embedded in the revenue cycle on both sides of the sector, what does that initially mean down the line? No easy answer, no silver bullet here, but something that really worth talking about and something that a lot of financial leaders are thinking about at the moment.

[A]

No, thank you so much. And I think that's it's fascinating to hear your note on payers handling 50% of all calls through AI. That might be why we can never get through to the payer and actually ask them a question. But I say that somewhat jokingly, but it is this real combination of trying to use AI to handle calls and still provide great customer service.

And I guess the key for so many of us is does that AI include an off ramp so you actually could talk to somebody when you need to. And I think the best systems are combining the AI to take the Lion Shearer stuff, but also including an off ramp so you could actually talk to a person as you need to to really get the customer experience and service that you want. That seems to be to me to.

[B]

Be the case absolutely. I think the industry just crying out for really more collaboration amongst providers and payers to kind of really get away from this push pull, friction, that dynamic that we've seen kind of really ramp up in recent quarters. Collaboration no doubt seems to be the key, but can providers and payers really get there to ultimately benefit providers, payers and also let's not forget the patient caught in the middle of all this as well.

[A]

I mean 100% we've talked about HCA, they're tremendous success. I, I've been watching CHS also.

Divest of some assets to become a stronger and leaner company. We talked about the evolution in the use of AI. Anything else that you're watching closely currently? That's top of mind.

[B]

Yeah, I think, I think it's worthwhile to your point, maybe expanding a little bit on the the recent CHS transaction, I think Community health systems are not a for profit system. Been so slightly divesting in in various markets over the last couple of years. Some hospitals in certain markets. One big, big transaction which just got over the line as of December 1st sold lab assets in around about 13 different states to LabCorp, which has been snapping up lab assets from hospitals from health systems across the country around just shy of a $200 million transaction here. But again really aligns with CHS's strategic focus to focus on some of its core acute care services and some of its key markets. Divesting some of those lab assets to LabCorp and on the lab side as well. It's Definitely worth noting LabCorp over the last couple years has been snapping up so many of these lab assets, acquiring them, partnering with health systems, some of these outreach select lab assets across the board. Really, really building a massive enterprise there on the lab front. Certainly worth noting as well on the lab side of the healthcare spectrum too.

[A]

Thank you so much Alan. It is always fantastic to visit with you. It always helps me learn what's going on. I greatly appreciate it. Again, Alan Condon, Editor in Chief, Beckers Healthcare Just a tremendous journalist and leader. Thank you so much for joining us today.

[B]

Always a pleasure. Thanks so much Scott.