Q1 2025 Community Health Systems Inc Earnings Call
Speaker Change: Good day, and welcome to the Community Health Systems' first quarter of 2025 earnings conference call. All participants will be able to listen only a minute. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero.
Speaker Change: After today's presentation, there will be an opportunity to ask questions.
Speaker Change: So ask a question you would press star then one on your telephone keypad. To withdraw your question, please press star then two.
Please note today's event is being recorded.
Speaker Change: I would now like to turn the conference over to Anton Hie, Vice President and Vestor Relations. Please go ahead.
Anton Hie: Thank you, Rocco. Good morning everyone and welcome to Community Health Systems First Corps 2025 conference call Joining us, joining me on today's call are Tim Hingtgen, Chief Executive Officer and Kevin Hammons, President and Chief Financial Officer [inaudible] Thank you very much for joining us today
Speaker Change: Before we begin, I must remind everyone, this conference call may contain certain four living statements, including all statements that do not relate solely to the historical or current facts
Speaker Change: Actual results may differ significantly from those expressed in any four-looking statements in today's discussion We did not intend to update any of each four-looking statements
Speaker Change: Yesterday afternoon, we issued a press release with our financial statements and definitions and calculations of adjusted EBITDA and adjusted EPS.
Speaker Change: We've also posted a supplemental slide presentation on our website. All calculations we will discuss today include impairments, gains or losses on the sale of businesses, and expense from business transformation costs. With that said, I'll turn the call over to Tim Hingtgen, Chief Executive Officer.
Speaker Change: Thanks, Anton. Good morning, everyone, and thank you for joining our first quarter 2025 conference call.
Speaker Change: We ended last year with very strong volume growth and we were pleased to carry that momentum forward into 2025.
Speaker Change: For the first quarter, St-Store admissions increased 4%, St-Store adjusted admissions increased 2.6%, and on a St-Store basis, net operating revenues increased 3.1%.
Speaker Change: We have been pleased with the demand for healthcare services across our core portfolio markets.
Speaker Change: The first quarter growth was driven by an outside impact from a heavier flu season than the prior year quarter
Speaker Change: Additionally, we continue to realize returns on targeted capital investments and expansions and the benefits of our strategic and operational initiatives including capacity management, transfer center operations, service line development, and growth in our physician practices and other altation sites of care.
Speaker Change: We are especially pleased with our progress towards our target of $1 billion plus in the Bethature Pro Seeds, which we plan to use to reduce debt and improve the company's leverage.
Speaker Change: Since our last quarterly earnings call in February , CHF completed the previously announced that has the shares of Shorepoint Health System in Florida and the Norman Regional Medical Center in North Carolina, as well as the unannounced sale of our 50% ownership interest in the American Medical School of Health and Medical Health, Bellot City.
Speaker Change: Last week, we announced plans to sell our 80% interest in Cedar Park Regional Medical Center in Texas to the current joint venture partner, which reached back to close in late second quarter or already third quarter.
Speaker Change: While the vestitures are not yet complete, we expect that activity to slow down substantially as the year goes on, enabling us to fully focus on further growth opportunities across our core markets.
Speaker Change: Yesterday, we announced debt refinancing and buyback transactions that will further reduce leverage and improve our maturity profile. Kevin will cover that in more detail in a few minutes.
Speaker Change: Now, I'd like to touch on some of our strategic objectives moving forward into 2025.
Speaker Change: This year, we are highly focused on three foundational areas essential for every health care provider, first delivering high quality care and exceptional patient outcomes.
Speaker Change: Next, Insurance Operational Expertise and Rigger in Every Market, and finally, Demonstrating Financial Discipline and Performance
Speaker Change: We are making progress in each area in a very specific activity underway to advance in these critically important functions.
Speaker Change: Next, we have been strategically developing both acute care and ambulatory services, including our acquisition of 10 urgent care centers in Tucson late last year, as well as incremental investments in ASCs, and we have added new freestanding EDs to the Portfolio 2.
Speaker Change: In each CHS affiliated health system, our ability to balance acute care hospital services with ambulatory sites of care leverages the unique benefits of each care setting to create comprehensive service options for our patients.
Speaker Change: We believe this approach, which we have been pursuing for nearly a decade now, further positions us well for the future of healthcare delivery.
Speaker Change: and we continue to invest in innovation, including AI, emerging technologies, and partnerships that advance patient care, support our workforce, and relieve administrative burden.
Speaker Change: As the year goes on, we will highlight some of these areas more specifically and share the progress we are seeing.
Speaker Change: Before turning the call over to Kevin, I want to acknowledge the fact that healthcare providers are currently facing a number of uncertainties.
Speaker Change: Navigating any potential changes that make come out of Washington in the weeks and months ahead makes planning more challenging.
Speaker Change: Our team is closely following these developments and advocating for policies that maintain and strengthen our health systems and all health care delivery systems to ensure Americans will have needed access to essential health services.
Speaker Change: As we complete the first quarter, I want to express my appreciation to our team.
Speaker Change: Leaders across our organization, our physicians, nurses, clinicians, and caregivers, and all of our support teams.
Speaker Change: sharing the commitment to help people get better and live healthier. And for that, I am grateful. Now, let me turn the call over to Kevin Hammons, who will offer more information about the first quarter and the year ahead. Kevin? Thank you, Tim. Good morning, everyone.
As Tim mentioned, we've made progress across many fronts.
Speaker Change: So before walking you through operating results for the quarter that we're generally in line with expectations.
Speaker Change: I would like to provide a brief update on the progress we made in continuing to position the company for future success, particularly through opportunistic divestitures and management of our debt.
Speaker Change: In early March, we completed the divesture of Shorepoint Health System in Florida and on April 1st, closed on the sale of Lake Norman Regional Health System in North Carolina All right.
Speaker Change: Total gross proceeds for these two transactions of $544 million was received and recorded in the first quarter.
Speaker Change: Last week, we announced an agreement to divest 80% ownership in Cedar Park Regional Medical Center to the minority partner Ascension Health for $460 million, which we expect to close late in the second quarter or early in the third quarter of 2025.
Speaker Change: Each of these transactions reflects attractive double-digit multiples on trailing EBITDA, leading to meaningful leveraging an increased shareholder value.
Speaker Change: Last night, concurrently with earning results, we announced the issuance of $700 million in new 10.75% senior secured notes due to 2033.
Speaker Change: with the proceeds to be used to redeem all $700 million of our outstanding 8% senior secured notes due to 2027 at par.
Speaker Change: Additionally, we've commenced a cash tender offer for all of the $626 million outstanding 6.875 percent senior unsecured notes due to 2028 at a price of 75.
Speaker Change: utilizing cash on hand in a bail-builder under our revolver to retire these notes.
These transactions will further reduce the company's net leverage.
Speaker Change: Improve our maturity profile and enhance shareholder value while not meaningfully affecting free cash flow.
Speaker Change: Furthermore, we are getting all of this done despite the recent dislocation in the capital markets.
Speaker Change: At quarter-end, net debt to trailing adjusted EBITDA was 7.1 times improved from 7.4 times at year-end, 2024, and 7.9 times at year-end, 2023.
Speaker Change: Now, turning back to operating results, in the first quarter of 2025, we saw continued momentum with strong overall volume trends and cost controls across most categories, leading to an answer result that we're generally in line with our expectations.
and representing a solid start to the year.
Speaker Change: The continued strong demand in our markets led to same-store admissions growth of 4 percent year-over-year, adjusted admissions of 2.6 percent, and 80 visits of 2.4 percent, while same-store surgeries were down 3 percent.
Speaker Change: Thanks to our net revenue, per adjusted admission was up 0.5% year over year. As rate growth from commercial plans and the Medicare fee for service, annual update will partly offset by unfavorable shifts in payer and acuity mix as well as declining Medicaid rates.
Speaker Change: Just to debit off for the first quarter was $376 million, compared with $378 million in the prior year period.
Speaker Change: in March and was 11.9% versus 12% in the prior year period.
Speaker Change: The impact of Pair Dan Gray's and Denials remains stable in the first quarter of 2025 relative to the prior quarter.
Reflecting our ongoing utilization management efforts in physician-advisor program.
Speaker Change: Our advocacy efforts regarding this troubling trend that is affecting all health care providers will continue.
Speaker Change: But we expect the year-over-year headwind that we called out in the third quarter of 2024 to persist until we anniversary it in the second half of this year.
Speaker Change: Turning to expense management, a performance on labor cost remains solid, with average hourly weight rate up approximately 3.5% year-over-year, including an increase in the number of employed physicians, which was consistent with our expectations.
Speaker Change: Contract Labor Spend was $40 million in the first quarter, down $8 million, year-over-year on a consolidated basis.
Reflecting our ongoing success with recruitment and retention
Speaker Change: We held the line on supplies expense, which was flat year over year and flat sequentially at 15.5% of consolidated net revenues in the first quarter.
Speaker Change: This demonstrates some of the benefit we are achieving is we have effectively offset the impact of inflation over these periods.
Speaker Change: Medical Specialist Cs were 163 million in the first quarter, increasing approximately 9% year over a year on a consolidated basis.
Speaker Change: representing 5.1% of net revenues versus 4.8% in the prior year period. This increase was in line with what we anticipated.
Speaker Change: While we remain encouraged with the progress through our in-sourcing initiatives,
We continue to anticipate further pressure in med-spec fees.
Speaker Change: With these costs growing in excess of typical inflationary trends in 2025, but still well below the spikes that we saw from 2022 to 2023.
Thank you for your time. Thank you.
Speaker Change: Cash flows from operations were 120 million for the first quarter, up from 96 million in the first quarter of 2024.
Speaker Change: and free cash flow was still slightly negative, yet improved over the prior year quarter.
Speaker Change: This improvement relative to our typical first quarter, when we often experience a more significant outflow due to the timing of interest and incentive and patient co-pays and deductible resets, partly reflects the long-awaited receipt of $80 million in income tax refunds.
Speaker Change: However, that benefit was erased by the delays and payments under certain state supplemental programs.
Speaker Change: Money is now flowing from these programs, so we believe we are on track to meet our annual cash flow guidance.
Speaker Change: With our Enterprise Modernization Initiative, Project and Power, we continue to implement new workflows, generate savings opportunities, and gain new insights into our business as the Oracle Environment further hardens.
Speaker Change: I believe our stabilization is on track and I'm confident in the value this project will produce for the company.
Speaker Change: As it relates to the 2025 Financial Guidance, we are maintaining the outlook that we provide
Speaker Change: Consistent with prior practice, we have not considered in our guidance any additional of the vestitures beyond those that have already been announced.
Speaker Change: and we've also not included directed payment program reimbursement for New Mexico or Tennessee, as those programs have not yet been approved by CMS for 2025.
Speaker Change: We do not have any update relative to either of those programs but still expect their eventual approval.
Speaker Change: Recall, we believe if those programs are approved, they would add an incremental 100 to 125 million to our annual guided run rate of EBITDA.
Speaker Change: This concludes our prepared remarks so at this time, we'll turn the call back over to our Operator Rocco for Q&A.
Speaker Change: Thank you. To ask a question, you may press star then one on your telephone keypad.
Speaker Change: If you're using a speaker phone, I ask you please pick up your handset before pressing the keys.
Speaker Change: If at any time your question has been addressed and you'd like to a join your question, please press start with them too.
Speaker Change: Clemens Raskin, you please look yourself to one question or a single follow-up.
Speaker Change: At this time, we'll pause for a moment to assemble our roster.
Speaker Change: And today's first question comes from Brian Tanquilut with Jeffries. Please go ahead.
Hey, good morning guys and congrats on the quarter.
Speaker Change: and balancing it, obviously, with a revenue-per-adjusted admission. I think that that's mostly flu and the margins. I mean, just curious how you're thinking about where the business can go going forward, both from a volume perspective. And...
Speaker Change: your ability to manage or flex through the cost structure and also any thoughts you can share with us on how you're thinking about tariffs potentially impacting your supplies and other input costs that you have to deal with.
. . . .
Speaker Change: Sure, Brian , I will kick that off and I'll turn over to Kevin to touch on the tariff question.
Speaker Change: In terms of the corridor and the flu impact, we did see an outside impact on the flu as I commented on earlier. It did have, I think, some sleaze effect on some of our boa recuity surgery volumes in the corridor largely on the outpatient side.
Speaker Change: We also are tracking to see if there's any consumer changes in terms of the reset of copays and deductibles and their willingness to take or receive care with the reset of those deductibles. We're tracking that very closely.
Speaker Change: But in general, in terms of how the core book of business performed, excluding the flu impact, we're really pleased to see so many strong signs of success across the portfolio. We had really strong EMS volumes with games in trauma, so it wasn't all related just to basic influenza related illness volumes. We're really pleased to see so many strong signs of success across the portfolio. We're really pleased to see so many strong signs of success across the portfolio.
Speaker Change: We also saw strong physician practice visits in both primary care but also in our surgical and procedural specialists. Good growth in our cardiac service line as it relates to procedures in our cat labs, particularly higher acute cardiac service line as we continue to invest.
Speaker Change: and we also saw an outsize growth in our robotics surgery caseloads. Again, reflecting our investments into some new advanced platforms across various robotics platforms out there. So again, in terms of the durability and the investability in our markets to attract and grow new lines and higher levels of business, I always still see that line of sight that's straight and narrow through the portfolio. Thank you.
Speaker Change: Their thing I would point out is transfer center continues to perform really, really well and provides.
Speaker Change: You know, basically daily insights as to where we can go next to continue to invest, whether that be in service lines or technology or new capacity, we still see growing opportunities throughout the portfolio, which lets us build into future quarters and future years.
Speaker Change: And then the last thing I would point out is just in the AFD space, despite the drop in some of our lower QD cases, primarily GI, we can have another strong growth quarter in our AFC environment as we continue to incrementally add one to two AFCs per quarter. So we still see durability for the long run as we diversify the midst of surgery happening in various types of care across our markets.
Speaker Change: Brian , I'll touch on just a couple other points of your question. In terms of expenses,
You know, we feel that even with-
Speaker Change: Some of the softness resulting from the flu, we still have very strong inpatient admissions.
Speaker Change: and we were able to control our expenses with the added load of inpatient inpatients.
Speaker Change: and we believe that we'll be able to continue to maintain and control expenses throughout the year. We also think that there's some tailwinds for us as we continue to stabilize our new ERP and gain insight into the business.
Speaker Change: tailwinds on being able to take out some additional costs. Relative to terrorists, just a reminder, we are a member of HPG, our group purchasing organization.
Approximately, or in excess of 70% . . .
of our supplies are purchased through the GPO.
with that we have.
You know, this pricing? Yeah.
Typically, contracts are three years.
Um...
Speaker Change: You know, through the GPO, so we have some price protection there.
Approximately half of our purchasing Thank you.
through the GPO, is domestic purchasing. Thank you.
in which it would not be subject to tariffs.
Speaker Change: And then, you know, beyond that, it's a mix of countries, less than 5% of our purchases are from China which would have the most risk
Speaker Change: I think in the current environment relative to tariffs so it's a very small part and again the
Speaker Change: The other purchasing is spread out across a number of different countries and I think it's yet to be determined what the risk is there.
Speaker Change: I appreciate that and maybe my fall of Kevin as I think about the balance sheet and you know obviously you have a re-fi
Speaker Change: that was announced yesterday. Just curious how we should be thinking about number one, you called out the potential of coming divestiture and then maybe curious about free cash flow guidance and what's embedded and what's not in the guidance and also just proceeds from the recent divestiture announcements. Lake Norman, I know it was, came in on April 1st, so just
Speaker Change: Anything you can share with us as we try to think about modeling the balance sheet and cash loads for the next one to two years. Thanks.
Speaker Change: Sure, so the proceeds from Lake Norman that closed on April 1st, those proceeds were actually received on 331, so they were on our balance sheet [inaudible]
Sitting in the cash balance. [inaudible]
Even with the additional divestiture.
of the Cedar Park Regional Medical Center that we announced.
Speaker Change: in that, you know, taking place or anticipating closing, kind of late in the second quarter, early third quarter. I don't think it's going to have a material impact on the cash flow.
that we are refinancing net of the impact of...
Speaker Change: The tender offer for the unsecureds will have a slight benefit in reducing interest expense for the year, but still within our guidance range.
Thank you.
A.J. Rice: Thank you, and our next question today comes from Adrian Rice at UBS. Please go ahead.
Thanks, hi, everybody.
Speaker Change: I understand the comment on the Tennessee and New Mexico DPP programs. Are you hearing anything about whether that business is usual or those?
Speaker Change: that put on hold for any particular reason, and I know in your case...
Speaker Change: You had three states, Alabama, Arkansas, and Indiana that had some level of discussion about potentially expanding or adding a program, any updates on what's happening with those?
Speaker Change: Thanks, AJ. So it's really been kind of quiet. We haven't heard anything specific.
Speaker Change: about Tennessee or New Mexico, nor have we expected to hear anything.
Speaker Change: Baxter, we can tell, things are moving forward. We do know that…
Speaker Change: tend to believe it's a positive, absent hearing anything else, but we're just still in a wait and see. And as we sit here today, we know of no reason that they will not be approved.
Speaker Change: going forward. In terms of the other states, Indiana has been discussing a program. It has passed.
The State Health
Speaker Change: I believe that Bill has also passed the State Senate maybe with some revisions.
Speaker Change: The state legislature is still in session for another week or two so nothing final has come out.
Speaker Change: but it is looking positive that they may pass a program in Indiana.
Speaker Change: I'm sorry, Alabama is still early on in their discussions and I don't expect to hear anything.
I can't stop at this point. It's just too early to know.
I know.
Speaker Change: Okay, and maybe my follow-up question, I'll just ask you a little bit about the public exchanges.
Speaker Change: You have an update as to how much of your volume, and what kind of year-to-year growth you're seeing on the public exchanges this year, and any updated thoughts on or advocacy that you're looking for?
Yeah, so.
Speaker Change: I'm sorry, you broke up a little bit, but I believe our net revenue from the exchanges is less than 6% of our total net revenue. We are seeing growth in that business, but it's still a relatively small portion of our total net revenue.
Speaker Change: And in terms of advocacy for the extension of the enhanced premium tax credits for the exchange volume, I think you know...
Speaker Change: Reading the current headlines, we're very active in the advocacy efforts there. I think it's too soon to tell us to whether those will be extended.
Speaker Change: beyond their current cycle of recruitment areas and our advocacy efforts to be careful and
Thank you.
Thank you, N. Sheerl.
Speaker Change: And with the questions that I have from Josh Raskin with my own research, please go ahead.
Hi, thanks, good morning, you guys here, it's okay?
yes
Speaker Change: Sounds like you guys are breaking up. Hopefully you hear this. So just in response, first question in response to an answer you gave before. Can you speak more to the strong primary care and surgical specialist visits? Do you have a good sense of how much of that is sort of overall market versus your specific initiatives and? [inaudible]
Speaker Change: Are you seeing follow-through care, you know, after and procedures after those visits?
Speaker Change: Dr. Basha, can you hear me okay? I just want to do a mic check here.
Speaker Change: Yeah, a little in and out, but I think you're okay now.
Speaker Change: Okay, sorry about that. In terms of our clinic visits, and again, I'll speak to our employees provider based, although we have semantic total information from independent providers.
Speaker Change: across our health systems as well. But in terms of our employed, affiliated provider base,
from Prospects in our Markets
Speaker Change: In terms of the procedural pull-through, in some specialties like cardiology, the growth and new patient visits we did believe did improve our cath lab pull-through within the quarter. I also mentioned some strengthening of higher acute cardiac services, so we believe there's some attribution.
to the growth of those employed cardiology practices, for instance.
Speaker Change: We did see some slowdown in GI, even though we had good practice visits, we saw a slowdown in GI procedures throughout the quarter.
Speaker Change: to take that elected care so early in the year and so their co-pays deductibles have been met. So we'll track that one throughout the year. That was the one area of softness that we did not expect in the quarter.
Speaker Change: All right, perfect. And then my big question is just in terms of payer behavior, I heard you talk about sort of stability there, but just specifically around denial some pre-authorizations. Are there variations on a geographic basis on a line of business basis on a specific plan basis that you're seeing?
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Ferdinand: I'm Ferdinand. This is Tim Hightower. Um your line is bridging what?
who are in here, please stand by.
Brian Tanquilut, Anton Hie, Stephen Baxter
Thanks for watching.
Speaker Change: Any way of recollecting the secret location, please proceed. All right, can you hear it's better now?
Speaker Change: I do here yet. We didn't hear much of the answer though, so I don't know if you don't mind starting over.
Speaker Change: Publicity, which one of Josh was it for both the clinical and the denial and downgrade?
Speaker Change: Now, we heard all the procedural pull through commentary. You sort of cut out after the planned behavior and segments planned specific geography. So to your question for denials and downgrades, we're really seeing it across all regions.
Speaker Change: Nothing that I would call out is being very specific to a payer or a service liner region, but more general in nature.
All right, perfect. Thank you
Andrew Mock: Thank you, and our next question today comes from Andrew Mok at Berkeley's. Please go ahead.
Andrew Mock: Hi, good morning. You reiterated the guidance despite absorbing additional headwinds around divestitures, the claims, denials and medical specialists fees. I guess based on that, should we be thinking about the lower half of guidance, or is there anything coming in stronger to offset those incremental headwinds?
Andrew Mock: So, the headlands, you know, related to downgrades and denials, were baked into our original...
Andrew Mock: Guidance, we had indicated, we started to see those.
Andrew Mock: an increase in the third quarter of last year. They really stabilized in the fourth quarter and remain consistent. We will anniversary that or anticipate anniversary that back after this year.
Andrew Mock: and so we did build that in to our original guidance. So I don't think that that would be an incremental headwind as we think about where we're at, you know, relative to our four-year guidance.
Andrew Mock: We are absorbing the additional divestiture as you indicated, you know, for the back half of the year, but it's still early. It's only after one quarter, and I think that we're within the guidance range. [inaudible]
Andrew Mock: We do, obviously, reserve the right as we think about any future deventitures if we get anything else across the finish line and with potentially DPPs being approved.
Andrew Mock: Those could all further change how we think about guidance and we would think about updating at that point. But as we sit here right now, I don't think the one divestiture was material enough to make a change to our guidance.
Speaker Change: God, and maybe just to follow up. It sounds like you've guided for elevated medical specialist fees, but it still sounds like it's maybe outpacing those early expectations. Can you comment on the categories where you're seeing incremental specialist fee pressure? Thanks.
At pain point, it continues to be...
a pain point.
The majority of that is in anesthesiology.
Speaker Change: Probably over 50% of the increase is in anesthesiology or 50% of our medical specialises. We are seeing a little bit in radiology starting to pick up.
Speaker Change: But the primary pain point at this point is still PMSC theology.
Speaker Change: Yeah, I agree, and if I could just add on to that, in terms of our mitigation tactics for that, as you know, we've...
Those are the platform to enforce hospital-based provider services.
Speaker Change: successfully, you know, managing the transition of APP on the EDN hospital side over the last, almost two years. We've since added anesthesia and sourcing to the mix. We call about last quarter, one of our major markets moving that to an resource platform, when the cost increase or the acts from the outsourced provider we believe is unreasonable and we can.
Speaker Change: We also have just begun the in-sourcing process in our first radiology program leveraging again our internal expertise and skills to try to mitigate any future cost pressures or extraordinary cost pressures across that hospital-based specialty as well.
Great. Thank you.
Thank you very much. Thank you.
Speaker Change: Thank you. And as a reminder, ladies and gentlemen, if you'd like to ask a question, please press star than one. Our next question comes from Steve Baxter at Wells Fargo. Please go ahead.
Speaker Change: Hi, thanks. Just wanted to follow up on the age of question about the PPT programs. I know that there's nothing in your guidance for the 2025 components of the Tennessee or New Mexico program, but I believe there were retroactive portions of that related to 2024. They were approved. I think towards the end of the years, could your mind as you recognize those in the first quarter or if not, you know, what would you expect recognition to a car?
Speaker Change: Stephen, I'm sorry. Could you speak up just a little bit? We're having a little hard time hearing you. Just a little thought.
Yeah, sorry about that.
Speaker Change: Just asking about the Tennessee and New Mexico Supplemental Payment Programs. I know that the 2025 components are not in your guidance yet, but to the extent that I believe there was retroactivity related to 2024, it was approved. Just wondering if that was recognized in the first quarter or that would be recognized later in the year. Just looking for an update on that factor first.
Sure, so you're correct, there's a retro piece of Tennessee.
Speaker Change: back to July 1st to 2024. That actually has not received full approval yet, so we have not recognized.
So we're still waiting on final approval of that.
Okay.
Speaker Change: Okay, and then just to expand a little bit on the Pyramix dynamics that you discussed it.
Speaker Change: I think I understand some of the discussion around acuity, but I guess specifically on
Speaker Change: You know, the lower your commercial mix, I mean, is that lap in the, you know, the denial of downgrade impact or is there something else that kind of consider there and then just open you could expand a little bit on, and if you mentioned Medicaid rate decreases, it's open you could potentially flesh that out a little bit. [inaudible]
Speaker Change: Care in the first quarter, not only on acuity, but also some disruption.
We also have seen a reduction in elective procedures.
and we're seeing more of that reduction in commercial business.
Speaker Change: and I think it's a combination of potentially the flu, but also some of the disruption in the economy, some of the discussion of...
Thank you.
Speaker Change: You know, high deductible plans are probably the most at financial risk in the first quarter before their co-pays and deductibles have been met and that's where we saw the biggest declines in elective procedures particularly outpatient and in the elective surgeries within that commercial space.
Speaker Change: I agree, and the other item that's impacting in that revenue per adjusted mission, we did because the outside impact of flu, I think kept some of the highest levels of medical volumes.
Speaker Change: relative to surgical volumes that we've had in some time. Roughly, again, 75% of our case volumes in the quarter were medical, and typically we'd be running two-thirds. So I think there was just some dilution impact there. We did see our case mix index increase for both medical and surgical in the quarter, but overall it came in a little bit lower than prior to your quarter because of that dilution impact of the higher medical, which typically weren't a lower acute index.
Speaker Change: and many more. Thank you for watching. I hope you enjoyed this video. If you did, please make sure to like and subscribe. I will see you in the next video.
Thank you!
Speaker Change: And ladies and gentlemen, this concludes our question of the intercession. I'd like to turn the conference back over to Tim Hingtgen from the closing remarks.
Tim Hingtgen: Great. Thank you, Rocco, and thanks to all of you for joining our call today. As always, if you have additional questions, you can reach us at 615-465-7000. Thanks again and have a great day.
Speaker Change: Thank you, sir. This concludes today's conference call. We thank you all for attending today's presentation. You may not expect your lines and have a wonderful day.
. . .