THC - Earnings call transcript Q4 2024 | Tenet Healthcare Corporation

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Operator

Good morning. Welcome to Tenet Healthcare's Fourth 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. may you McDowell,

William McDowell

of and McDowell, for Relations. Vice you a to everyone, as XXXX call discussion Chief today's Executive I We're today's President Sun Executive be as Officer; participating a am Tenet and have management discussion for Sutaria, Vice us Officer. Will our and President of well Dr. Chief join fourth outlook. thank Saum financial senior morning, quarter joining results you call. pleased Tenet's in Good of will and Financial Chairman Investor Park,

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

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

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

Saumya Sutaria

good delivered same-store XXXX, characterized revenue Thank morning, by everyone. you, deployment. outstanding Will, strong effective and growth, and We performance capital in disciplined operations

prior of by over that $X operating adjusted transformed basis XX% have of XX.X% margin highlighted transactions over represents our be portfolio adjusted was from $XX.X of XXX Full revenues from growth year billion well which improved year points to the positioned addition, and EBITDA year. In billion, XXXX. EBITDA franchise consolidated

well strength, growth our management. were by expectations, results continued as same-store quarter high revenue effective driven fourth cost above acuity as Our

year midpoint our quarter Our disciplined performance. full driven to record. initial than note the by year strong million I expectations us would enabled operational exceed year, of growth that each consistently our EBITDA over approach $XXX adjusted ended higher and our performance furthering this track the our has expectations,

XXXX. billion our growth over X.X% over volume was XXXX above joint We replacements XX% represents grew had Same-facility another fantastic highlighted long-term USPI High year generated in XXXX, revenues adjusted EBITDA, acuity which goals. in the of substantially growth in year $X.XX in EBITDA X%. ASCs, prior and by margins adjusted year. total a XX% up

remain Importantly, centers quite earned high experience we XX.X in customer overall a service in XXXX. levels as score patient our

and Despite over which generated were of the during Turning XX prior sale to throughout continue X.X% increase we year. growth a we mix adjusted utilization as XXXX to admission billion year, in up to per the strong over Same-store open environment. represents $X.XXX X% hospital strong prior year. segment. XXXX in and EBITDA Acuity drove payer our to revenue hospital X.X% capacity a respond same-store were admissions hospitals of adjusted up

an the in Tenet enabling generating for XX year businesses deleveraging. as our multiple hospitals operations, we This transformed gross of was $X [ of significant balance multiple important high ] related billion and sales proceeds sheet and portfolio through

outstanding capital shares of the retiring shareholders XX% share returned fourth program surgical in ambulatory past since portfolio as very in approximately to and in were we XX our have both via centers nearly quarter added to the X active development. began we we novo addition, years, In in finally, $X.XX repurchase our de repurchase the for And XXXX. billion M&A XXXX of

a portfolio resulted variety repurchasers in at into that our a of the These In we be Going our operate forward, team's of the actions have current is and particularly with we our and momentum able cash plan more performance XXXX, predictable, flow new ample valuation summary, benefit to efficient we're that year. businesses free to believe multiples. capital for this in of margins pleased and of environments active very shares, we shareholders. with will carry better in

guidance. XXXX to Turning

XXXX effective adjusted M&A ambulatory to in anticipate USPI opportunities the EBITDA in billion remain same-facility billion, 'XX and guidance ongoing additional strong. at of normalized projecting $X.XXX based on an strength of invest the space We to each intend XX full basis. pipeline We the EBITDA XXXX. to anticipate midpoint approximately our XX midpoint centers in are at revenue of sites adjusted growth attractive year a approximately towards of growth de and on novo by for $XXX our fueled growth X% We to $X.XXX portfolio. in of continuing acuity, the operational joining which care million of X% X.X% We the adding rate at is execution expectation X% year

Our efficiency to to ability physicians dividends overall regulatory environment. additional for platform sites of and our consistently resiliency this profitability, capital and scale patients pay create low-cost improves care it to growth as in continues our

Turning segment. Hospital to our

years. segment's will the from of X.X% lines strong the be in XXXX. normalized by performance a basis to for the facility, enhanced X% many third contributions strategic approximately The at projected operation new West [ which going for and opened traded service growth midpoint quarter of the over We Hills X% is driven Hospital be by capital deployment XXXX. ] admissions This are EBITDA and growth on expecting to adjusted adjusted

Conifer in and has we sold, noted, we've we have of contribute should with expanded XXXX. relationships this hospitals to acquirers as that Additionally, the have growth

great of space. of our on we potential acknowledge is changes regulatory deal there the currently in focus a impact Finally, that

We our as to have demonstrated forward. potential differentiated navigate perform in a well going changes of believe set operating and ability variety we from environments, are an peer we

part ASCs our operate changes that site of rates from which potential in important ASC rules. neutrality insulates freestanding with business our example, For

outstanding year XXXX a another in in XXXX. we that believe position had in summary, an are year strong In we and for great

reflects before momentum the guidance carry the and the year. Our we opportunities new into that us

turn and team our partners strategy Our focused management to patients, in established shareholders. ready for value deliver physician stands execute and

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

Sun Park

good Thank everyone. you, morning, Saum, and

with and of EBITDA year. pleased we margin finish quarter almost of $X.XXX total to XX.X%, represents the billion from fourth quarter, basis which very generated EBITDA adjusted are $X.X the fourth net 'XX. of consolidated of the strong an up XXX revenues adjusted operating In We points billion

For operating adjusted strong total growth, revenue billion and cost favorable revenues and full 'XX billion. of $XX.X same-store by controls. year of high net acuity, results patient consolidated effective driven we $X.XXX EBITDA payer mix generated These were continued

driven XX% Now our I'd like in which beginning favorable In again payer and key at strong with Same-facility items quarter, acuity grew to last of revenues same-facility margin grew XX.X%. levels delivered system-wide year the operating by USPI EBITDA high for last X.X% some each adjusted with EBITDA delivered an segments, case USPI's over volume over mix. adjusted USPI, surgical results. year. increase system-wide slightly highlight

the And year hospital points our nor at per basis X% XX.X% X.X%. Same-hospital quarter EBITDA over over admissions XX grew hospitals. adjusted turning segment. 'XX. grew adjusted Fourth EBITDA admission inpatient to up of revenue XX% fourth last and $XXX Adjusted margins was with best increased million, quarter

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

Next, flow, capital discuss our cash will balance and sheet structure. we

in Our billion completed includes million This flow taxes for $X.X in the the of free cash year. cash flow related performance with of was very to 'XX divestitures. $XXX income payment strong our

or flow Excluding to flow this tax distributions these year cash billion after $X of NCI. nearly of cash billion interests, or noncontrolling payments, represents free for $X.X the free

with XXXX, year repurchased our $X.X full the cash year shares our we on million. For $XXX stock of credit of X.X $X billion of no hand outstanding with over for billion We line borrowings finished million facility. under

or leverage our over year. the from divestitures well proceeds a was EBITDA X.Xx outstanding operational hospital past that EBITDA we X.Xx less NCI, performance. substantial as ratio as our Our Reflecting received the year-end improvement

ongoing pleased flow believe very allocation support capital shareholder generation and financial a flexibility to priorities a We have and are to value. commitment deleveraged our We sheet. cash our significant have drive balance we with

to turn now me XXXX. for our outlook Let

revenues operating billion. $XX.X range the to $XX.X in of We consolidated billion expect net

Our projected billion in consolidated $X.XXX adjusted range EBITDA the billion. is to $X.XXX of

when X to that EBITDA call As normalizing a adjusted out 'XX our year. there are prior reminder, items comparing the would I

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

Additionally, for these out-of-period normalizing 'XX. $XX supplemental the our of items, midpoint million Texas and we Medicaid adjusted is After reported in payments expected range. of EBITDA in X% 'XX Michigan at our grow to

strong cost as assumes in pricing well Our disciplined controls. and volumes continued operational as 'XX outlook efficiencies and same-store effective growth

USPI. Additionally, we openings as well segment partnerships and from center anticipate de investments recent in and the further novo as hospital at M&A from contributions

USPI, for and X%. X% In are same-facility of growth X% also of of X% the growth growth to we X%. admissions following: to And addition, same-hospital adjusted admissions revenue to assuming X%

the grow we guidance On expect at midpoints X.X% our X.X% USPI segment to a and normalized at of for ranges. respective basis, our EBITDA adjusted hospital

Our assumes increase year. million expected is of outlook programs. Tennessee be the of in from related $XX net the of first the this 'XX supplemental is and revenues X/X half About quarter to second Medicaid of also to recorded this

at our USPI year to expect Finally, of of first full to EBITDA to year the that the anticipate consolidated EBITDA quarter our this be EBITDA full the in midpoint. we be range of the will USPI's of at would We XXXX midpoint. in XX% XX% XX% XX% quarter year EBITDA consolidated first adjusted

'XX. for Turning to cash our flows

billion flow operations the in resulting $X.XX billion the to billion, in $XXX million of flows cash $XXX cash from in of to $X.X million the range billion. expect capital free of range We $X.X expenditures range $X.XX to in

distributions after to billion. as of to to deployment which have billion $XXX priorities not In in range NCI reminder, changed. $X.XX the range free of $XXX addition, the in flow in cash assuming also finally, would And we're a million $X.XX result capital NCI our million

we'll M&A. USPI to First, capital investments prioritize grow through

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

opportunities. to and/or Third, evaluate opportunities we'll will conditions balanced debt. a retire to approach have finally, share investment and And refinance depending repurchases, other on market we

flow valuations, profile Given shares to and active we repurchasers plan current be our attractive free of in XXXX. cash

operational an drive XXXX transformed effective physician with outstanding and of to for our portfolio conclusion, value In on we deliver outlook ability partners patients, We're 'XX shareholders. continue had growth business. in a and in robust and to for execution, confident our year

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

Operator

Bank. Pito [Operator Deutsche from with Instructions] Chickering Our question first comes

Pito Chickering

the change your of biggest and years, sort been tenants the in at deleveraging. looking has flows last the So cash few

XX% $X billion Your operations. from cash year this nearly guidance or flow cash is for flow up more year-over-year

flow it's repo us And billion we with out million the left million your at If this $XXX EBITDA after leverage So deploy be target guidance a ideal for to NCI. X.Xx your $XXX what looking are? for rest midpoint. NCI, cash of about at sort share this M&A, it's the at modeling going pull at year about leverage of ratios that less we on you point? Can to refresh $X.XX should

Saumya Sutaria

Peter, it's Saum.

gives a First We're business we of flow the in noted that us repurchase. I perspective, gives at scaling it cash as comfortable this I last generating we than it's terms both improvements also been respect as point especially, but it part to important today. the comments, terms in leverage pursue and made. the appreciate thought. that from this getting we growing valuation of share that from earlier we it strategic operations, may these goal the multiples we've our of us And significant flexibility in importantly, years to I few -- obviously in at reiterating very business, said, the of operate look over my all, activity with and In probably with free from very and at USPI, say

urgency And to sense. noted years, complete plan these would so mean, I higher and both return in And I the active debt think Sun point at anyway. for multiples We be we of regardless. we're coming situation couple I of repurchase any this of shares due not would makes our share don't at repurchasers be a on have right? that there

cash flow. need years, Obviously, So talked track with our continue executing thinking of is we that the generate we've the we've operationally approach But built couple there. really years. last that as to coming record we've our that to in the free about relatively in hardwired clear about

USPI about The comments, last does I of Medicaid in point exposure. we thing would I said don't have tremendous -- amount addition my out not to a in USPI what

or it the X of utilization about flows there, may our years regulatory reality isn't the think X really half looked that any And is out Medicaid segment be out very from risk you cash EBITDA mean than when have scenario is in I generated that ago. our different that's So there might to very related It's risk helpful. and programs. facing

So company. the we valuation the feel confident opportunities about for

Operator

Perse Our Sachs. next question comes from Goldman Jamie with

Jamie Perse

the a pretty years how that volume some the 'XX to spend today? from progress just XXXX on volume just a Where do were volumes post you of maybe recovery throughout environment do minute and seeing you're that the at Obviously, we're think year? perspective and pandemic. you today? the Can strong normalization of course you And expect

Saumya Sutaria

mean to statement December had mean statement I be to right XXXX. coverage that looks we've I make. continuing X that's anticipated attractive have the has least we've I to appear do would is And would we're mean good. a environment the portfolio environment simplest into take capacity now cost looks trends in don't doing to is I environment our there relative and -- volume capacity now I we've employment The the simple good. as on so, both that obvious where where, January make in the summary it and areas changed. strong noted, coming We opportunity of without from aren't way. XX was, to at that positioned to deliberate expand Demographics, demographics. it excessive terms

So feel good We pretty that. mean, our guidance XXXX. reflects into we -- I about

Operator

from question Brian Tanquilut with next Jefferies. Our comes

Brian Tanquilut

Saum, quarter. the insurance just comments trying just all I both about Medicaid out health and there? exchanges for political Maybe, about changes your you're Congrats how potential thinking the what USPI, health business policy care whether the on doing you're to from that And are overall and across are company on the think Republic with lines. as it's do the prepare that to for or change, headlines risk Medicaid to that for curious what

Saumya Sutaria

A few things.

internally So right? of having underpinnings contributed understanding upon to other kind greater is first dependency the underpinning or is et all, with understand in the the of clear clearly of meaning business an the our dependency of strength in any our cetera, et do, our example, I And discipline lines, we we of mean, our fundamental success for view, of less has markets, in service in uncertainty the operating types environment supplemental where, payments a important economics may what have that exchanges earnings, certain cetera.

give and operating us to of combination on opportunity the the as the happens. discipline So about an the manage insights needed pivot depending probably and what business

USPI part the less And exposure past mean years is of de resiliency minimis exchange on has the segments in we've that business, and that's terms taken centers very opportunity from had helpful the a You're by that care are surgery to business right. from the had I growth that perspective. exchange USPI the acute The create on different. ambulatory few that the than over freestanding are in in Medicaid of it making sure as perspective. impact the there rates, segment

a health setting And where more increasing way the it look, of important this things USPI about an of from acuity in portion So which USPI perspective, expensive moving at work is constantly so value a care, the because for the a tailwind into purchaser. lower-cost all of creates right? surgical the doing care an in is industry, we're

be acute think efficiency in able I search generate for the order to in margins, the allow to a important would Medicare of talk create on we to always concept metric environment. to efficiencies important that out to for because it's profitability, hospital of Can to On reimbursement you right? that that there goals type margins you Medicare us have care operate it's side, continue about generate

have the care. the programs for acute access these is access wouldn't the people otherwise for the provide that helping adaptive to #X that side, care action regulators understand on importance Specifically today basic

do. factor or of what thing important a can is if the now bunch I to right that the of policy out shaping policy that get for to we in comes sure not think And that shapes that be right -- manageable a that is likely something because restructure will I'm us really that's actions business and taking behind.

I be with and really well. states many in an that it be that's think things really are administration, critical supporting to being that these there's providing important factor provided made voters a case very also to and to this is as that matter access access happens to of strong that,

Operator

with Our next Barclays. question comes from Andrew Mok

Andrew Mok

case ASC mix single-digit look growth there meaningful are same-store significant without down increasing like I X percentage point look 'XX it to see percentage seeing growth. We case changes. the doesn't to at point up you're X from in high you're When 'XX, MSK but actually mix acuity significantly ophthalmology, revenue where point the

speak of disclosures. the you the not can So to cases it's higher? from mix acuity types driving case obvious Because

Saumya Sutaria

things we remember, item is the mean a for work I hips, the acuity case of in growing. may where procedures acuity in eighth revenue example, is problem. perspective. the at in No the single just acuity the ninth has from have expansion, case to highest you why clarify, joint there. that knees, certain where do shoulder I that's cases line of Orthopedics you an out case, look when lot actually mean, obviously, per ASCs, a low joint That's joint call or Yes. is which total that the we

per USPI So we're what offices building. we're we're growing I reducing the things resiliency net value some case, also strengthen of which business, cases, are revenue what that further be high-volume, the low-revenue In acuity, to is mean, exposure doing the done cases. in with is that wanted we and we could the growing exactly

reason the a line there acuity from the of cases orthopedics a acuity per net That's lot item it's high that acuity and in which revenue work. low case things we driver out you're the really fundamental has high So to of seeing. strength, call

Operator

Justin Lake with Wolfe from comes question Our next Research.

Justin Lake

issues Tennessee to not us growth you ex that $XX -- million little core within onetime guidance? you like a of Maybe you have to what markets, you us, headwind in But kind things tell about that assumed a A instance, in volume mentioned, think you're Michigan, your you've couple expect of as just what's the of you going there. And those tailwind going dollars kind for can is mentioned could then do a exchange exchange year-over-year, for growth kind of bit exchanges, when of DPP tell same numbers-wise. guidance?

Sun Park

and Yes, we've question. supplemental question Justin, the out for about kind the one-timers Sun, payments. thanks called the that On of I you think your It's referenced.

bit we but little mostly year, the is point in QX. of during from divested had a that's course The hospitals were 'XX, of the fiscal other still that in value

of there we generated fiscal So factors. are supplemental Medicaid payments. $X.XX a But couple 'XX, of those moving billion in about

Going our assumes something guidance that. into consistent 'XX, pretty with

You but excluding time, year-over-year. consistent mentioned pretty the Tennessee we that, one were

question we've growth times, XXXX. revenues driver was exchange, your said strong a population On admissions multiple exchange and about as total from in

how expect for much around strong growth of enrollment to we won't see XX%, a certainly 'XX, continue we been still environment. volume in that the have -- continue earlier saw But turns actual admissions. to we the into to but We Saum's We'll that cycle see that comments see environment. renewal positive. overall seems The XX% the

-- an strategy, as strategy from networks a as we're broad in our an long-term example, Just example. standpoint contracting

good we things So see 'XX. for

Operator

Our JPMorgan Chase. with Rossi from next comes Benjamin question

Unknown Analyst

higher bps So byproduct a just this discrete pressure there anything increase within How supply there? occurring that Is in with seen percentage as quarter? the revenue Is category acuity. characterize about would cross a your current you of dynamics XXX your some here of push supplies were to exiting the XX.X. largely year-over-year in

curious you're seeing number of in the during out XXXX. Just state where settling steady that kind

Saumya Sutaria

with it's acuity of a Ben, our on piece. It what latter said think yes, the just strategy. part is kind I you

and So in little up we've well to 'XX. year, been in we percentage as be, But will balanced over the pretty again, a expect supplies it go a bit balanced, the QX.

Operator

Gajuk comes of question with Bank from America. Next Joanna

Joanna Gajuk

both same-store more So of revenue right, nicely on normalized because that to like element and very the a almost 'XX, to X% growth you guidance are X%. grew seems X% in sort be clearly,

break conservatism? range? that included down volumes So pricing versus is that's in maybe it it also just Could

Saumya Sutaria

It's Saum. of there. Look, a things couple

rates we've worth with long looked and at is what learned we've to. First XX around think X% of performance data years' of X% we've of as term, USPI's guide this and to USPI, we before, shared all, growth same-store I

or looked growth Now that year, history year this okay? at over suggests you So X% the the end better 'XX was X, that average over has actually last X.X%, performed year that this strengthened prior past range, point period, we've period, out X XX-year rate. years, year, X.X% over the almost that upper of --

USPI. So long-term we're that from running to averages very perspective in terms hot of with respect

our guide to us brings growth right our what So comes long-term is. rate -- back just

XXX In continue for it's to growth. intensity and acuity are seen, robots This 'XX out these terms volume of in of point driving acuity huge right? taking the we're to lumpy, almost around terms to 'XX definitely in And the now generate and centers. year-to-year, factors it country. I of you've the started which signaling our them shift more what [ do of be into revenue intensity. have cases, plan how scaling to how can as in the programs part is those We our direction is growth of efficiently organization. of some margin, 'XX, of we're some programs able that in in now higher the procedures. the the our ] we're we rooms more

our long-term been quite of running a kind obviously reflects guidance the average. we've But above yes, So that. bit

Operator

Rice comes Next A.J. UBS. from with question

Albert Rice

on update in about term dealing other year you and type of authorization then that changes maybe updates managed end on for signing at challenges to labor care Is activity, of period Saum, thoughts where I you'll the are managed in you've in the you're we've would on 'XX And prior the terms getting a you're know care pay side, of in been at where which years. also content. ask last up historical contracts? been I some where rate maybe denial dynamic still of high the with? a with challenges toward any few

Saumya Sutaria

But our critical. has into working from of and on importantly would that that constant say why adjudicating there's different What been. Yes, is claims forth take costs unnecessary. back The don't I and else we administrative of is a I that than say, goes those. that. the sides no more mean, probably a it mean environment point have view obviously, than anything I both would -- I rate coding, disputes attractive the both difference. skill And that in with low very adversely coding payers operations revenue denials the where a that big made appropriate does our the a collaboratively driving is needed to solid and set basis of compliant doing Conifer documentation, in perspective work initial very, is on has of efficient cycle in

a in respect gap initial we the than in lower maybe appropriate doing. seeing the care you to what comment doing we're from from we're the denial seeing work We're Sun, what want are industry generate side. that cash on good the terms dispute that's right rates things of managed And in we generating flow to because with means rates.

Sun Park

and A.J., are X% the part above the see have respect X% contracts been range of commercial the to we've that as the as slightly question, you've high for your of at first increases inflationary to of pressures the in continuing end said some rates range mentioned. historically, or we to that

is So 'XX overall for contracted as and situation going to probably pretty over the XX% we're in about then I of XX% terms there for consistent. 'XX over contracting, 'XX, think And well. contracted

and have great 'XX we So beyond. into visibility

Operator

Wells with Fargo. comes question from Baxter Stephen Our next

Stephen Baxter

much to to capacity any how Wanted can capacity. of about to online you X% the you'll to how level guidance also some degree. coming the I and much exchange break XXXX XXXX? offer you're is about inside think love that maybe have I to in back to that volume compared hospital out come market number hospital quantification appreciate X% to growth what's for hear Trying of it XXXX. growth maybe would from that still same-store compared of to inside expecting

Saumya Sutaria

bringing it's market the a we're is versus which Yes. Stephen, demand obviously before. which that still of seeing the markets selective mean, online. But out it we're level there's I contributor, both. is capacity why called in majority it is the I that that

but X like is the looks Board. it that demand and numbers, it what quantified haven't of both across between is the the majority market-based We

also chronic line we're choices certain highlighted, Some in multiple continuing continue types illnesses related taking which that be lower to in prevalence that are hospitals the grow perhaps with than of our of more have care of is service may this of the that create to coming doing things people are environment. acuity demand work, out which to

growth how really about the And of we terms so think rates. it in that's

Yes. acute comment now. Look, care been into the in demand in think busy we're patterns. very Jamie's changes from said, it's seeing taking mindset And the it a pattern important the That in not as earlier, the not thing is year seeing I was changes a environment. demand a the most we're perspective I year right to question we're

we right And I'm see going what to that not not seeing so now. later forecasting in go I mean, the may the part of year, but we're

Operator

from question comes Michael Ha Baird. with Our next

Hua Ha

exposure [ all couple maybe of perhaps approach still or might cuts impactful, USPI if my and and a at to to USPI real different understand percent missed on the apologies minimal to news be policy. is first real growth versus guide, a X% And one, and spend. I then potential just clarification overall taking volume focus but my the Just of hospital And I that? Dodge it, question cuts, not a more Medicaid on question just on given implement sorry pricing then it but Medicaid X% but overly NIH the those Medicaid split ] administrative your X quick flow add I'm what's cuts. were

impact slow more your you might if to and Medicaid kind view down potentially might curious happen, on react? that to think likelihood states rates that I'm broadly? how that were cut So provider states to do hear the What's in your hospitals view

Saumya Sutaria

A Yes. different couple things. of

with side business the start USPI. respect to first. just let's it With of So

because care no of can to that. strategy about managed growth increasing consistently, deviation and now you exceeding mean But USPI. of X in to we're not from I approach can volume proven beats half we executing it's cases. same-store our understand it's fact, our volume, in As roughly for lumpy in with we what as that. there's indicated, years the lower lumpy, be from successfully And that what respect and can and And of I half expect we're year from tell long-term specifically quarterly thinking acuity we're high standpoint in revenue at row our guiding you the do a environment.

And pleased that. that, so we can that we're do by

working, fits We around were ago of years with a obviously it. that few But and a pleased it that. got terms how and it's in had and right, executing of we I'm bit little we starts really

But side, the So we center from I in don't obviously, is the don't grant revenue be and even our same. record track cost NIH in the the we're stronger. a significant giving of being -- on short-term algorithm business. medical you enterprises our long-term We -- or with have indirect affiliations. the policy exposure to I it guidance don't think NSF have clear, standpoint, academic

in environment, in have as other where you [ within but significantly ] that our particular, our don't we things environment and we imagine, we in grants our can about So that, RON thought saw that we when environment. and had

Oval what's that comments including the But one. is the abuse, I focus broader going policy all But public Medicaid articulated in of of question an fraud on the think you the happen. on focus and look, and Office. some way and reducing yesterday articulated things can't that's is tell important the other the in made to

be couple redeterminations years of the reduce that that Medicaid. have people of who probably not lot on thing to the or eligible done is number a last find to happen eligible over X think people may I Medicaid

comforted has I'm again, by But some for process. this through of so redetermination to sure. And that predict I I'm fact work no way somewhat that already -- the

where goes this to and what see seen. we'll be So remains

-- state's may be. As on responses to speculating what speculation the

care. Medicaid. to is reimbursement need unit generating systems still access people for the This are that's windfalls incredible is on the the it across way below The think create for not basis. the that I the in allies is go states the dollars are be with only through important to I board come -- to government because going Medicaid that that again, that cost of program the back advocating this partnerships health federal these on for that some

so will in The important that, role And an play think balancing going that's factor. states this. be I important to an

Operator

Ann Hynes question next Our comes with Mizuho. from

Ann Hynes

So given surgery larger scale the there's market. balance delivered is in Can your sheet, in center assets center surgery I some business? remind M&A us, appetite you there big the your know versus out what

Saumya Sutaria

opportunities. Obviously, deploy of the our it's aware over to on not Ann, that would. asset ability M&A basis years a We've everything to of I'm we market. going on kind last last our M&A acquisitions. than few proven year capital of any would comment Saum. you and that that's available acquisition both the We're took went in the the multicenter better it I on thought year, portfolio first we tell single-asset large post very early

benefit our said to value. cash on avenues of But look, of deploy provides and my I in We of We as can comments, growth in And and our for things. approach flow flexibility early point. at in -- lot we're areas shareholders generation that's disciplined. So the flexibility to balance in different we add valuation businesses. have plenty multiple a this which we us multiple sheet given cash believe believe in

Operator

Whit with next comes from Leerink Mayo Partners. Our question

Benjamin Mayo

Just just to ] had strength are some But on year, the partners? that maybe any those on and comment in update that with the in be not I've relationships want Or this aware heard XX And last de to new [ the a second. existing update with. partners? an XX you've all not been activity, the to health or of novo know anything I'm systems just those any with new with an selective financial new broader USPI updated we stick health partners year? you on of there I for work disciplined may of sure Are the any a partners system time.

Saumya Sutaria

supply haven't chain, Whit, system is generate of contract it's And our provided care, as updates Saum. things. right, effectively as everything, platform any our for such because partners to we No, just remember, mean, we our in do I these with without partners we on health work capacity that assets. other synergies, and managed partners management ability

both that's the occur to I novo in ways. assets don't So think vectors, -- and expansion mean, many in both I going can different of the we're growing with portfolio change. I de think

said generate ASCs better the are MSOs their to in realized of USPI. isn't that are doctors new I've markets, are operator expanding existing in investments as footprint. than with past, some some margin in And a from side for markets, are physician Some have those that those there

is So going growth novo forward. de looking to really that that's to another vector create think helping growth strategy, and of a multipronged activities. change It's I that's don't

Operator

comes from question John next Our Raymond with James. Ransom

John Ransom

you'll me. but question, predict with hate bear this Saum, I

that high, evidence because plans. not in to the any from have it what Do heard that? there's you be deductibles few a the quarter uptick particularly folks used fourth is think so commercial we've gotten quite fact that seasonal just of So

Saumya Sutaria

you So just USPI delivery or care John, are specifically? overall referring

John Ransom

electives. in I'm

either or the USPI. in electives the in So hospital

Saumya Sutaria

I'm answer. -- Yes, still QX again, a on surgery would not a bit. elective to that the going you productive that I significant mean, be in to But and I'm give sure a able is I seasonality especially say work. mean is quarter. QX elective Yes. it's statistically Well, I more

QX. Our of our much go a up asset look somewhat at also it But you just of the how versus impact it were and has in does is of events QX, if the in overall. the our And -- segment impact of utilization still some relevant. these deductibles -- weather bit USPI tempered

a it it -- you're the I that of was said, but pattern calculated And of bit hasn't seasonality we've some we've so we how much sort different, general it picking feels mean shift know changed. that events don't little a that that of but on is something intuitively, -- really weather versus up the I

John Ransom

of at 'XX. to that a [indiscernible] probably and in 'XX 'XX, you and answer the backlog for where in all stuff us a events cases of -- that we've think COVID we in this maybe and like electives going and just follow-up, guidance? cleared question, it was to can't and what's 'XX. that's in Do that out was of like normalized and you. other these utilization say, of look If bunch There back your are? answer. all kind of a kind up where more of year so 'XX 'XX, of cancer again, you implied 'XX -- kind but for on is we -- Is kind were your -- kind we're Is And that kind seems wonky I'd have clear thanks what of

Saumya Sutaria

is is ever I we're case be. of or mean, basis I back do that get No an may of in have -- point, a whatever and of where to what see strength everything for on fair to COVID to plan the the that at bit And the little shifts right. But in post-COVID not think kind I I year strong -- that yet, entirely explaining the don't as I necessarily we time, particular. some that, mean, gets demand environment I X at same the saw a the implies. way or said, guidance that's either the in yet that think environment 'XX we

see we'll So how out. that plays

Operator

question next from Nephron comes with Our Josh Raskin Research.

Joshua Raskin

I'm stick USPI the topic. on going to

organic you or of seeing competition competitors growth. if call more de could transactions? Are assets remarks, indicative your mentioned to de novos in novo So the acquired what larger can you of center broader even then differentiate as to centers? Saum, and your speak even developing maybe the expansions we'll you more of prepared one-offs that in sort ASC landscape between Is for sets markets? you or And opposed competitive

Saumya Sutaria

is reverse. significant a part value to the is setting represent of been expand de and consumers you're high I up, also that addition you're we payers you're mean novo novos ambulatory on here, the our from else services. in in that shift it's ground the and Josh, be acuity value go may our that into move in de what activity in and critical, Well, markets everything the consistent Look, usually grow think really on focused into that to for be with and thinking Because de doing again, me right? scaling we've we focused doing let up. work, a the building development novos surgical more is lower-cost moving high to things portfolio markets, acuity

you're novo side. it's of -- value Maybe part of our seeing So strategy. it that why from de the that's more

landscape still where centers. always And more We've been assess the I no, that just don't quality competitive than better The margin them landscape entity competitive good and the landscape, mean, competitive others. I across that. of And want think competitive for to competitive competitive pleased we has to the doing assess counts looks -- terms maintain exists. we the with and ability different that easiest anything, organizations pretty changed. every output of way whatever processes reflects probably pipeline scale, than the and center are some our situations pipeline is In scaling high-profit year. high to count the

Joshua Raskin

That's higher? that helpful. capital Is it the assume fair long-term de to are novo on returns

Saumya Sutaria

] partnership flow. that's generation care think free costs Yes, in [ syndicated, low. the this, start pointed organization the of the of around the activity. right? time there's it's capital-intensive acute the of a shorter but time, work not are again, cash building Because -- Look, course. changes syndicating like The is that frame Peter takes not I in partnership the Yes. once out building at X the an upfront facility, It's big a of

the within obviously, doing de on we focus capital And that, do also what we overall measuring more our on our And more segment, business better. into ambulatory the that when in of and return deploying this more the shift cash. we're invested better we're that the gets organization. We see novos, obviously, in gets terms following we the

So yes, you're what up doing right absolutely reasons. picking on the for we're

Operator

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

Matthew Gillmor

the labor few up made a and you and has years, management, the contract follow on lot SWB company clearly to noted metrics. the comments. efficiency cost The wanted of last progress I

any going to As us? for you are highlight areas to that beyond of in focus you'd look and ahead, continue are XXXX particular there efficiency that drive

Saumya Sutaria

change in think terms labor, creates which that the we've always we're kind labor, managing I metrics mean, supplies, with. the said of as look continue opportunity. to an scaling activities, got we're I consolidation, services, many structure along, the the that active can Sure. so Obviously, really relative note all cost the standpoint just care that out a to I've managing services comparison acute of scale is in in I've our utilization that said doesn't supplies, set pleased segment, made vendor with we cost comfortable standard in that improve asset of to in industry. obviously agenda gold area in of the Obviously, management lines service at purchase managing our -- we've that's peer the from that we and improvements what there. our overhead, we cost, purchase

capacity took build really that's during capacity standpoint. to the efficiency an So and the we into facilities we're expand volumes pandemic off-line we continuing as of work an from on that area that some

Our cost significantly to contributed global our savings. center has business

into lines you restructuring building with now an on, are that's areas analytics look cost well. flow service And X, the X we're years, variety on running different an things. started been XX and savings global business we've physician in it's XX, effectively work of breakeven now obvious to about clinical lot in the But that passed to expanded -- that it's actually materially cash what have cash those doing. receivable And savings and a contribute goes we of has areas, scaling forward certain flow, course, commodity as important well obviously or And If credentialing kind clinical might efficiency there's of that that last agenda basis. our center of what that part unit journey of we accounts the see think you of enterprise. finance, there's a immediate as

Operator

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

Unknown Analyst

Mike Ben. Murray on for is This

So accelerating? joint any drive material growth early And see wanted procedures grew I you And growth been when really to XXXX. for you then procedures and cardiology XXXX latest there? ASC these beyond. Can your slated do in in hear total in ASCs. discuss procedures have progress expectations the nicely to

Saumya Sutaria

very tailwind volumes perspective. But anticipate an we And level that, of I've there. the that the we anticipate along, in with business I wide obviously, in variety still -- guide as line proceed all and to given of be in payer clear that ASC. could set build that growth required cardiac mean, doing equipment a the safely the We said today been cardiovascular than and types cardiac. on CapEx not continuing to there's have is safety because than building I and of that important other procedures going there. opportunity ASCs have that patient orthopedic considerations standpoint. orthopaedics you to We're service our forward. obviously, line surgical the also from procedure people center different opportunity focus of always of both Saum. think It's I've think, slowly ambulatory a more going we're that's a from considerations stuff to in will mix done Same is expansion

potentially So margin is assets. the upfront investment with higher things for the physician much lower partners and other

to And that going obviously so but are think not we're will it we're be today, we'll that I And and economic -- evolve, sacrifice try safety like rush as think think. participants in regard. to to this also but from reasons, quality and reasons we safety I patient patient slower people market and will it in evolve than

Operator

today's This conference. concludes

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

Tenet Healthcare (THC) 12 Feb 252024 Q4 Earnings call transcript