Good morning. You know, we use videos here at the corporate office to remind ourselves of the sacred responsibility we have to our patients. I think in these videos that you're gonna see today, you're gonna see the power of our purpose as an organization. I think you're gonna see the power of our plan in executing on that purpose, and then the power of our people as they do what they do, day in and day out. We also remind ourselves of the responsibility and accountability we have to our shareholders, and we believe that we can harmonize both objectives and accountabilities, and ultimately produce value for both. So we're happy that you're here. Good morning. Welcome to the 2023 Investor Day. Somebody asked me last night, they said, "Sam, why'd you rush to have an Investor Day?
You just had one." I said, "Yeah, a little over two decades ago, we had one." But we felt that there was a lot going on in our company, post-pandemic, and we wanted to share that with you today to give you a better picture of our organization, and give you a sense of what we get to see throughout our company in our day-to-day interactions with our teams and physicians, and so forth. So we have three objectives here today. The first is to show you the endurance and durability of our business. We think it's important always to look back and understand what happened in the past, and how to carry that forward. And what I think you're gonna see is a unique business with incredible endurance.
The second thing, we wanna do is provide you with an overview of our plans to grow and deliver shareholder value. Again, I think you're gonna see patterns in what we've done. It's our job to find new patterns and drive the company to future growth. The third objective is to introduce you to our management team. We have a wonderful management team, and Bill Rutherford and I get to spend a lot of time with you all, throughout the year, but we want you to get a sense of the depth of talent that we have as an organization. Just to give you a sense, over the past 10 years or so, we've invested heavily in our business to improve it. These investments have gone toward our people. They've gone toward augmenting our medical staff.
We've invested in our facilities, programs, outpatient facilities, hospitals, and so forth. We've competed in the marketplace with differentiation, innovation, and scale, and we've had tremendously good execution from our teams who have performed at a really high level. You know, these efforts, these investments, coupled with the organizational learnings we've gained from COVID, have helped us, I think, organizationally. It's strengthened us competitively, and it's certainly strengthened us financially. What I think in many areas is misunderstood about our business, we view our company as a hospital-centric healthcare system. A hospital-centric healthcare system has unique staying power. I think for me, I've been with the company now for 41 years. I can roll all the way back to the early 1990s and Hillarycare. I can roll into the early 2000s with managed care and capitation.
I can power through a couple of great recessions. Then I'll look to the Affordable Care Act and the clutter that was in the industry around the Affordable Care Act with respect to population health, value-based care, hospitals going to be a cost center, and so forth. I think what you see on this slide is an incredible staying power. I called it endurance, and I think when we looked at our business ourselves, we saw a unique capability with respect to hospital-centric networks. As you look at this slide, you can see certain metrics on here, which I think support that. Our admission growth over this time period is up 22%. The acuity levels or the intensity of the patient population that we take care of is up 25%.
Importantly, our inpatient census, up 27%, and you can see some other stats on the left. What this has done is translated to the right side of this graph, where you see, significant financial metrics. Our revenue is up 91% over this time period, our net income is up 192%, diluted EPS up almost 400%, and the stock price up 650%. I get that this is in the rearview mirror, but it sends a message as to, once again, the, sort of durability and endurance, as I mentioned a minute ago.
For us to be successful, we have to build networks that have local scale, they have to have local scope of services and facilities, and we have to integrate them into a cohesive network, which we believe create value for our patients, it creates value for our physicians, and it creates value for the payers. This model, our provider system of choice model, has produced market share gains and leading positions in major U.S. cities. We now represent significant healthcare infrastructure in many major U.S. cities. For us, this infrastructure position creates relevance, it creates brand recognition. These are important ingredients for successful business relationships in our industry. Also, in midsize cities, this model works equally as well. We have a strong position in many midsize cities across the company as well.
Since 2012, we have gained share in three of the four markets represented on these two slides, 31 markets. Now we have 43 markets domestically. In the US, we have one international market in Central London. We don't have good data with some of those, so we didn't put them up here, but we have an equal representation of our systems in those communities as well. I think another important point here is the diversification of our portfolio. Geographically, not one market represents more than 10% of, of the earnings of the company. That diversification provides market insights for us that we're able to carry across the organization.
We're able to extract best practices from this diversified portfolio, and in many instances, it provides a bit of what I'll call a defense mechanism against something that happens in one market, it doesn't always happen in another, because we tend to compete against only a system within that community. So the advantage of our diversification serves multiple purposes for us. So we studied the past, and we're looking forward to what's the forecast for the future with respect to demand. For us, we believe where you compete is just as important as how you compete. And we believe we are competing in the right markets, markets that have strong macros, averages in growth metrics above the national average. So when we look back since 2012, inpatient demand in almost 80% of our markets has grown.
As we look to the future, we believe the demand curve for healthcare gonna continue to shift to the right. Population growth, aging baby boomers, and chronic conditions, yes, such as diabetes, obesity, and so forth, put pressure on the demand curve. We estimate that the total inpatient market will grow in excess of 10% over the next seven years, to an estimated 8,300,000 inpatient admissions in HCA's markets. This is a slightly accelerated rate of growth over the past period that we studied. On the outpatient side, we expect demand to be even greater than what we see on the inpatient side, and this is especially true for our emergency room services and outpatient surgical services. As I previously mentioned, we've had success in growing market share.
We've set a new target for 2030 of 29%, which is continuing the path of growth. So we looked outside to see if our internal forecasts were, in fact, reasonable. CMS recently published, and some of you may have already seen this, their estimates of healthcare spending in the U.S. For hospital services, they're actually forecasting an accelerated rate of growth of almost 6% for the next eight years. That's greater than the previous decade or so, where it was a little bit under 5%. So it tends to reinforce our thinking internally. So this strength that we've built, we believe our core business has even more potential to grow. We've gone through a fairly thorough assessment of our business, our assets, our organizational structure, and believe we can go from strength to strength.
It's primarily because of three opportunities that you see in front of you. The first opportunity for us is to expand our networks into the growing demand that we see. This expansion will involve similar patterns to what we've done in the past: facility expansions, outpatient facility expansion, service line expansion, and so forth. We have opportunities with network integration, where we can integrate our networks more effectively. The second piece of our network expansion is geared toward workforce development. We need people as much as we need facilities in order to accomplish our objectives with our network expansion strategy. I think you will hear from our team today on both, around our network configuration and how we think about growth with respect to that component, and then you'll also hear from our team as we speak to the workforce development.
The second part of our growth potential, we believe, is extracting the embedded value that we see inside of our company today, and we haven't been able to get after it until now. We have, because of an evolving technology agenda, an opportunity to mine that value, if you will. And so we are investing heavily in a digital capability within our company. This opportunity will allow us to take advantage of the patterns that we see, and give us better visibility into process, give us better standardization across the organization, and deliver greater value, higher quality for our patients, more efficiency for our organization, and better tools for our management teams. So we are very excited about the potential of what we're calling our operations transformation agenda. And again, you will hear from our team today around the areas that we're focused on to deliver on this.
And then the third opportunity, that we see is to continue to lean on the financial strength and cash flow production that we generate as a company and create value for our shareholders. We will invest heavily in our network expansion strategy. We will invest significantly in our technology and care transformation strategy, but we will have the ability to deliver shareholder value, in ways that we think are going to be productive for our shareholders, and Bill will cover that in his presentations later. Just as the U.S. has a constitution, HCA has a constitution. We design our strategy, we allocate resources, and we drive execution around this constitution.
Again, you'll see some of this in our videos, but throughout all these different cycles that I mentioned earlier, I think our adherence and focus on our constitution of giving our patients what they deserve, of partnering with physicians to leverage their talent to produce better outcomes, and then to use the distinct elements that no other healthcare organization in our space has, or if they do have it, is willing to use it to the benefit of our organization so that we can improve performance. Again, I think this focus on our constitution and not deviating from our core has driven success for us. Inside of HCA, we also have our own form of federalism. I'll stick to the U.S. analogy for a moment. This is our flywheel. This is how we plan, this is how we resource, this is how we drive execution as a company.
Inside the flywheel is the local piece of our organization. We have 16 geographic divisions that have responsibility to make the inside of the flywheel turn. They have been structured organizationally around each of our markets in a way that gives us the opportunity to develop networks within the communities that we serve, and ultimately execute on the operational agenda that we have. The federal part of our flywheel is the outer ring. The outer ring is the enterprise capabilities that HCA has with respect to supporting each one of our healthcare systems. So our approach at the corporate office is to find scaled initiatives that can support the execution and the capabilities within the inner part of the flywheel. So you will see us with capital, clearly, with compliance, with other components, workforce development, graduate medical education, and so forth.
The components of the corporate initiative or the federal initiative, if you will, within our company, geared toward scaled solutions and scaled resources that we can bring to each of our facilities in each one of our healthcare systems. We think this flywheel can continue to turn both inside significantly well over the next few years, and then with the support that we have with our technology agenda, our resiliency agenda, and other components of the enterprise capabilities that we're putting forth to deliver value as we push into the future. Internally, we talk about the HCA Way. You see it here on this slide. It's simple concepts with really powerful implications for our business and overall performance. This operating model has helped make it possible for us to navigate through different challenges.
It was how we approached the pandemic, and I think we were able to learn from this even more in the pandemic, and it's allowed us to really adapt to industry challenges. As we look to the future, we have designed our next generation growth plan to build upon the unique strength we have developed and to take advantage of the opportunities in front of us. We believe it's a coherent plan, we believe it's a winning plan, and it will allow us to provide even better care to our patients, respond to market dynamics, and deliver sustained value for our shareholders. So as you go through the day today, I hope you will see what I call the power of HCA, and I think that power has demonstrated an incredible wherewithal to deliver value to all of our stakeholders.
We believe, as a management team, that we can continue to push in a direction that will carry this company to even greater heights. I wanna thank you all for joining us today and for your continued support of HCA Healthcare. Thank you.
Please welcome Executive Vice President and Chief Operating Officer, Jon Foster.
Good morning! It's a pleasure to have you here today and to provide a closer look into the strategy and the operations of our company. My presentation, as well as the next three after me, will delve a bit deeper into how we think about the development and the expansion of our local networks and the services that we provide in them. Now, while there are certainly similarities across our different markets and our network expansion strategies, as you might expect, how those strategies are executed and how they're influenced by local dynamics can and do vary from market to market. As a result, we systematically and continually evaluate our competitive position, and we invest as we see opportunities to expand our networks.
As we're going to show, our networks are robust, they're durable, and they've been designed to meet the needs of our patients where they want it, when they want it, how they want to access it, and how to navigate through it. Now, Sam referenced our strong presence in major and mid-sized markets, and he's right. We've been very selective about where we operate, and that's been an important component of our success, certainly. But how we build, how we operate, and how we expand our local networks is what we'd like to share with you in this morning's session. We think about the general geography of our networks in two basic ways: the in-market network and the outreach network. We generate 85% of our admissions from the more urban in-market geographies.
Our networks, they're anchored by our hospitals, as Sam mentioned, and they are the hubs where we generate most all of our EBITDA. Now, those hubs are supported by an expansive network of access points that are positioned throughout the urban markets that serve as outpatient sites to our hospitals that are fully integrated and aligned with our hubs. Our networks are comprised of access points like urgent care centers, freestanding emergency departments, primary care practices, and multi-specialty clinics, and also imaging centers as well. In addition, we have services for patients that are being discharged from our hospitals that need downstream services like rehab, home health, hospice, and behavioral health. We also have standalone outpatient locations, like our ambulatory surgery centers, that offer a convenient, cost-effective venue for patients that need outpatient surgical care.
So collectively today, if you roll it all up across our system, we have roughly 12 outpatient access points for every 1 HCA hospital, and over the next few years, you'll see that easily growing to a ratio of 20 to 1. We're meeting patients where they want to be served. We're making it convenient for them and offering them a broad range of clinical services, so they don't need to seek care outside of our local networks. Now, 15% of our admissions come into our hubs from the non-urban areas, or what we refer to as our outreach markets. An interesting fact is that the admissions that we receive from these in-migrating patients carry a contribution margin that's 47% higher than the average admission that we receive from our urban market admissions.
This is due to the higher acuity of the patients that are transferred to us because there are certain services not available in their local rural market. So naturally, we focus on that part of the geography as well. Our networks in the outreach markets, they look a little bit different. They take varying forms, from formal clinical affiliation relationships with rural hospitals to management agreements with rural hospitals, outpatient specialty clinics, where HCA physician specialists are located, and occasionally we'll place HCA-owned freestanding ERs in sort of the border areas of urban and rural geographies. We expect this particular segment of patients to grow as well as rural hospitals continue to struggle, sometimes to offer or maintain certain services, or in some instances, they close altogether.
Now, in addition, we've also developed a set of what we call wraparound network optimizers that help to facilitate patient access and, in essence, supercharge our network growth. We have air and ground transport programs. As you might expect also, we participate in the vast majority of all commercial payer contracts across our markets and, in fact, have over 6,000 hospital or physician contracts so that patients can have access on an in-network basis to our services. We have 330 physician liaisons that call on doctors to facilitate patient access to our services. We have 2,900 case managers that manage the length of stay inside of our hospitals so that we can ensure adequate capacity for patients that are requiring inpatient services from us.
Our CRM team, they handle doctor appointment scheduling for patients that are being referred out of our hospital ERs, our freestanding ERs, and our urgent care centers. Our telehealth services, they connect our networks to the referring hospitals and the physicians that send us patients. We have patient navigators that, for certain high-touch clinical services like cancer, perinatal, cardiology, and the like. Then we have our transfer centers. They facilitate the transfer of patients from one location to another, and these things all working together. Our hub hospitals that are integrated with an extensive network of patient access points and supported by a wide range of optimizers, forms the impressive healthcare ecosystem that is well orchestrated, to provide care to patients when, where, and how they want to access it.
These various components, they work in a complementary fashion to retain and internalize patients inside our HCA local networks. And we believe this approach to building local integrated networks, as Sam mentioned, is a value to the patient, it's a value to the physician, and it's a value to our payers. Now, the breadth of our provider network, as you'd expect, is extensive. 46,000 doctors, 310 urgent care centers, 137 freestanding ERs, and 1,400 outreach programs collectively form the networks nationally that drive 41.,700,000 patient encounters to our organization per year. And as you might expect, that level of scope, it gives us tremendous perspective. It gives us perspective about what works and what doesn't work, and in essence, providing us a continuous learning laboratory to seek higher levels of patient care and service over time.
What has this produced? This approach to developing and expanding comprehensive networks has helped us grow our market share since 2012 by 360 basis points. It's also positioned us to be the number 1 or the number 2 market share leader in 81% of our markets. Now, by way of a specific example, let's look at the Austin market in Texas. Now, back in 1995, we formed the St. David's HealthCare partnership, and when we did that, there were 4 hospitals and 1 ambulatory surgery center in the primary service area, or what we would call the end market geography. Over time, in that immediate service area, we've added 3 more hospitals, 4 freestanding emergency departments, 25 urgent care centers, 11 ambulatory surgery centers, 75 outpatient clinics, and it's all supported by a 2,900-member medical staff.
Now, in the outreach market, we've added affiliated hospitals, we've added clinics, freestanding ERs, telemedicine sites, and flight operations. And in addition, we also have two de novo hospitals that are in the planning stages for the Austin market over the coming years. So all told, this has formed the largest, most comprehensive healthcare network throughout central Texas, and frankly, one that is perennially recognized nationally for its quality. And in fact, in 2014, was recognized as a Malcolm Baldrige National Quality Award recipient. Our network in Austin, it's representative of our omni-channel approach, our omni-channel model, if you will, to providing care when, where, and how patients want to receive it. Austin is, of course, just one example. Our efforts to capture patient volume migrating into our urban markets has been fruitful across our national platform.
Our 1,400 outreach programs span 472 counties and have driven up our in-migration market share by 450 basis points since 2012. We believe there is still significant opportunity to penetrate this market additionally. Now, as I mentioned earlier, our networks are all supported by what we refer to as network optimizers. Just to give you a sense of the volume of the patients that are being served, we have a few statistics here. Our transfer centers, they handle 175,000 inbound patient transfers from non-HCA hospitals annually, HCA hospitals annually. Our physician liaisons, they make 455,000 visits per year to physicians to help connect them to the services that we offer.
Our telehealth team, they handle 400,000 telehealth visits annually across 425 different locations, and we handle 2,900,000 patient navigation encounters per year and believe there is still significant opportunity to grow that even more. I mentioned our transfer centers. Let me just stop there for a second. We have 7 of them located regionally throughout the country. They're staffed by a team of 700 employees that coordinate not only the 175,000 inbound patient transfers from non-HCA facilities that I mentioned, but also the 490,000 patients that require transports between our facilities to a location post-discharge. It's a great team that offers a great service to our patients in referring doctors and hospitals. Our investment, as you might expect in our networks, has been and continues to be significant.
In fact, right now, we have $5,300,000,000 in approved projects in the pipeline that are scheduled to come online in the next two years. As you can see, roughly half of this investment is for expansion and renovation of our hospitals, with the rest being split between de novo hospital development and outpatient facility development. Here is a high-level summary of how our networks have grown over time. I think you'll agree that this is quite impressive growth, and it's something that we are proud of. It's something that will continue to grow. The growth of our networks, we believe, has been impressive. It's positioned us to serve an even greater number of patients in our growing markets.
So with that, I'm going to wrap up my presentation in this section of the session, but the next three presentations are going to delve a bit deeper into certain critical components of our networks. They're gonna showcase how we think about our emergency room strategy, how we think about our clinical service offering strategy, and how we think about our partnership strategy. With that, I'll turn it over to the next presenter, and I thank you again for being here today.
Please welcome Atlantic Group President, Richard Hammett.
Good morning! The emergency room. It's among the most important and vital assets there is in any community that it serves. They're massively complex, highly regulated, and always available. They offer a full array of specialized people, technology, and organized services designed to meet a need in an instant. Its people thrive on the possibility of providing life-saving care. Its proximity to you and I can mean life or death. During most hours of the day, it's the only source of acute medical care for miles. It's the safety net, and it's the entry point for the clinical capabilities that reside inside the hospital. It has two doors, a front door to walk in and be triaged, and a restricted entrance back door, restricted for the EMS, Emergency Medical Services. Those two doors represent the largest source of revenue for HCA.
Because 75% of the total admissions to HCA come through the emergency department, and one-half of all the inpatient surgeries in our hospitals are performed on patients who come through the emergency room. And over the 9,000,000 ER visits that we provide in our hospitals and our freestanding ERs, we use that information, that massive amount of patient volume, to optimize all elements of the patient experience: safety, speed, our clinical capabilities, our community responsiveness to drive our consistent growth. Now, let's take a look at the demand for emergency services in our markets. Demand for ER services has been a stable and predictable source of new patient volume for years. Shown on the left is a 10-year run of emergency department visits to HCA hospitals.
The average annual growth rate of emergency visits to our hospitals is growing at 3.7%, and our strategies are growing managed care ER volume at a faster rate than this overall average. We know the demand, and we know our market share at a very granular level, in many cases, when it's available on markets, at a zip code level. And in our markets, there remains about 24,000,000 ER visits of opportunity. So the fundamentals of our demand are very strong. We remain well-positioned to satisfy the rising demand in our, in growing markets and also compete effectively in the markets that we serve. So how are we gonna do that? So I'm gonna highlight four major areas in which we drive competitive advantage in the emergency department. Number one, operational excellence.
Now, the work that we do inside the box, people, process, technology, accountability systems. The second is through our relationship with EMS, Emergency Medical Services, the local 911 ambulance service providers. Third, the level of clinical capabilities that reside beyond the front door of the hospital, within the, within the hospital. And fourth, our capital allocation strategies to the emergency room. So let's talk about operational excellence. We know that time is a critical factor in the experience of the patient. It drives patient safety, and it drives patient trust with us. And HCA's comprehensive knowledge base in emergency services is a competitive advantage for us. Our process design and our process improvement mechanisms are all informed by the most comprehensive suite of ER data analytics in the industry. There's three foundational elements that I'll hit on, and there's, there's a lot here, but performance monitoring.
We're driven in the monitoring of this one department of our hospital across 300 metrics, 13 reports at the shift level and at the day level. Every division president, if you met them last night, of the 16 markets, has a daily set of emails about ER metrics sitting in their inbox right now, just as an example. They're pushed. We have dashboards of accountability. We use these insights to drive accountability reviews at the daily, yes, daily, weekly level, and monthly level within our hospitals. If you look at the suite of data, it would feel like an obsession, and it is. Our performance monitoring is at the core of what we do to drive efficiency in the ER. The second is real-time analytics. So the best example here is a tracking system technology we use in the emergency department.
It's on the desktops of our emergency department, it's on wall-based monitors in the emergency department. Increasingly, it's on our staff, on our registered nurses' phones. And so think about when a physician makes an order, emergency physician makes an order in the ER or changes an order, or a radiologist makes a read or an interpretation of the CT scan of the brain, or a lab test has been delayed. That information is instantaneously posted on patient-level detail on these monitors through the tracking technology, so the teams know immediately and can pivot accordingly. And the third area I'll highlight is predictive modeling. I think the best example to use here is how we try to predict the unpredictable, which is the daily volume in our ERs.
Because there's no scheduled work in the ER, and you can't close the door when it just gets too busy. So we know through our deep data that day shift is the busiest shift of the 24-hour day, and Mondays are the busiest day of the week, and Novembers are the busiest month of the year. True, but that doesn't help you staff or plan resources and staffing within the emergency department. Market variability, individual hospital variability, the resourcing needs within a hospital driven by volume can fluctuate by more than 20% any given day. And so we use our deep analytics to predict the right amount of staff and resources on a daily basis.
All of this is structured and supported by a dedicated team of process engineers, our PI experts, and they reside in our 16 division offices and in our corporate offices. They're the people engine, and this is all that they do, is ER. They're behind the insights and within the data and the performance modeling we provide. They're supporting our teams and our reviews. They're also harvesting best practices, immediately cascading those throughout the company, so there's shared learning immediately. Indeed, everything and more that I just shared with you has come from within our company and how we scale our improvement efforts within the emergency departments, largely through these teams. The third area is you can't put all this together without leadership. You think about this important and massively complex department; it requires leadership.
The best example here, I would say, is if you're been tapped to be an emergency department leader, you're gonna go through a 7-month development program to get you ready to lead this complex organization with such high expectations. You also heard Sam talk about an ER revitalization effort on, on previous calls. That's just a very important thing to hit on because basically, what we did post-COVID is acknowledge the need to rebase, so to speak, or refresh this entire agenda across all of our leadership teams and systems, and to, and to ensure a consistent level of knowledge, confidence, and accountability. That process is going on right now, started earlier in the year. What's the result of all this? The result is we lead, we benchmark.
We hold ourselves out against the scrutiny and performance of others aggressively within our culture and company, and this is one area where we do that. We benchmark against 2,900 other hospitals, and we lead in nine key ER throughput measures. Two key throughput measures I've highlighted here. How long does it take when you walk in the door to see and begin getting served by a doctor? 10 minutes or less is... 10 minutes is our average right now across our main hospital emergency departments. And that, that important metric, the treat and release time, when you walk in the door to the time in which you leave. For treat and release patients, we're a half hour faster than our peers in this benchmarking alliance.
Now, this is one reason why most of our benchmarking we do is holding ourselves out to the scrutiny within our own company, and we believe we can continue to get better. Let's pivot to EMS. Again, as I said, emergency medical services is your local 911 provider. Our goal is to be there, to be their choice of hospital care. And this is one of the largest customer groups in all of HCA because these local ambulance services represent a substantial percentage of ER visit volume to our hospitals. And from experience, because of that, we incorporate a number of different practices to relate and engage our EMS. One is we have incorporated paramedics, an important role in their care model for pre-hospital care.
We've incorporated paramedics into our care model in the ER, so we can do a better job integrating people from, from their team into our team. We also utilize extensive ER protocols and plans within our, within our hospital to do a better job of receiving patients who come in through that back door and offloading patients. Now, why are we so focused on time and efficiency? Well, in all markets, there's contracts between EMS providers and the fire department and or a local municipality, and by typical contract, they've got a response time for 911 calls in the range of 4-7 minutes. So for them, they need to get their patient into the hospital and then get back on service. And so for them, time really matters. How do we do?
Well, when you think about, you think about just that wheels in, wheels out element, how fast between they come in, they're received, and then we assume care from them, and then they can leave. We're averaging under 10 minutes. We average nine minutes or less, and again, we're still driven to do better. The third element of our strategic growth agenda is what we call clinical capabilities. We believe this has a multiplying effect on ER growth. Now, examples of ER, excuse me, examples of clinical capabilities are stroke capability, like the example you saw in the video earlier today at Swedish Medical Center in Denver, or a trauma capability, pediatric capabilities, or at the ability to take care of advanced heart, complex heart attacks or a burn program. These capabilities may cause a patient to self-select one hospital or ER versus another.
But the clinical capabilities inside of a hospital will always be a factor for the EMS and their decision around where they go with the patient in the back of their rig. Just as a rule of thumb, the combination of a stroke, trauma patients, and patients with a cardiac condition can be more than 20% of the EMS runs that are handled by an EMS agency. So, where they go, how they match the patient in the back of the rig to the hospital's clinical capabilities matters to them greatly. And our goal, obviously, as you heard earlier, is to prevent the loss of patients from our HCA network. Nashville is a great example of where we do this really well.
This is a map of the city that you're in right now, and I think by context, we have hospitals that are well located across the growing geography of this city. We also have these internal patient transport teams, and you heard Jon Foster talk about that just a minute ago, where when a patient is in one of our freestanding ERs or one of our hospitals with maybe more limited capabilities, we have the ability to transfer within ourselves to a higher level of care using our own internal transport, and they do that quite well. But Nashville's also done something else really well. They've matched the patient demand in Nashville for the clinical capabilities that are needed very well.
And so when you think about the fact that they have 52% ER market share in this city, in a growing city, it's very impressive. But more impressive is the fact that eight out of ten patients who need a higher level of care don't leave our network. They actually stay within the HCA network, and it's because of the combined effect of all these things I mentioned. The last example I'll give you is capital allocation, and this is an area where we have accelerated our spending into investment into emergency services. Over the last 10 years, as you'll see on the top right, we've added almost 2,500 ER beds, and we've added over 100 freestanding ERs, so many of those beds have been freestanding ERs.
We've continued to make investments into freestanding ER sites because we've seen such massive demand in our markets that we serve. And the freestanding ER, I think it'd be helpful if I pause here just to define that. If you look at a main hospital ER department, and you physically pulled it up out of the building and moved it 10 miles away to a street corner, that's in essence a freestanding ER because it is a - it is tethered to a main hospital. It's a department of, but it meets all the patient care and regulatory requirements of a main hospital ER. It is truly an ER, and the advantages are clear. For us, it's the fastest way for us to get emergency beds up and going, so to speak.
It can tap into an area of significant unmet need for us in a geography that may have a lot of distance between where patients need to seek ER services. They've proven to provide unmatched patient experience, and they have an unbelievable patient efficiency and throughput metrics. Our freestanding ER volumes are growing faster than our overall ER volumes as a whole, and about half of our hospitals have at least one connected to them, and they can be successful for different reasons. We have freestanding ERs that are in high need, high demand, rural markets.
We've also placed freestanding ERs in close proximity to one of our own main hospital ERs, with the express desire and strategy of patients self-selecting to that nearby freestanding ER because the main hospital has such physical capacity constraints. And so this is a faster, cheaper way than expanding a main hospital department by doing such a strategy. And the third is penetrating and going into new suburban markets that have high need. And we know consumers have at the top of their list, the reason why they would choose one ER versus another, is proximity. And so, as you can see below, under development, you have over fifty- we have 51 freestanding ERs in the pipeline and other additional investments in our emergency departments going in the future.
Now, finally, I'd like to give you one example of a market where I think all four of these elements come together. Now, Sam, let me write my presentation today, put all the slides together, and so it should come as no surprise that when I think of, like, where the, where this most successfully comes together, well, of course, it would be a market that rolls up under me, market that rolls up under me. So this is Ocala, Florida. It sits between Gainesville, Florida, and Orlando, Florida. It serves a population of about 400,000 people, and we have two hospitals there.
About seven years ago, we had a new leadership team, and they began to focus more on the operational excellence, the integrity of the work that they do inside their ERs and become better and more efficient and patient-oriented. They took what was already a good relationship with Marion County EMS and made it great. They made strategic investments into five freestanding ERs over the course of the subsequent years. Four of them were in those suburban growth corridors. One of them was one of those close by main hospital offloading techniques to take to reduce the capacity constraints of their main ER. Also an EMS satisfier. And when you think of their clinical capabilities, they advanced their cardiac capabilities. They became a trauma center.
They became stroke-capable, similar to the Swedish Medical Center you saw earlier. And the combined effect is this, is they drove, they drove outsized emergency room volume, emergency, admission volume, and they drove the overall market share of the hospital. A great success and one of our most successful hospitals in the Sunshine State. Thank you very much. It's been great to be with you. Have a great morning.
Please welcome National Group President, Tim McManus.
Good morning. I'm gonna be talking to you about how we expand clinical capabilities to drive growth. HCA has developed a deliberate and systematic approach to attracting complex, high-acuity patients to our hospitals. Our goal is to broaden and deepen our services through both horizontal and vertical expansion. We wanna be all things to all people. We wanna make sure these patients are able to stay within our system. This high acuity you've heard about all day is actually a force multiplier. We get more revenue per patient on the same fixed chassis. What's driving this high acuity? It's the aging population that Sam referenced. Between 2010 and 2020, this population over 65 grew 22%. Remarkably, by 2030, it's gonna grow another 31%. That's 75,000,000 people over 65 years old with more advanced comorbidities than ever. We wanna be there to serve them.
These are patients with congestive heart failure, end-stage renal disease, advanced kidney disease. You can imagine the complexity of caring for those patients. In this graphic here, I show you this service line innovation. This happens at the regional and local level. Our teams find physician partners who are interested in advancing their own skills and working with our platform to take it to a new level. We wrap around that, the important part of what HCA's corporate support and infrastructure. This is about leveraging HCA's scale. HCA's scale brings not only expertise on the actual subject matter, but it really takes 43 major markets and looks at who's done it before, and we learn from the past integrations of these complex programs. And then we infuse capital, technology, and innovation. Through this, and then, of course, scaling and replicate.
Scale and replicate, you're gonna hear that through my story today. This obviously drives increased complex, complexity of our patients. Sam referenced the diversity of our portfolio. We're not dependent on any one single service line for greater than 14% of our inpatient hospital net revenue. This mitigates risk, risk from having new drugs to market that may prolong a patient getting a treatment, or that shift from inpatient to outpatient, and we've been talking about for 10 years. This contribution margin, as you net, might expect, is higher than our average contribution margin for these complex patients. One reason we go for that. What I will show you today is our approach to high acuity. It's a discipline approach.
In four key service lines, I'm gonna run you through, but we do this where we program these services at scale, we created a competitive edge or a first to market, and we increased market share. You've heard discussions today about Case Mix Index. This is a measure of acuity or complexity. It grew 25% over the last 10 years. We built these complex care hubs, which allow our community-based hospitals to have that safety net and support these acute destinations. When you think about getting care, if you need care, you wanna go to a place that does a lot of it. You don't wanna be in a, in a place that's just doing a handful a month.
And so we drive those patients into complex c-hubs where, where our staff are better trained because they do a lot of it, and of course, we have those physicians doing a great job. There's also a halo impact from this. The best and the brightest physicians wanna go somewhere where these complex services are offered. In the old days, those physicians would probably have been attracted to an academic medical center. We're faster, we're more nimble, we give them voice, we are less bureaucratic, and physicians love that. These academic centers without our scale are at a competitive disadvantage. And so this growth in CMI has generated net positive growth on, on our revenue. The first example I wanna give you is our neuro. In 2016, we took a very deliberate approach to building the infrastructure, to building out these comprehensive stroke centers.
These high acuity patients often require surgery or intervention as that first video you watched. This impacted both our case mix and our market share. We added 10,000 incremental admissions over this time period. 121% growth in our stroke surgeries. How did we do that? First and foremost, through our quality. We have a door to needle time of half the national average. That's coming to our ER with a stroke, and we're giving you a clot-busting drug in 33 minutes. We did it through our technology. We invested in Viz.ai technology, which identifies patients earlier who are great candidates for a surgical intervention. That's what you want, and we did it through our research. Right now, we have 19 clinical trials going on. This is also a terrific attractant to those high-quality doctors I talked about.
In my Denver example up here, Denver is larger. This service area I show you here is larger than the country of France. This is showing you 65 hospitals that are feeding their complex patients to those regional hubs because of the talents of those teams. It's really important because they're using those network optimizers that Jon Foster talked about. He talked about telehealth. He talked about ground and air transport, and we're getting those patients faster to us so we can treat them. Minutes matter. Over the last period of time, we've actually got a 1,300 basis points. I want to reemphasize that, 1,300 basis point advantage, competitive advantage in market share over the number two competitor in Denver. Trauma is another great example. In the trauma space, this is not just about trauma.
This is about taking a comprehensive, integrated network view and investing. So we're the U.S. largest provider of trauma services, with over 11% of those high, highest acuity patients across the country are being cared for in one of our level one or level two centers. Over 200% net revenue growth since 2013, and the next 10 years is projected to grow at a CAGR of 9%. It wasn't just about trauma. Burn was a terrific adjacencies, and we think about adjacencies on every one of these services I'll, I will talk about today. We can clearly, with the platform of trauma, layer on the burn specialist, and we put... We tripled the number of burn centers, and that was really important because this filled gaps in geographic coverages that people, we saw those gaps, and we filled them.
We created a model that we could replicate across the country. The rehab space is really a tremendous catch-all. Those stroke patients, those trauma patients, those burn patients, many of which needed that post-acute care for speech therapy, occupational therapy, physical therapy at the inpatient level. And so we invested over $500,000,000 over the last decade building more beds for rehab. It was a service that we couldn't get patients through our system fast enough because they were sitting in there ready to get out of the hospital but weren't ready to go home. We did it better. 80%-90% of us sitting in this room today will require inpatient rehab at some point, largely because you're gonna live longer than your parents did, and you're gonna be treated for more clinical care along the way to manage those comorbidities.
Cardiac care is another terrific example. We, in 2013, we took a deliberate approach at expanding and deepening our CV service lines. The outcome of that was that we grew our 120 programs for ECMO, for ventricular assisted devices, for ablation across our platform. So this is about broadening and deepening. The examples I gave you on the right is just showing you the sheer growth that happened during that time period. Right here in Nashville, in 2008, our Centennial Heart, which is our flagship hospital here in Nashville, had six cardiologists. Today, there are 41, serving four times the access sites. They grew the CMI by 50% and expanded our network. And finally, cancer. In cancer space, we did over the last 10 years, HCA experienced 92% growth in our transplant and cellular therapies.
This makes HCA the nation's leader in bone marrow, CAR-T, and gene therapy research. We served patients from 36 states to 7 transplant centers, as shown by the blue lines on the graph. We perform more transplants than the academic medical centers of Mayo, MD Anderson, and Dana-Farber. The exciting thing that happened in the last year is that we did a partnership, a joint venture with McKesson. This brought together two community care assets and created this care closer to home. If you are a cancer patient, that's what you want. You want second to none quality, and you want it right in your backyard, and we've successfully done that. With McKesson, we got 250 research locations.
We embedded of the 1,500 medical oncologists under the under the US Oncology brand, that this was about not just doing research and doing cutting-edge medicine, which we all get really excited about, but it's doing care. It's doing care for our patients and our families. Another great example of an adjacency here was our solid organ transplant. We show in the orange lines here that we are, we're the nation's number one provider for doing solid organ transplants. So in conclusion, where do we go from here? We believe in our high acuity methodology. We are forecasting as for high acuity impact services ranging between 6%-36% over the next decade. So our strategies are actually simpler than I just suggested.
This is about continuing to invest and deploy clinical complex programs at scale, structurally creating physician partnerships to support these programs, investing in leading technology, and delivering strong clinical outcomes. Thank you.
Please welcome American Group President, Erol Akdamar.
Good morning! Jon talked about the power of the network, Richard talked about the importance of the emergency room, and Tim talked about advancing high acuity services. Integral to all of this is how we partner with our physicians. Physicians play a key role in expanding our network and growing our share. Because physicians are our partners and a key dimension of our operating model, our goal is to be the provider system of choice. Sam shared this flywheel earlier, and as you can see, one of the components is attracting exceptional physicians. But physicians cut across all dimensions of the flywheel. We work with physicians to develop comprehensive services, as Tim described. We work with physicians to staff the access points, of which Richard described the emergency room. But we also work with physicians to coordinate better patient care and to deliver operational excellence.
This model works for the patient, it works for our physicians, and it works for the health system. Let's take a look at the physician landscape. HCA has a robust network of physician partners, represented by the 46,000 physicians on our collective medical staff. We partner with physicians in many ways. As you see here, employment and independent status. We do employ physicians, but predominantly, HCA is an independent model, with 81% of our medical staff being independent. We have seen a move towards employment, and I'll give you two examples. There are some specialties that have moved more towards employment because of the hospital-centric nature of their business, like cardiovascular services, where they're desiring to be tethered to a health system. There are also markets where the market has moved more fully to an employment model.
For instance, Kansas City, for us, where 37% of our medical staff is employed, contrasted with Dallas-Fort Worth, which is more of an independent market, where only 7% of our medical staff is employed. Generally, there are three types of physicians on our medical staff. There are specialists, there are hospital-based physicians, and there are primary care physicians. We have a higher portion of specialists, which makes sense because they deliver high acuity care, they admit patients to the facility, and they are more procedurally oriented, and they do more surgery. Our hospital-based physicians, pathologists, emergency room doctors, radiologists, support generally the business that's coming to the hospital, and our primary care physicians are more upstream and provide care on an outpatient basis. At HCA, we take a pluralistic approach to primary care.
In addition to the primary care physicians you see on our medical staff, we have another 1,100 primary care providers that are in our urgent care platform, creating greater access to primary care for the communities we serve. HCA is also the largest sponsor of residency and fellowship programs in the country. GME is vital for developing the physician workforce for the future, again, for the communities we serve. In order to attract physicians, we've developed a value proposition. As I mentioned, a number of our physicians are independent, so generally, they are selecting where they admit their patients and where they choose to practice. The key elements of a value proposition that we've identified are giving physicians voice, creating capacity, both physical capacity, but also efficiency in their practices, helping them grow and then wrapping it around it, exceptional clinical capabilities.
We strive to give physicians voice to ensure that they are heard. Jon talked about the physician relations representatives that are out in the field, interacting with our medical staff, understanding what we do well, so we can do more of it, understanding where the challenges are in our, in our health system, so that we can carry that back to our operators, and we can continuously improve. We also have physicians that serve in leadership capacity at the facility level, medical staff leadership, quality leadership, even strategic leadership. There are councils and committees that they serve on. That also exists at a market level, where we leverage exceptional physicians to help lead our markets, again, in clinical and in strategy. We even have that at a company level, where we've tapped into world-renowned experts in their field to help us lead at a company level.
Our management teams are exceptional in engaging with our medical staffs and building that trust. In a recent survey, 90% of our physicians are committed to investing their thoughts and ideas in our hospitals, and 90% believe HCA is a favorable place to practice. We put time and capacity back into a physician's schedule. For instance, an orthopedic surgeon who we're able to allocate two operating rooms to in a given day is able to minimize the downtime between cases, create more efficiency in their day, do more surgery, and get back to their office and create opportunities for further care. We also assure that there's medical office building space on our campus or adjacent to our campus.
Again, this creates efficiency in the physician's practice as they move from their office space setting to an inpatient setting and minimizes the drive time and the travel time that essentially is downtime for them. We provide access to clinical capabilities, and we provide a platform for growth that I'll talk more about in future slides. Basically, physicians want access to high-quality care for their patients and a network that will help them grow.... An example of leading capabilities, clinical capabilities and growth is our robotic platform. HCA has invested over $800,000,000 in robotic technology, and we are the largest producer of robotic cases in the country. Not only do we invest in robots, but we also invest in training our OR teams to be best in class and in clinically supporting the physicians with this new technology.
From 2019 to 2022, we've purchased an additional 340 robots, and we've aligned with an additional 600 physicians. In 2022, 91% of our elective net revenue growth was in robotic surgery. Successfully executing upon our clinical agenda is foundational to creating these world-class programs. We also invest capital in infrastructure, in aligning on a common vision with our physicians. We have a proven track record for attracting and partnering with physician groups to create marquee programs. Here are a few examples: The Hospital for Endocrine Surgery in Tampa, Florida, was developed in 2020 through a joint venture with a renowned physician group, the Norman Clayman Endocrine Institute . Through a common vision, a $50,000,000 capital investment, and the relocation of the world's leading endocrine experts, we opened a world destination for endocrine care and research.
In Dallas, Medical City created two destination hospitals on an adjacent campus, the Medical City Heart and the Medical City Spine Hospitals. Through a partnership with elite cardiologists and spine surgeons from various groups aligning on a vision, we developed these two destination hospitals. The results have been impressive. The Hospital for Endocrine Surgery has indeed become a destination, with 90% of the patients coming from over 100 miles away and almost 10% of the patients coming from outside the country. It performs more thyroid, parathyroid, and adrenal operations than any other hospital in the world. Twice as many as Mayo Clinic, Johns Hopkins, MD Anderson, and Cleveland Clinic combined. They are also the leader in research, with over 1,000 research publications. The Medical City Heart and Spine Hospitals have now brought together 90 spine and cardiac physicians around the vision of these destination hospitals.
Medical City Heart Hospital is in the top 2% in the country for CV surgery, and Medical City Spine performs the highest and complex scoliosis and spine surgery. We've seen an outsized growth in market share and case volume in just a few years. Next, our urgent care platform. It's creating greater access for patients and is a vital source of network growth, as well as a source of patients for our physicians. For less acute needs, patients need access to convenient care that's close to home and is high quality. Today, we serve over 3,400,000 patients in our urgent care platform. Over the last 8 years, we've grown from 20 clinics to end the year with over 345 urgent care clinics. Primary care is generally underserved in most communities, and urgent care is meeting those needs.
Our pluralistic approach to primary care has been driven by aggressive expansion and acquisition in our urgent care platform. You'll see to the left that Dallas-Fort Worth CareNow has grown from 24 clinics to 57 clinics. It now serves one-seventh of the population in Dallas-Fort Worth. We had another strategic, large acquisition of MD Now in Florida, with 59 centers growing to 76. These access points complement our network and provide a full continuum of care for our patients and ultimately expand our network to grow share. Again, the results have been impressive. Our urgent care network creates convenient access for our patients while also creating downstream business for our network and affiliated physicians. In 2022, our urgent care clinic produced 220,000 referrals, primarily to specialists in the emergency room setting.
From these urgent care clinics, HCA was able to retain 56% of the patients going to specialists and 61% of the patients going to the ER. While those numbers are best in class, you can obviously see there is more opportunity for us there. Our, our urgent care platform will continue to be a key source of growth, likely moving from predominantly acquisition to de novo development and building out our network. Our model ultimately strengthens physician partnerships, helps us grow, and meets the community needs. These local networks, paired with enterprise capabilities, are attracting physicians, which drives growth for the physicians, for HCA Healthcare, and ultimately delivers the care our communities need. We believe this model should drive market share growth and allow us to meet our growth targets in the future. Thank you.
Thank you for your attention this morning. We'll now break for 20 minutes. Refreshments are being served in the foyer. Please find your seats. Our program will begin shortly. Please take your seats. Our program is about to begin.
... On October 27th, 2020, I was just a guy in his garage. I had an old boat in here, and I was siphoning out the gas, and I just remember a blue flame that came up, came around the edges of the wall.
All of a sudden, Jim came running in through that back door, screaming, "I'm on fire! I'm on fire." You could see flames coming out of the back of the house.
The next thing I know, they took me to Blake Hospital.
Jim had third-degree burns to the majority of the area. When patients initially have a burn or a flash, you gotta get rid of the burn tissue, otherwise it'll get infected, and that can lead to the loss of life of the patient.
It hit like a ton of bricks to hear how serious it was. You can see the extent of his burns. 44% of his body had these third-degree burns, and he was on a ventilator. He was unconscious for a few days.
Time is really of the essence in burn care, and at Blake, we have trauma surgeons in-house. We have burn surgeons, we have anesthesiologists, we have nurses that are trained, and everyone comes together so that as soon as the patient hits the door at Blake, we're able to provide the initial care that the patients need.
Where else can you go and be at the trauma center, into an ICU, to the burn unit, to a patient, you know, rehabilitation, right there, all on the campus? From the time I came in until the day I walked out of there, I never had to leave the hospital for any of it.
We're able to take these patients right from the emergency room to get them the care that they initially need and then get them off to the operating room or up to the intensive care unit right away. It really does matter in their overall outcome, and in getting back to normal life.
I want people to know how special the staff is. They took amazing care of him. They really saved his life.
I can run. I can go fishing with my dad. I can go take a walk with my wife and go biking. All those things are possible because of my healing at Blake.
Please welcome Senior Vice President, Finance, Mike Marks.
Good morning, everybody. It's my great pleasure to be here and to introduce this block of our time together. You can see we're gonna be talking about resiliency and benchmarking, and how we're gonna drive our efficiencies to the next level. I start this block, and then there'll be two speakers who follow me. My mission is to tell you about resiliency and benchmarking, and then Shannon Dauchot and Ed Jones are gonna talk to you about how we leverage our shared service platforms. Collectively, we're really focused on: how do we enhance our margins, and how do we take our cost management efforts to the next level? You can see our focuses are on not only driving efficiencies, but elevating performance and creating future value.
We use our shared service platforms to do that, and then we also use a lot of digital transformation tools. And throughout my time with you today, and through the time that Shannon and Ed will spend, you're gonna have an opportunity to see how we use our digital transformation tools and some really interesting work that we're doing around advanced benchmarking and analytics. So let's dig in. So what is a resiliency program? For us in HCA, over the last several years, really kind of coming out of the work from the COVID pandemic, we've started building a platform and a program that finds new ideas that can help us drive efficiency and take those ideas and putting into a program. So think about this as kind of a big project management effort.
Right now, we have 28 work streams that are focused on the areas you see on the right side of your screen, that have start times, end times, they have business cases that are funded, and they have dedicated multidisciplinary teams that are focused on delivering the value for the company. These programs all leverage the capabilities that you see on your left. So we've talked about digital transformation. We're scaling best practices. We're using benchmarking and analytics, and we put a lot of time and energy in how we build our structure to align our resources to accomplish these objectives. Our first focus is this idea of revenue yield completion, and I think you're aware the revenue cycle in healthcare is actually very complicated and complex.
And so we have to make sure that for the services that we render to the patients that we serve, under the contracts that we sign, that we're able to collect that revenue. Now, we don't want to get paid a penny more than we have earned for those services, but we also don't want to get paid a penny less. And so you're gonna hear in Shannon's presentation how we're using our resiliency program to deal with these complexities and make sure that we collect the revenue that we're earning. The second area that we're really focused on is this idea of cost. Now, I think you guys know HCA very well. We are already industry-leading in both our fixed and variable cost performance. It's really a hallmark of the company, and it's one of our big competitive advantages as a company is our cost structure.
But using the capabilities that you see here, we are still finding significant opportunities to drive additional efficiencies, both in our fixed cost and our variable cost. And you're gonna see through today's presentation several examples of that, that give us a lot of encouragement, that we can take our cost management structure to even higher levels of efficiency in the future.... And then lastly, I wanna mention our patient throughput and capacity management, and it's a really key part of our resiliency program. And, it's, gonna be a big part of today's presentation. Super important. So let's talk about speed and execution. You know, HCA is big, and it's kinda part of our scale, part of our size, but we can be big, and sometimes big companies can feel slow.
What we're trying to make sure of, with the discipline and structure that we put around our resiliency program, is this idea that we can be both big and fast. We like to use an analogy that resonates with me. You're in Nashville. The Tennessee Titans is our local pro football team, and they have a running back named Derrick Henry. Derrick Henry is 240 pounds. He's 6 foot 3. He's big. Now, Derrick Henry also runs 22 miles an hour, so he's fast. What we're trying to do is be the Derrick Henry of healthcare and be both big and fast. I want you to hold me to a challenge as we go through the rest of this presentation.
Are we able to use our scale and size, but also do it in a very fast way? So I wanna use an example of case management to really kinda highlight one of these resiliency programs. It's one of the 28 work streams that are in flight right now. And so what we're trying to do is invest, and we are in a multiyear effort right now to invest in case management. We've added service line leaders and support resources at our division and corporate offices to really focus on driving case management. And we're trying to accomplish four goals with this program, and the first one is improving care and outcomes for our patients.
What we've learned is this, is that the discharge process, in dealing with the really complex variation in care processes and dealing with a lot of the administrative burden that comes with getting a patient through the continuum of care and getting them out to their next step in the continuum of care, is complicated and a lot of times gets delayed. So we are convinced that if we can do a better job reducing this variation, removing the barriers to a safe and timely discharge, that it is better for patients. Our patients expect of us a sense of urgency and a focus in helping them get the care they need and be ready for discharge as soon as possible, and then efficiently and effectively helping them get to that next place of care, and that improves their care and outcomes.
Now, the good news for us is that same process of getting patients ready for discharge and then out to their next spot in their continuum of care also has financial benefits, and the first one is this idea of reducing variable cost. You guys are aware, we take care of our inpatients in patient beds, staff our care teams with supplies and drugs and physicians and the whole bit. So when you're able to reduce the number of days a patient stays during their admission, it frees up and reduces your variable cost per case. It also helps us to free up capacity, and we're gonna talk about that further as we go through the next several slides.
When you reduce a patient day, that allows that next patient who's sitting in the emergency room waiting to come upstairs, or that next patient that's out in another facility that needs to come to an HCA hospital for a higher level of care, it allows us to take that patient in earlier and quicker. That same factor helps us really improve our staffing demand. So think about all the nurses and the techs and the doctors that are taking care of patients, and when you can reduce length of stay, it frees that same care team up to take that next patient faster. So that's what we're working on, and this is how we're going about it. So the most important thing that we're doing, as you think about our investment in case management, is we're investing in our people.
So we've added these support and leadership resources at our division and corporate office. We've invested in training and education and staffing support for our 3,000 case managers in the hospitals. These are nurses and social workers, and we're really investing because what we've learned is this: when great people are well-organized and supported, they produce great results. So that's the first platform on how we're going out and trying to reduce our length of stay. The second is this idea of leveraging process improvement, technology, and automation. Think about case management as a decentralized service, right? So we have these 3,000 people. They're embedded in 183 hospitals. In the past, this was a very, not only decentralized, but unstandardized, process set.
And so through process improvement and through the adoption and rolling out of technology and automation, we're able to take what is a decentralized function and produce support through standards and through investments that elevates the performance of this across the company in a scalable way, without having to centralize resources. The third leg of this stool is this idea of using advanced analytics, real-time support through reporting, and high-level benchmarking to really give our case management teams in the field much better insight into their performance gaps and then their compliance with our standard processes. All of this work then leads us to being able to really focus on reducing our length of stay and increasing capacity. So what are the results?
In September year-to-date, 2023, when you compare our business to the same period in the prior year, we've been able to grow our admissions by 3% over prior year. At the same time, our census is flat, and so that happened because we were able to reduce our length of stay by 3%. Now, what is the impact of that? The impact of that is the equivalent of building 500 beds of new capacity. Think about building a 500-bed hospital with no capital. That's the first benefit. ... The second benefit is this idea of staffing demand. So we were able to free up the equivalent of 1,500 members of our care team to take that next patient in, get that patient out of the emergency room, allow that transfer to happen.
You can see this result also with almost a 60% improvement in transfer declines this year versus last year. So we're excited about the results of our case management program this year, and we believe that it's gonna continue to fuel performance for us as we go through the next 5 years. All right, so now we're gonna use some examples of how we're using both advanced benchmarking and analytics and technology tools to really power this case management agenda. And this is a, a Dynamic Discharge Dashboard that we have created. We've rolled it out to all 183 hospitals in the last 2 months ago, 3 months ago. And I want to tell you a story from 21 years ago when I was a hospital CFO in Ocala, Florida.
I used to meet every day with me and my hospital case management director and our chief nurse, and we would take a printout of our census list, every patient in the hospital. My case management director would have different color of highlights, and we would ask and find certain patients that needed focus so that they would be more ready for discharge. A couple of examples: patients that are in hospital beds that have a patient discharge order but are still there. So we would go through this list of patients, and we would find those patients, and we would highlight them in yellow. Then we would try to find patients that, if they could just get the laboratory test results back or an imaging study result back, we would be able to get that result to the physician and get them cleared for discharge.
We would find those patients, we would highlight those in, in orange. There are seven or eight other drill paths, is what we call them, that really help us find patients who are most ready for discharge, and we built those drill paths into this system. And this system is real time, and so every time a transaction occurs in our electronic medical record or any of our transactional system, it updates the system in real time. It's drillable. So if you think about our case management teams that are at the corporate office all the way through the groups and divisions and hospitals, you can take all of these questions that we're answering with this data, and you can start drilling.
You can go from corporate to group, to division, to hospital, to the nursing unit, to the patient, and you can do that in reverse and go to different drill paths in real time. This tool has freed up our managers and our leaders. Instead of them finding the patients that they can accelerate and prioritize their work on, it, in effect, gives them the work list that can allow them to focus their time and energies on the right patients at the right time to help us really get patients out safely, appropriately, and timely for discharge. So that's the 3D tool. We couple that with NATE Tempo, and NATE Tempo has been out in our facilities for about the last 2 years. This is an example of a response to COVID.
Right in the middle of the COVID pandemic, we were really struggling with capacity in many of our markets. We had a division in Central West Texas division, which is in Austin, who had developed the beginnings of what NATE Tempo was. In a matter of weeks, we took that idea, we fleshed it out and built it into a system, and we rolled it out to all 183 hospitals. Now what we're doing is taking it to the next level. So what NATE Tempo does is it gives us a technology workflow tool to help support something called a multidisciplinary round.
So a Multidisciplinary Round happens every day in all of our hospitals on a targeted group of patients, and it's a meeting, and this meeting includes the patient's doctor, typically a hospitalist, this patient's nurse that's on staff at that shift, the case manager assigned to that patient, and then a team of our ancillary and support leaders. They go through a review of this patient, and they go through the medical records, and they talk to each other about what are the barriers that we are seeing that's keeping us from being able to progress this patient's care through the continuum and get them ready for discharge. As they find the barriers in the care process that's keeping that patient in the hospital, they document those in a standardized, templated way.
Then those barriers become work list for the key departments in the hospital to make sure that we're prioritizing our work and getting patients organized and ready for discharge. When you think about coupling the Dynamic Discharge Dashboard as a top-down management tool with NATE Tempo, which is a technology-driven workflow support tool, it powers this process of really improving our ability to manage our length of stay and improve capacity. The next step for NATE Tempo and for the Dynamic Discharge Dashboard is the implementation of various data science algorithms that will make these tools even smarter. We're working now on things like prediction engines that will tell us the anticipated date of discharge, anticipating and predicting what status the patient will go to. For example, will they go home? Will they go to a skilled nursing facility?
If we can know where the patient's likely to go earlier in the stay, it helps us take the time to get organized for that and prevent discharge barrier delays. So these data science elements will be weaved into these tools over the next year, and I think will make them even stronger. Okay. In the beginning part of this presentation, we talked a little bit about how we use advanced benchmarking and analytics as a key part of our resiliency program. And I wanted to take a minute and use the hospital benchmark tool as one of the examples of this work, and this tool was rolled out company-wide last year.... It's been very powerful, and what it does is this: it takes 169 key performance indicators across seven domains of performance. So think labor management, human resources, physician cost, et cetera.
Each of these domains have a landing page that looks like this, and for every one of those metrics, the hospital management team knows how they rank in the company. So think about being a hospital C-suite member, a CEO, a CFO, a COO, and they are able to use this report, and they know where they rank in the company against their key performance indicators. I mean, literally, like, they get a rank of, "I'm number one of 183," or, "I'm number 183 of 183." No one really wants to be 183, right? That's the anchor person. So there's a lot of competition that we create in the field for people, and our teams are competitive, of making sure they understand their performance gaps and then start taking action against them.
Now, our data also curates for each hospital a curated group of peer group hospitals. 'Cause if you're in an HCA hospital, your best comparison is another HCA hospital that looks the most like you. Think about it. Standard systems, standard data, standard processes. And so when you're thinking about your performance gaps, having this peer group set of hospitals that you can see their data and you know that they're the most like you, it gives you the opportunity to find someone who's doing it better than you are, and it's kinda like Phone a Friend, if you remember that game show. This gives you who to call to find out who's doing it better. You also get six months of trending that you can see on your right for each of the metrics, so you can test yourself against yourself.
Now, what do our teams do with this? This data updates daily, weekly, and monthly, depending on the metric, and our hospital management teams are using this tool to find their biggest performance gaps. We even make it easy. We use an algorithm to find their biggest areas of opportunity, quantified in dollars, and that goes on an executive summary tab for them. We take those performance gaps areas, and we help them create an action plan at each hospital, and that action plan is embedded in the hospital benchmark tool, and that action plan has dates and deadlines, responsible parties, and it has corporate support from the company through the groups and divisions to make sure, from an accountability standpoint, that we're achieving the action plans that we set forth.
This work has allowed us to not only reduce variability in the performance of our hospitals across the company, but reduce variation in a really significant way. Now, this is just one example of how we're using benchmark. It's a good one, and we are using this as a capability, and you're gonna hear more and more about benchmarking as you go through today. You've already heard Richard speak about it in the emergency room, and it's a powerful part of our overall resiliency program. So the laboratory service line is another example of a resiliency work stream. It's one of the 28 resiliency work streams that I found really interesting. And so we, if you go back over the last 20 years, we've had a big, integrated regional lab in our South Florida market, in our East Florida division. It's called IRL or Integrated Regional Lab.
What we've realized over the last several years is that the performance of laboratory services in that division were way better than our other markets because this division had created a market-scaled capacity lab for the high-volume lab test, pulled those out of the hospitals, and really captured the efficiencies of having a scale laboratory in a marketplace. Then the hospitals in that division had stat labs for these labs that they couldn't send to the market lab and still process locally. We surround this idea of building market labs, which we're now rolling out to our other markets that have enough density of assets to justify a central lab, and then we're surrounding that with experts. So this becomes a supported service line in the company under Dr. Michael Cuffe, and they've got pathologists, they have laboratory experts.
In addition to capturing the value of centralization of our high-volume lab test, we can support that with subject matter expertise and standards. Which lab tests can you eliminate as being unnecessary? How do you standardize clinical reporting? You can see that what we learned through this best practice in one market is that this was a better way. We believe, and you can see, we spend about $1,200,000,000 a year in our lab function. We believe that this is worth about 10%-15% of pure cost savings as we roll this out over the next 3-5 years, and it also has clinical and operational benefits to boot.
So, great service line, a great example of taking an idea like shared services that we generally think of as being back office and administrative and operational support, but applying that as a capability to even things closer to the clinical core. You may not realize, but HCA has a long track record of leveraging global capabilities, and I'll give you a couple of examples. Our Parallon revenue cycles operation has been using global partners to do coding and other functions for many years. Our information technology group has been using global partners for over two decades to help really support big applications for the company. But in 2024, we're gonna take the next step forward with global capabilities, and we're gonna build a global capability center in India, starting with our IT group.
The nexus of this, or the hypothesis that we're trying to prove with this is really based on three ideas. The first one is we believe that this will give us better access to global talent. And when you look at the competitiveness of trying to hire the number of IT professionals and software developers that we need as a company, the ability to kind of cast a wider net and hire globally, and bring really talented professionals into the company, and where we can have one team that works in two countries, is going to be powerful. Because we struggle often to find those roles and fill those roles now. The second benefit we believe of a global capability center is this idea of powering automation and innovation.
These teams are going to be integrated with our automation center of excellence, to give us more resources faster, to really drive what is a really important part of our overall resiliency and business platform, which is driving automation through our systems. The good news, it also produces a significant cost reduction. So we're excited about where we've been with global capabilities, and we think we're gonna take a good step forward in 2024. And we will continue to evaluate additional functions for global capability building as we go through the future. Okay. So I want to apologize for the small font, and I know that's really hard to read. But we were challenged to be able to articulate what we think that this collective work... We have all these multidisciplinary teams working across these 28 work streams.
We have our management teams out in the field, always looking for new ideas, for best practices, for big pain points, and they're bringing those into our resiliency program. So we felt like we wanted to give you a sense of what we think it's worth, and we are targeting annual incremental cost savings over the next five years of $600 ,000,000-$800 ,000,000 through this work. I'll end with this and then turn it over to the following presenters. We're really encouraged with our resilience and benchmarking effort.
The support that we get from our senior management team, the engagement that we feel in our hospital and support service leaders and staff to really not only identify these work streams, these ideas to get more efficient, but then be super engaged in executing against those ideas, we believe are really creating a momentum for the company and will help us as we go through the next cycle, in this business cycle, to drive our efficiencies to the next level. Thank you for your time today.
Please welcome President and Chief Executive Officer of Parallon, Shannon Dauchot .
Good morning. It is my great privilege to speak with you today about the Parallon story. Over two decades ago, Parallon began as one of the original shared services initiatives for HCA Healthcare. At the core of our business is full service revenue cycle management, end to end. For us, this includes the responsibility for patient access in the hospitals. Functions like scheduling, insurance verification, registration, all the way through to final account resolution. These processes are highly complex, probably the most complex revenue cycle of any industry, and getting more so by the day. Over the years, we have delivered superior performance, cash flow stability, and predictability in a highly efficient manner. Once we demonstrated our ability to consolidate and transform administrative functions at scale for the company, we leveraged those learnings to expand the reach of our capabilities beyond core revenue cycle.
Over time, we have added a number of other administrative functions to the platform, like payroll and project services, and later, credentialing of our physicians and clinical data registry abstraction. More recently, we executed an initiative around contact center activities across the company as well, for both patients and colleagues, performing customer service functions through phone and digital capabilities, and that is seeing great results. With each new administrative function that we bring on, we're adding value to the enterprise. Our operational delivery takes many forms, with an on-site presence, of course, for our patient-facing responsibilities. Largely, our services include those not required within the walls of the hospitals. We have a very flexible workforce, highly remote and dispersed globally as well as across the country.
This has allowed us to become more functionally organized over time rather than just geographically structured, and is a key part of how we have evolved, allowing us to be more efficient and targeted with where and how we accomplish our work. Our 4 main revenue cycle service centers each serve over 40 hospitals. But we've also specialized in certain areas where a focused approach makes more sense, like payer-specific teams, a dedicated Medicare service center, our physician revenue cycle, coding services, and other functional areas I mentioned before, like payroll and our contact center. As you can see from some of the examples in front of you, we have a tremendous scale with massive volumes of transactions. We also have cash flow responsibility for most care settings across the HCA Healthcare enterprise: hospitals, physicians, urgent care centers, and specialty services as well.
In one form or another, we touch every colleague. But size alone is not what drives this kind of performance and efficiency. We follow a model that has served us well throughout our history. People, processes, and technology. Pretty basic, right? These are the elements that have enabled us to get where we are today. We start with our people. This is an area where we, like other industries, are facing changing workforce dynamics. We continuously invest in our team of highly experienced resources, providing them education, extensive career paths, and whether physically on-site or virtual roles, our workforce is positioned for the future. Our processes are centered on being highly compliant, organized, analytical, with change management and continuous process improvement principles woven throughout.
We approach technology with an automation mindset, and we're proud to lead the organization in a number of ways through the development and deployment of workflow tools, integration, bots, digital transformation, and more, often aimed at accelerating how we elevate the patient experience. This foundational model produces our competitive advantage, which ultimately is providing best-in-class results with a cost structure well below the industry average. There's a long list of ways we add value through our model, and a few of the highlights are here for you. Scale, which leads to our cost advantages through the elimination of redundancies. We have the ability to fund meaningful investments, and we have payer influence and relationships. Another benefit of our model is focus. The ability to specialize where it makes sense at scale, as well as growing deep subject matter expertise.
I think, and this is very important, that because we do what we do, local markets can focus more on patient care and growth initiatives and less on administrative functions. Compliance is one of the original reasons for the Parallon model. With a dedicated infrastructure, particularly in the government payer space, and standards backed by policies, we are able to have a very predictable, reliable, known operating framework. We further support compliance with an investment in legal resources and regulatory compliance efforts for all states. With the analytics that we produce, we create transparency, identification of trends and opportunities, and with our automation of very routine tasks, using analytics, we become monitors instead of doers, and can better adjust with those shifting workforce dynamics.
And last, our foundation drives our overall performance, operational excellence, longevity, and the expertise that comes from that, as well as an operational alignment and continuous process improvement. So our capabilities are what drive us to deliver unparalleled value and evolve with the needs of the HCA Healthcare enterprise. So what, what's next? Our evolution involves three main areas of emphasis over the next several years. Let's start with additional services. We plan to continue to leverage our administrative platform and prowess by continuing to insource functions that are currently outsourced today with external partners. We're building new support models for divisions and hospitals to enhance their charging, completeness, accuracy, and net revenue realization through a new enterprise revenue integrity organization. We will be centralizing and optimizing delivery of patient navigation services in conjunction with our patient contact center organization.
Of course, we know there are other growth areas, not yet even on the roadmap. Innovation. We will continue our advancements in automation and leveraging emerging technologies. And a bit later, I will share some more highlights around this work with you that we're really excited about. And operational integration. With a tight focus on collaboration with other operational areas, we're moving beyond our typical transactional focus and exploring new ways to expand our value. This includes even better revenue cycle management performance. One way to accomplish this is through the creation of our integrated revenue cycle. More to come on that. So when thinking about automation and innovation, we don't stop at the traditional transactional back-office activities. We're also trying to push boundaries when it comes to how we serve patients directly. Virtual registration is one of Parallon's latest innovations, delivering a safe, contactless, patient-centric registration.
By ensuring a fast, friendly, and confidential patient experience, this very self-led process reduces the number of non-clinical team members entering a patient's room... The tool initiates by scanning the patient's armband, and if we've seen them before, it will leverage the existing data that we have to prepopulate all of the fields, saving time on data entry and avoiding frustration for patients that could be experienced in providing personal information to us multiple times. If a patient needs assistance at any time during the process, they can choose to be connected to a live virtual registrar via a video call. The patients complete all of their forms and information using the tablet at their pace in the care setting. When asked for feedback, our patients remark how efficient and easy this process was for them during what can typically be a very stressful time.
Virtual registration is just one example where we're finding solutions to have the right resources and information at the right time. And yes, we're challenging the status quo and the way things have traditionally been done. By digitizing these functions that historically have been completed in person, we can further deliver efficiencies by streamlining processes and ensuring we can respond to patient volume fluctuations, all while giving patients more autonomy, privacy, and a better experience. Now, one of the keys to success for HCA Healthcare is a predictable, reliable cash flow for funding of operations. After some fluctuations due to the pandemic, our accounts receivable days have remained stable for the past 7-8 years, and we've maintained our level of working investments in capital. This is the result of a significant effort and initiative across our organization.
While we've been expanding our scope of services provided to the enterprise, we've been maintaining strong AR performance despite the increasing complexities and challenges presented in the revenue cycle space. Now, I talked about revenue cycle, and for us, that starts at patient access. But really, when it comes to the true revenue cycle, patient access is not the beginning. The establishment of rates and contract language with our payers is. And when that process works as designed, the cycle is fairly streamlined, and we get paid what is expected. And most of our claims follow what we call the happy path, from pricing through all the way to payment, in that it all aligns with our expectations. But for some that hit a barrier at some point in the process, that can cause friction, rework, and administrative costs in order to be sure we get paid.
So when it doesn't go as planned and those friction points occur beyond cost, our bigger opportunity for improving the revenue cycle is getting paid for the services our facilities provide. It probably comes as no surprise to you that we experience payer actions that add some complexity to our model, like underpayments and denials along the way, and unfortunately, that has increased. We have a very complex book of accounts receivable that Parallon is charged with resolving. Medicare, over 20 different state Medicaid programs, thousands of payer contracts, and each of these has different processes and different account life cycles. In order to address this and stay on top of it, we have to keep advancing our approach. Opportunities exist for us when we have payment barriers. We'd like to prevent them altogether.
Not only are we focused on driving business process value, but if we can excel in this area, we're really pleased to work to improve the patient experience. Value for them by less confusion, fewer delays, less friction on their part, so they don't need to worry about the financial side of their care. Because of this, revenue cycle management, our core, still has opportunity, and in light of the current environment, we know we can't do it alone. So throughout a patient's claim journey, we know that often inputs influence the revenue cycle long before Parallon picks it up to begin the claims processing activity. Where denials and other payment barriers arise, often the teams responsible for resolving these issues do their work independently with eyes on their part of the problem, but not necessarily seeing and talking about the whole picture.
Despite each of our teams excelling in their specific efforts and collaborating really well already, we know we can do better and ensure that we can eliminate missed opportunities and any fallout. With the growth in denial and underpayment activity and overall complexity, we knew we really needed to refine our approach. It requires us to be even more sophisticated, more coordinated, and we have found some opportunities to tighten that circle even more. Recognizing the importance that all of our teams play in addressing these challenges, we've come together formally to create our Integrated Revenue Cycle, or IRC. The goal is to drive real change to the outcomes of our revenue cycle functions through true collaboration across our teams, connecting both the clinical and the strategic, from payer contracting to utilization review, to documentation improvement and case management, hospital operations to Parallon and legal.
Here in the IRC, we address the issues and obstacles, share big and small ideas, get organized around meaningful projects, initiate process improvements, and find as many ways as possible to reduce our AR days outstanding. In the IRC, we have a long list. We prioritize, we challenge each other, get in the room together without fail, remove all the barriers, make decisions about investments, set measurable goals and accountability. We get consensus. We go big, and we go fast. I have a few examples shown here of some of the key opportunities that began with general denial mitigation strategies, and that continues to be our primary focus. We've identified wins with internal handoffs and tracking of escalation of our most egregious issues to arbitration and litigation, better feedback loops, and where to deploy automation. The IRC initiatives also include some expanded services.
I mentioned before, Enterprise Revenue Integrity is one of those. We've also developed a centralized physician advisor organization to proactively tackle denials during a patient's stay through a peer-to-peer conversation with clinical decision-makers at the payers. And who would we be, if not focused on how we can use data and analytics to drive our performance into the future? Here are a few examples. One of the ways that we're addressing denials is by unifying our data, layering on advanced technologies like Generative AI, and using that intelligence to transform our processes. We have immense amounts of data from multiple systems and for seemingly different purposes, that we're bringing together in the cloud. And that's harder than it sounds, because you have to standardize and map all the data together, but it's so worth it.
Imagine the power of having a patient's clinical information, and financial information, and payer contract details and language, as well as date and timestamps on every activity, all in one place. With this, we know we should be able to expose more subtle signals and patterns that will help us better understand the true drivers of the results we're seeing. Our new denials dashboard activity is one example. So now, by putting all that data together, we can view denial drivers from the very beginning, starting with insurance authorization through those peer-to-peer reviews with those physician advisors, all the way to billing and final resolution. By bringing together all these data sources and using AI to populate a new, robust clinical summary, gathering important parts of the medical record for us, we can also create a more effective medical necessity appeal process, more complete and faster.
Then that AI will point us to ways we can target to prevent those denials in the first place. This is just one use case. In the revenue cycle space, we have accomplished a lot, and you can see here the trend line of our cost over the years. Over the past two decades, we have chipped away at manual tasks and fixed costs, evolved our workforce dynamics, and have continuously improved upon efficiencies across the board. But as good as we are, we are hungry for ways to evolve and improve. You will notice our cost reduction curve has begun to get tighter. Looking ahead, we're addressing bigger opportunities like net revenue capture, staying focused on driving increased value through our integrated revenue cycle efforts.
We are confident we will achieve more efficiencies and performance improvement by expanding our administrative services platform, as well as exploring the power of new and exciting technology solutions. Thank you.
Please welcome President and Chief Executive Officer of HealthTrust Performance Group, Ed Jones.
Good morning, everybody, and it's a real pleasure and honor to be here, and looking forward to taking the next 20 minutes to give you an inside look of what sits inside of HealthTrust and how HealthTrust creates value for the company. But I did want to start with HealthTrust, started back in May of 1999, and it was just a group purchasing organization, and its primary focus was to build a contract portfolio that had breadth and depth. You roll the tape forward to February of 2000, and we launched our first shared services initiative in supply chain, along with our revenue cycle that Shannon just covered. So back in 2000, we had a GPO, and we had a supply chain organization.
Over the last two decades, we've added other capabilities to the organization and to that platform to create value for the company. So let's take a look. So HealthTrust, as I mentioned, is the operational support platform for the company. It gives us the ability to scale capabilities across the company. And every day, we wake up, and we focus on four key areas: supply expense, operational excellence, clinical labor, and purchased services. And if you look at the center of the screen, all of those things are capabilities that we either built or acquired, that are focused on driving performance in each one of those areas. So when you start with supply expense management, we have a GPO, and we have a supply chain organization.
So those two components' primary focus is how do we drive performance there, as well as how do we support nursing and other caregivers to make sure we have the right product at the right place at the right time. If you think about operational excellence, it's our shared services platform, and then, more importantly, how do we integrate those capabilities clinically with our caregivers? All of that is geared to how do we drive a more effective operating platform for the company. As we think about clinical labor, we own and we run a staffing business. We have one of the largest managed staffing providers in the space.
So basically, think about that as a general contractor that manages contract labor for the company, and then half the shifts that we fill are all internal employees, and then the other half we buy through other staffing agencies. But we're able to buy that at scale, which gives us a cost position in the marketplace that's very strong. The other two components of clinical labor is our Galen College of Nursing. You'll hear more about that today by Dr. Sammie Mosier, as well as our clinical education capability. So think about contingent labor, how do we help develop new nurses, and then how do we train our nurses, not only in the first part of their career, but as they continue through their journey?
And then purchase services, defined really as all the non-labor and all the non-salaried spend, and then a subset of that is about $4,200,000,000 . We have a couple of capabilities around that. One was an acquisition around technology that gives us line of sight of how we're spending our money around purchase services, and I'll talk about that in a minute, and then as well as our supply chain organization. And all of this is geared towards how do we support our hospitals. So I thought I'd take a moment just to show you kinda where we sit. So if you look at the footprint of HealthTrust, and this is all the capabilities, everything from our distribution centers to our Galen campuses to our centers of clinical education.
We're pretty much sitting in the markets where our hospitals are, so no surprise there. But I did wanna draw your attention to a couple of things. When you think about the GPO, there are seven owners of the GPO, and of that, HCA is the largest owner as well as the general and managing partner of that. What that does for us, it allows us to buy at a scale of $50 ,000,000,000. If you think about HCA, we spend about $9,500,000,000 in supplies, but through the GPO, we're going to market with a buying volume of $50 ,000,000,000. The other thing to note is we have, right now, about 33 campuses and sites, all dedicated to either developing and new nurses or training them after they graduate.
Then the last call-out on the slide that I think is worth mentioning is that we do have a sourcing office in Shanghai, China. We've been located there since 2010, and that's been a very valuable capability, but it really revealed itself during COVID. And why was that important? It gave us eyes and ears on the ground as things started to unfold with the supplier base in Asia. Having been there for 10 years, we had developed a lot of relationships with suppliers. We knew which suppliers had 510(k) approvals from the FDA, which suppliers are the ones you wanna stay away from, et cetera.
What it allowed us to do is get ahead of starting to make some decisions around supply, procurement decisions that helped us start to recover the supply chain more quickly, and that really served us well during COVID. If you think about the actual capabilities, if you look at the top 3 to the left, those are all the GPO capabilities. So think about sourcing and building contract portfolios for people to access. The HealthTrust GPO, all targeted around IDN acute care systems. Advantage Trust is focused on the non-acute, and obviously a significantly growing segment of the market, so we have a capability specific to that. We also have HealthTrust Europe, and this really has three purposes: 1, it supports our HCA assets, 2, it does support several NHS trusts, and 3, we also support several elements of the private sector.
As I mentioned, Valify was a capability that we acquired. It was a software capability that allows us to provide and access line of sight to things like: how much do we spend in neuromonitoring, dialysis, elevator maintenance, lawn care, everything in between? Then it allows us to benchmark that across the enterprise. So if you think about supplies being about $9,500,000,000 , it allows us to put the same type of rigor around this other area of spend. If you take your eyes to the bottom of the screen, of the two, three capabilities around labor, I already mentioned Workforce Solutions and the labor management capability that we have, and Galen College of Nursing, as well as clinical education. The only thing I'll say on that is the Galen College of Nursing is a tremendous capability in itself.
What we're doing on the clinical education front is a powerful capability in itself. But what you'll hear from Dr. Mosier is how, when you start to think about those two things together, it's not only just the nurse starting school, but it's a progression through their educational journey, ultimately landing in HCA, being whatever they wanna be. And that's where I think there's a lot of power in the future. And then supply chain. And supply chain's really evolved over the years, so it's really everything from procure to pay, inventory management, every element of supplies, even pharmacy. So all the employees, pharmacists, people that work on the dock, procure to pay, distribution, et cetera, all sit inside of the supply chain organization. And so it's, in essence, an outsourced insourced model.
Then I'll also touch on some of the next generation of shared services that we believe will not only create value in the future, but will continue to free up capacity for our management teams locally. So one of the key metrics that we're focused on is supply expense as a percent of net revenue. Really important metric. And through a very strong, clinically integrated sourcing process, we've been, we've been able to contribute to margin expansion over the last decade. And if you think about the key capabilities in doing it, you can read across the screen, and I want you to think about these enablers, these key capabilities, as enterprise capabilities. So these are things that we're managing at the corporate level, and all of these things have been able to help contribute to a strong performance over the last decade.
So as we think about supply expense and $9,500,000,000 , we really think about it in four key categories: pharmacy, medical devices, commodity, and blood. And that really drives our contract strategy, 'cause we do track several raw material indices and other trends in the marketplace. So we know where we need to go long in contracts, where we may need to go short, where we may need to lock in pricing, et cetera. We typically move about a third of the book a year, and that really helps us diversify our risk. So pretty much, we have a little bit over half our book locked on supplies for 2024.
If you think about the balance sheet, we carry about $2,100,000,000 on the balance sheet, and if you think about the cost of capital, how powerful that could be if we're able to reduce that inventory balance. We've got line of sight right now. We believe we can reduce our balance sheet by over $200,000,000 and free up that as working capital. We think, through our benchmarking and analytics and our next generation of warehousing capabilities, we can drive that another 15% to a total of 25% or $500 ,000,000 of inventory reduction. So think about that in terms of power of working capital on the balance sheet through these initiatives. So one of the things we talked about, and you've heard a lot about, is analytics and benchmarking.
What I wanted to do was just take a moment and give you a real-life example of what that means inside of HealthTrust and how we do our work. It's really in the area of pharmacy. I know the slide is hard to read, but I'm gonna walk you through it. So the first thing we're able to do is we now can identify drug variance costs at a DRG level with a click of a button. We can then click again, and down on the bottom left of the screen, we can then see what the actual drugs are that are in that case, and they're stacked, ranked by opportunity. In the top right, it kinda shows where the facility is, and then the bottom fourth click really shows you the position.
So in a matter of four clicks, we're able to see the variance at an enterprise level, drive all the way down to an episode of care, hospital, and physician, and we're able to do that at speed. Mike talked about speed. Everything we're doing now in our analytics and our benchmarking agenda is all about how do we identify opportunities faster? How do we work with our clinical teams to build the right clinical plan and protocol? Then how do we create that plan, and how do we execute it within our organization through our platform? So this is just one example, and it's a seven-figure opportunity for us in this one instance. Our second area of focus, using the same methodology, is in medical devices.
So imagine the ability for us at over 183 hospitals, being able to look at medical devices, find the variance, click down to a specific device, specific hospital, to a specific physician. And so the speed in which we're acquiring and identifying opportunities allow us to really accelerate our performance. So we're really bullish on this capability and how that's going to accelerate our ability to harvest value. So the one thing I wanna talk about was expanding our shared services platform. Obviously, we've been doing it for 20 decades. You heard from Shannon, all the work she's doing there. Here are kind of the next four that we're tackling, and we're gonna talk a little bit about distribution centers. We're gonna talk a little bit about equipment management.
I first thought it'd be important to kind of level set what makes a good opportunity for a shared service capability. Whenever you have a decentralized function, you typically have variation in process, which then drives variation in results. In everything we do in shared services, the way we like to think about it is: how do we create management capacity at the local level on the ground so they can focus on more strategic things? They don't have to worry about collecting bills, they don't have to worry about processing orders. They can focus on growth, deploying capital, they can recruit physicians, focus on creating the right work environment, and ultimately drive a patient, a better patient experience. If you think about shared services as an enabler to create management capacity on the ground locally, where the action happens, that's what shared services does.
So when I think about distribution, and we'll drive that in a minute, we think there's tons of opportunity that will drive additional value in the supply expense line as well as the inventory line. I'm not gonna talk in detail about EVS, food service, and facility management, but I did wanna just touch on it for a moment. If you think about EVS and FANS, so basically our hospitality, hospitality agenda, all that's decentralized. Some's outsourced, some's insourced. We have a variation in the way the food we buy, the menu sets, et cetera. We think there's a lot of opportunity in that, not only to create a better cost platform, but create a better patient experience. And we have pilots underway today, and right now, the early returns are, this is really positive.
We'll gauge 2024 as the pacing process to roll this out even further. If you think about facility management, we spend about $1,200,000,000 in repairs and maintenance. If you think about all the infrastructure to run hospitals between cooling towers, boilers, and the like, if you think about all the trades, painters, electricians, plumbers, et cetera, we think there's tremendous variation that happens on the ground, and we think there's a lot of opportunity for us to bring a lot of rigor and structure around that area. And then equipment management, which I'll go really deep on, is really about how do we create a better experience for the nurses to access the equipment they need?
You may think when you look at those capabilities, and you think about Galen, and you think about Clinical Ed, you may say, "Well, how in the world and why does this sit under HealthTrust?" And I really think it starts with organizational structure. We have built an organizational structure that parallels the operating structure of the company. So we have a corporate team. We're integrated at the group level. We're integrated at the division level. We're integrated at the hospital level. What that allows us to do when we go to execute is we're at the important places of the organization where decisions are made and execution is driven. We have a proven methodology and approach. You heard Shannon talk about people, process, technology. That's the winning formula, and we've been able to prove that.
All that rolled up has allowed us to execute with speed and precision. So let's talk about distribution for a moment. If you go back in 2000, we built out 22 distribution warehouses, envision warehouses, and think about them in terms of more franchises. Some general guidelines on how to run them, but they were really run independently to serve that local, local market. But what we learned during COVID is that there was tremendous power in viewing these distribution centers not as individual places where product were stored, but as a network that was spread across the company. And so during COVID, what it allowed us to do is move products and equipment through the company to meet the patients where they were during these, COVID waves. And what we decided was there was tremendous opportunity.
We had not built the platform for that, but we could build the platform for that. So the first thing we did is in Florida. We had 3 distribution centers in Florida. We've collapsed those into one in Lakeland, Florida. And we'll go into a little more detail in just a second. The second phase of this is we're looking at Texas. We think there's tremendous opportunity in Texas to do the exact same thing. You can see on the map there's other natural kinda clusters of warehouses, and we think there's opportunities to further rationalize the assets and even maybe create micro inventories, leveraging inventories across individual facilities and investing in the technology to bring visibility to that. But let's talk about Lakeland. So Lakeland is about 90 miles from the Atlantic Ocean, about 60 miles from the Gulf Coast.
It's 713,000 sq ft. It's one of the highest points above sea level. It's fortified to sustain winds of over 140 miles an hour, so it's very, very durable for us. Interesting note, it's located less than a mile from several of our strategic partners. So the discussions we're able to get into now, given the size and scale of this operation, is how do we start to take structural costs out of the supply chain? How do we become easier to do business with? So rather than maybe partial truckloads, we go to full truckloads. Rather than full truckloads, we go to containers. So we think there's so many opportunities to start identifying raw materials, sub-assembly, production, finished goods, and all the layers of distribution that takes place in the industry.
We're building a platform that allows us to take a lot of that structural cost out, and that's gonna do two things for us. One, we believe it will help us lower our supply expense, but it will also help us hit our inventory reduction targets as well. It not only services hospitals, but it also services a lot of our other points of care. The one thing that this has been able to do for us, because of its size, we've been able to invest in a lot of automation. I know it's hard to see on the screen, but we've got a tremendous amount of automation in this, in this facility. Some of it just automatic pick and, pick and sort.
Products come to you based on what the order is, and the person just pulls it off out of the system and packs it and picks it. We have what we call cobots. They actually work alongside a colleague, and they allow us to pick at a more efficient rate, and we're seeing 2x labor productivity improvements there. There's sorters, and then ultimately, there are shipping lanes that are pre-built based on optimization of truck routes. And this has been something that we have been really, really bullish on as we move forward. And the last piece is, it's a key component in our business continuity strategy, not only from a pandemic perspective, but also in responding to hurricanes or other natural disasters. So let's talk about equipment management.
So equipment management is, is really about how do we enable nurses at the bedside to spend more time taking care of patients? And as you know, we've had a staffing crisis now for the last few years. Back in March of 2021, we wanted to understand what was taking nurses away from taking care of their patients. The number one issue was their inability to find the equipment they needed to take care of the patient. So what type of equipment? IV pumps, monitors, and the like. And so we started a pilot, and we were focused on three things: improve the availability of equipment for our nurses, reduce our short-term rental expense, and then third, how do we think about lifecycle management as we replace the fleet and rightsize the fleet? So here's what we did.
We basically installed a platform, and you'll see where it says, "Identify." That's actually a map of a real nursing unit. And within that nursing unit, we tagged all the assets with low-voltage Bluetooth, which now gives us the ability to look at a specific nursing floor, and we can see every IV pump that's available, every monitor that's available, et cetera. The second thing is that's important is the ability to locate it. So nurses can either go through their handheld or a desktop and say, "Tell me where the nearest IV pump is," and they can go to it. And then lastly, there's a management component on this, on how do we manage and understand utilization, timeout for repair, et cetera. If you look at the results from these pilots, I'm not gonna read all of them, but you can see they're quite impressive.
But I will touch on the last one. Those nurses that took place, took part in this pilot, over 80% of those nurses said this capability met or exceeded their needs. And so we're in the process now of rolling this out, and by the end of second quarter, this capability will be rolled out across the company. So what I want to do is end kind of where Mike began. Over the last 60 minutes, you've heard from Mike, Shannon, and myself talk about advancements that we're making in our analytical capability, the things we're doing around benchmarking, how we're building on our existing administrative support platform, our operation support platform, all geared towards driving stronger financial resiliency for the company, not only today, but in the future. We got a lot of momentum.
We got alignment and commitment across the organization to execute the plan, and we're confident we're gonna drive results in 2024 and beyond. Thank you for your time. Enjoy the rest of your day.
Please welcome Senior Vice President and Chief Information Officer, Marty Paslick.
Hello, everyone. Well, as the CIO, you can tell I don't have to say a whole lot. If we had a word cloud for this morning, I'm pretty sure the word analytics would be one of the largest words in that cloud. We will talk about some of the, the next-generation capabilities, but really, our analytics background goes back nearly two decades, and it was big data that led many Fortune 100 companies into a new era of analytics that profoundly altered how they operated their businesses. Companies such as Apple and Walmart were quickly moving to a new wave of technology for data warehousing called NCR Teradata, and joining them in that pursuit was HCA Healthcare. The result was the largest collection of clinical data by a provider and the ability to take advantage of data at scale.
Now, as data began to fuel operations, the emergence of mobility began to play an important role in companies that had a highly mobile workforce. FedEx was a leader as they placed a mobile device in the hands of their drivers. Recognizing the mobility of our clinicians and operators, HCA Healthcare has invested heavily in mobility. As one of the largest users of Apple devices in the enterprise, HCA Healthcare manages more than 190,000 Apple devices for the purpose of improved communications, collaboration, and maybe most importantly, last-mile data delivery. As we envision the future healthcare delivery environment, two key technology partnerships will serve as our next-generation catalyst. First, we believe our partnership with Google will fundamentally improve our ability to use the cloud's best attributes: speed and elasticity.
We also expect our close partnership will also provide us an accelerated glide path with both generative AI and our next generation of analytics. Our second key partnership is with MEDITECH. We believe our enterprise adoption of a new foundational electronic health record will not only serve as our transactional clinical system of record, but will increasingly become the method by which insights identified by the HCA Healthcare Intelligence Net, which we are developing with Google, will be delivered into the clinical workflow real time, providing our care teams access to profoundly differentiating clinical decision support. We expect HCA Healthcare's adoption of advanced technology will enable better patient care to be delivered more efficiently, more consistently, and more transparently.
In fact, we strongly believe that there's never been a time when we have seen more potential, more commitment, or more opportunity to unlock the multiple sources of embedded value that exist across HCA Healthcare today. Our history and our partners set the stage for a new frontier of clinical and operational capability at scale. So it's now my privilege to introduce you to Dr. Michael Schlosser, the Senior Vice President of Care Transformation and Innovation, to define the impact advanced technology will have across our enterprise.
All right. Good morning, everyone. It is truly a privilege to be up here with you today and to share a piece of the story of this technology and transformation agenda and, mission that HCA is on. There's really three things that I hope you take away from my portion of the presentation today. The first is just how wide and deep the ocean of opportunity is, in particular, in the care transformation space, so in applying this type of technology to care delivery. The second is how HCA Healthcare has really, I think, ideally positioned ourselves to be one of the, if not, the leader in this space, in the healthcare industry. And then third, we'll dive into a couple of examples of how this work is already underway and the impacts that it's already having across our organization.
So you can see that this is not just planning and strategy and ambition, but it's actually work that is already in flight and underway, and we're beginning to see the impacts that it can have. I can truly say there has never been a more exciting time, at least in my lifetime, to be in healthcare. The technology that Marty just shared with you, that we are heavily invested in, gives us the ability to transform healthcare delivery in a way that's never been possible before. And the outcomes that we can achieve through that transformation, I think, are a multitude. Improved outcomes for our patients and our care team members, improved experiences for all of those that deliver care, and really a step change in clinical and financial performance for the entire company.
But if we're gonna understand how we get from where we are today to that preferred future that I just described, we do have to really sort of understand on a deep level, the current opportunities and the current way care is delivered in our hospitals. So care delivery process really was never designed. It was never engineered. No one ever sat down and said, "Let's figure out what is the exact right way for doctors and nurses and pharmacists and techs to ideally interact with each other so that we have the most efficient and most effective way of delivering healthcare across all of our healthcare settings." It really grew up organically over time.
Doctors and nurses just sort of knew what it is that they needed to do, and they show up every day, and they get the patients the care that they need, and the outcomes that they deserve. And I think it's really actually quite impressive when you look at our performance and our outcomes, both clinical and operational, that we get the outcomes that we do. And it's a testament to the amazing hard work and fortitude and intelligence and experience of our 300,000 colleagues, that we perform at this incredibly high level. And then you add to that the fact that some of the technologies that we've deployed, and when I say we, I really mean healthcare in general, not just HCA, have really not made that care delivery process better or more efficient for those caregivers.
If you think about an electronic health record, in some ways, it's actually added to their work. It's actually become a second job, where the care providers have to both provide excellent care and are fully responsible for the lives of human beings, and then they've got to care for this system, where we put in all the data, and it has to be all done correctly for billing and regulatory and compliance purposes. I'll throw a number out at you. We studied this, and our care providers, doctors and nurses and others, spend between 30% and 50% of their time on administrative activities. We refer to this as administrative burden. It's all of this extra stuff that we've put on their plate in addition to providing for the care of the patients in our hospitals and other sites of care.
So again, it's pretty amazing that through all that, our clinicians do the amazing job that they do and have created the standard of care that we have. But when I look at this, when I look at this slide and these examples, which, I wish I could tell you that we pulled these images out of our archives, but no, these are actual pictures of our hospitals, I see nothing but an ocean of opportunity because the people have become a patch for all of these systems, these systems that don't talk to each other and aren't designed to make them and their jobs more efficient. But all of these problems are completely solvable through technology. And in fact, many other industries have already adopted digital capabilities, big data, machine learning, artificial intelligence, in a way that has eliminated a lot of these types of administrative tasks.
In many cases, all we have to do is follow a playbook that already exists, and we can eliminate a lot of this administrative burden. That's one of the areas that we are laser-focused on when it comes to our technology agenda. This really goes beyond just the care teams. I mean, as a care provider, I tend to always think about the care teams in this process, but it's the people who support those care teams and then the folks around them that are also impacted by this. You heard about our ambitions in technology and digital transformation and artificial intelligence throughout the presentations that immediately preceded Marty and I. This is an example of this ocean of opportunity that we can tackle.
But we're HCA Healthcare, so just removing the administrative burden and lifting all of our caregivers up to the top of their license, while we know that returning that time to them will lift the entire organization as they begin to be able to focus more on patients, more on things like transitions of care, which are high-risk points in the care delivery process, we know that there's actually a lot more potential we can unlock than just that. Inside the 42,000,000 , the data that describes 42,000,000 patient encounters that we have the privilege of doing a year across our entire system, are amazing insights and patterns.
We take care of the same types of patients every week, every month, and so we can learn from those patterns by studying that data, put all that data inside that intelligence net that Google's helping us build, that Marty spoke to, and begin to train algorithms that can return data and insights right into workflow, through MEDITECH or our mobile solutions, or directly to our administrators or other leaders, so they continuously improve and can make better decisions, and we continue to get better day in and day out. So we have high ambitions here, not just to remove the administrative burden, which again, I, I think is an enormous opportunity, but to really become an always-on, always-learning health system, where the data continues to improve our performance, every day, every year, every quarter.
So hopefully, you're starting to see what an ocean of opportunity we're sitting in right now and are beginning to be as excited about this future as I am. All of this is not necessarily easy, but again, I think HCA has invested and focused on this effort in such a way that we are ideally positioned to tackle some of these really big challenges. To really transform the way healthcare is delivered in our hospitals and across other sites of care, we can't just apply technology. You can't sprinkle artificial intelligence over the top of those manual processes and paper workarounds that I showed you on that previous slide and expect to really get a transformed outcome. You might see some incremental improvement, but to really get that transformation, we have to redesign the care processes themselves.
So we've built a custom design team, and this has been ongoing for the last 2.5 years, that we call Care Transformation and Innovation. This is a team that gets the privilege of waking up every day just thinking about: how do we solve some of the biggest challenges in healthcare delivery that our caregivers and other leaders have put in front of us or, or asked us to solve? It's a multidisciplinary team. We have clinical leaders, business, financial, data science, technology, importantly, change management, all working together, all focused on how do we solve these problems at scale.
Not just, can we go do a pilot in a hospital that shows that AI can do X or Y, but can you actually take a solution like that and design it in such a way that we can scale it and get deep and wide adoption of those solutions so that we really can see scaled impact across our entire organization, and then again, maybe across all of healthcare? In order to get that scaled impact, we believe we have to design these solutions elbow to elbow with our care teams and our leaders. You probably have heard at some point that healthcare moves at a glacial pace, and that's true, actually, there are some good reasons for that.
We have people's lives at stake, and so we're not, as caregivers, you know, apt to make quick decisions and quick changes to the way we do things. But we want to accelerate that work. You've heard a lot about acceleration in the last few talks as well.
One way that we've discovered that we can do this is by standing up 2 innovation hub hospitals, and we've been working with these hospitals for 2 years now, and training them up to be clinician innovators, to be folks who actually are receptive to change and excited for change, and therefore, we can come to them on a week-by-week basis and try out new ideas, work elbow to elbow with the end users of those products, iteratively design the solutions so that they are optimally designed, so we can take advantage of them, they can be accepted, and we can spread them across the entire organization. That's how we'll get to scaled impact of this care transformation agenda.
Because ultimately, what we are trying to accomplish is to deliver a step change, not just incremental improvement. We do that well also, but a step change in patient and care team outcomes through that clinically led integration of technology into care. I mentioned change management. I'll mention it again, because that is probably the hardest part of this entire agenda.
So if you're listening to others talk about digital transformation or AI changing healthcare, and they're not talking about their change management strategy, they're probably not gonna get the scaled impact that we, I think, have built into our processes. So there are a couple of other foundational investments that we are going to have to make, some renovations, if you will, that we have to do to our current systems in order to be able to achieve these types of outcomes that I'm talking about. So the first one, and Marty already mentioned this, is to our core clinical system, our electronic health record. And right now, most of our hospitals are on a product called MEDITECH Magic, which is a bit of a dated system. We've got incredible value out of the system that we've hung on to for about 30 years.
But we are now moving into the future, partnered with MEDITECH on a completely new product that's called MEDITECH Expanse. It's a cloud-based system, and it's interoperable, and those are two really important things, and I'll give a little more detail on why that is. But there's really four things that I want to call out about Expanse that are important. The first one, which probably right now would be the one our caregivers would say is the most important, is that it's a better system. It's got improved workflows. It's an intuitive system to use. It looks like all of the other technology we use in our lives, and we've now implemented this system in four hospitals. We actually just went live with one on Monday, and we're getting all of that feedback. The caregivers like the new system.
More important to us, and I think the caregivers will see this as more important in time, are the ability to create standard data or harvest standard data from the system. So I mentioned the 42,000,000 patient encounters, and that- that's the real number, and all that data does flow into our data warehouse, but it's not all standardized, and it's not all normalized right now. So we have to do a lot of work to take advantage of it. As you've seen throughout the entire morning, we do that hard work, and we take incredible advantage of it.
But as we roll out a standardized cloud-based system, we can standardize all of those data dictionaries and all of the way that data is entered into our system, which means now it flows into that new data architecture that we're building with Google in such a way that we can immediately take advantage of it, and as or more important, artificial intelligence can take advantage of it. The second is the ability to standardize workflows themselves. So if the data is sort of the flow in, the workflow is sort of the from the system out.
So the caregivers, if we have standard ways that we want them to do certain processes because we know it's a best practice and it will lead to better outcomes, we can build those into this cloud standard that we can hold at the corporate level and then push out to all of our facilities. Now, you still have to do the change management. I'm going to say that word a few more times I'm sure. That part doesn't necessarily get easier, but at least the technology now enables us to create that standard approach across the entire organization, and then hopefully lift our standard of care as we do that.
The last thing, which I mentioned in the beginning, was interoperability, and this does make MEDITECH stand out as a little bit unique in the industry, and that they're building a system that they don't see as the be-all, end-all clinical system. They don't want to be all things to all people. They want to do what they do well, which is that core electronic health record. But then they want to partner with folks like us to be able to bring innovations alongside or even incorporated into their system. So they built it such that it has APIs and FHIR interfaces, so that if we build a really interesting algorithm inside Google, inside GCP, we can feed that data back into MEDITECH, and it can get right into the workflow of our providers.
So as Marty mentioned, it's a really important partnership as we work together to understand what are we gonna do inside and with MEDITECH, and then where are we gonna innovate alongside them. The second system that we have to renovate is our data system, and Marty talked about Teradata, which has served us well for many years. But we are building with Google, a next generation, and I totally think a state-of-the-art system that's beyond anything anyone else right now in the industry is building, that will allow us to take our clinical data, as well as all the other data sources that we have in our hospitals. And if you've been in a hospital, all of that equipment that sits around the patient has a data port that can stream raw data out of it, an IV pump, a bed, an anesthesia machine.
Think about harvesting all of that raw data, plus all of the data that we're already using, bringing it into a data lake, and then building structure on top of that, where the data is standardized, normalized, and easy to access, and easy for anyone, not just a data scientist who understands how to code SQL. We're already building that system I just described to you. It's called Lake House, and we're partnered with Google right now to build our first iteration of it, which will unlock amazing potential with that data going forward. Okay, we've got amazing opportunities that I hope I've laid out for you, and we've got the systems and the foundations and the investments we've been making over the last three years to take advantage of that.
So let's talk about some of the work we're actually doing. So let's make this real. So when we started care transformation, we went and spoke to our caregivers and our leaders in our hospitals, and we asked them lots of questions about what their pain points are, because we wanted to start with what they thought was important. And we got lots of different feedback. I'll talk a little bit in a minute about what the physicians told us, but one of the things that the nurses and nurse leaders pointed out to us was that staffing and scheduling of our units was actually a big opportunity. Now, remember, this was in the middle of a labor crisis, right? So think end of 2021, beginning of 2022, the entire industry was dealing with serious shortages of clinical labor.
So it was interesting to us to learn that we weren't necessarily even using the labor that we had in the most efficient and effective way that we possibly could. We had nurse leaders distributed across our entire organization, probably some 3,000 plus of them, that were doing this sort of on their own. I mean, we were giving them data and tools to try to do it as best as they could, but it was a highly variable and highly distributed process. We've already mentioned a couple of times today the idea of standardizing decentralized processes, which is hard to do. So this was a decentralized process, and when we measured it, we saw the results you would expect to get with decentralized, nonstandard process, and we saw highly variable results.
So this was a massive opportunity because the nurse leaders were telling us: This is a huge burden on us. It takes an enormous amount of time. That's not really what nurse leaders went into being a nurse leader to do, was to build and maintain schedules, and it's definitely not the highest value use of them in a hospital. And then the outcomes that we were getting from that process wasn't entirely satisfying to all those involved either. So lots of wins that we could create here if we could solve this problem, and that, and that's exactly what we've gone and done. We built a product called Timpani, and this is now live in nine of our hospitals, including one of our most complex hospitals in North Texas. And Timpani is a completely digital, completely automated, end-to-end staffing and scheduling, and clinical labor management solution.
There's really six different innovations here. I'm not gonna go super deep, but I'll just sort of hit the high points here that all come together to make this possible. So the first is the way we measure demand. We recognize that a head in a bed was not a very specific way of measuring the demand on a nursing unit, and so we measure the demand, the work intensity that a patient creates in a new and different way. We also applied machine learning and artificial intelligence to how we predict demand. So we used to use averages, which is pretty typical for our industry. Now we have machine learning algorithms that are constantly getting better at predicting how busy a unit is gonna be. Previously, we always used self-scheduling.
We thought this was very, nurse-friendly to let them schedule themselves, and so they would pick their shifts. One of the problems with that, though, is if the nurses who are picking their shifts don't really have the full picture of what the needs of that unit are gonna be, they're sort of just picking based on their own needs, and then the nurse leader has to figure out how to make that all work. And so we shift to preference-based scheduling, where we could harvest really rich details about the preferences of our nurses, and that gives us more information to work with when we're building schedules. And then the last thing is talent profile. And what this really is, is a measurement of how proficient a nurse is or another care team member.
By proficient, we mean how independent can they act on that unit with that patient population? We then combine all of those new data sources with other data we already have, like how much... how expensive is the various types of labor that we might use? And we put all that information into a solver-based technology, and we're partnered here with Palantir, who helped us build this system. And the solver can try about 1 ,000,000,000,000 different options for each nursing unit. Takes it about 30 minutes to do that and come up with the most balanced schedule that meets the needs of the nurses, the hospital, the patients, the unit, even the CFOs, and basically ends up with a schedule that's fairer, more balanced, and a better outcome for all of those who are involved.
And then the system goes on to become a decision support tool to how you manage that schedule over time. We build our schedules about a month in advance, and then life happens and things change, and so you need to be continuously updating that schedule, and the system can identify the next best action, the next best nurse or tech to fill any holes that might occur or call off people where we have excess capacity. So all of this is aimed at making sure that we have the right people in the right place at the right time to care for the patients that are gonna show up that day.
That's ultimately the goal, is to care for the patient, but then to do it in a way that also meets the needs of the entire organization at the same time, and that's really the power of this kind of digital technology. The last step, which we're piloting right now, is day of assignment, and that's where the system will actually help match the nurses to the patients on the day of, so then the entire process from end to end will be completely digitized. The other thing that I want to leave you with on Timpani is that this is by no means a point solution. It's a platform. And so we now have a capability to see and understand the management of our labor, which is, by the way, our most expensive and most valuable resource, in a completely different way than we have in the past.
But we can build on top of that. We can run simulations in this system that tell us what we should be doing from a hiring perspective to maintain that balance that we have. We can take this system and port it over to other areas, like the emergency room, which we always, we've already started working on. So that's one of the key tenets of this type of transformation work, is we don't build point solutions, we build platforms that we can continue to grow and evolve on top of. So I mentioned the physicians, and they had a bit of a different view, when we asked them what their pain point was. They started off by telling us documentation burden, and then they said documentation burden, and then they said documentation burden.
So we said, "Okay, we heard you," and we decided we're positioned to be able to actually solve this problem for them. So, physicians, just like the nurses, didn't go to medical school so they could sit behind a keyboard or dictate into a phone notes all day long, and a lot of them do it at night after work, and it eats into their work-life balance. And so what we're building with a partner called Augmedix, is an ambient, speech-driven technology, where you can put the phone in between you and the patient, and we're doing this in our emergency rooms. That's Dr. Alex Dennard. He's our Chief of Emergency Medicine at UCF Lake Nona in Orlando.
You can interview the patient, and the patient responds, and the AI is listening, transcribing that entire event, and then natural language processing and large language models break that transcription down into the structured documentation that we need that can then be fed back into the electronic health record. So this system is live in 4 emergency rooms. Right now, we have a human in the loop, so we have a medical scribe that's in the middle of that process that helps sort of clean up the note because the AI is still learning, but it's continuously getting better, and large language models have massively accelerated this work. So right now we have a target of the AI being able to completely independently build this structured note, 60% of the content being completed by the AI, by January of 2024.
The more users we can expand it to, the faster it'll get smarter as it learns from all of those encounters. We started with the emergency room because it's basically the hardest place to do this. It's chaotic, it's noisy, it's asynchronous care, and so we know if we can do it there, we can take it to all the other areas of our acute care frame. You've probably heard about this in other spaces, right? You've probably heard of, like, Nuance and DAX and some of these other systems that Microsoft is working on. One key differentiator for us is that we are focused on structured data. We don't wanna go backwards and just have AI create free text notes that then drops into the record, because the structured data is what's gonna power this entire intelligence net.
So it's maybe taking us a few minutes more to get this done, because we're focused on that key outcome. So then let me finish up with an example of how we're deploying generative AI. And it's always better to be lucky than good, right? So we started this transformation journey and this care transformation work three years ago, obviously, because we knew a year ago, generative AI was gonna burst onto the scene and absolutely transform everything, and so we were prepared with all of that pre-work that we had done. And our partnership with Google also is critically important here. So let me. You all are probably pretty familiar with what generative AI is. Let me just jump right into an example to really bring it to life. So a lot of healthcare delivery is language and communication, right?
It's looking for information, it's communicating that information to other caregivers, it's summarizing it, it's explaining it to patients, and so that's actually what large language models are really good at. So one of the highest-risk times during care delivery is handoff, when one shift is handing off to another. And so the nurses right now, across our entire organization, do this process, again, mostly manually. They collect information over the course of an entire 12-hour shift. They do it on a piece of paper, like you can see on the screen there, and then they hand off to the next shift when they come in. So another highly variable manual process, which, of course, creates risk and variable outcomes. Just to sort of size this opportunity for you, we do this handoff process 400,000 times a week across HCA Healthcare.
So we've trained a large language model to actually do this work for the nurse. We taught it how to read an electronic health record. We taught it what all the data elements in that EHR mean, and then we gave it prompts like you do to an LLM. We said, "Hey, you're a friendly assistant to our nurses, and you're gonna build this thing called a bedside shift report, and here's a little bit about what a bedside shift report is." What you see on the right side of the screen there is the output of, in this case, PaLM, which is this large language model from Google that we're using. So it's very capable of building those summaries, finding that information, and bringing that information right to the forefront. And it can actually interpret the information to a certain extent.
So it can pick out what's important, it can understand the difference between a critical lab and just a normal lab, and so it can automate this entire process, again, that happens 400,000 times a week, making it more standardized, safer, and removing this burden from our nurses. The key thing about this is the scalability. So you can do this - you could do this in ChatGPT if you grabbed a bunch of documents and just dropped it in there. We would never do that 'cause they, they don't protect our patient information if we do that. We have pipes into these large language models where all the information is protected.
But to do it in a scaled, reproducible way, where you continuously monitor the output, is actually the challenge, and that's the innovation that really our teams have created here, is the ability to do this in a scaled way. And so we're still in the iterative design phase here. We have our two innovation hubs. The nurses are continuously giving us feedback. We wanna get this thing right where it needs to be, but we're looking for a full pilot to start in December, and then if that goes well, hopefully, scale across the rest of the organization. And that's just the beginning for Generative AI. What's really cool about this technology is once we've trained it to read the EHR and to understand that data, we now have a reproducible structure.
We can start adding more prompts, and we can teach it to do more things. We can teach it to do discharge summaries or ER to inpatient handoffs. We can teach it to translate key documents that patients need to be able to understand into any language at any grade level. And so this foundation of teaching the LLM to read our EHR is really just another first step, another foundation that's gonna allow us to continue to build exciting new use cases into the future. So this is a space that I think is gonna absolutely change healthcare in the next few years, and we're leaning heavily into it.
What all of this comes together, and what I hope you can see from what I've shared with you today, is that we're creating a new part of our flywheel, a new way for HCA Healthcare to continuously create value by unlocking that value that's inherent in our processes. That the inefficiencies that we've been able to identify can be turned into opportunities, and we can continuously mine those opportunities, and create new processes, new technologies, learn from those, measure the impact, feed that information back into the system, and then keep turning this flywheel faster and faster. We've talked about the embedded opportunity in our current operations, and this hopefully gives you a little bit of a view of how we're already unlocking that embedded opportunity, with these technology and process improvement efforts that are underway.
So I mentioned transformation is not easy, and it almost always takes this kind of expected curve, where in the beginning, you have to make investments, and it takes time, and you don't immediately see return on those investments. You have to sort of put in that early effort and create those foundations, and then you have to get good at changing. You have to get good at transforming, and I'd say we've made a lot of progress in that space. But if we do all those things, which we are, I think in the very near future, there's an inflection point where things start to really accelerate, and that's where that embedded value starts to get unlocked in a rapid fashion.
We see this as a massive growth opportunity for our entire company, that we can continue to become more efficient, more effective, better clinical outcomes, better financial outcomes, and then just continue to invest in this agenda, and it will move faster and faster for us. It's really a privilege for me to be able to introduce to you what we think is a next frontier for HCA Healthcare, where we can lead this industry in how we use technology to transform the lives of our patients and our caregivers for the betterment of everyone involved. Thank you for the time today.