Q3 2021 Lifestance Health Group Inc Earnings Call
Good afternoon, and thank you for standing by and welcome to the Lifescan Health third quarter 2021 earnings Conference call. At this time your participant lines are in a listen only mode. After the speaker's presentation. We will have a question and answer session to ask a question during that session you will need to press.
Star one on your telephone please be advised today's conference call is being recorded if you require operator assistance press Star Zero. It's now my pleasure to hand, today's conference over to Vice President of Investor Relations Monica Perkowski. Please go ahead ma'am.
Thank you Holly good afternoon, everyone and welcome to lifestyle Health third quarter 2021 earnings Conference call I'm, Monica Borkowski, Vice President of Investor Relations.
Joining me today are Mike Lester Chairman, President and Chief Executive Officer, Mike Bruff, Chief Financial Officer, and Donald Karachi, Chief growth Officer.
While this is my first earnings call with lifespan I have been in corporate finance and IR professional for nearly a decade with public health care companies I am excited to be a member of lifespans and look forward to working with all of you as we continue our journey as a recent public company.
We issued the earnings release and presentation. After the market closed today, both are available on the Investor Relations section of our website investor Dot lifestyles Dot com.
In addition, a replay of this conference call will be available following the call.
Before turning the call over to management for their prepared remarks. Please direct your attention to the disclaimers about forward looking statements included in the earnings press release and SEC filings.
Days remarks contain forward looking statements, including statements about our financial performance outlook. Those statements involve risks uncertainties and other factors, including the possible future impact of the COVID-19 pandemic on our business that could cause actual results to differ materially. In addition, please note that we report results.
Using non-GAAP financial measures, which we believe provide additional information for investors to help facilitate comparison of prior and past performance.
Conciliation to the most directly comparable GAAP measures is included in the earnings press release tables and presentation appendix.
Also unless otherwise noted all results are compared to the prior year comparative period at.
At this time I'll turn the call over to my cluster, chairman and CEO of lifestyle, Mike. Thank.
Thank you Monica welcome back from maternity leave and congratulations on the birth of your son.
Good afternoon, everyone. Thank you for joining us today to discuss our third quarter 2021 results.
Our society has navigated the pandemic over the past year and a half we have seen demand for mental health care continue to grow.
At the same time, we've continued to witness the challengers patient space as they tried to get access to high quality affordable mental health care.
The services, we offer lobster answer needed more than ever we are deeply committed to our mission to help people lead healthier more fulfilling lives by improving access to trusted affordable and personalized mental health care.
Our gene combines a vision for the future of mental health care delivery with a sharp focus on execution and a growth mindset.
Evidenced by our strong operational and financial results.
During the quarter, we added 400 net clinicians stay.
Stabilized clinician retention to 80% annualized aligned with our expectations.
Opened 29 de Novo centers and.
<unk> completed six acquisitions.
The team's solid execution brought our footprint to 4375 clinicians and.
And approximately 500 centers across 31 states <unk>.
Contributing to our strong growth and enabling us to deliver on our mission of increasing access.
Financially. We also delivered at the high end of our expectations, including revenue of $173 8 million up 70% year over year.
Adjusted EBITDA of $10 7 million and adjusted EBITDA EBITDA margin of six 2%.
We continue to maintain a strong capital position with $212 million of cash on our balance sheet.
We've also added new talent to our organization, including the appointment of a new independent director Seema Verma to our board of directors.
Same as a leading national health policy expert with over two decades of experience in the health care industry, having most recently served as the longest running administrator for the centers for Medicare and Medicaid services.
<unk> brings to the team deep knowledge of healthcare policy and we look forward to learning from her expertise.
We continue continue to invest in management leadership throughout the company such as business operations people operations and information security to strengthen our operating rhythms.
Necessary infrastructure to support a growing company.
At the end of the third quarter, we had approximately 6000 employees.
Investing in our talent and human capital is Paramount.
Under our employee equity incentive program, we will be making grants to eligible employees, including clinicians beginning in 2022.
For our clinicians eligibility for equity awards investing will be tied to productivity directly serving our mission of expanding access to mental health care at this critical time for the country.
We believe our equity program will boost our value proposition and a highly competitive labor market.
Attracting and retaining the talent needed for our patient centric business model and establish an ownership mindset, among our employees, including our clinicians.
Just as critically it aligns with our values and purpose and builds on our history of investment and her team are providing meaningful war rewards for furthering our mission of enhancing access to mental health care in a sustainable manner over the long term.
Turning to the market environment, we believe that patient demand for mental health services has never been greater.
From 2019 to 2020 alone the number of adults seeking psychotherapy increased 28% per a recent Mckinsey report.
In October the American Academy of Pediatrics declared a national state of emergency and child and adolescent mental health.
At the same time in patient demand continues to grow the health care industry is experiencing elevated resignations per the latest jobs reports driven by worker burn out childcare cost.
Fatigue.
This has impacted the mental health care sector as well. According to a survey published by the National Council for mental well being in September.
82% of mental health care provider organizations reported it has been difficult to retain employees and 97% said that it has been difficult to recruit employees.
Life Science is not immune to these broader labor market dynamics and their impact on the mental health care industry in particular as we shared back in August.
While these dynamics present, a more difficult operating environment growth in demand for our services continues and we are focused on controlling what we can to drive strong results by being the employer of choice for clinicians.
Over the past quarter, we've escalated focus on our clinicians value proposition with special attention to engaging with our clinicians on a regular and systematic basis and leaning into our values of delivering compassion building relationships and celebrating difference.
The culture and community rebuild with our clinicians is what really matters, especially in a high turnover of labor market.
We've made improvements by engaging clinicians more frequently to hear the stressors in their labs and taking actions to ensure that we continue to support them, both within and outside of the professional setting.
For example, we've implemented a systematic way of identifying at risk clinicians and working to assess and address their needs.
In cases, where their compassion fatigue or burn out or identified peer to peer support is offered through our national clinical team.
Additionally, 100% of clinicians had been assigned champions, who have initiated routine one on one communications to ensure that we are giving our clinicians opportunities to be hurt.
These initiatives are an important component of our value proposition to clinicians and core to delivering on our mission.
Across our forums for engagement one clear theme emerged most evolved from our clinician feedback.
Many are now feeling the impact of COVID-19 fatigue and value the flexibility to deal with their own mental wellbeing.
As a company focused on mental health, allowing for employees to have a flexible schedule as part of our strategy.
To this end many employees are planning to take more time off than usual during the holidays, given the difficult year and we've adjusted our projections accordingly.
We now expect our full year 2021 revenue to land towards the lower end of the $668 million to $678 million range to which we previously guided still representing a growth rate in excess of 75%.
Clinicians value the flexibility afforded by their careers at lifespan and we believe that supporting them is the right move to prioritize the wellbeing of our approximately 4400 clinicians providing care for patients across the country.
Supporting the wellbeing of our clinicians will create greater opportunities to recruit and retain talent into the future.
And ultimately lead to a happier more productive workforce over the long term.
Our efforts are paying off we are.
I'm pleased to report that even in the current labor market environment. We grew our net clinician base by 400, a 10% sequential increase in the third quarter and one of the best quarters in the company's history.
And our retention rates have stabilized at a level consistent with our expectations with approximately 80% annualized within the quarter.
This was driven by our laser focus on our clinician value proposition.
We've also seen sequential improvement in our clinician satisfaction scores from our internal quarterly surveys.
Including an improvement in our communication scores as we collaborate more closely with our clinicians demonstrating our ability to continue to build a best in class environment for the long term.
We're taking the necessary actions now that we believe will position us well relative to the market as macro conditions improve.
I am proud of what we've achieved but there's much more to do.
Life Sciences, a leading mental health care provider with a broad and unique set of assets and capabilities.
I have great confidence that we will be entering 2022 with an extraordinary set of opportunities to help improve the mental health care system for all of those we can serve.
And now I will turn the call over to Dominic to provide more detail on the initiatives that are driving growth across the organization.
Thanks, Mike and good afternoon, everyone.
First off I wanted to reiterate what Mike said earlier about how proud we all are.
The mission, we're serving here at life Science, we are revolutionizing how patients received easy access to affordable mental health care.
There are more than 50 million people in the United States with a mental.
Many of whom are unable to find the care they need.
As we continue to deliver growth nationwide, serving those patients that are in desperate need of care is at the core of what drives us every day.
We won't stop until every person in the United States is one click or call away from a lifetime Health Commission.
As we look to continue to transform the industry our growth strategy remains focused on three core pillars expanding into new markets building market density and deploying our digital tools.
In the second quarter, we expanded into five new states growing our presence to 31 states and making progress towards our long term mission of delivering care to all 50 states or either in person or virtual care.
We continue to have a strong acquisition pipeline of new state entry points and look to become fully operational and approximately six more states in the near term.
In the third quarter, we focused our growth efforts on building market density in our five recently entered states as well as continued density building in our legacy states.
We build market density by first executing on our playbook of hiring more clinicians.
Second acquiring tuck in practices.
And third opening de Novo centers.
During the third quarter, we made excellent progress against each of these drivers.
The first driver we added 400 net clinicians in the quarter, bringing our total clinician base approximately 4375, an increase of 72% year over year.
Year to date, we've added a net total of almost 1300 clinicians are approximately 30% of our total clinician base.
Our six point clinician value proposition continues to resonate in the market as we provide our mission driven culture, a collegial and collaborative work environment. Our strong work life balance enhanced digital tools robust support services and a competitive compensation package.
We are truly dedicated to enhancing our value proposition as an employer of choice for mental health conditions as evidenced by our support for workplace and work life flexibility.
Second regarding acquisitions in the quarter, we completed six tuck ins, bringing our total to 70 acquisitions since inception further demonstrating the robustness of our acquisition pipeline. These acquisitions deepened our presence in Atlanta, Austin, Chicago, Seattle, and D C and expanded our <unk>.
<unk> into Columbia, South Carolina.
Third in terms of de Novo centers during the quarter, we opened 29, new locations and reached the company milestone or two hundred's de novo location opening bringing the total number of centers to approximately 500 nationwide as we continue to strengthen our first mover advantage and national scale.
In addition, we launched a brand new special design for all of their needs and Novo centers going forward that re imagines the mental health care experience for both patients and clinicians.
Designed to reinforce our commitment to providing compassionate evidence based treatment every detail from lighting to materials to color palette has been thoughtfully selected encourage stress reduction and support personalized high quality care for patients as well as collaboration and a best in class work environment for our clinicians.
The first centers to future of the new space will design are now open in Chicago and patient and clinician feedback has been overwhelmingly positive.
This enhanced design keeps us at the forefront of innovation in health care and delivers on our long term promise to re imagine the mental health care experience both in person and online.
Turning to our growth strategy of deploying our digital tools, we're investing in our digital platform to provide patients and clinicians with a unique high quality user experience, regardless of how they engage with life science.
We are currently focused on improving the overall booking and intake experience by creating a more streamlined process for our patients that reduces the burden on them and our clinicians while also improving our patient clinician matching process.
Our product built in house will offer personalized experiences based on the workflows and needs of our clinicians and patients.
Our continued investments in digital tools combined with our investments in physical space design are a testament to our unique hybrid model that puts life sense at the cutting edge of health care innovation.
We believe in a future where patients receive a unified experience across all channels, regardless of how they choose to receive care with us and a consistent experience for our clinicians as they flex back and forth between in person and virtual care.
As we look forward to the future license continues to have an unmatched offering that will enable us to deliver strong long term growth for years to come.
We remain focused on our core growth strategy and it continues to deliver consistent results.
We also remain excited about our long term prospects and the integrated care and value based spaces is we continue to evolve our solutions in those areas over the coming years.
Let me now turn it over to Mike Bruff for a deeper dive into our financial performance.
Thanks, Don ish and good afternoon, everyone.
In the third quarter, we delivered revenue of $173 8 million up 70% year over year, primarily driven by robust net clinician growth of 72%.
Federer margin of $52 1 million increased 57% over the same period last year driven by strong revenue growth.
Center margin as a percentage of revenue declined 260 basis points year over year to 29, 9% as expected as new clinicians ramp to maturity.
Adjusted EBITDA of $10 $7 million declined 29% and adjusted EBITDA margin of six 2% was down from 14, 7% in the same period last year.
Primarily driven by planned investments as we build out our growth initiatives and public company infrastructure.
Our balance sheet remains strong.
We ended the quarter with $212 million of cash and cash equivalents and 157 million of net long term debt with no material payments due until 2026.
For the nine months ended September 32021.
We used $21 million of cash flow from operations, including $23 million for IPO related payments and $19 million in interest payments on long term debt.
Our capital allocation strategy remains disciplined.
Because we continue to prioritize investing in our growth both organically and via acquisitions as well as an operating efficiency as we scale, our clinician and support operations.
As Mike said the.
The market remains robust and the need for mental health care has never been greater.
We are building life science for the long run to deliver on our mission of increasing <unk>.
Access to trusted personalized and affordable mental health care.
We are confident that our investments and our clinicians and in our infrastructure will provide strong leverage and cash returns over the next several years.
Turning to 2021 guidance as Mike noted.
We still expect full year 2021 revenue within our previously guided 668 million to $678 million range, but now expect to land towards the lower end, reflecting the anticipated incremental holiday time off for our clinicians.
Guidance for center margin of $198 million to $208 million.
And adjusted EBITDA of 47 million to $53 million remain unchanged.
Looking ahead, we are in the midst of our annual planning cycle for 2022.
As we work towards finalizing our plan, we are considering strategic financial and operational factors.
As well as continuing to monitor the broader market dynamics.
Therefore, we will not be providing formal 2022 guidance at this time.
However, our.
Our preliminary outlook is for 2022 revenue growth rate in the low thirties and.
<unk> EBITDA dollar growth right on pace with or slightly greater than revenue.
This assumes retention rates remain relatively consistent with where they are today and.
And that we move forward with making the appropriate infrastructure and talent investments necessary to execute on our long term strategy.
We will provide formal 2022 guidance and assumptions.
On our fourth quarter earnings call.
As Mike noted, we remain proud and committed to delivering strong year over year growth.
We believe that we are delivering a critical service to our patients.
<unk> continued to see strong demand and unmet need across the country, which will persist.
And with that I'll turn it back to Mike for a few words before going to Q&A.
Thanks, Mike.
As we look at the market in our environment, we see so much opportunity and room for growth in front of us and a market that is growing mid double digits and a societal need for mental health care that continues to get more recognition and less stigmatization.
We know we must invest smartly and continue to build our highly differentiated hybrid platform.
We also know we must continue to executing on our clinician and geographic growth.
We are confident in our outlook for our company and that our strategy is working and will continue to allow us to build market share.
Delivering on our mission of affordable quality mental health care for all keeps our approximately 6000 purpose driven employees inspired to execute and make a tangible impact.
Let me close by thanking our team members and partners for their dedication and support this quarter.
Out of the work and results that everyone at last chances produced and the enthusiasm they bring each and everyday to achieve our mission.
Now operator, let's go to Q&A.
Alright.
As a reminder to ask a question given the depressed Star then one on your telephone keypad to withdraw your question press the pound key.
Order to allow as many colors as possible to ask a question management does ask that you limit yourself to one question and one follow up question. Thank you.
First question is going to come from the line of Ricky Goldwasser with Morgan Stanley.
Yeah, Hi, good evening and thank you for the details.
So my question is around productivity and retention I mean these were some of the key.
The headwinds that you highlighted in the second quarter.
Psych attrition is stabilizing in the second quarter levels.
Can you talk about that.
That clinicians productivity.
How is it progressing.
Progressing versus Covid.
The expectation that you laid out for us last quarter.
Sure. Thanks, Ricky I appreciate the question so our retention rate.
We said was 80% annualized in Q3 and that was consistent with our expectations for the back half of the year.
As you know the labor market dynamics present, a more difficult operating environment. We continue to be focused on doing everything thats in our control to drive results and really to be the employer of choice for our clinicians. So overall, we remain very confident in our ability to grow we continue to add to our clinician base with 400 net adds in the quarter, which was one of the best.
Thus the quarters that we've had.
Since we started the company.
We continue to see.
<unk>.
We're listening a lot more to the clinicians were getting great feedback from them.
We think that we've demonstrated this great place to work by.
Uh huh.
The number of clinicians that were hiring but we do see this burn out and you read about it.
As the Arab exhaust in the New York Times talked about earlier this week and the great resignation.
But we're engaging more we're just a little bit concerned about.
Clinicians wanting to take a little bit extra time off during this holidays, which actually makes a lot of sense to us.
And then come back completely recharged in January and ready to have a great 2022.
So that's really the philosophy that if you think about your 2022 sort of early commentary that the low thirties and revenue growth.
What kind of Catholic interpreting as a sort of 30% to 32%.
What are you kind of like what's the underlying assumptions.
Included to get to that sort of growth, if we think about organic versus M&A.
In.
Where where do you see potential upside to that.
My breath can you answer that sure good afternoon Ricky.
Youre correct.
In our comments around our outlook.
Low <unk>.
The biggest change in our model has been to now include the headwind through the full year of 2022 of having retention at approximately 80% annualized rate.
That's the biggest piece, we believe that the.
The labor market is.
Uncertain as to whether or not this is a structural move or temporary and we believe that it's pragmatic for us to at least assume that at this point in our planning cycle I think to get any more detailed on assumptions at this point is premature.
The reason why this is a preliminary outlook as we are still in our planning cycle and we do want to monitor the market.
Before we move to finalize that plan.
We will reserve more assumptions until we meet on the fourth quarter earnings call.
Okay. Thank you.
Thanks Richard.
Our next question is going to come from the line of Lisa Gill with J P. Morgan.
Afternoon, and thanks for taking my question.
Just really wanted to follow up on it.
Listen to the clinician is taking incremental time off are there any incremental bonuses that you have to pay people.
Today is my first question and then secondly, as we think about the competitive marketplace. Today, how do we think about paying for the clinicians and you talked about next year equity programs around brands and I agree with you around that ownership mindset, but what are some of the other things that you're taking into account when we think about it.
Rental costs for 2022.
Yeah. Ricky this is my close to or at least this is my cluster. Thank you for the question, we're actually not seen any unusual wage inflation in the sector above what we've already contemplated in our models and guidance, we don't see any changes to our prior planning expectations are clinician types have always been in high demand and we.
Recognize that the demand in a way that we set our compensation structure and how we build in wage increases for our clinicians.
The the equity program that we rolled out we think is going to be significant it was planned for a pre IPO and disclosed in our S. One so theres not an additional cost there, but it does we've gotten great feedback from the clinicians.
And it will.
It's structured in a way and invest in a way that is centered around their productivity. So we think that's going to be a very positive impact at least that's the feedback we've gotten from the clinicians going into next year.
That's very helpful. And then just as a follow up can you disclose the six tuck in acquisitions.
The revenue contribution in the quarter from the acquisition and expected contribution in the fourth quarter.
Lisa we don't disclose that.
Okay I appreciate it thank you.
Thank you Lisa and our next question is going to come from the line of Ryan Daniels with William Blair.
Hey, guys. Thanks, so much for taking the questions Mike I wanted to dive deeper into the equity incentive compensation I think that's an important data point and.
Definitely has potential to engage in green the workforce more so can you speak a little bit more broadly too.
Rob that will be is it all existing clinicians and employees are just newer ones, maybe help us understand how it will vest and what those productivity measures are that will drive that vesting rewards.
And then I'd also be curious for anyone on the team to hit this one is going to be used more in potential M&A activity going forward, just giving physicians that are maybe owners equity piece of life stands versus just a pure cash M&A transaction fee.
Sure.
Thanks, Ryan So I'll answer the second half for so in our history. We've made 70 acquisitions to date and depending on the size of the acquisitions, we have used rollover equity as a tool in those acquisitions and that's turned out to have worked out really well for us as well as the clinicians that have rolled over.
As far as the 2022 equity program, we're moving forward that as I mentioned before it was it was planned pre IPO. It's designed to ensure that we can continue to obviously recruit and retain the most talented team members and it's consistent the design is consistent with other publica with other public companies I would say the one <unk>.
<unk>.
The majority of our employees or our clinicians so I.
I think it's going to be a little bit unique in that we have so many clinicians that are able to purchase participate in the equity of the company and you would have to be W. Two employee full time.
Our full time W. Two employee to.
To qualify for her to be eligible for the plan.
And again there is no there is no incremental cost to add clinicians we're simply moving forward with our original plan to include clinicians and our allocation, which we think is the right thing to do and to land with our mission.
Yes that sounds like a good program. Thank you for that detail and then the other one I'll ask is just on some of the technology investments you talked about more sophistication on personal lines matching some more.
Rapid Onboarding I'm curious if that is fully rolled out or if thats something thats in progress and if it's rolled out.
Benefits, you've started to see on the patient satisfaction or matching and retention side. If it's maybe too soon to have data just any early indicators there would be helpful. Thanks.
Sure Yeah, we're continuing to deploy a number of tech enabled services and it's really a core pillar pillar of our growth strategy. We continue to invest in that digital platform to provide both patient and clinician focused and it's with a high with a unique high quality user experience, regardless of how they engage with last chance.
Donnish could you add some color to that.
So like we mentioned before we're working on improving the overall booking and intake experience by creating a more streamlined process for our patients that reduces the burden on them and our clinicians while also improving our patient clinician matching process, it's really important to make sure that it's a fit from both sides that not only are you getting.
The patients the right fit for them clinically, but also that you are getting the right types of patients for the clinicians to keep them motivated and focused on the diagnoses that day.
Really like to treat or their sub specialized in the.
The product is totally built in house.
Offering personalized experiences based on the workflows and the needs of our clinician and patient base.
As far as our continued investments in digital tools, we've put out a product innovation roadmap thats really been built for the end to end patient journey with this being the first priority that we're executing against along that road map.
Okay, great. Thank you for the color I appreciate it.
And our next question is going to come from the line of Kevin Kelly Endo with UBS.
Thanks. My first question is on the visibility into 2022, and I guess that means.
How much.
Is M&A, how much visibility do you have an incremental recruitment.
What's your pipeline look like relative to what it was six months ago.
If you can give us some color around around the visibility into the revenue number that's my first question.
Hi, Ross.
Yes.
Good afternoon, Kevin.
<unk>.
At this point.
Our cycle, we're looking at all of the underlying growth drivers to determine.
To what level, we're going to.
What level of assumptions that we're going to use for each one.
I think we've been fairly consistent and been able to drive.
Growth in our clinician base this past year.
I would expect us to continue to drive clinician base growth next year.
The wonderful thing about our business model is that we've got multiple levers to pull to drive that growth.
We've got we've got Optionality to look at organic or inorganic when they make sense and those are the things that we're working through right now.
With respect to the broader market.
And the dynamics that we are operating in today.
I think the jury is still out as to whether or not some of these things again are structural or if they are temporary.
And allowing us to have more time to understand that.
And then to finalize our assumptions is the prudent thing and I think we'd be getting ahead of ourselves to try to give you a deeper set of assumptions at this point I think the only thing that has changed from our modeling is that we are taking the 80% annualized retention through next year.
Okay fair enough.
I guess when we just look at your sort of guidance if I just take the EBITDA number forward as well that the margin would have been a little bit lower than what we would have expected given the revenue guidance that you had and im guessing there is some additional spend there that goes above and beyond.
Is it marketing spend is it retention spend that is there anything different from original plan.
And if you can maybe quantify it but if you can just talk to what might be different is it just growth opportunity spends.
Yes, sure sure Kevin.
Obviously, the first bridging item is fully baking in at least from our modeling is baking in the 80% retention rate.
Second is.
The ongoing investments that we made in the second half of 2021 will carry forward.
Into 2022, and then we plan to move forward with those expected 2022 investments.
Because we have a tremendous growth opportunity ahead of us.
Huge Tam.
To attack.
I don't think Theres anything out of.
You would think of no surprises in terms of the broad categories of investment in which we're looking at I think.
Thinking about the digital and tech enabled services those continue to defer you differentiate life stance.
<unk> out our hybrid model and then I think just the general public company and other investments and talent that we need.
To support that growth so.
I won't get too more detailed underneath that simply because we haven't finalized the levels of investment or the allocation amongst those priorities but.
I would suggest that.
There is not going to be anything thats thats, a big surprise.
I appreciate that thank you so much.
Got it.
Thank you. Our next question is going to come from the line of Steph Wissink with Jefferies.
Thank you good afternoon, everyone and we have two questions are related the first is on the 80% annualized.
Retention figure I'm wondering if you can help us contextualize that what it was maybe pre pandemic. How you expect that to trend I know in the 'twenty two guidance you're mentioning it holds but how could that trend over time, what has the peak than in the past.
And then I wanted to ask a related question on the fiscal 'twenty two framework.
What are you assuming in terms of the productivity measures per clinician as you rollout into the forward year are you assuming that the.
The bookings per clinician or then appointments per clinician is similar in the fourth quarter as it would be for the full year or is there some sort of seasonality handicap, that's already built and normally to your fourth quarter and you're adding an additional handicap for additional time off to recover. Thank you.
First thanks for the questions.
As far as retention rate. So as we said in our roadshow in 2020, we saw an 87% retention rate and due to Covid. We had indicated that we saw we had more clinicians leaving than we had seen historically in 2020, and so we felt like that was going to shake out around.
80%, we in fact have stabilized at around 80% and.
Phil feel good with that number on a go forward basis.
And when you think about.
This is Mike Mike Bruff, sorry, I forgot I have to differentiate myself.
With respect to clinician productivity.
For the fourth quarter.
Said differently for the back half of the year.
We had productivity assumptions.
And we were pretty spot on with those assumptions, especially through the third quarter.
Our results came in within our expectations, maybe slightly better than and for the fourth quarter. We at this point, we're not expecting any material change in in productivity other than.
The feedback that we've gotten related to the holidays that clinicians would like to take.
A couple of a few more days of time off than normal.
Beyond that we don't have any indication that productivity would change, but I do think the reason why we're not calling it is that there is a I think.
Broader macro debate about.
What's going to happen with the Labor force.
So right now as we think about 2022, we are.
Baking in at least at this preliminary outlook that retention stays at 80%.
But we have not factored in any <unk>.
Shifting productivity, one way or the other.
Thank you very helpful.
Got it.
Thank you and with that we will conclude today's conference call. Thank you for participating in the lifespan health third quarter 2021 earnings Conference call. We appreciate your participation you may now disconnect.
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