Tenet Healthcare (THC) 30 Apr 192019 Q1 Earnings call transcript

Company Profile

Participants

Brendan Strong	Vice President, Investor Relations
Ron Rittenmeyer	Executive Chairman & Chief Executive Officer
Dan Cancelmi	Chief Financial Officer
Brett Brodnax	President and Chief Executive Officer, USPI
Jason Cagle	Chief Financial Officer, USPI
Saum Sutaria	Chief Operating Officer
Ann Hynes	Mizuho Securities
Pito Chickering	Deutsche Bank
A.J. Rice	Credit Suisse
Whit Mayo	UBS
Joanna Gajuk	Bank of America
John Ransom	Raymond James
Ralph Giacobbe	Citi
Ana Gupte	SVB Leerink
Matthew Gillmor	Robert Baird
Frank Morgan	RBC Capital Markets
Patrick Philippe	Barclays
Matt Larew	William Blair
Steve Tanal	Goldman Sachs

Call transcript

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Operator

Good day and welcome the Tenet Healthcare Q1 2019 Earnings Conference Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Mr. Brendan Strong, Vice President of Investor Relations. Please go ahead sir.

Brendan Strong

Emma. morning Good everyone. Thank you referred the to are slides today's in website. on company's posted The call Please statement the slides. note cautionary in information the included on the forward-looking

addition, of our events financial including of current our not limited uncertain. earnings management's currently statements statements. In based events, and with the position. statements and but that respect forecasts nature, outcome statements their constitute expectations timing plans Actual could are as represent future to statements differ those These available future address and statement. forward-looking forward-looking today materially on outlook forward-looking during any to future relate to note and that please business These by discussion but from certain information matters and in expressed results

factors or please Tenet's respective of that filings. Tenet their information refer in Form and update risk to other dates. statements obligation the to any subsequent discussed XX-K more forward-looking information assumes SEC recent most as For speak no

cautioned Rittenmeyer, You Ron these turn to over not any and Executive the call Officer. I'll of reliance forward-looking Chief Ron? statements. on Executive now are Chairman Tenet's put undue to

Ron Rittenmeyer

you, morning. good Brendan and Thank

to posted implemented will As in see the solid materials positively impact We've several to continue year. we you had a we start changes that can and the successfully yesterday, are performance. our

pleased expeditiously improvements I and refine, that to remaining also and we so point. address year. to performance awareness that with a the the with leadership very positive having execution. continue We're will of are and impact. with to in operations that the our maintain We our our finer continuing our a continuing continued sharpening set stage organizational in progress balance acute about may are more them structures the improvements am make effectuate that arise of resolute We're for to our issues can simplify, change

quarter. We on outlook. generated EBITDA million turn of above quarter $X.XX our adjusted EPS delivered high-end adjusted consensus well add consensus over of the some wanted above EBITDA, or another our outlook and in We the Dan, to million to I revenue. this of adjusted Adjusted $XX strong midpoint $XXX I of Before perspective range. and was the above EPS,

expectations. delivered results meaningfully that quarter even were consistent pleased the hospitals flu Our year a with season improved delivering our and optimistic volume are much We the growth we the stronger milder despite first about growth volume progresses. as in

we new-term pressure in opportunities have base. the our and improvement efforts we in making positioning We equally we cost our have cost place for our outreach on revenue positive lines improved service strategic are out where in hospital believe hospital our investment. offerings marketing patients through go of We base enhance management part focus of believe are some and to hospital will in is this chronic specific on portfolio, for need greater a seeing our are our are momentum markets key growing patient community many demand disease our and Looking and prioritizing and who over our meet services. alignment important, to to due but service we grow business margin as we our improving of forward. grow as a investments margins, The we our combination leveraging competitive

So, as targeted important we these investments move. see and a

at Conifer's divestitures by transform performance previously the will broad-based in initiatives effectiveness. than that we on opportunities and in area progress increased that of in across a Conifer other continued continued the organizational management, continue to particularly overall have we great The expectation million the Conifer accountability. DNA of EBITDA I've the we approach remain with targeted before primarily versus becoming driving more highlighted see had very serve business where an we inventory describe also with right to And all adjusted of us of strong in way on at that our and our our XXXX, improve of Dan's used delivered trajectory. control year, X%. of strong surgical back very term results Conifer the marketing expense the throughout the given a communities impacted by year in forward tying to with XX% growth gains now. XX.X%. of margin pointed USPI in meaning consistent move improvements started specific a adjusted are a and be now last to and of addition these up points carry cost solid Tenet is sales we less margins of targeted to part for comparing XXX think remarks. QX, improvement per coupled healthy on grow that with to quarter, focused organization. really confident working $XX other on quarter we growth have we another broader first about quarter are programs place with really segment. growth is commercial in teams to we at I'm through new better margin was which quarter, we areas, improvements that the and volumes have had with the strong As more will development EBITDA our place discussed than Conifer basis is make strength case and had top this nicely EBITDA USPI all EBITDA. further business were upcoming revenue for is when of We Conifer in on customers leader volumes. declines of the as which Revenue we initiatives

on exclusive strategic continue work we've regarding potential the to review, we the as discussed On transaction. basis a

which discussions weeks we shortly the these to was recall, And may you call, As continuing. approximately started exclusivity nine before XX QX ago. are earnings this

I to or result on in transaction. customers just Conifer Dan that And set progress. delivering date third-party And for members as outlook for Tenet adjusted Those the and step the quarter, can ongoing. beyond to before mention our to qualified provide our we said will Dan? over EBITDA, no reconfirming I negotiations of are EPS. be We for committed outcome I have well a a effort, assurance this that for shareholders. additional discussions best comment We we results Conifer, cannot and as XXXX this to our details turn the in before, there for it comment announcing engaged these and want remain on that advisors as team are revenue, next adjusted

Dan Cancelmi

Adjusted which high was our adjusted $XXX quarter. Ron our end Thanks, range everyone. above was of million EBITDA for the outlook quarter, the EPS of good $X.XX, the range. and generated above We in mid-point morning the of

the expectations. of segment $XXX X.X% after Ambulatory Hospital with Our million $XXX less $XX million. former outflow EBITDA EBITDA was basis generated which was Conifer's to and was U.K. XX.X%, free with to of cash our XX% points divestiture for our up facility-level of NCI million, flow up EBITDA business. range margins was of Aspen, million, million XXX $XXX consistent an was adjusting up EBITDA, and $XXX adjusted

we stronger we is for much year. typically us a and anticipate first The cash flow-generating through move the as softer results quarter quarter

volumes. Hospital to Turning

comparison. the quarter. to first compared As five, from last and were X.X% meaningfully in improved acuity flat. adjusted per increased first season admissions Adjusted Revenue admission per strong especially to quarter, admissions acuity difficult we slide flu shown and modest essentially continue on increased performance grew in adjusted the given last year. increase growth in year's a compared X% to Expenses benefit X.X% our admission

Increased larger malpractice cases. growth expense to as to As we will in this anticipated a remain resolve continue contributed pressure second malpractice quarter. source of the also

adjusted the of as of the half comparisons well growth. in first with exclude California, stronger second as more $XX the in only admissions year, increased cost cost quarter. management in $XX we million the combined level expense the to malpractice forward should favorable in business result X.X% Looking risk-based on malpractice contracting increase our million increased expense lower If per

Moving the centers flu-related to increased last up surgical X.X% million business urgent visit On revenue visits revenue basis, up first cases X.X% represents in segment in Ambulatory volumes EBITDA increased the Non-surgical grew increased to a our business, same-facility growth of lower seven. a of non-surgical centers, Aspen our revenues less of revenue facility-level care and NCI slide our freestanding our NCI were per per care generated X.X%. on same-business system-wide XX% business, EBITDA Both primarily X.X%. the In and and with million and quarter X.X%. urgent X.X%. centers X.X%. on X.X% $X basis, imaging six and day these EBITDA in exclude grew due surgical year. less which up In and declined visits Ambulatory that $XXX to rates the case EBITDA

a EBITDA points. lower our again first base, performance strong of once $XX to transition Conifer with EBITDA slide in million was Conifer's continues for deliver customer the last was was basis the of up to up and higher on XX.X%, EBITDA you fees now year. margins million consistent me expectations. X. Conifer quarter Let termination margins of $XX which on Once Conifer's incredibly adjust with revenue XXX

these discussed, previously a The on other majority sizable declined customer divestitures Conifer one by by were XX. and revenue XX.X% and primarily clients. Tenet occurred the of quarter, first Conifer's expected As vast due December including Hospital in to in-sourced that the

Moving to our outlook.

segment, and revenue the and adjusted cash views of EPS key components on our outlook free XXXX are reconfirming for flow. We including by our EBITDA adjusted

are contained outlook Slides through to also Provider reiterate on the quarter program. Fee XX. details want California call our X Additional XXXX regarding my comments on I fourth

expires recall, may June you on As this the current of XXth year. program

not in of quarter For third program that modeling anticipate under the purposes, revenue we note this do recognizing please the year. any

And Tenet XXXX. year new was will revenue and EBITDA quarter, we of delivered about of the result approximately a program the criteria be range. fourth the summary, financial revenue outlook not record high program be year-end and the our means of would revenue with above upper end this the year accounting USPI outlook in growth we for are in the driving $XXX shifted EPS under continues XXXX. of strong solid for a half range into revenue next our for from As recognized our of consistent million results strengthened the reiterated fourth improvement. is met from Conifer revenue to business. the quarter margin in full If $XXX our then California In of are have assuming this we deliver Volume program meaningful results. $XX this million in operating year's Hospital plus should recognizing this as quarter. which million

turn now the back me to Let Ron. call

Ron Rittenmeyer

pointed wanted we're close had to in as back Dan. Dan move Thanks, saying that we going to have on – not as and we're forward out I've very the by as I just good we and strongly sitting quarter. But past. said, a this we out that as

We well. continue to execute

And review, in of continue. transaction bullish the as and talking our we've potential we strategic on volume benefits hospitals the I enterprise our exclusivity in that control expense think see for plans in past. And been outpatient will we're traction a on tight XXXX. we beginning remain facilities to regarding and is that Conifer's across about. outlook and reconfirming was Positive implementing very maintained and that are the as the the

So for think operator the had I'll With net turn over a to it that, quarter. great I'll I you turn we questions. and now Brendon. Emma, to it over

So –

Operator

[Operator Securities. question today you. Hynes first Instructions] We'll from Thank from our take Ann Mizuho

Ann Hynes

in what you that positive had care said tough out me stood is that. admission over let thing know trends? Hi, Could posted think, remarks good less business that your day one on I one still acute you've the don't comps prepared the morning.

what So for was a this reacceleration if the one big care you adjusted the maybe admissions admissions me if obviously, guys know let day. of focus you to acute had for revenue And or ex in admissions could adjust same-store you was year. secondly,

couple you taking improve Thanks. of go further? can actions to into If a it near-term even you're

Dan Cancelmi

morning and is this Good Dan.

that. me address Let

our pleased about adjusted the about were and we it volumes admissions. admissions in XX basis and in The yes, points. improvement was It points an had flu comparison Adjusted X.X% quarter. So, were hospital basis was essentially to XX up flat. admissions were admissions on see impact

USPI absent better quarter, the I'd in volume. your the and the prepared business the that surgical flu day point comp. X.X% about volume To one remarks had less So out in tough be would on trends about impact my pointed as

hospital that So was same-business but volumes it But X.X% a surgical impacts was basis. X.X% well. their as our on day also growth

would roughly Our you impact hospital type surgeries but have of volumes down, were the the on X.X% surgical same too.

trends were surgical quarter. slightly I -- to the in So consistent would the say I improved

year In terms in was last first year-over-year the certainly impact yield last -- in of net quarter. the revenue first the quarter and the strong year incredibly on acuity of

growth admission the revenue year very were perspective. growth the adjusted Again quarter over comfortable -- peer because first our last tough was in our we revenue a with net I think with was was expectations comp last Our per X%. we're in pricing line year from pricing. And net

Medicare good year and the visibility rest pricing perspective We year. for this we're And commercial next of from have We year. a year. the our Medicare about a And know in contracted proposal our effect where over last XX% was in into in for expectations. went X% quarter XX% for is line recent update, fourth from the at rate with the most into

So feel are. pricings our with good we -- where

Operator

next Thank Deutsche Pito Bank. from question you. from We'll our Chickering now go to

Pito Chickering

Good morning, guys.

two So questions here.

on one flows. cash First

you in of cash why little the confidence ops this guidance the So is flow normally than first have operations? form you from into a year, Can that lighter yield from rest of cash a detail lighter. annual quarter more a can significantly and but -- on quarter go

Dan Cancelmi

Hi, Pito this is Dan.

the is flow and requirements annual year match. cash guidance generating typically full be XXX(k) due our quarter the why to flow move stronger as do flows our softest that's we reconfirmed capital address our to working we quarter, for as Let much cash Yeah, me our through employee primarily expect the that. And such first cash we certain year.

some of the of terms expenditures about It's $XX some year-over-year. invest In resources of additional capital did -- year-over-year, variances million timing. that's we in

year-over-year programs. whatsoever. previously of and about. terms we $XX a the the contract from million things our a on in where quarter timing that million cash We $XX there program. of the changed year concern have first of had lower last was year terms timing in Fee about just in No first point matter the cash A revenue for the section received I'd payments of how flow termination. investments see in not did the Conifer It's what I out estimate of couple the based Provider to this Also last capital year out the called of other in of and also approval of we quarter we California in talked comparison, this related

impact So that year-over-year. had of an somewhat also

million Additional $XX payments settlement malpractice about year-over-year. were

a Historically, an had seasonality say tick-up -- go slight a in have AR to that somewhat our up-tick did too. bit with days quarter. seen the then based the you there on So impact from QX. back QX of if years we in And through first oftentimes

at to office that impact central improve We also or -- we're too. improving -- long-term basis USPI our in back a efficiencies Platform our functions had business on USPI office our an and somewhat of

add still we'll But flow get you all our the up, with So all for back. we're comfortable when year. that cash it guidance

Pito Chickering

one going you Great. you And saw million first quarter its quarter, to the question quarter. in you the for follow-up contracting, fourth know, million, third $X losses on back the risk-based $XX termination

think, I $XX million, So million of I think losses was on revenue. $XXX

these But they because you are if numbers these about and you talked margin up acuity you talk contracts these patients. are pressures for these pretty about -- higher guys? when margin think coming I sort nice arising come -- from of right

Dan Cancelmi

is this Pito, Yes, Dan.

that. a We what seen. bit anticipate to come are we've from quite Let those hit going me losses down

business we on in the As move year, be losses much we anticipate a quarter-to-quarter lower the through basis. to that

changed that not that done management fixing entirely. on yet. have business it. We it we're and We're in We're

on make -- to we'll your contracts right the We sense the that continue to contract see get they to also point evaluate we're But forward. if evaluating all about footing. going business

Pito Chickering

so Right. much. Thanks

Operator

A.J. Suisse. you. from next go today Please to Thank Credit question now move We'll our ahead. from Rice

A.J. Rice

Hi, everybody. Thanks.

Conifer, it. I to strength. out of rather than just wondered two again and One aspects the of And last outperformance been of number quarters has this the of the the margin flush particularly areas quarter

have savings. move why business you're to it the that as would that And to improvement to there most being to it. holding doesn't of a systemic data and are any attributing side, tends management think know from reason much retain? revenue gotten away guys is retained. margin other of like have of And And I assets then more -- like that assuming legacy that's good cost you? the Is as Tenet I the keep have strong? being there rid about your said doing we're you'd doing it and is aspect CHI Conifer it on tend chance I'm the some that on have divestitures sounds that is you On it's job, in much Do a But others divested? margin profitable was inherent seem to if business better you you well are you something than customers, helping so how is be Conifer of

Dan Cancelmi

is Dan. A.J., this

some address those to of try points. me Let

because revenue declining well Fully they the well as divestitures, other as divestitures anticipated. were of as Tenet of terms In by yes, customers.

the terms do your of In hospitals business. we are point -- about retain sold when the

Sometimes we do.

they internal There are buyers the when we facility certain are revenue Sometimes with or process. comfortable more customers over don't. own take their cycle

us look customers aspects their services too. the and of get for all around until up minimum then at a business a decision running. get period to And of they transition time and arms and bring maybe many they -- However, just just it to certain business oftentimes for at everything in-house a make the evaluate

and we about year margin understood opportunity be They're day-lighted year. announced part so cuts Conifer's to recently that for lost going there's $XXX -- So to that. we that's business talked -- certainly or very, efficiency next so stick. more year program continue million that million We've We've have additional as why most very going this move cost sticking. past our have strong. and been sort to over been successful. And They're the and efficiency of $XXX through actions of some of improvement ways. it both Cost was has it obviously this previously. implemented been The had

continuing it's Conifer. we're the to at feel prepared focus to grow working performance what that's that's -- we're be we improve top an -- We Ron we're and -- mentioned so, good obviously area in his of about -- as line. able And remarks, to toward revenue

Ron Rittenmeyer

at And takes you time. there's cost. takes not sale. It's not that a I It's -- would Ron. where insight revenue It's -- and your a add the get do I -- lot -- simple as it retail that as a job time. lot and would is work better of target, this a develop of target just to a relationship bit provide and usually a relationships, lower actually with can time there's add of

Your CHI Tenet and that more say players help. are does scale the something scale And helps. comment they in mix about, the I contracts about wouldn't inherently is they or the contracts are. big profitable. are that There obviously,

I beyond that, add So, how -- more don't much know so I can

A.J. Rice

lot. Thanks Okay. a

Operator

now to question Please from from And UBS. go ahead. go we will Mayo our Whit next

Whit Mayo

was Hey. Dan for Thanks. year-over-year, looks down if about the he's it looking in quarter USPI, the XX%. Jason, Maybe consolidated but unconsolidated question or a at was up like revenue around,

pieces sort trying of So some quarter. It three this I'm to fewer looks reconcile facilities total like of the there're there. moving

you So I anything? focused you've more historically on did de-consolidate consolidating. think

out help So of tease Thanks. moving pieces there. some maybe the me just

Jason Cagle

Hi, it's Whit, Sure. Jason. How are you?

Whit Mayo

Good.

Jason Cagle

question, that about. start Brett And in seen, versa, I'm something locations facilities, you've We past. it's and constant we at bit that me in portfolio, after that two quarter point. quarter process the talk going Let of unconsolidated routine where done, lot little Usually then quarters into a first. often it but that's is facilities one. it's to outperformed many facilities and for two we talk And the the lot last To quarters our size consolidated vice with question with we're a the adding a sold the merged in your let the and quarters. this M&A. I'll We're the have first about

look talked equity we line, see overall This quarter you of XX% about. XX% growth you the growth and the if at compared to earnings that

So relative just particularly a the was quarter strong where consolidated. facilities this the unconsolidated were to

Dan Cancelmi

system-wide, Brett. year-over-year. is On just as it X.X% I -- Whit, a before was we've up same-store And again, basis this turn pointed revenue to out Dan,

Brett Brodnax

is this How's it Whit, Hey, going? Brett.

Whit Mayo

Good.

Brett Brodnax

mean, the Only when Jason a part company. don't of company, strategic to to what We do the that said. is I from we portfolio facilities would normal time we is bit think about view process. optimization a as our for thing time the reiterate sell I little that of

happened We we capture this in also we merge exactly can facilities particular And that's what synergies. where situation. think

the XX $XXX be a in we As had it for We really facilities the you We M&A invested pipeline busy recall, our relates added And to notwithstanding this strong. as XXXX. to space. quarter, that, million last year. continues very may

of an year the expect we So latter the very to M&A from fruitful perspective. be quarters

Whit Mayo

Okay.

to million two Is gain that the facilities that correct? statement, through unconsolidated So that income the the were relates divested. $XX

Jason Cagle

was, No. so last equity about Whit, there in What and year, I growth $XX talking wasn’t a over prior gain the million those. million on versus earnings year. was $XX

Whit Mayo

Okay.

is the flowing So affiliates, through relate the $XX that million gain then? to unconsolidated what that does

Jason Cagle

not sure. to to have Whit, I'm back get you. I'll

Whit Mayo

That's fine.

Jason Cagle

a wasn't There facilities. those on gain

Whit Mayo

in business And process on that you the that us my Yes. provide be any don't through profile of makes the you remain be the think on you would separated, is would to Thanks. other particularly co what a was But maybe framework a out for of could comment the flow cash anything number that of this say helpful? help can to sense. there Conifer know and question, want event I struck which I've I times and the lot think

Ron Rittenmeyer

Obviously, we that discuss On and get to have I your not that that prepared would I'm second to question to -- today. we about don't that. Conifer, answer point, if show

us stage, be So to for a I into get think this at little premature it'd that.

other any about Dan So that? comment

Dan Cancelmi

We're good.

Ron Rittenmeyer

Yes.

Okay.

Operator

We'll Fischbeck you. now Thank America. question from our of next Kevin go Bank to from

Joanna Gajuk

this the morning. Thanks Kevin questions. for Good filling Joanna is in Actually taking Gajuk today.

the margin you overall can your because you program California else commentary mean of or implies Still so. terms decline back it the EBITDA the you the coming So X.X% progression QX X% growth improvement year in you for anything full to QX So out of talk about Hospital will margin the growth. for flagged the flush payments X% in around rest and I flush QX? out, your segment to year, expectation

drive you Thank half, steam pieces there's just implies different second that? that So probably again us can remind that you. so the a

Dan Cancelmi

Joanna, this Dan. is

Let me hit that.

move year, certainly are which QX Hospital terms continued as In we that items pointed out are the certainly There year-over-year malpractice in we -- of improvement certain additional help. such will that as year-over-year the in the in malpractice down. that well as California. year-over-year losses than we of will will The Those quarter. half come business you comparison also get will the be saw as what smaller the growth the in risk-on as into volumes on year back business, through we first contracting focused -- much the

of we management. the going of margin business, other in improvement terms be which efficiencies to move year. through the on the In drivers tight continue how on as to we view to continue also Hospitals will margins We'll contributed very to we That's execute cost cost continue.

mentioned pricing. we good I very our from about a feel As pricing perspective,

lot a continue to So take will through initiatives on that we the move of hold focusing as we're the year.

Joanna Gajuk

leverage I you. if changes times target? of there Thank your terms And in so five may any target, Great. commentary leverage around

Dan Cancelmi

is Sure. Dan. Yes. This

on leverage focused and five cash growth. very or flows committed through lower, remain reducing EBITDA we times remain Now to to improving we primarily

I on five assure what call we're math any and can in can to one times reevaluate on. allocation do Again, guidance February, based we'll capital We still we the our some do to our focused you decision. achieve on that late As mentioned that's have work I have.

the about that on thinking always are We means. leverage and what impact

Joanna Gajuk

Thank you.

Operator

ahead. you. to Ransom next our from question go go Thank Please now James. from We'll John Raymond

John Ransom

on more to in But to talked business? quarter, know quarter. of that a good side were the volumes, pick a your flow the the fourth I if about Hospital going guess what you surgery is little the get pretty try to side on I surgery on the I Hi. strategy

Saum Sutaria

this Hey, Saum. is

So things. few different a

to surgical the turn recognize are I all, of to First us declines around. that important

things. So few a

very we're very, there our us the will near-term. operations, help coordination, near of focused in the on throughput, operating rooms care flow our ultimately our in and the access improving First the all, term to our

other you acuity focused obviously, the includes USPI service service building up overlap programs we're can that of higher through surgical partnership finally, Now, side focus then our demanded in communities to That more from markets that the trauma on the surgical expansion our many lines on very service platform on benefit hospital imagine the and Ambulatory lines. lines. long-term the as us greater as presence fundamentally surgical the allows two. with Tenet the between of get And

all thought and over service rebuilding services both and the represents in operational our of where the from process time on. trauma pathway longer So surgical surgical obviously significant of near-term period that high to a the things those they're around including acuity mid-term markets investments programs lines, demand we're

John Ransom

-- a an actual inefficient quarter dates those necessarily Okay. finally you slug basis bonds Tenet the at get fair to kind Conifer. pretty your particularly make-whole from cash with an switching this of you but not is basis on capital capital to all It's This allocation. is cash the generate, work starting if start and look I of provisions. annual on flow. of and maturity as cash just a and structure amount generating to actually your free down leverage

Has have your So I'm the floating changed at fixed-rate targets be debt Xx as love with thinking of just debt. -- aggressive leverage legacy say the team in more toward floating turn or drop from EBITDA management you that the companies was especially user wondering leverage around of rate debt. Most target and banks? rate to least a as more

Dan Cancelmi

that point debt decisions that in -- sense be toolbox rate at and Hey, that ahead Dan. will evaluate refinancing the make to will on time will based whether be the making, it's look Certainly that in we'll environment's tool we at. we where John, some debt variable as

of to about make-whole closer something that I as say open as of would maturities it your in and costs you the we absolutely through breakage say so we we're next The sense debt are also wouldn't if I get that point XXXX. to also the forward. So move makes we're dates. some those to it's definitely year we I'm going down it, come do but year it for cost there and us, maturity will to certainly consider and forward saying some as move move

John Ransom

me. or is seems something Is legacy for me. know than but especially practices struggle calls your alone Tenet less in peers. a more one -- volatile? structural more try it -- last probably That's relative out it what led just that something -- peers, speak that can't in make in to this item stand for to bit than hospital guys. line you more place with all I to And Thanks. your much line operators And does kind to this a there it the opinion Tenet of spike to other your the of have out in item developing to

Dan Cancelmi

Well, Well, about call -- very actuarial we basis. John out valuations on move obtain it Dan. were quarterly this we're around. when we is certainly it We and the numbers a transparent

also have actuaries well. as at it look internal We

So from resolve quarter-to-quarter larger typically trail. of cases treasury where case absent cases the the case, rate a really with the the than we're and related a discount or and change movement to to the is rate we proceed larger maybe decisions the function make at certain rather a

one. from have been say. to -- than that's talked won't continue But listen point others. And particular to as some markets your other necessarily any we move really probably perspective some all focused about out are obviously, more call So, through headwinds as litigation challenging year. a I we've we this structurally on about

John Ransom

Thank you.

Operator

Thank you. our from We'll ahead. go now Citi. Giacobbe Ralph next to today go Please question from

Ralph Giacobbe

Thanks, morning. good

a not in slower day. to XQ what's recall, a revenue Just I mention, obviously were a ASC typically and stronger quarter. and lighter better think And the quarter I the less bit side, actually little was if seasonally one on volume the seasonally and

explanation And one I a sneak about IPPS just why thoughts in sort was change for it to expectations more. Medicare just the little I that want your So pattern and proposal seasonal X.X%. in I XXXX on or about was whether -- of with the that any occurring? in I a commentary any maybe your then there's rate. think surprised was guess The of sort line what rate

of little and just is a changes lower and you that sort there was So is or considerations? bit thought Thanks. yours then what wage other given

Dan Cancelmi

good morning. Dan. This Ralph, Hey, is

update to the then proposal USPI Medicare your Let turn the to Brett rate me it address address I'll over comment. and and

for federal above into line go it's taking. in what then a include X, bit effect the that next would a was -- of have Net-net, year. disproportionate impact people market proposal our was But with about increase. the index that adjustment. from X.X% wage I patient globally change in revenue Medicare impact were say also the of and share In little any to you does the into rates take in terms fiscal October And maybe expectations. in in it basket will the consideration

in going do all to in was want we was thought where So it to... be. it Brett, you line

Brett Brodnax

Brett. it's Ralph, Hey, bet. You

we with. consumer to mean little related same-day strong deal very the we're I is last And in being high-deductible how what we're right. more very to a QX X.X%, as pleased at which of plan. a rational same-store they year as seeing had to alluded our You're with QX bit we health

So deductible if well, met saying, they don't to just quarter. lay first surgical their why November just I they're haven't the in that procedure December, or

a met. full have surgical is done that once procedure year So being their deductible they of that

but saw nice in remaining we through helped We're that year, the certainly this tailwind us So a that expecting it not QX. of for the part quarter. continue to as

Jason Cagle

our the million, that was bottom. entity total earnings you. And this that at could just at is of on presented and still is that as page, of unconsolidated and which add to sold, XX. XX equity caught on but estate looking only a portion of were which number the an you unconsolidated is the bottom If in The up that equity fewer earnings finally at the Jason. our that's I whole. page $X The on. I real a facilities the USPI's had What XX is portion we was

Sorry Whit. about that

Dan Cancelmi

have questions? you other did any Ralph

Ralph Giacobbe

Thank set. you. all I'm No.

Dan Cancelmi

Ralph. Thanks,

Operator

Apologies, you. thank

Leerink. go question now today to will from from Gupta SVB Ana go next our Please We ahead.

Ana Gupte

Hey, morning. thanks. Good

So are? up on following and Ron, if exploring you us some Are the what longer both putting contract spun it pricing? that to you the on you mechanics around on of that trend your what the of trying has? current or out just or is spin? happens contract transaction a Or Conifer, color one? timeline as you've it to ever a to get think sale merger been I And that you as sense And if the can a remained any that Is -- is bullish to to give it guarantees tax-efficient both? something Tenet negotiations on drivers spin the this the due over do it around on said

Ron Rittenmeyer

the and to I this in unfortunately I it's that tone we We're I same. sorry I'm pointed thanks quarter with messages. my we're going Well specifics there's there. will to message just not signed we out, haven't the that continuing that. Ana. getting we've And someone continue we that saying There's was agreement just that -- pursuing been quarter, as that's that and my question you the stopped of saying I That's just to past stay just what to because given as But in want the it. said as going we for some that in asked for stick do I I to that. we I'm that were beyond that comment read -- no to said and it's as last the and as can't what last don't it. that have haven't I point engaged and pursue

weeks So probably we well here. eight would been I said, to in Like If through we job far say, I conclusion will already to we'd been only that it's the get were it. the enough. XX

amount do the So these the it effort. requires this when requires -- you of things appropriate

the for, that. start even color as you not I kind in may just exclusivity, asking So of give can't doing be if because I that well you're

So anyway, that's I'm can you. sorry, the I but give best

Ana Gupte

color. still Thanks bullish. to am glad the for I you're hear

Ron Rittenmeyer

Thanks, Ana.

Operator

you. Thank

Gillmor now next Baird. from comes Matthew from Our Robert question

Matthew Gillmor

about to the trend the wanted ask admission ER. through I

up admits flat. admits overall mentioned think were You I ER about were X%. But

talk what of efforts trend? So, that were to? factors? you'd about attribute or can you the And marketing that that some Was there other

Saum Sutaria

Yeah. question. This is for Saum. Thanks the

seeing look department, we for is, better of from of coordination, care a with. emergency been things. get as emergency the to appropriate patients the level second that on the so earlier applies I my thing facility includes are we in them and department. think is, that focused comments operational we've throughput the I that mentioned improvements obviously we have parts can the our of again, few been present into on all and access what different and One care focused And

important of admissions that note. to both So you in emergency that things department those have improvement I been think

Matthew Gillmor

it, Got much. thanks very

Operator

you. Capital Frank has our next Markets from RBC Thank Morgan question.

Frank Morgan

other And ASC Good the slow, just last morning. that. I guidance you wanted you're to confidence pricing USPI a have X% causing the pricing Thanks. or I'm like touch the on what that for in of to the growth X% ASCs. in just couple some mixes guidance? been the been gives portion in of payer your in assumed sort deceleration that seems case it -- that for shift It then, of over of segment of you business? And And kind has in Is curious deceleration? a pricing now years. mix what's number specifically inside more

Brett Brodnax

Frank. Hi, Brett. This is

I right. it's issue. a you're mix So mean primarily

mix Our for our GR in result in we the know expect quarter. mix And as the That to And governmental. was payer our quarters. business basically improve business up subsequent the governmental outpacing, was a that of mix is said, you XX% primarily commercial as quarter. GR that

Operator

you. Thank

Brett Brodnax

Or … another have did question? Frank, you

Frank Morgan

No. you. Thank I'm good.

Brett Brodnax

Thanks, next Frank. question? Operator,

Operator

go from Barclays Thank question. you. Philippe next our ahead. has Patrick Please

Patrick Philippe

Hi. Good Thanks. morning.

update the cost frame maybe own so for just how compared any far on Thanks. just savings? your by the Any So can wondering break the has to realizing you the provide that on going today And segment? expectations? I initiative. down how was in to process time color if saving's Any saving change

Dan Cancelmi

Patrick this Dan. is

Let that. me address

of So just then entire where just the And sort recap program. it. we're me let at -- with

ahead the in we pace, more about cost We than initially started program. realizing end through year had originally and increased to off we of efficiency last we And thought last talked up XXXX, year. ended began move we that we we $XXX at million of $XXX So, XXXX, million. when as were we

very So we cases. strong savings in faster executed there. on performance few greater a We many the and had items, were

those. So, thought on million had we savings improvement. to we And -- would additional have would had that of entered And we're this talked be. then about realize those capture we well realized this also run we we year talked of And we on quarter pace where as able efficiency of new about a would call -- about year. exit on we we year. our be We ahead to we a fourth indicated $XXX would end to that. of this $XX ahead of roughly this achieve rate $XX -- savings million initiative XXXX be Absolutely, and we year, performance that cost-efficiency million

track. on are we So

on, have about and many, line into that we're good and on at. actions executing very we're We visibility focused many feel where item

Patrick Philippe

that. my color just And over a looks bit And to continue Thanks. was tick-up trends what you're around any curious, I'm it there here. like just Great. if other seeing question uncompensated care time Thanks. there's

Dan Cancelmi

is Dan. This

with hit say me that. It was of flat. side consistent the inpatient -- back I'd Actually was Let the some and we the down down half growth trends uninsured on in roughly outpatient say if But bps about are here. in outpatient that couple somewhat was was saw year. did what Medicaid a it's a dealing XX the year-over-year. there the numbers expand X.X%. states then not would up program. numbers their smaller quarter I in Inpatient with growth, -- we're that last

wouldn't to been compared driver. unusual I reason and say we've So the that's partly experiencing. the But nothing for -- what

Patrick Philippe

you. Okay. Thank

Operator

Thank you.

now go our from next We Blair. William to Larew question Matt will Please ahead. from go

Matt Larew

taking for Thanks morning. the Good question. Hi.

with deliberate multiple discussing pivot to perhaps on being talk focused support and you you investment a does illnesses, diseases, your kind more Could to that been own towards inpatient if chronic of chronic more this focus. bit focus support patients patients little anticipate allocation, or capital illnesses? You've about of outpatient chronic and changing how just

Saum Sutaria

again. Saum it's Hey, Yeah.

the level, expanding respect the we we're to elected with of either obviously question. think patient department those chronic that with I for is through base surgery. of for the work the in to on continued our doing emergency illnesses highest And the at to rest important all or tend presence care and focus good their addition see multiple

three or then, exclusion really about of So, that, question I components. your emphasis other there's illness those different that addition four greater at building chronic with focused say think we about it's how on we're and in to service well, wouldn't to lines, but focus. the And

about heart failure to our in specialty that where focus and we're on physicians you and our focused other is and care. patients care things to primary with much that we chronic aggregating manage be offer emphasis more realigning including The about areas first provided think our and diabetes, think best illness employed

many the from focus have us deliver conjunction and more second and going we're very with those of that a in play I understanding thing with point described is on required service patients and lines procedure perspective we into by Ambulatory better refreshed capital a that illness. of multiple this will our higher at room The that through USPI. would obviously those move which focus course our that footprint can our Hospital our within that on will footprint, chronic technology support service setting, also deep lines that coordinate are And acuity the line towards service markets business right earlier, in the side that we much of

Matt Larew

Okay. Thanks, Saum.

Brendan Strong

in hour I end take the another of are question. try at We're top to last the going starting minutes. the let's here. know of couple one Emma, people Thanks, call Matt. to on next to get trying

Operator

Sachs. now Steve from Goldman go question from ahead. Tanal today Please Thank take We'll you. our last

Steve Tanal

little morning, that. maybe I would the assets. bit much. sort and what which a Good quarter average? the the you jump for whole up a And follow-up finally, which to normal, to was cash receivable in Thank lower tying quarter, of question make in inventories thing wanted very you on and flow expect color little be the do for outcome XQ fact and be then similar other if above should specifically just just you together, than receivable. on drove helpful on of days, accounts just and Thank accounts guys. more the Kind quarter that in

Dan Cancelmi

Hi, Steve. It's Dan.

Let me that. address

the another of to an AR answer to days in As on I from year in question, days an the there couple end quarter. was up-tick mentioned a end

from good segment Hospital an be in be can XX AR. as seasonality on can roughly the in revenue in that note a AR of I There flows portion days mentioned, attributable you QX. of the to in to As the based up-tick historically QX days

impact made the days decision mentioned streams, side. on from quarter-to-quarter. revenue So depending level also a around the was and several specific on of the the improve consolidate performance to basis. roughly business that there to move X.X-day in USPI on offices timing a I We AR longer-term can

partial So well. had a as impact that

Brendan Strong

we conference the I Emma conclude going don't look for think today. May Bank there. UBS to America we at there. We Well, Great. XX. to we're you forward right. to us We'd like call see there, everybody on We're going be you look to joining If XX. of thank to on May All the at forward seeing seeing you

any at XXX-XXX-XXXX. please have you me Thanks questions, very call If much.

Operator

ladies gentlemen. Thank you you. That your participation, would call. conclude Thank for and today's conference

now may You disconnect.

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