HCA Healthcare, Inc. (HCA) Earnings Call Transcript & Summary

Okay. Let's go ahead and get started. It's my pleasure this afternoon to have HCA with us. Representing the company, we have Bill Rutherford, Chief Financial Officer; and Mark Kimbrough, that runs the organization's investor relations efforts. So thanks for joining us today, guys. I mean I think maybe we'll just get the elephant in the room out of the way and just go over the impact of COVID on your operations. I think you gave a little bit of an update, but not sure if there's anything that's changed since last week. I would imagine not, but maybe just some high-level thoughts about how the business is performing today versus maybe the end of March, beginning of April.

Great. Well, thank you, Whit, and good afternoon, everyone. I'd be happy to give you as much update as we can and cover any questions. So we've talked about previously, and we've talked about in our first quarter call, the impact that we had seen through the first quarter, and we've done something that we didn't typically do was to give intra-quarter activity. To refresh your memory, at the end of the first quarter, we saw our admissions down about 30% in the last 2 weeks of March from when we first saw COVID. And during the call, we were down about 30% through the middle of April. The last 2 weeks of April, it improved a little. We were down about 20%. And really, in the first week of May, we were down just under 15%. So as you recall, we had talked about these 3 phases. We saw the response phase that, for us, started about middle of March. And then, we believe, towards the end of the second quarter, we'd enter into the restart phase. And it appears we are in that restart phase, as different communities across the HCA footprint have begun to open up. Some began late April, some began 1st of May. Some are even opening up this week and into next. So we see that rolling throughout our markets. Our inpatient surgeries, on the earnings call, we said inpatient surgeries were down about 50% from prior year in the first couple of weeks of April. The last 2 weeks of April, we were down about 30%, and then first week of March, we were running less than 20% down. Our outpatient surgeries, on the call, we said we're down about 70%. The last 2 weeks of April, we were down about 50%. And really, in May, our hospital-based outpatient surgery was down about 20% and our ASDs were down just under 40%. So we have begun to see the restart process improving volumes from where the low point was. Our preface is still early. So it's hard to draw any conclusions off of that, and we anticipate these volumes will continue to improve as the restart process goes through our different communities and as we go through finishing the balance of the second quarter. But so far, it's playing out about what we anticipated it to be. We have spent a lot of our effort in preparing for recovering some of those volumes from a lot of work streams we have underway, from things that we can control to making sure we have adequate laboratory testing, to making sure we have an ample supply of PPE to serve that, to think about how do we most efficiently bring on capacity as the volume begins to reappear and, then importantly, working with our physician community and our physician colleagues as they rebuild their schedules and activity. We're pleased -- so we went through division reviews last week that it appeared our physician community is ready to get back working and getting back to their activity. And ultimately, I think the variable will be what our patients' confidence and comfort level returning back to a health care setting. And I think that will unfold over the balance of this quarter. And then lastly, I'll just comment, ultimately, I think the question is once we get through these 2 periods of response and the reboot, what does the recovery period look like and how the volumes settle back in? And I think there's going to be a lot of probably macro events that determine that, including patients' confidence and comfort level as well as just what's going on with some of the macroeconomic trends in our markets. So far, we're in the middle of our phases like we thought we would be at this point in time.

Yes. I might just bounce around a little bit here. Just -- as I heard you talk about some of the surgery numbers, I just started to think about some of the processes internally that might have to change, whether it's perioperative processes or whatnot to be as efficient as possible. And are your operators thinking about running longer hours? Do you run Saturdays? Just maybe if you could expand a little bit on the feedback with your physician partners and just trying to put some context around the productivity levels.

Yes. Well, I think we're prepared, if needed, to adjust those schedules. I think, now, it's about how do you efficiently bring on new capacity. So if I'm in a suite that has 6 or 7 ORs or even more, you don't open all 7 at once. You kind of maybe open 3, see how the schedule gets completed. And you build in certain triggers by which when you would open the remaining ones. And so how do you get this rolling kind of opening of new capacity coming online? So you don't staff 7 ORs that are running all 7 or running at 40% capacity. You'll staff 3 ORs and try to run them at 70%, 80% capacity to get most efficient process on there. So I think the schedule really will dictate that. But every one of our markets and facilities are built on these triggers on when do they bring on this capacity based on when does the volume appear. You don't want to get too far in front of that, but you don't want to get lagging on that as well. And to the extent we start seeing -- because of the recapturement of these deferred procedures, we need to run elongated hours to get maximum utilization of that capacity. We'll do extended hours as necessary. Our focus is to really be there for the physician community when they need it. And we've got that staggered based on when the schedules appear.

Got it. We ran a survey that asked a number of hospital executives how COVID is impacting their business. And one of the metrics that has stood out to us is just a sharp decline in both contract labor and professional fees that have -- I mean, it seems to make sense, right, as the volume dries up. Has that been your experience? I mean it's declining. It's not declining as much as the volumes are declining. But as you sort of run that out over the balance of the year, how do you look at those 2 line items? And is that a tailwind, I guess, relative to your initial plans?

Well, yes, let's talk about contract labor first. But our early efforts around trying to adjust our labor cost with the volumes is to get -- was to go after the premium labor components, if you will, because if you recall, we had a guiding principle, was to protect our existing employees, protect them from safety of care environment as well as protect their jobs to ensure that no one -- no HCA employee lost their job during this pandemic period. So we implemented a pandemic pay program as our own employees were not able to gain the shifts that they typically have because of our lower volumes. So our labor efforts were really around how do we eliminate all of the premium labor as we could through contract labor over time. And before we would use contract labor, our preference was to use an employee and pull them in a marketplace, so that they could get a schedule before paying contract labor. And our teams have really done a really nice job. We flexed dramatically in our utilization of our premium labor components early on, so that we could preserve our existing employees gaining shifts. So we were able to, I won't say, get rid all of it. But virtually, all of our premium labor components, we were able to flex. Those were the discretionary pieces of our labor, and our teams have done a really nice job on that front. And then when you think about that, as you think about reopening and building back up the labor capacity to serve this volume, doing that in the most efficient manner, and that's what these different volume triggers are proposing to do. So very pleased with the ability to flex on that premium labor in light of our commitment to our existing employees and our pandemic pay program. On professional fees, which I'm assuming you're referring to as physician professional fees, we're able to flex on those to a degree. We still require professional fees as we pay for on-call coverage and for certain specialties in your emergency room. We have some professional fees that were "subsidies" from hospital-based physicians. And as our volume declines, we enter into discussions about how to appropriately reset some of those professional fees. Sometimes that's entering negotiations, sometimes that's collectively working with the staffing groups that work with us. So I think we've been able to make reasonable adjustment on the professional fees. And then, ultimately, I think that's going to be determined about how volume settles out after we get through these 2 kind of response and reboot phases. But our -- I would characterize our Stage 1 kind of response on the cost side are mostly all around the discretionary cost spends, whether it be this discretionary labor, discretionary pro fees, other discretionary cost expenses in our other operating expense lines. And our teams have done a really nice job making the appropriate flexes given the volume changes that we have.

Yes. How would you characterize the performance of your overall business before COVID? I was just thinking about, at least a lot of the numbers we had looks like you guys perhaps were tracking ahead of plan. I wasn't sure if that was a fair characterization or not.

It's very fair. I can give you a lot of adjectives, but we were very strong, and I gave that a little bit on the call prior to kind of the middle of March. And as you know, we turned the calendar from '19 to '20 with a lot of momentum. We had incredible performance in '19, and we felt all of the macros still had incredible momentum. And it showed itself in the first 2 months. January and February, we blew it out. And we were walking well on both volume and a lot of our operating metrics. And we were investing to grow pretty heavily, and we were seeing a lot of that. And then the whole industry got -- thrown the curveball around March -- middle of March, March 15 or so. And it just dropped like a rock. And we had to change our paradigm dramatically at that point in time from growth-oriented to really rebasing the organization. And we think the Phase 1 kind of steps, the Stage 1 steps we took, and we were early to it, really helped the company navigate. And some of those, you could look at today, were done in abundance of caution. But early on, we went to the marketplace to secure the cash flow and liquidity of the company in terms of gaining access to a new $2 billion credit facility. We shut off the share repurchase program. We started dialing back capital. Yes, we suspended the dividend program. And we did a lot of those before we had insight into the CARES Act opportunities we had. And perhaps, now, those were an abundance of caution, but we thought it was very prudent to make those steps. And then our operating team started to make the necessary cost adjustments to weather through this. And I think all of those has put HCA as good a position as you could be given the circumstances that we're in. And we're hoping, as we go through these phases, we'll continue to see improvement and we'll get back to some level of normalcy and resume some of our strategies that we had pre-pandemic showing up.

Yes. I mean you guys laid out a few years ago a $10.5 billion 3-year capital plan. I think that was the right number. And I frankly thought you were going to raise that number this year, but you didn't. And obviously, now it's been suspended. And I hear you about the abundance of caution. Is it -- are we -- is this too much abundance of caution at this point? Do you look at where you are today, you start to see the reboot and say, "You know what? Maybe we should pivot on this program or that program?" Or it's just like, well, it's just too early at this point to think about that?

I think it's a little early. I mean on the capital side, 2 things. One, I don't think any decision around the capital have compromised, at least, our short or intermediate term growth because we decided to complete projects that were nearing completion. And projects that have come on in '19 and '20 are the projects that are going to fuel your growth. What we stopped were maybe planning of something that was scheduled to start in August or September, but those are projects that were going to be long lived, and they weren't going to provide short or intermediate term growth anyway. So it really depends when we get back to resuming some of those, but we don't think we've compromised any of the growth just because the projects that were in flight, we've decided to complete that were nearing completion. And because of how long lived some of those projects, it doesn't have near-term consequences. Now if it stays low, it potentially does if we defer those for an elongated period of time. But we'll be judicious on when we think we need to turn or revisit some of those. We know we may have moved the dial pretty far early on, and we've got the capability to give the green light for some projects if we felt the marketplace was recovering a little quicker than we thought and resume some of those. But we think where we are right now was prudent. I don't think yet it was overly done. I think we're going to have to have some more inputs to see how the marketplace recovers. But we feel reasonably comfortable the moves we made were the right moves. We feel very comfortable they're the right moves, but we feel comfortable that it really doesn't compromise any of the growth profile of the company in the short or intermediate term. And then when we get to the summertime, we get into the balance of the year, and we get a read really on how volume and the demand and the mix settles in, we'll make the appropriate capital allocation and get back to some of our philosophies, I hope, of having -- making sure we can invest in our existing markets to provide growth, to have a balanced return of capital from shareholder to investment to acquisitions. And we think we have a pretty long track record of a balanced philosophy, and we will resume that once we get a read on how the overall revenue picture settles out.

On that topic, maybe just to expand a little bit, just do you see any pockets of opportunity for market share shifts? I mean I just -- I think about what you're saying and there's just this, like, flywheel that you have with your capital. You just take the productive cash, reinvest into productive assets to get a higher rate of return. And so I just was wondering if this isn't, in some ways, an opportunity to accelerate some of that because the whole market has had to sort of halt how they're investing.

Well, I will tell you. I do think this has the opportunity to continue to differentiate HCA in our marketplace. How and when and exactly what those opportunities are, I don't think have fully materialized yet. But we do believe just the strength of the network and our capabilities has the opportunity to help us shine in this moment, not only to weather through these phases that we're in, but potentially find those pockets of opportunities. I don't exactly know where they will be, and I can't tell you they've actually all materialized yet. But I think there's a potential they will, whether that is in the acquisition pipeline resuming, as generally, you need a catalyst for that acquisition. And historically, the catalyst has been some economic challenges by others and how that plays out, we'll have to see. To the extent there were a lot of new entrants in the outpatient arena, whether it be urgent care, freestanding ED imaging, if they didn't necessarily have the organizational depth to land the -- to go the distance, does that create opportunities for us in terms of maybe rationalizing some of those new market entrants and then we can benefit from that over the long run? I think those are all potential, but we're just going to need a little bit more time for it to play out. I think I characterize ours and most everybody's attention is to get through -- make sure we have the capability to provide the necessary response to our patients today and then making sure we're prepared to kind of reboot when business begins to show back up. And then I think when we're in the recovery phase, we'll hopefully find those opportunities present themselves that we can take advantage of.

Got it. I want to transition just for a second to payer mix. A lot of inbound questions that we get around how to think through the implications of the recession and how commercial patients make it redistributed. And I think, last count, you have maybe 23% of your inpatient volume inside of Medicaid expansion states, so still not tremendous coverage there relative to your peers. I don't know, as I throw this question out thinking about just the impact on mix, what comes to mind? And maybe talk a little bit about presumptive eligibility, just internal processes that HCA has. And everything is different because of the ACA, so I think you've always sort of described -- yes.

Well, it's a great question, and we're spending a lot of time thinking about that, too, and reading the various studies that are coming out about a potential long-term impact and balancing that out. We have -- one of our early work streams was our internal processes around helping patients give -- evaluate their opportunities for coverage, especially in the exchanges, given our Medicaid expansion coverage, as you mentioned, and really restarting some of the processes we had in the early days of reform and exchanges being rolled out with our certified application counselors. We are also looking market by market, working in a broader view with other providers and where there's existing coalitions of providers, trying to do public service outreach to people who may find themselves being unemployed to help them understand what their options are on enrollment. So we're gearing up internal processes and collaboration processes with others to help patients and the community as a whole, understand what resources are available to them if they find them with a change of coverage status. Somewhat optimistic, there'll be some COBRA extension programs out there. And then, as you know, in past periods, there's always been a correlation between economic kind of health in a community and longer-term demand, but that's often been lagging, and so well -- and we think there's some buffers today that weren't necessarily present in the past, health insurance exchange and Medicaid expansion as well. So we're gearing up our internal resources to help patients when they seek covers, and then we're working with other entities, both providers. We've talked about we're working with some outplacement firms, working with them so that they understand what is available to patients. And we're trying to advocate to extend enrollment periods where there's an opportunity to do that. But ultimately, I think everybody is trying to assess what could be the impact on a growing unemployment to commercial or employed coverage lives and where do those lives go. And we know there's a lot of studies being published. I don't really have any commentary on our estimate of where that goes, other than efforts we're trying to do to help steer that. But I do think the lagging aspect of that gives a little bit of benefit to us, and we'll have time to see how that plays out. So it will be one of the predeterminants of what is the impact of an elongated recovery, does the community come back and employment start coming back up, what is the profile of the people who are finding themselves unemployed, did they have insurance before and the like. And so we're drawing on our past experience. We went through -- the last time we went through this in '08 and '09, we're drawing on the resource capabilities we had when the reform got introduced and then trying to launch some new strategies where we can identify opportunities in the market to participate with others.

I wanted to go back for a second. You've mentioned some COBRA extension commentary. Is that just your view that we may see some government premium support? Just wanted to hear you elaborate a little bit more on what you...

I don't know of anything firm, and then we've heard some discussion of some thoughts that are being considered to either allow premium support or allow the period of coverage to be extended or potentially even allow a period of coverage and when you could roll an exchange extended. I think those are all just thoughts and proposals now. I don't think there's anything firm, but we're hopeful that -- and you would think, if the employment -- unemployment numbers continue on where they are now, there'd be some policies that would try to bring some relief or alleviation to people to continue to have health coverage. So that's what we're trying to find, where are those certain policies that we could participate in advocacy for.

Yes. On the topic of COBRA, while I'm thinking of it, I mean, last cycle, if you will, 10 years ago, 12 years ago, whenever it was, I mean, we saw, I don't know, maybe over 30% of those that were eligible for COBRA elected it. There was some premium support then. And obviously, the costs have gone up materially in the last decade. How do you think about what percent of people will actually elect COBRA this go around?

Honestly, Whit, I don't really know. I don't know how to think about that. I'm reading -- and we are all studying and reading and engaging different studies to think about that. I don't know. When you think about, do I pay for premiums for COBRA, maybe what assistance do I have, does an employer provide assistance or is there other assistance versus what is my net cost if I enrolled in an exchange product with subsidy, I think people may find the exchange enrollment may be a better option than a high-cost COBRA depending on any assistance they get. So what we're trying to do is just help people and have a process through our application counselors and help people navigate questions they may have and how to evaluate the right answer for their own family status and situation. But ultimately, I don't know how to think what percentage will ultimately elect for COBRA versus explore others versus choose to go on an insurer or seek Medicaid. I think that's where we're just going to need a little bit more time to see how that plays out.

Yes. No, that's interesting. On that topic, just thinking about payer mix. We haven't focused on bad debt as an industry for a number of years now that the item is off the income statement. Maybe just remind us what your reserves look like on the pure self-pay and the balance after. I mean I think your reserve was like 97% or something.

Yes.

And just any numbers you have, it might just be helpful.

Yes. For the pure self-pay, if you will, the uninsured, there's -- okay, you put revenue on the books and you reserve virtually all of it. The real impact of providing care to a growing uninsured is our variable cost to provide that care. There's a lot of revenue gymnastics that occur. But at the end of the day, you end up reserving all of that revenue for your truly uninsured because you really do not collect any of it. So the financial and economic impact is the cost component and the variable cost component you have is serving that growing uninsured population. Really, why it hasn't been a factor in recent years is because we haven't seen growing uninsured. And as you know, our inpatient uninsured hovers around that high single digit. And it just hasn't been an economic consequence of late for the true uninsured because the variable cost, compared to our overall revenue and cost basis, hasn't been material to warrant discussion or focus on that because you reserve all the revenue. On your growing deductibles or coinsurance for insured population, that does have a factor on it because I think most people have just a limited amount of money they can pay towards that. And as more of the liability gets shifted in individuals, what we've seen is that our collections, if you will, or a liquidation from insurer has stayed relatively steady when I look at it in a variety of different ways, both in aggregate amounts on a per account basis. But we recognize their liability per claim is increasing. So we really haven't seen any erosion of cash liquidation in there, but the collection hasn't kept up with the amount of balance that gets shifted to that. That hasn't been a material driver of our revenue, either just because it just doesn't move that dramatically one period to the next. And I personally believe there's only so much -- there's a limit about how much you can shift to an individual liability versus coverage ultimately over time. So we'll have to see how that plays out. If a substantial amount of people move into a higher deductible or higher coinsurance, it potentially has some impact for us. Historically, in any one period, it hasn't grown dramatically to be material to us. So we'll have to see how that plays out. But we have pretty good efforts to keep our collections on par, but you don't necessarily increase that with the growing liability, if that makes sense.

Yes. What do you think a recession means for your clinical cost? And I really mean just like your nurse spend. I want to say, historically, when we see unemployment go up, you tend to see more nurses enter back into the workforce. Maybe that's inconsistent, but anything would be helpful.

Yes. Well, I think, generally speaking, there's an inverse relationship. If you have an economic downturn, and that ultimately impacts demand over time, then you end up with a different equation from a labor supply and demand. And when you had growing demand and short labor, it drove up cost as a result of that just naturally over time. So again, we haven't gone through this in some period of time, but you would think that if there tends to be some demand contraction that, that would have some impact on the labor cost going out there. And we'll just have to see how that plays out. Our focus today is to make sure we protect our employees as best we can from a variety of different programs that we have in place. But over time, I do think, if you end up in an economy that's growing slower than it was prior to this, it has a corresponding impact on the cost side. You don't -- I don't necessarily have to pay for supplies as high as I used to before or professional fee services and then, ultimately, what is the supply and demand of labor impact on that. So all of those will play out. Again, as mentioned earlier, I think our first effort was to weed through the premium labor components as best we could, so that we could get our employees as much shifts and keep them as productive as best we could.

Got it. In the last few years, HCA has been very focused on allocating capital to a lot of the, I guess, I'll call them, higher acuity, nondiscretionary, inelastic service lines, trauma, rehab, neurology. I mean behavioral has kind of been bouncing around. And what are the priorities today? Or what were the priorities until you had to suspend some of these programs? And where do you think HCA will focus more of their -- of your efforts just in terms of service line development?

Yes. Well, again, we're in a unique time, so we're going to have to wait to get a read with the market inputs to ultimately determine what adjustments to our strategy would have to be made. But generally speaking, our strategy was to ensure that we could provide a full range of services in our HCA network. And the result of that was investing, to your point, in high-acuity services, and whether that be through expanding cardiology, whether it be neurosciences, trauma programs, women's and NICU, a whole host of things, that, that have multiple impacts to us. So we could take care of a full range -- a range of patients' needs. We could help attract leading physicians because they wanted to be part of the systems that were growing their scientific and clinical capability. And it helped to intensify your revenue on there. And so our -- that was our strategy and have worked and continues to work pretty well. We'll have to wait to see, ultimately, what is the new environment post this. Do we get back largely to where we were before and we return back into continuing to invest and strengthen and diversify our service offerings? Or does -- what the market has given us tell us that we need to adjust the strategy in a certain way? So we're going to have to wait a little bit to see what type of adjustments that we'll make. But historically, and over time, that strategy of investing to meet a growing demand and very robust, growing markets and to differentiate the HCA network as a provider system of choice proved to be beneficial to us. And I still believe that fundamental thesis will be there. It may take some short-term pauses depending on how the marketplace responds. But over time, the health care market tends to be very resilient. And we'll get through short-term cycles and I think return back to being able to differentiate the network and invest at a pace where we think the demand is prudent for us to invest at.

Yes. Back on the comments you made about nurse spend. And I guess, I wanted to maybe follow up a little bit on just the Galen transaction. I mean really interesting move, very strategic, very thoughtful. I know that it had been in the works for, I think, a number of years. Maybe just some high-level thoughts on what drove you to that decision and how you think that will pay a return over time.

Yes. I mean, fundamentally, the thesis for acquiring Galen still stays today as it did when we went through it last year and closed on it early this year. In that, we are still one of the largest employers of nurses in the country. Over 90,000 nurses that we employ, and Galen was one of the largest educator of nurses in the country. And even -- in whatever environment we might have in the future, we will have a need to continue to hire nurses to meet our demand in our markets and to fulfill nurses who are leaving the industry on there. So it was a natural kind of strategic fit that -- and our vision is to have a Galen School of Nursing presence in every one of our major markets as a really key source of new nurses entering into the industry. And so that thesis will continue in any future environment that we have. And then when you think about other strategic value aspects of that, as we have employees entering the workforce or we have employees wanting to gain higher credentials, we'd have an avenue by which we can help them get higher education. So you may have a patient care tech want to go get a nursing license, we can scholarship them into our nursing school, or we have a floor nurse wanting to get credentialed for intensive care capabilities or OR capabilities. So all of a sudden, we have an educational vehicle that allows our existing nurses to efficiently gain access to higher education and promote their career growth. And then our experienced nurses can actually return and participate as faculty members on there. So we remain very excited about the Galen School of Nursing joining the HCA network and think there remains a lot of long-term strategic value for both of our organization. They followed some of the HCA principles that we did. They like scale, they like standardization, they like consistent operating practices. So the Galen leadership, and credits to them and their leadership, saw the opportunity where they could join HCA and really accelerate their impact on the nursing community, which is really at the core of their mission.

Helpful. Maybe another sort of important asset inside the HCA organization is HPG. And in every few years, I feel like I hear some really interesting creative initiatives underway. Anything that's worth discussing? I think pharmacy was an area that you focused a lot on a year or 2 ago. Is there anything that's new that's worth discussing?

Yes. Well, HPG is an incredibly valued organization. That's our supply chain organization, both from the GPO as well as supply chain operations. And it really showed itself during this pandemic in terms of what the scale and capability of our supply chain organization was able to do. Because we had existing warehouses, we had insight into our usage, we had insight into our procurement processes, and they were really a star through this process. And we had a lot of great feedback from teams that were working around the clock. And so all those investments we had made in the past, both from pharmacy as well as warehouse, paid a lot of dividends. I think one of the things, honestly, that came out of this is around laboratory operations. Can we use the HPG operational chassis, if you will, around laboratory, just like we did to, you mentioned, pharmacy? We put pharmacy underneath HPG 3 or 4 years ago with both pharmacy distribution as well as the pharmacy organization. We put clinical education under our HealthTrust Purchasing Group. Galen School of Nursing has a strong relationship and participates under HealthTrust Purchasing. What we're looking at is now laboratory operations. We're still mostly decentralized and spare a handful of regions. Can we do more of our consolidation and standardization of procurement and protocols and lab? We're looking at environmental services and food and nutrition. So some of those, what I would call, nonclinical, other support areas, ancillary support are probably opportunities that we are evaluating to see how can we utilize the strength of the HealthTrust Purchasing Group to bring value to some of these other areas that we haven't yet tackled yet.

Yes. I might need to follow up on that lab question off-line. A lot to unpack there. But maybe just one last one here. We're going to run out of time. Just -- we've heard HCA. You guys talked a lot about the evolution of your physician employment strategy for years -- a few years ago. Like employment, employment, employment is all we heard. And I feel like we've sort of peaked out. Where are we in the phase of -- or the cycle of employment? How do you think COVID may play a role in your engagement strategy? Do you worry about physicians exiting or even nurses exiting the workforce altogether or practices looking to align? Just any final thoughts just around your physician strategy.

I think it's a great question, and I think it definitely has the potential of impact of physician environment. Even pre-COVID, we were still active in the employment. We had been -- believe we're a little more strategic and thoughtful because employment, by itself, wasn't a strategy, unless you found ways to really integrate those employed physicians into your strategy, in your clinical operations, in our physician services group under the leadership of Dr. Cuffe who had done just an incredible job over the years, but we were still very active. I mean we're probably growing our employed physician ranks 10%, 15% a year. Didn't get the attention as it did in the heyday. We were growing rapidly just because it was on a kind of a routine course, but there were very strategic alignment opportunities that we had. And now with this pandemic, I do think it could disrupt the physician environment, either because you have physicians who were nearing retirement as this become a precipitating event for them or just because they were smaller organizations that had identified maybe they didn't have the wherewithal to make it through. And so they need to partner with a system to partner with. So I do think, once we get through these response phases, that, that environment activity picks up. And I think we're in a strong position to respond to and respond to it well. But employing -- just employing them and ultimately putting them in RW 2 and then treat -- and keeping the world the same, we've proven it doesn't necessarily advance ours or their strategic desires. So how do you take employment and couple it with other integration capabilities where we think about service line integration, where you think about clinical and strategic integration. So a lot of our physician strategies are evaluated more from just do you employ them or do you not employ them, but how do you really partner and align with them so that we can help build their business, that we can help them participate in their clinical practice and then how do we use that in advance of a certain strategic advancement, whether it be a service line or growth initiative that we have. And we think we've done very well in that over the years, again, under Dr. Cuffe's leadership. And if the environment does get disrupted, just providing a paycheck without necessarily having the mechanism to integrate them clinically or operationally doesn't really add value. So we're well positioned if that does require us to even accelerate that activity further, then how do we make sure that we onboard those physicians in a much more strategic fashion. Maybe instead of just having a bunch of individual practices, how do we group them into a market-based practice and, all of a sudden, thinking up in one market, do I have a collection of 35 employed practices that were still largely independent, how do I merge them into a large market-based group practice and get the benefit and efficiency. So those are some of the new advances that I think we have in the physician environment that really didn't exist a few years ago. And so if that community does get disrupted and we end up having to employ more, we think we have the right operational chassis to do that.

Yes. Well, with that, we're out of time. I appreciate you guys entertaining my crazy questions. And if anyone wants any follow-up, please feel free to reach out to myself or my team, and we'll try to be as responsive as possible. And Mark, Bill, thanks again for joining us. This was incredibly helpful.

Bye, Thank you. Take care. Glad to see you.

See you.

Thanks, guys. Bye. Bye.