Financial Data and Key Metrics Changes - The company has increased its estimate of the potential impact of enhanced subsidy expiration from $50 million to a range of $50 million to $100 million, primarily affecting the acute care division [5][4] - The company anticipates same-store revenue growth in the 5% to 7% range, with a midpoint of approximately 6%, split evenly between price and volume [18][19] Business Line Data and Key Metrics Changes - Surgical procedural volumes have been somewhat soft, attributed to challenging comparisons with the previous years when hospitals were recovering from the pandemic [19] - The Cedar Hill hospital, which opened in April, has faced delays in obtaining deemed status from CMS, resulting in an estimated $25 million EBITDA loss in Q2, with expectations of improvement once the status is granted [23][24] Market Data and Key Metrics Changes - Approximately 6% of adjusted acute admissions are exchange patients, which is lower than larger peers like Tenet and HCA, indicating geographical differences in patient demographics [8] - The company has noted that while Medicaid supplemental payments are under scrutiny, they are pursuing three pending programs that could yield an annual benefit of $150 million to $200 million if approved [15][16] Company Strategy and Development Direction - The company is prepared to implement cost efficiencies and other programs to offset potential revenue reductions from the loss of exchange volumes and Medicaid supplemental payments [10][12] - The company is focusing on leveraging technology to improve revenue cycle efficiency and clinical productivity, including the use of AI for post-discharge calls and ER coding [40][41] Management's Comments on Operating Environment and Future Outlook - Management views 2024 and 2025 as the first clean post-COVID years, expecting a return to historically normative growth models [18] - Labor pressures have stabilized, with wage inflation returning to more normative levels of 3% to 4%, and the company is not experiencing significant pressure points in labor costs [30][31] Other Important Information - The company is exploring M&A opportunities, particularly in the acute care sector, but has faced challenges in the behavioral sector due to high multiples for niche providers [55][56] - The company believes it can capture more market share in behavioral care by addressing labor shortages and improving recruitment and retention [50] Q&A Session Summary Question: Update on the potential impact of enhanced subsidies expiration - Management has increased the estimate of potential impact to $50 million to $100 million, primarily in the acute care division [5][4] Question: How is the company planning to offset revenue reductions? - Management indicated they have a menu of options to modify the cost structure and are prepared to react to pressures over the next few years [10][12] Question: What is the outlook for surgical volumes? - Management expects surgical volumes to improve incrementally as the year progresses, although current trends have not changed dramatically [20] Question: Update on Cedar Hill's financial progression - Cedar Hill is expected to improve once deemed status is obtained, with a ramp-up to divisional margins anticipated within 24 months [24][25] Question: How is the company addressing labor challenges? - Management noted that labor pressures have eased, with wage inflation stabilizing and recruitment improving, although challenges remain in some facilities [30][45] Question: What is the outlook for behavioral care rates? - Management expects sustainable same-store revenue growth in the 6% to 7% range, with a mix of price and volume growth [51][52] Question: What are the M&A prospects for the company? - Management is open to M&A opportunities, particularly in the acute care sector, but has faced challenges in the behavioral sector due to high acquisition costs [55][56]