Release Date: April 30, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: Can you provide an overview of what you're seeing in terms of the appetite for value-based and outcome-based contracts and how that's helping you support the guidance raise? A: We've embraced managed care from the start, striving for partnerships with MCOs. Our local leadership allows us to have a deeper connection, driving success together. This partnership at a local level helps us achieve better clinical outcomes, which in turn leads to financial returns. Our sophisticated back office supports real-time metrics sharing, enhancing collaboration with managed care plans, ultimately driving volume and supporting our guidance raise. (Unidentified_7, Unidentified_3)
Q: What are your latest thoughts on potential policy changes from Washington, specifically around supplemental Medicaid cuts? A: We are actively involved in advocacy, educating Congress on the implications of potential changes. Meetings have been productive, with members gaining a better understanding of long-standing programs. While there's room for change in Medicaid, our focus is on ensuring Congress understands what's beneficial or harmful for funding. Current trends suggest a focus on the expansion population, which aligns with our interests as we are not major beneficiaries of that group. (Unidentified_3, Unidentified_7)
Q: Are you seeing any changes in deal volume, market dynamics, or seller mentality, and how sustainable is the current pace of investment? A: The deal flow remains strong, with more opportunities than we can pursue. Our disciplined approach ensures we select the right deals. The recent $200 million investment was driven by real estate acquisitions, aligning with our preference to own and operate properties. We have ample liquidity to continue this pace, though future deals may focus more on leases. Our growth is limited more by leadership capacity than capital. (Unidentified_2)
Q: With record-high occupancy and skill mix, are there still staffing constraints limiting admissions, and is there a magic number for operating leverage? A: While the sector hasn't fully recovered post-COVID, our recovery is near pre-pandemic levels. Our leaders have successfully filled positions, allowing occupancy to rise without compromising staffing. We don't see a magic number for operating leverage; instead, we focus on continuous improvement and organic growth opportunities. Stability in staffing and potential recession could further enhance leverage. (Unidentified_3, Unidentified_7)
Q: How is the competitive landscape for deals, and can you achieve the same economics in new markets like the Southeast? A: Competition remains consistent, mainly from private equity and family-based funds. Our operational history and reputation often make us the preferred buyer. In new markets like the Southeast, local operators' expertise helps us evaluate labor and rate dynamics, allowing us to achieve similar success as in mature markets. (Unidentified_2)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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