Q1 2021 Universal Health Services Inc Earnings Call
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I'd now like to hand, the conference over to your Speaker today, Steve Filton Chief Financial Officer. Please go ahead.
Good morning, I'm Mark Miller is also joining us. This morning, we welcome you to this review of Universal Health services results for the first quarter ended March 31 2021.
During the conference call will be using words, such as believes expects anticipates estimates and similar words that represent forecasts projections and forward looking statements for.
For anyone not familiar with the risks and uncertainties inherent in these forward looking statements.
We recommend a careful reading of the section on risk factors and forward looking statements and risk factors in our form 10-K for the year ended December 31 2020.
We'd like to highlight just a couple of developments and business trends before opening the call up for questions.
As discussed in our press release last night. The company reported net income attributable to Uhf's per diluted share of $2 43 for the first quarter of 2021.
After adjusting for the impact of the items reflected on the supplemental schedule is included with the press release, our adjusted net income attributable to uhm per diluted share was $2 40 for <unk> for the quarter ended March 31 2021.
During the first quarter of 2021, we received approximately $188 million of additional cares Act grant funds, while we continue to experience residual effects from the COVID-19 virus, the net impact our loss revenues and incremental expenses in 2021 has not been nearly as severe.
As it was in 2020 and consequently, we have begun the process of returning these $188 million in cares act funds to the federal government and expect that process to complete to be completed shortly.
As previously disclosed we also returned $695 million of Medicare accelerated payments to the federal government in the first quarter of 2021.
As I noted during the first quarter of 2021, we continue to experience certain unfavorable impacts on our operations and financial results from the COVID-19 pandemic.
Specifically, we experienced an increased wave of COVID-19 patients in December 2020, which peaked in the first half of January 2021.
The negative impact, resulting from this elevated level of COVID-19 volumes was primarily a function of accompanying declines in elective and scheduled procedures and both acute and behavioral patient days, along with increased expense pressures, particularly on salaries and wages and shortages of clinical personnel.
Our cash generated from operating activities was $72 million during the first quarter of 2021 as compared to $502 million. During the same period in 2020 the.
The decline in cash provided by operating activities was driven by the aforementioned repayment of $695 million of Medicare accelerated payments.
We spent $247 million on capital expenditures during the first quarter of 2021.
Our accounts receivable days outstanding decreased to 50 days during the first quarter of 2021 as compared to 55 days in the fourth quarter of 2020, as we recovered from the billing and collection delays, we experienced in the fourth quarter as a result of our previously disclosed information technology Internet.
At December 31, 2021, our ratio of debt to total capitalization declined to 35, 7% as compared to 41, 3% <unk> 31 2020.
In light of our expectation that COVID-19 volumes are likely to continue a downward trajectory in 2021 is more vaccines become available in the accompanying pressures on our operations and financial results ease.
Our board of directors approved the resumption of our regular quarterly dividend with the first quarterly payment of <unk> 20 per share made on March 31.
The board also approved the resumption of our share repurchase program in the second quarter of 2021.
We were pleased with our first quarter 2021 operating results, which were just slightly ahead of our internal forecast the pace of the recovery from the pandemic is still difficult to predict with precision, but we assume the COVID-19 impact will generally he's at an increasing cadence throughout 2021, and we remain comfortable that we have.
We'll achieve our full year 2021 earnings guidance we.
We are pleased to answer your questions at this time.
As a reminder to ask a question.
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Your question please.
T.
Your first question is from Justin Lake with Wolfe Research. Your line is open.
Hi, yes. Thanks. This is Perry Wang dialing in for Justin My question is around pricing.
Looks like your pricing was up about 26%, which is notably higher than your peers. I was wondering if you could give any color on what's driving that increase was it mostly due to higher acuity from COVID-19 cases are is there any benefit from.
Better commercial excellence.
Sure well, obviously, we've seen during the entire pandemic, our pricing is above well above historical levels and the main driver of that has been the higher acuity of our COVID-19 patients.
A lesser degree our non COVID-19 patients as well.
So I think some deferred care et cetera is driving higher pricing I think our pricing, our particularly our acute care pricing in quarter, one was particularly high for a number of reasons in.
In the fourth quarter, we talked about the fact that as a result of our event our billing and collection activities were delayed we saw an increased aging our receivables and that resulted in higher bad debt expense and lower net revenue based on our regular accounting conventions we.
Anticipated that we would recover some of that as we caught up on our billing and collection and I think that did in fact occur in Q1, and I think we probably benefited to the tune of maybe 10 or $15 million in that regard.
I think that we also benefited from the present.
Harsha reimbursement this is the government the federal government reimbursement.
Non insured or uninsured patients with the COVID-19 diagnosis, I think which really there was very little of that in Q1 of last year and Thats, another probably 15 or $20 million and then there's a small amount of state and local supplemental payments.
We received in Q1, mostly related to the treatment of COVID-19 patients.
$5 million to $10 million. So I think those items are the sort of non recurring non recurring but items that we had in Q1 that we didn't have in Q1 of last year.
Great. Thanks.
Your next question is from Kevin Fischbeck with Bank of America. Your line is open.
Great. Thanks.
Maybe start off by asking.
How Q1 shaped up versus your internal expectations. So I guess it was a bit above the street, but it sounds like youre only reaffirming guidance, even though you continue to expect things to progress through the year.
How did Q1.
Shape up and then are there any kind of mitigating factors and things youre watching it for you or does not.
Sure Kevin.
Actually say in my prepared remarks that the Q1 results were just slightly ahead of our internal forecast.
Which is partly why we have chosen not to make any changes to guidance. We feel like we're largely on track the things that we're watching there sort of a happier screenings, we assume that as the year progresses and this is what our guidance assumed as well that COVID-19 volumes will continue to decline non COVID-19.
<unk> in both business segments will continue to recover.
And also I think quite importantly, labor pressures will ease.
And those pressures will be manifested in lower wage rate increases as well as the ability to.
Treat.
More patients, particularly on the behavioral side.
And then I guess, just a follow up there.
As we think about that volume returning back to normal I guess, it's one of the things that we're hearing conflicting information from COVID-19 possible companies generally expect labor pressure to ease, but I guess some of the staffing companies continue to expect.
Labor shortfalls et cetera, as volumes return putting upward pressure on.
On demand there and we see nurses potentially look to leave the work force I guess, how are you thinking about margins on that volume as it returns back to normal.
Do we think about low acuity volume may be coming in at lower margins and then.
That's what you take on the labor side.
Yes look I think Kevin that the notion is that the things that have driven the pressure on our both our wage rates and just on the overall availability.
Mostly clinical but in some cases non clinical personnel are things like the actual virus itself.
The last 12 13 months.
At any point in time, we've had employees who are sidelined either with the virus itself or because they are being quarantined because of exposure to the virus we.
<unk> got employees, who have suffered burnout and theres been a lot written about that we've got employees, who are quite frankly chasing premium dollars elsewhere.
Hospitals are paying really sort of extraordinary amounts because of the pressures of the pandemic et cetera, I think our point of view is that again as more of our employees get vaccinated will have fewer and fewer of them out.
As more and more of the general population gets vaccinated will have fewer and fewer COVID-19 patients there'll be less burn out there'll be a willingness of nurses, especially nurses to return to the for the workplace.
Well have the opportunities to chase those premium dollars elsewhere et cetera to your sort of.
To your point, whether we return to the same sort of supply and demand balance of labor that we had pre pandemic hard to say.
But certainly I think we have a view that.
The labor pressures that we've experienced over the last 13 or 14 months should certainly he's measurably.
As we continue to recover from the virus.
Alright thats helpful. Thanks.
Your next question is from Ralph Giacobbe with Citi. Your line is open.
Great. Thanks, good morning.
Steve any weather impact to call out in the quarter and maybe if you could just get a sense of how you exited March and if you're willing to just discuss sort of early trends you've seen so far in April.
Yes.
Talked about the COVID-19 trends in my prepared remarks route.
Saying that in almost all of our hospitals Vale.
Volume of COVID-19 patients peaked in the first half of January.
Continue to level off as the quarter went on.
Then I would say kind of late February early March we started to see measurable recovery, particularly in the acute business.
In elective and scheduled procedural volumes.
I think the good news about the weather is while it certainly had an impact.
Our broad geographic swath of our markets that included Texas, and Oklahoma, and Arkansas and Tennessee.
Because it occurred largely I think in the middle of the quarter.
And because I think it was so widespread its not like we were really losing market share to competitors. During that time I think people were just staying home are stuck at home and I think because they had for six weeks.
Recoup whatever.
Procedures. They have missed I think by the end of the quarter. The impact was was not.
Really significant so at the end of the day for I think both the reason of the COVID-19 decline in COVID-19 volumes and the recovery from the weather events clearly March was.
We exited the quarter in March a lot more profitably than we began the quarter in January.
Okay, Alright, I think thats, how im sorry, and I would say those trends have continued into April as well.
Okay got it.
Helpful and then just on the guidance.
Obviously, you're reaffirming you've talked about sort of the cadence of earnings improving sort of as you move through the year generally sort of it sounds like in line with kind of your initial expectation, but what about sequestration can.
Can you size the benefit of that and why doesn't that flow through number or are there offsets any help there.
Sure. It's a good question and I think it was asked on the on that.
Fourth quarter call as well and I think what we said at the time wise, we really didn't make a specific assumption about sequestration in our budget forecast.
Because this year was so difficult to forecast in terms of volume and acuity.
And how they would both kind of trend as the year went on et cetera, we were much more focused sort of on those issues and we were on sort of the specific reimbursement issues. So we have said that having the sequestration waiver extended is a benefit to us of 10 or $11 million a quarter, but.
I wouldn't describe it as a.
Pick up of 10 or $11 million per se in our guidance I would describe it more as sort of accurately.
A bit of a cushion in our guidance because we didnt, we didnt really make specific assumptions about it.
Okay, Alright fair enough. Thank you.
Your next question is from Josh Raskin with Matt from your line is open.
Hi, Good morning. This is mark on for Josh. Thanks for taking the question I just had a quick one it seems like uhm is seeing a larger spread between admissions and adjusted admissions than some of its peers.
So is there any reason why you arent seeing those outpatient volumes coming back quicker and did the weather events for the first quarter impact outpatient differently than on the inpatient side. Thanks.
Yes, so I think and we've talked about this in previous calls I think the dynamic.
The single dynamic that probably most separates our experience from our public acute care hospital peers.
As the percentage proportionally of COVID-19 patients that we've treated we've talked in the last few quarters.
The fact that something like the low to mid teens percentage of our admissions on the acute side a bit COVID-19 diagnosed patients and I think our peers are either in the high single digits or maybe eight nine.
10%, so that's a pretty significant difference.
That affects a lot of things that I think it affects our cost structure. It affects our length of stay and to your point I think it also affects outpatient procedures and scheduled particularly scheduled in.
And elective procedures and it affects our emergency room volume as well, which obviously a lot of that is outpatient ultimately.
So I think that's probably the single biggest reason why our outpatient hasnt recovered.
As much.
And then your question about the weather.
It's correct I mean, I think weather events tend to affect outpatient more than inflation. Because obviously, if you have an urgent procedure. If you are having a heart attack or stroke, you are still going to find your way to the emergency room as opposed to if youre, having a hip surgery or knee surgery or whatever it may be but again I'm going to make the point that I think in the end.
Recovered most of those deferred outpatient procedures by the end of the quarter.
Alright. Thanks.
Your next question is from Jamie Paris with Goldman Sachs. Your line is open.
Hey, good morning.
Just first question on the quarter I wanted to talk about COVID-19 patients for a second I know the question was asked a few times last year.
Basically the response from that COVID-19 patients aren't very profitable I'm wondering if that's changed at all day.
These learnings over the last year, maybe a healthier patient population or linked to stay things like cash flow can you comment on the impact of COVID-19 census in the quarter on revenue per adjusted admission and also the EBITDA impact.
So the point that we've made historically and I would repeat because I think it's still valid is that medical patients in general are less profitable than surgical or procedural patients.
COVID-19 patients or medical patients and therefore.
I think that's equally true up for them.
The other issue is that COVID-19 patients tend to be sicker. They are more acutely ill. They clearly have a longer length of stay than our regular medical patients.
And that means that the.
Costs associated with them are higher.
Your point about I think kind of developing treatments and protocols I do think that clinically.
And I think all hospitals have gotten more depth and more efficient at treating COVID-19 patients over the last 12 13 14 months as you might expect I think we learned a lot about what the right things in the wrong things or to do but unfortunately, a lot of those.
More efficient and better clinical treatments.
We are also very expensive so things like rendell severe one of the main drugs that are being used to treat COVID-19 patients are very expensive.
So.
Again, this dynamic of the profitability of COVID-19 patients versus non COVID-19 patients I think still exist that as.
COVID-19 patients so our.
Are simply less profitable than the surgical and procedural patients that they have generally crowded out during the pandemic.
Okay. That's helpful. And then just one on surgical volumes.
For those but maybe you could comment on what you saw across the months of the quarter, both on the inpatient and outpatient surgical side.
Any categories or sites of care that are recovering faster or slower than others.
Yes, and again I mean, I think what we have found that we have found this again throughout the entire pandemic period is that as COVID-19 volumes.
And the peak that our volumes of elective and scheduled procedures and non COVID-19 business tends to decline and I think we certainly experienced that in Q1. So in the January timeframe with COVID-19 volumes were peaking I would say that surgical and.
And elective procedures will probably at 75% or 80% of pre pandemic levels I think by the end of the quarter.
As COVID-19 volumes have declined pretty measurably.
We're at 95% plus of pre pandemic elected in surgical volumes and I think those trends have continued into April as well.
Alright, Thank you Steve.
Your next question is from Frank Morgan with Uhm. Your line is open.
Frank Morgan here.
Yes, you have a cost question.
You talked about.
Some of the severe labor pressure, where people are chasing workers are chasing those rates.
Is that more of an issue on the acute side or the behavioral side and are there any particular markets, where you see that as being worse and.
I don't want put words in your mouth, but is it fair to say that the.
The limiting factor in behavioral health care is index steel labor day.
<unk> is higher than what you can serve given the labor pressure.
If that is true do you how do you balance just.
Sacrificing margin to get that incremental revenue in that.
Higher levels of top line. Thanks.
Yes, So I think Frank you accurately frame. The question, we've talked about pressures on labor really from the beginning of the pandemic and I think most of our.
Hospital company peers have done as well I'm not sure. We're all experiencing it in the same markets and to the same degree, but I think it certainly is a macro issue.
Interestingly, we have said throughout that the labor shortage has manifested itself differently in our two business segments I think on the acute side. We certainly have seen an increase in wage rates themselves. We see an elevated usage of over time and shift differential and use of temporary.
Traveling nurses all of which are measurably more expensive than our base wage rate for for nurses and other clinical personnel.
On the behavioral side.
You measure it by.
Salaries and wages per adjusted patient day, which I think is the right way of measuring youll see that.
The cost of labor isn't going up all that much. The real challenge is we just simply can't pay enough to get sufficient per.
Personnel and at least some of our hospitals in some of our market and so I would say that on the behavioral side and I think you alluded to this in your question.
Shortage of appropriate clinical and in some cases non clinical personnel are probably the single biggest obstacle in headwind to getting back to pre pandemic volumes and quite frankly, even above pre pandemic volumes.
And I can assure you that it's probably not.
It probably actually I would say most certainly the single biggest focus of our operators.
As we turn our attention to what we need to do to both recruit and retain.
The proper amount of nurses and that obviously includes proper pay rates that we're constantly doing compensation surveys to make sure that we're remaining competitive.
We're looking at our processes for recruiting and hiring.
Our processes for mentoring, new nurses and new graduates all those sorts of things are.
A focus of ours and we've.
Made some progress and I think.
As for my earlier comments indicated there is.
Expectation and then hope that as the pandemic eases in the pressures of the pandemic ease the labor pressures will ease as well and thats. Some of the initiatives that we've been implementing will gain more traction.
Thank you.
Your next question is from Peter Chickering with Deutsche Bank. Your line is open.
Hey, good morning, guys. Thanks for taking my questions a question for Steve and Mark If you want to jump in if we step back a minute and look at the behavioral market do you think that you guys are growing in line.
After a slower than overall demand and its slower can you give us color on on why youre growing slower and what's the change during 2021.
Yeah.
Or do you want to comment first.
You can go ahead, Steve Okay. So.
I think.
My response to Frank for some.
It covers that.
And I've said this before during the pandemic every one of our internal data points and metrics indicate that volume continues to reward demand I should say continues to increase at.
At least at sort of pre pandemic levels, if not in many cases above pre pandemic levels. So we measure that by the amount of incoming our inbound call traffic telephone calls internet inquiries et cetera.
And.
I think there's also macro information out there that suggest that the number of diagnosed the bowl behavioral illnesses has continued to increase and theres been a lot written about the fact that mental health stress et cetera has been greater during the pandemic for a variety of reasons and again our biggest challenge throughout.
<unk> has really been our ability to satisfy that demand.
And again labor is probably been labor shortages have probably been the single biggest impediment to doing that and that tends to be very geographies specific so that there are hospitals in which we do not have those issues and we're seeing demand growing and volumes, increasing and then there are markets and geographies, where we clearly see that taking place I think it is.
Noting that in the markets, where we tend to experience those problems.
Again data point that we have suggest that our peers are experiencing those same issues in those geographies, so where we've had to cap or closed beds because of the unbilled unavailable for a clinical personnel.
We know that there is evidence that our peers have had to do the same thing in those same geographies.
And I would just add.
So what Steve said, we have been dealing with certain staffing issues for a while now we are taking new and different actions to try to combat some of this with just.
Improvement in some of our internal processes that we think and we.
We have confidence we'll have a different outcome for us going forward. So when these specific markets.
Ease up a little bit.
We'll be probably more ready maybe than we've been in the past to capitalize on that.
By improving operationally some of the things that we're doing to attract staff keep staff.
So on.
Okay, and then two quick follow ups on the premium labor comments, you've talked about can you help us quantify how much it impacted costs in the first quarter Youre looking at premium hours as a percent of all nursing hours, where did it peak during <unk>, where do you guys exited March and as you look to two Q. So fair to think about margins improving to the low prime.
Liam labor, despite a reduction from the strong pricing seen in <unk>.
Yeah, Peter So I would say this.
You know what.
At the beginning of the quarter.
The way, we measure sort of the impact.
The labor pressures on wage rates as we measure the percentage of our nursing hours in particular that are being paid at premium rates things like overtime, and registry and traveling nurses et cetera, and I would say at the beginning of the quarter when our.
COVID-19 volume is really peaked.
The percentage of our nursing hours that were being paid premium rates were in the low double digits. You know 10, 11, 12% something like that.
At the end of the quarter I think those rates were maybe half.
That.
And while that doesn't necessarily.
A shift of five or 600 basis points doesn't seem huge.
Think that it's worth making the point that those premium hours are often being paid at two or three times the rate of our regular hours. So the changes in the number of hours don't have to be all that significant to really start to drive.
Volume changes so.
For your last point I think we think that as those pressures ease and as the percentage of premium of ours come down to more normalized historical levels.
They should have a beneficial impact on.
On our margins because while I think our revenues will also come down because acuity will come down I think that the inc.
Incremental rate pressure is greater than the decline in <unk>.
I could use that we would anticipate.
Okay, Great and then my last quick question here, you talked about sort of the monthly trends for acute cadence aimed for behavioral health patient days tracks are in January in the peak of the COVID-19 surge sort of how did exit March and any comments on April. Thanks, So much.
Yes, so again.
I think.
Behavioral patient days were about roughly 4% below.
Last year for the quarter I think at the beginning of the quarter.
When COVID-19 volumes were at their highest that was probably more like six or 7% down and at the end of the quarter more like two or 3% down.
And again the expectation it may not be.
Steady progression like that but I think our expectation that those volumes will continue to improve as the year progresses, both because the COVID-19 pressures will ease.
And on a related note the labor pressures will ease as well.
And then one clarification on that would be saying exiting sort of down two 3% for March and April is that on 2020, which the comps got very easy op for obvious reasons or is that versus 2019.
So when I say pre pandemic, we generally are using 2019 as that pre pandemic managers. So that's what I'm referring to.
Great. Thanks, guys.
Again, if you'd like to ask a question. Please press star followed by the number one on your telephone keypad. Your next question is from AJ Rice from credit Suisse.
Okay.
Hi, everybody.
Quick questions hopefully one.
Obviously, you're reinstating the share repurchase.
I wondered on capital deployment elsewhere, the M&A pipeline both.
It sounded like there might be a few acute things that you were looking at last quarter any update on whether those still remain in play and then also there has been press reporting about some larger deals that private equity has on that.
Broadly describe as behavioral that might be in the market any.
Just any update in your thinking about whether there's likely to be meaningful M&A. This year from your perspective.
Yes, I'll answer that AJ its mark.
We continue to look at deals on both sides.
I would not categorize it as likely.
Because we're in the middle of a lot of this investigation, but there are and it seems like there is a little bit more activity happening right now in both.
On both sides so.
I'm always optimistic that we're going to hit on something but hard to say likely at this point.
Okay, that's great. Thanks.
Steve you made an amount of comments about what's happening with labor and how thats a constraint on volume growth in the behavioral side.
The other two metrics impacted pre pandemic the growth trends in behavioral had been.
What are the pricing dynamics and also the <unk>.
Length of stay pressures that have generally been driven by Medicare.
Medicare Medicaid managed care can you give us your updated thoughts you have been doing better on pricing I don't know whether you take pricing like you are seeing now will continue but any thoughts about that and then also where we are with the whole length of stay issue relative to Medicaid managed care.
Yeah. So I mean, I think what we've said over the course of the last several quarters is that sort of pre pandemic I think our behavioral pricing was increasing on average at about a 2% to 3% rate.
Based on.
Revenue per adjusted day.
Base.
During the pandemic net increase has been more like in the five or 6% range.
I think some of that elevated level of pricing increase is due to a <unk>.
Net of an easing of pressure on the part of our managed care insurance payers. We're.
We're seeing fewer denials less charity care during the.
The pandemic.
While we love if that behavior to continue post pandemic I suspect that managed care behavioral become a little bit more aggressive as the pandemic eases on the other hand, some of that increase I think is more permanent and that we've got and we've been I think much more focused and aggressive about <unk>.
<unk>.
Increases from particularly from some of our managed Medicaid payers from whom we have not had increases in quite some time et cetera, and obviously those are more sustainable. So my gut is that once the pandemic eases.
Some more.
That behavioral pricing increase will settle in.
Somewhere in between those two numbers that I gave before maybe in that 3% to 4% range, so that'll be a little bit higher than historical.
But a little bit lower than where we've been running over the last several quarters and I think the same is generally true of length of stay.
We've not seen a lot more transition to managed Medicaid during the pandemic I don't know that.
Yeah.
It was an appropriate time for states to make big changes in their Medicaid programs.
But also as I think we've disclosed before the vast majority of our Medicaid patients.
Certainly something like three quarters of them are already in managed Medicaid programs. So I don't think we think that the impact of incremental or additional patients migrating to managed Medicaid will be that significant in the future and book I think we made this point in late <unk>.
2019 in early in 2020 in January and February of 2020, but what I would call pre pandemic.
Length of stay is leveling off.
Labor shortages have been leveling off.
Et cetera, and then.
Pandemic hit in mid March of 2020 and.
The bottom sort of falls out, but I think we felt like we had made a lot of progress on those couple of issues prior to the pandemic really beginning to impact us.
Okay, maybe one last one.
Very specific question and this may be too granular Jeremy if you want to just take it up off line, but.
If I look at that corporate expense item. It was sort of consistent this year versus last year, but I noticed last year, you tended to drop off by about $20 million to $25 million in the second and third quarter.
And it seemed like that was a bigger drop off than you traditionally did pre pandemic is there should we look for something.
Seasonal pattern more like last year or.
Was that somehow driven by what happened with the pandemic and therefore, maybe it doesn't have that.
The seasonal drop that we saw last year, but it's sort of more muted.
Going forward.
Yes, so honestly a J. It's a question that you asked us yesterday and we continue to look at it.
I will tell you that I think potentially.
Potentially.
Probably the biggest swing factor may be.
Our own health benefits.
Which like everybody else I mean started pre pandemic. It is sort of a normal level and that dropdown is people.
Karen.
Nearly as much care and now are sort of increasing backup to increasing so we will look at that I think further in and try and give people a better sense of how they should model that in the future but extra.
It strikes us that that's the biggest swing factor.
Okay, Alright, well that's interesting incremental thanks, thanks for that.
Sure.
Your final question is from John Ransom with Raymond James Your line is open.
Hey, good morning, one for Steve and one for Mark or Steve just wanted to.
Just get you to confirm some math if you would on all of the 2021.
One timers, including bad debt recovery.
Sequester and anything else that you think we should pull out as we think about our 'twenty. Two comparison, so I'm just kind of a total kind of a good guy EBITDA number it would be great and then for Mark.
We know there's a big spike deal in the marketplace.
They want a big price something like three times revenue its a premium asset.
<unk>.
No.
When you guys look at something like that and think about running your returns.
How do you put that through the seltzer.
<unk> analysis.
You want me to go on that for you.
Sure.
So when we're looking at any deal you mentioned, one particular, one but when we look at any deal.
It's.
Fairly consistent as far as our approach because I mean if.
If we think that the.
The possible acquisition has merit, we're obviously going to do.
Our diligence to figure out pricing and what we're comfortable at.
And there are a lot of factors that go into it.
I won't go into everything here, but certainly.
Asset on the behavioral side.
We would consider the markets.
For the.
Seller is already doing business and how that overlaps with our markets.
And that will play a big part in determining.
How interested we are so.
Same thing on the acute care side, if we see something on acute we would actually probably be more interested if there were synergies in markets, where we already play as long as we didn't have FTC issues.
Because we could build up.
Market's a little more different on the behavioral side, but.
But that.
Consideration is a big one for us.
And then obviously the pricing and who else is in the market competing against US. So we continue to look at.
A couple of different opportunities on the BH side and when it all comes to fruition.
You will certainly know about them.
And then I'll just very quickly recap.
The sort of.
Extraordinary for want of a better word.
Particularly acute care revenue items in the quarter I think we can.
<unk> B.
The event impact that as the recovery and collection of our aged receivables from Q4 in the sort of $10 million to $15 million range.
State and local COVID-19 related reimbursement in the $5 million to $10 million range and that hurts a reimbursement of non.
Our uninsured COVID-19 patients in the sort of $15 million to $20 million range. I think those are the items we talked about.
No I'm, sorry, I got that I was thinking for the full year.
Think about full year 'twenty one.
I know the bad debt recovery won't recur sequester goes away.
Thanks, I was just trying to get an annual number I got the quarter number.
Oh, Okay I am sorry, so yes. The event really is a onetime thing.
State and local sort of reimbursement is difficult to predict.
Project and the hurt some moneys at the moment.
Our sort of slated to go through.
National Emergency date, which I think is currently July I think the administration has suggested they anticipate it going through the end of the year, but technically at least at the moment. It only goes through July so.
We'll have to see what that benefit is.
Okay. Thank you.
Thank you.
We have no further questions at this time I'll turn the call back to presenters for closing remarks.
Okay, we just like to thank everybody for their time and look forward to speaking with everybody again next quarter.
This concludes today's conference call you may now disconnect.
Okay.
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