THC - Earnings call transcript Q4 2021 | Tenet Healthcare Corporation

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Operator

Good morning. Welcome to Tenet Healthcare's Fourth Quarter 2021 Earnings Conference Call. After the speaker remarks, there will be a question-and-answer session for industry analysts. [Operator Instructions]. Tenet respectfully asks that analysts limit themselves to one question each. call your the Mr. turn now over host, to I'll Financial President Tenet. Dan Vice Chief Officer Cancelmi, Executive and for Mr. Cancelmi, you may begin.

Dan Cancelmi

on senior Thank you, join with Rittenmeyer, Tenet's everyone Executive Chairman; our and to pleased include Dr. me our management Saum Executive Operator. Good us morning. this We're today's Ron call Chief Sutaria, have Officer. morning.

note to certain no slide website update expectations With been could presentation, statements represent well other are in that, Investor I'll Relations recent the statement is any as webcast morning and Ron. a obligation includes today's the should to the included over and discussion call our XX-K this during Commission. Tenet and Tenet currently subsequent most this the slide filings of made posted in under information. tenethealth.com. our our take today Our with advised and plans to to Actual discussed the Securities results call materially. that Risk of Form presentation, Factors as based which has based cautionary forward-looking statements on available Listeners forward-looking information. section turn Investors differ are Exchange on management's

Ron Rittenmeyer

Dan. us XXXX. quarter you, all Thank morning. our for earnings, joining thank Good you today and of also And of fourth regarding all

we've Saum years changes us forward. Before and sustainable carry highlight XXXX of Dan, that I believe to briefly fundamental will this a over and few aspects and the touch to what turn over to I on last continue would like are made we several

to team on another group We closed an their muscle their organization. exclusive five quarter centers, guidance. results XX both strong development build the significant ASC adjusted USPI next quarter years, delivered my ending billion and flows, comments in very consistent service with EBITDA As XXXX for earnings acquired further the with $X relationship the SCD the in above I fourth the and for release, stated of cash established approximately the strong, transaction

strike recognized positive has it the reflect achieved business, impactful contributions every Additionally, is aspect market this, of lapse. in caught as development with to our The in from also of by coupled remains has more hospital disciplined represented the team business stronger to Tenet performance performed volatility an USPI recognition earnings across consistent handle except and XXXX. successfully organization while you approximately with made the said, clearly COVID now surge. ability some for the remaining as accomplished, somewhat fully an analytical question larger have be than additional a revenue, become our classified by X,XXX while than comment, of Conifer's as This detailed Tenet dialogues point which have expanding and/or time and what seem I of shift the year-after-year. and of Tenet It management this added with hospital proven and above transition expense Conifer the XX of flow believe to understand accomplished cash are are a the with mostly EBITDA and leader is difficult Enterprise it's consistent multiple cash detailed positioned over multiples basis the from our being company. positive portfolio divestitures group business, gaining sources the core hospital internal de-leveraging projecting Conifer corresponding contribution, consistent continue of broader effectively. objective of and the built points Tenet number we've is in centers. Coupled has now we flow, it improved Tenet opportunities expectations well-designed balance recognized Hospital When in of USPI appears The marketplace. ambulatory approach, then by free forward XXXX. more growth said Every company. paradigm lost of its overall the and data-based in a come represent of point of quarter-after-quarter, on worthy the this to the now dealing looking delivery portion Having fact, has why settled fundamentals growth, by just We the in results, for of USPI's in on margins that to the our not earnings, we've our reasons a strong we view as to sector further growing in consistently. should, to acquisitions end four of as generation, valuation a and sheet, more due solidifies a end years. last And board, a continues with consideration. XX% and management offerings a its Massachusetts the solution supported of company, continued

So now, it like Saum. I over with comments those to to would turn

Saum Sutaria

thank staff, Hi, you deliver a everybody. resolve like to you, their thank off to with start to nothing short of our excellent. quality care Omicron high morning, been surge and the Ron, physicians, I'd recent has through personal good of nurses and

$XXX midpoint of our the posted billion In more the you to ended with outlook higher EBITDA report yesterday, than excluding $X Act than is we release, of results. year delivered adjusted QX, our consensus. we saw than higher and funds. million This and as Cares Turning strong the in

strong a the quarter. of We drove in also XX.X% EBITDA margin companywide

of We manage continue approximately QX, COVID the effectively to In total. COVID. through X% were admissions

COVID greater Omicron to resources balance continue of nature strong effectively transmissible on safety operators impact maintain and highly protocols. had our staffing, a the While

had stay across quarter. was on hospitals surgical remain easier acquired hospital Serious and finally, and infections despite zero we and on in of infections fourth our events addition, length Average in COVID our in acquired hospital emergency the fourth better quarter given patient And safety focused portfolio. In departments safety reduced quality declined focus surge. access. the USPI's service the the

approximately and up rate. USPI reiterate case, net year-over-year $XXX to in continued a few to sequential a from USPI surgery in I Despite year and this, the acquisitions. over than COVID the a revenue excluding portfolio segment increase margin SCD perform points is EBITDA want about a of of deliver year-over-year month month the quarter multiple fourth total quarter. at resulting reflect NCI increase patient XX% XX.X% the EBITDA the surgical as the USPI scheduling, transactions At since Tenet. a centers from during or in of portion XXX acquired facilities acquisitions our This in physician growth year ended in SCD per We fourth commitment and through tuck-in EBITDA two quarter. other more a included positive surgical quarterly XXXX. the to addition operations to and the strong at to XXX approximately in acquisition small earnings The and of continue the SCD de-novos. $XXX much for margin Our the strategy EBITDA high-level expected had Compass, in hospitals all available anticipate a in enterprise to interest and will executing the have the X.X% comps. Due cancellations, of with system-wide the XXXX. of buy-ups X.X% surges, X.X% staff December the opened facility revenue delivered and grants stronger a continued cases minus acquisitions, same at USPI net quarter availability growth. affected. a run were we a trajectory in USPI, accomplishments This million million

QX, resilience non-COVID from X% business, in medical was again outperformed with an markets the surgical to our patient discharges example segment enhancements. prior-year. investment technology our QX, Hospital service acuity line continued and clinical in exceeding our expectations. and demonstrate This In Our nearly high of increased over by all as supported

stay to quality performance Our operators using performance length cost of costs, standards helped active This the and I Conifer while our our staffing, again strong good platform quarter once described margin analytics time enhancements. before. us also another real capacity of maintaining maintain management utilization. and had adjustments in labor high optimize maintained of making

globalize operating offering modernize model technology deliver Conifer's to to We and continue Conifer's results.

signed new also revenue cycle care and clients for management services. value-based We and renewals

past continuous XXXX, of scaling midpoint three consensus. midpoint over leading $X.X guidance and the of billion reflect commitment be December the raised We results guidance years. XXXX in and USPI our over of deployed the Our the since to We've outperformed several times USPI's improvement platform. capital to developed surgery at investment ambulatory

returns physicians the from over approximately We acuity strong caliber also X,XXX lines. started made. investments high and new service to USPI's we've anticipate We welcomed high medical staff XX

South We investments to Beach remain our also hospital We're we markets. at summer expanding Carolina El capacity and our the hospital acuity Paso on open in high Palm expand in XXXX. in of track to and care increased

those developments meet in new growing Phoenix exciting communities. the one needs We healthcare Antonio also two in announced of San to and

neurosciences, we surgical and ecosystem to quality of cardiovascular services. an in high continue Additionally, foster supporting physicians advancements

expect Looking increase adjusted continued a XXXX This in represents from $X.XXX income. X% with billion. ahead, we outlook grant EBITDA midpoint excluding XXXX, growth of

six we closing. core There for and to normal guide are These our we in subsides; These return the continuing to portfolio to $XXX the surges. the our the a SCD adjusted acquired EBITDA, excluding well. million XX.X%. plan. as in estimates in proceed XXXX Year-over-year despite of Let income, optimism the very an the growth me to at from outline projected grant portfolio key excluded for new reflects December few and is USPI's estimate provided priorities buy-ups adjusted healthy throughout excluding This track our of be to no acquisition a timing demand complete previous in after we able run the buy-ups. what SCD be current year centers wave on change of in to will physician centers EBITDA USPI we've and deal on is performing approximately XXXX. Omicron portfolio COVID demonstrated the integrate as closed rate and at that XX XXXX We're centers are as

the synergies. growth We place EBITDA adjusted to core in Year-over-year projected X.X%. management segment in be capabilities have Hospital to is successfully realize the anticipated integration

but a COVID returning not labor As normal normal in we to market. completely operations subsides, expect more

our focused teams service remain lines. postponed to and high Our continuing recapturing will acuity on care advance

continue across to strategic is our We accelerating capital hospital deploy a offensive our a and focus on This across technology well-balanced execute by investments plan clinical markets. business will enhancements supported segments. capital with

years, while of plan robust adjusted Conifer's to services will EBITDA We reduction the initiatives for is X.X% operations. we our to on also XXXX. next actively to over to improve portfolio We few a activities and our management. spend efficiencies projected labor supply to continue continue further purchase growth have offshore in be focus automate spend that external realize

have part last of margins four Tenet. improved Conifer's years, over points a X,XXX it be and continues discussed, basis Ron to over As productive the

a as We for as total and positioning rate it COVID on the is review part continue directors. of topic to enterprise. our growth, we to the of with impact evaluate opportunities a It of interest our market environment Conifer's relates business, conditions, frequently the overall board

business. reiterate will resiliency in are the I the Tenet's we Finally, building

and more an this, to our shape, credit compliance build detailed focused which motivated our Dan into financial insights XXXX Our secured market, continue free segment outlook. balance and our positive our goal at to capacity and strong generation, and and Ambulatory time. from cash us sheet improve ethics yield insulate a the volatile results we over turn debt line with for continue to on it Tenet. to in a I'll flow high Underpinning of environment maintaining somewhat a better continue trajectory Surgery support more for will our now we diversification the will look talent, is of analytics-based over

Dan Cancelmi

Thanks, Saum coming we our with and finished expectations. To pleased everyone. the I'm quarter Ron how very well fourth with and year EBITDA comments, in echo above adjusted Saum's morning, good

faced, labor cases COVID outperformance including are notable facing. the was and Omicron spike the continuing availability particularly challenges pressures across variant due in the given wage and the providers we the Our inflationary to industry many

the which in EBITDA adjusted billion, million $XXX guidance. For consolidated was midpoint the the $XXX better the $XX XX% or higher million than million million was $XXX our of consolidated guidance. excluding midpoint income we of of adjusted Even we quarter, quarter, fourth generated or than QX of earned our the EBITDA our grant $X.XXX

most of a and increase our billion, $XXX of For consolidated million the XXXX, over recent we full-year beat adjusted XXXX, of $X.XXX EBITDA guidance. to of compared produced the and XX% a midpoint

again reminder, we quarter, a based during guidance each outperformed our raised three QX. on outperformance As times we and our in XXXX

acuity, strong Our patient mix for cost high well a by effective driven the as very payer favorable results as were year control.

in increase higher XX.X% QX I'd also USPI despite costs for beginning compared And points XXXX, was XXXX. levels was per COVID. XX.X%, XXXX each in revenue XXX of In margin a consolidated solid basis margin fact, EBITDA highlight to the revenue delivered than items were margin XXX for few the like than XXXX very SW&B of improvement consolidated our X.X% was XXXX impact and key a QX income XX% to QX QX in EBITDA of for USPI. grant an at case segment XX.X%. XXXX. our with percentage a about Also quarter compared as than of XX.X% X.X% cases QX pre-pandemic USPI's our surgical continues lower strong QX be cases quarter, excluding XXXX. in higher XXX% were of which basis surgical adjusted points in to the QX to

Turning delivered quarter. hospitals another Hospital our to business, good our very

management effective. labor continues Our to be extremely

margin strategic lines. as index we our mix service higher investments continue strong case remains on acuity Our focus higher in

XXX EBITDA margin, of all before outperformed about grant basis compared admissions the pandemic. were hospitals our compared our for non-COVID performance our really markets for XXXX significantly was full-year up improved a and to great It substantially points adjusted Our QX to hospital year as QX excluding income expectations. XXXX of our X.X%

Conifer, had also to and Turning another $XXX a XX%. they for million the and of adjusted full-year of margin produced strong EBITDA quarter good

cash XX, momentum. growth well and balance position continue our capital Moving us sheet flow, our to very structure to Slide

of cash Medicare the the million of generation taxes payroll began deferred XXXX flow cash in XXXX. as company strong payment repaying $XXX billion the in deferred from $XXX taxes. flow was excluding free of payroll first and $X.XXX advances or advances of the even made repayment and Our generated year we We installment Medicare million cash

maintain had leverage was cash end resources year-end we our to no available on Xx Xx sufficient cash borrowings more the under compared and about EBITDA credit. our hand $X.X our of billion than At XXXX. about line under continue EBITDA year-end, at of ratio revolver. to outstanding of liquidity Also, We about and

XXXX walk outlook of segment. and a business our our adjusted to XXXX. our turn forward from our for now on XX me a XXXX consolidated Slide to basis, presentation EBITDA in Let for provides projections by

projected XXXX consolidated described our including year-over-year USPI center the growth core adjusted the represents almost is surgery growth XX% midpoint range. $X.XXX business. EBITDA core of Our outlook for on as X.X% at billion This consolidated the slide, in of

other a assumptions related Let me few our to mention XXXX outlook.

assuming we grant not any income are year. We earn this

$XXX We our release. $XX in million annual expect announced interest approximately senior once cash secured notes savings our to of that achieve future QX million of retire we in we X.X%

share of Our XXXX adjusted the at range. midpoint EPS is approximately $X.XX the per

release change As $X.XX EPS the share our we in our year this headwind regulations. include limitation does a in interest mentioned of per about related a expense to IRS

many assumes this you aware, working Texas The year. CMS. state is approved supplemental As resolve CMS yet Medicaid funding this certain our has the to funding not is by approved and outlook with of are been

approximately us is However, million assuming $XX first funding or approved we revenue. this have year, funding included the in second not revenue we're quarter in is which This any the in for the the as it would quarter when recognize of is we later annually.

to is that X%. X% Page our XXXX the this COVID want hospital to also assumes case I last the income our carry-forwards to limitation Medicaid cash $XXX to increased the this surgical outlook midpoint that when increased in of in excluding From Omicron billion XXXX are deferred X.X% perspective, flat guidance admissions to part be change payroll generation and supplemental we be an the increase out the targeting EBITDA rules fully not of want Again, about Hospital midpoint I as free the QX. cash the remainder scheduled cases year year recorded Texas and and revenue release, than about far at adjusted reflects see point the will flow the loss we XXXX this increases so impact certain the assuming advances Also, X% to or This utilize repayment the this questions year, that the of to per of we admissions to I of to disclosure on funding due in million range mentioned, release up interest XXXX compared assumption our another that year. timing year and few to quarter net As as due X.X%. X% taxes. did case payments in night. mentioned be $XXX million are anticipate we we're operating USPI tax for increases I release. XXXX Medicare at those the as compared we of in cases expense USPI assuming our growth and fact not the in elective of of will received X% strong first mention will are $X,XXX rescheduled. higher expect any of of the earlier, federal to you'll a adjusted XX disclosed unknown net of has consolidated a are flow

improved over Medicare aggregate years. about deferred be flow cash final will Our billion several this and has the $X And year. the the from advances repayment generation for in made payroll taxes past substantially

about about billion And lot to on with surgery possibly, flow debt repurchases, retire, $X Operator? in provide on and the debt capital to including our conditions, investment service structure, to us capacity, Q&A. our to believe of market allocating including ready a no market opportunities. depending center business, other refinance upon build future acuity conditions, capital or focus hospital that, XXXX opportunities XXXX as grow options. currently begin share growth evaluate and as higher opportunities our enhance cash to and and evaluating under continued offerings, beyond the line, beyond, we're in on of capital We billion outstanding available a continue this, borrowings free flexibility and Assuming secured $X.X and deployment about our of foundation think plan we we depending

Operator

you. this question-and-answer Thank be conducting we'll [Operator session. Instructions]. At time, a

Our Please from of with with first question comes Bank proceed question. Kevin America. Fischbeck your

Kevin Fischbeck

guess to that comment returning being recedes. guess but I not little normal, towards Saum Can made labor. about wanted about the up How and you wage back expect far to right talked that where about think XXXX COVID think for I great. stabilize? as talk Okay, as kind Saum, or Thanks. we you where of labor I about normal to a go a XXXX? outlook as you labor you're growth expect, shape should that what and you and seeing now growth into heading I

Saum Sutaria

for the Thanks question. Yes.

the that this throes think surge. still current I we're COVID of in

rates higher otherwise labor. And been particular, you pretty are -- in COVID is that other unique labor the to Delta staff so the -- And of exacerbates. waves. them for relative And that's a than we mean, just by to with affected created, contract what staff I like shortages be, or Omicron then Omicron because saw have that's

think are affect that therapies and available, what the the I by end so first more we anticipate up, there quarter, COVID no things new assuming other hospitals. And with -- that is that of the surges come that

So it's of And the of become both ought labor the normalize substantially, really bit. and rates to that stability to the start we're issue. the a the staff rates during surges, mean, we a the see market for. the biggest combination I looking

at to able may at and that been paramount issue being to get and the the delayed. our retain the we becomes the them goes have business point. that that surge that energies point, on and Obviously, staff managing availability in As building and or away, refocus deferred capture staff of things back

kind looks. So of how that's it

the be rest think be impact year. it'll real will on quarter what the the a first of we the I of read have the end for before

Operator

your proceed is question next Bank. from Chickering Deutsche with Please The Pito with question.

Pito Chickering

my morning, guys. good Hey questions. for taking Thanks

point quarter during we give more could look first rebounding a saw as seeing quarter first OR you what for back at a similar at you we seeing COVID As surgeries you color this on rebound, on scheduling us are XXXX? of decline? are guidance cases bit your If the February what the

Saum Sutaria

the this the a we cases, but mean, incidence to we're surge, surge is declining, number of Hey, actually before early pretty little at Xx COVID to bit say, I relative it's of sitting still inpatients high. the that had. it's I it's Saum. mean, Again, think still new I

So I'm that bands. have cautious a We effectively like have projecting forward. little bands Massachusetts or elective about surgery still elective bit states surgery

a some and have both we've our be -- QX perspective. bit there's Omicron an but may we suggested, now, cautious from So in lot going guidance, perspective right little a on a regulatory

allocating open put acuity making most sure Now, premium that lines, standpoint. into said, access that are important hospitals, on in on very surgery places operating staff we for it result we're remain that are premium staff. staff as We a feel And to organization service to a we an the that's volumes focused this think we're allocating a we an about stage game, think other in ICU hospital putting be our being care of from acute of access. would have just it's at that room and the and how service we maintain the obviously on example, areas higher important that good to outpatient allocating

Let ask USPI. on bit comment further a to Brett little me

Brett Brodnax

on No, terms Saum shared. very did Saum. thanks, what impact volume, terms January, things Yes, consistent we the in of see Obviously, of in in Omicron side with of USPI of the to going end to into of March. folk bit staffing, up see the at schedule February February starting into and but we starting and see that subside the going a are little

Pito Chickering

question Okay. then margin follow-up the on And side. a

about the despite much. how be hospital margins I increasing guess, sequestration, in besides deliver from settings? to expensive mix margins able an to lower acuity comp a a as know, Thanks government should being very relates more Excluding mix high commercial we COVID strong you're as you've so into think guiding had in you dynamic and XXXX. with today, it year-over-year, favorable acuity it's to the

Dan Cancelmi

Dan. we we're mentioned XXX an higher about that's in does growing -- obviously years, remarks, continuing area margin focus year-over-year would the of acuity points And it's to services, the improvement what improvement focus over good on, hospitals several continue we're past obviously, higher my Hey, I in year margin impact Listen, our the on still improved our about. been driving have on that's very Peter sequestration we basis but to an basis, this margins. going we be to focused been whether our to addition over continue where that's been beneficial. operating on management the all it's terms. initiatives through we several think other more other years, an we've contracts, where past in and allocate capital there. line in to to expense we the the focus, cost we've and an That's it's contracts, going that really don't supply side right do renegotiating or There's the chain terminating area if as get Obviously,

talked to there. about, listen, transitioning with Manila. we've business insurance we've and whether too well, center to As been more going rules contracting plans. from That's our we well-positioned supply in its global we're chain there's or And a do perspective think

Operator

Our next James Sarah proceed from question. with with Barclays. your Please question comes

Sarah James

Thank you.

the up moving So questions following in kind of the just pieces. on

us strategy with gave expensing are bridge you and control, the doing it your guys there's labor. what guys You XXXX under that of to around supply from different a your detail XXXX on lot like of are portions

compared how insight think So versus I'm wondering if to normal us last second some compared can about year. you year half half a give on you first to seasonality the

some that Just your how moving seasonal see you [ph]? of control under pieces are the

Dan Cancelmi

Hey Dan. Sarah, it's

starting December of to well. off, other mentioned, maybe December, an and COVID how seasonality this there cases elevated I obviously, increase the so in seen sort end we year, cases we was an to, in it of versus year compared as I this Certainly hear. we was years. everything your question as have even far But year, think think caught hard relates the I view

we've assuming all back, out that Texas I funding, into recognize comes in taken there's and that's we'll QX I the gets some we and related it math to that some that pointed So, likelihood that in consideration. to mean, able the won't that recognize, we're items approved, but year. be that in be later

the move move So the we assuming depending second, and there COVID as cases think, we as that don't on timing it ultimately quarter. wane growing spike, and gets as year impact year, we earnings earnings we be of when another But third, approved. big through have through fourth the will the will

than Now third quarters. seasonally, the softer quarter typically, is somewhat other

to for take ambulatory robust. consideration, need expect be also to quarter the our we've quarter but fully you the typically fourth strongest very So, into that business. That's

And we're just so -- that's that's -- this the viewing from a basis. year sequential how

Sarah James

in think current are years? your payers labor you any of And about the with environment future play in you come price into think escalators Great. negotiations recognition the as and

Dan Cancelmi

We think specific is would we with The in I to thing negotiations negotiations. material payers. there want terms say been only into get don't of hasn't any I changes

Operator

next Lake with question. comes Wolfe from question proceed Our with Please your Justin Research.

Justin Lake

Thanks. on a the couple for Good to I XXXX. morning. wanted parts moving follow-up of

curious HRSA and us sequestration. lot extra benefit gave of XXXX COVID you that you on a the and those Specifically, about bump in detail thinking how XXXX I'm plus what's from built about, the saw you had you're XX% payments, for in assumptions?

Dan Cancelmi

Hey, Justin, it's Dan.

Let that one. me take

If assumes less, we'll or assuming certainly of first But not same X%, that, are that our X% level for COVID let's assuming, with But, full-year, be this COVID lands. or that, depending cases could there are case. so, a be about when cases, little for guidance or quarter of the start in north we this we're our how assumptions, less where year, For bit admissions. X% again, as XXXX, level not ultimately was at COVID the there XXXX. total of roughly

In assuming now, I our right assuming additional in not in to that. pointed we funding, of Any grant whether funding, there's it. have if my not we But income -- of earn any the evaluate we'll we're guidance. out and are remarks, terms as the

only associated about, costs, caring I expenses longer, -- the not and The other of is for the for Medicare that, comes point the length terms In typically lot would those the of add-on. one higher. are say is stay thing incremental your of with patients, costs there a that funding, in

down. start associated come come the if presumably, with then So, also cases those down, those cases to expenses

this think So, viewing how sort it's high-level, year from we're that perspective. again, I a of

Justin Lake

And on get how you HRSA do XXXX? dollars anything you Okay. what for expecting much And did in XXXX?

Dan Cancelmi

also same will Those have Well, would presumably, those, as for is -- a dissipates, that as long also be patients to, that they how who And there. the that reimbursement is funding there. There there. question it's funding, longer thing no cases COVID. funding those the be

at year. that ultimately funding, And it'll Now, so on lands funding, see will to the we've continued level where as we'll as of obviously. far be available receive well least this depending year. cases this Again,

Operator

Our Raskin question. with comes Nephron proceed from Research. your Josh with question Please next

Josh Raskin

morning. sort heard thanks. how out to within figure for I've Trying thinking long-term, days about and a impact net sort the Great, of Good of couple you're earnings the XXXX COVID, of sort things. guidance of of

overall. you et sort is, of on of it? But and total you've that of COVID get to seen trying that in those the the of better the that and of what through I utilization as treatment weigh And impactful the pause Tenet to in utilization to Tenet admissions that, volumes, see I'm managing against, totality pause cetera. impact and X% be continues So less just understand typical with in future, tend surges think will better do you at sort

Saum Sutaria

Hey it's Saum.

again broad of nature infection up the infected, it's might types it severe, of a and bit may Let way we based it is emerge, I have relative what think, the understanding it's to number not Omicron but more and forward I'm variants surprised clinical me been where a address Delta because in cautious of hospitalizations expected. a upon I terms as mean drove which course, of of attempt right, in to projecting, that that, that's not us projects

most are few basis, that available that COVID available to an my view, outpatient In the if I a going treat chain standpoint things, that would far probably, drugs things hospitalizations second, in hospitalizations, therapies from a supply probably mortality. vaccinations, and which here's -- the One probably drugs say. the reduce The become that's most things even will impactful on new have COVID here So by is forward. impact the the been reduce are impactful reducing those the the COVID of primary environment. have hospital among than other will things in

et illnesses of really important. a The those in right. hospitalizations end you where adding is extent, as the point, when on and hospital have to. I probably world affect have seasonal COVID Dan's The some impact that to respiratory has extra et we probably the more expenses becomes way take over virus time. lot costs care of like standpoint. going COVID that'll think get just hospitals cetera, as flu really industry some becoming setup respiratory a of return the makes to So the help at significant well, we manage of like care hospitals. costs to point a of mean, seeing isolation, we the become becomes, of ourselves we're cetera. that ongoing that to where question COVID the without hospital up the can to It's just that, I COVID from that take do this expenses, that ends the that's up involved infection all other to regular kind And -- Dan

come volumes and an it back going utilization I of The other unknown And result immediately? Or return tracking non-COVID big obviously time partially sector for cases normal, would result point will the is described. take when like levels. those into assumption I a are to a will going our dissipates. non-COVID as demand make There in to spring we're back? those an it those We of that's XXXX to strategies. cases spring COVID back is carefully why Is and to pre-COVID some is as partially making utilization other as about that

Josh Raskin

against It is yes, see other. guess, But EBITDA? net-net sounds impact lot right doesn't like, COVID cost to totality the of Am of question, is understand seems on that. in an Okay, it's I volumes way of a $X.X at a impossible or billion on big you that comments it this not a your one and the just, point. necessarily big I sound impact reading like revenues. increase the But there I COVID be

Saum Sutaria

delivering For guided XXXX, it's than Conifer. of I a the it the strategies deliver hospital described it's we've it's lot X% have kind growth on that is less ASC segment the the assuming. not ongoing take declining. -- and $X.XXX billion in what Dan's we're initiatives mean, And is efficiency the of cases that we are will and what to to then at segment the not our

Operator

-- is Suisse. Our with next A.J. Credit And you. thank from question Rice also

Saum Sutaria

Hi, A.J.

A.J. Rice

we at you've of just to slightly on you're I'm slow that, and equity a no more also that. then you valuation comments I about is. but guys market the going the pass on this sure, operation, gains taking noticeable sounds commensurates out your for with time USPI hopefully with out guys is unlock beginning, that other credit upside you direction Ron's your spend you're prove urgency recognize what you lot bate the like give the has that created it probably value ways an do market And it. wanted longer as And to in leverage the maybe and year the sympathetic and to view private a I'm that the very your little and sometime to is or opportunities value SCD the even are case business current just believe let seemingly Hello, ongoing near-term? we've if that the have we been see like maybe inventory created in a so evaluation. need figure the sense change more that sounds it's it any Conifer to and of transaction forth, in that clarify look

Ron Rittenmeyer

already unlocked there not that in or to you've but focus -- And And We think suggest, in you was, -- that I our or said quarter-over-quarter Well, evaluation company had We prove month-over-month, this make it, suggest to when more more trying comment year-over-year only have fact, I for or We're all mean, think that the consistent looking Conifer keep is we what performance would how do we're about think true. really is doing and us was and Ron. still process backdated, these do. And just the for It at is value reflect got And vehicles I there's performance you no the especially keep numbers well. do how that. not had. other we'll makes you performing unbelievable some forward. on don't any surgery at to when talk of centers we've leap of this high numbers. bit our has out separately. have at point, the a valued thought other I'll terms stage. is ideas at returns other we've sense.

because we're of spent let COVID been means. ignored ahead, companies to by them. XXXX the it it leadership organization, selling clearly given to basis We've us our of be for right at it, we've down today. to we I just marketplace Conifer of the and the and have of times, time about me a side the also making the But Partially we're points, we've ignoring of working at a that, answer earlier, Conifer. So on support which Conifer. amount wasn't. accomplishments that. door. of plan And really because time. the can't JPMorgan, and in army you this, down changed terms do We mix on. going back which not out going imagine and the we've of great moved go should out looking the not level On of in feel the has that management any IT but up, couple spent wouldn't same we Conifer. performance the this, that same Today, always a can't wanted make lot the I slowed question, on been offshore, the lot in building have XXXX we done haven't at organization. Look progress that turned asset especially on of size And with there material what's a did was stop lot good statement. agreed the the to out

very So when it business, is at as I a looked business. Conifer a good

that. a said a between years Yes. our when out. for and shareholders, talked about more if does we out. versus spin the Now, you're mean, But the as spinning do greater what same company at valued asset time, we've there's it to doing have I it balance give the us

that's about that that balance got And debate. rates the things up, on then board, isn't make -- I of we've to we've level look, looking So mean on, been is conditions, this. the the know, call. talking earnings going got it. interest you've this, is a and board This other you advisors got to my call going And And we're at decision. the focus, and this market you into types a decision an

We mean, to a at we're to meeting be we tell analytics. And we yes, some is call going of soon in best debate to the resolved. there's that not decision is make working people the board would think think I end and things to what need that have month. to you, And final. I really point, But at have a items of have type the on we about, there's question that need fully that decision.

a ultimately, do everything's And the of we stuff answer I've remember, going to I for our it forward. it's to got this I going we're right. the was forever, come said also analytical we group say up four least mean, feel we're is doing. we're years, very ex Look couple nothing at that is. or back will what wasn't You strong analytical to for public sale, don't very answer, very right years it continue we've with everything the before, company. to number is the that want using go good. with not existed, advisors strength we're Today, got good and

but way just answer answer. I question, to definitive long you your So give to a try can't

Operator

Instructions]. [Operator

comes question Jason Citi. Cassorla next question. your from proceed with Please Our with

Jason Cassorla

my those how Great, going as of about the And questions maybe you in maybe thanks. payer delve XXXX. asked Good quarter forward? morning, been have trends But mix could and payer puts are around and the already. guys. think of what Most out takes into mix we trends sustainable

around does consideration guidance of Medicaid the that point, resumption Thanks. this any determinations at assume to Just point? XXXX

Dan Cancelmi

we've was more commercial the entire mix pretty Dan. favorable in quarter saw what trends. our aggregate throughout much it's payer Jason, The pretty consistent the year than Hey, trends overall with

it's necessary. of given absolutely individuals to the of care that makes certain sense concern is unless some And and seek

recovered lower far. so position, we took consideration have into do although, that we than payer half some guidance developing this then of anticipate cases no for were when year acuity our we and as in change the well. So, what we seeing sort the of really back throughout the And of that trends were quarter stronger in XXXX they year, major compared to the

much impact with have trends on consistent that'll the surprising quarter were our were the not expectations. But the they mix. and So pretty some in

Operator

Tanquilut is with Brian next Please your question Jefferies. with from question. Our proceed

Brian Tanquilut

I morning, for guys. question good is Hey, guess Brett. my

SCD across in performance joint USPI, think replacements opportunity payers a the we about USPI's legacy to should SCD businesses speak so in one embed total about joint to to have flagged outpatient. and the ASCs think the I both assets. the of into commercial skillset shift How As we XX% heard

across and [indiscernible]? to So harness much just figure expand Thanks. portfolio you opportunity you trying it see how can and how opportunity that you out how think,

Brett Brodnax

thanks significant XXX% XXXX a number put total improvement growth we you mentioned to experience year, and think is that Brett. total joint I Brian continued business in mean, look question. This mean about lines for growth total to significant with year-over-year growing some portfolio related and I and for the the XXX% joints. just a service significant our the of XXXX. have for added Hey And Saum in we those XX new over numbers, context prior-year, QX that And across into showed joints to in as

great acuity and we of specialties, including And across in higher Obviously, job, to so, growth terms SCD great historically to from them does a context, not done I significant total vice spine, learn joints, versa their cardiac. footprint. of joint of course, expand a job has we're expanding how rates. pretty in only any variety in a going And in total those continue think are expand including wide

their SCD, do on the from work with years. everything we'll together and business another to partnership development to go-forward essentially out continue will a learn into their our they as five next one they build integrate as with we perspective with obviously, we So And five-year over partner continue together basis from a portfolio ours.

Saum Sutaria

strategy to other Ambulatory the the Surgery let already leader add was in the in remember me working just orthopedics one that point USPI's was core which SCD very just that deliberate, Brian, orthopedics mean with Hey, in I space. is platform

orthopedics, and has unquestionable we've recently being to So of of including our we joint not spaces with why adding the and that's that and the an had been and new orthopedic USPI to And that very limited where partnered think ability we centers and is grow portfolio. it's Brett strategically, surgery, SCD, in whole aspiration innovating the in portfolio related USPI with leader to the the team other is headed. build procedures bone this important pain environment in outpatient

Operator

from is Please Hendrix Markets. Capital with Ben with question proceed next your question. RBC The

Ben Hendrix

Hi, good question. my for morning. Thank taking you

HRSA from Just of follow-up add-on to quantify guidance, had XX% a and sequester earlier and for subsidies, baked the had received in at quick one then what relief on from XXXX you question. you into a for do Is XXXX? Thanks. Justin's kind to it COVID-related kind you total least possible the magnitude of directionally perspective have in what and

Dan Cancelmi

Dan. it's Ben, Hey,

profile a the for we're helpful example thing, cost number again, HRSA. admission. higher for specific HRSA for there Medicare for the for be We would a And haven't very patients care those put is take than let's uninsured. or reimbursement providing yes caring would type Medicare otherwise the who add-on, that out here's helpful, for. the has it's for I typical very of funding it been But patients patients

there. costs so, yes, the And are also but funding the there, is

certainly there. a We ultimately have we'll hope to all terms the then it's So necessarily case. lands. away, of and not matter not the and still the funding that's goes wait ultimately where in but funding the cases are of see But

case. But away approximately the assume revenue was tell would hope again, just, that get approximately that's question you that's headwind. can't The that, $XX massive HRSA you funding and okay, a the So we not the XXXX We is or certainly costs goes there's I you a for lot. million.

Operator

question from Leerink. proceed Please with SVB your next question. Whit with Our Mayo is

Whit Mayo

really quick Two Okay. ones.

on clarification the an the now? million wasn't in difference old disclosures, you just thanks. First, getting call, guidance to SCD the Baylor what's on then $XXX us that of could you're million the and a I clear and give if the put $XXX update

Dan Cancelmi

it's Daniel. Whit, Hey

the and diligence. based estimate were $XXX we keep in of mind million, In announced the and we due centers million made invest to on of determination terms centers. not subsequent those November, the a when We targeting deal, the difference XX of between in $XXX latest in six

on and too, of a large estimate. updating is portion of that a that's based So the difference. also we thing, learned information further is other the then on, factor was timing buy-ups And fairly

versus our ramped. importantly, still originally feel ramped, which overall is overall is consolidated the six ramped portfolio, XX we comfortable More fully XX, centers million, than from that smaller fact our fully estimate fully very estimate EBITDA is with planned $XXX the of

So will achieve three $XXX aren't years still six think four, long-term, there, even to we though centers million. we

the of obviously will disclose Baylor question about we when other call point put, to your of the we USPI that. terms get that, In finalizing we'll

point. nothing there's add this really So to at

Operator

question is John proceed next question. with Please James. Ransom your Our with from Raymond

John Ransom

ASPs consolidating do good buy-out you Hey, start many the think at up year? unconsolidated morning. of end you through this the versus How year

Saum Sutaria

John, you are latest just clarify, to SCD vis-à-vis asking transaction? the

John Ransom

buy-out to get majority Yes, position? this how many think to year centers the you

Saum Sutaria

accomplished we've well year-to-date. John, well another this -- year, XX about XX XX So do plus year. to And we over expect this

John Ransom

your more gets end year? Does goal, end to there to that are do this after the of

Saum Sutaria

estimate, It our gets expectations. us to our

of I the a time, a past quite end those few think there's them up less go you that under some yes of and over portfolio of part that but then than are as are XX of facilities we'll are know still consolidating you more development. total year the facilities XX old a XXXX, if of

up portfolio centers more the we So XXXX those as consolidate, mature. when into consolidating you end go XXXX, we will of will

Operator

question. your from with Andrew Our proceed is Please question UBS. with next Mok

Andrew Mok

in $XXX hospital your CapEx lines quarter? And help allocated do million. good the the Hi, acuity the you how in where morning. you portfolio? expand understand service meaningfully to Can higher the runway within you growth view accelerated to quarter CapEx us

Saum Sutaria

continue this making we mean, haven't -- Well, I the right. that a is stopped. it mean, I the And one runway for us, to strategy longer-term was

we capital, obviously And happen of probably top deliver And plenty innovated USPI, to of suite stay mean very the there. runway cardiovascular that's an trying high based work we're be the has prongs setting, in true developing. thoughtful. the And it. community what safely. being then there's acuity a setting, create multiple it mean, and the the of hospital expansion, is services on of to also really are procedures So, number caregivers I I that to all right to but of getting ambulatory complement heart environment things of able neurosciences, growing at to are Clinical that the in surgical technology it's of infrastructure foundation and essentially for right we do.

room acuity we on So continue and there's the along technology space. a in service think going of this to that's evolution lot high with

thing other just cases, medical cases have as you acuity that's high The a hospital about hospital not be surgical is focused well. on to obviously, priority. of based And based, more

Ron Rittenmeyer

so you have end Thanks. Okay, joining operator, we're much going everyone now. to it us to today. Thank for

Operator

today's concludes conference. This

may thank your this you we at participation. your and disconnect time, You for lines

Tenet Healthcare (THC) 8 Feb 222021 Q4 Earnings call transcript