커뮤니티헬스시스템스(CYH) 2026년 3분기 실적 발표 컨퍼런스 콜: EBITDA 및 가이던스 하향

핵심 요약

• 커뮤니티 헬스 시스템즈(Community Health Systems)는 2026년 3분기 조정 EBITDA가 2억 8,000만 달러를 기록했으며, 마진은 전년 동기의 12.2%에서 10.2%로 하락했다고 발표했습니다. 자산 매각 및 전기 항목을 제외한 핵심 조정 EBITDA는 약 7% 감소했습니다.
• 동일 병원 기준 순매출은 3.8% 증가했으며, 이는 2.2%의 입원 환자 수 증가와 3.6%의 조정 입원 환자 수 증가에 힘입은 결과입니다. 하지만 조정 입원 환자 수 증가분의 절반 가까이는 무보험 환자에서 발생했습니다.
• 민간보험 대상 비급여/선택적 수술 수요는 계속 부진했습니다. 동일 병원 수술건수는 2% 증가했으나, 마진이 높은 선택적 정형외과 및 일반 수술보다는 마진이 낮은 심장 및 소화기계 수술 중심으로 구성되었습니다.
• 경영진은 2026년 연간 실적 가이던스를 순매출 113억~115억 달러, 조정 EBITDA 12억 2,500만~12억 7,500만 달러로 하향 조정했습니다. EBITDA 중간값 기준으로는 6.5% 낮아졌습니다.
• 3분기 조정 영업활동 현금흐름은 1억 6,800만 달러를 기록했습니다. 연간 영업활동 현금흐름 가이던스는 주로 EBITDA 감소로 인해 1억~3억 달러로 하향 조정되었습니다.
• 회사는 외래 시설, 의사 영입 및 임상 역량에 대한 투자를 유지하는 동시에 연간 1억 달러 이상의 비용 절감 효과를 가져올 것으로 예상되는 조치들을 시행했습니다.

핵심 재무 데이터

사업 및 영업 성과

커뮤니티 헬스 시스템즈는 환자 수요가 수익성이 낮은 의료 환경과 지불자 범주에 점차 집중되고 있다고 밝혔습니다. 동일 병원 조정 입원 환자 수 증가분의 절반 가까이를 무보험 환자가 차지했으며, 응급실 방문 증가분은 사실상 전체가 무보험 환자에서 비롯되었습니다.

경영진은 선택적 수술 수요 약화의 원인으로 본인부담금(copay) 및 공제액(deductible) 상승과 전반적인 가계 비용 부담을 꼽았습니다. 클리닉 방문은 7.9% 증가했고 정형외과 MRI 및 기타 영상 촬영 활동은 견조하게 유지되었습니다. 경영진은 이러한 지표를 수요가 경쟁사로 이탈한 것이 아니라 연기되고 있는 증거로 보고 있으나, 수요 회복 시점에 대해서는 구체적으로 밝히지 않았습니다.

수술건수는 동일 병원 기준 2% 증가하며 증가세로 돌아섰습니다. 외래 수술은 증가한 반면 입원 수술은 감소했습니다. 심장 및 소화기계 수술은 성장했으나, 높은 치료재료 비용으로 인해 TAVR 및 와치맨(Watchman)과 같은 시술은 연기된 선택적 정형외과 및 일반 수술에 비해 수익성이 낮았습니다.

인력 동향은 개선되었습니다. 의사 이직률은 40% 이상 감소했고 병동 정규 간호사 이직률은 10% 하락했으며, 고용된 의료인력 기반은 전년 동기 대비 2.5% 증가했습니다. 경영진은 이러한 추세가 향후 수술 역량 및 환자 의뢰 증가를 뒷받침할 것으로 본다고 설명했습니다.

또한 회사는 9월 외래 클리닉과 응급실 전반에서 생성형 AI 음성인식 진료(ambient listening) 100만 건을 돌파했습니다. 경영진은 이 기술이 행정 업무를 줄이는 동시에 청구 누락 방지, 코딩 정확도 및 의료진 생산성을 향상시키고 있다고 밝혔습니다.

비용 통제는 인력, 조달, 기술 및 기업 구조조정에 계속 집중되었습니다. 이미 시행된 조치를 통해 연간 1억 달러 이상의 절감 효과가 발생할 것으로 예상되며, 물품 및 서비스 계약의 갱신 시점이 도래함에 따라 추가적인 절감 기회가 있을 것으로 전망됩니다.

경영진 가이던스

경영진은 연간 가이던스 범위를 달성하기 위해 4분기 영업활동 현금흐름이 8,500만~1억 8,500만 달러에 이를 것으로 예상하고 있습니다. 자본적 지출의 약 절반은 성장 프로젝트에 투입되었으나, 회사는 2027년에 접어들며 일정 수준의 유연성을 유지하고 있습니다.

커뮤니티 헬스 시스템즈는 농촌 보건 전환 프로그램(Rural Health Transformation Program) 1년 차 지원금으로 주로 자본적 지출 및 소프트웨어 업그레이드 용도의 2,500만~3,000만 달러를 수령할 것으로 예상하고 있습니다. 관련 자금 및 지출의 대부분은 2027년에 발생할 것으로 예상되며, 수익은 해당 연도를 시작으로 여러 기간에 걸쳐 인식될 예정입니다.

2027년의 경우 경영진은 민간보험 수가 인상, 메디케어 입원 및 외래 수가 개정안, 외래 확장, 연기된 수술의 회복 가능성 등을 잠재적 수혜 요인으로 꼽았습니다. 또한 2026년에 인식되었던 1,500만~2,000만 달러 규모의 이전 기간 주 정부 지시 수수료 혜택은 재현되지 않을 것이라고 경고했습니다.

리스크 및 주요 관전 포인트

• 건강보험 교환소(HICS) 자격 상실 및 자급(self-pay) 환자로의 전환에 따른 연간 추정 영향액은 8,000만~9,000만 달러로 증가했습니다. 3분기 영향액은 3,000만~3,500만 달러였으며, 경영진은 4분기에 약 2,500만~3,000만 달러의 영향이 있을 것으로 예상하고 있습니다.
• 무보험 환자의 이용 증가로 자급(self-pay) 회수액은 지속적으로 감소했습니다. 경영진은 매출 인식 추정치를 분기별로 업데이트하고 있으며, 현재로서는 일회성 조정을 예상하지 않는다고 밝혔습니다.
• 전문의료과 비용은 주로 마취과 및 방사선과 영향으로 13% 증가했습니다. 경영진은 2027년에도 이 항목의 비용 증가율이 인플레이션을 상회할 것으로 예상하고 있습니다.
• 보험자(지불자)들의 청구 처리 속도는 계속 지연되었습니다. 3분기 동안 상황이 더 악화되지는 않았으며, 매출채권 회수기일(accounts receivable days)은 6월 30일부터 9월 30일까지 안정적인 수준을 유지했습니다.
• 메디케이드 근로 요건 강화 및 의료제공자 세금 지원금 감축 가능성이 소폭의 악재로 작용할 수 있으나, 경영진은 영향이 아직 불확실하다고 밝혔습니다.
• 경영진은 거시경제적 압박과 환자 행동 패턴의 불확실성으로 인해 중기 목표를 재검토하고 있습니다.

애널리스트 Q&A 주요 내용

연기된 선택적 수술: 경영진은 본인부담금과 공제액이 높은 민간보험 가입 환자가 치료를 연기하는 주요 집단이라고 밝혔습니다. 정부 제공 보험 가입 환자는 동일한 수준의 연기 현상을 보이지 않았습니다. 회사는 분할 납부 조건을 제공하지만 지불자와의 계약상 본인부담금이나 공제액을 면제할 수 없습니다.

2027년 실적 동인: 잠재적 호재 요인으로는 민간보험 수가 인상, 메디케어 수가 개정, 외래 확장, 의사 영입 및 연기된 진료의 회복 등이 있습니다. 악재 요인으로는 지속되는 무보험 환자 압박, 메디케어/메디케이드 보장 범위 불확실성, 비반복성 주 정부 지시 수수료 혜택 종료, 전문의료과 비용 상승 등이 있습니다.

외래 사업 확장: 커뮤니티 헬스 시스템즈는 2026년에 수술 센터 2곳을 인수하고 신규 센터 2곳을 개원했습니다. 경영진은 추가적인 신규 개발 및 인수를 예상하고 있으나, 의사와의 협의(physician alignment) 결과가 자본 투입 시기에 영향을 미칠 수 있습니다.

농촌 보건 전환 프로그램: 회사는 1년 차 프로그램에 대해 약 30%의 신청 승인율을 기록했다고 발표했습니다. 경영진은 2년 차에 추가 기회가 있을 것으로 보고 있으며, CHS 진출 지역 내 지역사회 및 학술 프로그램에 부여되는 지원금으로부터 간접적인 수혜도 기대하고 있습니다.

실적발표 컨퍼런스 콜 전문

전체 실적 발표 컨퍼런스 콜 녹취록

경영진 발표

Operator

Good day. And welcome to the Community Health Systems Third Quarter 2026 Earnings Conference Call. [Operator Instructions] Please also note, today's event is being recorded. I would now like to turn the conference over to Anton High, Vice President of Investor Relations. Please go ahead.

Unknown Speaker

Thank you, Rocco. Good morning and welcome to Community Health Systems Third Quarter 2026 Conference Call. Joining me on today's call are Kevin Hammons, Chief Executive Officer, and Jason Johnson, Executive Vice President and Chief Financial Officer. Before we begin, I must remind everyone that this conference call may contain certain forward-looking statements, including all statements do not relate solely to historical or current facts. These forward-looking statements are subject to a number of known and unknown risks, which are described in headings such as risk factors in our annual report on Form 10-K and other reports filed with or furnished to the SEC. Actual results may differ significantly from those expressed in any forward-looking statements in today's discussion. We do not intend to update any of these forward-looking statements. Yesterday afternoon, we issued a press release with our financial statements and definitions and calculations of adjusted EBITDA and adjusted EPS. We've also posted a supplemental slide presentation on our website. All calculations we discuss today will exclude gains or losses from early extinguishment of debt, impairment gains or losses on the sale of businesses, expense from government and other legal matters and related costs, expense from employee termination benefits and other restructuring charges, and business transformation costs. With that said, I will turn the.

Kevin Hammons

call over to Kevin Hammons, Chief Executive Officer. Thank you, Anton. Good morning, everyone, and thank you for joining our Third Quarter 2026 Conference Call. For your continued interest in CHS. I want to begin by expressing my sincere appreciation to our dedicated clinical and operational teams across all of our facilities. Their steadfast commitment enables us to advance our core vision, making the healthcare experience exceptional for our patients, our communities, and each other. Even with the dynamic operating landscape shaped by shifting coverage dynamics and broader macroeconomic pressures, we are taking direct proactive steps to fortify our competitive position. Our execution remains anchored in our core operational priorities, elevating clinical quality, enhancing the patient physician experience, and strengthening our employee engagement.

Building on the quality momentum we shared last quarter, including strong Leapfrog safety grades across our network, our facilities continue to deliver outstanding clinical outcomes. In the third quarter, we further reduced our severe sepsis and septic shock mortality rates and hospital-acquired infection measures, metrics continuing to outperform national benchmarks. This commitment to clinical excellence is not just an operational milestone; it directly positions CHS as the provider of choice in our communities, creating a distinct competitive advantage that positions us to expand market share as patient demand normalizes and to achieve sustainable growth into the future. To capture that demand and establish clear building blocks for future revenue growth, we are actively expanding our clinical capacity and stabilizing our core workforce. On the talent front, we reduced physician turnover by over 40% and bedside RN turnover by 10% compared to the prior year. This improved physician retention, along with targeted specialist recruiting, has driven a 2.5% year-over-year increase in our employee provider base, expanding our procedural capacity and referral networks to set the stage for higher acuity volume and revenue growth in future quarters.

Simultaneously, our investments in technology are driving operational efficiency and clinician engagement. In September, we surpassed 1 million ambient listening encounters across our outpatient clinics and emergency departments. This technology significantly alleviates administrative burden, reduces provider burnout, and enhances charge capture and coding accuracy, driving productivity improvements while elevating the overall patient experience. Returning to our operating performance, third quarter adjusted EBITDA was $280 million. While overall financial results fell below our internal forecast due to the same factors that many peers are experiencing, namely elevated uninsured volumes and temporary softness in commercial elective procedures, we delivered sequential volume gains and solid cash flow performance. Importantly, our leading indicators clearly demonstrate that care is being deferred rather than lost to competitors. During the quarter, same-store commercial adjusted admissions, excluding exchanges, increased 2.7%, clinic visits surged 7.9% and MRIs and other imaging tests showed solid growth. These metrics confirm that our local networks are capturing available market demand and maintaining strong market share.

To protect profitability in the current environment while elective care defers, we are proactively managing our cost structure. Specifically, already this year we've taken actions to generate over $100 million in projected annual savings and we expect to implement further structural cost reductions in the future. These decisive measures demonstrate our commitment to disciplined margin management today without compromising our clinical capacity or operational readiness for tomorrow. Looking forward, we are positioning CHS to capitalize on several multi-year growth tailwinds. We remain focused on disciplined capital allocation, strategically expanding high return outpatient entry points including ASCs, urgent care centers, free-standing EDs, and targeted physician practices against rigorous financial return targets. Outside initiatives like the Rural Health Transformation Fund present opportunities to expand healthcare access, overcome patient mobility barriers, and drive incremental patient volume into our facilities in future years. In closing, our industry-leading quality performance, expanding physician employment, targeted capital investments and proactive cost management give us high confidence in our path forward. We are actively executing on the leverage within our control to navigate short-term industry dynamics and build long-term sustainable shareholder value. Let me now turn the line over to Jason Johnson to walk through the third quarter financial details in greater depth. Jason?

Jason Johnson

Thank you and good morning everyone. As Kevin noted during his prepared remarks, financial results for the third quarter came in below our internal expectations, despite strong discipline from our operating teams, reflecting continued outside pressures on service and payer mix that are affecting the industry as a whole. Adjusted EBITDA was $280 million with a margin of 10.2% versus 12.2% in the prior year period, when excluding the impact of divestitures and out of period items from prior year results, reflected an approximate 7% core decline year over year. During the quarter, we did not recognize any out-of-period benefits from new or existing state-directed payment programs, and consistent with last quarter, did not recognize any amounts for the 2026 Florida program. Same-store net revenue growth of 3.8% year-over-year included a 2.2% increase in admissions and 3.6% growth in adjusted admissions. As Kevin previously noted, almost half the growth in adjusted admissions came from uninsured patients. And while overall, same-store surgeries increased 2%, similar to many of our peers, demand in commercial elective procedures remained below expectations. This unfavorable payer mix and service mix shift led to a 0.2% growth in same-store net revenue per adjusted admission.

Our operating teams maintain strong cost discipline in this environment, particularly in the areas of labor management and supply chain efficiency. Along with our structural expense management program that's run corporately, we're taking steps to proactively manage profitability in the current environment. Same-store operating expense for adjusted admission increased 2.1%, and when excluding the impact of provider taxes, was up just 1.3%, significantly better than inflation. Same-store supply expense increased 1.6% and was down on a per adjusted admission basis, reflecting ongoing improvement in procurement through our ERP as well as lower mix of surgical revenues. Contract labor spend declined to 1.6% on a same-store basis, and an average hourly rate was up 2.1%, both below our expectations coming into the year. Medical specialties, meanwhile, remained a pain point on the expense side, increasing 13% year over year on the same-store basis, and increased again primarily reflected pressure in anesthesia and radiology. And while it was improved from the 19% increase in the second quarter, it was well above our initial expectations for 5% to 8% growth for the year.

We are pleased to see improvement in cash flows on both a year-over-year and sequential basis. Cash generated from operations for the third quarter of 2026 was $168 million when adjusted to exclude taxes on divestiture gains, up from $121 million in the prior year period, reflecting better management of accounts payable and ongoing collection of accounts receivable, including timing of state-directed payment programs we discussed last quarter. Total net leverage stood at 7.2 times at quarter end, up from 6.6 times at year-end 2025, despite the $810 million reduction in debt year to date, due to the reduction in trailing 12-month adjusted EBITDA. We ended the quarter with no amounts drawn on our ABL and our next significant maturity is in 2029. Based on year-to-date performance and our expectations for the remainder of the year, we are updating our full year 2026 financial outlook. Net revenue is now expected to be $11.3 billion to $11.5 billion. And adjusted EBITDA range is now $1.225 billion to $1.275 billion, or a 6.5% reduction at the midpoint. We've also reduced the cash flow from operations guidance to $100 million to $300 million, primarily reflecting the lower EBITDA. The guidance reflects our updated views of the impact from higher uncompensated care trends as a result of coverage loss and the softness we've observed in commercial elective demand through the end of the year. Finally, our Year 1 awards in the Rural Health Transformation Program are expected to be $25 million to $30 million, primarily related to capital expenditures and software upgrades. We expect to receive most of the grant funds associated with the Year 1 awards and to fund the grant-related expenditures in 2027, with Year 1 awards will be recognized over multiple periods starting in 2027. We plan to actively evaluate and pursue Year 2 funding opportunities as they become available. This concludes our prepared remarks. I'll now hand the call back to the operator to open live for questions.

Operator

Thank you. We will now begin the question and answer session. [Operator Instructions] Today's first question comes from Brian Tanquilut with Jefferies. Please go ahead.

질의응답

Brian Tanquilut

Hey, good morning, guys. Yeah, so first question, maybe as I think just about the volume performance this quarter, you know, volumes are pretty good, but I think you called out acuity and obviously the payer mix is not as good. So when I think about the higher acuity cases, specifically ortho, what do you think is happening there? On the payer mix side, as we think through the mitigation or some of the offsets that you can push through, Kevin, how are you thinking about this? Because obviously, there's an earnings power reset that has happened here. And how do we think about the ability to grow going forward? Thanks.

Kevin Hammons

Sure, thanks Brian. I'll start off here. So, you know, what we think is happening is certainly the, you know, co-pays and deductibles continue to go up. And with the kind of macroeconomic pressures, I think with higher gas prices, grocery prices, and higher cost of insurance and rent that we've been talking about are just putting pressure on people's ability to pay those co-pays and people are deferring care. As I mentioned, our clinic visits are up 7.9%. We're performing orthopedic MRIs at a rate that outpaces prior year, so we're capturing more of those patients in our system. They need the care, but as we speak to our doctors and they're speaking with their patients, what we're seeing more of is people kind of deferring that ultimate procedure of getting the surgery. So those office visits, those tests are not translating into the higher acuity procedure at the same rate as we have seen in the past.

Again, that gives us confidence that that business is just being deferred. There's pent-up demand. Ultimately we think that it comes back into the system because when you need a joint replacement, it's not going to heal on its own. So, we think that, you know, as we either get into our initial expectations, we got into the back, we would see that seasonality growth. We did not see as much of that in the third quarter as we had previously expected. Now as you get to October, if people have not met their co-pay and deductible, it's likely they could push that off until next year, get their procedures, you know, in the first half of the year and have a longer period of time to have other medical procedures done without having to pay a co-pay and deductible again. So we've adjusted our guidance kind of accordingly to reflect our outlook on that.

Brian Tanquilut

Then maybe my second question, Jason, is I think about the building blocks for 2027. I mean, I know without going to guidance it's a little early, but how should we be thinking about thinking through the 2027 outlook?

Jason Johnson

Yes, you're right. It's a little early for us to give guidance just yet. We're still in forecasting and setting our budgets. I think we can speak broadly to some of the puts and takes as we see them today. And I think this commentary is going to be consistent with what I've seen so far from some of our peers. But maybe for us, starting with some of the more certain items that were out of period and divestiture activities. So for the out of period state-directed payment programs, about $15 million to $20 million net benefit in 2026 that won't repeat in 2027. As you may recall, that includes positive contributions from Florida for the program year 2025 and Georgia, partly offset by some negative prior year true-ups in Indiana and Arizona. Divestiture activity, 2025 divestitures are actually going to be a wash. And then maybe some of the items that are less certain and are still coming into view. First, there should be tailwinds from solid commercial rate updates as well as the Medicare inpatient and outpatient rule as proposed. The outpatient rule is expected in the coming days, I believe. We also think it's reasonable to anticipate some of the deferred elective procedures to return next year, which should contribute to solid volume growth and improvement in payer and service mix versus what we saw last year in 2026, which we view as a characteristically unfavorable mix. The payer and service mix improvements we expect to be further supported by the investments that we've made in outpatient and ASC footprint, including the material acquisition of an ASC we discussed in the second quarter and three other acquisitions or de novo openings this year, as well as the recent physician recruitment activity and improved retention. I mentioned Rural Health Transformation Program, which we think will be a modest positive impact on EBITDA next year. That's the $25 million to $30 million of Year 1 funds, mostly related to capital expenditures and software upgrades, but that income begins to be recognized over a multi-year period starting in 2027.

Maybe for some headwinds, the spike in uninsured volumes from the HICS subsidy really began to ramp up in the second quarter of 2026. So I think it's reasonable to expect another quarter of that, along with some potential future degradation in coverage, depending on the outcome of the 2027 open enrollment, although we think it'll be to a lesser extent in 2026. As regards the Medicaid work requirements, under OBBA, we think there will be a modest headwind there. We have about a little over half of our Medicaid volumes and revenues come from expansion states. We think it's likely that the very large majority will qualify for continued coverage under the various exemptions like age, caregiver status or medical frailty. But we really just don't know exactly what the impact will be until the data starts coming in on how many might drop off, including for technical reasons like failing to provide the documentation. There's also a potential modest headwind in the fourth quarter of 2027 from the OBBA funding cut to provider taxes. And finally, maybe on the cost side, I think we expect to continue to maintain our strong discipline across labor and supplies, including through our corporate-run structural expense management program. The big question mark on cost is the medical specialties, which we expect to continue to grow well above inflation next year.

Operator

Our next question today comes from A.J. Rice at UBS. Please go ahead.

Albert Rice

Hi, everybody. Just for my first question, I was going to ask about the cash flow. I know you did take down the expectation for this year, the full year, but you're still looking for about $100 million to $300 million in positive cash flow. And I think if I got it right through year to date, you're negative $15 million or so. I just wonder about your confidence in being able to get to that positive $100 million to $300 million. And then is the decline in cash flow made you take a look at any of the capital spending targets and maybe push those out or revisit them?

Jason Johnson

Yes, our adjusted, this is Jason, our adjusted cash flow from operations when you exclude the taxes that we paid on divestiture gains is a positive $15 million. So our updated cash flow guidance assumes an $85 million to $185 million cash flow from operations generated in the fourth quarter. That compares to the, you know, prior year was a positive $309 million and the third quarter it was $168 million so I feel good and comfortable that we can achieve. We did not change our capital expenditure guidance and still expect to come in between the range for either the $350 million to $400 million.

Kevin Hammons

Hey, Jason, it's Kevin. Jason's absolutely right. I think we're confident with our updated guidance as we look ahead. About 50% of our capital spending has been on growth projects, and we do have a little bit of flexibility as we look out into 2027 there. But we're continuing to look at opportunities to grow and expand our service footprint and ourselves and get good returns from that capital spending. So, we'll continue to look at it closely and kind of have discipline around that.

Albert Rice

Okay, and for my follow-up, I think you're the first of the public companies to comment on the Rural Transformation Fund and how that's playing out. Maybe can you just sort of walk through how it did play out? Did this end up being about what you expected? Were you hoping for more? Was this a positive surprise? And anything about the way it was processed as we think about future years on that fund?

Jason Johnson

Yes, this is Jason. I'd say if I went back a year ago, I would say that I would be, we expected to receive more than we did for Year 1. However, as we began to kick off the process for evaluating and pursuing, and we actually saw the [guidelines?] for proposing to use the funds, this probably is more in line with what we expected and I was trying to advise caution, and some of the comments I made previously about how beneficial this could be. However, $25 million to $30 million Year 1. I think we submitted a lot of applications and I think it's probably about a 30% success which I understand from talking to others is actually pretty successful. Year 2 and beyond, there's opportunities to, uh, the states didn't have a lot of time to prepare for Year 1, so they're already kicking off Year 2, uh, but I think in the future there's lobbying efforts and making sure that we can begin to align with strategies more than shovel-ready projects, which were a lot of the equipment.

Kevin Hammons

uses that were for this year just due to timing. One other comment I might add to that, and as we are now observing where some of the states are spending the money. There are more social programs run by local communities that are getting a lot of the rural health money. There's also some academic institutions, but we believe this could be a halo effect across. So even though we are not directly receiving some of the rural health transformation money, that money is being directed to many of our communities through other forms to benefit people's healthcare and there may be some halo effect and some reimbursement potential for us or these programs may direct people into getting more care.

Operator

Our next question today comes from Ben Hendricks at RBC. Please go ahead.

Unknown Speaker

Hi, guys. It's Drew Steadman for Ben. Operating expense per adjusted admission excluding provider taxes as well below inflation, what's driving that discipline and how sustainable is that level of cost control heading into 2027?

Jason Johnson

Yes, I think maybe start with the labor and the supplies are our ERP investment and improving processes are a big driver for both of those items. And I think it's sustainable again that headwind. You know, we'd be even a better story if the medical specialties weren't this high this year. On salaries, I guess that also points to the improved retention that Kevin called out in his comments and really the specialties are just going to take a little time because it's a market by market analysis and scenarios depending on the dynamics in each market.

Unknown Speaker

And then just as a follow-up, you flagged interest in urgent care and freestanding EDs and surgery centers as more insulated from payer dynamics. How quickly could you deploy capital into those assets and, you know, what are you seeing valuation-wise in those?

Kevin Hammons

So, we've already been deploying some capital, so in the second quarter, in the second quarter we announced the acquisition of two surgery centers, one of them being the largest multi-specialty surgery center in the state of Alabama. We also built two de novo surgery centers that were opened in the second quarter. We're continuing to pursue some opportunities with acquisition and/or developing new. The big barrier there is typically making sure that we're aligned with the right physician groups in the markets. That is the thing that can probably take the longer period of time in terms of deploying capital is just making sure you have the correct physician alignment. But I would anticipate us continuing to make progress in those ambulatory sites over the course of the remaining year and certainly well into next year and beyond.

Operator

Thank you. And our next question today comes from Stephen Baxter at Wells Fargo. Please go ahead.

Stephen Baxter

Hi, thanks. Um, it looks like the surgical trends, you know actually improved a pretty good deal in the, you know, in the third quarter, had like actually pretty solid growth there. I think like 2% was the same-store number, but you're still kind of talking about a bit of a shortfall in like the acuity and I guess elective procedure environment. I guess, can you talk a little bit about, you know, the type of surgeries that improved and how that's going to affect the future and drove that growth? And I guess, were you expecting more growth or was it just not the right kind of surgical mix inside of that number? Yes.

Kevin Hammons

Yes, it's really, we did bend the trend on surgical procedures. We've had several quarters now where, you know, we've seen negative year-over-year surgical procedures and this quarter we kind of bent the trend and turned that positive to 2%. It really was a mixed issue. Inpatient surgeries were down, outpatient surgeries were up. We saw more cardiac procedures and more GI procedures this quarter. The cardiac procedures, though, particularly like TAVRs and Watchman devices, are low-margin because of the high cost of the devices. Well, what we were short on were the elective orthopedic and elective general surgery type procedures that are higher-margin business, and those are more elective type procedures and that's what's being deferred. Again, kind of fits back into the story of: We believe this is a patient decision around care and being influenced by financial decisions, so it's patient behavior, as well as trying to get out there. We feel very good about the growth and about capturing the business within our markets and that gives us another level of confidence that as these elective procedures come back, they will come back into our system.

Stephen Baxter

Got it. Um and then just wanted to ask for, you know, an update on the latest thinking on the medium-term targets. It looks like maybe that slide from the presentation, you know, isn't there anymore this quarter. I mean, should we think that there's some element of, you know, reassessment given the challenges at the moment and kind of the amount of moving parts in the industry or is that just kind of a streamlining thing and we shouldn't think about it as any change there.

Kevin Hammons

Yeah, I think we're reassessing given the current kind of dynamics in the industry right now. Some of the headwinds causing the macroeconomic issues, if you think about down prices, the disruption in the Middle East have not yet been resolved. As we sat here even a quarter ago, there was more talk in the media that those things would be resolved in the near term, but now we're here in October, they're still not resolved. So I think it makes sense to kind of reassess and pause on those before we have a little more clarity on some of what's impacting people's decision-making and the patient behavior.

Operator

Thank you. And our next question today comes from Jason Cassorla with Guggenheim.

Jason Cassorla

I was hoping to get your thoughts on uninsured utilization activity. Obviously have the patients that are transitioning off exchange coverage that are going uninsured. But are you seeing any changes in the utilization on like a per uninsured individual basis or like any pressures because patients who are newly uninsured are leveraging your inpatient emergency departments for lower acuity services instead of their, you know, PCP or some other setting that they would have otherwise used when they were previously insured. And maybe backstopping all this, can you remind us how you're thinking about bad debt and reserving levels for that as we think about next year? Thanks.

Kevin Hammons

Sure. So, you know, if you look at just numbers, it seems to be about a one-for-one decline in former exchange business versus increase in uninsured business. We think that those uninsured people though are utilizing the system at a higher rate. Certainly utilizing our ERs, substantially all of the growth in ER visits have come from uninsured patients. Across our system and that's pretty even across all locations. I mean, it's widespread, so it's not a geographic phenomenon. And because of not having insurance, they are no longer going to the primary care doctors. They are coming into the hospital ERs for those lower acuity services.

Jason Johnson

And from a revenue recognition standpoint, we do estimate the amount of uncollectible revenue and update our estimates every quarter considering the trends in cash collections, which we have seen collections on the self-pay portion continue to decline. But I think from a perspective, we're not expecting any kind of one-time adjustment in the future from the current.

Kevin Hammons

pay volume increase.

Jason Cassorla

Got it. Okay, very helpful.

Kevin Hammons

Maybe the last bit of color I'd add on that is we look at our clinic visits, though, that were up 7.9%, those are capturing more of the insured business. So as we look at the growth in our clinic visits, we are capturing more of the insured patients, whether it's government insured or commercially insured, in the clinic visits. Okay.

Jason Cassorla

Got it. Okay, very helpful. And if I could follow up, I wanted to go back to your prepared comments. I think you said about $100 million of projected savings. Maybe could you expand on that? How much you've harvested year to date? What the visibility is for savings yet to be realized in 2027 and beyond? And kind of where those buckets, those major buckets of savings are coming from would be very helpful. Thanks.

Kevin Hammons

Sure. I, you know, my intent on our prepared remarks is I would expect that the actions we've taken today have a future benefit of something in that $100 million range plus. We're continuing to work on this program. We've taken steps across several areas in the company, including restructuring some departments, gaining benefits through the use of our ERP and technology through purchased service contracts as we use our ERP and have better visibility into certain spending, the ability to control that, leveraging scale through supply contracting and so forth. So there's a number of areas that we have an organized program around and our dollar amount there was what we would expect kind of at a minimum going forward for the actions already taken, but the work continues on to identify additional opportunities and expand that budget. I think particularly as it relates to supply chain items, many of our contracts don't come up for renewal all at the same time. There's kind of a runway of opportunities going forward for us to be able to capture additional savings on many of these items in the future that we've not yet taken steps on.

Operator

Our next question today comes from Sean Dodge at BMO Capital Markets.

Sean Dodge

Kevin, maybe going back to your comments around the top of the funnel activity you're seeing with things like clinic visits and imaging that all continuing to be healthy, but just not converting as much into elective surgical volumes. What are the tools or levers you have to try and drive better conversion or the things you can do like payment plans, financing options, more patient outreach? Just what can you do there? What are you doing to try and pull more of that through?

Kevin Hammons

We are doing more patient outreach, so I do think it starts there. You know, some of this, if it's really based on patient behavior and financial decisions. We do offer some payment terms on patient responsibility. We are limited in our ability to waive co-pays and deductibles because of, you know, the payer contracts don't allow us to do that. But, you know, that really becomes the decision largely between the patient and their physician in terms of the need for care and when it can be done. Some of this delay, and we don't have complete visibility into it because a number of our physicians are independent physicians as well that practice at our facilities and we capture the surgeries, but insurance can be delaying some of this by requiring additional physical therapy, you know, some delays in pre-authorization, but ultimately we expect, you know, net to come through.

Sean Dodge

Okay. And then just relating to the cash flow, last quarter you all mentioned a slowdown in payments from the payers. I don't think you've commented on it yet, but just any update there? Is kind of this payer behavior dynamic, is that stabilized? Is that worse, gotten better? Just anything there?

Jason Johnson

Hey Sean, this is Jason. It has continued. It hasn't worsened. We continue to see a slowdown in the payment of claims. No worse than it was in the first quarter when we really first started seeing that shock, but it hasn't changed. Either our days in AR are consistent from June 30 to September 30, so we've kind of maintained.

Sean Dodge

Thank you again.

Operator

Thank you. And our final question today comes from Andrew Mok at Barclays. Please go ahead.

Andrew Mok

Appreciate all the color on deferrals and consumer behavior. Do you have any insights into who is deferring these elective procedures within the commercial population, whether by income, job type, or other demographic factor? And to the extent it does come back next year, would you expect those procedures to return relatively evenly throughout next year, or would the recovery be more back-end weighted, given similar deductible dynamics? Thanks.

Kevin Hammons

What we do have is a lot of this deferred care is coming from your commercially insured patients who have the highest co-pays and deductibles. We don't have demographics directly on each of those, again because some of that deferral is coming through independent physicians, so we wouldn't necessarily have captured that information. But we are seeing, we're not seeing the same level of deferral among government insured patients that have, don't have to worry about co-pays and deductibles. We are seeing the deferral among patients that have co-pays and deductibles, and we can deduce that it's commercially insured. And we know that those co-pays and deductibles are increasing year-on-year, so it's becoming a bigger burden. In terms of the pace at which recovery comes, hard to estimate that. I wouldn't want to get ahead of myself on that one.

Jason Johnson

Yes, and maybe one other way to think about the population of patients who we think are deferring, I mean, the median income in our markets is like $68,000 a year I think something like that which is below the national median so I don't I think that probably, generally our market tends to be cost conscious.

Kevin Hammons

And they have same deductibles as everyone else has.

Jason Johnson

based on that, to the extent they can defer.

Andrew Mok

Got it. That's helpful. And if I could just follow up, I think your revised ACA headwind implies that the headwind gets a little bit better from 3Q into 4Q. Is that right? And can you explain the rationale behind that? Thanks.

Jason Johnson

Yes, thanks for asking that. We hadn't exactly clarified that. After the second quarter, we estimated that the impact of the HICS disenrollment and movement to self-pay would have about a $50 million to $75 million annual impact. That amount ended up being $30 million to $35 million in the third quarter, and we now expect the full year to be $80 million to $90 million. So, kind of at the midpoint, that's about a $20 million to $30 million increase from our previous estimate. We do think that the fourth quarter will go down to maybe $25 million to $30 million, so just slightly from what we saw in the third quarter. And that's because the prior year third quarter had the highest amount of HICS volumes and revenues for the year. We think that kind of comes down a little bit. We saw it come down a little bit in the fourth quarter, at $25 million.

Operator

And that concludes our question and answer session. I'd like to turn the conference back over to Mr. Hammonds for any closing remarks.

Kevin Hammons

Thank you everyone for joining the call today. As always, if you have additional questions, you can reach us at 615-625-7000. Have a good day, everyone.

Operator

Thank you, sir. And that concludes today's conference call. We thank you all for attending today's presentation. You may now disconnect your lines and have a wonderful day.

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