Earnings call transcript Q2 2023

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Operator

Greetings and welcome to the Tenet Healthcare Second Quarter 2023 Earnings Conference Call and Webcast. After the speaker remarks, there will be a question-and-answer session for industry analysts. [Operator Instructions]

I'll now turn the call over to your host, Mr. Will McDowell, Vice President of Investor Relations. Mr. begin. may you McDowell,

Will McDowell

of and outlook. McDowell, for Relations. Vice you discussion a to everyone, as XXXX I as well We're today's am have a discussion for us Will President our join second thank afternoon, quarter joining results, financial you of call. pleased Tenet's Good of Investor

and Chief and Dan Cancelmi, Tenet's senior call today's Officer; in Officer. will be Vice Executive President Chief management participating Dr. Financial Saum Sutaria, Executive

been includes a the slide Our posted webcast has our to Relations which tenethealth.com. this of section afternoon Investor presentation, website

subsequent obligation made to Form Investors our cautionary and the represent are Listeners currently other and is call well advised as to this Securities note based no of differ on expectations included today today's that available in and update based discussed certain XX-K Exchange forward-looking recent any factors could statements Commission. actual results Tenet take information. plans during our forward-looking presentation, are information, the on in should discussion most and materially. the management's under as slide statement with statements filings risk

that the call over to With I'll Saum. turn

Saum Sutaria

Thank you, everyone. and Will, good afternoon,

get by results, by on a team. who forward start Tenet impact XX is Sun's finance we results CFO at record of units. Officer, all underway, leadership Financial track business in of priorities. welcome execute He more the quarter's for our like to supported of retirement. has The extending to call. was responsible Park, for finance the commercial the into than industry. impressive for to our and I has years operational he continue healthcare of become Most to we Sun leadership this strategic recently, delivering transition us an Chief our this warm as look broader joined actively AmerisourceBergen's experience phone I'd will Before positive Sun following and Dan's

volumes second I'm for adjusted of quarter. we quarter, EBITDA results of to reported our $XXX In let's revenues translates better pleased drove net strong XX.X% into X.X% consolidated the the is our million second which Robust our $XX guidance the or turn and attention of free an and to about operating midpoint adjusted present million, margin. effective results attractive than that Now attractive the EBITDA cost billion $X.X cash and range. and flows control

$XXX XXXX, margins We Urology robust. over produced strength EBITDA adjusted EBITDA, with with another Orthopedics over represents volumes second were Net quarter X.X% nearly up adjusted with USPI case revenue quarter in strong improved XX% grew which over ASCs X%. million strong coupled in ongoing very XXXX. total remained Same-facility in the XX% quarter second cases growth joint GI, of replacements and and ENT. per

for environment. but delivery. care Looking access in care. to are current for looking active growth. collectively foundation ahead, the population. of continued a healthcare that ambulatory growth and the ecosystem and ambulatory tailwinds These surgery Patients an in procedural evident A seeking ongoing lower proactively aging include recovery tailwinds demand factors sites support innovation surgery These create care more strong convenient recovering

these in capitalize leader the opportunities. to As USPI this well-positioned is on space,

We overall performing physicians continue high quality to attract physicians, care in translated a which USPI and into growth procedural has retain and facility.

physicians, strong high lines, deferred expand has to volume high as acuity through delivering continue as operational physician We enabled from demand. service well growth while This patient and excellence. new satisfaction servicing

should over the care expanding be ongoing of growth this changes, old the strong see GI source particularly noting, also expansion which time. patient so population under deferred a recent year. case we of of been for both worth has demand from and year XX care and We guideline is evidence It far believe

Ohio, our three bringing reach Among our state. this centers During to in in impressive total our new XX specialty adding the expanded portfolio by XX quarter, we new centers. GI the successfully single

Additionally, and two Florida. de orthopedics in novos openings Michigan focused and our of new were on facility

level activity or by growth pipeline. under further expansion demonstrates novo momentum and and also construction. capital develop USPI's We This encouraged prospects. and high stages will this to XX are in currently in is centers business of the continue than our de syndication bright this our our strengthens deployment efforts into in grow more our portfolio. future With

over $XXX strong EBITDA Hospital adjusted XXXX. with our X%. remained million revenue to up up Turning XXXX. segment. per a Acuity admissions admission were non-COVID On second basis, We X% quarter of second in quarter adjusted same-store generated

shown Our and nurse hiring to We've and improvement. workforce continues grow and successfully reduced has turnover accelerated stabilize.

cost of of X.X% As reduced labor contract a result, second quarter about SW&B. during the we XXXX to

see net With bringing acuity and look targeted comfortable we topline strategic time It the It approach find a hires management our our we XXXX. revenue half strategy. strategy, portfolio of more online. validation XX.X% this our as with the to to placement feel specialty of add room position is to acuity year-to-date that we'll feel expansion, the higher labor on aligned and transformation, labor to of of SW&B this we capabilities, comfortable as running right in is new now and continued prioritize first environment, for pandemic. of ourselves as to favorable with market-by-market, analytics was capitalize level We XXXX invest recover at it our the us a for We gives improving as from XX% high and contract capacity in driven note percent services. prioritize a labor important the capacity

processes to inpatient and acceptance, utilization, areas. to into utilized workflows will integrated dashboards hospital analytics acuity that operating service focus to believe line accessible labor our care workforce on team to room highly and digestible includes data with continue leadership business our real-time staff, development results. contract productivity, and key with We coupled procedural are driven easily utilization, decisions discipline insights analytics The their huddles. and strong enable transfer throughput, managers, driven segment this deliver high equip data more. and This senior Our to optimize make

for technology also margins. performance. and to strong Ongoing that clients delivered continues and perform its automation initiatives offshoring Conifer support well

in Second redeterminations. quarter to need EBITDA eligibility XX.X%. activities, given commercial Medicaid patient especially services, Conifer on the the margins were continues from focus

back, business. I nimble that on higher of ability operating growing. indicated and business generate right the focus, styles effective, results because strengths support the results it management, acuity improving turn the I Stepping and like now, all confidence quarter evolving is that environment ours our in various the and predictable last such is our control, capacity cost to

a As again initial full This full billion. guidance year a our we million increase over XXXX billion $X.XX adjusted at a of represents $XX are $X.XX guide. range million raising year our to by the to midpoint EBITDA result, $XXX range

flow to we about In to business improve, and improve flexibility deleverage continue to structure. growth provides necessary us unique short, growth. to our which continues mix prospects are capital and earnings optimistic investments enhance future our ability our to strong make Free cash our through differentiate

will now a that, review of Dan our with Dan? And provide detailed financial results. more

Daniel Cancelmi

Saum, Thanks, and hello, everyone.

strong EBITDA quarter Our the financial results hospitals above In volumes, the same-store our second and of EBITDA, our with guidance were high generated expectations. above and USPI in $XXX the range. second quarter revenues of adjusted consolidated adjusted million end we the quarter,

and by same store high effective Our strong revenues acuity, results driven cost patient volumes, control. were and

our for few each Now items of I'd to like key segments. highlight a

compared USPI, X.X%. year, the same X.X% quarter, facility per case and last revenues increase urology, and with and high-quality orthopedic strong saw ENT, cases. USPI strong X.X% In volumes in delivered start in which patients. growth growth case provide produced operating net to care up net continues our up a to revenue with Let's GI, to We

very attractiveness the compared stakeholders. portfolio XX.X% value grew income grant pleased is the the testament provide it's excluding to at a of strong and performance, the with year last EBITDA strength we to adjusted be quarter and continues continued to to USPI's USPI's We're of of our XX.X%. second which margin

Turning to hospital care our business. acute

inpatient year Second quarter the same adjusted hospital admissions second total last quarter compared X.X% increased admissions X%. to and same hospital increased

X%. non-COVID admissions increased While

fact, are year. X.X% up In non-COVID admissions over year-to-date, last

labor and Our last were in be a nurse contract second costs costs. quarter the a continues the consolidated the significant in second pressures, quarter SW&B year, X.X% very in of first in management decline basis, contract year, labor of quarter, last year. this On X.X% X% the effective from staffing especially fourth quarter cost despite to X.X% the

investments costs focus And XX% higher has in grown pandemic. the higher and strategic we the lines. case our revenue mix CAGR, the in second SW&B case-mix year. on were before strong, service consolidated our quarter the acuity, XX.X% in to our in continue quarter of last Our compared a percent as since X% revenue as XXXX And yield at remained margin quarter index a

quarter. delivered very XX%. our produced quarter. turn solid $XX adjusted Overall, a with strong now quarter a Conifer, were and to the EBITDA which second in performance second Let's pleased of margin of approximately again million we Conifer

our million flows, no strong of million performance. cash and cash quarter, the of quarter the hand cash of our million and generated $XXX so free cash on review had we now Let's bolstered by sheet, We outstanding flow collection this Conifer's the At credit. far line structure. and $XXX in capital year, under of end balance $XXX borrowings

our issued As retire of billion secured billion previously to proceeds due then next second in XXXX. that that in year. mature early the notes of announced, were the secured We we $X.XX $X.XXX the quarter, from notes outstanding notes used

needed. debt no billion we debt borrowing We $X.X XXXX. now significant of secured have have if approximately available until And maturities capacity

X.X times XXth, June year X.XX EBITDA Our to times leverage ratio at compared XXXX. end was

shares repurchased approximately XXX,XXX shares $XXX and the million as financial our support continue per repurchased us believe XX the provide part share. program. of deployment $X price of year, at we stock growth to actions will inception cash we Also million of X.X about our average have million Since free generation billion of during X% an flow for quarter, of shares to last repurchase share our the flexibility then-outstanding for our our We approximately ample strong capital initiatives. $XX about or program

outlook year. Let me for our turn to now this

midpoint increase $XX million USPI by million hospitals. As XXXX million This continued our adjusted raise the million strong includes for of $XX for range, XXX our and our to a are raising Saum $X, mentioned, performance. raise at EBITDA our million outlook XX $XX reflecting a we

of net $XXX be increase expect in a million. range now billion, billion $XX.X to we of an operating Additionally, $XX.X revenues

our assumptions for increased admissions We've inpatient hospital and adjusted growth in admissions.

increase assumptions the for same growth Additionally, increased surgical X% a our for to prior XXXX, we've USPI, X% our point case facility to expectations. XXX basis over in

passed absorbed other guidance $XX an from compensation EBITDA and among Florida, personal full-year injury increased things reduced recently million in worker's approximately headwind legislation Our which reimbursements.

expect XX% be $XXX year or to XXXX third outlook, we the EBITDA XX% USPI of quarter we USPI's consolidated third midpoint the at quarter be in the adjusted the the the range. in at midpoint will to million EBITDA at full And $X,XXX million our approximately guidance our EBITDA million midpoint. anticipate $XXX million to of range of Regarding our $XXX of

a From to expect this form net $XX amount of to flow XXXX. million for flows capital higher the reinvesting increase expenditures cash our are in expectations fuel business cash perspective, our our operating to back activities Turning growth. over into future cash prior from we and

As expect a this to $X.X year. be to the billion result, to free cash $X.XX of billion for we range flow continue in

cash substantially flow executing generation years on business past we drive while to flows, and free improved continue cash Our our has our expect the over strong several to plans. growth

provide with cash to effectively flow financial us Our shareholders. for deploy benefit flexibility the significant capital of improved

a changed. capital deployment not priorities our have reminder, As

plan grow our surgery we business. capital $XXX to approximately million to First, center annually continue of allocating USPI

growth hospital higher focus acuity Second, continued the service enhancing our offerings. on opportunities, including

and retire further other conditions and Third, to and/or debt share refinance opportunities market depending repurchases investment opportunities. evaluating on

ready we're the to And that, Q&A. with begin Operator?

Operator

is Our Valiquette Steve Instructions] today from question Barclays. from [Operator first coming

live. line is now Your

Will McMahon

McMahon Hi in Congrats Will the roughly the on X% on Steve. guys. for USPI.

of question portion you us Just expect. million kind a there. the told year In raise guidance of on past, $XX the what kind you've full quick

normalized setting and in So the back specifically of call EBITDA? that you what's a to the for for little outpatient on out? Can just more full the of it for growth outlook it Thanks. sizable what increase against give do the year driving on mix payer maybe us think on the you and pretty color XQ then rate kind for anything

Daniel Cancelmi

Yes, Dan. this is

my guide them. year, that the EBITDA as heard billion. XX% We're USPI's have remarks, terms mentioned to of the XX% would be not roughly anticipating in year QX guidance of I EBITDA for of you $X.XXX of In USPI's the may rest full

growth, performed very QX And So been we're are and at the looking far so seasonally that QX. that's anticipating tight has with pressures looking stronger has very typically, on business we this management out combating, into volume how QX. pushes year are lot there. well still is incredibly expense inflationary of a strong that obviously, also

million. in resulted the their and by guidance that's And so results we're so pleased us far with $XX increasing

Will McDowell

you. Thank

Saum Sutaria

thing about other the would and recovery the add case-mix the specifically the only mix. mix this payer growth to year. I feel both you good asked The in and about We that, very because

Operator

question Goldman next from is Perse Jamie Your coming Sachs. from

Your line is live. now

Jamie Perse

I we USPI, on Thank hospital little the with but for was you. in strong for spend in could the afternoon. hoping surprised quarter There surgical the the segment. Good hospital trends I very segment. bit minutes a volumes a got few are the just obviously

about little weaker were actually bit XX think basis inpatient and looked I guys outpatient there. a down you than points

still would just backlog maybe tailwinds the a little probably made you little color you're I some how I outlook growth, some can tied just be seeing what there'd more those about around So us there. and we comments surgical you more bit for to but on of give think were there, given a of know the should importantly, recovery. USPI, think

really any So Thank topic helpful. be on you. would color that

Daniel Cancelmi

to that not it younger the most physicians of both obviously all ability population comments demand a more USPI commercially a recovery to guidelines. terms and we're to deferred really examination actually amount did substantial in and That's my expand it while new and service insured. some the report care, we're by the that recovery on of are and supported we able and of up into of GI address appears backlog to be of appears the being if meant be that growth to to line ramping them, happy new the fundamental at them stimulation Yes, with service seeing we're line at the be

that's I So there. a positive think tailwind

hospital very on you we've have that taken been think an I capacity. aware approach our we Look, the are side, about where guys thoughtful

towards still bringing Obviously, that we even results can with range comfortable We very point, our a getting of with nothing still you side. utilization capacity given as labor were rates type feel very this mix focused expensive, surgical on on before of the ongoing down from of basis I still expensive think target into an admissions, that open. a at expansion. versus any we moderating our this we're contract labor is to a more and bit on than we were medical capacity little tell that focused, the willing began

capacity in a still we're face do hospitals. in sometimes, a from emergency some acute environment. bit surgical off between care coming So, we constrained we trade department, the especially what standpoint medically through see and the a to capacity Again, of managing

from standpoint, that's investments be of think what you And Look, hospitals. our on, good you intensity, saw. the that's surgical margins bit ups net acute as feel and best probably follow and time. revenue what There'll quarters pretty a our we little going focused and about in over our if some recovery the we're you follow downs generate procedural really that's and but the us really care mix to we a because help acuity go

Saum Sutaria

basis, X%. X%, overall expectations, very they outpatient ahead revenues was hospitals how - during And same hospital up side quarter. overall about hospital the when Like up revenues Jamie, with our of were there year-over-year are the look were you so they we on our at the - pleased inpatient performed roughly

Operator

you. Thank

Next from question is from Bank. coming Deutsche Pito Chickering

Your line now live. is

Pito Chickering

Yes, good morning taking Thanks afternoon, or for my guys. good questions.

I and did just you looking conservative year. the back the back seeing admissions about half - math the guess for on guidance did upside this about the X% case conservatism, of - remain, the looks the X% year, implies in or growth the normalized half half and USPI, growth like there - to normalize anything here, X.X% if color simply of current Are For under is it the year. be about about you guidance case be this same-store of that designation about the just profitable half. the to a in and of July? USPI, for it to case is And back implies growth, modeling the first in X% would volumes you hospitals any a your

Daniel Cancelmi

July. I hit chassis would full we is volumes normalize, on described think important and like look I even Well, long-term USPI first the of trends The on the stronger, all, points. you mean, the the if But has still of mean, - obviously, guidance I now on ahead I year are no you've volumes proven. as what color mean, some think.

seasonality the be pretty quarter, like any think this first and we USPI that going expectations an and that's robust biggest it quarter different to here I Just from to at look tends in believe be And think standpoint. certainly QX can this the is to about year. no reason outperform see earnings to thing

that's you perspective normal pretty ahead predict a thoughtful volume to we're point I as you growth much really seeing it's out, that think X.X% in can ensure X%, significant year. prudent than truly from mean, also we look X%, that better a about we're But and what But looking-forward.

on seasonal stronger be reflects and thing is the above. different things - not same the The think again their illness including tends but somewhat guidance it other by things to in seasonal somewhat variation driven as hospital think side, USPIs, its respiratory there QX is I I and as

Our and and the contract capacity way optimism about planning we're comfortable. to that cost where adding the maintain we business the if we environment around can environment it labor got finally back-in labor some also

Saum Sutaria

half been our roughly in I'd year, expectations. hospitals very same of side in know, of And COVID I grow the COVID the have Pito the overall this this But good expecting and the roughly of volumes, outperformed other at point. hospital in about year on and back cases assuming volumes the has of at last X% not the fourth - obviously, half We're quarter. midpoint level the again, performance were X% the the was admissions add thing you third Yes, roughly. only year, is, in the back X.X% admissions the quarter we're

Operator

Thank you.

Lake is Wolfe question coming Next from Justin Research. from

now line Your is live.

Justin Lake

it. Appreciate Thanks.

Just a couple numbers of questions.

certainly, a outsourcing costs physician up hot a topic. other like First, has bit. looks been operating it And were your

Maybe going costs then give what's there. can of mix just operating within lastly ballpark what on hospital you percentage? that as that other side. the estimate or curious, your And Just are physician us physician outsourcing a costs payer on a on

Given a hear that there, number Medicare how pure managed to commercial and Thanks. and just you Medicaid look love year-over-year? and include

Saum Sutaria

you first one. second take want I'll one. to Dan, take the the

us. thoughts and that area for So on few physician since staffing of the a been Not upon the hospital began an pressure them have physician time. pandemic us based just there's focus those have and been focus the faced. talked a outsourcing of based of period about the for discontinuities and have surprisingly, costs some We've that over entities in industry market reimbursement

But new, isn't right. this something

I So takes delivery into that with our line account, our segments, in - robust think and to you care into our in of forward mean, look account if in both item. our increase will what guidance, guidance happen we costs respect takes

yes, combining in pressure our that mitigating utilization So there, possible. with there of service that lines provide work improving cost us, that and area, partner. we of to work on some share us opportunities where they growing we the preferred market by for with by is partners And have their because consolidating with also better our resources certainly, physician they're

needed in selectively our order able outpatient, contracting to And strategies, because there. selectively, we're expense of base seamlessly insource manage our to including where

time. it's and new - been it this recollection not for area, it's an So important is my do but least we've I at not is some think managing

Daniel Cancelmi

mix the remain so than inpatient, good satisfied from with the volumes in-and-outpatient payer revenue the a been this payer consistent commercial payer mix stronger - to we're perspective aggregates tracking, mix attractive - with the quarter outpatient the very in really as a well, trends. quarter, the continues on Justin has yield and perspective, And first from volumes with

Operator

Thank you.

Fischbeck Bank Next question of from today Kevin coming is America. from

Your line now live. is

Kevin Fischbeck

I thanks. kind being there volumes in or into wanted of forced quantify labor where a you Great, about you Is to some might of temp kind go can growth. to which point admissions sounds at kind longer-term. had of how your point about if think be, now way there is is and aspect a where just be I've shorter we - volume deferred - and staffing might volume it aspect CapEx like term frame, a when to to there's it, much maybe invest it, then

of So staff Thanks. above think talking think to average, kind - and the volume grow how and recovery let's about. about that it's if about just to be you're whether volumes to think CapEx right you're could that able

Saum Sutaria

Kevin. Yes,

not mean, certain been I in couple of invested our capacity in of think it's where be in lines full. that minimal. more service to constraints we think I bit about to capacity service I and we infrastructure It's thoughts. the lines, really current areas have the to would physical hospital physician we've say want constraints that are or be I a particular But are be general, able CapEx services may grow. in. the There

both market-to-market a it's X.X%, From of we what obviously, take where standpoint, our if based and ability payer therefore little across we markets. the number those and the really service mean in mix I share, that's - terms upon portfolio, market lines the that a blended the the selective to and something in is What different service about labor really bit doing. is growth we're we're

markets, cases, the we more room the underlying we But costs labor cautious area. mix goes in for markets, of capacity we're in bit that time a look of all have other premium based as mix pretty the forward. to in So additional volume feel that on, good our already think, about labor continue upon tend or results. and contract investing we'll and see on In and costs normalizing, we growth if we're as adding path case some

somehow be the fraction for one-and-done. have or suggest us, that seen it of large acute viewed about of really deferred not I maybe going how than not But I the me really Finally, the seeing, different now is is you patterns a much mean, side, on and we're been right really what has it's not to care others what My acute-care sure. care. asked to is really and least are deferred at general side deferred. question seeing much view I'm

Operator

Thank you.

Sternick JPMorgan. Calvin question from next is Our coming from

Your line live. is now

Calvin Sternick

the markets Were there Yes, that thanks question. seeing as strong a a in on mix. the any you're particularly for quarter in rebound sort had of question the out I maybe And buy-ups geographic and on pipeline and stood you some initially? of give on recover update USPI, of then SCD some slower that the physician too. from can the M&A to just an were the

Just how any any wondering impact about volume buyouts if thinking - just sort if of the on physicians environment. are there's given potential strong

Saumya Sutaria

Yes.

take first Just novos the while taking And de we're to out like all first year. very with of been to of on that's the for that And going the it, obviously, open our report as want year reverse, that strong delayed last USPI. the them contributor well. year on this are at a this on the in an - we're were those first overall track one, we SCD nothing I'll very, take expectations to the to are just half Look, first the second one track if the you buy-ups ordinary one. time, mentioned

Daniel Cancelmi

others. into is a geographic not of geography terms markets I is pace get from in What perspective. due we're specifics volume reopened than growth going or I reporting Calvin, areas about say that -- that Yes. the would not primarily to the geographies what slower to would each a at certain but like say have I'm hospital

So markets it's not this contributors Texas and are the to not big performance. like Florida

that markets markets Michigan. one is two reopened driving The and and because trends there's just these not or or the slower And the it's markets, that's some California this performing being well, what's not case. are all That growth. driven are whether by volume of other

Operator

you. Thank

coming is from question Mayo Partners. next Whit Leerink Your from

line Your is live. now

Whit Mayo

Hi, thanks. Good afternoon.

are question. unpack the anesthesia in or I know increase changes you new of markets any the guess groups? manageable seeing physician from said to at trying disruption it's I the in - but just you what's maybe Are ask Just so, for groups I'm relative of dislocation to I on any any USPI. sort these with kind USPI? coverage subsidies? you Meaning point staffing seeing back seeing on Are we volumes

Saum Sutaria

issues Yes. USPI significant a we in. much just that so a we side bit This than hospital discussions anything contract good, different have. - environment the operate are not to the is on the and sort it's like little because on more side - labor of the just it's the see mix is It's

to magnitude faced side respect much the so anesthesia lower staffing. that is of on And hospital than that the being challenges effect that USPI the so are with

Operator

Thank you.

from Our next A.J. Rice coming is Suisse. Credit from question

line is now Your live.

A.J. Rice

Hi, everybody.

about talk how about haven't like and just mentioned the much want we've seen from of you going a the to you? year-to-year but your a the of all booked they're respect does assume - growth exchanges while. are - hear What talk maybe other you most to to tailwind call line, the Just how provide has areas that? with confirm you feel are is marketplaces, that some that I - for two marketplace want some to you benefit public I'm And them. saying do in there? care you contract much whatever you're seeing or on what managed strategy I that's for being in the been

of And obviously, same lines, question redeterminations. there's then, on the the Medicaid

to a little be Are you of for you may the Are Medicaid. tend that early in days is getting there? actively involved - you in see what those on end do people reverified? because couple And a exchanges up people got you markets heavier some there? of there You've upside

Saum Sutaria

the question. for thanks A.J., Yes,

I all. early redetermination, days on think it's first of

And benefits eligibility And indicated, best-in-class we're effect. service. clients. it and really seeing I'll our glad And reinforce, we're as has because solution. now that enrollment as much point it I've you Conifer So a us, benefits it's - a not raised that I'm expanding

another, form about very, or moving from to one or other, they're from our ability and feel very capture patients, good catch whether we standpoint to So the Medicaid insurance exchange eligible even of to system that of uninsured lot achieved. a way, actually may apparently do this that Medicaid for enter includes the those that coverage. even And in enrollments new environment, of but by the in qualify we

than exchange on doing Our a Medicare early minus broadly in consistent years. of exchanges We took for rather the the approach very contracting that a been many has basis. and on plus strategy commercial

we're with the we're rates with access. So pleased network pleased the and

be narrow don't there a including up, networks have ultranarrow that some some handful they opened them. of networks, may lives As a but lot have in really or in, are

And patients. long-standing well broadly that be to networks lot to are strategy lives, lot a of lives so for we been contracted. the be has or a inclusive exchange gaining of of the of a company very tend It have

Daniel Cancelmi

I And and A.J., it's and that commercial would about in we that are think that managed our are are they Trends mix. part overall, when revenues see And you line care for we the we the exchange disclose. very care nicely, our exchange trending like that revenues, volumes good. of volumes you the commercial included tell

Operator

Thank you.

is from Andrew UBS. question from coming Next Mok

Your now line live. is

Andrew Mok

Hi. Good afternoon.

repurchase of authorization about XXXX. $XX done and share to $XXX have remaining You've through million of date million

You've have increased curious cash $XX around flow hear guide your share to But million. repurchase by better thoughts changed year. with Thanks. profile what CapEx this about the and a

Daniel Cancelmi

views how we certainly opportunities at is always pursue share in share obviously a look and quarter. say. some This to no Depending capital we're terms from that the No, perspective, continue investment conditions, to shares repurchases. we'll thinking we on will and additional repurchases. other in allocation continue our in Dan. repurchased And of there's market absolutely change about We as -

our CapEx hospital So our increased thinking additional side. whatsoever We the repurchases. growth share with additional no drive investments on change on from substantially to guidance

Saum Sutaria

we still EBITDA trends mean, feel very, particular, we Surgery trade discount whether that that as in strengthens, is time and first vehicle look Yes. or minus over a basis, still at would it investment compelling support, point. out echo business long-term you peers, equity of we pandemic, I our division segment some especially the our as especially by as Ambulatory the that, on at come of we growing to our the I trade very an on would in even a total. NCI the

So we associated like very them. business with have much prospects our lot feel a of that upside

Operator

Thank you.

Your from next question coming from is today Tanquilut Jefferies. Brian

is line now Your live.

Brian Tanquilut

contract pretty and Thanks. in should healthy higher negotiations from guys. to per about we both than admission that sustain rates? how hospital I Saum, ability afternoon, level, X%, some about your the at the Hi. Good an acuity with revenue average be the maybe look inflation the as thinking adjusted think perspective as payers Congratulations. obviously strong, we of up

Saum Sutaria

both Look, on strategy, if we we across think in actually I the have out to our to And initiatives and ought we expanding Dan markets. to acuity Look, I think, area, our runway continue that we of Yes. will the able as maybe focus I pandemic still comment. come be sustain.

be a really On a to company hospital the mean index which a a result. and and know, is X% pre-pandemic, very will at been and strategy joined us since that basis, long Tenet's there. been acute of a mix CAGR work some portfolio, strong that working that been reposition there time, in the it at I this world when very, non-COVID XXXX, our upside continue care at case we've has we as you CMI growing for undertook think to we has

create which among And our the other in portfolio, then contracting and consumers, - part our the upgrading pull physicians hospitals, has that of to reputation choose quality work strengthening things, we case. a perspective, attractiveness lot from been has that and definitely as a been of and of employers of the

cities look operate. we're program now two reputation hospitals of of if networks what desirable the years pre terms they than the in at standpoint pandemic because post in in they were ago. were or ago five in contracting were we a consequence, helps that more escalators and It's in we're a more because of And must-have the as what efforts, some three been I negotiate And from they're our doing. quality than our the to and our years terms contracting able case ways which recent in kinds are better

time. So can cycle believe for be will a some this continue I that virtuous

Operator

Thank you.

coming Cassorla is Jason from from Citi. question next Your

live. now is line Your

Jason Cassorla

taking question. Thanks for the Great.

like your wanted CapEx flow up ask It context of you're and Just guide. generation sounds about EBITDA cash to this year. in better both

million Just obviously, you $XXX year-to-date. cash flow, done

half just items EBITDA, like a quick flow payments free and guide There's it be on operationally consider. You that And the of I'm fourth Thanks. as spend? just there's $X.XX billion. cash if Medicaid thinking the supplemental should timing follow-up, or to consider relates updated of year wondering then strong as about any an if cash should to flow any quarter in we otherwise? elements there's we onetime back CapEx

Daniel Cancelmi

is Yes, Jason. this Dan,

year. generation, pleased good cash expectations. with done really has of far how obviously, has free Conifer we're been our so outperforming performance this our It's In terms a flow job.

encouraging. So that's very

payments maybe quarter million. change more say timing, this necessarily there's mentioned, CapEx year, the we're Your in bit we into fourth I substantive from have to $XX make the going little point we still our And tax thinking decision, a seen other the than would made the strong as no really wouldn't in performance about a so invest we to some But that third quarter. far.

Operator

Thank you.

Your Wells Baxter next from Fargo. Stephen coming question is from

live. now is line Your

Unidentified Analyst

for performance progression in businesses where Nick multiples you. are assets. the the you you could hoping effective target for This on the Hi. on I update Thank provide so year of far to those terms is was you and this an Steve. of SCD

Saum Sutaria

this de USPI's Yes, U.S., entirety pleased a the and this buy-ups performance I of did plan earlier. with Dan to to a novos. very also, that the year, according work the been strengthened We're And the has opening lot well. as And and that it's and ongoing margins we've margins management the of which year has done contributor been strong on of as growth. improved acuity on both mentioned operations

Operator

you. Thank

coming question Markets. Capital RBC from from Next is Hendrix Ben

Your line live. now is

Ben Hendrix

color case much. on all if Thank mention I heard the USPI but growth cardio appreciate I I categories, very know the you growth. don't you across

seeing of Thanks. Just your want focus area. on some comments and that what in degree there you're

Saum Sutaria

still the very Look, We it patient because ASC and coronary issues will be work. worked very device-based attuned setting. that this of vascular other voiced area rapidly there in work market about is and today, in safety vascular of One, an Yes. and cardiovascular No, the selectively of expand. to peripheral we're perform selection course, have caution have types I which out. consistently how to

number out in appropriate of different work we're of midst to So pilots protocols. the a clinical safe

I mean, businesses ASCs can do of a a error and associated and liability damage lot really small are there. patient single

the into environment we're more a going careful cardiovascular very protocols expand of developing way. if in we're in and cautious right broad that So set to about

going The Even activity second those compare thing commercial. that be lot you types than just facilities much, have has can to of of orthopedics, and generate. realize commercial if is to of that, types impact to the which payer more a mix, because you the is to that margins it's heavily Medicare much cardiac, tends

But Now for look, margins work do that. out margins got got it ASC by to I engaged at how that stays the far. do part so has with this, are with that of recognize is and partnership physicians in best-in-class USPI to healthy what build the building you business the scale

field? things discuss. in outpatient Sure. be things to I slower my think the because than will going into cautious people move here But it's I is setting mentioned So some more view around the that that, all and of what

Ben Hendrix

you. Thank

Operator

question-and-answer reached We our that conclude webcast. teleconference the today's of you. session. and does end Thank And

lines your a thank at and your this have We disconnect for day. participation may wonderful You today. you time,

Saum Sutaria

much. very you Thank

Tenet Healthcare (THC) 31 Jul 232023 Q2 Earnings call transcript