HCA

Jack O. Bovender, Jr.

Chairman and CEO

2004 Sanford Bernstein

This press release contains forward-looking statements based on current management expectations. Those forward-looking statements include all statements regarding our estimated results of operations in future periods and all statements other than those made solely with respect to historical fact. Numerous risks, uncertainties and other factors may cause actual results to differ materially from those expressed in any forward-looking statements. These factors include, but are not limited to (i) increases in the amount and risk of collectability of uninsured accounts and deductibles and co-pay amounts for insured accounts, (ii) the ability to achieve operating and financial targets and achieve expected levels of patient volumes and control the costs of providing services, (iii) the highly competitive nature of the health care business, (iv) the efforts of insurers, health care providers and others to contain health care costs, (v) possible changes in the Medicare and Medicaid programs that may impact reimbursements to health care providers and insurers, (vi) the ability to attract and retain qualified management and personnel, including affiliated physicians, nurses and medical support personnel, (vii) potential liabilities and other claims that may be asserted against the Company, (viii) fluctuations in the market value of the Company’s common stock, (ix) the impact of the Company’s charity care and self-pay discounting policy changes, (x) changes in accounting practices, (xi) changes in general economic conditions, (xii) future divestitures which may result in charges, (xiii) changes in revenue mix and the ability to enter into and renew managed care provider arrangements on acceptable terms, (xiv) the availability and terms of capital to fund the expansion of the Company’s business, (xv) changes in business strategy or development plans, (xvi) delays in receiving payments for services provided, (xvii) the possible enactment of Federal or state health care reform, (xviii) the outcome of pending and any future tax audits and litigation associated with the Company’s tax positions, (xix) the outcome of the Company’s continuing efforts to monitor, maintain and comply with appropriate laws, regulations, policies and procedures and the Company’s corporate integrity agreement with the government, (xx) changes in Federal, state or local regulations affecting the health care industry, (xxi) the ability to successfully integrate the operations of Health Midwest, (xxii) the ability to develop and implement the payroll and human resources information system within the expected time and cost projections and, upon implementation, to realize the expected benefits and efficiencies, and (xxiii) other risk factors detailed in the Company’s filings with the SEC. Many of the factors that will determine the Company’s future results are beyond the ability of the Company to control or predict. In light of the significant uncertainties inherent in the forward-looking statements contained herein, readers should not place undue reliance on forward-looking statements, which reflect management’s views only as of the date hereof. The Company undertakes no obligation to revise or update any forward-looking statements, or to make any other forward-looking statements, whether as a result of new information, future events or otherwise.

All references to “Company” and “HCA” as used throughout this document refer to HCA Inc. and its affiliates.

HCA

2

2004 Sanford Bernstein

Las Vegas

+22%

HCA is located in 16 of 20 Fastest Growing Large US Cities

Dallas/Ft. Worth

+12%  Generally 25-40% Market Share  40% of facilities in Texas & Florida

Denver

+9%

Kansas City

+5%

Austin

+18%

Southern California

+9%

Percent Growth in Market Population 2000-2005 Compared to the National Average of 4.5% HCA Houston

+10%

Tampa Bay

+8% 3 %

U.K.

Nashville

+8%

Switzerland Richmond

+8%

Panhandle

+10%

Palm Beach

+11%

Dade

+8%

2004 Sanford Bernstein

Health Care Market Outlook Strong

National Health Care Spending 1990 – 2010

$2,702 $2,355 $2,044 $1,779 $1,547 $1,311 $990 $696 1990 12.0% 1995 13.4

% 2000 13.3% 2002 14.8% 2004 15.4% 2006 15.9% National Health Care Expenditures as a Share of Total GDP 2008 16.4% 2010 17.1% Will the U.S. economy shift 2.3% of GDP to health care services over the next seven years?

Source: U.S. Centers for Medicare and Medicaid Services —National Health Expenditure Projections, 2003

HCA

4

2004 Sanford Bernstein

Inpatient Admissions and Outpatient Visits

1980 - 2002

30 29 28 27 37 36 35 34 33 32 31 Inpatient Admissions Outpatient Visits 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 600 550 500 450 400 350 300 250 200 150 100 Source: AHA Annual Survey, 1980 - 2002 HCA

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2004 Sanford Bernstein

7.0% 5.0%

HCA Admission Trends 2001 to 1Q 2004 Same Facility

15.4% HCA Growing Medicare Market Share Growth in Medicare Admissions 1998-2001 16.0% 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% HCA 6.7% Market Competitors 3.0% 1.0% -1.0% 1Q 00 2Q 00 3Q 00 4Q 00 1Q 01 2Q 01 3Q 01 4Q 01 1Q 02 2Q 02 3Q 02 4Q 02 1Q 03 2Q03 3Q03 4Q03 1Q04 HCA Admissions Rolling 12 mo. Avg

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2004 Sanford Bernstein

Admissions growth rates vary by market

2,500 Average Chg.

+2.5% 1 2,000 1,500 1,000 500 (500) (1,000) (1,500) Indiana

-12.3%

-15% N. Monroe

-11.0%

Top 15 Markets in Admission s Growth +11,860/ +5.9% vs. PY Far West Una.

-3.2%

Switzerland

-6.4%

Mid America

-5.2%

Bottom 15 Markets in Admission s Growth -2,773/ -2.6% vs. PY No. VA

-3.9%

S.Carolina

0.1%

So. Cal

-5.6%

-5% Panhandle Las Vegas

-0.8%

Houston

-2.6%

Tampa Bay

+3.1%

San Antonio

+3.1% +2.7%

Dallas/ Ft. Worth

+5.6%

Columbus

+1.6%

Mid. GA

+0.3%

Cent. La.

-1.4%

San Jose

+3.9%

0% Corpus Christi

-1.7%

Treasure Coast

-2.4%

5% Admissions % Change Denver 2

+6.1%

Ft. Myers

+5.9%

N. Cent. Fla.

+5.2%

Jacksonville

+4.5%

10% Nashville

+14.9%

Richmond

+4.9%

Austin

+6.1%

Rio Grande

+12.8%

El Paso

+9.7%

NW Ga.

+12.9%

Total Admissions Determine Bubble Size 1: Same Facility 15% 2: Denver is a non-

Volume Variance by Market – 1 st Quarter – Same Market

consolidating JV Market HCA

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2004 Sanford Bernstein

HCA Capital Expenditures

Billions

2000 $1.2

$2.0

2001 $1.4

2002 $1.7

2003 $1.8

2004E $1.8

$1.5

$1.0

Expansions $0.5

$0.0

2000 2001 Patient Safety & Infrastructure New Facilities 2002 2003 Expansions Routine Distribution of Capital Dollars 2002 and Beyond HCA

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New Denver Facility 2004E Land & Improvements 14%/$565M ER & Outpatient Services 19%/$720 54 Facilities with Surgery and/or ICU/CCU expansions Replacement Facilities 3%/$98M 37 ER Expansions Open Heart, Imaging Cardiology, Oncology, etc.

1,565 New Beds New & Expanded Services 18%/$740M Four New Facilities 378 Beds Surgery/Spec'l Units 22%/$870M Beds 14%/$550M New Facilities 10%/$395M 2004 Sanford Bernstein

The Genesis of the Bad Debt/Charity Care Issue

17.0

%

HCA is in 14 of the 20 highest uninsured states, with 72% of its hospitals in those states 13.1

%

22.2

%

21.2

%

18.1

%

19.2

%

23.5

%

22.2

%

15.1

29.7

%

23.5

% %

15.4

%

25.6

%

15.9

%

19.3

%

16.4

%

14.6

%

15.4

%

20.3

%

16.7

%

19.7

%

22.8

% National Average:

15.2% HCA 1

Weighted Average:

22.6% 2 >20% Uninsured 15-20% Uninsured <15% Uninsured

1: U.S. Census Bureau “Health Insurance Coverage in the United States: 2002”.

2: Kaiser Commission: Health Ins. Coverage of Nonelderly Adults 2001-2002.

HCA

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2004 Sanford Bernstein

ER has the highest volume of uninsured… requires intervention

ER Visits 1,235,641



2.3%

Admitted

210,002

17%

Managed/ Medicaid 92,869 Medicare 103,820 Uninsured 13,313 5% Net % Change 1Q03-04 Admitted

Managed/Medicaid Medicare Uninsured

6.6%

6.4% 5.9% 15.2%    

1 st Quarter 2004 – Eastern & Western Groups HCA

ER Visits

1,025,639

83%

Managed/ Medicaid 684,968 Medicare 109,235 Uninsured 231,436 Net % Change 1Q03-04 ER Visits

Managed/Medicaid Medicare Uninsured

1.5%

3.3% 0.5% 20.1%    

2004 Sanford Bernstein

Origination of Bad Debt Expense

75-80% Uninsured Patients 20-25% Co-Pay & Deductibles

 1Q 01 vs. 1Q 04 front end collections  93%, percent collected  53%,  co-pays/deductibles  25% Intensify collections at discharge and post discharge  Minimum front-end deposit requirements

HCA

“How System is Accessed”

Outpatient Svcs.

6% ER Visits 41% Admissions Thru ER 39% Direct Admissions 14% 2004 Sanford Bernstein

Bad Debt Action Plan

75-80% Uninsured Patients



Follow-up care criteria established.



Patient Financial

 

Management Committee In-house case management Concurrent financial counseling



Standard discharge process



Screen all potential non-emergent patients by qualified medical personnel



Once stabilized or deemed non-emergent, proceed with collection effort



Mandatory ER case management HCA Outpatient Svcs.

6% ER Visits 41% Admissions Thru ER 39% Direct Admissions 14%



Executive Management approval must be obtained



Minimum deposit standards



Enhanced front-end collection goals 2004 Sanford Bernstein

HCA

Enhanced Outpatient Services Focus

O/P Comprised of Three Business Lines

2003 % of HCA Net Revenue As a % of Outpatient Surgeries Hospital Based 70%

15.3% Outpatient Surgeries

ASC Based 30%

12.5% 9.4% 37.2%

Outpatient Diagnostic Services

Outpatient ER

Hospital Based Freestanding

 Imaging  Cardiology  Oncology  Orthopedics  Neurology 13

2004 Sanford Bernstein

2004 Managed Care Contracting

2005 Contract Pricing Timeline* 16% 15.0%

6,844 Facility Level Active Contracts

35% 42% 55% 75% 95% 100% Pre-2004

11.1%

10.5% 1Q04 2Q04 3Q04 *Anticipated Completion Dates 4Q04 2005 Cumulative 11.4% 13.0% Net Revenue per Adjusted Admission Managed Care & Other Discounted

9.9%

13.3% 11.1% 9.6% 7.0% 7.3% 0% 1Q 02 2Q 02 3Q 02 4Q 02 1Q 03 2Q 03 3Q 03 4Q 03 1Q 04

83% of 2004 and 42% of 2005 contracts completed.

HCA 2004 Sanford Bernstein

Operating Expenses per Adjusted Admission Managed Effectively

2001 2002 2003 2004 15% 13% 11% 9% 7% 5% 3% 1% -1% 5.4% 4.7% 7.0% 8.0% 8.5% 8.8% 5.5% 7.8% 7.4% 5.2% 8.1% 6.5% 7.4% 7.0% 5.6% 6.0% 5.5% 8.0% 9.4% 10.2% 10.8% 8.9% 9.3% 7.5% 6.2% 6.0% 7.6% 3.8% 10.4% 5.3% 6.7% 6.4% 1Q 01 2Q 01 3Q 01 4Q 01 1Q 02 2Q 02 3Q 02 4Q 02 1Q 03 2Q 03 3Q 03 4Q 03 1Q 04 Operating Expense/AA Operating Expense/AA

(Adj. For Bad Debt)

Same Facility – Percent Change from Prior Year HCA 2004 Sanford Bernstein

HCA

Employee Satisfaction at Record Levels

30% 25% 20% 15% 26.7% 3.5% 18.8% 2000 25.9% 3.6% 3.9% Employee Satisfaction (Gallup Score) 3.7% 3.8% 3.8% 3.7% 22.8% Employee Turnover 20.1% 3.6% 3.5% 18.3% 2001 Nurse Turnover 17.0% 16.8% 2002 2003 3.4% 3.3% 2004 Sanford Bernstein

Strong Cash Flow Trends Provide Opportunities

$3,500 Net Cash Provided by Operating Activities Dollars in Millions $2,786 $2,822 $2,046 $1,584 $1,301 $0 1999 2000 2001 2002 2003 Capital Reinvestment Balance Sheet Share Repurchase Program New Dividend Policy

Excluding settlements with government agencies and investigation related costs.

HCA

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2004 Sanford Bernstein

Opportunities Of Having Strong Cash Flow

Share repurchase program YTD 2004

1

2003 $422M: 10.0M Shares

$1.1B: 31.1M Shares

2002 $282M: 6.2M Shares 2001

$706M: 19.2M Shares

2000

$1.3B: 43.5M Shares

$7.3 Billion 244 Million Shares 38% of outstanding shares Average Price: $30.03

1999

$1.4B: 55.6M Shares

650M Shares 12/31/96 1998

$930M: 41M Shares

1997

$1.3B: 37.9M Shares 1: 2004 purchases through 5-6-04

HCA 465M Shares 2 4/30/04

2: Includes other activities affecting share balance (stock option exercises, restricted grants, and ESPP activity).

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2004 Sanford Bernstein

HCA is Investing Significantly in Programs for Patient Safety and Improved Patient Outcomes

 

E MAR: Medication Error Prevention



E POM: Physician Order Entry



100% Participation in CMS Quality Reporting Initiative



Member of NQF and Leapfrog



Cardiovascular, OB and Emergency Department Initiatives HCA

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2004 Sanford Bernstein

In Summary We Have….

Great Assets Excellent Investment Opportunities Strong Cash Flows Excellent Long-Term Earnings Growth Outlook A prudent financial strategy that provides for a strong balance sheet and return of cash to shareholders through share repurchase and/or dividends HCA

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2004 Sanford Bernstein