HCA Healthcare (HCA) 27 Jul 232023 Q2 Earnings call transcript

Welcome to the HCA Healthcare Second Quarter 2023 Earnings Conference Call. Today's call is being recorded.

At this time, for opening remarks and introductions, I would like to turn the call over to Vice President of Investor Relations, Mr. Frank Morgan. Please go ahead, sir.

to today's welcome and morning, everyone call. on Good our Hazen; and me this Bill Sam is morning With CFO, CEO, Rutherford. Sam prepared and questions. remarks, some and then Bill we will will provide take

on everyone press to statements, forward-looking are differ might are and various based expectations. let over other contain current they it be and More management's risks, information cause turn today's call I me listed our Before remind Numerous that that on expressed factors should any factors these Sam, today's those uncertainties actual forward-looking materially results SEC and from release to in in statements today. filings. may

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

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

morning. strength strong past of we this Good second reflected of Across business, maintain joining outlook. X results areas company The the services into These quarter. for that in reflect to we guidance over XXXX year. call. continued we believe updated this solid the Accordingly, operational half most the earnings for experienced healthy should produced operating the our the quarters. our and margins. you momentum demand the Thank continue We second our earnings for

increased which and outpatient lines. categories the The grew divisions grew across company's X%. visits, Other increased with surgeries grew growth This diversified quarter across outpatient inpatient driven including surgeries room service within increased outpatient which company cardiology share to volumes increased the year-over-year, Against the equivalent same volumes in was the facility growth per broad-based and procedures, difficult Admissions emergency strong. was $X.XX. comparison of admissions X.X%, XXXX, by also earnings second X.X%. diluted grew, to X.X%. were X.X% Same-facility most X.X%

Additionally, commercial we and X.X% growth strong across helped rate supported increase in In virtually These costs of all to of labor mix to payer as the as hiring XX% from admissions year. continued volumes second an decline and people, of has labor remained adjusted compared by as of facility our X% a an to at year. key and last by strong quarter, we annualized result, year compared X%. metrics. X.X% year. were prior revenue reduce Nurse nurses contract same quarter the last continued drove XX%. improvements compared the acuity Turnover invest growth in a in saw favorable for to positive to results trended the the increased These and for quarter factors

agenda services making significant patients could we accept from investments even improve higher patients. to first care During We where bed hospitals and we our technology necessary total X.X% capacity. and are from quality believe the Instances provide to available quarter, our resources people provide our we not will represented the us and our our other in networks, of with quarter. in the the down declined admissions, improved X.X%

competitive As we we that markets expect demand in remain future, of backdrop encouraged our strong and look by both to the the overall our within we positioning them.

for overall their plans. execute our I colleagues to want their Healthcare and operating dedication effectiveness. to to culture thank continue capital our disciplined HCA and strategic will its use allocation

available to On patients forum. we some that party I unknown certain with online made to an of we was me want very information event So by recently had a list on announced recent and with XX, our seriously. let July take discovered a close to of speak an unauthorized we this. that respect

information include license like clinical that We list or security confirmed other social not sensitive does passwords, payment driver's or have the information, numbers. information

investigation exclusively theft a e-mail that to from forensic external an messages. but format this storage was is location be Our used to appears event ongoing,

We obligations. And are lawsuits. personal its believe day-to-day unexpectedly, committed multiple part privacy process HCA a in materially patients operations named and remains not believes a incident its to have we This of our nor or do any in Healthcare we our vital to been impact in the it our as regulatory not the security and the of defendant affected accordance legal disruption caused of class business with notifying will action has financial mission results. information. is their of maintaining patients all

on the will the details to quarter's call for that, more With results. turn Bill I

and our on provide Great. I good Sam, Thank everyone. will performance quarter. for the comments morning, you, some additional

prior Consolidated our team's management X% increased of the net revenue in pleased and by in was X.X% billion in equivalent This remain revenue year billion from driven $XX.XX of admission. costs per with backdrop inflation. $XX.XX growth increase with equivalent period. We the X% even admissions to operating

the quarter. in XX.X% was margin EBITDA adjusted consolidated Our

majority we approximately to in the points and in a of we the During basis now reduced This XX quarter. transaction venture consolidated stake our our joint the the margins completed acquire venture. are operations quarter, consolidating Valesco this

second improving mitigates Envision bankruptcy We but believe care our remained and risk also with hospital-based last this million hospital physicians transaction first our our proceedings consistent settlement EBITDA teams margins will $XXX and this transaction the alignment between the quarter, satisfaction business quality, not further payer When have efficiencies. patient we on recognized and only support quarters. and between you the consider adjusted

me capital some allocation key cash metrics growth flow So value long-term a and of our they as strategies. part to remain creation and let speak

prior million billion spending the $X.X billion. this just year. over quarter. flow of dividends and quarter Capital repurchased cash $X.XX in $XXX million We billion in paid $XXX million Our $XXX during was stock from operations $X.XXX the in the year to our increased from

leverage Our our debt stated X to X near to remains times times. adjusted of range the end EBITDA leverage low of ratio

$XX.XX range and morning, to As noted guidance this We our we billion. are year between in billion XXXX our release expect updating follows: as $XX.XX revenues full

billion attributable billion. between We to to $X.XXX and net income expect HCA $X.X range Healthcare

EBITDA and year adjusted $XX.X between billion full expect billion. range to $XX.X We

to We share $X.X approximate expect range to earnings year. full during capital diluted the $XX.XX, expect billion $XX.XX year and spending and per between we

So with that, Frank for to Q&A. it up call over turn I'll and the open

Thank give would you, instructions Instructions] you question. who a now to those to like [Operator Bill. may Bailey, ask

from with question And [Operator Credit first Instructions] A.J. Suisse. comes Rice your

just strong discussion -- back Texas I had I come know Florida remarks Maybe divisions. and solid Sam prepared quarter that performance in was some his about and had there's early enjoyed volume. across been said wondered, this

strength as is rest and Medicare there. pent-up if about Advantage Medicare, guys could unleashed Now the comment of the some the being of seeing There you discussion some in demand seeing wondered any on if whether from care that. I of you rebounding. well. I a comment was managed also that on wonder would country particularly you're

As mentioned across volume our was in I broad-based divisions. our comments, growth my

some growth I had growth. have think we had it out payer perform adjusted pretty line We fairly top that admissions, admissions, company broad-based so the but the XX clearly and mix adjusted metrics, across admission was and XX quarter, much same that admission don't of divisions divisions forth. in every improvements

that fairly Florida. couple consistent was of divisions isolated struggled, performance. one So but We have in did a a

in other The west Midwest. was out the isolated one more

pleased company. really had geographies for we across so were the performance And the most the that with of part, the overall we

And at I was looking interesting, something yesterday. it's

of COVID And have an than the greater We from this for a the have, little comparison year. first bit a from our X% standpoint, the admission of of pressure part includes admission hospitals almost year growth in standpoint. from XX%

significant our inpatient hospitals very surgery X%. surgery have where have We almost performance from growth as above standpoint well, the XX% of

and speaks that the performance our to part facilities strategy. our markets, portfolio of consistent that competitive development have really physician the development So network of strength the and core I we then ongoing think positioning of as our

Markets. the with RBC from Ben Capital comes question of next The Hendrix line

second your seen you you're guidance, far And this half operating half? would SWB, cadence professional the color on fees provide anything alter particularly that With call supplies updated through and to can versus what you've regard through to out year? more typical expense, second assuming thus then for other some what the

Ben, is this Yes, Bill.

start. me Let

continue guidance growth Gap] year-to-date think reflects I opportunities. [Audio we're market the our in on our the updated performance, in observing which what

I profile slightly expect year, about year. the when the margin first profile the be half between second and the better net-net, margin of in the think we'd of second the the of half I the to think company half

as I revenue salary, percent benefits supplies. with were Same wages year-to-date. running think and of a they're running our mostly where

that. seen in a little think don't professional pressure have on balance the but through fees. will We exist year And we to will us the same meet the pressure be able of that

Leerink question The Mayo Whit comes with Partners. next from

Maybe just a around labor. question

year? and improved the think to Bill, much get heard Just maybe say, the second that rate maybe the a exit of sense XX% Did I you for contract the trying quarter? change of I half expectations it throughout labor year-over-year.

QX. prior with sequentially labor pleased environment. down our is as It's year. we're well improved mean, versus XX% I Yes. labor QX mention did the We and contract the between

turnover are our of I Our us a SWB under And up, as labor hiring for is We good our cost portends the was mentioned year. of going percentage balance metrics before, the X%. through things think down. contract that

in the I it quarter. think was X.X%

we kind would And of I again, orientation we're months, Especially as think we improvement. of that. some some So through pleased their balance get with go the then hires the get process. into through we our continued of expect the summer year,

question from comes Gary Taylor Cowen. next with The

I where lie the were you rattle revenue. might I down me. thinking secondly, metrics all roughly make care sure breakeven? could managed few the that EBITDA venture, maybe have often on I do run -- want admission the kind two those but And for those of line? I Just just SWB a quick in us? million to understood kind adjusted I we ones Bill, and $XXX on Envision expenses off for that reside think you some if Is of But to the wondering joint missed surgeries, of through was I then a of it, of admissions know roughly

with that. Yes. Gary, me let start

mentioned managed Some as we same mix. I care, mentioned of think in her the really comments, favorable payer our

Adjusted X%. in Our admissions up admissions managed quarter. over care were X% were the

that growth. and the again, Emergency managed prepared think case X.X% I in good mentioned up comments. our were visits mix we of in acuity care quarter,

really it's we're really in are Valesco with your close. payer and right, north and as that. little you're venture, mix pleased operating. that numbers revenue basically the About in the consolidated showed the is $XXX trends. a other is to itself seeing, we're So in of joint SWB XX% And million of commercial XX% a had to revenue that Relative that the we we the the proposition of breakeven in quarter rest

next question come Wolfe Justin from Lake will your Research. with And

pricing quarter. the the in on Question

given strong remind drove that, those slipped mix it anything the payer mix, you better second to pricing. acuity and expected with a So strong the I us, might and and pricing? can is in have have commercial items I there little quarter maybe strong strong be that bit would

can guidance? back then, us just you year And give in what for volumes? expect Would be Bill, you the the of half the that

Yes.

out. comparisons, don't have year. nothing mean, roughly last Justin, we I when we $XX still year was call support had COVID an us. obviously do COVID will that We year-over-year impact specific of for payments million this I

Our COVID of total roughly X%. admissions year, were last X%

influencing year, we'll seen be largely on balance year. we projections revenue that's of for X.X%. bit year-to-date around think facility are the So our our year, would as a X% the the of consistent. I for On balance We've full volume far, for think the still the thus the admissions little hover same about line. well I

to full X.X%. year, would the Our finish adjusted we year-to-date admissions. X% admissions are adjusted X% think I it's still by time

we So half pretty we've the consistent in year think of with trends in be expect the seen the will volume what first half of second year. the I the would

come question Chickering from next will the with Detroit Phil And Bank.

revenue of through and implied year, back the upside. at raise the I EBITDA As how trying the much raises raise at into should the I'm flow-through half revenue EBITDA understand of look to flow

versus tracking years? XXXX it of sort pre-COVID in how is So sort of

turn a in margin We Well, that, in overall think the expect at the position as perform improvement the we market. rate, of second the we've remind when better has midpoint we going percent than our half roughly I on year million be from about profile when our of guidance in And you, profile we we I labor said, the the the all, of I think of raise. margin that, continued as to guidance, saw I the all the do it's in $XXX hold, calendar. first think contributed half revenue, guidance them forward. where I raised EBITDA But view based will year. I almost our slightly look the where the of the for

now. that's all right considerations think in our I So reflective

me let Bill, add point And Yes. here. a

dealt sort we've just believe, where X neither dynamic we an Obviously, earlier, by it's at were these do so. as in a dealt with where over I relevant snapshot place, we've take or level. indicated months a actually versus We've XXXX. were Bill a think last also macro market with hospital-based year unprecedented X of the margins fairly if a this point. you physician it's of And we moderating. pre-pandemic into unprecedented And macro we are labor of when increased to comparison our forces years

So it's forward testament I to with to to the and continue to think a of adjust of the sort operationally ability our move company strategy. dynamics

before, our compared improved we has to mentioned think were positioning As pre-pandemic. competitive we we've where

during period. Our market time improved share has that also

generate and these want. results that continue has continue to we factors, in move we the to believe that So very adjust to all wherewithal way to ahead a company the positive the

Ann Mizuho from with comes Hynes question next your Group. And

you have know it's your observations one on started but I know your sounds Texas, determinations it's messy. business? any bigger I bit of little early. how like been early, impacting a Medicaid do It states, is

early any positive you And process to So overall for determinations is an your negative guidance? think or if the remind HCA? observations? have anything you going can KB do this you And in from be us

Thanks still not to that. watch it a there. It's market you're continue question. approach is only the for good on to pretty and a And got we've Yes. respond right, but organized early,

them didn't that this haven't of in material some continue are we're application other impact receiving to either some we what negative They So We of there's an technical. any or or patients to some Medicaid, many complete get more any reenrolled think who of are seen opportunity them on determination, the aspect seeing today. that.

are health who for insurance can, sponsor redetermined either to remain gaining employer coverage, teams plan an in best for by coverage coverage our qualify of qualify many individuals that being them marketplace. are off, assist studies which they people the trying the So identify those the or will as in encouraged in

to But watch And so right continue impact that now. we'll no unfolds. that as

there guidance Nothing positive our how believe but could just be in over is out. have for We to wait run, that long to redetermination. see Medicaid plays assumed some from this the we'll trends

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

became been had was to about it back back we way the more the guess similar normalize the wanted dig year, of an like and growth thinking the beginning of in less issue I bit half I trending just started volume year. half year. relatively you're as I of way maybe half, when the kind little you last the that of about in the felt in the to kind the about back any and a that first it then to to COVID think [Indiscernible] thinking spiked versus how guess in of at less the of year volume half

maybe that if more QX you so be would little and And the into got a the comp rate difficult slow. might growth as

and where about put about year? about lines things like just the into volume that. the rate you will thinking growth and in think growth you How of thinking continue that maybe long-term how trend half I do back context of are want you're So this to versus

Sam. Kevin, this is

the me first of reconcile time. not that sure give you half the us of in half the exists year think, numbers, commentary. we of Let general with do of sort what year can to at Bill this of the a more volume. the I'll with particular backdrop, And to sort let this I'm respect point back is of I for

Florida, Utah, our board, attributes Tennessee. demand much in before, growth markets. experiencing solid services. feel health we in continue this Texas Carolina, South are that markets, growth and we to Population that said we're we unique pretty care Nevada, be for Across believe there's within strong the continues population As within and to driving our

And our second going we maintained, best to our point positioning that's help very sustain we grow. market us needs, communities share investing in these can is in What we're so position respond growth seeing in that forward. acuity. And payer some mechanism the the I our significantly volume and we're of the to are think, that's support the within the dynamics overall is that move think assumptions positively, that The strategy place, is we within put patient this as and our we to then facilities markets. of has is strategic, dynamic. our Acuity exist view some mix by supported that that, second

throughout positioning economy the our strong have reflective of exchanges. seen and a of our the admissions. have commercial communities well We people of first that's year, as the half Again, we lot job outpaced as that think a admissions in total

year. those last And the And will the that we're on half this least on term. so future, in into we into near of at the those think continue continue will optimistic

So to try maybe Bill, you reconcile… can

say, we're our of consideration, mean, when just think you, mentioned I as growth, to I'll take anticipated seeing admission mid-single-digit we we said all when projecting Mind guidance, forward, outpatient try those X% going factors Sam we into to originally we about growth. X% where and year-to-date.

around And hovering of year. of balance was we're So growth equivalent expectation. north X.X% the position admission admission seeing X% X% to that's that's and adjusted the admission, that X% our still the informing growth for our fact given

for X good the X the months So continuing year. based still to good We're the think first of around full year a I is on outpatient number now revenue growth. see

X% this equivalent to expectation support the for should full that so And X% admission year.

With I Bill, if one in respect add our to networks. our Yes. thing. investments can And

which facility as including largest other that our pipeline motion, of and We development as have, are outpatient projects inpatient at components there. robust are the needs well this particular in juncture, very

more latter in recent 'XX, years. in pipeline see an than as 'XX, the that far early capital standpoint organic our as seen much from is 'XX we've market hit robust So pretty will we

Brian question Tanquilut The comes next with from Jefferies.

point there's lot moving know a I Partners of impact touched around just -- on physician basis stuff staffing. Bill, the happening with some XX being American Physician drag. of noise Envision you and a the

So to is Or bring that had that up? structural to a bring as we more staffing? there opportunity in like for that drag, in-house physician capabilities think thing where about is you've

This Yes. Sam. is

that can Let color me and Bill with start in here.

I mentioned, to the availability so for multiple have As difficulties these forth. over short had of in factors. we the to run, And past backdrop space the few in very been because service physician and has to years capacity the us, respond maintain hospital-based and difficult

to what most able And do move the the we've did grow, increased continue pressures in we the make for these forward challenges. earnings year that part, and overcome business for these to had so expectations to And we our we've appropriately. and to sure been some face of of our

now the But Bill level As going the we it's first the some. nearly don't and a don't same these we've think. gives of experienced what efficiency better to we even the to hospital-based with that in in half more we we'll effectively, pressures platform clinical believe physicians although and the even have of our type and of producing the into potential operations hospital be operations, mentioned, Valesco have to anticipate performance increases think. part, we growth, year, last do better challenges respond And integrate we us not possibly

individual these we've we But to of some past. to the we be. and time the think pressure. challenges, said where overcome say and us We've as And we've get labor, execute short they of be. create -- I of operational to physician the in it to mentioned. costs. the have pressures and In HCA, I to to pattern tended allows of them. scale responding resources over can that an had want earlier, the through have I'll we I move sometimes different so ability And a run, happen had Currently, uninsured We've they whatever had again, kind this

from question next Wilkes Bernstein. Lance the And with comes

on long that venture or an for footprint? initiatives for question opportunity strategic I is term, what compensation expand maybe volume you at interested do investing potentially of in see health reduced was the you're in across just here. ability organization on kind where point, a side got putting digital through And this, the it's whether to capital and the you're the I've AI. you this the place

is This Sam.

our very the that. have prospects a and agenda I'm for growing about company, We around us what are digital in excited

can move into We us use the infuse the are is investing cloud so in a to which of that standard even cloud a move allow new more to to think then and going clinical big fact, matter and more care efficiently, that data the data back process. into information effectively we sets system, we

And will efficiencies. today our we quality We care our we're with that, something variation same believe company, digital of and, improve have processes, we in better innovation. couple agenda that inside eliminate the create calling lot of more a transformation to exists opportunities at the time, care

for that a will the know our we're huge and will Intelligence, about it. believe, It's way for us influence early in part play that exactly prospects Artificial that. encouraged we will to agenda, how but what be

companies in We we agenda are some what this more with partnering sophisticated that our ways with I think to help expertise than us have very and internally. push it inform through will accelerate

our So we're push what significant we us as what yield a to potential fact, into But very do. as Intelligence, see it in this excited can we'll for And will. view in positive for we cycle, if way. you a wait us life can next Artificial about

from UBS. comes question Andrew with next The Mok

that quarter, seems pricing maybe weighing was understand down to outpatient revenue this causing wanted discussion and Revenue on us you on up that the about pricing the down be outpatient metric pricing I strong follow to per angle. from X% Can like different unit the platform X%. your are equivalent a in across to help up it just blend inpatient trends looks, year? which mix

pleased say we're growth the with that I'd seeing. outpatient we're Well,

We're well of year-to-date a you a If that the at outpatient a mid-single issue on expectation of quarter growth have, we mix north -- bit and There's basis. look it's in overall always the occurs. that digits. was that our little

which room are lot X.X%, volume up, was outpatient. Our a of what, emergency were

growth surgical outpatient in Our up was X.X% quarter. the

stats. good So are I those really think

that say, overall with I are room overall, and outpatient revenue, seeing. per blend outpatient There's surgical, But emergency the unit. we pleased we're growth would a diagnostic. the always between very On

revenue Yes. quarter. growth quarter outpatient And over actually overall second the up was Bill, the just first

revenues acceleration. alluded type So physician, to highest cardiology procedures, parts, the as we urgent up of be our to to, all moving There's seeing lot tend procedures. a to way between which outpatient are some care, of Bill clinics, just reimbursed outpatient

And it at in mix And tend look the in to both and elements, it for has than was We to businesses. outpatient. revenue And so the the get sort the aggregate. the continue increases quarter. outpatient part, influence the of inpatient first stronger can within we then targeted in our price the most of pricing in second aggregate that been we the quarter our want that growth our

way So has of the it's to all Bill's growth us. different the more, point, of and mix mixture components solid sort a of produced for in the that

Next from question Calvin JPMorgan. Sternick comes with

ask rate the cycle. I wanted commercial about to

the are how last rate you progress on of X/X guys you and about the give you update are quarter, and an way think through us those through of I XXXX. discussions said evolving? X/X XXXX about the way Can

pretty They're Yes. evolving consistent.

rates of As in see we just we're mentioned, mid-single continuing digit the kind to level.

As I 'XX, a our continue. And far for contracted XX% of now. I think efforts 'XX think we're little as north for

our I the progress strong we're that we're think pleased making continue in to area. major our payers with and be relationships with

the Stephens. Fidel And question from comes next Scott with

authorization this utilization or are higher seeing cost when perspective? as behaviors medical Or the managed pretty management-type backdrop you're care trends consistent against Interested in just are whether the a changes seeing prior any the there? interfacing things payers with them year, from where

the quick general CapEx Is a any update investments to that guide? slight in on just that broad-based around are just to you projects raise talked CapEx. that the the cite just the specific would Or just the there Sam follow-up, about? then And related

both take to try of me those. let Yes,

sure the think again those in bit. able through I and that payers to of authorization defend necessary. necessity be a picked time, our think if through to try But activities to we reviews, maybe the to our where still as that go We to process. make will, tend as about up we of work a mentioned have But you devote see have friction, little medical activity work have during and you us is those way period there lot resolve those the COVID that that you -- positions our through effort. as eased we past, smooth to with of to a try payers level But it. we both appropriately, as

in for I the think to capital it's market growth. deploy to CapEx, of the see the reflective continue simply we On opportunities

Fortunately, able to we to we see to think cash see growth the again, strong opportunities continue that it's of CapEx. the be flow And really support market. reflective I in

us. as markets some of we for we spending. for long-term on and land we good But in have these expansion acquired we And Bill, those last some the future call, on capital put that fast-growing pressure mentioned serve, our decisions upward believe that's are some

The next Group. Cassorla from question comes Jason Citi with

Yes. Great.

to what the Where trajectories of on labor the and trends, turnover efforts you the put in Just contributing you're to thoughts a to outputs some wanted and front better of any on there? to inning the to ask efforts? to? the all kind Or hiring is frame help and in other a little relates see the bit more do these on I it there place labor you as way front. retention guess, about like Thinking turnover programs move

This Sam. you for Yes. is that Thank question.

we As within have our our invested people I mentioned, heavily past the very function. We've increased in recruiting agenda years. few our over capacity

and believe hiring, efforts will Our half are continue the of the we yielding on year. latter that recruiting strong into

be in resources retention necessary so to getting at day-to-day and they Our we're needs better to with employees' helping tools responding effective the to their turnover. that. that That's jobs, efforts our have respect

Turnover is approaching pre-pandemic levels, especially in the nursing area.

you quarter turnover, it the are would annualize But pre-pandemic. a second than points above suggest that. We if few less

believe do by through labor, we in year. improvement With contract of we we to we the expect last encouraged move half see that and continue we're opportunities Bill area. that, improvements as So have mentioned, as the to

development And then about I'm initiatives. our very workforce excited

for -- competencies to company. expanding heavily also continue for we're capabilities what of College each grow individual relationships and establishing calling and for our and better And which our our our investing They're in then We their they seems, and own in in can people opportunities Nursing. we're to people so invest a it or ongoing education Galen in new Centers quarter, for their is care new new upskill markets that clinical put either career. deliver Advancement, them and Clinical our position into

inning innings in of in We're the what we the So in? middle areas. are some

compensation will year earlier, been organization as the navigate And how margins. we've to and we across I think half very through mentioned and periods able But see difficult our the competitive, out. the we all, tremendous in maintain these latter wait of results. And all I with We're so benefit plays believe, to programs.

look labor I again, cost XXXX in just very in revenue labor as the the think a of are a market. below a -- in that's of proxy, face And our as labor difficult XXXX. again, our very at XXXX -- percent if costs you

Jamie The next Perse Goldman with from question comes Sachs.

you Can quarter? informing in comment should is third And to to third normal that? July from be a headwind about we slightly digits way Is seasonality revenue expectations that and Anything the anything or single think mid-single digits. quarter? down the And maybe right the for high normally, thinking on down beyond about? perspective that's tailwind EBITDA seasonality that thinking I be

that may was that not as an fully backlog there And been earlier I'd then on thoughts answered. love on your have well. question

mentioned and the normal we year. this the second of this of seasonality that fourth far half the so end into at continue patterns through on see we first we've seen that to starting think that materialize. year, will And quarter We of half the were

and given forth. quarter. not of The quarter quarter strong third activity the is year and the as is the fourth strongest always The the fourth for deductibles so quarter us as outpatient

patterns be to And similar pre-pandemic third in will fourth and the so in that's reflected seasonality. our guidance. we what's quarter And think

from And the Valiquette. Steven come will question next

Your line is open.

follow-up as guess elevated the for costs, rate up questions just renewal I contracts many commercial on you as didn't these labor coming for payer 'XX the that some of for to There company labor for fiscal have 'XX. in conjecture to better for a quite more capture So commercial had HCA some some which renewal and up prior was update. rates

better confidence versus pressure here potentially overall noise XX, is ago, the died on potentially certainly still the kind in of within do that XX little bit maybe -- commercial question still Or versus discussions? be now being mid-XX is going are you the pressure some 'XX? fiscal have somewhat for slightly than months rate that Now pressure of key tougher variable to the labor cost I to levels subsided. updates capture given those guess average labor a Is down those

get latest of kind thoughts your Just to around that. want

underneath it, this Labor targeted one contracted escalation expect. Well, some. our Bill XX% as around would we're still you moderating that inflationary objective. on are as Sam. mentioned, there's Yes, indicated pressures costs, 'XX is

belief we cost with that to someone. is physician by be And for to Now respect have that, fees. pro have our pressures will paid

thinking price a justification and factor so And will our in that appropriate our for become new increases.

So category. cost just our are one not

all on can income into as multiple the considerations categories, our negotiating. have We when see of statement. you factors And that we're

Raskin And Nephron the from Research. come next Joshua will question with

Advantage on before, volumes. and there Medicare support than differences in an quarter inflecting? Medicare quarter in of or specifically meaningful obvious you the outpatient market you anything Medicare focus last anything saw seeing any we like feel Were higher And that the demand is levels would are mix payer the that side, the on

Yes, the categories, adjusted kind payer admissions between Josh, of admissions the at versus they're when look comparable. I

Our X%. Medicare up admissions adjusted were

managed up care emergency as we growth. mentioned fueled X%, adjusted room were earlier, by Our admissions

the And payer mix, that's, pretty So I positive payer categories. that's I think comparable strengthening think, us. for the among trends trends are

other outpatient good nothing So the underneath that else traffic. to I commercial than area continue we see distinguish, would ER

as to pushing up close was outpatient commercial Our well. X%

think I general we're again, they're pretty So of trends in the terms seeing. comparable

put the outpatient. a say, on to bit I Bill, color of little would just

is commercial revenue outpatient growth clearly growth. outpatient revenue our Medicare outpacing Our

some the seeing you we XX% by to by But influenced outpatient will. commercial which really calculations, again, influenced by the revenue growth, if the are are of of represented XX% solid by are commercial. admissions Some roughly influenced adjusted ER, surgeries,

growth So that And commercial all yields growth. good solid there. of revenue

no are you. Frank the further time. questions. back Mr. At I call this turn There over Morgan, to

if joining for you hope your your much I might a questions great this answer everyone, have a today. day. of Thanks, call. much. week. our you any have. additional Have rest you we And you wonderful thank around I'm so very Bailey, Thank can afternoon for help

call. This concludes today's conference

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