Tenet Healthcare (THC) 25 Apr 232023 Q1 Earnings call transcript

Good morning, and welcome to the Tenet Healthcare First quarter 2023 Earnings Conference Call. After the speaker’s remarks, there will be a question-and-answer session for industry analysts. [Operator Instructions]

I’ll now turn the call over to your host, Mr. Will McDowell, Vice President, Investor Relations. Mr. begin. may you McDowell,

and McDowell, for Relations. Vice everyone, I today’s am Will President thank morning, joining you call. Good of Investor

pleased results, join Tenet’s you outlook. discussion to a financial We’re of discussion of us our first well as for XXXX as a quarter have

Chief President management senior and Officer. Sutaria, Chief today’s and Dan be Dr. call Financial Tenet Officer; will Cancelmi, in Saum participating Executive Executive Vice

presentation, website which Relations Our has posted webcast a this Investor our morning to section slide of tenethealth.com. includes the been

should this management’s to that information. statements on slide Listeners obligation cautionary Investors could with well are other call of certain no statements update are available the our under plans presentation, to discussed made advised as today and and discussion subsequent take any included differ the today’s forward-looking recent Exchange based during statement is materially. Actual risk factors most filings Securities currently as in expectations our results and information. the and Tenet in XX-K represents based forward-looking note Form on Commission.

I’ll over turn call to the Saum. that, With

good and morning, Will, you, Thank everyone.

million, to off given organic a ahead We’re billion first quarter, our XXXX. operating of translates in consolidated continues net all focus an revenues which start $XXX Strong our three into expectations $X to and business for far. attractive growth performance USPI’s XX.X% EBITDA and good In the support on units. volumes nice is so results margin. of accelerate of we delivered adjusted

confidence in operations. full quarter, are of a now strong first have raising our our our the guidance, demonstrates result year we performance the in which As we

wider down, and to is deferred returning procedures the of is stabilize. taking shape, returning Across our businesses, acuity post-pandemic a COVID range workforce to are admissions GI starting hospitals, are our is a environment

in and time, some for deliver performance attractive capital us efficiency this and strategy, our environment. anticipated have this discipline enable operating to We

quarter which We over represents margins with strong had grew X.X% and EBITDA, adjusted adjusted EBITDA million $XXX first XX% XXXX. USPI a Same-facility at growth were in XX.X%. great cases at quarter

the setting migration procedural before, our sustained said ambulatory business. of I’ve and into the services a As continued significant tailwind for is

physician the orthopedic Growth volume service GI, quarter acuity in strength. especially drove and cases, urology, population as our higher first ENT line as well active expansion,

to We initiatives bearing pleased have our are traction and growth gaining organic fruit.

development continues USPI additional three two post-transaction healthy. active pipeline centers the from remains quarter unchanged in Our quarter. the area. at and in new this completed buy-ups. We Progress multiples buy-ups prior in We added

under discussed, USPI’s Tenet umbrella the leading is As M&A differentiator. previously engine an industry

post-synergy invest to multiples We of a below million and to intend acquisitions pipeline have M&A in each times. We many continue for our level of year drive investment. robust that X to to approximately support $XXX ambulatory

the energized syndication centers over or level construction. We in by pipeline activity under the currently of in USPI XX with de are also novo stages

preferred partner talent physicians linkage is business by development quality hospital management and significant USPI for of high creates pipeline. The as to superior platform the demonstrated a benefits. growth our scale and organic our

admissions compounded a case XXXX. On our grown mix up as index XXXX. remain EBITDA of segment, grew first quarter Same-store over the X.X% the first XXXX. levels since in strong, a at basis, Hospital to admissions Turning XX%. same-store inpatient adjusted Acuity generated ER our non-COVID of X.X% million hospital adjusted we X% grew and has volumes growth $XXX in were annual quarter rate

to our hospitals cutting continue to to enable services specialty access clinical technologies. high across acuity access and We expand edge

Delray women’s few new surgical first quarter, on health. at Medical In trauma, patients neurosciences, cardiovascular, treat Alzheimer’s ultrasound a and include focus services, non-invasive the focused examples our A technology maintained our we Center. specialty to

for enables Stroke a United at as which aspect the I total us achievement our Desert Medical of Advanced of Trauma Commission Hospital broad across region Center, care southwestern Joint the Primary Regional a Baptist designation Level Center, injury every Resolute and of States. nearly to our of provide Certification a

benefits accelerate. and first contract pay costs workforce further in and XXXX helped reduced quarter have reduce hiring investments turnover, to This continues the stronger, the labor is to quarter of in pace getting our Our and XXXX. XXXX of nurse first

our a Conifer the and for offshoring that have well nice technology strong its to continues All-in-all, perform hospitals to initiatives clients support had performance. start Ongoing and deliver margins. year. automation

receivable sales in cash revenue and in the pipeline was to up outstanding party Third quarter, ramp in was two up Tenet’s from the XXXX. continues helping to year days for commercial strong with end. a performance accounts quarter, strong collection down days by drive Conifer X.X% activities

are EBITDA a to we billion $XX million raising to $X.XX adjusted at Looking year our billion. guidance range of midpoint by XXXX full forward, the $X.XX

discipline, have to talent management ongoing start on and operational accelerating a across the investments our we in enabled remain businesses. strong excellence, performance Our focused year, and

great strong the USPI, efficiencies return to us multiples inherent and These use capital future. to deleverage for Continuing cash cash flow. the cash sheet, to with growth grow, add margins free enhance At significant free margins, will and tailwinds a attractive post-synergy and organic further of balance capital flow. cash Tenet’s enable flows generate in investments to strong remains centers shareholders

that, a more detailed will provide review Dan of results. Dan? with our And financial

everyone. Saum, Thanks, good and morning,

above Hospital’s well of EBITDA adjusted and we quarter, Our volumes financial our expectations. the the were first revenues of EBITDA range. first high the strong and above and results in million quarter our quarter with guidance end In consolidated our adjusted $XXX generated USPI same-store

and non-COVID continued control. patient Our patients, results strong effective and volumes, by acuity same-store cost high revenues for were driven

key to like of for segments. a I’d Now, highlight items each few our

cases our strong growth and orthopedic X.X% the high in quality last Let’s start to same produced increase ENT facility strong with year, growth compared which GI, in with delivered a to surgical to USPI, In urology, quarter, USPI cases. continue and patients. provide care

in adjusted the first very cases Surgical at and of strong XX.X%. continue the margins quarter grew its to were pre-pandemic levels compared XXX% XX% to of EBITDA USPI’s XXXX quarter. be

stakeholders. the attractiveness a of the start to our We strong testament USPI’s excellent we are that performance value pleased with the portfolio This year. and provide to to is

hospital admissions non-COVID while compared same-hospital increased year quarter our admissions admissions X.X% last increased first adjusted to XX%. the X.X%, acute same business, to quarter increased first Turning hospital of total and care inpatient

Our labor the contract nurse a X.X% basis, despite management temporary staffing from the costs pressures, quarter consolidated of XXXX. cost to significant costs. be decline contract fourth were especially SW&B, in very labor On X% effective a continues

year per admission Total year. the medical hospital million costs exclude were X.X% were as quarter lower quarter, a these managed gain in well on first X.X% in compared When on the down admission last XXXX were sale basis. per costs adjusted office SW&B costs first $XX quarter the adjusted you than to buildings. prior of from impact a

as were XXXX in first year. XX% compared and quarter revenue to percent fourth XX% in SW&B a in the of last the XX.X% costs quarter Our quarter of

strong continue our remain acuity, in on as higher Our case and mix higher strategic margin service lines. investments revenue we focus yield

CAGR Our a the case mix has pandemic. XXXX grown index X% since in before at the quarter

$XX quarter Our of received first related to incident. included results cybersecurity hospital’s million proceeds year’s last insurance

As we previously recoveries which disclosed million our the received these XX January. guidance in of in were reflected quarter,

of a revenue XXXX. first well million gain quarter million last year recorded as Medicaid related reminder, medical in $XX as sale As of to on of we the buildings the Texas office that a $XX

million quarter. first Conifer quarter off now Conifer, of to good we’re XX%. in year businesses. margin delivered a external from Conifer $XX year. the clients approximately and generated to in to X.X% each revenue first compared produced a EBITDA to of of last turn Also, Let’s again strong solid the Overall, growth a adjusted quarter which our start

credit on Now, cash we let’s review and in cash hand our had of outstanding our We At facility. capital million borrowings cash flow sheet the of $XXX structure. $XXX and $X.X under of million the line quarter. quarter, flows, generated of balance the billion end free no

certain capital matching due such for compensation our requirements the As generating quarter’s working annual contributions reminder, cash first flow employees annual our our a payments. annual softest XXX(k) oftentimes and as incentive quarter to

X.X program. have in shares repurchased at approximately about quarter, in which Since $XX $XX days our million strong year, in or as $XXX the we Conifer of billion two-day share during in for repurchased for inception of shares AR. repurchase we cash stock share. quarter price XXX,XXX the outstanding resulted improvement about performance of fourth in of part produced shares our our our collection an quarter, the million a X program then a of the X% million first per last average Also, approximately the

leverage And as available X.XX XXXX. year March times quarter reminder, Our a of ratio approximately needed. secured if times X.X borrowing was EBITDA, have capacity significant end debt XX the slightly debt have XXXX no X.X up the we from third billion of and until maturities

turn now me outlook year. to Let this for our

million the hospitals. EBITDA we $XX billion Saum at billion year. raising $XX the or million As strong our includes by a increase raise $X.XX for $XX start for midpoint reflecting our the million outlook and are million XXXX to raise $X.XXX billion, $X.XX USPI mentioned, adjusted to This a to $XX

Additionally, $XX.X billion. in expect expect continuing per to to revenues the Also, be of earnings from net $X.XX billion now in adjusted we operations we the share full diluted now operating to of range to year $X.XX. be $XX.X range

the $XXX XX% anticipate XXXX consolidated And will in be we at of we the $XXX USPI second to midpoint expect approximately to at quarter the adjusted outlook, range. year to guidance million of be $X.XXX quarter midpoint range the our EBITDA of full million Regarding in our our XX% second of EBITDA that million. EBITDA USPI’s

generation targeting for another From XXXX. expectations. expect now billion of increase strong cash $X.X free and flow the we $XX our million Turning cash a to an over year in perspective, flows range XXXX, free $X.XX for to flow billion our of of flow previous are cash cash

generation has years. cash free flow substantially Our over past the several improved

out while our plans. drive pushed reduced leverage on debt to growth our strong significantly expect have We continue flows cash maturities we business and to and executing our

to we’ve with financial of for shareholders. mentioned flows provide capital effectively significant these deploy us cash flexibility benefit the previously, As

As reminder, changed. our deployment capital not have priorities a

our we offerings; continued of grow conditions growth $XXX finally, on surgery market to debt; hospital allocating First, opportunities, retire repurchases the and refinance center including planning on depending and second, higher on third, service to our evaluating share acuity and/or opportunities. investment capital USPI enhancing continued focus approximately annually opportunities other million further business;

we’re the Operator? Q&A. that, And with begin ready to

Our be from question-and-answer Brian now session. [Operator Jefferies. Instructions] We’ll coming question first today you. Tanquilut from conducting Thank is a

is now live. line Your

guidance of But maybe is just you we the to some my you as your for that embedded in the question Hey, your employees. think good you’re for year? how much and morning, what whole, quarter. Thanks. look reinvesting guys, we I do in opportunity SLB that about labor? as remaining temp next improvement a have think and I [ph] congrats know permanent wages as temp even to good is bring down do into you guess and left think labor

this, We through have environment. obviously a spend as The labor morning. contract in Good Saum. move done expect it’s managing Brian, operators phenomenal do a we really our year. additional difficult moderation very Hey, job, some the

Our recruiting to the been and mitigate some with costs retention which improving, have contract of incremental labor. is helping measures associated

So guidance happen expecting the expecting when certainly year. we’ve said we as to that released our to through February for are some won’t year. additional back this levels in we are year, not get labor as moderation we contract we But pre-pandemic our move this

Thank you.

Next from question coming from Pito Deutsche Bank. Chickering is

now is line live. Your

Yeah, morning, for taking good questions. great my quarter. A guys. Thanks

beat you million. $XX the midpoint guidance, the For of first by guidance quarter

by million The full but by XQ raised the Street, year You $XX million. about only above $XX raised

year? Street So, for year the the or should that The half the into half misunderstand did seasonality simply half Is The sort something versus missing we this the year of reduction? of conservatism first back curious, guidance implied just read Street back the was

Hey, Pete, it’s Good morning. Dan.

Now, you guidance We million, off anything beat it to good by that. we’ve of year. start $XX and shouldn’t the a our $XX we by million. to raised Listen, read into

shouldn’t encouraged read and trends it. by optimistic we’re and anything we’re that that we’ve the So into seen

so much. Great. Thanks

Thank you.

is question from Research. Justin Next from coming Wolfe Lake

live. Your line is now

guys, [ph] question. the This side, on and Hey, on both volume Justin thanks strong in really for is for the core USPI Austin the Hospital.

had kind driven XQ Were clean flexing kind at the some of and we going any present Thanks. line the or forward? a then service guys previously here in hospitals you interruptions COVID of some talked curious, still comp of are USPI. in Just in those

Hey, it’s Saum.

ability hospital one volume. it’s contract come rates and Dan access just has as labor been make the to with been was a talking to bit side, services. as costs. labor my it from that improve the Hospital the bit scale about as think, contract decisions the opens it rates high of utilizing at about labor versus labor And, comments, in in the serviceable the more whether for that On it indicated I about contract a prior in take makes full particular, of with always demand the questions, up was time We demand capacity up little there, to down, very perspective I contract know the come opening labor easier down,

we that in about that generate the some to is lower acuity. on work imperative that cost Continuing we discipline past we in focused productivity, even that the our obviously, the is open structure, we’ve can years things of during And, talked to the strong remain have of few stay, that as that capacity, margins pandemic. up length if overall so for returns

in side, it. strategically I’m that reductions This is we USPI and quarters about we’ve pleased the of last certain talked business, business were really otherwise the with the acuity types over couple volume strength. that going three not the were On on – things affected low in of that having

services, I’ve strength was volume GI demonstrated the grow. particular, strength is This we year-over-year. commented flat coming growth the from before, And of pain return about that not to in that services strong. was business in quarter pain want orthopedic Strong

isn’t engineering lines the so we interest but dampening this upon were recovery it areas. in to service a in, our strength volume certain So of, kind based many of is that actual speak,

think ASC really a suggests because and strength marker is that important I USPI will pre-pandemic industry, forward. the most be volume it there importantly, through going And significantly levels breaking the for

you. Thank

question from Next is JPMorgan. from coming Calvin Sternick

Your live. is now line

centers the to SCD is some and Yeah. centers. progressing the the in and talked year Hi, developing about know novo ramping of integration II there? wanted ask the bias I position the last you slower good morning. of some of de about I how

far that’s of the how to progress. understand trended sort so just curious of just some So

no, good Yeah, update. Thanks. Good question.

buy-ups continue at changed indicated, not progress continue I that multiples any of the the the As prior and buy-ups are from multiples. the

the broken were described of And from I to centers kind good. having having as opened. just ground of that somewhere the that’s in-development, So them point

intact. year, them that’s from two good all transaction a be and Those still and opened expect to this partnerships of are original thing. We number that up strong

still I think, time, behind said year positive So, is about but the Like original original we plan. the movement. see the we’ll a I a original plan, were plan last

you. Thank

Next question is Bank coming of from Kevin Fischbeck from America.

now line is live. Your

Great. Thanks.

were but sounds views to maybe you as volume Just rebound? the something the would beat, wanted guidance, higher than like your far to why looking that in QX you maybe to And it’s about point than persist? quarter. It the volume it stronger that we progressed through sounds because in looking a sudden any the were were stronger they believe, about beginning reason this you volumes like volumes go about ask kind to all to that earlier for. question upon or it the for. guys It were is even there volumes back sounds Is of of to there of either conservatism, how is these wouldn’t the raised is so QX, for like numbers based XXXX

this Saum. is Yeah,

publicly about think, I read we’ve information of our what the really information. couple volume HCA’s things, this a at have So point, and we strength

industry environment, post-COVID, The people that that I as getting kind and more to where on anyway we run running offices. physicians’ We this healthcare. now environment. think our comfortable all to post-pandemic outpatient going know that the now there employ recovery of is from in returning at helps are all throughput Obviously, create ones full enter are demand. we They’re pretty. some

shortages, our That the things efficient and setups much a much the important that in that to throughput we’ve throughput year case is adequate area talk able ERs effective be fast was and that focus with operations think with But to throughput, having demand. having about. service in staffing to we improve track gotten I the more and didn’t our ER last across our board. big

us, able across the environment, doctors this I they for infrastructure, that services get then think And to go naturally and piece us, have a location higher post-pandemic important are that’s when the recovery right into as don’t to deliver hold of in substitute an puzzle that we hospitals acuity And for to. technology going board. for and the in particular, be to have onto put

of range a from COVID pretty portfolio that always had exposure we the that we Look, perspective, handled states, our to markets differently. indicated, were broad more as seeing to that thing strength bit well. that to recovery states volume a has see And And some more of little in the as other I’m locked a pleased we’re go handled portfolio some down. Tenet markets in those

well USPI, bit year, reengineered some quarter service we quarter At and year of our there’s a fourth I of as focus lot processes, a to last think, priorities incentives couple a the more going of focus is in and things, one line into put as this of on. third

things change. that right growth. some point that that at just organic as than should of no trying with were balance the the some forward of getting I There’s looking I acuity to low reason create think a this at service. that that Some momentum out that rather respect helped grow we has see optimize wanted And we things really to USPI to

I’ll we’re to pleased pleased quarter, raised time. just commentary we’re guidance delivered to have and add to guidance. our good this at And point my the Look, a have in

optimistic look results depending on we’ll revisit like. about we future, what the as the We’re look and forward,

Thank you.

coming is from Suisse. from A.J. Next question Rice Credit

line now live. Your is

to other two on. touched areas been ask Hi, about just that haven’t I everybody. wanted

of Medicaid, whether hopefully get or that’s public guys different your As off event you you’ve picked views rolls, redeterminations, getting neutral a for roll analysis a done as the or exchanges, positive. on on up people as on we’re sort to commercial of

help and in XXXX? that some rates Do rates in and through However, managed a contracting, the discussions update on from seemed you’ll labor think on pressures Is you for get there side help. then labor for labor you got your you factored care I year generally following little this know your any that guidance, rather. like XXXX? into It

A.J. Hey, Dan. It’s

me terms to this would hospitals, Let our the which we address state. have address we say, those would redeterminations, resources the by redetermination, really to I of you any anything, impact substantive try point the in we this Medicaid tell state Conifer dedicated in from have at redeterminations But seen haven’t began. I just that as occur

have We hospitals. the in enterprise of the through levels Conifer all across communications

registration like and other through across types members community scripts of of point screening been links with updating of campaigns communications doing websites. documents, messaging the state resource working to non-Tenet statistics. going We’ve and broader We’re community banners and and our revising at on various them questions, working enrollment and reenrollment with tracking community messaging entry members, in with also facilities. our those And webpage some

far, So we it nothing monitoring significant, we’re we’re but on and think of closely. it top

question, significant terms your the the downside think the it’s very upside premature We in the any year, point. we enrollment encouraging in were from of for terms of statistics at this haven’t the terms In guidance in redeterminations. assumed we said of as February, exchange or Obviously, growth.

the to rolls, guidance of individuals would of that But haven’t some our exchange obtain anything potentially Medicaid expect try you many off So into coverage. may this would significant out those year. reach again, and who factored transition we of

commercial the perspective. our positioned I very contracting contracting, from messages well of would we’re We terms In on say think this. consistent with previous a

our recent but would been, contracted. increases year, in with the always pronounced maybe would mind, of type of of negotiations, some what they we amount inflation even not negotiated. clear, historically more bit I XX% levels negotiations, We’re and little getting it’s held CPI but are better our of contracted now. Listen, being have plans. XX have essentially certainly obviously already next And every year the than say top contract it’s seen, a conversations more we of like the obviously, XX% and the And what been this have are around terms business been we’ve is fair

lot. a Thanks Okay.

Thank you.

coming Next question Research. from from Josh Nephron is Raskin

is line now Your live.

quarter. you back Hi, on for and give then whether of wondering and for give morning. get I ramping some these that color I the centers did a to sort quarters of perhaps X% saw thanks. the the revenue keep Good of you over next what guidance? more rate maybe us are number. just to if anything for ones second growth sort hate for in the then growth you number plus newer harping transaction? EBITDA buy-ups SCD just geographies overall but up. lastly, the that I And the or on lower this consistent And to seasonality, guidance, three the wanted Any changes were about legacy USPI some same-store was USPI specifically, first with guidance implies message on to that, a than or

it’s Dan. Hey, Josh,

Let me start.

in is X%. $XX to assumptions guidance to million obviously, of our volumes the for X% a USPI start guidance we the increased great Now, year. We X% off to the to EBITDA. terms increased – volume from X% also Strong guidance, to

It’s seeing the of in if So to mentioned, appropriate. nothing make where we’re early obviously continue we’re question, like the and what stand changes year encouraged. Again, obviously into end another as to we’ll I we reevaluate and and at guidance things the there’s read quarter any this. second

start time, very point incredible to with the so the pleased to business that At margins, the in USPI continues generate year. we’re

you. Thank

Next coming from Ann question Securities. Mizuho from Hynes is

Your line is live. now

Hi, aren’t just surgery I the maybe so the at as inpatient surprise more anesthesiologists suggests given that act. USPI? check impact to gravitating that or volume money, Some on towards making reimbursements much seen that talk billing having and higher. want I’ve data departments thanks. they’re Is outpatient no negative a about

this So the if And is having I think impact? volumes? so, on what dragon do is guess [ph] it you an

that question we into with data. something we’ll It’s Just sure identify a not any question look there. interesting to could if couple of I can answer credibly an there. trends and comments I’m that see

anesthesia in certainly that I lot talked say requiring pressures would a before area is arena is we’ve for that of work. the that’s about physicians, in in the or what staffing hospital-based ASC-based an But particular,

the up. intensity true. ASC and in ASCs is to the in is the better, significantly But our anesthesiologists payer RASCs again, mix the they’re [ph], commentary versus set for certainly particular about and creates in environment, draw activity Your ASCs hospitals way that remember, revenue a in

manner, I to there’s that kind bubbled through hasn’t say driver question of at pressure volume of quarter. take year in have a relevant managing we’re look to that saw the but the carefully the a answer again, we it. issues in some to we’d in it more have while major your And data particular So would third any last there, statistically up as

cash know All debt I which you is up point? you us, repurchase and good. guidance, free And you right, or perfect. have can guidance And this repayment flow then, Dan, share remind do incremental at any

No repurchases with the are guidance, and additional share started assumed that we consistent year the was how in with our guidance.

Okay, great. Thank you.

Sure.

you. Thank

is Next coming Ransom Raymond from question John from James.

Your line is live. now

Kind rate great. you lift mean, you. there’s more the we procedure, be there. as could weeds USPI on of If and revenue [ph] of kind asked. line end on in ones That’d assume look in and natural versus of going there the the less some pain, get per an have just but good we rest that specifically Thank the because going at what’s at year terms question Hey, if on of us mix? all you you been look item? understand ortho I what’s help of

preventative I more in business in deferred particular Medicare a might areas saw value No, procedures I think as this it. a of think There actively so talked deferred that are and not And have or we in a in I and still we’ve before, of indicated, that but I is appreciate a couple ASC think question, Listen, things, population. particular, good and appreciate bit were specifically. certain I it. dampened that Yeah. John, our healthcare about of as maybe the there’s services utilization

we For this a we in honest, impact from good acute when had for become be we our us that’s efficiencies weren’t prepared that a it’s hospital that ASCs ultimately looking environment would margins. back, like on revenue as for the there’s come to to care for bit even an And by sure was our within coming get to going in ASCs a help capacity fuller, maintain if sign would this per bit, the we’ll general, some prepared back, benefit case. net utilization. had Because it but we

work we’ve this of finding would that’s it that ensure little maintain So efficiencies challenging again, mix advance knowing the a that in to bit is been on knowing margins of come and, our a think preparatory back. business going quarter some focused come doing bit more that back, this a And the and be good it happened we by sign. back I to to coming

at running our partners’ happens similar across seeing Our I full give independent nice throughput, think, physician what physician the to It’ll that’ll employed them if with practices, we’re a offices that board, tailwind. be the some long-term to partners practice represent our this grow year continue new again confidence partnerships at sometime to businesses, which their and will in their maybe them to own USPI. recruit tailwind with

will think mix focused challenging. other I short-term a if in in, margin this things to be is a even good be bit the performance. the cycle So some of and more We’ll stay on the

that colonoscopy I’m think hearing what big it? what from you a as Is about quarter, you. that from take is I

you. Thank

coming is Fitzgerald. from Cantor Sarah question Next from James

now Your live. line is

the walk was evolving off of through could I you out margin start how you. Thank as you peak us we hoping think of to shortage. about come labor

really up? about think through you do to margins? increases some can payer staff the flowing to able possibly leverage get margin rate you then as much of how you’re from And how So scale

we’ve the volumes several additional very Hey, Sarah, our and morning. that it’s over strengthened Listen, mindful as USPI, well. but of Good years, hospital Dan. And depending are our territory. as cared to the from anywhere phenomenal margins quarter the the XX%] think obviously, platform, there’s for USPI’s expansion. margin hospital we significantly the margins given obviously, treated the [ph] and are not through And, opportunities past only we’re margin for [high-XXs on efficiency of

help and and past and with in given nice take it. be certain fixed during The highly on inflationary they’ve at in And are the least can on years driving terms environment. challenging volumes really certainly, incredibly several a it and statistics and in costs additional done clearly. see margin you of phenomenal profitable side, adding associated with efficiencies operators, cost just a have it the we job our But there yeah, volumes can hospital so additional

feel negotiate with may very than are been we of negotiated. from escalators a good that mentioned recent little terms negotiations, able we we’ve commercial more earlier, to historically In where have perspective annual pricing, contracting and bit higher rates as at we’re I a

good feel we about at we’re from So perspective. where a contracting

Thank you.

Thank you.

Next is Markets. from from Capital RBC question coming Hendrix Ben

now is line Your live.

an sequential very SW&B. little agency Hi, talk hope of progressing the capacity But trended admission, in year decline you thank noted volume? I segment, how cost labor in peer us given specifically, you idea Thank percentage appreciate how see acute Certainly, declines inpatient how rate has a about And bit you this the for on that your much. can a in give as of constraints, you. your color improvement inpatient could HCA of strategy? that impacted you that

Saum. is This

As that at is I has mean, up labor a I we’re terms that the think been good going. We’ve It’s is most marker a thing we indicated the our retention. It probably building and workforce. slow rate. for contract on been important focused quarter-over-quarter-over-quarter, improving which before, in year. I recruiting of look over

as But haven’t just market a shortages move disappeared perspective ultimately, from XXXX structural to labor we the in the from XXXX.

capacity. contract labor is And normalize, an rates resource, use begin still can that as to to so but important more freely labor open labor up contract those you contract

our markets. where you in us, math markets on rates recovery, cost that capacity For of different different will, we even of different we different up how structures, open because the face in bit, varies labor and a equation, contract kind are if stages

that by market market. take we And kind so of

I think had access services saw that that, the a QX to the in opened some up past. our of reflected indicated, we as of than we fact bit more strength the part you in volume

the also And because service ability quarter. a healthy margins. demand that there, this it’s test to not it’s at good, good that’s And is but being it ended up whether for testing our only

pushing keep back we’ll also though that. rates we’re very But the perhaps, trying on are And action that we contract so to all way on labor drive this won’t there, driving direct get pre-pandemic year. And focused unit in levels. they towards

Thank you.

you. Thank

from Next Andrew UBS. question is from coming Mok

live. now is line Your

stats outpatient any help the and in blend you drivers Hi. XXX Good by understand would admits Adjusted There spread? morning. higher. Thanks. outpaced that in that X.X% were points. about basis admissions admits Can weren’t adjusted up us what’s the obvious driving quarter inpatient

in a volume, That’s driver it’s just Andrew, very strength gross volume in intensity side. quarter Obviously, the of Dan. outpatient of the primary the the the strong. our inpatient Hey, Yeah. mix It’s there. to the was relation revenue

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strength So on outpatient was acuity of the mix the a driver side and there.

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Cassorla Citigroup. Next question today coming is from Jason from

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thanks. Great,

stat debt uncompensated year-over-year quarter but was care uncompensated and in care wanted in just XQ? color about that looks think be could overall debt XX% decently trends, comp XX% expense bad about care pretty Just what to quarter year-over-year ask issue, a of up up it the bad drove was any that fourth I too. higher like uncompensated on that back in

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levels. year who hospital I forms seeing Hey, finding in and someone manageable. of an Dan. Listen, probably we enrollment everything through uncompensated a some It’s insurance team of possible more you comp resources think, when have the program. lower last overall Jason. Yeah. We eligibility our we job would an do care, for lot time assist our doing not spend incredible been does tell say with of other would year-over-year them insurance, Conifer it’s and is we I the

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Stephen Fargo. from from is Baxter Our coming final question Wells today

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a to meaningful And procedures guess your help ASCs? Hey, Ambulatory setting the a procedure opportunity these ortho couple question. outlook setting way? the hospital were was and for from had shift want one ask here hoping forward into about more It’s a ASCs, outpatient pre-COVID. thanks side. you ortho to massive in of question. the longer-term inpatient this to we talk growth migrate then over Yeah. bit for of pulled you for the what opportunity the could to little strategically of I you next second, where the We’ve another compared a do do little having about to I I the this there do think the need shift bit hospital procedures Thanks. the on years. as

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that stay, a inpatient rather based have have a and of outpatient you’re the site determine hospital ambulate home First right and will with of even turns that from turning being lot you setting. time, that of it’ll be hospital like of going standpoint to moment of surgery. that nature a to technical patients short qualify will into would And patients care a the if basis. the that on multiday the based the of all, used recovery is what done say surgery be than what into day potential that stay, I there’s was the to procedure it something ambulatory a Over get surgery, outpatient an in look able be same comorbidities subset more

certain ambulatory really, one a I be outpatient, based inpatient up ASC that’s when will of end determining with mix comorbidities So what versus the to think, ultimate especially that needs what there’s setting. fully hospital careful outpatient

in you tell setting more for continue in the setting. we ASC growth in that the runway area the much to comes would our that fact this I see belief from ASC

continue continue new existing Medicare de ASC or initiate with to development market. patients, patients commercial through the And treated centers. We being to we older, novo wanting new coming to their in expanding including effectively in orthopedics to first the either our see along see that joining work senior physicians USPI center setting are centers

in based go demand runway think ASC still to there’s I orthopedics. So for

work areas those figure safely today setting. Longer clinical term, to how out very we’re at developing are hospital algorithms or more types even orthopedics actively and acute that within on care much focused to in in do of is ASC the done looking what the procedures spine

example an shoulder orthopedics, in would surgery, migration I and spine we’ll of as be as I a in years well. see in So think indicated, surgery few and that those a areas

We’ve our conclude And of and session. ladies webcast. the gentlemen, and question-and-answer that today’s end Thank does reached teleconference you.

wonderful today. lines for you You your have participation at your We a may thank day. this time and disconnect