Universal Health Services, Inc. (UHS) Earnings Call Transcript & Summary

Hi, good morning. Welcome back to day 1 of the UBS Healthcare Conference. My name is Andrew Mok. I am the health care providers analyst here at UBS. And I'm pleased to be joined on stage with Universal Health Services CFO, Steve Filton. Many of you probably know him. All right. With that, there are QR codes on each of your tables. So if you'd like to submit a question, you can scan your QR code and submit them, and I will receive the question list here, and we will get to them at the end of the session.

Steve, maybe to start, labor is, obviously, on top of everyone's mind. You've talked about the directional improvement in the contract labor market that you expect this year. Can you help us understand the pace and magnitude of that improvement, particularly exiting Q1 and into Q2?

Sure. So we had our Q1 earnings call just a few weeks ago. And I think the updates that we gave at that time are still largely sort of relevant and current, but try and provide a little more color. I think as most of our acute care public peers, and quite frankly, I think our not-for-profit private peers, particularly on the acute side, have been saying, despite the relatively dramatic reduction in COVID volumes that began after the Omicron surge certainly by late January, early February, the labor dissonance, the disconnect between supply and demand on labor, particularly for nurses, it remained, I think, a sticky problem for most of Q1. I think we acknowledged at the end of April on our Q1 call that those difficulties had persisted through April, for the most part. We're hoping that we would see some improvement in May and June. And I think the good news is that we have started to see some improvement in the sense of a reduction in our demand for the number of hours for what we describe broadly as premium pay, and that would include payments to our own nurses, things like overtime and shift differential as well as payments to third-party nurses who are coming to us through temporary or traveling nurse agencies. So again, I think in the last couple of weeks, we're seeing on the acute side, some measurable reduction. Your question sort of talked about cadence and trajectory for the balance of the year. And look, that's the sort of tough part for us and I think for our peers, we really don't have a playbook that we can look back on and say, this was our experience in past pandemics. And even our experience from a year ago, I'm not sure it's all that relevant because the labor disconnect and the labor tightness in 2022 is clearly way significantly more exacerbated than it was in 2021. So we're encouraged, I think, by the improvements that we're starting to see in May. The quarter started off roughly because the labor shortage persisted. What we said at the end of the quarter in response to the fact that some of our peers had already revised the balance or their guidance for the balance of 2022 is that we just thought it would be helpful to have a couple of more months of experience before we made those judgments. I think we still feel that way. So we've had 3 or 4 more weeks and that's helpful. But I think we, I think, have maintained a cautious tone and a cautious outlook and feel like we'll be in a better position in a month or 2 from now to make judgments about the balance of the year.

Got it. And you mentioned lower demand that you're driving. What's driving that lower demand of contract labor? Is that unique to UHS? Or are you seeing that across the industry, across your hospitals, lower demand?

So hard for us to gauge what's happening elsewhere. But certainly, our demand for, again, these premium hours, premium nursing hours has declined in the last month or so. I presume what's driving that is the -- as I said earlier, alluded to earlier, the dramatically declining COVID volumes. I think what drove this really elevated demand for nurses was the Omicron surge that occurred late or maybe mid-December of 2021 and continued into mid- to late January, depending on the geography. And not only did that create an immediate demand for nurses to work in acute care hospitals and COVID units and ERs and ICUs, et cetera, but I think it really caused a panic among acute care providers who were struggling with their ability to provide care, and we're struggling with how long this was going to last and they were making longer-term commitments. You would hear a lot about 18 -- or excuse me, 13-month commitments, 3-month, 4-month commitments to nurses being made in January and February, again, even as some of the volumes, the COVID volumes began to decline. And as a result, I think that we didn't see the demand or the number of hours, these premium hours being used really declined a great deal in Q1. And honestly, even into April, again, as I said earlier, we started to see some of that in May. And so hopeful that if COVID hospitalizations remain as low as they are, that we'll continue to see those numbers come down. So I think there were a bunch of things going on. I mean nurses were committed, hospitals were committed for longer-term contracts versus, quite frankly, some of these traveling and temporary nurses had made a great deal of money during the pandemic, and we were hearing anecdotally that some of them were taking time off, weren't necessarily returning to work so quickly. Again, all of that was exacerbating the shortage, I think some of the, quite frankly, economic anxiety that's been out there for the last few weeks is, in some ways, having a -- the sort of reverse effect of encouraging nurses maybe to get back to work and because of the economic uncertainty being created out in the marketplace.

Got it. And can you help us understand what percentage of those premium contracts have you been able to renegotiate so far? Where do we stand what inning, I guess, are we in? And if we think about a typical 13-week contract, that would suggest you'll be able to get through most of them at some point during 2Q. Is that a reasonable assumption?

Well, it's certainly a reasonable assumption for us. I mean we're not entering into and have not entered into any measurable number of those longer-term commitments for several months now. It's always a little bit difficult for us to say what others are doing. But at least what we hear anecdotally is that hospitals are being, I guess, more aggressive, I'll use the term more aggressive about not entering into those contracts and even we've heard about hospitals sort of terminating contractual commitments that they had even though they had not actually run their term. So again, the general sense is that we should see improvement at least in the back half of the second quarter and as the year goes on. And again, we're back to this question that you asked earlier, well, what's the exact cadence we have talked about, I think we talked about on our Q1 call, just from an acute care perspective, we had about $150 million of premium pay in Q1 this year. That's certainly our highest quarterly amount ever, but certainly during the pandemic. And our original guidance for the year presume we could get to about half of that by the end of the year, that we'd exit Q4 at around $70 million. And I think it's a little too early to know whether that's a reasonable target or not. But certainly, we're making progress away from the $150 million.

Right. And in those recent renegotiations, any sort of spot prices that you can provide to help us understand how much lower those are being renegotiated at?

Yes. So even in Q1, I think we made the comment that the hourly rates that we were paying for those temporary and traveling nurses had come down a little bit, and I think they've continued to come down a little bit more. What we didn't see, I think, in Q1 and even into April was a reduction in hours. I think in May, we're seeing some, again, measurable reduction in our hourly -- or demand for hours and also in what you described as sort of the spot or current rate that we're paying for those hours. It's a little hard to sort of get to, and then because, again, every one of these contracts are different, et cetera. But I'd say we've seen at least a 20% reduction in hourly rates from their peak in Q1.

Got it. And the other side of managing the cost equation is negotiating higher reimbursement with your commercial payers. Can you talk us through some -- that process and cycle? What's the time line there? And how have those negotiations been going? Have you been able to advocate and receive higher rates from your commercial payers?

Yes. So I don't know that there's kind of a specific time line for this. I get asked a lot of questions about sort of what the average length of our contract is and how many 2- and 3-year contracts we have. They're all legitimate questions, but the reality is the vast majority of our managed care contracts have relatively short-term out, 90-day, 120-day out. And so either party has the option of canceling the contract during the term, it doesn't happen often but we talked, again, I think, at some length on our Q1 call about probably from my personal observation, seeing more contract terminations in the last, I'm going to say, 3 to 6 months than I've probably seen in the last 5 or 6 years. And a lot of it, and I use the behavioral segment as the example, not that I think this is not happening at all on the acute side, but I think it's more prevalent on the behavioral side because we've been, as we've discussed quite frequently during the pandemic, capacity constrained on the behavioral side, meaning we're turning patients away. We have more patients than we can treat largely because of limitations we have with our labor force, again, mostly nurses, but in some cases, other employees. And so in that situation, when we have a payer, just giving example, who's paying us $600 a day. And we're turning patients away. We have the option of going to that payer and saying, look, if you're not willing to give us an increase to $650 a day, which is our next lowest payer in the market or in the hospital, we literally or at least figuratively have patients who are queuing up outside of our doors who can be admitted and are eligible for admission and for whom we'll get paid more money. So that's -- it's really your choice. You've either got to pay us a competitive rate or we're going to pursue other options, you terminate the contract, given notice of termination, et cetera. And again, I think we've been seeing more of that, particularly on the behavioral side. And I think we've talked about this before. It's manifested on the behavioral side in our higher revenue per adjusted day or the growth in revenue per adjusted day, which I think throughout the pandemic has been averaging kind of in the 5, 6, sometimes higher percent range. And whereas I think pre-pandemic, it was probably somewhere between 1/3 and 1/2 of that. So we've clearly been getting larger increases from a number of our payers in large part because of the dynamic I described. On the acute side, I think we're making those same calculations, same judgments about all of our contracts and certainly all of our lower-paying contracts, I will add that -- or clarify that on the acute side, we have not been so capacity constrained. We really haven't been turning away patients. So we don't have that same broad optionality. But at least in some cases, we're still making the judgment that if a payer is unwilling to give us what we believe is an adequate increase under the -- in this environment with much higher labor costs, just broader general inflation, we're willing to be, I think, more aggressive about terminating our lowest-yielding contracts.

Got it. That's helpful. And as we enter an endemic state, what's been the latest on how volumes are developing in each of your business segments? And what are your expectations around deferred utilization and acuity on the acute side?

Yes. So -- and again, I think our experience has been a little bit different. I mean on the acute side, I think it's fair to say that acute hospitals have -- the pandemic has been a mixed bag for acute hospitals. Certainly, at the beginning of the pandemic, there were real negative trends in acute hospitals. What we saw back in March and April and May of 2020, at the very beginning of the pandemic, these terribly dramatic declines in non-COVID volumes. So almost overnight, in March of 2020, we saw our emergency room volumes decline by half. We saw our elective and scheduled surgeries and other procedures declined by, in some cases, 2/3, et cetera. That was devastating, I think, to the acute hospital industry in general. But within, I would say, 3 or 4 months, by the late spring, early summer of 2020, we started to see volumes recover. And even when we experienced subsequent COVID surges, which we have experienced any number, at least 3 or 4, since then, we haven't always seen that same crowding out that we saw at the very beginning of the pandemic when the country literally sort of locked down and shut down. And I think the acute hospitals, even during these surges have had some level of benefit because there wasn't a lot of crowding out. They still maintain their non-COVID surgical schedules, that sort of thing. Meanwhile, the COVID patients themselves were relatively high acuity, which meant higher revenue. There was additional Medicare reimbursement for COVID patients, there's 20% DRG add-on, there was CMS reimbursement, there's so-called HRSA reimbursement for uncompensated COVID patients, et cetera. So in some respects, as I said, the pandemic has been a mixed bag for acute hospitals. And most recently, as COVID volumes have declined to their lowest levels, certainly since the very beginning of the pandemic, it's also been a mixed bag for acute hospitals. They've started to backfill some of that non-COVID -- or some of that COVID business with non-COVID business. But it's not necessarily a one-for-one exchange, and it's not necessarily something that occurs completely and fully overnight. And meanwhile, we're facing a lot of these labor challenges and premium labor costs and elevated costs that we've been talking about before. So I think that's the challenge for the acute hospitals. We've sort of framed it this way is we're in this period where COVID volumes have declined dramatically, we're in the midst of recovering and backfilling those COVID volumes with non-COVID procedures and non-COVID surgeries and procedural -- other procedural kinds of activity. On the behavioral side, I would say that there's really never been a benefit from COVID. There's not higher acuity. In fact, there are sort of patient mix challenges that we've always had whenever there's been a COVID surge. We faced the labor shortages that we've talked about already. So I think as COVID volumes have declined broadly across the country, the behavioral business is recovering in kind of a more straightforward way that is we're not losing anything with the decline in COVID volumes, and we're seeing this incremental -- and I'll stress the word incremental. It's not a -- it's not a dramatic increase in volumes, but an incremental increase in volumes as we fill more of our positions and as our retention rates go up and our turnover rates go down so that our net hires, the net amount of people that are entering our employment pipeline is greater. We're seeing a bit more of a kind of a straight-line recovery in the behavioral space.

Got it. That's helpful. And you mentioned that there isn't necessarily a one-for-one exchange when you lose those COVID patients and gain the non-COVID patients. Second quarter of 2022, it looks like this is going to be the lowest COVID hospitalizations at least since we started the pandemic, what are the implications of that for the business? Should we expect a pretty meaningful moderation in revenue per admission as we transition from 1Q to 2Q?

Yes. So a lot of that depends as getting sort of back to your earlier cadence-trajectory question. A lot of that depends on how quickly can we replace the COVID volume that we've lost. And it's an interesting thing. I mean, I think the industry from the outset again from that March, April 2020 period when non-COVID volumes declined so dramatically really, I've been in this business for 35 years, and I've certainly never experienced anything remotely like that. The goal that the industry sort of set for itself, [ not ] in an informal way, but I think sort of in a real way was, we've got to get back to pre-COVID volumes. And back in, again, March and April of 2020, that made a lot of sense. That was a reasonable target. And I think in many respects and by, as I was saying late spring, early summer of 2020, we had gotten back there and have gotten back there a number of times in the couple of years that have transpired. But the interesting thing is or as we think about it, here we are in May of 2022 and all other things being equal in May of 2022, we would expect our broad volumes, elective and scheduled procedures, emergency room visits, all these things to be depending on what you think is a normal annual growth rate, 6%, 8%, 10% ahead of where we were in 2019. And yet we're still, I think, as an industry and as a company, generally measuring ourselves in terms of prepandemic or 2019 levels. And that's really the current challenge or part of the current challenge, if we can't grow above 2019 volume levels, all the other things that we're doing, reducing premium pay and controlling overall inflation and seeking price increases from our payers, all the things that we've talked about are probably still not going to be enough. And I think the industry is confident and UHS is confident that we should be able to get back there in the sense that as we think about, as we analyze, as we determine sort of what has happened to volume over these ensuing, at this point now 2-plus years, it's not evident to us in any way that the volume has sort of naturally or logically dissipated in any way. It's not gone for the most part, elsewhere. The population hasn't sort of miraculously gotten healthier, et cetera. So it's a question, I think, of what's it going to take to restore the volume growth to not just prepandemic levels, but to what I would describe, you describe as endemic or I would describe as post-pandemic levels. And I think it's a number of things. I mean I think we've got to rely on our physician population to work through some of that backlog. We've got to rely on patients who quite frankly, may have deferred care during some or all of the pandemic to return not only to the hospital but originally to their primary care physician offices and then their specialist offices and get the treatment that maybe they haven't been getting or at least the diagnostics that they haven't been getting for the last couple of years and sort of get them back in the pipeline of care that was clearly interrupted very dramatically at the beginning of the pandemic and maybe for -- I think for some people, you'll hear about some people who will say, I haven't been to a doctor in 2 years or I'm just getting back or I'm just taking care of this illness of that illness. So I think a lot of that has to occur.

Got it. And when we look at the inpatient volume data, at least the data we look at, it certainly looks like it's plateaued in recent weeks, and we've yet to see kind of volumes break out of those 2019 baseline level. So is there something -- is labor constraining your volume growth? Is that the main constraint to breaking out of those 2019 baseline levels.

And so I would answer that question, Andrew, very differently for the 2 business segments. I think on the acute side, the answer is generally no. Labor is not constraining our volumes for the most part, with the exception of, again, in the very early months of the pandemic, which we've already talked about, and then for -- I think very isolated periods of time, days at a time during some of the surges we've experienced since. We never really limited the amount of demand we could take. And when we did limit it, I think it was rarely because of labor constraints, it was usually because of regulatory issues. The federal or state governments were saying, you've got to make sure you've got capacity to treat COVID patients so you can only do emergency procedures, that sort of thing. Those -- again, other than at the beginning of the pandemic never lasted very. So I think the broader issue is that our physicians in many ways, I think, have been a limiting factor for us. And honestly, I think I share this view that others shared at the beginning of the pandemic, which is that once we back into the hospitals and patients are back into the hospitals -- I think we're going to pause for a second.

Yes, let's just -- pausing it. Steve's mic not here. In the meantime, just a reminder to everyone in the audience, if you have questions that you would like to submit, you can scan the QR codes on your tables and they'll populate up here, on the iPad, for us.

Okay, try again. So I think that the -- our physician capacity has been a limiting factor in being able to get back to not only prepandemic volumes on the acute side, but some reasonable level of growth on those volumes. And in that, I mean, I guess what we have found, and then I think what I started to say right before I get interrupted was, we felt like our physicians would come back. And again, this was clearly sort of a misperception, but almost like factory workers. And now they would work an extra shift a couple of hours each day or on the weekends in order to catch up, because clearly, there was a backlog. We were hearing that not only from our physicians, but we're hearing that from our patients. And yes, I think what we found in reality is that most physicians got back to their prepandemic routine. So if a surgeon, a cardiac surgeon, did his/her surgeries on Tuesdays and Thursdays from 7 in the morning till 3 in the afternoon. that's sort of what they went back to doing. And even though we offered surgeons and proceduralists the ability to do work into the evening -- the early evening or Saturday and Sunday mornings. And there were certainly some doctors who took advantage of that. I think for the most part, doctors did not. And so I think what we hear today is that most of our, again, surgeons and proceduralists will tell us that they have a significant backlog that they've got scheduled, they're scheduled out for 8 or 10 or 12 months and could probably schedule out longer, but they don't choose to do that. We hear it from our patients as well, who will call us and say, I've been trying to get in to see Dr. Smith. I can't -- I need a hip implant or I need a colonoscopy, can you recommend somebody else? Can you refer me to somebody else? But we find that most of our physicians are in that space. The other issue is, the one I referred to earlier, where we got patients who haven't necessarily been sort of in their normal routine, and they haven't been to their primary doctor in a year. And now they go to their primary doctor and he refers them to a cardiologist or a GI specialists or whatever, and again, all this takes time, especially if it's not an emergency. So there's definitely that issue. But I don't think we're really constrained on the labor side. I think and again, in a practical way, what has happened on the acute side is we have, throughout the pandemic, filled all of our vacancies and we've had, with rare exceptions, all the labor we needed, albeit at a very, in some cases, elevated price, at least for some of that labor. Now on the behavioral side, I do think it's been a different issue and a different dynamic, and we've certainly discussed that throughout, and that is we've been unable to fill all of our vacancies during the pandemic on the behavioral side, regardless of what we were willing to pay in terms of premium pay, et cetera. And as a consequence, we've been turning patients away on the behavioral side. And so on the behavioral side, I think that the easing of the labor shortage is a precondition to improving our volumes. And as I said earlier, I mean, I think we're seeing the earliest signs of that over the last, I'm going to say, a month or so, and we're making some progress there. But I think labor has definitely been a capacity-constraining variable on the behavioral side, not too much on the acute side. On the acute side, it's been a real contributor to much more elevated costs.

Got it. So despite those labor constraints on the behavioral side, the contract labor has been running more consistent in that business. I think it's 2% to 3% of your employees. So why haven't you been able to staff up on the contract labor? Why don't we see more flexing of the contract's labor on the behavioral side to meet that demand, especially if you are willing to pay those higher rates?

So I think this has been a challenge for what I would broadly describe as the subacute provider business. And so that, I think, includes providers like behavioral hospitals, but also home health agency providers, skilled nursing, nursing homes, long-term care facilities, et cetera. Nurses, I think, who historically have worked in those sub-acute settings have always sort of been paid at a differentiated and a differentiated lower rate than their acute care peers. I think depending on the specific service and depending on the specific geography, for as long as I've been in this business, I mean, that's been maybe a 15%, 20% discount. And that's been okay, if you will, or that discount has really never been terribly disruptive for most of my 35-plus years in this business because nurses, I think, choose to work in a subacute setting for a variety of reasons, patients aren't as sick, it's just not as stressful, you're not facing the same level of mortality, all kinds. I've literally talked to hundreds of nurses over the years and have heard that explanation over and over and over again. And when nurses essentially say, I'm willing to work at that discount in an environment that I don't find not nearly as stressful for or as challenging. What happened during the pandemic is that dynamic sort of got turned on its head. And that same nurse who has worked at a 15% to 20% discount for most of his or her life now had the opportunity to maybe make 400% or 500% of their base salary, working as a temporary or a traveling nurse earning $10,000 a week, in some cases, having to travel for that, and in some cases, quite frankly, not having to travel for that. And really just sort of disrupted the -- that historic supply and demand. So back to your question as, why didn't we have more contract nurses, why didn't we pay more over time? Why don't we have more premium pay on the behavioral side, not because we didn't want to. We certainly were willing to pay those rates. But when a nurse came to us, I've used this example a number of times, when the nurse came to a behavioral health CEO or behavioral health nursing director and said, I have this opportunity -- I who make $70,000 a week on average, have an opportunity to -- $70,000 a year, I'm sorry, now I have an opportunity to make $10,000 a week, there's really no response we ever had to those sort of disclosures, if you will. We never -- we couldn't match that. We couldn't raise their salary by $5 an hour. We could -- there was nothing really we could do. So generally, we wish the nurse well. We would say we hope and believe this was a temporary thing and that they would be welcomed back, sometimes we kept their benefits in place as a means to encourage them to come back. But the reality is that we just couldn't -- we didn't have that flexibility or optionality, Andrew. We wish we did, because we would have spent more money had it allowed us to treat and admit more patients.

Got it. That's helpful. keeping on the behavioral topic. There's been a lot written on the impact that COVID has had on mental health broadly. I think the CDC just released new data showing that overdose deaths just hit another record level in 2021. When you look at your service lines, do you -- are you in all of the service areas you want to be in today? Or are there any services that you're not in that you think could be an area of growth or future investment.

Yes. So first of all, we, I think, thoroughly agree with your observation that during the pandemic and just broadly over the last several years, demand for behavioral services is really up and across and up and down the continuum have increased, whether that's just sort of general behavioral illness, severe depression, things like eating disorders, addiction illness, et cetera. All of these things, and I think the data supports this, have increased in frequency and the need for more treatment has increased. We're generally in most of the businesses or most of the service lines across the behavioral continuum. I think we've recently started to enhance and increase our footprint in the medically-assisted treatment of addiction illness. These are things like methanol and Suboxone clinics. That's not a service line that we had really been in, in a significant way. We've clearly increased our footprint in telehealth offerings and optionality largely in response to the needs of the pandemic and the role that I think telehealth has sort of played during the pandemic. But I think beyond that, we have a presence in kind of that broad spectrum of both residential, acute care behavioral services that cut across any number of specialties, I think we're enhancing our outpatient capabilities, and I think we're well positioned to do that. I mean we're the largest inpatient behavioral provider in the country. So we probably have the ability and the opportunity to expand kind of up, down laterally, horizontally across the continuum, probably have a greater ability to do that than virtually any other provider in the country.

Got it. And the behavioral business is one that lacks a lot of market share data, how do you assess your own growth and market share in this business? Have you done any look-back analysis throughout the pandemic to kind of gauge market share changes?

Yes. So the premise of your question is correct that there's not nearly as good or as accurate, I think, market share data on the behavioral side as there is on the acute side. We've done everything we can, however, to measure market share during the pandemic so that trying to gauge whether the issues that we were facing, the labor issues, et cetera, were affecting our market share in a way that was not affecting peers. And we tend to look at market share for the most part on a market-by-market, geographic specific sort of basis. And for the most part, whenever we could see that we were experiencing more muted volumes in the market because of labor shortages. We were seeing the same sort of dynamic in our peers in whatever geography that was. And you can see that both ways, you can see it in terms of patient volume, which is, of course, the way we generally measure market share, but we'd also see it in the recruiting activities of our peers. So when we were out there recruiting heavily because we had a shortage of nurses or techs or therapists, we would see our peers doing the same thing. I often get asked about the performance of Acadia during our one -- most notable public peer during the pandemic. And I think they benefited, back to a point that I was making earlier, they've got a much bigger presence historically than we do in the medically-assisted treatment area. I think, something like 15%, 20% of their revenue is coming from that business. That's a business I think that to their credit has been relatively recession insulated -- or not recession, COVID-insulated, COVID-resistant. They're not nearly as reliant on RNs. And as a consequence -- they've also had a bigger presence in the residential space with a longer length of stay, not nearly as reliant on our end as well. So that's helped. I think businesses that are not as reliant on our end have been hurt more -- have been helped more during COVID and businesses that are more reliant on our end, and I've mentioned several of them earlier, that includes home health and skilled nursing, et cetera, have been more challenged.

Got it. And you mentioned medically-assisted treatments as an area of investment. How big is that business for you today? Where could that go over the next 5 years?

So it's really a business that we are not in, in any meaningful way. We probably have a couple of random facilities around the country today. It is a significantly growing business. Obviously, you talked about citing a statistic about opioid deaths. There's also, I think, an infusion or there will be a continued infusion of monies from these large sort of mega settlements in the courts for opioid treatment over the next several years. So I mean, I think the opioid treatment is set to grow. And I think given that we have almost no presence in it, and I think we can -- it's an area of pretty measurable growth for us in the next several years.

That makes sense. Last question here, a minute or 2 left. You've meaningfully stepped up the level of share repurchase last year. This year, I think, you're on track to do at least $1.4 billion. Given the maturity and life cycle of the company, should we interpret that as a step-up function in share repurchase? Or is this just more of an opportunistic timing feature?

I think it's a function of a couple of different things. I mean, obviously, it's a function of the way we view our own share price and our own valuation at the moment, which I think is kind of at historically low levels. I think as my earlier commentary suggests, and I think as we've certainly said before, there are certainly some transient issues in this business, and maybe they're more than just immediately temporary. But things like the labor shortage, we believe will ultimately work itself out. And what really encourage us, I think -- encourages us about the 2 businesses as we think that the underlying demand in these businesses is still strong, particularly in behavioral and that will be able to realize that in the next several years. So as we think about the way the outside world is sort of viewing and evaluating and valuing our stock and the way that we think about our businesses, et cetera, we think this is sort of a real opportunity. I'd also add that I don't think we think there are or have been a ton of other external opportunities in the M&A marketplace, et cetera. So the opportunity to buy back our shares and our EBITDA at historically low levels is more compelling given the fact that there are not a lot of -- or haven't been a lot of compelling M&A opportunities as well.

Great. Well, we were just about up on time here. So let's end it there. Thank you again to Steve for joining us here today, and please enjoy the rest of the conference.

Thank you. Thanks, Andrew.