THC - Earnings call transcript Q3 2024 | Tenet Healthcare Corporation

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Operator

Good morning, and welcome to Tenet Healthcare's Third Quarter 2024 Earnings Conference Call.

[Operator Instructions]

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

William McDowell

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

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

includes morning to section our this could plans this information. Our discussion presentation, posted represent forward-looking website, certain slide materially. to differ today webcast has been that and available our Actual management's a the results which Listeners made advised Investor of during expectations and call are currently statements based Relations are tenethealth.com. on

the under in Exchange is Investors information. statement take Tenet forward-looking any Commission. obligation presentation XX-K Securities our update and today's on filings as factors slide no statements with the and other subsequent based as the most recent note risk cautionary included discussed Form of in should to well

with I'll And over the to that, call Saum. turn

Saumya Sutaria

Thanks, Will, good and morning, everybody.

discuss our a to those results, together and markets, and I'd the third like moment rallying company, to to hurricanes to and impacted peers Spirit pay take respect in the rebuild those recover in in quarter our best a acknowledge partners is by the our we our and Before in suppliers who American operate energy devastation significant, shows in those crisis. regions. but The of the in

XX% exceeded reported quarter revenues third our growth the EBITDA, million disciplined continuation results XX.X%. volume over quarter represents Once third again, strong billion. results growth EBITDA and In our and Moving of in of of quarter, represents once driven adjusted EBITDA on representing XX% of over were which $XXX third operating a in performance was $XXX XXXX, results. adjusted and operating USPI's margin an we to quarter third Consolidated by again the growth $X.X adjusted net expectations million, operations. with consistently strong 'XX. our

Orthopedics X.X% grew the replacements open were and in robust. margins growth or in remain quarter, prior including coupled with We De Diego, a have GI the with California. currently volumes in an largest growth musculoskeletal in we and novos development and revenues centers ASCs remains new USPI's center under activity partnership outpatient construction. Same-facility EBITDA procedures. up urology the Synergy surgery nearly X dedicated new establishing part are and XX% XX syndication total stages year, novo of strong ongoing story adjusted in over joint the Orthopedic de important did San

environment to utilization was third open our up the capacity million strong way. segment. quarter strong quarter representing in sequential same-store remains as growth a continue hospital admissions importantly, growth. in hospital with $XXX EBITDA up X.X% The XX% of Adjusted over cost-efficient and third XXXX we the Turning to

in We've XXXX succeed way revenue adjusted year, to operating XXXX prior continued was over X.X% our strength, up quarter Third ability leading environments, in than results robust cost tough aftermath expected the with our to XXXX now allowed demand in and COVID deliver throughout management chassis and operating year. in the of acuity mix. and in admission per proven stronger efficient where us reflecting the has XXXX

July, hospital newest our operating cath emergency procedural growing area our hospital rooms services. years. markets In continuing a over with women's focused is devoted to an we large such, state-of-the-art a The our services department investments opened rapidly and labs, Antonio. in entire San near in expanding Westover Hills, the in coming on are floor growth network significant As support to we make to in

next our hospital for continues XXXX. with Florida Lucie, an of opening planned in construction Additionally, St. Port

guidance. Turning XXXX our full to year

$X.X billion business billion units. increase of full our a $XX organic based in raising of the again fundamental on once an are to of XXXX represents outperformance our We $X This of range to million year both prior adjusted $XXX expectations and We've nearly the our this million guidance from at year. by EBITDA the call. our range raised guidance the over midpoint now increased our second announced quarter initial at guidance

Clearly, performance on the Alabama of spend bit pleased completed XX. are to portfolio September time a I'd year. we like with little the strong sale our of We our discussing our throughout transformation. hospitals

we at have All multiples of executed have operational improvements on we several the each the have that these years. reflect facilities last of high over made been the sales to to that

an cases, management. as invested geographies expanded expected More capital demonstrating value and of profile our the attractive should many its retained enhanced of Conifer and providers in these business us importantly, a more and result model, with result. current hospitals relationship deliver that the the has we for revenue acquirers return portfolio higher cycle on hospital our sales, has returns to

are culture of well hospitals leadership execute we've to able to positioned to well. favorable results more and team a during our and discipline While operating challenging a as operating a built deliver benefit times be from environment,

we going is and actions for are X. leverage After improve EBITDA to significantly forward. have we The committed to accounting leverage ratio around on a an tax minus payments asset NCI the have our due us are our deleveraged ratio still sales, that enabled taken basis on balance sheet

date. very are the deleveraging with to accomplished pleased We

through stronger are for shareholders create flow free Looking forward, generation. cash well we value positioned to

with a portfolio transformed high us degree provides of capital and flexibility. Our financial

given to equity ambulatory business development, continue multiples deploy and trade enhance believe the market. at in novo shareholders M&A industry-leading and surgical to de to capital spending we will return through capital to share excess relative attractive to capital We continues organic growth to increased our our fuel growth repurchase that via

And strategy now view The Sun? positions operations established results. us physicians, and capital consistent drive shareholders. value that, disciplined combination our turn, and more with deployment Sun management of for a our and of an of will team provide focused to detailed in significant financial patients

Sun Park

Thank you, everyone. morning, Saum, and good

strong third we In total generated third be XXXX. continue with revenues third operating billion quarter adjusted EBITDA to net quarter consolidated million, a and adjusted over XX% coming of $XXX our range. above increase financial well results EBITDA quarter, Our the $X.X of in in guidance the

EBITDA EBITDA of Our points now basis same-store 'XX. margin segments high and system-wide which our cost acuity revenues quarter the quarter, revenue mix. of I X.X%, strong grew up delivered These highlight to growth, and system-wide USPI, by EBITDA third for results. per would XX.X%. with third same-facility adjusted is strong results controls. up of again last net over XX% with cases grew favorable XX.X% key effective USPI adjusted XXX payer operating from of adjusted revenue each payer delivered were X.X% third same-facility at driven Same-facility like quarter increase with mix some items year, favorable in case, system-wide in over year margin last levels X%. driven by USPI's beginning

our to Adjusted at EBITDA over year hospital grew last basis points XX.X%. Turning XX% segment. margins with up XXX

adjusted favorable Excluding of X.X%, XX% continued admission increased our segment hospital mix payer revenue high third the grew per Same-hospital EBITDA hospitals, acute 'XX. again adjusted admissions inpatient divested over in levels. grew and demonstrating quarter X.X% and

in lower Our X.X% consolidated labor net third salary, expense of X.X%, and respectively, we 'XX. reported wages consolidated both and that SW&B, quarter, and benefits were was our the of quarter XX.X% than substantially the revenues of XX.X% contract in

under $X.X million balance of capital we generated And discuss billion billion facility. shares We for outstanding million. of quarter. XXX,XXX cash no Next, as $XXX we sheet $XXX year-to-date, credit we with $X.X of structure. million cash million have shares quarter. the borrowings our repurchased our for flow, on repurchased line XX, $XXX our and of had September We hand free the flow of will cash during third stock And in X.X

of as well NCI, XX as the divestitures our reflecting from mentioned, our was operational a improvement EBITDA Saum ratio or our leverage proceeds X.Xx X.Xx outstanding from as EBITDA December received we As that hospital performance. substantial year-end, less

turn outlook to for XXXX. now me Let our

million billion now For the to billion, consolidated the prior 'XX, midpoint lower Alabama range sale $XX.X our primarily $XX.X versus of revenues expectations operating at hospitals. due we the in the of to expect $XXX net

raising impact EBITDA fundamental sale of the Alabama $X.X are businesses, to range billion our billion the our partially of $XX offset of We $X.X million by to XXXX our the by reflecting outlook strong performance hospitals. adjusted

to the reduced taking the expected XX% adjusted have raising we midpoint now are EBITDA we range, our of adjusted to 'XX full of midpoint EBITDA segment, to our $X.XX to hospital expect the of in facilities. $X.XX the or range our range EBITDA 'XX XX% And from by billion to $X.XX USPI, outlook divested account billion. 'XX when narrowed year $X.XX EBITDA at grow adjusted 'XX At the At into billion. billion impact we our over million $XX

recent Alabama free taxes $XXX our range in Turning flows billion. million million includes to the cash $XXX cash We net range flows. including to now of divestitures, completed the to related $X.XXX payment of about expect This in transaction. the

tax 'XX billion cash an billion midpoint million [ prior at our or expectations. outlook increase these ] NCI, flow $XX free the less represents this Excluding free over $X.XXX of payments, $X.XXX of of cash flow of

As has we've improvement [ our while for ] different investments in and our our us delivering cash the our performance shareholders. said in making helped flow value continued before, balance sheet deleverage business

Now minute 'XX. a I'd discussing like to spend

to premature We at for evaluating guidance. are and point on therefore, us this still conducting our processes provide key assumptions, and business planning specifics it's 'XX

you to we current context for about give thinking want some year. However, next do our

there all, call out. that I normalizing would of items are First X

XXXX that have from will recur reported $XXX we EBITDA 'XX. have We not and adjusted in in million of facilities divested that

and reported have programs of efficiencies a cost and Medicaid million XXXX. growth adjustments X additional $XX disciplined offsetting Medicaid at we revenue expect in and items out-of-period we favorable same-store continued from volumes these More supplemental and some controls. In strong Michigan level, than addition, in potential supplemental Texas from continued programs in operational pricing, effective consolidated

well investments for capital within M&A hospital guidance further our with in as process deployment an anticipate of completing as our We contributions finally, development priorities earnings recent look USPI. and call. segment forward not also as ] sharing from a you novo in to partnerships [ the from And in changed. the have reminder, de and February planning 'XX We

grow capital First, to USPI we to M&A. prioritize for will continue investments

acuity invest key including hospital opportunities, Second, focus higher growth in we service our offerings. expect to on

for retire And evaluate drive shareholders approach and/or at be debt. refinance investment to conditions other value share consider a our will we attractive to our see finally, and depending free an which with have repurchases, the trades opportunities. at Third, attractive as flow cash very balanced we'll and multiples market it opportunities this equity on profile. opportunity to to We

pleased our progress in the transformation. portfolio we're with 'XX and In made we our conclusion, have strong performance and significant extraordinarily with

ability for the we Q&A. patient to our in Operator? that, with in providing care increased We ready to begin the we're And are deliver on outlook our serve. remain on communities we focused [indiscernible] confident our XXXX as

Operator

[Operator Instructions]

Research. Josh Our Nephron with first question from Raskin comes

Joshua Raskin

quick couple of Just a clarifications.

unusual. guidance in the EBITDA sequentially think would I be segment very drop ASC a implies for seasonally that obviously USPI

if there. curious just there's the cash flow, just to payments could if anything I'm out us to I So you are tax in call XQ tell be. think what And total going

my could just changes potentially managed any be, real about care talk then or you just changes seeing And would behavior? that from question you're

Saumya Sutaria

questions three there. There's Okay.

I the USPI So on let's with start think point. handle them. don't accurate the don't Why we that's --

just try tax So care. the let's talk that about first I'll payments, and to managed clarify and

Sun Park

Yes, Josh, this Sun. is

million at in million $XXX For for [ USPI $XXX QX. implies in our EBITDA, QX ] we and USPI the reported midpoint guidance currently

So whatever see QX each year we -- upswing. what a

of tax payments... terms In

Joshua Raskin

rates, I question. the was at so growth I up looking screwed

Sorry about that.

Sun Park

I see.

total addition about in of to kind our of investor tax in as in payments. $XXX have payments pay with year, other presentation, million tax, for on $XXX QX expect standard the of million we we put our we which Okay. deal

Saumya Sutaria

the care comes adopting midnight, in denials. Advantage fully the still I what rule I I has the impact Advantage would particularly on midnight process topics. adopted. care Look, been rule on the X don't secondly, the One to and guidance the to managed about market in around it And is when as fully side, I'll underway. the dialogue the think limited what is space. Josh, I the think Medicare X probably think X of it's there's discussions Medicare been describe X adopting comments just the keep managed midnight impact of of been

in between level, somewhere short of certainly points the probably some I be disputes if disputes both compliant our rule of again, seen sides to way. can providers very us. growth, and the I related but an And costs on only about contribution have guess then activity the and clean in amount of that work goes XXX do issue denials industry, somewhat this basis to the for we've of X we should with that admissions document and overall denials we're speak has I years, more increasing that we us, there was payers XX for We're disciplined other and seen least up extraordinary and and adopted. administrative the back and in mean, At things. gone last you if few at midnight to fully And think look I code. and and way that at

to industry. you're in And at administrative this our there time, same it's right on the side really the at capabilities on been [indiscernible] the clients, to what's happening point, just made because have inside certainly that frustrating of mitigated the be relatively this solution And some investments has processes and impact sitting if cost. have Conifer wasted it's we to activity. a time that right and of have But and

Sun Park

Sun is this Josh, And again.

also I think you asked sequentially. revenues USPI about

sequentially QX, USP and ] XX.XX So implies QX was so revenue in [ guidance our for about ] XX.XX flat. [

both our we they And didn't EBITDA we so then QX. as and you we see, leave also USPI X to strong things. guidance, EBITDA pretty margin change revenues and think Again, it as opted expect second, know, historically, a One increase same. the the I is, in were.

are those and revenue guidance. pieces the kind So of EBITDA for the X

Saumya Sutaria

to down. XXX facilities down. is at given Yes. been shut the we point in And and of look, at what had and hurricane plan more we them from impacted happened standpoint, some recover our this shut still fortunate ability have Only X point,

raised the we fourth for year our work what margins last that we're and committed where there. we we've decision will to we our done, think did to realize recover in able the and we And that numbers full at time, might therefore, improve, confident have will quarter so quarter raised. a business impact, back that wonky the that going what to But that confident to for the fourth it make look we we're made it keep have from on for we're USPI, we've year we the and be guidance the bringing quarter. will yes, guidance. we'll And same point a operations that but the meet slightly that little the

Operator

Markets. from question Capital comes next Our Ben RBC with Hendrix

Benjamin Hendrix

wondering see of Is you thoughts if your a on degree you those Is on which growth historical was any your more next moderation assumed specifically And trends? momentum. provide comments, volumes that I in around kind continuing XXXX there in that the general detail could to SS outpace little bit there? year. just to

Saumya Sutaria

thank question for 'XX. No, Yes. Good you.

environment. to see We continue demand a strong

we that especially environment. around occurred the But robust the talked more about which down As doing that in done the our segment, through going have environment. many schools in from COVID time, we've as the order kind slow labor, same with so currently, on the the that of continues at contract I capacity the that's recovery, we've a accommodate really that of before, demand is that in formed normal still hospital we relationships see to year recruiting efficiently, country. replacement spent our a believe with year expanding country demand we're don't know the volume that do not around the to And of when And work working demand nurse terrific to with that cost early we range. testament in expensive to it mortality this

moving we're forward. from so I as that quarter look the about not kind can't first I -- about decline this of we some we our to and here them And differently forecasting as don't think the mean operations, sit say I today we're point. at fourth quarter, a thinking

Operator

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

Albert Rice

little of the volume from there. there Josh's sort step-up But Clarification first I'll bit clarification one was hurricanes from That's growth. X% a One alluded you being use question. same-facility in half. impact to the then USPI maybe of Maybe around approach. and a

term, I back And have X%. side what's path a making higher it in if you to case was. side. on long is wondered volume a Just X% that the the helping procedure transition And you're get of that? know you but midst per on still the little to towards acuity Are the to hitting revenue

priorities flow strong on got I you've low Thanks deployment. just obviously, capital debt for at pretty down point cash to where to free level. then you're want is a ask there. laying a And your your net, But the

away debt would USPI a possibly of around to dividend to discussion flipping there consider we're any from even is deal the accelerated development in accelerate So the pace down or say more the larger buyback paying or a consider there? out pace

Saumya Sutaria

A.J. Thanks, Yes.

and standpoint. would extraordinary Just to in look into as lower to made kind the hurricane to year, net question an given growing an in XXXX, the care drives of that QX, terms the we acuity, We'll out And the the given we volume acuity, the I the from in focus revenue per beginning we comps orderly of drives volume for thought we QX, happen transitions overall activities learning continue with that's which can pattern happens on what case. the clarification related certain later of from right, point, the year, value territory the also continue said point QX, higher we And impact. of It opportunities see where positive at yes, cost system the extraordinary migrate fashion you've those prior to ASCs. seen, type move QX. of of the from in in that

that will for couple I next continue think of the years.

beginning, of those it multiyear move As things was to kind of we had the out. said from a plan some

much our the delevered, are looking capital cash debt Sun clarification, us, about team in of very generation we forward. and very which Look, opportunities structure on the free you're obviously, cognizant right Obviously, right paydown given the of ahead we've balance have but One will still the we're deployment. cash way. flow sheet,

history we've even to we USPI this larger you XX being or last plus would second our in in vision, despite make "XXX XXX" the X more in than deployed deals ASCs, what X guidance, that before point done, for that of look the quarter year this I our the did deal our otherwise. if in capital is at given for we've the The done first the including we've years,

cash spend and the ability is my to And so his, in over trend the positions course, USPI noted in given at within our accretive to our we and accelerating relative company. years, as thing of fact, we shareholders. accelerated the continue believe have, to comments to value in the I few back value And return most deleveraging creating to last Sunday single

think So we consistent. -- very they're I

very have comments the to of with one proactive nuance at flexibility with our each those are forward. points added consistent more dimensions helpful Your point looking be that aggressive we the and on this

Operator

comes Our question with from Stephen Baxter Wells Fargo. next

Stephen Baxter

like another about to generally cadence guess a expected. I fourth of different would ask third Usually, quarter. in up you a guys year I wanted than probably the hospital have are one It the versus little seems quarter bit to a EBITDA different this earnings the cadence. the hospital guiding fourth quarter. is is we

help unusual either in keeping So we the And negative wondering ridge should the in there's us just quarter if then that positive business mind? third be anything you could that. hospital in or if

Saumya Sutaria

the guys, continue if look let's there a it you But the reason the mean, USPI ambulatory know surgery numbers. change. I look, I trajectory obviously a That's be numbers. don't what very at business. we from in have to of for the divestiture the Sun there's our less a address just hospitals range. I to first, can it's to in the go is all, there. would you through thing to see on there that's may with small biggest a of this thing. outperform. range the upside year, a specific seasonality And look in conservative than standpoint, And think second first is pronounced bit goal But want But mean, a I

Sun Park

Yes, I'll do a bit. little

Steve, throughout last our and million kind in obviously, about California once think, we year, we quarterly quarterly fairly Michigan was QX. kind called steady I if our This at normalize quarters. [indiscernible] $XX that from from out you the recall, had the at you out. you look for HRA we you tax if again a QX it up. if of that, look progression, of progression, of year, But piece had out-of-period was our

We million QX. Texas also called out an from out-of-period $XX

are And we have question, in things the we and lumpiness pretty So margins, good a very bit there's a did calling kind any commentary of QX part with But good that. your well-managed guidance then QX, consistent overall of cost our onetime demand think our last not out-of-period operating out. we in on or of is environment. that

Operator

Mizuho. question next from with comes Hynes Our Ann

Ann Hynes

you strong versus in some said you can you Can you you -- And just a I supplemental amount Medicaid $XXX year said be let confirm of but you've you what have million come that of payment EBITDA highlight think called the us out into because believe I Medicaid and this that? heading you just year? think last XXXX. in can volume -- XXXX, you And of programs know QX you growth to could offset payments incremental partly think maybe and overcome,

Sun Park

fees Ann, million bit Medicaid because year-to-date. becomes 'XX to little a same-store it's 'XX, metrics. supplemental about comparison Sun. divestitures hospital all of of the be tricky Year-to-date in in The almost at we'll $XXX

payments my million we we more consolidated So at that? can you all with that And we and $XXX maybe divestitures various then, discussed. this another things in stage hospital that currently off-line $XX than out-of-period through Medicaid from we at commentary, plus the level offset million yes, believe we can out that called on work

On about supplemental your question payments year. next for

aware early in have specific of that all monitoring I potential we're we're new final think too it's and comments. decisions. markets closely, We're all certain awaiting to programs

So as out update that. more obviously we we'll about find

Operator

from question Baird. Ha Michael next with comes Our

Unknown Analyst

to in of benefit the admin of strength of number about get sources forward. wondering operationally expected your durability talk levels, could you've wondering should back years. see the average pre-COVID take below earnings the of could first your And X that time if and parse then terms on So it's strength, the I for out if you of going what sort sort we the it was expansion. I day, time of was the will I growth about that how X improved think line, hospital days hospital you think segment I inpatient margin and to

Saumya Sutaria

comment similar time to pre-COVID. kind of past thing the don't length spend of stay I that on length of up, of which been labor, stay of increase my calling of costs order in we've comments This contract stay that of to made. same initiatives we expect a chase about manage appreciate trying lower. new fresh mix this acuity from in results have important, the pleased the in piece, labor bit we improvements levels our contract XXXX pre-COVID a volume the in I a it's the length you're But to form the continued stay exact out that management, and Well, has is in a had in started environment would lot in mean we therefore, 'XX were you I excess would because with right? lengths we're getting As think acuity our and we're a length bit true and goes make to stay, there. and

look demand will So our think appropriately, I of the about standpoint, we call, even we're with to of inpatient suited is are care of is in to those length relative Look, second sustainable point, durable just fundamental build our said in business admissions. pleased the and echo geometric driver high business context metrics to and XXXX. from within that the continue And which to out your patients is we what the there environment which I uniquely today. looking on mean broader a optimize earlier to into demand like it and forward acuity terms comment, other get to We of positive strategically taking in feel stay the things.

not for et of cost robust appropriate the an demand in could differently said, quarter seeing We're markets last we're signs be add environment. versus that should where not next cetera. first demand in terms I serviced quarter that stop As the in structure, capacity year don't or selectively a to of I year we looking signals planning -- this

success So and pretty particular, lines, -- demand service strength about I other, of hospital-based in inpatient is seeing The critical we're feel in areas. urgent that. good surgical cardiovascular our it's and and nice both some specialty really

and both elective are urgent drivers the business. So

obviously and the by Payer that very commercial so which mix has our in of significantly a exchange to networks. more strength. range driven inclusive market, exchange being this of contracting And even but has broad very been by goes not been year much very helpful strategy, only

Operator

next question comes Deutsche Chickering Pito Our Bank. with from

Pito Chickering

continued outpace has to admissions admissions. Medical surgical

how durable is verification So comps on past [indiscernible], Medicaid you think think quick do And it as normalize Or you that do get admissions a then year is? surgical easier. a that next get hurricanes.

impacted. facilities quantify in the about you talked impact You Did revenue a fourth from quarter? hurricanes the

Saumya Sutaria

We're Pito, expecting Look, raised and mix, commitment had second we're rather repeat to ask the -- better I But We've maintaining X fourth the to guidance going our hurricane a spending you therefore, in have we just acuity, better of Yes, all to the got second. than margins, quarter. time impact. quarter, at to the but higher end we're us would question running. first focused affected. centers we our on the XXX details that of

either it's mind got connection was it us? or question little bit jumbled. that a repeating more the first Do you for time something, -- The one

Pito Chickering

Yes.

do Apologies. bet. hotel you outpace year's in think do You you to as I'm How reiteration, year quarter. continue next Medical admissions a room. surgical Medicaid past we determination? this surgical that comps after is [indiscernible] think durable easier accelerate Medicaid as this Or get that. get admissions admissions

Saumya Sutaria

it. Got Yes.

facilities including to diversion Obviously, that X are standpoint, one our ability we ever our just the the terms continued our medical commitment things. commitment community. receiving is a department and avoid excellence how yes, as reflective Okay. of Well, manage to to of house in emergency admissions from services, being times on wait

admissions also ability medical patients, intensive hospitals. to for patients from have result from hospitals We sick other our care oftentimes in transfers receive which improved outlying

out that. surprised have in medical priorities I in this medical that commercial and environment, including acuity, I we're of participants. care, to and admissions fundamentally, point grow strong pretty continue these would mean by high so is emergent exchange again, not -- for been cases. elective And surgical part also are just not the build including strategy the admissions, to our

course, some from -- growth utilization of exchange of attractive And that exchange question both that raises comes new benefit impact, the coverage. but participants the picking also up more exchange

Operator

question next with from Research. comes Wolfe Lake Our Justin

Justin Lake

follow-up I takes make leverage. correctly expect EBITDA on terms you and real on sure and still heard First, my year-over-year? a year-over-year that in I And 'XX. puts comp, the to with question the just the want all to is of headwinds grow then quick

Now ratio that share once share that get to might if number. leverage you you've ready you you you And be target thoughts aren't to completed wondering if could the now, any able the deal, to expect I that when a you to on deploy was communicate capital?

Saumya Sutaria

Yes.

just X quick answers. real Justin,

first to with to formal of think offset we we'll the numbers. Sun's I going but We're best when that midst where is this the think -- I The pleased standpoint from my with comments section yes, at actively my I the But that we're something stage, at -- pleased a stands, offset we not than from normalized still through that we our again, this are than provide which to obviously, more full we leverage in our that standpoint. is having in say working I doing. debt we ready rather can that. of comments are are than ways that paydown more that work into is think on through around guidance. we're we're do And and And the commentary the indicates we that guidance that, should to mean, description a go expect read leverage stage is, a you probably number, puts where takes, most

Operator

Joanna from next comes of Gajuk with Our America. Bank question

Joanna Gajuk

guess comments terms call assets be the actual midpoint. maybe hospital The will the guidance to it And there. in are the But to on there more be I it it, there on have the guidance revenue reduced acquisitions. around sounds for these was year. you multiples? ASC I acquired? deals up what is larger this other less for multiples? commentary competition I question, follow-up by $XXX there Any there like capital the mean, million, or would terms I deployment end of of Or when paying comes in guess,

I this Hospital. the is assume So Alabama

inpatient there's again, you had guess, but but was also sure, QX hurricanes just bring make admissions. So to up higher, don't there And assuming too? impact in here, hurricanes to want any I the I that -- same-store from

Saumya Sutaria

up The it. the here. efficiency, and step the split business our organization to our just multiples we're multiples. more capital about post-synergy at drive able to really chain focused would the cetera, for on better question the paying ASC multiple deployment And the of in being is We'll what rather we we're supply what to of that assets end and questions back are management, from we're because efficiencies, effective that ability, first effective audience, collectively, the of buy multiple standpoint. on focused often the -- inclusion, reduce And and network remind couple within I years than et the again, we're period

up I from this we know actually speaking, have question purchasing note time. multiples comes recently. any in time to of Now changes not seen the

any of type We seen changes. not have

a And to and so part assets choosing to same acquisition hurricane. portfolio. Do in high-quality in we that's post thing to cover want you attractive the that the consistently terms guiding are become the USPI good that hospital, of the multiples are past. of And have availability the we of pre

Sun Park

equity, Joanna, about. talked believe that revenues, on environment, our environment, things still pricing we've demand all high hospital those good we good

guidance, is for any Our impact all QX reduction primarily we material don't hospitals, any driven revenue by divested in have the there the and hurricanes.

Operator

with Partners. Mayo Leerink from Whit question Next is

Benjamin Mayo

are curious of So cost the sales obviously, about other much that the support with and past. the the size didn't thinking than I'm any to infrastructure one call 'XX. How Conifer out need to going ongoing you just care smaller one, an underlying the had you the portfolio, you from in in just of I And accretion quick the acute business hospital as forward? offset

So just address was you hoping could I that.

Saumya Sutaria

more the time, second Okay. With the of part that, one offset?

Benjamin Mayo

reporting you're considering Well, Conifer you getting going from the and the forward. the don't accretion that earnings hospital to the eliminate sales

say ongoing Just [ offset ] about an we to think as 'XX.

Saumya Sutaria

Yes. Right.

Got it. Okay.

a Obviously, we agreements and have the on divestitures, ongoing would period make it's Remember, significant that time. tend So for perspective. the hospitals period transition the we from service obviously, of after that in start been acute with care typically, to let's the the to size portfolio. support corporation an divested adjustments, reduced, basis, of

those with we relationships way the partners not so Conifer transition the we And these these sales support thoroughly were we which think also with and is folks. them if than hospitals our to we ought things some very that's and because that about owning differently least longer-term of have

just of cognizant we overall reiterate that opportunity there So from I again, to very what that And respect out job take there, are that of would do seriously. we the standpoint. we

things surprising, go are purchase costs we markets asset and part not expect down as direct naturally with services Obviously, mean, away contracts I to you that chassis other what sold. that that's would there of would sales. come as simply allocations these are the certain

Sun. the On offset,

Sun Park

Yes. and relationships of Saum we divested revenue have with has On cycle a times lot as yes, you our discussed sites. as Conifer, before, noted, several long-term

we to to us. do those benefit a be 'XX, to Going expect

when we'll is have expectations. give 'XX, of but our In overall we to terms more of actual information again, specifics, that our part guidance

Operator

with is question next from Our Andrew Mok Barclays.

Andrew Mok

relationship, Maybe that I from last that contribution that first. expand you the you understand up if are incremental EBITDA be relationship there's expand there those if incremental just you on of cases not the where I But could to divestitures? in do an still saying contribution would question enterprise Conifer, an EBITDA. follow

Sun Park

It's no, terms Andrew, Yes. factors. right. referencing we're of mostly you're opportunities the that in expanded 'XX

Saumya Sutaria

look, we've there's thing, some other -- about opportunities. out, calling mind of the expansion the don't And I Yes. talked

us will particular on significant One than require larger amount. in will of take to others, them be which a

in But we what as will to acquisition that we'll to investments as getting to profile give for the in Conifer order make detail So that margin almost over of before more I Conifer XXXX in outside time. again, XXXX a look typical would in business put market terms guidance. Sun with and new think onboard like we our performance overall would said, as the customer about that

rest that expansions. to from these straightforward would of little onboard a the bit the more in we've for of great the story that say, are divestitures, done expansions I Conifer for perspective. But terms a it's

Operator

next Jefferies. Our from Tanquilut with Brian question comes

Brian Tanquilut

Congrats on business. still talked see the Saum, remarks, you about you a bit your in quarter. opportunities prepared in that efficiency the little

today have we it the Or runway margins left level So where divestitures stand think and is the much side? segment do to and think XX% with how segment right that you for you've about you as the done, right think that hospital margins? about EBITDA is

Saumya Sutaria

represents estate efficiency think on improve different in real getting without our being utilization hospitals, numbers, ability a to capacity than example, think ongoing focused I -- especially that us opportunity. represents right? little from of is utilization, about the are capacity for I some in And you the bit others into Well, just we of opportunity continue efficiency one to the one we mean, how high-value including things that give standpoint, specific facilities our to

so -- supplies from utilization optimize is, us And the today. still try I to stabilization continue physician to efficiency. environment, mindset finding whatever third-party to example, that standpoint be with the staffing satisfied Obviously, of in an labor environment, would that, the forward like et as one an margins looking services, But not not, of important business. improvements et ongoing expenses, the other to to staffing the and more we're number capacity is again, the cetera, all what area present our is opportunities look of cetera, purchase say

Operator

question Capital with from next Markets. Gillmor comes Our KeyBanc Matthew

Unknown Analyst

USPI. hit joint wanted to the I on total replacement at growth

there acceleration look this sustaining. last year and the of sort sort at was if I quarter XX% think disclosures, into range and we you're XX% of up an starting your

wanted with just your growth share any on how the USPI to the sustainability perspective to you see that respect pipeline development maybe side. of and have if into level that ties to So of

Saumya Sutaria

full that range than lower I believe And -- moved can made the no that outpatient care, bone to towards with other Well, wanted decision we and we sometime I in cetera, and broadly, that we be joint, has at cost unquestionable that a high-quality -- is what settings. the joint think I outpatient-based around in industry outpatient-based manner pretty spine, bone, of et we or think services. a heavily care. seeing We provide XXXX, a mean leaders services we're it's think more that a I secret even those in before,

cannibalization. still We in still Some in of outpatient-based the into is Obviously, think we that the freestanding into cost, of a simply today, service things providing a hospital environment. move the with chronic see versus outpatient all there's environment is there over and hospital-based of reality few the higher that years country illness with care are the next of burden services the lower people chronic management freestanding opportunity the environment. need it's migration that in because will But setting, appropriately services. condition those direct that not these

the for an and expands you when market these in been expanding has The can it offer market ambulatory setting. services

expand careers focused in to surgeons we're the continuing that place orthopedic very so viable to anything a that younger on more show earlier their to And continuing this get and is to exposed in their is marketplace, practice. ASCs them exposed than else who to aren't training to ASCs younger

Operator

comes Sarah next Cantor question with James Our Fitzgerald. from

Sarah James

basis guide. XXX points to XXX be volume about XXXX than shifted to the compared guide XXXX Ambulatory XQ to per more revenue case

with out of migration compared and mix driver mix durability on given the this low about per going larger think of trends acuity your a around revenue quick is the of should volume So to case just commercial forward then we And being clarification. how ASC. comments

get just the what's to DPP, On a and trying year-to-date clean between per mix case to the ambulatory revenue We're hospital. number?

Saumya Sutaria

first them of Thanks think I are the the that split couple there's to question. look, again. for put We'll important things a But here into up on question, perspective.

than of of takes. business we're the this there's added not I that yet, the we're dedicated we because of XX but gone about a that acuity guidance haven't modest add heavily remember, nonorthopedic at pleased understand haven't because about was planning. different rest revenue more of And reasons like that come case the we concept I the really detail relevant I into out all, beginning anything net especially is said than XX breaking that mean of per the think is and per year, to how we right? in segments 'XX growth -- We USPI a when lower that expectations therefore, net that as in that in and And average thinking we're respect from we're acuity First that to a centers chunks 'XX, the year, tranche with the growth a center. centers had one outperforming growth puts center -- with and case lot for they from is large our standpoint. more USPI. that truly important and acuity we and revenues But even orthopedic in continue our of

for I the in business would around the to rate the part about think long-term answer bone of about this and in healthy joint 'XX. get I of rest to the care growth see a and we the tailwinds again, So would guidance echo question But 'XX, we'll ASCs.

Sun Park

this is And Sun. Sarah,

and related your hospital Just on mix mix second DPP segments. the to I the would question. just the virtually different patient the X payment segment, amounts in across of consider all given

Operator

Our next question Ransom Raymond James. is from John with

John Ransom

-- the your doing. take journey at since I'm shot you are seems guys a that pick people to just to and going too, be what

And say first then when effect answering probably you're 'XX, that mean, prepared this, on a that we if secondly, basis USPI, to exchanges expect one in payments Saum, on the So are expansion look state you of should tired to increase that? the directed you same-store quantify quite is Are we I health the you over saying total of can but at 'XX? this year, the in any? not

Saumya Sutaria

Yes.

-- to in was cover [ We ]? back 'XX to to Do would obviously 'XX. HICs 'XX to But that on we you 'XX higher state on a than the to relative for to forecast haven't being gotten end structural is more step that it up is standpoint. payments basis year-over-year, what we 'XX haven't going up Obviously, directed made want expect compare any then. the you the if 'XX, from

Sun Park

HICs, broader space. on across trends, think, certainly John, sure. ambulatory are the applicable our hospitals Yes, and I

I volume we for QX remind speaking, everyone USPI the quantified about see hospitals, it. talking in really to I in smaller, think continue for is while a it, it do component ambulatory about can year-over-year exchange what of we just haven't on We And probably versus XX% we're see increase impact on relatively hospitals. QX.

So still us. for very significant

Saumya Sutaria

benefit to absolutely. all the a year been business It's

Sun Park

Absolutely.

Saumya Sutaria

Especially because in contracting of strategy inclusive the our being networks.

Operator

Goldman with Perse Jamie from is Sachs. question next Our

Jamie Perse

little and potential the how for unconsolidated about thinking looking a a facilities perspective. about Just those at ramp of those talk for on portfolio forward? some facilities development a increases you're ownership going you are where update an Can minute? in ASC from bit of

Saumya Sutaria

there. and Jamie, environment No, we've But have stable exact after other more of Yes. reporting cut on yes, gotten we we've out the this discussion as buy-up numbers have things XXXX -- of a bit we of the into continue opportunities. kind to

it's our to within at on a basis, work. continue of part portfolio. And ongoing buy-up the opportunities consolidated small, We least execute but additive on a

a resources not because a Obviously, sometimes an ability past it to stuff the small, opportunity it's unlock yes, do in business been lot when for that as we But but perspective. of add was as that, we has the big on. growth executed other that development new of from or it's types synergies

Operator

session. turn reached question-and-answer like the closing back end the of to over comments. management now to We I'd for call the

William McDowell

That's you all very much. today. Thank all for

reach free questions, If you out me, to to joining have today. call any very our for feel and follow-up much you thank certainly

Operator

today's conference. concludes This

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

Tenet Healthcare (THC) 29 Oct 242024 Q3 Earnings call transcript