Universal Health Services (UHS) 26 Oct 222022 Q3 Earnings call transcript

Company Profile

Participants

Steve Filton	Chief Financial Officer
Marc Miller	President and Chief Executive Officer
Kevin Fischbeck	Bank of America
Ann Hynes	Mizuho Group
Justin Lake	Wolfe Research
Jason Cassorla	Citi
A.J. Rice	Credit Suisse
Andrew Mok	UBS
Stephen Baxter	Wells Fargo
Whit Mayo	SVB Securities
Gary Taylor	Cowen
Pito Chickering	Deutsche Bank
Sarah James	Barclays

Call transcript

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Operator

Good day and thank you for standing by. Welcome to the Third Quarter 2022 Universal Health Services Earnings Conference Call. And at this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference may be recorded. hand Executive over and Vice President CEO. to today, your Marc like and Filton, Steve President would the to conference speakers Miller, I and CFO; Please ahead. go

Steve Filton

Good for the quarter, this Michelle. Thank you XX, third We Health results Universal ended to you, Services' review morning. XXXX. of September welcome

statements. will using similar forecasts, represent words such conference believes, as forward-looking the During be expects, call, that projections we words anticipates, and and estimates,

business I recommend anyone forward-looking familiar statements, in the for those December call section up before questions. and year-ended like XX-Q XXXX. the risks statements opening our Form Factors to in and inherent We'd careful not our uncertainties for and the a on to Form highlight the For couple trends with XXXX, Risk June a Factors of reading XX, XX, the XX-K quarter-ended just and forward-looking Risk developments and of

night, quarter-ended to $X.XX reported third the our discussed company After adjusting the net release impact XX, reflected share of with as was of share included per the diluted for net release, for to our attributable supplemental last income for of adjusted $X.XX the per schedule, item XXXX. on income diluted As press the XXXX. attributable quarter in the UHS the press UHS September

Marc Miller

decrease third compared to as hospitals the the quarter. a experienced number treated a quarter, our in COVID in the During we of diagnosis patients with prior-year

segment, government of the COVID and made of reduced XXXX, XX% with quarter admissions to of patients lower As our the patients. but our associated COVID-diagnosed in of patients COVID revenues our the in less In a X% in the XXXX. declined in percentage total of incremental acuity quarter due Acute only reimbursement up admissions resulted third of admissions, this third

reduction from levels, was a pay declined of other $XXX to able The we second received million overall quarter, million in payments, wage gap, to only solid the in The in Acute volume quarter while quarter, million quarter hospitals inflationary of was overall internal volumes shift the of Behavioral reduce revenue there effect largely to result to the to in recover combined insufficient the of softness. capacity. to result in slightly in-patient activity forecasts. amount our Behavioral offset helped a quality Texas, $XX to At resulting fund below COVID labor premium revenue reduce offset to our third to narrow were time, incentive costs, same increased vacancies, leading the and to to capping there $XX forecasts. rate measurable an resulting which growth the continue further the from outpatient, bed decline increases to pressures. continue slightly labor below leading a in our in pre-pandemic allowed And EBITDA internal quarter in their of with the While in pricing in this surgical the increases tended EBITDA higher we the accelerated

Steve Filton

$X and quarter the related of facilities losses to impact that million related included third in the of approximately Ian, million to to September. million note losses also $X startup late $X We of Hurricane

For approximately losses the the incurred of in ended we've September connection facilities. million XXXX, nine $XX startup months with XX,

nine expenditures certain be largely quarter or earnings share continue -- opening plan to year, active $XXX our capital months of XX% on the of to softness disbursements, first reaction timing decline the activities year. expenditures about XXXX. we of quarter of we the operating reduced compared Our the timing cash during first million of was -- although our to as to supplemental certain of of during the we million XXXX, by The months generated new during trajectory $XXX due an moderated facilities, $XXX the pace in shares. from In was and the the of reimbursements. the XXXX. or to repurchases, receipt million the same We own acquirer third of capital the to this experienced $XXX million Similarly, for of the spent nine our payroll

the approximately we in estimate of that original of guidance. For shares our full-year of we XXXX, numbers the acquire will XX% projected

XXXX, million. at shares X.X the of During $XXX we million third of approximately aggregate cost quarter approximately an repurchased

at of first $XXX the XXXX, approximately approximately we an nine During share cost million. repurchased $X.XX months of million aggregate

Marc Miller

and announced Marvin morning, Eddie of XX this healthcare services, we as Jacksonville, In Executive most who intention of billion. Vice and Operating in shared revenues and leaderships alignment Chief Care the who XX nearly where facilities, ecosystem years, and Centura's groups, and and annual to system's Officer he announced Health XXX has at his retire. operating Sim to roles Prior Centura served increasing Eddie, Denver, operational care coordination, Centura of clinics. approximately Baptist led with senior experience, Yesterday more role, recently delivery responsibility Health, for three he Pember, Florida. excellence, succeeding XX in to the President for brings $X Health, supporting Acute of across than clinical responsible Division, leadership joining in Colorado, of improved served appointment was President Eddie clinical years at

of there, network was integrated integration clinically employed physician As and than more responsible network an with physicians, a XXX president XXX of he for physician physicians.

to X. and service. thank of Acute forward number Care his will joining and service company, for we Under a early look the has of start with organization leadership, our Marvin Division Marvin's Eddie XX as well December achieved remain in Marvin transition Eddie's experienced growth December, for we As years public for following the UHS. with us, period recognition on robust key and to quality markets, expansion significant accolades industry as in a

We are time. answer to this at pleased questions

Operator

question Thank of you. line the Instructions] Bank comes Fischbeck our of And [Operator with from Kevin first America.

line go open. ahead. Please Your is

Kevin Fischbeck

when have that XXXX. items towards [Ph] about to thinking of direction, most of XXXX I would look not, in us everyone's you're help peers Can your on that thinking analysis? don't given you if Great, base side be be fantastic, in XXXX. level-set starting that know kind any thanks. [hesitant the to] either comment if I guess about we one-time of to us should provide

Steve Filton

Kevin. Sure,

You has And this guidance to give until following earnings for that practice the February. never our not going UHS' been know, we're in year depart it fourth from quarter year. announcement to

of in year. a reoccur then impact about record of although described financials in the million our finally, least at is for that of expect I year. QIF, I that non-recurring suggest year, another tossing it reimbursement did clear something DPP not believe of startup special any on those quarter, $XX not We in remarks, in his or Other quarter, sort why we think we've mentioned our similar the the this the just this The opening a fourth Marc we've those QX peers reimbursement funds in of which been we've And I'll next the we year. do recurring about quarter that, identified third Medicaid out of should know consideration. $XX in one reimbursement, the and amount they neighborhood should next theory, of pretty comment sort quarter. in the program. the the next not we third losses; Texas, Q-I-F and hurricane, items million received of we for record Florida, identified be item, than to in

Kevin Fischbeck

be Okay, year should therefore Are of necessarily to PHE like we that's next this backing something numbers? really helpful. about you COVID tied kind and government money was a year's of the not thinking as that headwind or volumes out

Steve Filton

were government that higher was to I the hospitals I See, latter, deal all were the acuity HRSA programs or of whether think sequestration those help with subsidize the higher it's the hospitals, XX% waiver, to meant mean, COVID Kevin. add-on patients. and expense or designed it

of for fewer I As think less need there's there are patients a COVID that.

business little recover real they XXXX, variable as a particularly in been slower the think snap bit to non-COVID other declined, about and XXXX. and the back I we procedures in Acute have have volumes were COVID volumes, electives as think than is,

probably I think of think will most we slowly I think my continue that see is into back. mind, pace we But XXXX. recovery sort them coming in that the of the And the other is just as prevalent labor which, course, -- the labor we performance about the Division, tightness of the the Acute important item addition in in the market. of to think variable

Kevin Fischbeck

right, Thank All great. you.

Operator

comes line Ann the our Mizuho from Hynes of you. Thank next question Group. with And

open. go Your line is Please ahead.

Ann Hynes

would Hi, to for you three good good prefer range morning. still Maybe directionally, about estimates the didn't this given mention we think in on you XXXX first that press consensus guidance, the QX? And How gauge the months? year? should that low-to-mid to go for Is release. a

Steve Filton

issued previous don't we with the Yes, affirming and in our our so we're we're as which think, prior I doing. press consistent and guidance is what release, mention practice, guidance,

QX, in in it items, be in appearances and I the was a in long of reasonable I at DPP I think in non-recurring think, in et the conferences, end we reasonable of third Florida, the as to particularly as the top mentioned some during of public a with that should degree like I that we especially practically trends half quarter, previous place saw achievable, moneys, cetera, the guidance, I continue target. lower not But think QX that feel the some very guidance some conceded my response. the

Ann Hynes

XX%. just also reducing year? presentation said continue I All just you year? Can your budget into I that right. is you're how know talk view do the that you've think year, a Thanks. by of And by you think just for one will CapEx and this your you drivers for XX%, prepared wait-and-see follow-up that, or next reduced expectations repurchase next should I question, we for mean, in and next share your about that

Steve Filton

the prepared what rising presumed abundance the just was want standpoint, at. an on at $X.X our original in is from environment the trading cases, that, certain $XXX I XX% so and done billion said I original like the interest clarify currently rates think, we'd number $X shares. that's obviously caution. as What in again, a we've just cautious. been and said I $XXX original of we've think higher of from price for year something, more originally, we've Probably of dollar about Similarly, In billion trends, repurchases, I like million XX%, both Yes, what out share $X.X Obviously, repurchase of trimmed million-$XXX than million forecast, guidance the to billion. appropriately likely a more to our range. about an of CapEx of in to be that operating in remarks we

stream We continue prudent one own our our EBITDA earnings to believe that still is of we own investing growth can the make. investments in most and

their I'd to specific precise about give of when CapEx about million-some-odd more We'll think people models today, much as and ranges acquirer XXXX, guidance, So, about of we'll in an February. be it repurchase of shares in you active share But share those we repurchase. what I million CapEx be continue $XXX suggest are think year. next million-$XXX our sort into think and $XXX for assumptions for our

Ann Hynes

thanks. Great,

Operator

Thank of you. And from Noah the question line our next Comen with FactSet. comes

Noah, mute. open. is your line may Please Your on be line go ahead.

next will move our of and ahead Austin with the go from next we'll to Research. Okay, line come our question. Wolfe question And Gerlach

ahead. open. line go Please Your is

Justin Lake

questions Hey, quarter. Justin at Wolfe. labor a obviously you job the contract couple on in here, first wages. great this is did guys of Lake, improving Steve, Thanks. A

already quarter fourth of You're kind your at targets.

then us higher to next what offset on continue of we moderating get in permanent for year? is Can so you give doing stabilize running just it your your by the any lot growth or here? idea of employees do point, one, an wage that's you be wage a can And growth. expect to that color does appears So, how to

Steve Filton

Yes, Justin.

the some we in able reduce further on to down should yes, that pay of those next intend not of bottom it's retain levels, to increased sort think reducing I it's and million-$XX the to line I running pay think but we plan million of Premium wages be $XX the So, of to pay reduction cost I Acute pre-pandemic. was point, I To premium talent. to get all premium I get down maybe first stretch having that a realistic quarter. mean your the quarter about still because second at not that segment in a that think least question, to recruit think say we're million pay. another is to $XX don't the falls and to yes,

in said both we've times the base been basis over number running, say, think levels. XXX than inflation wage probably last several to points that quarters has XXX I higher to going rate a of segments pre-pandemic I'm

it's And pre-pandemic, So, if to closer it was I X% it in April, closer Acute X%-X.X% now. to was pre-pandemic, think, X%-X.XX% in X%-X.XX% it's now.

months. those I think like to to how reasons we'd prepared next several trends is we're that over specific not the the sort see out guidance about one of talk XXXX

that I given pressure actually and other and somewhat that, think a we out pre-pandemic that where maybe between over on see inflationary wage inflation think levels there, levels. the But the return and are next it pre-pandemic be we the may of months. have economic some number, several we'll today seen number, probably a perspective maybe to somewhere not of lessening to to but pressures of that's wages, contribute I the

Justin Lake

Got on you just to kind went it. my And question of already inflation. second

about and were they it talking inflation, beyond One like labor. of your seemed peers talked

XXXX? trending inflation, of into you we fees, when are curious, seeing professional think Just instance, pivots Anything think impacted of that's costs, should by that things outside for Thanks. about kind you be about any supply that labor could there?

Steve Filton

statement, mean But if experiencing certainly is and overall wage the pressure the an on portfolio. look I clearly income inflation we're our basis biggest throughout our Yes, line. at salary on you

pay, example, the I although key numbers percentage driver, focus a again, of facilities. wages in reducing is number pressure. think as an very As many think, growth as that, some small of will that by will premium But permanent vacancies is our our risen we but costs, do our inflationary I which have we as overall can of volume significant this offset clearly that it's they utility And higher on, drive costs, many filling again, us help one, can. if

Operator

from on our the question of move question. with And the next will next Cassorla Jason comes we And line Citi. you. Thank to

Your line ahead. Please open. go is

Jason Cassorla

thanks. Good Great, morning.

reversion moving measurable Just prepared would on the in or you would around surgical onetime construct the you outpatient gradual forward, time? believe remarks setting you this do over more in a volumes, this move shift a to your a consideration more and the call of quarter, expect is as a shift back sustained

Steve Filton

settings obviously going context of the outpatient certainly an to sort has of in period broader inpatient Jason, settings decade. a the industry over been this for time for extended well shift from on

a I hospitals settings perspective, From emergency receiving Behavioral cases rooms. think comfortable people think more it outside accelerated in during I of pandemic. and in some the hospital care were

free one our standing We just that have as department. seen example emergency

around today XX would been busy have We Have I pandemic, country. over six especially, to about months. the XX last those of the during say and extremely the

care comfortable of are reasons there. just I for think variety again a people more receiving their

investing payors have business sort move of to of this outpatient. we COVID normalization from further mean. for to think a to People reasons development And hospitals the concerns of of I -- And back opportunity a pressure have But in a other thankfully, [technical will that. acknowledge part -- degree to we all and continue COVID the taking segments to difficulty]. are the advantage business we will outpatient to more been in certainly our quite -- we to both of return obviously there bit as move are surges. away and about why further

the the trend been takes continuation I think business some we But broadly that’s And of trend more that. a pandemic. businesses place of and cognizant our of are think I both our in a very time. into I that for accelerated it’s just in strategy somewhat account, think during

Jason Cassorla

And talked on in COVID Yes, about And about just the the year, Medicaid the then, the up and a I potential as that of okay, you early some incremental down just on volumes, the thanks. emergency wind next you of health I the as but have there think public your we pressure of here dollars guess past but next of considerations follow what Medicaid to is re-determinations rolled if the also the could there was I know business. also for rates an that ending coming early, be for think both outlook just are it’s side given year SMAP? in end. is States wondering

Steve Filton

of level, and the our Yes, offset difficult creates level ending I necessarily think SMAP Medicare a the at headwind reimbursement inflation. some I mean at I I the be XX,XXX to think especially to mechanically from Again, sort don’t for although sort foot think of government going fully probably it’s material. it’s of incremental Medicaid

that we to inflationary and offset pressures of can pricing think these that biggest or way presuming the can quite the the volumes, are and will pre-pandemic to above levels, to be frank, offset perfectly a inflationary think frankly, increases because pre-pandemic that don’t I return going volumes be beyond we are account face. all I to

Jason Cassorla

Got it.

all thanks for the Okay, color.

Operator

of Thank our you the from with our for line and Credit comes A.J. question Suisse. one moment And next question. next Rice

Please go open. line Your is ahead.

A. J. Rice

everybody. Hi Thanks.

First be the I thoughts just of crowded out COVID bounces of good terms that easy single better nicely. very leverage, sort X% and even cases psych because thoughts on little some any to normal any assume X% updated year getting describe that mid But businesses ask we an given about on Strong that Behavioral the a know volumes? you're trends may strong quarter. back about historically to last margin X% between in to a at but is mix of comp, back in you I against where revenue revenue the are hospital -- Obviously, age. and growth just psych cycle and some up as that, updated the and quarter? the digits of equal in or

Steve Filton

a we increased the the clearly struggled said of pressure the if times isolate a patient Behavioral or our where that to during COVID just resulting already has no having cetera. it have out of sick, week closed more and two, population, acuity, higher some there's no of no the challenge there's the just AJ, And the of reimbursement, the to really pressure a there's surge, we increased periods have business, in an pandemic, business, there's in on creates et business been experience more number patients labor Behavioral even labor. COVID more often only for there's I rest Acute tight that COVID it's think utilization, the than employees from Whenever there's during then has beds, benefit environment.

as said think, we'll Behavioral I strong. closely think revenue I business. going sort challenge here. have another the growth I like is in vacancies. of a as see that period on fill address and straight So, quarter, experienced ability services the reflective in I when many in environment, related see second that. that's in able single we've the to think been of We sort -- of think the more labor pre-pandemic low upper XXXX, revenue Behavioral what of to previously, in nearly is quite matching do And to QX problems, of continue may able patient many the COVID we admit the experienced quarter don't of of And and to as not And I labor more more to to in issue, post-COVID to which historical to you able we're to can our line about think relatively times, what that. know mid-single-digit a demand ability achieve And The we we've patients. least progress make digit the COVID able was long to do we're we're that achieve we've third remains endemic trends. sort talked that at is to underlying growth, environment, as continue But that, winter surge for or being being historically able an we in a our utilization, we've

A. J. Rice

on like lot mix, see the give? for starting that stay that not metrics what per on about because is metrics some updates Any had you. and particularly of question a some are year length a payer if the favorable on I those COVID. little on of improvement commercial around year-over-year, optimism to last benefit next going Sequentially, comment you obviously just stabilization they're to any in side of revenue for at want would the some there? year. was was talking of look of rate even admission, bit a Any if a side, meaningful adjusted maybe And companies the of comment and on then Acute Okay. showed a And metrics

Steve Filton

maybe of in I think his metrics mean COVID opening at had Marc Acute I the costs. quarter directly length control The decline. of the sort reductions those is think patients most, our this stay is question stay to of the add the we most I efficient high is I number are the as year's I that related that related believe not if to reduction to XX% Yes, opportunity, to significant more discussed be in further stay actually acuity have of in we and that X%. of one remarks. year directly possible, of length the COVID think of in diagnosed length Last would patients, are

significant patients, of per all patients, even and our many a For commercial basis. paid on patients, our of certainly of admission chunk for we're almost our government a for

that to to inability traditional same degree costs pandemic the of we there's the with struggling do the of very some or unnecessary. we've on to continued with in of length we're reasons, but two has reduction reasons, that venues, lot other have, additional the And subacute they're length because issues and refer day patients stay. the We're of stay So, focused struggled is it during capacity really for extra without a an a of reimbursement. additional number of just incurring to

question, the mix lot volatility of as don't other during I your As had far in think a we've pandemic. payer

times, in say I we Again think just it's of would stable be more to continue. and and healthcare and get to to, specialty a that continues probably manifest historically and what would that getting outpatient And care will be that and hospital now their I a I then we to or thing look more the getting their hospital started that say a number living in people So, and care forward accustomed they've has that endemic settings and and said as getting as stable. seeing working I've same COVID gotten think environment an environment, trend more physicians, itself will comfortable settings. primary people

A. J. Rice

lot. a Thanks Okay.

Operator

of next UBS. our from Instructions] Mok with [Operator question you. line comes And Andrew the Thank

Please ahead. go Your open. line is

Andrew Mok

think potential you Hi, Wanted would point fourth in level you the quarter? I that’s question, follow-up on the to fourth Thanks. you that and the today mentioned Steve, drive Justin’s to EBITDA labor into in million to based $XX to visibility on current in anything morning. going improvement $XX improvement have another million improvement of good quarter. sequential trend else Do

Steve Filton

obviously say peaked Mark would the is, Andrew I then success pay. million third was million $XX we’ve QX. had significant and quarter. as It $XXX Acute of reducing a All amount in in in at about It QX, said, premium in division $XXX million in this

don’t we we’ve we to we It’s which a trend target and can on some of that trending think pre-pandemic. point. the I that a continue level realistic believe that premium yet it that’s it number. So, $XX that don’t amount think will. further seen has this that saying, down there million flattened believe at Obviously, was appropriate. of But continue of clearly and that’s out basis reduce I propel can not I a to and that reduction. sort pay is is fixed of

Andrew Mok

it. Got

Okay.

follow-up, MAT assisted opportunity think, you you’re Can the characterize update Steve, enhance to the how progress footprint the Medicaid there a broader your starting As I and Thanks. that you would you over this year months? next treatment on line. your XX us in mentioned earlier

Steve Filton

see I doing continuum process this areas. MAT off it’s of in some space. We see sort before type kind as a gap one, boots growth inpatient, MAT across Yes. settings. of in or developing a ground, we much -- just I three at it as sense virtually of the the mean, And our treat of relatively And in in acquisition facilities really driver of think care diagnosis kind Behavioral doing as don’t it’s pursuing huge moment, some was outpatient a two, of all it fragmented the on that enhancing we as I’ve mentioned sort as very necessarily really the fulsome small future that. a the

part a country. maybe to So, it’s in to the services much But of really one of being to at some we’re markets. much, opportunity much most that of broader providers comprehensive going -- more or strategy least the Behavioral of do our in provider the continue pursue comprehensive the of

Andrew Mok

the Great. Thanks for color.

Operator

Stephen our And Instructions] with comes [Operator of Wells you. line Thank the Baxter next Fargo. on question

Your line Please go is open. ahead.

Stephen Baxter

just thanks keep question. ask but you Hi, I think on your challenging your yield or Was for discussion overall up specific to commentary a to that. pricing the be that government Yes. wanted I a for that And with follow-up to clarify the earlier, inflationary suggested to guess pricing it pricing Wanted your might yield pressures, yield? my actual an first would’ve your wanted of think to been yield for what negotiations get be do rate in of you new will be your you. book guess just commercial commercial to year question then incremental I a XXXX. would percentage contract And the XXXX? update? what on typical compared update Thank in the

Marc Miller

Yes.

revenue not we at called comes they’re clearly So, that because and know sources from simply out keeping up moment our with of the government my comments half fact previous I think the inflation. that

years sources the continue we from challenge. bigger the Although, those that probably over I of next we’ll incremental believe that to think increases government get was that couple

seek rates commercial higher of sort and that payers our the things, greater to in continue need on side we more from acknowledgement environment. reimbursement think of operate we inflationary I this commercial to

taking On has the previous that’s Behavioral a constrained. aggressive talked with side about been in been because calls part business capacity our payers We’ve relatively of we’ve been that in number pricing that -- in stance overall we’ve a which the in stronger strong quarter. were

that going payers for if away, the come reimbursement those market most require are either we’re you will, levels to patients lowest it us to paying go to or turn our terminate us So, makes them if or payers. it contracts. of to to sense to to up Because and sense sort makes inadequate, of terminate those

On again, our contracts this many been the et sort how Acute of of side, have cetera. of idea renewed, and

little our that in them XXX managed care of day that bit have contracts most or a the is short-term all out virtually outdated think I out. sense of have XX

under market, an our rates, there’s opportunity, think So, to we where that contracts where have think a be we in cetera. et where Acute for and leverage we renegotiating Behavioral we amount of might think that press an greater appropriate may we’re spaces both payer

will we’re definitely seeking more pricing our business, side. So, shortfall yes, as on government of the the and the aggressively commercial we side clearly clearly of that. get relief describing side, on again more being the I on was sort And

Operator

Mayo we’ll from our go comes the to question. Whit Securities. you. And Thank SVB line question next next our And of with

Your line Please go open. is ahead.

Whit Mayo

Thanks.

quarter? on have utilization if much in Just the XX% what more you rate the follow-up contract bit Thanks. idea but got was in end for maybe Steve, of of your Acute that an versus I’ve little how a was SWB one improvement quarter. in the the wanted at second, towards quarter around to labor the do bill third trended pegged wondering you And just just favorably of exit the quarter, rates? of

Steve Filton

is of that is Yes. premium pay being both down, in in combination demand or temporary this I the I Obviously, utilization. comes as demanded think my well. required mean improvement traveling the them a of down for for nurses rate and that comes mind, and rates sort intuitive are those the as and

front month previous a the peaked. of volumes as have referring think but decline down. in and year So, you steady in say of even I premium in the pretty I I a is what we it’s value specific when of I my pay would incremental beginning -- mean with, pay since was to I the response, mix COVID a don’t -- seen premium sort month rate numbers know, by in coming have of me

a how amount it exit quarter rate think beginning. was than was we certainly of the greater it And lower in going so I the to pay or higher premium or in a view reduction our

Whit Mayo

in contract to the that point, as do labor of Behavioral the number Okay. a if pain but for just a spin you had know significant segment? have and you recognize that. it’s I not And see wanted

Steve Filton

mean the Yes. I I side, of front a of don’t Acute it’s think third about the it me. I but is specific in in historically number what been have

Whit Mayo

out. came I corporate this where in bounces Okay. thought one might number last lower than shake know we Well, just but one overhead, it of sort around,

Just be to anything any out developments or Thanks. call helpful. would

Steve Filton

analyzed overhead in QX nothing corporate say consistent last year I the numbers, that. of as we specific. Yes. think year, was in experienced this I we’ve but that driving terribly pretty terribly don’t material with those anything there’s what will decline

Whit Mayo

guys. Thanks, Okay.

Operator

Taylor question you. next Thank Cowen. our Gary with line comes [Operator the of And from Instructions]

Your open. line Please go is ahead.

Gary Taylor

Hi, good morning.

sound a impact hurricane into couple it damaging a to fourth that any me, expected on for quarter, like material was continue nothing just ones be continuing? would the Just the that doesn’t but quick disruption,

Marc Miller

suffer correct, any physical significant fortunately facilities. Gary. didn’t any in We of That’s our damage

the the be were recovered So, most I should all in think quarter. and temporary fourth impacts

Gary Taylor

just is of earlier associated there or the make revenue had number And I gross it, I’m companies impact a want for with thinking EBITDA a million, and that know then you’d a EBITDA? provider tax sure the to year. DPP I the XQ understand is a mentioned of then on I other $XX Florida that number in or net have like sort the

Steve Filton

$XX Yes, so that million the is impact. EBITDA

Gary Taylor

stay I just labor is up I am line Okay. in segment, expense last challenging there contract look struggling is Acute and operating almost I any there. million up that is it think for year-over-year. when to me that understand at one, modeling the then don’t that’s And $XXX other most perhaps really line the

maybe two I drivers and largest like three up think is the it’s of cited professional just Could and or utilities you items $XXX us that bucket. most what insurance million about maybe just And think are? help that a in that largest confirm fees that? the year-over-year,

Steve Filton

Sure.

where loss So, calls and clearly And subsidiary subsidiary our that line to is have medical XX this loss XX% more think on line. biggest of medical in And like something in a insurance hospitals and previous we driver is revenue. degree like there a our line. operating distortion the talked is ratio we our the subsidiary most the insurance that XX% that for the for about I record insurance significant the because expense revenue And or of that other insurance is revenues. sort subsidiary, otherwise, it distorts any increase ratio

expenses. quarter, $XX third insurance revenues and is million about the increase in So, million there $XX subsidiary to in

think we of that rather XX% other like I have front those. And a me. of I adjust numbers quarter-over-quarter it’s in like think operating don’t reasonable go-forward. can the XX%. But, provide increase you certainly that’s a expenses, If out I year-to-date probably than certainly

and numbers. to of out those think we subsidiary point for separate a make insurance of XXXX I guidance when the impact give will the We trying

So, follow. that easier to understand I it’s for creates. people the difficulty

Gary Taylor

spend other the and the when share on Acute [utilities correct, [Ph]. Steve, buckets professional think three of largest OpEx Yes. we fees, have about I queue]

Steve Filton

out there has the past most physician say after in insurance, things. Probably Yes, the payment. of I been the adjusting would miscellaneous is a bunch most recent item other volatile

cetera locum that recorded would and increased including hospital-based line. physicians et our payments subsidies physicians on be So, for physicians to

just of you and some that, then so seeing impact impact general broad inflation. And are of the

Gary Taylor

Thanks.

Operator

our next And Pito question. the for you. question comes Deutsche our with from And line of Thank Chickering Bank. moment one next

Please line ahead. Your is open. go

Pito Chickering

thinking And of the XXXX did in sort rate Three range think XQ about reason XQ Behavioral quarter? and Behavioral Yes, improvement margin any my business for much. not number it X% October? is focused good the on in Thanks about in questions Is should continuing there Number number fourth low morning, fair wages run in to X% right questions. in pricing how admission to two, Behavioral, the that the quarter? is behavioral for about three, we if so September guys. track fourth range, taking one, X% if follow-up XXXX? think margins behavioral growth Thanks is

Steve Filton

two were better. think these think and soft. tracked I a two combined. we Behavioral of -- Yes, these was I And in mean made sort of months the look, August the -- I comments July have hospitals month broadly. September volumes made most Acute rather think reflection really both I And broadly. earlier comments

But in we think tend are we confidence upward. that’s pandemic historically. think periods think will the our volatile I to So, is have trends is more they some the I learnt what that been trend Behavioral a upward. have lower say experience. been I But And that thing again, the utilization, with is during trend than COVID bit the of volumes

single continue QX, if growth have upper sort we did the the forward. that as going yes. And single reason mean about I revenue the to As for think in to I mid allow and see to digit far of think as I we saw question margin continue I should that is enough be shouldn’t that there improvement? think quarter. we is in don’t why any answer we

Pito Chickering

raise on What’s you XXXX, Or like 'XX? in are times Acute your sort hence, XXXX? it should same in of full-time Acute 'XX the than the employee levels in you are inflation wages, did think the with follow-up during wage in be and, coming wages we all seeing multiple less why competitors just generally

Steve Filton

rates, care saw peers multiple mean wage XXXX, during Yes, definitely I during and acute often we raising particularly times our COVID surges. again

wage said, will reasonable, I like mean without hope 'XX, more really and another in significant saw I that As wage volumes our COVID surge, I January with rates 'XX and January stable, be that hopefully is think will as more and we I in Look, are and of XXXX. financially, be most understatement. people mean think I peers our issue I reasonable know, the may increases an other more that most rate think is, then be not-for-profit struggling

think, they're less they that pay I believe to 'XX. than is going in what outsized appetite will maybe willingness we as much give So increases, in hope again, of their for have characterized to XXXX the did that an be

Pito Chickering

thanks much. Great, so

Operator

the question. comes our line next Thank James Barclays. of you. question our And moment next from with Sarah for And one

go Your line ahead. open. is Please

Sarah James

Thank you.

you away remarks to what cap in that you what any you previous like in due positions. difficulty] percentage were Behavioral said your had of to that admissions the to [technical prepared give looked able Can You admission vacant in pre-pandemic? turn filling lower and on XQ, the color

Steve Filton

didn’t try we across publicly. that pre-pandemic. out internally. I'm decline metrics the those because or been because same capped because for have I've to generally COVID reason were cetera. metrics consistently, isolating volumes of it, know QX. not every you number think But I they're do reluctant to don’t same-store as we manifested volumes do give Yes, call tracks those volume, that. volume portfolio of et than difficult capped But track been lower impact hospital the was again, of down. the way, of many either have could is X% et We increase to the hard internet, measure And And the satisfy to main we we a beds staff. it but was but I and pandemic what it going cetera, call beds. give units Sarah, times the can revenue the give could during patients growth that describe I percentage see -- come precise think It's we it be or to is over what call were again, as when know in enough will that we it COVID that in the have uncapped inbound it the it say And again, COVID is was certain able what beds in because we significantly we And

Sarah James

you're 'XX? CapEx openings year it. is conjunction influencing guide Got might reduction shortages. the, have thoughts And builds given leaning with commentary it on that new related openings forward? happen your on million around going roughly, impact And $XXX staffing does in novo What what this your in in de that in XQ to

Steve Filton

it's think I a mostly timing issue.

I from capacity ultimately, that make to return, think a they'll sense. timing already make an perspective They sense having that we're cetera, that may pencil the sense existing in economic in But et that which we make have. a environment out staffing have get we a built. difficulty add not reasonable CapEx investments view capacity to

large reality already So, I XXXX don’t probably any capacity projects know is that well-committed that be XXXX adding expansion too. there's scheduled the would -- -- because capacity are

in deferral sort impact I thing, our some that CapEx 'XX. 'XX 'XX think I or 'XX, to than, 'XX, immediate probably rather out it's of projects an in and pushes to delay think, that

Sarah James

That you. sense. Thank makes

Operator

of question. for our One Comen And with question Noah next the our FactSet. next line comes Thank from moment you.

Noah, on ahead. go Please phone open. be is mute. line may your Your

Operator

All would like right, remarks. further questions time. any at turn Filton Steve And back this for I to showing to further over am I conference no the

Steve Filton

look thank to to like just We'd their forward and time everybody morning, -- this for

Operator

This ahead. conference call. conclude participating. does go Please for today's Thank you

great Everyone, You day. disconnect. have all a may

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