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

Hi, everyone, I'm Steve Baxter, the health care services analyst here at Wells Fargo. We're very pleased to have Universal Health Services, a leading provider of acute and behavioral services. From the company, we have Steve Filton, CFO. Thank you very much for being here.

Thank you. Good morning.

So maybe we'll start on the acute side of the business. The first half, you had historically strong volumes. Obviously, we're in a period where we're recovering from various COVID spikes that we saw in the first half of 2022. When you think about where we are from a volume recovery standpoint, what's the story in the acute side of the business? When do we think about returning this thing closer to pre-pandemic levels of growth?

So as you described it, Steve, this has been a year of pretty robust acute care volumes. There has been speculation, and I think rightfully so that some of that recovery has been the catch-up on postponed or deferred demand that had occurred over time during the pandemic. Everybody, the providers themselves and investors, et cetera, would like to be able to parse it precisely to understand how much of demand is what all sort of call true recurring demand and how much is sort of this recovery of some deferred procedures. It's very difficult to do. I would say, well, not impossible. And I don't know that anybody can really do it with any great level of precision. We had 10% in the first quarter, 10% year-over-year same-store adjusted admission growth. And so I think we just conclude from what is a historically sort of unprecedentedly high number that there's got to be some level of catch-up in what we expected and saw was a little bit of moderation in Q2. We'll probably see, I think, a little bit more moderation in Q3 and 4. But I still think acute care volumes remain strong. And again, the character of it that we've seen so far this year and seems to be persisting is pretty strong volumes, although somewhat lower acuity, which at least in my mind, seems logical in the sense that I think the procedures that tended to be deferred and postponed during the pandemic the less acute less emergent procedures and now they're being caught up. So I think the trends have largely continued into the back half of the year, although, again, with some modest moderation in some of that extraordinary volume growth.

Got it. So when you're talking about moderation, you're talking about the year-over-year growth rate, are you talking about moderation of you would typically expect Q3 to look like versus a Q2 and a more normal...

Yes, more of the year-over-year. Again, if I'm remembering correctly, I think the adjusted admission growth in Q1 was like 10% year-over-year. I think it was 8% in Q2. We expect it would moderate a little bit more in the back half of the year, and I think we're seeing that.

Okay. And then the acuity was going to be my next question. You talked about what you've seen on that front? I mean it does make sense to your point that deferrable procedures would be less acute in nature. Obviously, we've had the ongoing shift to outpatient care accelerate dramatically for certain procedure categories. What are you seeing in terms of acuity? And I guess, how has that evolved through the year?

Yes. So look, I think you described it correctly. I mean, there are a couple of different dynamics, I think, occurring at the same time. One, I think is, again, as we catch up on these procedures, the procedures that tend to be have been deferred and postponed or the less acute ones. And so we're sort of skewing during the last couple of quarters to a slightly lower acuity level that I think at some point, is going to stabilize. We've also had, as you described, this dramatic dramatically accelerated shift because I think we've been seeing this shift from in to outpatient for, quite frankly, decades, but it really accelerated during the pandemic. I think it really accelerated specifically and particularly amongst orthopedic procedures. It feels like we're largely through that. Again, I think what most of the data suggests, as an example, is maybe 5 years ago, 80% of total joint replacements, hips and knees were being done on an inpatient basis and now 3 or 5 years later, it's flipped completely and 80% are being done on an outpatient basis. But I think the reality is that means that there's not a whole lot more to go that the procedures that are being done on an inpatient basis currently are on the older, more medically compromised population and probably not a lot more change or not a lot more shift is likely to happen. So I think we're likely to return to what I think was sort of that pre-pandemic more incremental and evolutionary continuing shift of inpatient to outpatient.

Okay. And then as we think about the rate environment, 2023, obviously, is a done deal, I believe, from a revenue perspective at this point. You got [ 7-1 ] rate updates in Medicaid. I think it was kind of the last outstanding piece there. I guess, give us more of a sense as you think about 2024 contract and where things stand for commercial at this point? And what your expectation is for what happens to the Medicaid rates have been stronger over the past couple of years, mostly in behavioral, but I believe also in acute.

Yes. So I think contracting rates are generally have been a positive, albeit with a bit of a lag for the providers as we've settled into a more inflationary environment that we've been experiencing for a number of years as we're renegotiating our contracts we're beginning to get that inflationary relief in our contracts. And I think we'll continue to do that. I think that process probably started mid-2022. And I think we will likely continue for the foreseeable future as long as we're in a somewhat higher inflationary period. So again, I think contractual rates are generally a tailwind for us. I think the concern that providers have and always have is sort of in an environment where medical loss ratios are going up the payers. They have a number of levers that they can sort of pull to try and control medical loss ratio. Contractual arrangements are, one, although I don't think we're really seeing that. More likely, I think, and probably more nuanced and a little less obvious or utilization review practices and denials and observation versus inpatients such a categorization. So we're paying a lot of close attention to that and trying to make sure that some of this sort of downshift in acuity is not driven by those kinds of things, not evident to us at the moment that it is, but certainly something we try and be very sort of attuned to.

So even if it's not driving the acuity, do you feel like you've seen a significant change in the level of utilization management?

Well, I think for sure, from the perspective of, I think, in the very beginning of the pandemic, especially when utilization rates dropped so dramatically, so quickly, the payers, I think, were really very conscious about not being sort of overly aggressive about utilization review, et cetera, when utilization was already so low. And I think then as utilization patterns have returned back to kind of more normal levels, I think their sort of utilization practices and their level of aggressiveness has sort of also moderated back or regress back to kind of, I'll call it, more normative levels.

Okay. And it does seem like these Medicaid supplemental payment programs have become a bigger swing factor for your business year-to-year. I know that we're watching Nevada closely to see kind of what happens there. I would love to hear if there's any update on Nevada. Maybe there's also been some attention on whether Texas is also potentially increasing the size of some of their supplemental programs. Can you give us an update on both of those?

Yes. I mean, first of all, I would just make the general comment that I think these Medicaid supplemental programs, to your point, are becoming more prevalent -- and I think there's a reason for that. I mean I think that the states are -- view these programs as a way to enhance Medicaid reimbursement, particularly for what I would sort of describe as safety net hospitals, that is those hospitals that are providing inordinate levels of either Medicaid -- care to Medicaid patients or care to indigent patients or both. And so you see more of it. It's not an accident that you're seeing more and more of these supplemental programs, which are doing just that. They're supplementing what I think providers would describe as otherwise relatively inadequate base Medicaid rates. In terms of the specifics that you asked about. So Texas, to your point, has increased the size to some degree of their supplemental pool. It's -- Texas is a pretty complicated state from a supplemental reimbursement perspective. They've got a bunch of different programs and they tend to all interact with each other. So when one goes up, one goes down or it could go down, et cetera. I think ultimately, we believe that the net impact on our hospitals in Texas will be positive. And it will be a bit of a tailwind, but I think it's worth noting that when you read about an increase in the uncompensated pool, it could result in a lower amount of disproportionate share or whatever. So you just have to keep that in mind. It's a pretty nuanced situation. The Nevada programs, as we've been disclosing are new -- incrementally new. They are -- continue to be developed. We've been disclosing that one of the requirements has been that the state has said they needed to get the approval of 2/3 of the hospitals in the state to move forward. We've been advised that they've obtained that approval. And so now we think that basically, what has to happen is the state needs to file the paperwork for these programs with CMS, they require CMS approval. But as best as we can understand it and understand the dynamics of the program, that approval should be gained at some point and the program should be effective sometime in 2024 largely with a significant potential benefit to our hospitals in Nevada. And then there are some smaller programs that we've disclosed in South Carolina and Oklahoma. Again, I think mostly, these will be tailwinds in 2024.

Okay. And I know that the Nevada one, at least in terms of your current guidance is a headwind. When you think about it being better in 2024, does that mean it's getting back to what it was? Or do you think the program size like we've seen elsewhere is potentially increasing to...

Yes. So I think that corrects your question. We've been disclosing the fact that Nevada has been developing the implementation of 2 programs. A smaller program that we actually thought would be implemented and effective in 2023. We had about $25 million of income in our guidance or EBITDA in our guidance associated with that program. That program has been delayed and its implementation has also been, I think, somewhat downsized. So now we think we're going to get about $3 million just in the fourth quarter. So that's about a $22 million headwind for us in our 2023 guidance. Now we actually raised our guidance or at least chopped off the lower end of our guidance after last quarter. So we think we're going to overcome that headwind and still believe we will. But the bigger program, which is probably could be 4, 5, 6x the size of the smaller program, we always imagine would be implemented in 2024. And that's still our expectation.

Okay. On the acute side, obviously, labor has been a huge amount of focus. Generally, it feels like wage inflation has been improving as we've moved through the year. What's the latest on the wage front? And what's the interaction with the strong volume growth you've seen in your ability to continue to improve wages at the pace you expect?

Yes. I mean, so as everybody knows, I mean, one of the big challenges for the acute care providers in 2023 was dramatic increases in the amount of premium pay. We describe it generally in the context of premium pay, which includes over time and shift differential to our own employees as well as payments to third-party temporary and traveling nurses, premium pay for us. And I think for most of the industry peaked in the first quarter of 2022, which was the last COVID surge of consequence that we experienced. Subsequent to that as COVID volumes declined, we cut our premium pay pretty quickly. I think by the third quarter of last year, it cut premium pay almost in half. And since that time, since the third quarter of last year, it's remained relatively stable. I think we'll make maybe a little bit more incremental modest improvement in the third quarter this year. But to your point, I think one of the reasons why premium pay hasn't declined more and we expect that it would have declined more is the strong acute care volumes that you had asked about before. So I think we'll make a little bit of incremental progress in Q3. And then it will be interesting to see weather as we get into the busier fall and winter season, whether we can continue to make further progress. Certainly, it doesn't appear as if we're going to be able to get back to kind of the pandemic levels of premium pay, but I also don't feel like we're at risk of getting back to those sort of extraordinary levels of premium pay that we were experiencing in the first quarter of 2022.

Okay. So when you think about the improvement that you might see in the back half of the year, is it more rate than if you think that the volumes are going to remain fairly strong? Or how are you thinking about that?

Yes. I always feel like rate -- when it comes to that premium pay, the rate and volume sort of go hand in hand, not necessarily always in the exact same period, but the reason that rates have gone up is because the demand for hours has gone up. As the demand for hours has declined, rates have declined, and I think over time, sort of proportionately. So again, I think what you're seeing is the demand for hour is clearly a lot lower than it was, again, a year or 15 months ago and rates also quite a bit lower. Although again, in both cases, neither the demand for hours or the rates are back to prepandemic levels, and it doesn't feel like they're going to get back there anytime soon.

Yes. Okay. And then obviously, the physician subsidy expenses were a big area of focus as we came out of the second quarter and those have escalated to a bigger headwind than you would initially plan for. So you've also stepped over that with the guidance improvement that you made. As we think about these expenses having ratcheted up so much in the pressure that these underlying business models are seen, how do you think this plays out over the next couple of years? Like what are the key couple of opportunities you'd have to potentially manage this more efficiently as we step into 2024 and 2025?

Yes. I mean I think what you've seen and what we've seen and been experienced as an industry is almost sort of -- and your question sort of alludes to this kind of almost a complete reset of the business model of these physician subsidy businesses, primarily for us, emergency room, physician coverage and anesthesia coverage. And I think what the industry and everybody has come to realize, I think, over the last 12 or 18 months is that businesses were more -- much more heavily reliant on the profitability and the billing and the profits embedded in that billing that came from their out-of-network patients, although a relatively small percentage of their patients, but I think a relatively large amount of their earnings. The No Surprise Billing Act obviously had a significant impact on that, changed the profitability of these businesses. And so as a consequence, whoever is running these businesses, whether they are continue to be third-party providers, whether hospital providers themselves take on more of these physicians themselves and hire them and run these businesses ourselves. Whoever is running these businesses is going to find them less profitable. And as a consequence, the subsidies that we're having to pay for these businesses has increased significantly. And that's, I think, what you've seen for the first 6 months in our financial statements, and I think that, you'll see a similar impact over the balance of the year. But I feel like once we get to 2024, that basically business model has been reset at this higher level of expense, and there won't be another incremental sort of increase in expense next year and perhaps even some level of decline or moderation as we are able to drive some greater efficiencies, whether that's through kind of more efficient staffing levels that is using more, let's say, CRNAs versus anesthesiologists in that area or just getting over this sort of temporary funding requirements that we've had this year, et cetera. But again, there's not going to be a complete reset. We're not going to get back to physician subsidy expense at prepandemic levels by any means. But I would think at a minimum, we should see those expenses level off in 2024? And maybe in sort of a better case, see a bit of a moderation in those expenses.

I guess how do you think about the financial trade-offs of potentially in-sourcing some of the services, especially on the ER side? Is that something you think you could do when you think about getting rid of the physician subsidy expenses could be like a breakeven proposition for you. And then operationally, what are some of the benefits of bringing those services back in-house for yourself?

Yes. I mean, again, I think the way this business changed, when I started in this business a long time ago, most emergency room physician coverage, anesthesia coverage was outsourced, tended to be outsourced to smaller local groups, a lot of times in a smaller community local like McAllen, Texas, you literally have a single ER group that was servicing the 3 or 4 hospitals in the community, but what the well-known sort of consolidators in this business, the envisions and the team else in the world did was essentially roll up and consolidate all these sort of smaller franchises around the country, and there were economies of scale that they were able to generate, et cetera. And I think that worked well for both them and for the providers. I think a lot these things tend to be cyclical and we're returning to or will return to an environment in which it's not nearly as consolidated or centralized. Hospitals will employ some more of these physicians where that makes sense. But I think we'll continue to use local and regional providers where that makes sense, et cetera. I just think that the advantage is perhaps of that consolidation and sort of centralization will probably overdone and we're not nearly as valuable to the industry as maybe some had thought.

Okay. And then obviously, you guys have talked about the potential over a multiyear horizon to improve margins in the acute business, maybe closer to where they were prepandemic. Can you talk about what the key levers are? Because from an environmental perspective, it does seem like there continue to be a lot of pressure on the acute business model, wage inflation probably not coming back to where it was. Pre-COVID any time soon, you mentioned some of these steps up in physician subsidy expenses. I guess how should we think about the factors that would allow you to potentially realize some progress against that goal for the long term?

Yes. I think that the biggest pressure on the acute business during the pandemic was that sort of crowding-out factor that as COVID volumes increased, you tended to crowd out. And I sometimes say that they're using that phrase crowding out because it sort of has a very physical connotation and sort of implies that COVID patients were so numerous and so ever present that they literally was either no room physically in the hospitals for non-COVID business or we didn't have enough staff or whatever the issue may have been. But the reality is, and I think we touched on it a little bit earlier is mow of that crowding are tended to be, I think, more psychological than anything else that people were reluctant to go to hospitals, particularly for less emergent sorts of procedures. But much more so than just reluctant to go to hospitals, they were reluctant to go to physician offices to go to have regular diagnostic care mammograms and colonoscopies and that sort of thing. And whether that lasted for a year or 2 years, depending on the individuals, et cetera, it clearly had an impact. And I think what you're seeing now and what we sort of talked about earlier when we were talking about that kind of robust volumes is patients are returning to these more normalized patterns across the continuum, meaning they're seeing their physicians for their annual exams. They're having the colonoscopies. They're having the mammographies. And the result of those -- that sort of activity is then there's this kind of downstream issue of -- issues are identified, diagnoses are made, et cetera. And now there's other things being done. So that's, I think, the big opportunity for the acute business to recover. As you point out, I think the business faces some additional challenges, incremental wage pressures, et cetera, although again, premium pay and the reduction in premium pay, I think, is a big recovery item. But yes, I think -- and we've sort of made this point. I mean we believe that the acute business can recover a substantial amount of the margin gap that exists today between pre-pandemic margins, but maybe not all of it. I think we're more optimistic than on the behavioral side, all of those margins are recoverable over time.

I think that makes sense. And then to switch to behavioral and one thing we've heard over the past few quarters is that volume growth in some ways was held back by your ability to staff and higher at reasonable rates in the behavioral business. Where do we stand today? Do you feel like we've largely moved past that? Or do you feel like that is still a bit of a handbrake on the growth of the business as we get into the back half of the year?

Yes, we certainly have made a significant amount of progress. And I think we've made the point multiple times and continue to make is I think it's -- continues to be a relevant point that I'm going to say, since about the spring of last year when COVID volumes declined from the big COVID surge early last year, we've continued to have net positive new hires, And that has allowed us to generally continue to grow volumes, mostly adjusted patient days for the most part. It's a bit of a -- you sort of even kind of trajectory in the sense that there still is a fair amount of turnover hiring a lot of people, but there is a lot of turnover, again, not just for us but for the entire industry. Turnover has been a challenge for the hospital industry for, I'm going to say indefinitely, but it really accelerated during the pandemic. It has gotten somewhat better. But it's still challenging because it means that we're -- while we're hiring a lot of new people, a lot of them are being -- have to be trained and oriented. We're hiring more and more inexperienced nurses and clinicians right out of school, et cetera, and they require more training, et cetera. So there are periods, and I think the second quarter was a decent example of this. There are periods where we've hired a lot of people, but they are unproductive for periods of time, meaning they're drawing salaries, they're getting paid, but they're not treating patients, they're not allowing us to admit more patients, et cetera. But over time, this ability to hire more people, and frankly, the ability to continue to drive down those turnover rates will allow us to treat more patients, et cetera. And I think that's why, as I alluded to earlier, our sense of being able to return to pre-pandemic behavioral margins and maybe even something better to peak behavioral margins, which really probably go back to 2014, 2015 is something that we envision as being achievable certainly over several more years, not I don't mean to imply that it's going to happen in the next quarter or 2, but it should be a multiyear progression.

Yes. So that's going to be the follow-up. So then when you think about the inefficiency, I guess you saw from the hiring in the second quarter, what's your thinking on how long it's going to take to kind of drive that out or bring it back down to closer to typical levels? Is that something that can happen as you exit the year? Is it a third quarter thing? I guess how long does that take?

Yes. I mean, again, I think our general sense is it should improve over the balance of the year. But to your point, I mean one of the challenges in sort of projecting this with absolute precision is there's a number of moving parts. So we know how many of that hires we have, but how many of those people are we going to lose and what's the turnover. . And again, generally, all these factors have been improving. And if we go back and we look back over the last certainly 15, maybe 18 months, we're going to see steady improvement. But it's not absolutely ratable and predictable. So again, one of the things that I encourage people to do from a behavioral perspective last quarter was to look at the last 6 months, look at the last 12 months. And I think that gives you a better picture of the improvement in the behavioral business than sort of the second quarter performance standing on its own. And I think that's going to be true going forward that no one quarter good or bad, is going to be as relevant as sort of the longer-term performance of the business.

Okay. And then with the second quarter, you discussed it, I think acute behavioral volumes were largely in line with your expectations. I think you're pleased there. There were some residential volume weakness, I believe. And I think you called out like a handful of specific facilities that you were in the process of maybe remediating whatever the underlying issue was. Where does that kind of fit as we move into the back half of the year?

Yes. And look, I make the point people ask not just about this question, but we made a number of comments about second quarter performance. So just to remind people, that was about 6 weeks ago, nothing has changed terribly dramatically. I think all the things that we pointed to, and I think we talked a little bit on the acute side, all the trends that we sort of talked about, I think, have generally remained in place. . So making improvement on those, the handful of sort of facilities that had particularly nuance problems, making progress on getting more of these clinicians trained and on the floors treating patients, et cetera. And I think we talked about that as a process that would sort of take place throughout the third and fourth quarters for our behavioral business, and I think that's the way it's playing out.

Okay. As we think about the next couple of years, and I'm still confident that you would think there's a lot of unmet need in your markets on the behavioral side. I guess what do you need to see to potentially start adding capacity and beds in a more aggressive way?

Yes. I mean, so generally, adding beds is driven by the data that we accumulate on what we describe as sort of deflections. These are patients who come to us through referral sources, through Internet increase, through calls to our 800 number and whom we sort of go through the process of triaging and determine that they are -- they meet admission criteria, they meet financial criteria, all those sorts of things. And -- but we don't have room for them either physically, we don't have a bad for them, which for years have been sort of the predominant issue. The issue that I think has been more predominant over the last certainly 2, 3 years of the pandemic has been we don't have enough staff for them. And so as a consequence, as an example, during the pandemic, we stopped building new beds or we certainly decelerated the rate of building new behavioral beds, because the view was, look, if we can't staff the beds that we have, what's the point of building new beds that we can't staff. But as we continue to solve the staffing problem and the volumes continue to demonstrate that they're there and that literally is a facility by facility, market-by-market sort of determination, I think that we'll return to a model in which we're pretty routinely adding 6 -- 8 -- 100, 1,000 new beds a year where the demand is justified because we'll be able to staff those beds. And again, I think we've made this point throughout the pandemic that we didn't think that there was anything about the underlying behavioral demand that had diminished. As a matter of fact, I think there's a lot of evidence that suggests that the pandemic in many ways tended to exacerbate and accelerate the need for behavioral care.

Has the company changed its thinking at all on whether addiction treatment services could, over time, be a bigger part of the behavioral business? I guess what do you think about the fundamental attractiveness of the addiction business?

So the point that I always make about this topic is we've been treating patients with addiction issues for years and years and years. We've tended to do that in kind of a more traditional therapeutic way what used to be sort of a standard 28-day program and now has many different forms. But the business that we haven't necessarily gotten into in a big way that our public peer has is medically assisted treatment and Methadone clinics, that sort of thing. I think it makes sense for a company like us that has such a broad continuum of care, meaning across the continuum in an outpatient care, sort of pre-inpatient, post inpatient across many, many diagnoses, whether that's general psychiatric diagnoses, depression, autism, eating disorders, trauma, PTSD, all those sorts of things, that having sort of that arrow in the quiver of medically assisted treatment makes more sense. So I think we'll continue to develop more of a presence in that business. But I think it will be integrated into -- and more synthesized into our full continuum of care, which I think we think is going to be most attractive to employers and to insurers and to the government to sort of say, look, we -- addiction treatment is clearly an issue. And obviously, opioid treatment is kind of the thing that gets the headlines these days, but alcohol abuse and other drugs remain a huge problem in the addiction area. So again, I just want to make the point that we've always had a significant presence in addiction treatment. We'll probably expand our capacity in medically assisted treatment, at least incrementally, but continue to build out our ability to treat people with addiction illness because unfortunately, socially, that just seems like it's not going away as a problem, it's a societal issue.

Got it. And then on the rate side of things for behavioral, obviously, there's a supply-demand imbalance there that the company has been able to use to help drive up rate a little bit, get paid a little bit more appropriately on the Medicaid side of the business, in particular. I guess how do you think about the sustainability of larger Medicaid rate increases as we move into 2024 and beyond?

Yes. And again, I think you described it correctly, Steve, in the sense that I think our ability to lever higher rates during the pandemic, especially has been in an environment where behavioral providers, us, obviously. But I think most -- mostly across the industry have been somewhat capacity constrained and they've been unable to treat all the patients being presented to us. It leaves us in a position of being able to ask our payers to pay us rates that we believe are competitive and are fair and allow us to provide the appropriate treatment to their members. And then I think we've done that successfully over the last couple of years, and it's reflected in the higher revenue per adjusted day growth that we've been experiencing over the last several years. I think what we said going into the year, if you look at it, or revenue per adjusted day pre-pandemic was growing pretty regularly and consistently, maybe 2% or 3% a year. During the pandemic, it was probably closer to 5% or 6%. We said that over the next few years, that number probably moderates to maybe 4% or 5% growth. We've been running certainly on the high end of that, like 5%. And it feels like that should be sustainable for certainly at least the intermediate term.

And then maybe the last question, Medicaid determination is obviously a big area of focus in both your businesses. I guess what are you seeing at this point on the acute and behavioral side that you can talk about?

Yes. I mean it's an interesting thing. I mean, as you suggest, I mean, it's certainly gotten a lot of sort of headline coverage, and we know that there have been significant numbers that people redetermined off the Medicaid roles as it's being reported. We're just not seeing a significant impact in our hospitals now. And then I think that's true in both acute and behavioral. And I think there's a couple of reasons for that. I mean, one is obviously while people may be getting redetermined off, we, as providers are not going to feel that impact until they actually present themselves in a hospital emergency room or a behavioral facility, et cetera. So there is sort of a time lag, I think, associated with that. I think the other sort of feedback that we've been getting from our hospitals is that it feels like a lot of these people are being redetermined off for administrative reasons and are getting reenrolled pretty quickly and efficiently. So again, the impact doesn't seem to be so great. So I think we've actually probably been a little bit more cautious in our outlook than some of our peers about the potential for some impact from Medicaid redeterminations over the balance of the year. But at least so far, we'd have to say that it doesn't seem to be having much of a measurable impact.

Okay. And you don't feel like it's really showing up in terms of higher commercial like you not seeing transition exchange coverage or any major changes?

Yes. No significant changes in payer mix, either positive or negative, I think that we would attribute to Medicaid redeterminations.

Okay. Well, perfect. And that's a good place to leave it. So thanks so much for your time.

Okay. Thanks, everybody.