Universal Health Services (UHS) 28 Feb 242023 Q4 Earnings call transcript

Company Profile

Participants

Steve Filton	executive
Marc Miller	executive
Ann Hynes	analyst
Justin Lake	analyst
Joshua Raskin	analyst
Stephen Baxter	analyst
Kevin Fischbeck	analyst
Jason Cassorla	analyst
Albert Rice	analyst
Pito Chickering	analyst
Benjamin Mayo	analyst
Sarah James	analyst

Call transcript

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Operator

Good day, and thank you for standing by. Welcome to the Fourth Quarter 2023 Universal Health Services Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Steve Filton, Executive Vice President and Chief Financial Officer. Please go ahead.

Steve Filton

Thank you, and good morning. Marc Miller is also joining us this morning, and we welcome you to this review of Universal Health Services results for the fourth quarter ended December 31, 2023.

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

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

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

Marc Miller

quarter. in similar of third in million pay quarter of the acute $XXX Overall quarter, which fourth in XXXX, Our with of X.X% per it as from year-over-year. to admission, experience increasing revenue their $XX first acuity Meanwhile, for for peak lagged by solid admissions million adjusted fourth trends the demand year-over-year. what was and in XXXX, Net strong the quarter pressure the was to of volumes well, of services from premium year, fourth increasing quarter, were adjusted the stabilize. the as which payers as have quarter X% continue much increased X.X% has XXXX, surgical started the amount hospitals in to a to of declined compared the

expenses, year XXXX, year. which physician subsidies for elevated in especially our revenues For by the the flattish strong full margins largely resulted care offset were acute full

per acuity adjusted our up revenues in per by same-facility day patient residential X.X% at patient consistent greater behavioral revenue lower growth quarter, drive health which primarily versus day day. centers, driven our with robust our the revenue at a treatment was increased to increase relatively levels tended acute by fourth to X.X%, in behavioral experience. The our year-to-date hospitals the the quarter During hospitals

we our we a impact has compared XXXX the impact begun certain to of XXXX. X% for continue quarter, although stabilize. discussed growth, that as Additionally, appears behavioral last to see increased has states redeterminations negative in of health revenue approximately hospitals behavioral EBITDA With to for Medicaid year on same-facility X% it volumes, full also

Steve Filton

$XX period December quarter, that also the fourth July the Program covering million Access note We recorded of with the we recently of XXXX. in through X-month Mississippi approximately in approved connection Hospital

was Our quarter year. during $XXX million with for during million XXXX forecast $X.XXX the during was same which cash expenditures generated billion compared compared $XXX XXXX, $XXX and during from the operating spent quarter to as We our million of million capital the consistent to on during full XXXX the original $XXX year XXXX. of activities as fourth in XXXX

of our million almost shares our shares of XXXX, that date. repurchase repurchased XX% Since X, of XX year For program. own than January $XXX representing the have outstanding shares, to XXXX, of more full million pursuant acquired as we our we

XX, XXXX, billion $X.X December As to credit million capacity revolving of available our we pursuant $XXX of aggregate had borrowing facility.

Marc Miller

in will acute restrain from and underlying the businesses. volumes reimbursement which patterns segment We metrics shift reflect we release, pricing the resemble the was of from settings XXXX to for provided night's the elevated in acuity full XXXX and historical our both variety from their will the results in inpatient our continuing assumptions increases services payers last pandemic, a outpatient our The operating in acute business of before ways. anticipate levels, will moderate pre-COVID respective to experienced in increase, year, despite trends largely core and the that but operating forecast conversely, pressure

We largely premium expect and in continued improvement in remain stable that pay XXXX. trends labor general trends cost will

Specifically, in XXXX. to expected headwind XXXX which are inflation rate the by overall were a expenses, physician major in grow

As press and same-store an $XXX adjusted demand XXXX forecasted the late filed growth CMS for release, operating X.X% growth ] were by services in robust, and X-K includes believe early January. our We is results supplemental to noted disclosed patient in Nevada XXXX. experienced of in our in million exceed behavioral remains day an $XXX we approved (sic) in our by additional forecast which [ XXXX us in million revenues, December our

In and we quality metrics A that growth. are volume driver business that were both positions, and care our volume of in XXXX, we certain an but of measures our be on increased XXXX. satisfaction specialty pleased segments, of continued improvement workforce vacant these even patient in to filling continue in of in focusing success behavioral shortages to acknowledge to significant upside markets, due obstacle more is we

are questions We at time. to this answer pleased

Operator

Instructions] Our [Operator Hynes from Mizuho. comes with question first Ann

Ann Hynes

that benefit for I I days. you just short-stay happened? have midnight national throughout X these you know in think XXXX? actually the want that had think X, early plans change QX? hospitals inpatient one to of in the billings receive a that's early QX large are kind that built managed benefit and you get you actually care Does Do of year, Did think And saying a to in the of in you lot regulatory starting this about QX? actually better rule. from ask do January they of denials actually start might

market? includes me tell redeterminations change considering And this growth Medicaid this benefit exchange for guidance you also there's are big your kind positive benefit potential a in the And in like any shift health also, you payer and for can for guidance? mix for assuming what any of

Steve Filton

Yes.

business, their to at of least in I pressure acuity prepared Marc as think in combination projected remarks, which acute but revenue think we loss denials medical his would we -- excuse -- which the from saw changes, patient we much me, also the saw et XXXX patients improved were in attribute aggressive and including status I rising, stabilizing include So et and observation, variety cetera. more ratios from QX -- what ways, for I XXXX increasing a admission recasting as payers what for in payers. Again, commented think of of inpatient was cetera, per admission a being

anniversary practices effectively, aggressive I think the billing that is changed in don't behavior of starting our you're more of some we seeing the I think think But the all during to I we're payers quarter. fourth quarter.

in that little volumes we're we as pricing bit improves. XXXX think, guided, and As moderated acute I far that said remarks, assuming in the in how segment, a that sort Marc his again, as I of acuity think

normative historically what of returned acute mid-single-digit X%, volume. of And we to in X% to price split pretty growth, growth kind So care I I be a would maybe consider and evenly think what model conservative pricing, means more a more little running volumes, sort been really has which being less is have we're a that of little than than aggressive we're higher bit about running that. which been about but being between that,

But midnight payers it's be behavior sort don't use I of change. et there but how in We it's until forward, on the of the have feel differently an guidance X rule we think may from see specific a impact the our believe cetera. not going the necessarily part payers opportunity will material included incremental we like there we really

Ann Hynes

follow-up. Great. Okay. just And one

labor And that labor? volumes your impacting both back still You of is in behavioral? held because you it prepared talked Is remarks segments? your about are how much this in the being do shortages Or volume. mainly maybe think

Steve Filton

said, and we've been as so I the several labor mean, think the I businesses market, differently. I affected it's last years, X it's Yes. think, tight very throughout a

the using obviously, temporary et at fill of our cetera. label acute higher cost generally able been On all and we've traveling side, positions. a necessary But often to nurses,

Although indicated declined remarks, in numbers those as our we have significantly. prepared

basic a on acute in side over several behavioral to of we're X%, the between growth the segment, unable the positions our pretty curtailed volume. price think simply mid-single-digit probably our in me, again, fill means has is split evenly -- our Again, last year for number volume cases, years, next guidance and X%, X%, On in and the growth. behavioral side, that it I excuse contrast,

think has a about bit last I volume, conservative and segment, little which that we're means more a which years bit behavioral has running of about couple aggressive the little year. the more hot price been this In been being soft relatively

day our was in growth X.X%. XXXX think patient said Marc I

that So a could do think that our some in fact, we our But in assumes that's know run precisely, positions, know something we guidance the say we hospitals, can moment, there fill we we realistic all but still markets, at that. that we if, outlook at higher volumes but we of not least. could than in greater filling, acknowledge don't I some positions have difficulty are that

Operator

next Justin with Our question from Research. comes Wolfe Lake

Justin Lake

-- you gave guide. I midpoint specifically first up obviously, range Nevada the about EBITDA looks ends high the in growth wanted the The the to Steve. at you like the X% Ex ask the end tailwind. at XXXX of -- range, that, great it a before,

-- maybe Just X%, we're splitting little able a probably I the expected ex-Nevada. think than we're -- understand, trying better to bit, hairs X%

of that why Just X% inpatient. curious any to you Or typical? 'XX if a really comp by Marc or instance, point shorter could you EBITDA in maybe And you anything the than one-timers out? business there were where within mentioned grow? want for the any is X% it's tough guidance, us what not kind apples-to-apples think kind on tell to Like maybe on going thoughts that's of

Steve Filton

Yes.

reasons strenuously, a acute Justin, in that's or at all, we in the in really our in payments look lagged argue that way significant reimbursement, reasons the quite has that business Medicaid that that Medicaid and the across excluding that I we million businesses costs, have over I not several any business of quite Marc years that with I to elevated is the is is the of remarks. excluding the our series of referenced think $XXX costs one margins physician what labor earnings frankly, mean his kicked there because one increase expense made arguments an particular, up Nevada appropriate think or both first would the whether So that of -- the supplemental subsidy last of is

minds, simply adequate of our these in at increased rates some amount ] to general of bringing back [ Medicaid but expenses. the supplemental us that partially in least are for specifically us So increase programs compensate these

about way growth the necessarily think we as you them, way I'll But our ignoring your mind, question year-to-year, asked my it. and correct answer not is of try in doing it. So the

physician hopeful physician bit be a expand a would in margins. cautious difficult we'd board, just I achieve about we better as I is a been we've after labor, to guidance, that the of that that that of expense I do and targets years say in the and we are we've in set example. have margins able guidance. of subsidies elevated embedded difficult the would general been these years, bit costs, to if we're across little the could say unpredictable, ability What environments believe last again, revenue several XXXX costs, couple But sort our increases inflation operating a in are perfect over do our than some faced that

think growth we've about in I look both businesses. how profitability cautious prudently the been So at we

Justin Lake

and helpful. number just it's you for imagined at And DPP, I'm a should don't you a out I in payments. business. supplemental over And these Steve. on curious, That's in where I'm to the actually said, actually estimated the XX-K, but gone then, That it like lumpy, that and part never great put look mentioned it disagree be time, table it's Steve, here us showed go you of XXXX. as sitting And guys to the just place I

$XXX of XXXX, in EBITDA. think it I million XX% of benefit or was net

benefit XX% XXXX. it's Now million of in or EBITDA $XXX an guidance your

like that And potential years. do see at of this the next been that couple this to or you continues Nevada? could do last a I'm state just Or stabilize over it's see curious, moderate starts you the because of like -- growth some think point do part any be obviously you of kind the big

Just about it curious think forward. how going you

Steve Filton

Yes.

expense of elevated if and you appreciate pressures, think think we've by that's has, look, I I an your more look, go peers. by you to particularly Medicaid inadequate because track many this over good it significant I And mean with space, But of reimbursement, has think expansive trajectory. not you upward I inadequate if you've acknowledgment the public it, by and really an suggested, states provided you that payments supplemental been commenting as a make has however any on specific several in in Medicaid in area it's inflationary environment disclosures really So accident. last and the point. want been an years CMS again, I probably I disclosures our labor. in than think back, years our I mean,

frankly, are for a absolutely supplemental reimbursement states position the to necessary these -- a to a population receive them the And providers. not in provide keep bonuses as otherwise will quite providing hospital not keep as But that position to able necessary monies in to services them. to be providers

there honestly, until these adopting programs in a talking we our We not have of other approval are number they disclose know that don't submitted quite about other sort are do states. them of get down conversations for So them. sort further the and road But happening of that thing. are states and that really that

the the of they're I think can think don't reimbursement about our the really cetera. -- so growth any about impact the CMS, reimbursement. growth, rate, of these growth but the overall they're or cutting growth capping in risk And exceed I about, these as we're back states programs. talking growth, sort to certainly your at talked don't talked programs, limiting at I et talking of capping capping in point, the Medicaid that has of about commercial that maybe think just

stop could strikes really net a safety are to material see them where curtail that programs happening that the that are the designed of that difficult the become it them CMS in they terribly these for way. it growth once but or extremely rate be programs and/or I so So state slows, target on would reliant implemented, hospitals the to me

Marc Miller

think I to not-for-profit because that point go of the these be to backwards safety this. on hospitals that that's going it's hard net, main rely

bank other to had And states a point, for this. seen the future, before. reverse Steve's And to to we're never this question lot can in more so of the a hard on to as going that crux be of or it's we you your in we But in I whether know. not seeing lot them fact, think activity never

we it's going to So think increase.

Operator

comes question next Our from Raskin Research. Nephron with Joshua

Joshua Raskin

profile, than you you about attractiveness start looking a interested behavioral the term, as just health capital either sort one updated Question, of those segments on segment the of return acute at your and views in relative be of more other? different care in longer specifically has whether the either or believe deployment, the the I'd think one attractive thinking growth

Steve Filton

behavioral I of capital, the Vegas. in we And example. financials we've obviously, Vegas are most going business, our return. Yes. of a dollars higher earned we margin anyone probably or I I of in market of outsized And think, to has at mean, who sort that's our not it next sense to significantly a it's business, Las invest looks returns. for in return. a think of great the capital can the wherever amount capital over highest deployment dollar I just but it's line see more higher earn Las the in that opportunity. we about agnostically opportunities think that about decade the want for But our individual is a think always part, viewed We've which invested last of of millions the tremendous hundreds capital

are not share in We our market, market in stop to that and #X investing et about that market cetera. protecting position

has look compelling we us, that's for as at repurchase over X last and I of demographics and that made, environment. capital because of return we we'll our I remarks X continue think, to market think think that, obviously, well, devoted capital market, of well. deployment decisions by And in to in the been our the terms So competitive the as as amount years or I a the are, been said, commented share market, significant as opportunity

Marc Miller

obviously thing I'll now probably -- But said. just opportunities past. add looking said. Steve one the and what at we're We're looking with to I agree than outpatient done in have Steve everything we more

are maybe think to good markets, historically. And more for so then percentage and of those presented in that increasing we'll sense capital being and did I more greater make our outpatient, at there success think if us. than we again, deploy And look to are at continue we them a returns they our there to

Steve Filton

In segments. both

Marc Miller

both In segments.

Joshua Raskin

Right.

sense. makes that So

but I be, in deployed so in in more you those conversely, depending then. in what would markets supply? environment markets the guess, about maybe do I are I margin accretive, I'm accretive. any And accretive major seeing by you on segment care my are short opportunities curious of maybe competitors? Those not current the margin Vegas need are think supply term, that capital theory, for additional follow-up sort there's of though, that's Are And certainly in if guess, more return your acute the example, But case. the guess

Steve Filton

We've market continued mean presence hospital a we that's on so my the new And as if Riverside in the market, a in where opening we, County, in Florida. building positions. in had West in significant of opening South Gardens, I success. are significant X been expand hospital have in amount chronology success. heels and historical significant Yes. ago, very Henderson We're Las of where Vegas you D.C. Beach California, know, Hospital getting we XXXX That's Texas to our a Henderson, correct. new one a late years I'm Palm

nonhospital to then -- the side, behavioral So -- joint and on continue hospital add do nonprofit we ventures and beds partners. with

So think again, there lots I are of opportunities.

about us also think for mean, challenge to And where be do markets. the in our we I investing your Joshua, competitors to think I are judicious that. is I point,

because as lucrative has has been very for us. of HCA invested think I both a heavily Vegas Las return it market in well

sort competitors well. to broad don't doing. really our take the earn certainly a again, of returns characterize that. positions see whole we see to what sort we of have franchise greater expanding of by build the would difficult capital as those that And our need varies on way. It our and advantage by But we competitors our It in had yes, we've is competitors success. want of really to view We be to are So market. we strong where chase deployment want and investing

Operator

Our next with question Wells from comes Stephen Baxter Fargo.

Stephen Baxter

Two what the behind I expenses of the hear inflation could guess, in if you acute little there. to of have quick fee XXXX wondering how the you contracting that -- think on to seem or on business. on the was is particular? I you you bit worst level physician good a comment ones visibility

thinking acute step on philosophically side? you've lot how acute company. on could been the business would creation. you And focus There's kind size the the increase inbound kind be companies, then love a at I seen about the wondering that about think of of I was care management back there a just the and how your as couple guys couple of the business. in portfolio potentially peer are significant whether across capital just contemplate interest on a value you examples acute of a of of examples you of in whether to hear a

Steve Filton

Yes.

locked saying, of would the been, the have in? a found what acute is had us profitable. The businesses cetera. physician country, physician greater changes provide the in to the are you or environment, providing particular, less have Do hospital-based answer little your can't a and contracts were et unable far we in number do businesses, There to rates simply were were they care us bankruptcies, bit the locked cetera, And asked services it. no-surprise "Look, any companies of hospital made frankly, in yes. in? of months because were providers that coming those the of The billing you and subsidy et those either that this." those expense think ago, operating reality the I that we physician contracting hospitals to groups, terms subsidies XX have you visibility in in act, do notion flawed. is, if asked, were And The

the is arrangements physician last our will X.X most years, I of I hospital-based that believe what over have So recast. been say

been cost dramatically is XXXX. But a think I statements, providers. the now stable say, in I our 'XX made of cautious incumbent such asked, say that increase in hospitals either think do the that the employed done with I put that all XXXX. either again Answer and some more popping the in comments and beginning But more think think increased really back the that shouldn't XXXX. would in and We about that all They've 'XX was concerned because that us question We some I reflected of late doing a into response We've cost early development. again, or in that volatility providers we cases, to physicians overall it have that other we've area in We've under in is really happening the going our been a much largely after care to that it surprised in financial we've one we're XXXX certainly little control. areas. acute in ourselves. why it's will new reasons the Justin in again again in or guidance think gone renegotiating I so, RFPs in

Marc Miller

Sure.

what the in are As the about our there, portfolio rationalization opportunities, interested and we we companies carefully the familiar referring current other second very acute care to question all most of in we out with do acute can to those for companies, your markets. track you're some care of question what portfolio

are there to that opportunities hospitals certainly to we are we if within that look that. pick other do are markets already present, would So up

are if as But kind we'll made do opportunities were in earlier, opportunities, we're we markets expand of of pursue addition as And to well. Like new thought capital said that, sense, companies. would them. to. agnostic portfolios we to But if side there whole that with into certainly we these are Steve which deploy there the to familiar that we

Steve Filton

merged ago, at properties compare behavioral them management we've to X a done question somebody that bit where transactions on last We can that behavioral the years we've the that. because increase but We've to take not we've tend today, that the of in a then are different. the facilities, to list portfolio behavioral again, has there I you open where and facilities, we're directed material. wants quite closed side. sold been business, individual XX-K not fair your efficiencies. underperforming not over properties amount know they're behavioral and they're make looking portfolio of from facilities, XX to If And XX of was disclose management quite would or the we're business But I years. see our point to

think we're the for I ready question. next

Operator

Our from with next comes question Fischbeck America. Kevin of Bank

Kevin Fischbeck

Great.

seg you the update Just on give back things. volume on wage of where incremental gating growth that drive businesses do wondering if psych us of to the across is couple labor is an wages raising could today? return think of you still factor both How facilities? the the potentially more and to extent side acute percent about to the a And the a just

Steve Filton

has would in wage moderated its little a I Yes. say bit growth that highs from both segments.

of in again, And And said sort we're reducing of I remarks, in prepared that made we've one premium think labor is, which thing. differential temporary annual in fair think inflation. to includes amount probably range second... traveling and overtime shift of I'm wage we that obviously, I -- X% progress our sorry, a X% pay,

Marc Miller

sense. we areas It's in is, sense if makes figure to out try that as but or think, would as whether to as that, No, to a not and capacity. as one to more make way done increase where look often quite wages that we easy certain we are areas. might definitely look And there the have it question not at raise we

lot for The is we high in us other these facilities. have of a occupancy factor

side positive program is to spend ways and few changing less not not are years. done figuring time to last we're really the to a So and like more beds, we that increase one Steve on talks growing that our programmatic looking do how behavioral cannot that offerings at constantly about on do have will the spend portfolio bid time of capacity. us that just What we changes allows rationalization facilities out for reviewing facilities but that think growth, the the we've And the facilities also certain that, of that effect. in and just things

doing that we're So lot as well. of a

Steve Filton

we I efficacy and that to help of you're the really that's do of us the But the paying our just thunder, why wages why -- add, X the they're because somebody position the making everybody same last hire X in and facility. or positions or asking, would everybody for will that else use last I increased making think that temporary if the short an last X% X% we labor facility, wage. in Kevin, would increase what to $X hour is be the in that facility when about workforce In attract think, volumes. or than And challenge we more order,

that that's every do paying we consideration understand are we but acknowledge have can, We there we So that to certainly implications fill we use. the want to position to up to that.

Kevin Fischbeck

I guidance more growth pre-pandemic for to just maybe little a the volume hospital at guess kind bit acute be to years X% just being later, like XXXX, Okay. XXXX rates growth and you be trying volume look normally forward, back same-store of X% where X Great. or just growth were would thinking growing X%. care you'd about above X% push think And your going you're then get in I I only when I on want you back I guess X%. when or to of

still might XX% your have be in those volumes or levels. you're above -- thought XXXX, XX% would So we

growth? growth right normal normal within of up be Shouldn't your more is in markets number? there why [indiscernible] X% only So off or pent-up demand demand normalization like the

Steve Filton

this as period been Medicaid would about declined, XXXX the for you're $XXX what I comparison no had about, to cetera. Nevada exclude it's Nevada in say et we Kevin, our think I and comparison increases a a particularly from I that margins because though, Yes. the million inappropriate in questions wholly time. we've think talking this, result, is virtually again, we've supplemental mean to have and And of of Nevada

et recovery say we're that flawed with we we cetera, that's then it's to to I approach. And But $XXX payments, So pre-pandemic million still Again, the again, more is in acute were a those going to that not from get it. XXXX. I of even the looking think be exclude division had at flawed to is a more supplemental that the the closer there say from to to to growth think excluding margins. comparing and believe where margin-wise go way to payments supplemental

Kevin Fischbeck

kind Sorry, feels feels like It rebounded line more me like yet. around to your long-term my really was the volume trend volumes your volumes. the like it question guidance, to haven't of

not in in still still the another X normal, growing X rate to of I'm to couple ] you [ volume? wouldn't back why trending So growth sure only years? Shouldn't growing long-term faster be you're be for you

Steve Filton

I mean actually that the X%, I of some point, for that in starts Honestly, admission at growth, are level over adjusted by projecting moderate. admissions or historically to I grew our XXXX year. high X% think those we're think

Operator

Our next with from Citi. Jason comes Cassorla question

Jason Cassorla

wanted I behavioral. on Great. to just ask

the factor you're rationalization You the a perhaps portfolio behavioral current that little to occupancy improvement, discussed talked you're I XXX for growth below Can around behavioral past the moving maybe to opportunities forward? the And of some still give labor well? XXX you accelerate on in as more volume labor you've levels. potential around the us a maybe I JVs 'XX. expansion efforts. at side bit as M&A guess, basis just in With or rates facilities the on against contemplating bed pipeline what just backdrop are know gating sense the bed business for expecting points growth, pre-pandemic growth

Steve Filton

added around somewhere beds so behavioral XXX new this I think I we in Yes. year. mean,

much comment a more will a maybe frankly, But side I probably think seeing, that like as outpatient little year. Marc well. the next numbers, so bit I add opportunity we're is made on as just think the We

of that across services, So all do including expanding plan services existing our and we lines et and addiction as to to continue well. are cetera, outpatient treatment, expanding

mention Josh of Raskin as think kind higher higher I returning, you margin about a business.

attracting of, that's more investment So I our there. dollars think,

Jason Cassorla

Okay. And question bit. then Fair a enough. up following earlier on just an

return Medicare Just Obviously, this around for low And dynamics talked expectation of curious your you've growth. mix redeterminations, on exchange of next volumes in what year? are about payer 'XX. acuity

could And point? into admissions the indication would if great. And seeing Just or Just that given remind picking at then there -- uninsured uninsured any backdrop, any year around expectation 'XX? percentage of trends next color how us admissions those that can are just into any of be this up? what you if you're kind be

Steve Filton

No.

a in of overall in admissions. the of X% mid-single X% significant which uninsured seen run haven't admissions, change our sort to We digits,

pandemic dynamic -- lower talked pandemic, taking I that of think in is both Medicare, lower providers I think, deferred big and of emerged have those acuity the the procedures change the postponed patients think number especially the payers acuity, more had seen XXXX I which place. from a or think I in as during we've what we've that about

our but as they again, as moderate just moderating, all for XXXX. not volumes forward. us And well been for And have going peers our in

I would goes especially think which in our in is agree acuity let's what's acuity that and it quarter fourth the are say, pricing moderating, I think the lower volumes driving increase, dynamic.

Operator

question next with from UBS. Rice Our comes A.J.

Albert Rice

Maybe just first. to comment on premium pay

you started the you a think exited $XX there think have in Is said of the do quarter year. a you rate? opportunity? premium And tailwind pay from together, it good $XX in million versus the much all were Do the you is year 'XX? you million at as how $XXX further putting run you I million 'XX first reduced and

Steve Filton

Yes.

was the quarter So the down And to not that A.J., first clarify, number has million -- -- XXXX. of yes, $XXX so obviously, that just come XXXX, considerably.

there pay to $XX getting about is ultimately we -- in number premium think have that still talked a million quarter I of we sort range. the think

dependent happens what $XX of $XX still A million volumes. lot opportunity. on million of there's to is So or that

premium have levels that than I'm yes, been. get the volumes originally premium I back of quarter, not think a as to pay way has strong I because they've to sure million going part bit further around certainly about we $XX goal been but we were mean, a But the to pre-pandemic we're have acute the higher little be anticipated as least get pay. should of at there. reducing we able remained

Albert Rice

at how $XX any don't have year 'XX number you how tailwind Do create a chance? million, much of much by have that 'XX? full And I pay, versus have just the stayed but for that would number you premium

Steve Filton

Yes.

[indiscernible] I would So million, we million year, think that $XX were Because think I be of off half A.J. think the improvement. $XX the on my its own like But probably top that a would would a about quarter. probably million running head, in -- I first the of $XX

Albert Rice

ask both And more redeterminations. supplemental then little a question, bit my on and Medicaid, just the follow-up from Okay. the

could together, we've net to it tax I or you supplemental, all When a much -- the after know just On what programs. put individual provider 'XX understand versus talked how I gross is 'XX, about got change in be what that. guess you trying expecting you're it in of

plush in release I'm And the that you wondering redeterminations in the think, just a little a XX-K for business. behavioral press [ headwind mentioned, then that Medicaid the were if you more. out bit I or ]

Steve Filton

Yes.

Medicaid to disclosure earlier have programs that somebody gave of to mean, about some the the that the you robust detail the we a had schedule. I lot these that increase. Obviously, that. you at XX-K can suggested, is estimated it's of So night. if a million [indiscernible] last supplemental $XXX I'd a biggest 'XX million think from we at look filed But increase refer that. we the I take 'XX, people But $XXX of supplemental in shows a table piece pretty see

side, the which far months Texas in states Medicaid said, some the and we've child probably the the what as redeterminations. think Arkansas adolescent a a effect some as business that to of and Southern that minimal other and relatively these and is to our business side, the a behavioral think, A.J., in affected on child adolescent extent We've that acute and bigger is And last -- largely from on the perspective, on X notably I large effect other a states, the Texas we on most it's and Louisiana XXXX in our population acute the behavioral had attribute behavioral like redeterminations, business. I in softness, business, seen

the the commercial population of we're in have The taken that. like -- alternative some of the or think program. already Medicaid we're programs CHIP exchange most out starting place, disenrollments or this these to some for of sort worst are part redetermination of see of We reenrolled either in

we're be So imagining will XXXX I the think that of in impact redeterminations limited. that

Operator

comes question Bank. with from Chickering next Our Deutsche Pito

Pito Chickering

'XX at talk guidance, the half has coming about think Pricing for of from for pricing. revenue would 'XX? down robust very versus and thing the few seen that care guidance fourth the rate great. about Medicare, in behavioral of Medicaid different I been a strong any rate quarter? good what seeing on payer the you've last in pricing looking exit increases managed color How then of is the And in we sort the behavioral, be that you years. should between mixes Can sustainability On you're step think

Steve Filton

Peter. Sure,

our that's has I in So think behavioral driven sort adolescent as of things. child really is actual XXXX and One again, strong and a the I by in lot of think, been we commented, X business the residential, pricing, where is. softness

higher definition, pricing the residential patient would to days we per weighting increases describe as by of so And adjusted that, patient or days acute sort revenue of and what day.

and kind starting see XXXX, the challenge a to muting emerge think we'll As I residential that we of effect outpace growth, of pricing. handful particular from growth emerge that had acute in from residential disenrollment we have facilities the a challenges, on regulatory will as

who And that for or last of some success I particularly had to degree, particularly a effort managed historically, on but consistently, we doing aggressive than to about talked higher our XX part in to the less that anniversary issue capacity payers is think back rates. The been pretty over constrained we're that's, we I facilities have in months think, have think, and increases. starting giving payers, that, lot negotiate adequate already where markets XX us, pretty I and to We've a Medicaid go other impact. are

can So our the going that will pricing sense volumes. for the again, payers, continue general bit and get but our of XXXX acuity while to behavioral from is strive increased a to side, offset our we budget be are little we certainly decline on maximum by increases

Pito Chickering

conservative margin flat for labor sounds it for just at is million is simply Full-time And known Great. slightly XXXX, savings inflation. normal. just pure is Okay. margins million, over then guidance to sort X% of these on this to growing $XX tailwinds? now $XX XXXX like there to acute labor a reimbursement any Contract point? this headwinds despite Or is Are revenues guiding X%. all offset physician

Steve Filton

Yes. $XX expense. I this and be physician as I sitting of think but years, we it the to we've call on pretty a projecting turned When kind of pressures big increase. conservatism -- a it that. It were $XX twice I expense, of by couple to broad million taken year in were before, a physician when we in out Pito, informed we is last think good is a Again, that frame million, exact ago, here caution were tried increase a example the the

accustomed have aware issues, a even of So the we're et when to. little more couple bit of years cetera, last volatility we're created than

guidance. account So that as fairly of think for to were I trying we view cautious I approach some to in what a

Pito Chickering

X% $XX coming expansion margin million X% and it cetera, that? $XX be normal revenue cetera, nothing normal from ignoring So assuming let ask on a savings me contract labor, the to million, the et differently, growth, et what would

Steve Filton

Yes.

it's believe in the business guidance, I answer, we're before. can from just cetera. achieve revenue guidance. inflationary the better I'll So our to hopeful of bringing Pito, be if that currently normal, question that what environment, more and our we'd I sort think define than repeat hard out high I are we in margin a how therefore, said because a you efficiencies reflected that's view is in to target higher the et

Operator

comes next Partners. Mayo question Our Whit Leerink from with

Benjamin Mayo

year, can recall. First, that Steve, disclosures I out Medicaid have also considerably supplemental point in every XX-K your to just I you payment initial wanted those exceeded

any Medicaid but theme have workaround is many So I just for really to is record, through you there's question on you? that actually where have XX, that wanted now for there's solutions to IMD now years disorders actions that wondering a XX my those Medicaid gotten states see the into been any I'm manifesting where just mention for if the now growth covering evidence use volume are substance that adults waivers. policy

Steve Filton

wouldn't effect on Yes. IMD material would of I had has impact. I has I mean are no, the a But in say that examples specific it there waivers. a probably material individual But not think broadly segment. I markets point affected there it's say facilities yes, broadly, that are couple a could by to. I been

Benjamin Mayo

to as itself on elevating back higher outpatient priority. And Okay. your now comments a

programs. IOP partial for that hospitalization Now and reimbursing Medicare's

Just for wondering about talk outpatient obvious referencing when behavioral? that opportunities if what up that's if opens for you you you're

Steve Filton

I really, continuum. full mean, I think, is Yes. the

on We is cases, call the from opportunity. and cetera, Advantage an necessarily affiliated again, have in to of outpatient many of stand-alone point, et And growing the with more facility. those outpatient, a But of partial what programs, existing including all your programs besides across be diagnoses, the -- pure we're sort we're it's continue step Medicare I But inpatient are always think focusing down sort what intensive in it's care hospitalization population and Medicare we the facility, now outpatient. we addiction behavioral it's others. across which facilities not of to maintain or had but means programs the our behavioral to -- which even finding need all segments for also

Operator

with Sarah comes question James next Our Cantor Fitzgerald. from

Sarah James

Could you're assuming earlier, on the increase what Because of So that seeing of I'm speak are to mid-single of some bit work side? to seeing was pricing of little X% about to X%, of your in kind peers blended physician on and point fees. below talking you the about your the digits being a little comments rate halfway bit products. the that commercial traction able being on a

you what So wondering side? on the for looking that's acute guys like I'm

Steve Filton

Yes.

are characterizations those think I fair.

[indiscernible] cover of consistent we're peers in getting be our to terms an if commercial overall to pricing that But that by business, our And X%, to or you're the guidance So in -- increases saying commercial probably X%. whether -- to in we're so et contract, experience. contract cetera. varies seems talking with able increases are we're the really that mid-single-digit X%, life citing about that specific of overall X.X% on assumption twice

Sarah James

investments just you would Are are Or side. guys focus on bed behavioral investment? of implementing those you technology more of what Great. and segments? on And doing your acute either where the sort on one checks virtual you technology on any

Steve Filton

Yes.

think our already are would facility. a I mean, investment, highlight. this specifically, project we have talked before, electronic in underway. I I technology but That behavioral medical about implementing an lot in we behavioral, is record So of and we've

an with on patient and like their to number experimenting we're patients of in Watch efficient testing a device et location cetera. are and of track rounding wear We kind will patients, behavioral our we track Apple more eyes to something where per able lay able solutions those technological to we're and when facilities

So that's in improving the efficiency of our as patient rounding facilities well. behavioral our

Operator

to like questions showing further Thank time. it now closing at remarks. turn no you. I'm for I'd back Steve this to Filton

Steve Filton

Yes. first time look We'd speaking thank couple Thank their after the forward to like quarter. this and everybody a to for to morning just you. months everybody in

Operator

you conference. Thank concludes This for participation in program. your today's the

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