Q1 2025 Ardent Health Partners Inc Earnings Call
Speaker Change: Ladies and gentlemen, thank you for standing by and welcome to the Ardent Health Partners
Speaker Change: All lions have been placed on mute to prevent any background noise. After the speakers remarks, there will be a question and answer session. If you would like to ask a question during that time, press star, follow by the number one on your telephone keypad.
Speaker Change: Thank you, operator, and welcome to Ardent Health's first quarter 2025 earnings conference call. Joining me today is Ardent President and Chief Executive Officer, Marty Bonick and Chief Financial Officer, Alfred Lumsdaine. Marty and Alfred will provide prepared remarks and then we will open the line to questions.
Speaker Change: Before I turn the call over to Marty, I want to remind everyone that today's discussion contains forward-looking statements about future business and financial expectations.
Speaker Change: Actual results may differ significantly from those projected in today's forward-looking statements due to various risks and uncertainties, including the risks described in our periodic reports filed with the Securities and Exchange Commission.
Speaker Change: Except it's required by law, we undertake no obligation to update our forward-looking statements.
Speaker Change: Further, this call won't include this discussion of certain non-GAAP financial measures, including adjusted EBITDA and adjusted EBITDA.
Speaker Change: Reconciliation of these measures to the closest GAAP financial measure is included in our quarterly earnings press release which we issued yesterday evening after the market closed and is available at Ardent Health dot com. With that, I'll turn the call over to Marty.
Marty Bonick: Thank you, Dave, and good morning. We appreciate everyone joining on the call and the webcast. We are pleased to report another solid quarter of financial and operating performance results as we build a track record of discipline and execution in support of our strategic growth initiatives.
Marty Bonick: Before diving into the details, I want to step back to focus on the big picture in underscore that Ardent is well positioned for multifaceted long-term growth with an emphasis on three key areas.
Marty Bonick: First, we have ample opportunities to drive strong market share growth within our existing footprint, leveraging our strong position platform and consumer first strategy.
Marty Bonick: Second, we are focused on expanding our outpatient and acute care hospital footprint and our well position to support this expansion with approximately $500 million of cash and a favorable lease suggested net leverage ratio of three times.
Marty Bonick: Finally, we continue to drive margin expansion through operational initiatives, leveraging our skill, supply chain efficiencies, and other cost saving strategies.
Marty Bonick: In support of our focus on execution, I'm pleased to welcome Dave Casper's as our Chief Operating Officer Effective March 31st.
Marty Bonick: Dave's experience driving strategic growth in Wal-Mart Health, Banner Health, and Target Corporations Retail Healthcare Business will significantly complement our executive management team.
Marty Bonick: Additionally, we are on the final stages of recruiting Achieve Development Officer to support our focus on M&A activities.
Marty Bonick: Turning to first quarter results, we continued to deliver against our strategic objectives, volume growth was once again solid. Admissions grew 7.6% driven by strong underlying growth and heightened flu season.
Marty Bonick: Inpatient surgery growth of 3.4% was strong and benefited from our efforts to optimize transfer center operations to capture additional demand.
Marty Bonick: Adjusted admissions increased 2.7%, which is on the upper end of our full year 2025 outlook of 2-3%.
Marty Bonick: First quarter revenue increased 4% and that patient service revenue per adjusted admission grew 1.2%.
Marty Bonick: Those growth rates were tempered by approximately 70 basis points due to the strategic transfer of certain oncology and infusion services to a health system partner in the middle of last year.
Marty Bonick: Recall we discussed this mechanical headwind during the 3rd quarter 2024 earnings call and we will let that event after 2nd quarter 2025 results.
Marty Bonick: These services produced roughly $10 million of revenue, but were breakeven in Avida.
Marty Bonick: Additionally, I would note that our first quarter results exclude any benefit from the 2025 New Mexico DPP program that is awaiting final CMS approval.
1st quarter, 2025, adjusted Eva Dawg, grew 2.5% to $98 million dollars.
Marty Bonick: In pursuit of our strategic operational excellence initiatives, we made additional progress on our supply chain during the first quarter.
Marty Bonick: Supply cost is a percent of revenue declined 60 basis points year-over-year
Marty Bonick: We have a number of projects in the pipeline that we expect will create additional efficiencies over the next several years and continue to see an opportunity to improve margins by 100 to 200 basis points over the next three to four years through scale, supply chain optimization and other operating cost initiatives.
Marty Bonick: Also on the cause side, the growth rate of physician professional fees was 6% in the first quarter of 2025, down from 13% growth during the same period last year. While hospital-based physician subsidies remain a headwind, we are beginning to see hopeful signs that the growth rates are moderating.
Marty Bonick: On the ambulatory front, we are pleased with the integration of the 18 Next-Care Urban Care Clinics that we acquired on January 1, 2025. As the year progresses, we expect this transaction to generate additional downstream volumes in our Tulsa and the Albuquerque markets.
Marty Bonick: Consistent with our focus on high growth, mid-size urban markets, we expect to continue to strategically expand ambulatory access points to meet consumer demand and drive growth.
Marty Bonick: In terms of M&A, we are seeing more potential acquisition candidates as providers assess optionality in the marketplace in a more uncertain regulatory environment. We are seeing increased interest in our unique joint venture model for potential academic and non-profit, non-profit partners that are in this exploratory phase.
Marty Bonick: We will continue to evaluate these potential opportunities in a disciplined manner and have the balance shape to move forward when a stockholder value-enhancing opportunity presents itself.
Marty Bonick: In summary, we continue to successfully execute on our strategic growth priorities during the first quarter of 2025, creating strong momentum to start the year. This puts us firmly on track to meet our full year 2025 financial guidance, which we are reaffirming today. With that, I will turn over the call to Alfred.
Alfred Lumsdaine: Thanks Marty, and good morning to everyone on the call today.
Alfred Lumsdaine: As Marty indicated, Q1 of 2025 represented a very solid start to the year and we expect to maintain our operating momentum throughout 2025.
Alfred Lumsdaine: At a high level, we continue to execute across numerous key strategic initiatives during the quarter that helps set the stage for attractive long-term growth.
Alfred Lumsdaine: We captured incremental supply chain cost savings, improved transfer center operations, and integrated the next-care urgent care acquisition.
Alfred Lumsdaine: Like many peers, we benefit from a strong relationship with our GP-A partner health trust and have fixed pricing for a large majority of our supplies this year.
Alfred Lumsdaine: Recognizing that the tariff outlook is fluid, we estimate the 2025 EBITDA impact is no more than a mid-single-digit million dollar amount based on the current tariffs in place.
Alfred Lumsdaine: That said, I'll move on to first quarter results, which excluded any financial benefit from the 2025 New Mexico DPP program.
Alfred Lumsdaine: While CMS has not approved the renewal yet, we're encouraged by signs of a typical program of approval process between the state and CMS.
Alfred Lumsdaine: First quarter revenue increased 4% to 1.5 billion dollars compared to the prior year driven by adjusted admissions growth of 2.7% and that patient's service revenue per adjusted admission growth of 1.2%
Marty Bonick: Excluding the infusion and ecology transfer that Marty mentioned, growth rates for revenue and net patient service revenue per adjusted admission were 4.7% and 1.9% respectively.
From a volume standpoint, demand remains durable
Marty Bonick: Admission's growth was a very strong 7.6% and adjusted admissions increased 2.7% year over year, which we believe speaks to our strong market position and growth opportunities within our current markets.
Marty Bonick: Inpatient surgery growth with a solid 3.4% in the first quarter, while outpatient surgeries is to climb 2.3%
Marty Bonick: Overall, we estimate year-over-year surgical volume was impacted by approximately 1.5% from the timing of leap year.
Marty Bonick: Adjusted EBITDA increased 2.5% in the first quarter, $298 million, which is consistent with our expectation towards achieving full-year 2025 guidance.
Marty Bonick: The growth rate was impacted by a notable increase in pair of claimed denials when compared to the first quarter of 2024. To be clear, we aren't seeing a significant increase in denials compared to the back half of 2024, but it does create a year over your headwind.
Marty Bonick: That said, we expect underlying EBITDAG growth to accelerate as we lap this dynamic in the back half of the year.
Marty Bonick: Turning to some specific line items, salaries and benefits expense as a percentage of revenue increased 70 basis points on a reported basis, but virtually all of that increase was driven by postipost.compensation.
Marty Bonick: We're pleased with our operational improvement around contract labour, which declined 60 basis points a year over year to 3.8% as a percentage of total salaries and benefits.
Marty Bonick: We continue to see strong nursing retention rates and a stable contract labor rate environment.
Alfred Lumsdaine: Marty already covered our improving trends in professional fees and supplies, so I won't rehash those.
Alfred Lumsdaine: Moving on to cash flow and liquidity, we ended the first quarter with total cash of $495 million and totaled that outstanding of $1.1 billion.
Alfred Lumsdaine: Our total available liquidity at the end of the first quarter was $790 million dollars.
Alfred Lumsdaine: Cash used in operating activities during the first quarter was $25 million, compared to $15 million used in the first quarter of 2024. As a reminder, Q1 is traditionally our weakest cash flow quarter, largely due to payment timing related to year-end of cruells.
Alfred Lumsdaine: Capital expenditures during the first quarter were $23 million, and we expect that to ramp throughout the year.
Alfred Lumsdaine: Our total net leverage has calculated under our credit agreements was 1.4 times and our Neely suggested net leverage was 3 times.
Alfred Lumsdaine: On a related note, I'm pleased to share that late last month, FNP upgraded our credit rating to be plus from V, reflecting our improved net leverage in cash flow profile.
Alfred Lumsdaine: Overall, we remain firmly on track to achieve our 2025 financial outlook, which we are reaffirming today.
Marty Bonick: With that, I'd like to turn the call back to Marty for a few final comments on the quarter before we open the call to questions. Marty?
Marty Bonick: Thank you, Alfred. In summary, we continue to make substantial progress as we execute on our strategic growth initiatives and leverage the consumer focus platform we have built to create long-term stockholder value.
Marty Bonick: We are pleased with our solid start to 2025 underscored by strong demand trends. We continue to sharpen our focus on market share growth, taking a disciplined approach to evaluating opportunities in both the ambulatory space as well as acute care hospitals.
Marty Bonick: With leverage of three times in ample cash, we will continue to assess opportunities to execute on this strategy.
Marty Bonick: I want to close by thanking our 25,000 team members and more than 1,800 employed and affiliated providers who continue to deliver exceptional care to patients across the communities we serve.
Marty Bonick: Together, we are focused on making healthcare better and advancing our purpose of caring for our patients, our communities, and one another. With that operator, please open the line for questions.
Speaker Change: At this time, if you would like to ask a question, press star, follow by the number one on your telephone keypad. If your question has been answered, and you would like to remove yourself from the queue, press star, follow by the number one. We'll pause for just a moment to compile the Q&A roster.
Speaker Change: Your first question, it's from the line of Ann Hynes, Luma Zulu
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Mitt Mayo: Ebedame of decline, call it 20% or so. Is that a normal sequential decline and you reference stronger flu and the volumes look really good, so I would have expected to see better than normal sequential growth. I'm trying to put this sort of in perspective with normal seasonal patterns to the way your earnings develop. Thanks.
Mitt Mayo: The Tailwind Category. It was clearly, you know, we mentioned a pair of denials, but again, on a sequential basis, we didn't really see that as a...
Mitt Mayo: Sequential, it was more of a year over your impact than a sequential impact. So again, with some amount of normal puts and tags, I think you can put that into, you know, the bounce of a normal type of seasonality with the strength of the year end of. [inaudible]
Mitt Mayo: and then the reset of deductibles and copays at the start of the year and then other kind of timing things like reset of payroll taxes, etc. You have a little bit of a cost burden and Q1 that happens as well and our race is going to affect in Q1. So again, there's just a little bit of a sequential dynamic there, but I would not call out anything outside of the balance of normal. [inaudible]
Okay, and maybe just a follow-up on the... [inaudible]
Mitt Mayo: Elevated Denials, I presume that that's that's MA and what I'm hearing I guess is this is a continuation of what you saw from last year or are there new changes in payer behavior or dispute resolution any changes with linked the stay on MA just any additional color might be helpful thanks.
Speaker Change: I think what you're hearing is very consistent with what we're experiencing. Yes, a continuation of last year, we really saw that step up happen in the middle of the year. A couple of things we would call that up there, I would say.
Speaker Change: There has been a continuation of the slowdown in payments even on clean claims.
Speaker Change: That's maybe, again, well denials have not accelerated. There's maybe been a bit of an acceleration from just a length of time to pay a clean claim. And that's certainly showing up impacting our cashflow numbers. But now we're not, again, how you frame the question is consistent with what we're saying.
Thank you. Bye bye.
Speaker Change: Your next question is from a line of Anne Hynes from Azulho.
Anne Hines: Hi, I'm sorry about that. I have some technical difficulties. Maybe just on the supply chain initiatives. Can you tell us why you actually have so much opportunity versus your peers? Are you involved in a GPO? And maybe if you really can dig into the type of opportunities you have that will create that type of margin expansion, that would be very helpful. Thank you very much.
Yeah, and this is Marty. Thanks for the question.
We do participate with Health Trust as our GPO partner.
Anne Hines: and very similar to our pure group, and so that helps us with our day-to-day contracting, but the utilization within our service lines is where we still see opportunity.
Anne Hines: for Improvement. This is an ongoing journey that we have and have continued to see improvement as we've gone through both certain stations as well as I'm looking at physician preference items and
Anne Hines: Most notably, the action we took last summer by partnering with one of our academic institutions to move some of our oncology and fusion services.
Anne Hines: The drug costs for those services have varying reimbursements based upon the geographies and markets that we're in and so we continue to see opportunities to further address those drug costs with in concert with our partners.
Anne Hines: as well as just general position preference items that were continuing to negotiate across key service lines as we're seeing volumes improve.
Speaker Change: I'm great, and then it sounds like the underlying emission growth was better than your expectations, besides flu, were there any other areas that you would call out? Thanks.
Marty Bonick: Yeah, this is Marty, and so we've had a big focus around our transfer centers and making sure both from an internal efficiency that we've got good bed turnover through like stay initiatives and optimizing. Everything out of the...
Marty Bonick: but as we've gone through service line rationalizations that help lead to an increase in our inpatient surgeries and again the focus on the transfer centers of bringing in cases from across our regions.
Marty Bonick: into our tertiary center. So the combination of those activities is which driving
Marty Bonick: And this is Alfred Anne. I would just add that, you know, again, we believe it's also a representative of the strength of the markets we're in and the underlying growth of this market.
Speaker Change: Your next question is from a line of Craig Hettenbach with Morgan Stanley .
Craig Hattenbeck: Thank you. Marty, can you just build on the commentary of just durability of demand, any areas of care where you're seeing that most pronounced in anything to note in terms of how broad and basic this is versus market specific?
Yeah, Craig, this is Marty, so- [inaudible]
Craig Hattenbeck: Just as building on what Alfred said, we've referenced before the strength of our markets growing on average, about 3% a year and so we see that as very durable. We know that there's some commentary between the payers and the providers in terms of whether there's pens up to man, we don't subscribe to that theory, the strength of our markets. [inaudible]
Craig Hattenbeck: Strong Volume Growth. We accentuate that by the operational improvements we're making to be able to service that growth. But the strength of the markets that we're in, it gives us good conviction that these volumes are durable from a positive growth rate perspective. .
Speaker Change: Got it. And then this is a follow-up on the COO hire, just any areas of strategic focus for him and then also kind of experience he brings the organization as you continue to look to scale the business.
Speaker Change: Dave's background with both a consumer retail focus. We'll accentuate our consumer growth strategies as we go through the markets and
Speaker Change: and just to focus on a continued focus on integration and optimization of the entire platform. We've talked about the centralized services that we've created in the years leading up to the IPO last summer. But we also said that we know that we've got a hundred to two hundred basis points of margin expansion to achieve over the next several years, and Dave will be a key focus in driving that.
Um, oh.
Speaker Change: That integration activity will be paramount to making sure we can extract value for many transactions and making this a creative for the company until they'll have purview over the execution of our ongoing initiatives as well as that integration of new activity and growth into the system.
Ben Hendricks: Your next question is from the line of Ben Hendrix with RBC Capital Markets.
Ben Hendricks: Great, thank you very much. Just wanted to get an update on the, you know, the...
Ben Hendricks: expansion initiatives or the strategic initiatives you called out specifically expanding your outpatient and acute footprints. Just any update on how conversations are going with potential new market.
Ben Hendricks: Opportunities and sellers in those markets. How are they thinking about valuation in the uncertainty on the Medicaid policy changes and kind of just what you're seeing in terms of a seller appetite? Thanks.
Marty Bonick: Ben, this is Marty again, thanks for the question. We continue to focus on a multi-port growth strategy, the first we always said was going to be inside of our markets.
Marty Bonick: Tulsa Marcus, the 18 urgent care centers we've bought as a great indicator of that continued focus that we're going to have of strengthening the access points in our market, strengthening our positions in those markets and building out a more robust footprint, first and foremost.
Marty Bonick: On the second part, in terms of new markets or new hospital growth, I would say the pipeline continues to build.
Marty Bonick: Since going public, our visibility has taken a new stage and we've got more inbound calls coming from.
Marty Bonick: Academic Partners in particular that have taken note of the model that we have and have desires to grow inside of there.
Marty Bonick: perspective regions, but may not have the balance sheet or the integrating operating experience to expand into new regions and see Ardent as a good target partner. So I'll say the conversations and the pipeline are growing, which is...
Marty Bonick: The reason that we're focusing on bringing in a dedicated chief development officer into the company.
Marty Bonick: to be able to capitalize on those opportunities. In terms of valuations, you know, you've certainly seen some headline valuations that are above historic norms and averages, I would characterize those as largely.
Marty Bonick: sort of one off strategic acquisitions for certain existing systems in a given geography. We believe that the overall valuations will continue to trade somewhere in the normal sense of where this industry has historically been and any acquisition that we focus on is going to have to be something that we see as a creative to the company in the near term called the first 24 months where we can see, you know, apps and purchase price synergies that will help us to deliver a transaction and make.
Great, thanks for the color.
Joanna Gadzik: Your next question is from the line of Joanna Gajuk with Bank of America.
Hi, good morning. Thanks so much for taking the question. And so, um,
Joanna Gadzik: I guess a follow-up on that comment around, I guess, related to the park question. So you mentioned that there's interest, it sounds like receiving from the nonprofit's and academic centers to partner. So can you give us a sense of…
Ados Preliminary, you know, Abyss R. [inaudible]
Joanna Gadzik: You know, systems waiting essentially to see what's going to happen or to kind of ready to kind of, you know, do something right now. So, as I said, you want to ask him, is that sort of like, you know? [inaudible]
Joanna Gadzik: Are you close to getting something done? Should we expect something this year? Or does it's more kind of like next year when the dust cells any any kind of indication I guess will be helpful? Thank you
Marty Bonick: Yeah, Joanne, this is Marty, a scalper to chime in if there's additional. But, you know, we've been pretty open that, you know, we went public with the expectation of growth.
Marty Bonick: We believe we've got a strong operating model that would be valuable to enter into new markets where we could create a partnership and create something more valuable for that target seller that they were able to achieve on their own [inaudible]
Marty Bonick: We don't have anything definitive to announce today, obviously, and we will appropriately message that when there is, but I would say that there's a mix of conversations going on with potential near-term opportunities, as well as exploratory conversations about what future growth and look like in a given geography. [inaudible]
Marty Bonick: You know, we are focusing on a mix of hospital acquisitions that would be both complimentary to our existing markets or state footprints or in as well as new and so, you know, we're just encouraged by the pipeline of growth and again the reason why we're bringing on dedicated to development officer to help.
Marty Bonick: You know, nurture those relationships, conversations, and bring those to fruition, but we've been saying we've been hopeful that we will see some type of a transaction whether that's a tuck-in or a new market, you know, still in this calendar year.
Speaker Change: Okay, if I may, on the new max, the code DPP, like you said, you know, no approval yet, but there's some approval coming out. So any indication, like would you assume to get the finalized body end of Q2? I mean, we already may. Thank you.
Speaker Change: Yeah, this is Martin again, on the DPP programs, we are starting to see...
Speaker Change: They know the importance of these programs to the states. Again, these DPPs were started under the first Trump administration and
Speaker Change: I think that the sense that we're seeing these new other state approvals come through are consistent with our conversations that we're having with the elected officials both in the state and CMS that's just a matter of processing through these.
Speaker Change: and we are expecting approval that the timing we are hopeful for to see a Q2 approval, but obviously we can't control that. And this is Elfrey Chow, and the only thing I would add is that we stay close to our contacts in New Mexico and I think we've been clear that all of the indications are that things are progressing as you would expect and a very normal tracking towards an approval.
Matthew Gilmore: Your next question is from a line of Matthew Gillmor with Keybank.
Matthew Gilmore: Thanks. I wanted to ask about exchange volumes and payer mix. I think the presentation made reference to strength with exchange volumes. Can you provide some details in terms of the magnitude of the growth in the quarter and maybe update us in terms of the percent of revenue that's tied to exchanges versus I think the 3.6% you talked about for 24%
Alfred Lumsdaine: Germant, this was Alfred. You know, like all of our peers, we are saying very strong exchange growth.
Speaker Change: or additional enrollment in exchanges as well as new plans that we have that are ramping, so our exchange volume group was significant and today, key one, we're operating in the mid-single digits of the percent of revenue.
Speaker Change: Got up the telephone. And then following up on the comment around the moderation and professional expenses, I was hoping you could sort of unpack that a little in terms of the hospital based position expense, you know, where are you seeing improvement and
Speaker Change: You know, are you confident and comfortable that that'll be sort of a durable moderation? Any additional details there would be great. Thanks.
Yeah, Matt, this is Marty. You know, we have-
Speaker Change: I expected to see as we, you know, we could get guidance earlier on the year that, um...
Speaker Change: This was still going to be an inflation that was north of general inflation, and we've modeled that as such, and we are seeing that continue. We are encouraged that it is motoring from the peak in 23. The rates came down to bid in 24, the growth, I should say, came down to bid in 24. We expect that to continue to moderate 25, but still be above normal inflation levels. While Q1 was slightly ahead of where we thought things might be, we know we've just given some of that.
Speaker Change: Uncertainty, uncertain specialties, radiology is one that has been a figure-growth area as well as continued pressures in anesthesiology that we expect to see some continuation of this trend going throughout the rate of mismanagement of the year as we had forecasted and got it early in the year.
www.Lumsdaine.co.uk
Speaker Change: As a reminder to ask a question, press star followed by the number one on your telephone keypad. Your next question is from the line.
of Benjamin Rossi with JP Morgan. [inaudible]
Speaker Change: Great. Thanks for the question. So with 1Q revenue per just an admission at about 1.2% at a restatory drive to impunity and more challenging you over your cop.
Speaker Change: To start there, is there anything else from our mirror mix or intuitive perspective that we aren't seeing in there, such as additional direct from your reference or rationalizing your uppatient surgery offer?
Speaker Change: And then in reaffirming your guide, what puts and takes are you factoring into reaching the lower end or upper end of your 2025 price and guidance of 2.1 to 4.4% over year. Thanks.
Alfred Lumsdaine: Hey, Ben, it's Alfred. I'll start with the first part of your question on the NPR-GRAA with 1.2%. You touched on, you know, a piece of it, the service mix and acuity, you know, clearly that was, you know, on a year over your basis.
a drag.
You know, we continue to see good, you know,
The year-over-year The year-over-year-
Alfred Lumsdaine: Commercial rate increases have been very consistent with our expectations. The other items that we're drags on a year-over-year basis, we talked about in the denials, you know, which we will laugh in the middle of the year, so you'll get a more normalized growth rate on a year-over-year basis.
Alfred Lumsdaine: And then the last thing is the transfer and Marty touched on it in his comments, the transfer of the oncology services, you know, that was about 70 basis points as well. So really those three items were the drag on a European basis.
Alfred Lumsdaine: Great, and then as a follow-up on the transfer center operations, and you mentioned the improvements to your transfer center more broadly on a regional basis, could you just walk us through those efforts and you approach more broadly to inpatient capacity and related patient throughput during this elevated patient utilization backdrop?
Marty Bonick: Yeah, I've been this smarty. So we have regionalized our transfer center operations and you all know we have one instance of epic as our...
Marty Bonick: Electronics Health Record and Relirical Operating System that helps us drive and have visibility in terms of where we have capacity opportunities. Taking the technology and the organization of those services, it's allowed us to have a very...
Marty Bonick: seamless process for outlying rural regional hospitals to be able to transfer patients into our networks and
Marty Bonick: to help us to drive that volume to the most appropriate setting. So not only are we trying to maximize volumes coming into our tertiary hospitals, but our secondary hospitals, which may not have gotten the original call, we're able to relocate those patients.
Marty Bonick: Managed capacity and demand across the broader network. And so before that, that was all happening on a one-off basis. And if you call Hostile X and they had availability, they'd accept it. Now you're calling the market and the market is helping to distribute those patients.
Marty Bonick: More effectively across our footprint, which is helping us to see increased pull-through in those transfers getting placed in one of our hospital beds.
Alfred Lumsdaine: And then this is Alfred, I want to go back to the first part of your question because you asked about the, you know, kind of what are the range of outcome in terms of the items that would affect the range from the top end to the bottom end of our guidance, you know, obviously we're very pleased with the start of the year and solid key one that we had, you know, I would just point you back to the things we've talked about, the pressure of professional fees. Thank you for that.
Alfred Lumsdaine: The pair of behaviors and denials is their variance to those expectations and then of course tariffs we've touched on relatively minor in terms of the overall exposure but certainly not something that we had anticipated in our guide.
Speaker Change: At this time, there are no further questions, I will now have a call back over to management for closing remarks.
Speaker Change: Thank you everybody for your time and attention. We appreciate the support of Ardent and our performance. If there's any follow-up questions, please refer those to Dave Styblo and have investor relations for Ardent. Thank you everybody.
Speaker Change: This concludes today's call. Thank you for joining. You may now disconnect your lines
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