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HCA Healthcare (NYSE:HCA)
Q1 2021 Earnings Call
Apr 22, 2021, 10:00 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:


Operator

Welcome to the HCA Healthcare first-quarter 2021 earnings conference call. Today's call is being recorded. At this time, for opening remarks and introductions, I'd like to turn the call over to the vice president of investor relations, Mr. Mark Kimbrough.

Please go ahead, sir.

Mark Kimbrough -- Vice President of Investor Relations

All right. Thank you, Cara. Good morning and welcome to everyone on today's call. With me this morning is our CEO, Sam Hazen; and CFO, Bill Rutherford.

Sam and Bill will provide some prepared remarks, and then we will take questions afterward. Before I turn the call over to Sam and Bill, let me remind everyone that should today's call contain any forward-looking statements, they are based upon management's current expectations. Numerous risks, uncertainties, and other factors may cause actual results to differ materially from these -- from those that might be expressed today. More information on forward-looking statements and these factors are listed in today's press release as well as in our various SEC filings.

On this morning's call, we may reference measures such as adjusted EBITDA, which is a non-GAAP financial measure. The table providing supplemental information on adjusted EBITDA and reconciling to net income attributable -- attributable to HCA Healthcare Inc. is included in today's release. This morning's call is being recorded and a replay of the call will be available later today.

With that, I'll now turn the call over to Sam.

Sam Hazen -- Chief Executive Officer

All right. Thank you, Mark. Good morning to everyone and thank you for joining us. As the COVID-19 pandemic continues to surge, we started the year with strong financial results in the first quarter.

The results were driven by better-than-expected revenue growth and improved operating margins. Revenues grew over $1.1 billion, or 8.7% as compared to the prior year. This growth was generated by highly acute inpatient volumes, better payer mix, and a rebound in surgical and outpatient volumes in March. Generally speaking, March trends are continuing into April.

Inpatient revenues increased by 12%. The acuity within our inpatient business was higher as reflected in both the case mix index, which increased 7% and length of stay which grew by 6%. Additionally, commercial admits inside of our domestic operations represented 29% of total admits, compared to 26.5% last year. The commercial payer mix has been consistently around this level for the past four quarters.

These two factors combined explain the 17% increase in inpatient revenue per admissions. The total -- the total admits were down 4.2% year over year. In comparison to 2019, admits were down approximately 3%, which was -- which was in line with our expectations. In the quarter, we treated almost 50,000 COVID-19 inpatients, which represented 10% of total admissions.

Throughout the quarter, the percentage of COVID-19 admits to total admits declined. January with 17%, February was 8%, and March was down to almost 5%. Outpatient revenues increased 4.7% as compared to the prior year. This result is better performance than the previous two quarters in which outpatient revenue was down approximately 5%.

Outpatient revenues declined in January and February, consistent with that trend. But March, which had one additional weekday this year, increased by 30% as outpatient surgery and other procedures recovered strongly. Same facility outpatient surgery volumes grew 2.3% as compared to last year. As compared to 2019, they declined 3%.

E.R. visits declined 18%. This decrease is generally consistent with the trends we experienced in the previous two quarters. E.R.

visits were down 19% compared to 2019. Our teams continue to focus and deliver on our operating agenda. The adjusted EBITDA margin for the company grew on a year-over-year basis and was consistent on a sequential basis with the prior quarter. Diluted earnings per share, excluding losses and gains on sales as well as losses on debt retirement, increase 78% to $4.14.

During the quarter, we announced the definitive agreement to acquire a majority stake in the home health and hospitals business of Brookdale Senior Living. This business provides us with a large platform that complements our local provider systems. It will expand the services we offer across our networks and provide us with more enterprise capabilities to coordinate care for our patients and improve their experiences. Additionally, we believe the home will become a more important setting for healthcare in the future with continuing growth and demand.

We anticipate this transaction will close in the third quarter and we look forward to our new partnership with Brookdale. Also during the quarter, we opened two new hospitals. One in Denver and one in Orlando. Each of these hospitals will strengthen our system offerings in these communities.

In the second quarter, we expect to close on the acquisitions of two small hospitals both of which complement our networks in Nashville and Savannah. And lastly, we continue to invest broadly across our networks to improve convenience, access, and value for patients by developing more outpatient facilities. The pipeline for development and acquisition in this category remains strong. As we look to the rest of the year, we have increased our annual guidance to reflect the first quarter's performance and better perspective on important macro factors.

Mainly, governmental reimbursement and economic outlooks for our markets including uninsured assumptions. Bill will provide more details on our guidance in his comments. The first corps is yet another period where the disciplined operating culture and strong execution by our teams were on display. I want to thank our 275,000 colleagues and 50,000 positions for their tremendous work.

We could not have performed at this level without their unwavering commitment to our patients and the communities we serve. As we continue to resource and execute on our strategic agenda, we will remain true to our mission of improving lives and delivering on the responsibilities we have to all our stakeholders. And now, I turn the call over to Bill.

Bill Rutherford -- Chief Financial Officer

Good morning, everyone. Sam spoke to many of our operating metrics and results so I will discuss our cash flow and capital allocation activity during the quarter and then review our updated 2021 guidance. As a result of the strong operating performance in the quarter, our cash flow from operations was $1.99 billion, as compared to $1.375 billion in the first quarter of 2020. Capital spending for the quarter was $654 million and we completed just over $1.5 billion of share repurchases during the quarter.

We have approximately $7.3 billion remaining on our authorization and consistent with our year-end discussion. We are planning on completing the majority of this in 2021 subject to market conditions. Our debt to adjusted EBITDA leverage was 2.85 times and we had approximately $5.6 billion of available liquidity at the end of the quarter. As noted in our release this morning, we're updating our full-year 2021 guidance as follows.

We expect revenue to range between $54 billion and $55.5 billion. We expect full-year EBITDA to range between $10.85 billion and $11.35 billion. We expect full-year diluted earnings per share to range between $13.30 and $14.30. And our capital spending target remains at approximately $3.7 billion.

Our revised guidance considers the strong results in the first quarter, and also considers the extension of the public health emergency and the deferral of sequestration reductions through the end of the year. In summary, we recognize some uncertainties remain as we go through the balance of the year, but we are confident in the company's ability to manage through various business cycles and we are well-positioned to continue to invest capital to capture growth opportunities and execute on acquisition opportunities if they become available. So with that, I'll turn the call over to Mark and open up for Q&A.

Mark Kimbrough -- Vice President of Investor Relations

All right. Thank you, Bill. Thank you, Sam. Carol, we're going to open up for questions.

Please remind everyone to limit their questions to one so that we may keep trying and get in the queue as possible.

Questions & Answers:


Operator

[Operator instructions] Your first question comes from the line of Pito Chickering with Deutsche Bank.

Pito Chickering -- Deutsche Bank -- Analyst

[Technical difficulty]

Mark Kimbrough -- Vice President of Investor Relations

Pito? Pito, you're breaking up. I can't hear you. No, you're breaking. Carol -- Carol, it's -- let's try the next one.

Pito, try calling back in.

Operator

Your next question comes from the line of Kevin Fischbeck with Bank of America.

Kevin Fischbeck -- Bank of America Merrill Lynch -- Analyst

Great. Thanks. I guess my question would be on guidance, I guess. First, a clarification.

Your guidance, I assume, does not include the two deals you expect in -- in Q2 or the Brookdale acquisition. But then more to the point as far as guidance, how do you think about the upside yet because your -- it sounded like a lot of the -- the raise is because of sequestration and the extension of the health emergency. How -- how much of this outperformance and guidance range do you think of as kind of onetime versus things that we should be thinking about as you having a better visibility into future growth in 2022 and 2023?

Bill Rutherford -- Chief Financial Officer

All right. Thank -- thank you, Kevin. Kevin, let -- let me answer that. First, you're right.

The acquisitions for the balance of the year are not included in our expectations, but we don't expect that material of contribution from those for -- for this year. Relative to our increase in guidance, you know, largely due to the strong performance that we had in the first quarter is the driver of that. As Sam talked, you know, we have some insight into margin and -- and the read-through through April. And then we did consider the continuation of the deferral of sequestration through the balance of the year and we know the public health emergency got extended at least through 90 days to July.

So, the majority of the guidance range is a result of our performance from the first quarter and considers the -- the extension of the sequestration on there. So, you know, as -- as we've talked about at our year-end call, there are still be -- variables out there but, you know, the way we're reading the environment right now is generally positive.

Mark Kimbrough -- Vice President of Investor Relations

Thank you, Kevin. Carol, next question, please.

Operator

Your next question comes from the line of Frank Morgan with RBC Capital Markets.

Frank Morgan -- RBC Capital Markets -- Analyst

[Audio gap] margins and obviously, big expansion year over year, and you sustain nice margins from the previous quarter. But can you just give us any more color around the dynamics or your ability to continue to manage costs this way? I mean, it really looked like it was across everything, labor, supplies, others. Is it more a function of just the top-line growth or is there something structural on the cost side that's allowing you to, you know, take advantage of having flex labor? Just any color there would be appreciated. Thanks.

Bill Rutherford -- Chief Financial Officer

Yeah. Frank, this is Bill. I'll start. You know, I -- I think the margin is primarily attributable to the top line with the revenue and the -- the acuity in the payer mix that we.

But we continue to be focused on looking for efficiencies throughout the company as we've talked about our resiliency plans in the past. And so, those efforts continue and many of them are well under way in almost every category. And so, that is -- is a part of the performance of the company. But the margins clearly are -- are being, you know, helped by both the acuity and the payer mix and -- and the revenue per adjusted admission that we're seeing.

But as we've talked about multiple times, we are continuing to look for as much efficiency as we can as we -- we go through different cycles. And many of those efforts continue to be under way.

Sam Hazen -- Chief Executive Officer

Yeah. And Bill, if I can just add to that. Our -- our cost per adjusted patient day was in line with our expectations and actually, you know, slightly underneath that. And so, we were only seeing in the face of really a difficult labor market, 3% growth in cost per adjusted patient day.

So, I think the -- it's a combination of both, but obviously with the mix that helps, Frank.

Mark Kimbrough -- Vice President of Investor Relations

All right. Thanks, Frank.

Frank Morgan -- RBC Capital Markets -- Analyst

Thank you.

Mark Kimbrough -- Vice President of Investor Relations

Carol?

Operator

Your next -- your next question comes from the line of A.J. Rice with Credit Suisse.

Mark Kimbrough -- Vice President of Investor Relations

Hey, A.J.

A.J. Rice -- Credit Suisse -- Analyst

Hi, everybody. Maybe just add a little bit more about the capital deployment opportunities. In our last quarterly call, you guys have mentioned -- because you're looking at some post-acute care dynamics. And then obviously, you had an announcement about Brookdale.

Perhaps that was what you were alluding to last quarter, but maybe talk about your appetite there and whether you're seeing a broader health system, I know you get two hospital deals. But -- and maybe broader health systems or some thought that they might look to partner up coming out of the pandemic. Have you seen any uptick in activity there? And then finally on this capital deployment spending around your capex. Are you moving -- and you're still emphasizing access points, but I wondered whether investments in ER, for example, might be diminished given what we've seen coming out of the pandemic and less ER activity maybe diverted some of that money elsewhere.

So, just some comments on capital deployment opportunities.

Sam Hazen -- Chief Executive Officer

Okay, A.J., this is Sam. I'll try to respond to those. I remember all of -- all the elements. On post-acute, let me speak to that.

Obviously, the home care opportunity and hospice opportunity to us we believe is a significant expansion of the services we offer. And the opportunities for integrating those patients who are discharged, and we discharged about 250,000 patients a year into home care, creates an opportunity for us to coordinate care better, stay connected to the patient after they leave our facility, and ultimately integrate them more effectively in the HCA healthcare system. So, we see a nice, broad opportunity. We believe home care provides multiple channels of value for us, some of which are in the discharges that we talked about.

Some of it's in better case management and discharge planning, and some of it is staying connected to the patient when they repurchase healthcare. Also, on post-acute, we've mentioned before because of the CON relaxation in Florida, we have made a large commitment to in-patient rehabilitation facilities in the state of Florida where we have the greatest opportunity to do the same thing with rehab. So, we've invested somewhere between $250 million and $300 million, or we are investing rather, in developing rehab services in the state of Florida which will expand the offerings in those markets to our patients and support our systems. So, we still see potential in both of those areas to expand into more significant relationships with Medicare Advantage payers potentially on post-acute.

So, it creates opportunities for us in multiple ways. As it relates to our capital spending, as we mentioned in our guidance for 2021, we are increasing our capital budget to somewhere around $3.7 billion. Much of that increase is related to growth projects where we are expanding at facilities where we need to expand. We're still running the company north of 70% inpatient occupancy, and many of our facilities are north of that.

And so in order for us to capitalize on this differentiated portfolio we have, where we believe our markets have unique growth prospects because of great economies, population growth, and so forth, we need to create capacity both on the inpatient in certain circumstances and build out the networks additionally with outpatient facilities, as we mentioned. With respect to ER, specifically, we do see ample supply, generally speaking, with our ER beds today. We will have some continued investments in emergency room supply and capacity across certain markets because, number one, in some cases, we need it. We continue to operate at high levels.

Or, two, we have freestanding emergency room opportunities. And we will invest in those, but they're not nearly as significant as they were five years ago, when we were investing more heavily in that. So that flexibility will allow us to invest in ambulatory surgery centers, where we have a tremendously strong pipeline for new development. I think we have 10 or 12 new ambulatory surgery centers that are under development, and we have a robust pipeline in that particular category as well.

And then we will also invest in urgent care, recognizing that that continues to serve a role in building out the capabilities inside of our markets. As it pertains to M&A, I do think there are going to be opportunities. As we've mentioned in the past, they come when they come. It's hard for us to predict.

We are fortunate to have a balance sheet that can take advantage of those opportunities as presented. We have an enterprise chassis, if you will, that is built to be bigger and to bolt on new opportunities and create synergies and value inside of those systems. And so we will continue to look for those as they develop and, hopefully, find opportunities that make sense for us. Thank you.

A.J. Rice -- Credit Suisse -- Analyst

Great. Thanks.

Mark Kimbrough -- Vice President of Investor Relations

Thanks, A.J.

Operator

Your next question comes from the line of Pito Chickering with Deutsche Bank.

Mark Kimbrough -- Vice President of Investor Relations

All right. Let's give it one more try, Pito.

Pito Chickering -- Deutsche Bank -- Analyst

All right. Can you guys hear me now?

Mark Kimbrough -- Vice President of Investor Relations

Yep.

Sam Hazen -- Chief Executive Officer

We can hear you.

Pito Chickering -- Deutsche Bank -- Analyst

Take two. All right. So thanks for taking my questions. Can you give us the components of the 2021 guidance raise? How much was due to the strong first quarter? How much was due to additional government funding? Any changes to the back half of the year? And as you look at the margins the back half of the year, you'll face tough comps and good pricing and mix due to COVID.

Can you help us walk through the gives and takes that are on the assumptions for margins, including the payer mix, circular trends, and labor costs?

Bill Rutherford -- Chief Financial Officer

Yes. Pito, so this is Bill. Let me try to zero in on that. You know, as I answered Kevin's, majority was due to the strong performance.

We understand we beat our expectations, and depending on your number, anywhere from $300 million to $400 million, we expected the first half of the year to be stronger than the second half, but it still outpaced our expectations. The sequestration extension for the end of the year is probably worth anywhere from $40 million to $50 million a quarter. So that added. We originally did not anticipate that continuing past the first quarter.

So that's an element of the raise, too. So if you look at the midpoint, our raise was $500 million. You could say it's probably $350 million to $400 million from our performance and then the balance through these government extensions if you want to have specifics on that. But we also have a range with variables that are -- that continue to play out.

On the margin question, yeah, you're right. And you know, when we gave our year-end guidance, we said we anticipate our margins to likely look a lot like the full-year 2020 as we began to kind of see the second half of 2020, really, with the strength of the payer mix and acuity. So we're very pleased with where we stand with that. We'll continue to evaluate as the year goes on.

But I think the balance of our guidance, I reflect back to our discussion at the end of the year. So the raise, really, is the consideration of the strong performance in the first quarter plus the continuation of the government support.

Sam Hazen -- Chief Executive Officer

And, Bill, this is Sam. Let me add one thing to that. I mentioned just a second ago that I think we have a differentiated portfolio. And inside of that differentiation, we believe that the growth prospects for Austin, Texas, Dallas, Texas, Miami, Florida, places like that are much better than the national average.

And so we continue to see job growth. The other thing I would point to is that the increase in enrollment through the exchanges is a very positive dynamic. And we see further opportunities for improvement in that particular dynamic as there's more money supporting navigation and other support for individuals who have lost their jobs. Our participation in exchange products has improved year over year and, actually, significantly improved over two, three, four years to where we have roughly 80% access to exchange lives across HCA markets today, which is quite different than what it was maybe three, four years ago.

So as more people get enrolled there, we think the support -- and this is one of the things we've talked about in the past, how does the Affordable Care Act provide support in a recessionary cycle, and it seems to be providing solid support. And as we look forward, that is an area that we find to be a positive dynamic as well.

Mark Kimbrough -- Vice President of Investor Relations

OK. Pito, thank you much. Cara?

Operator

Your next question comes from the line of Ralph Giacobbe with Citi.

Mark Kimbrough -- Vice President of Investor Relations

Right. Hey, Ralph.

Ralph Giacobbe -- Citi -- Analyst

Hey, guys. So outpatient surgery, up 2.3%, stands out. Maybe just what's driving that category to kind of buff the negative volume trends. And then I think, Sam, you mentioned 30% on the outpatient side in March.

Obviously, that's a pretty hefty number. So just hoping you can give more detail on the categories there and maybe the impact of the influence of weather. I'm assuming some of that may be pulled forward from weaker February. But any commentary on that would be helpful.

Thanks.

Sam Hazen -- Chief Executive Officer

Right. Thanks, Ralph. I think, obviously, the March this year had a favorable calendar. We had one more workday than we did last year.

Last year, obviously, we shut down the company for the most part midway through the month. But when we look at March 2019, we saw activity levels that were consistent on a per business day. So the outpatient surgery activity in March of 2019 per business day was pretty much identical to the outpatient surgical volume per business day in 2021. You know, it's probably a little bit of pull-through from February storms.

But for the most part, we were up and operational in a week in the state of Texas, which was a remarkable feat on the part of our teams. And so I don't know exactly how much of that was storm-related. It's hard to really pinpoint that. But we're seeing, obviously, a little migration from inpatient to outpatient, which has continued from one year to the next, and that's influencing our outpatient statistics also.

But when I look broadly across outpatient volumes, not just surgical, cardiac volume, very strong performance in electrophysiology on the cardiac side, recovery in endoscopic procedures on the outpatient side. So some of the diagnostic activity, which we believed had been deferred, showed itself a little bit in March in ways that we hadn't seen maybe in other months in the latter part of 2020. So we're encouraged by that. As I mentioned in my comments, we're seeing some pull-through into April that's very similar.

And we'll continue to monitor this and report out on it and give you a better feel as we get further into the year.

Mark Kimbrough -- Vice President of Investor Relations

Thank you, Ralph.

Ralph Giacobbe -- Citi -- Analyst

OK, thank you. Thanks.

Operator

Your next question comes from the line of Lance Wilkes with Bernstein.

Lance Wilkes -- Sanford C. Bernstein -- Analyst

Yeah. Thanks a lot. So I just want to ask about two things as we're starting to move into a kind of post-COVID impacted period. Was interested in both what are you able to do from a capacity expansion standpoint kind of within facilities and within outpatient to accommodate, you know, more volumes, kind of the catch up on deferred care maybe for the second half of the year to understand how that capacity could expand? And then just also interested in add that -- how that's performed during this period.

And any activities you've taken as far as, you know, kind of collection or other sort of processes to deal with that and how that looks going forward?

Sam Hazen -- Chief Executive Officer

Okay. Let me take the first one. I'll kick the second one to Bill. I think with respect to capacity management, a couple of things.

One, as I mentioned, we're investing to expand capacity where we believe appropriate, both inpatient, outpatient, emergency room, whatever the case may be, we have a very sophisticated analytical methodology to determining where do we have constraints and where do we have opportunities to relieve those constraints with investments and so forth. But the second thing I would say, and I think this is an important point, and it's a learning that we experienced during the COVID year, I'll call it, 2020 and the first part of this year. The ability to manage our capacity in order to deal with the different surges that we experienced required us to hone our discharge planning process and case -- case management functions at time to create flexibility with the capacity that we do have. So if we were to see a spike in deferred care starting to show itself, I think the learnings operationally and from a capacity management standpoint, that we experienced and gained during the COVID surges will help us in responding to that particular situation.

So those are the two approaches that we're -- we're doing to deal with potential growth in demand. And we still continue to believe that long-term healthcare demand is there. And it will be there in the future and our systems are durable and built for that as we continue to move through these different periods. Bill?

Bill Rutherford -- Chief Financial Officer

Yeah. On the bad debt and the uninsured, I think as we reported in the past, we've continued to see declines in our uninsured volume as the COVID pandemic began to show itself all throughout the last three quarters of last year, and that continues into the first quarter. And those uninsured declines were greater than our total. So some of that is also due to we are receiving some HRSA payments for some reimbursement for uninsured COVID patients.

So all of those have, you know, resulted that our uncompensated care levels are actually below where we were running prior year. And we don't see any material developing trends in that category. So we're very pleased with where we stand relative to the bad debts and the uncompensated care position.

Mark Kimbrough -- Vice President of Investor Relations

Thank you, Lance.

Lance Wilkes -- Sanford C. Bernstein -- Analyst

Thanks.

Operator

Your next question comes from the line of Scott Fidel with Stephens.

Sam Hazen -- Chief Executive Officer

Hi! Hey, Scott.

Scott Fidel -- Stephens Inc.-- Analyst

Hi, thanks. Good morning. I had a follow-up question actually on -- just on the home health strategy. I'm interested if you guys had mentioned the interest statistic that you have around 250,000 patients to start annually directly into the home.

Interested if you've been able to evaluate what percentage of those patients would be covered by the existing Brookdale Home Health footprint. And then as you think about markets where you have -- don't have the overlap with Brookdale, whether you would look to scale up that asset or whether you would consider pursuing additional strategic relationships with other HH providers? Thanks.

Sam Hazen -- Chief Executive Officer

All right, thanks, Scott. Yeah. Scott, on the Brookdale, roughly 60% to 70% of their agencies have overlap in our markets. So obviously, that was an attractive strategic component of the acquisition.

And as we work through the acquisition integration, we're going to, you know, explore that even further. Relative to, you know, agencies that reside in non-HCA markets, you know, we'll still evaluate what is the appropriate course of action. And if there are partnership opportunities, we may pursue those, but we'll still take that and consider that as we go through the completion of the transaction.

Mark Kimbrough -- Vice President of Investor Relations

Thanks, Scott.

Scott Fidel -- Stephens Inc.-- Analyst

Thank you.

Operator

Your next question comes from the line of Brian Tanquilut with Jefferies.

Brian Tanquilut -- Jefferies -- Analyst

Hey, good morning, guys. Congratulations on a good quarter. I guess my question for you, Sam, as we start seeing this pace of recovery, you know, how are you thinking about remaining pent-up demand in the market? And then, you know, as we talked about payer mix earlier, what can you share with us in terms of the mix of patients you're seeing both on the kinds of procedures we're seeing, the recovery in March and April, and the payer mix bucket that we're seeing? You know, is it shifting back to, you know, more Medicare, more uninsured, more Medicaid? I just want to see if you can give us some color on what the recovery looks like right now. Thank you.

Sam Hazen -- Chief Executive Officer

All right, Brian, thanks. Well, I think It's still early to land on exactly what the recovery is looking like. If you look at the two elements of our business where we saw significant dropoff, pediatric activity on one side and then obviously, Medicare activity on the other. So the middle piece, if you want to call it that, is what had been most durable.

Having said that, most of our outpatient business that was deferred is that middle piece. Some of the in-patient that we have lost is the outer shoulders, the pediatric, and the Medicare side of the equation. So I don't really have a good sense of what's going to happen on the Medicare side. We're starting to see more pediatric activity in the month of March.

It wasn't down as much as it was in previous periods, which reflects I think kids going back to school in many communities. Activity starting to happen again with spring sports and such, and we're seeing a little bit more traffic in our emergency rooms related to pediatric volume. But I think on the outpatient side, which is where most of the deferred care, we believe, was, that is largely a commercial book of business. 55% of our revenues or so on the outpatient side is commercial-related.

And as that starts to develop, we think that will be probably what shows itself from the deferred care. But it's still early. Obviously, there's still uptake with vaccines. There's still, you know, concerns with COVID from one community to the other.

And all of that could create some choppiness to it all, but we need a few more months to really judge exactly what that rebound is going to be, but we're encouraged, again, by March. We're encouraged by the early view into April, and we're hopeful that that sustains itself over the remainder of this year.

Mark Kimbrough -- Vice President of Investor Relations

All right. Thanks, Brian.

Operator

Your next question comes from the line of Justin Lake from Wolfe Research.

Justin Lake -- Wolfe Research -- Analyst

Hi, thanks, good morning.

Sam Hazen -- Chief Executive Officer

Hi, Justin.

Justin Lake -- Wolfe Research -- Analyst

Hey! [Inaudible] try to squeeze in two numbers questions here, if that's OK. First, given the meaningful shift in 2021 numbers, obviously, to a positive, wanted to ask about the right jumping-off point going in 2022 in terms of moving parts. I mean, obviously, I could think of is on sequestration is probably going to come back, maybe offset by some acquisition benefits, etc. So if you can run through that, that would be great.

And then on the commercial mix shift, given how dramatic it's been, I was wondering if you have any ability to parse that out in terms of market share gains versus just the population shift in younger people moving south into your market and simply just let deferred care among commercial populations versus maybe Medicare? Thanks.

Bill Rutherford -- Chief Financial Officer

Right. Justin, I'll -- I'll start with the first one. I -- you know, it -- it's early for us to be thinking about the variables going into 2022 as we were just talking about, you know, trying to, you know, get a read on how the recovery period if you will or how the -- how -- how the business settles once COVID gets to a normalized level. So it's just a little early to think about the put -- puts and takes of 2022.

We don't have insight into government funding beyond this year at this stage. So, you know, give us another quarter or two, and then, you know, as we near the completion of the year, we'll be able to talk to you about our view of -- of the trends we're seeing currently as far as how they roll into 2022.

Sam Hazen -- Chief Executive Officer

And, Justin, this is Sam. On the market share, you know, we are operating at an all-time high on market share based upon the -- the most available -- currently available data we have, which is the end of the third quarter for 2020. And we are pushing the overall market share for the company across the 43 domestic markets into the low 27% zone. So very high watermark.

On the commercial side of the equation, we have, in fact, gained market share on the commercial at an even faster pace. I don't know exactly how that's playing out in the fourth quarter and the first quarter, but we have seen trends that are more positive for our company on that particular front than our overall trends, and I think that's been part of our results. And we continue to evolve our physician strategy, our service line strategies, our outreach strategies, and so forth toward the commercial book of business as you would expect and we believe it's yielding positive results for the company.

Mark Kimbrough -- Vice President of Investor Relations

All right. Thank you, Justin.

Operator

Your next question comes from the line of Josh Raskin with Nephron Research.

Mark Kimbrough -- Vice President of Investor Relations

Hey, Josh.

Josh Raskin -- Nephron Research -- Analyst

Thanks for taking the question. I just had a quick one on capex. It looks like capex was actually down almost $200 million year over year in the first quarter even though you are guiding to considerably higher capex for the full year. So just wondering what caused that decline this quarter, and I wanted to see what the thinking was on how capex would ramp through the balance of 2021? Thanks.

Bill Rutherford -- Chief Financial Officer

Yeah, this is Bill. We -- we understand it was below. You know, some of that is the capital program story where, you know, repopulating the pipeline with approvals and so that the spending of that you didn't see in the -- in the first quarter. We still believe that our capital spending will approximate this $3.7 billion, maybe a little bit on either side of that.

And so we do anticipate the capital, the actual spend to ramp as we go throughout the year and we'll just have to continue to evaluate that. So ultimately, I think what you're seeing in the first quarter is as we slowed down capital in 2020 as we began, you know, reimplementing some of our capital programs, just the spending didn't occur at that same level. But -- but we still believe 3.7 is the right number.

Sam Hazen -- Chief Executive Officer

Hey, just -- just -- just time, we know how the capital gets spent.

Mark Kimbrough -- Vice President of Investor Relations

All right. Thank you, Josh. Even though I don't think you're Josh.

Operator

Your next question comes from the line of John Ransom the Raymond James.

John Ransom -- Raymond James -- Analyst

Hey, good morning. I have an exciting opportunity for you. I'm going to ask two questions and you can either answer both or pick one. We'll catch up on the other offline.

So dealer's choice. My first question is if -- if we look at your assumptions for the back half of the year, my hypothesis is that, certainly, Medicare will grow faster than commercial but both buckets if we measure by adjusted admissions will grow, just commercial at a lower rate. Is that consistent with your assumptions? And my second question is, you know, what is -- what part of your top two or three public policy priorities in D.C. given the new administration? I'll stop there.

Thank you.

Bill Rutherford -- Chief Financial Officer

Yes. John, let me take the first one. Our assumptions throughout the year just consistent with our year-end is that we do expect a recovery of our historical business to return, you know, as we see COVID settle to a level as we hope, you know, broader populations get vaccinated, that we'll begin to see this return. So -- so we do expect some growth to occur from where we are now as we go through the year.

And I think that is reflected in our full -- full-year guidance. The exact timing and the pacing of that is unclear, but we do expect throughout the year there'll be recovery and we'll return to, you know, some historical level of a pattern for us. And -- and that would likely occur through all-payer classes in Medicare, as well as the commercial as we've talked about.

Sam Hazen -- Chief Executive Officer

And we're -- we're going to play both of your cards. So the question around.

John Ransom -- Raymond James -- Analyst

Like a dream come -- it's like a dream come true for me.

Bill Rutherford -- Chief Financial Officer

Just -- just for you, John. Just for you.

Mark Kimbrough -- Vice President of Investor Relations

He should have asked three questions.

Sam Hazen -- Chief Executive Officer

On the public policy front, I think, obviously, we're -- we're focused in on health policy and it's our belief that the Affordable Care Act is providing the support for the country that it -- it was intended to do. And we're hopeful that we can maintain policies that provide that kind of protection for people so they have the coverage and access they need. And then the second area would be around tax policy. Obviously, we're a tax-paying healthcare system as compared to many of our competitors who aren't, and paying and focusing in on getting to the right tax policy is important to us too.

So those would be the two categories that we're -- that we're focused on.

John Ransom -- Raymond James -- Analyst

Thank you.

Mark Kimbrough -- Vice President of Investor Relations

All right, John. Have fun at the golf course.

John Ransom -- Raymond James -- Analyst

Not today, Mark. My course is close.

Operator

Your final question comes from the line of Jamie Perse with Goldman Sachs.

Mark Kimbrough -- Vice President of Investor Relations

Hey, Jamie.

Jamie Perse -- Goldman Sachs -- Analyst

Hey. Hey. Good morning. You -- you've mentioned the -- the March trends and that continuing into April.

I -- I wanted to clarify, does that mean the volume levels were -- were similar in -- in March and heading into April, or that the recovery curve is progressing in April? And then more forward-looking, just what -- what leading indicators do you look at whether it's primary care utilization or non-COVID diagnostic trends that -- that might give us some -- some color on where volumes might go from here?

Sam Hazen -- Chief Executive Officer

I think for the -- the comment around April is -- is -- is a general observation about our business as a whole. And some of the aspects of our March activity and results is carrying forward into April. That's really all I'm going to say at this particular point, time. What was the second question again about?

Bill Rutherford -- Chief Financial Officer

Leading indicators.

Sam Hazen -- Chief Executive Officer

OK, yeah, we use our physician practices as a source of leading indicators if you will. And we're starting to see new patient activity grow. I want to say in the month of March, new patient activity, some of this is business-day driven was up 17% over the previous year, and that's a pretty significant indicator of future activity that occurred across a variety of specialties. We employ roughly 7,500 to 8,000 physicians.

And so we're seeing activity within new patient rosters and new patient activity show up at our clinics. And as I mentioned also, our emergency room activity, it started to grow a little bit from where it was in -- in the low points in 2020 and during the -- the COVID periods. So those are two leading indicators that I would suggest are indicative of maybe more activity starting to percolate in the markets.

Mark Kimbrough -- Vice President of Investor Relations

All right. Thank you, Jamie. Cara?

Operator

And then no more questions at this time.

Mark Kimbrough -- Vice President of Investor Relations

All right. Well, listen, I want -- we want to thank everyone for joining the call today. As always, feel free to call if there are additional questions that you might have, but have a safe day. Thank you.

Duration: 44 minutes

Call participants:

Mark Kimbrough -- Vice President of Investor Relations

Sam Hazen -- Chief Executive Officer

Bill Rutherford -- Chief Financial Officer

Pito Chickering -- Deutsche Bank -- Analyst

Kevin Fischbeck -- Bank of America Merrill Lynch -- Analyst

Frank Morgan -- RBC Capital Markets -- Analyst

A.J. Rice -- Credit Suisse -- Analyst

Ralph Giacobbe -- Citi -- Analyst

Lance Wilkes -- Sanford C. Bernstein -- Analyst

Scott Fidel -- Stephens Inc.-- Analyst

Brian Tanquilut -- Jefferies -- Analyst

Justin Lake -- Wolfe Research -- Analyst

Josh Raskin -- Nephron Research -- Analyst

John Ransom -- Raymond James -- Analyst

Jamie Perse -- Goldman Sachs -- Analyst

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