Good morning. Welcome to the 2025 Global Healthcare Good morning. Welcome to the 2025 Global Healthcare Conference and their partners. I'm with Leerink. I lead our efforts covering healthcare providers and managed care. It's my pleasure to have the team from Ardent with us today. I've got Alfred and Marty here. Dave's in the audience as well. We can just go ahead and get started. If anyone has any questions, just raise your hand. We can keep this interactive if you'd like. Marty, it might be helpful just to start the conversation to talk a little bit about your core markets, your strategy, maybe talk about the joint venture strategy as well, what maybe differentiates yourself from other health systems. Yeah, thanks, Whit. Good to see everybody this morning. Good to be here. Last year was a good year for us on a number of fronts, obviously taking the company public and ending the year with good financial results in Q4. The New Mexico DPP approval in 2024 certainly was a tailwind coming into this year. As you look at our markets, we operate again in mid-size urban markets, eight mid-size markets across the U.S., concentrated heavily in the South Central. We have strong positions in those markets, number one or number two leading positions in our inpatient environment in the majority of our markets. These are growing markets. They're growing about three times faster than the U.S. average. We are well positioned in those markets. We have a good market share and a great opportunity to continue to build in the outpatient side of healthcare beyond the hospital. Taking strong hospital positions, building our clinics, and then building into the ambulatory footprint across the platform. We also, as you said, have the joint venture model. We have joint venture partnerships with academics and community nonprofits. That has been a really positive strategy for us historically. We do think that is going to bring even more opportunity for us as we move forward. These partnerships allow us to take advantage of strong local brands, whether those are academic or nonprofits in the markets that we serve, and bring the best of what they can offer and the best of what we can offer. A lot of academic hospitals have strong roots with teaching, research, and that respect and penetration in their communities. Running community hospitals is different. We come in and we're able to bring the expertise that we have in running those community hospitals. The services that go beyond supporting that, whether that's revenue cycle of our partnership with Ensemble, our IT partnership with Epic, all of these things are things that we can do and do very well at scale, so those are in highlight. Yeah. I think one of the things that stands out about the opportunity at Ardent is when I look at the amount of revenue or EBITDA coming from outpatient today, it's materially lower than some of your other peers. Can you just elaborate a little bit more on that agenda that you've had to advance your ambulatory strategy? You've done some acquisitions more recently in our emerging care side. I think you've framed some of the data points around how that's generated some returns. Just where are you today? Maybe put some numbers around and where you think you could be. Yeah, I think it's a great point. David, we were very, very hospital-centric four or five years ago when Alfred first started. That was the opportunity we saw in our markets. We have great leading positions inside of our markets, very strong clinic networks. We're very light on the outpatient services because we think about expanding value-based care programs and the contracts that we have. We have to be able to manage people where and when they most need that care in the work setting. We see that as a great opportunity for growth inside of our markets. We've been executing on that. Last year, in the first quarter, we acquired six urgent cares from East Texas. It goes very complementary to our hospital footprint. We can already see the benefit now that we've had them up on our Epic platform, the pull-through that we're seeing. 45% of those patients that were seeing those clinics last year were brand new to the UT and Ardent system that we had down in East Texas. About 15% of those patients were seeing follow-up care within 30 days after that initial urgent care visit. That was part of our thesis going through, that those urgent cares become another access point into our system. If you don't have a primary care provider, we're going to get you linked up with one of those. If you need a specialty care provider, PCP, an emergent care specialist, we're going to get you linked to that. If you need a procedure, we'll schedule you right from that office appointment. I think that's a big reason why we've seen that grow. East Texas was a great first step for us last year, followed up by acquisition of 18 care centers in our hospital or home markets markets at the beginning of this year. We expect as we get those clinics up on that aggregate and see similar results, we'll resemble East Texas. That is the first point, just building the access point. A lot of you probably heard what we've talked about, our consumer-focused strategy. The number of unique patients that we're serving in our markets while we do a hospital inpatient market share, like many people do, in terms of the number or percentage of new patients in the markets that are part of us. We are looking at the total population as our sort of total addressable market, our TAM. There are about 5.6 million people that live in our markets. We saw over 1.2 million unique patients last year. That grew from the previous year. As we can get more people into our system, they are going to need those facilities and specialty care. That is part and parcel. We started urgent cares. We will be growing into ASCs. We expect to do some work on that this year. I plan to see as well as looking at it in 2026 as well. How would you sort of rank the priority in each one of those different outpatient access needs? Maybe any specific markets where you feel like you're more under-invested than others? Yeah, I think pretty broadly, the opportunity is in each one of our markets. With the acquisition of these assets, we went from virtually no market share in Tulsa and Albuquerque to a significant double-digit market share penetration there. We will be looking for additional urgent care sites at first point of access because that will help us grow at the top of the funnel. Secondary to that, ambulatory surgical centers will be the next focus. We know that there's certainly procedures from the inpatient to the outpatient. We have capacity issues as we've talked about previously. We did a lot of service line rationalization last year. We'll be seeing some over-margin inpatient or possible outpatient volumes out. If we had those outpatient ASCs, we would have had a lot of strains with those. That's the sites that we're looking at in ASCs. Selectively based upon. Market by market for some of the ERs in remarkable hospitals and new centers. I would leave with urgent care today. Yeah, the only thing I would add is with the ASCs, while the urgent care has largely been a buy strategy because of the prevalence of assets available in our markets, I would actually expect that the ASCs will be a mix of de novo and M&A. A lot harder, just depending on market dynamics, to find the right center in the right location at the right price. We could expect that some of the ASC activity will be de novo and not M&A. That's right. Alfred's talked about it before. We're going to be very disciplined in our capital allocation approach. For an ASC that's performing well, it's trading above typically our multiples would be. The urgent cares, on the other hand, we've been able to get at a relatively discounted multiple to where that industry historically has traded. I think it's indicative of our belief that consumers need more than a point solution when they access care. A lot of freestanding urgent cares that are not tied to a system have that limited capacity to be able to refer that patient on to that next level of care for those 15% of patients or so that need that follow-up. How do you think about partnerships with some of the outpatient access points? Do you think about JV partners, a USPI kind of like partner at all that you do not really think about as you see as a joint venture partner? Yeah, thus far, we've had lots of conversations with folks who are obviously very pro-JV in a lot of what we do. However, for these assets that we believe are really important to our strategy, right now, we've been building the internal capabilities to run these centers. We've got a great urgent care leadership team that's helping us to identify, integrate, and operate those centers. On the ASC side, we also think that the economics that go along with those as part of our ecosystem growing the margins system-wide, the outpatient margins generally are higher than we see in the ED environment. Right now, our preference is to have those on the ASC side, like joint venture physicians, but they're not necessarily coming up. Maybe just spend a minute on the joint venture strategy that you have today. I mean, in almost all of your markets, you have a nonprofit active in that whole center that you're affiliated with. What are the positives to that? What are maybe some of the negatives that come with that? Maybe how that might position you for future growth opportunities in new markets? Yeah. No, we really like the model, obviously. It's what said we've got an academic or community nonprofit relationship in almost all of our markets that we operate in. To different varieties. I'll take East Texas as the case study for us. This was a market where you had a small academic center in East Texas, University of Texas system, that was operating really a specialty niche academic center. There was a system that had financially struggled. There were eight hospitals there that we acquired jointly together with the university. Both sets were losing money. We were able to come in and bring our operating processes to that market, help strengthen everything from the managed care relationships to the backend processes, labor productivity metrics, supply chain purchasing that we have through HPG, just bring a lot of operational support to that. The university has, I would say, if you live in Texas, everybody loves UT unless you're an Aggie. We really painted that town and that market orange. We were able to just really change the face of that system that had struggled financially in that market and sort of lost some of that consumer confidence. Together, we've been able to bring that brand. We've been able to recruit new positions. We've been able to recruit specialists in that want to have that university faculty appointment and have something more than the traditional community care model can offer. That partnership with the university has allowed us to expand services. We opened up a NICU and women's program. We opened up an ECMO program this past fall, just expanding the quality of services we're able to offer in that market and really showed the strength between what the university can bring, the halo effect, the teaching, the research, the benefits they're doing. They're building a new medical school right now that will open up later this fall. We are going to be the host teaching site for that. We are going to have clinical services in that new medical school. There are going to be new doctors coming and training and working with us as we go forward. We've grown that relationship from sort of double-digit number of residents to over 300. That is going to be our future medical staff pipeline in that market. We have a great relationship with the university. They see the benefit of what Ardent's been able to do to transform their operations. Likewise, that partnership has just created a great halo effect. We've got momentum in that market. It's one of the fastest-growing MSAs in the State of Texas. Alfred, just remind me back on the outpatient initiatives that you have. What percent of your revenue today is outpatient excluding emergency room? Where do you think that can be in five years or so? Right. Yeah. Overall, our outpatient is just slightly more than our inpatient from a revenue mix. Now, the predominant amount of that outpatient is still HOPD. In terms of overall, what I would call true outpatient, you're probably talking about, again, true outpatient's a little bit of a misnomer, but maybe 20%. Any ideas to where or what that can be? Yeah. Clearly. our expectation is that grows faster than the inpatient with the investment in the ambulatory. If I had to put a we talk about our growth algo as being sort of 3% volume, 3% rate long term. I would expect the, again, if you're rolling in the M&A activities with the outpatient growth, we will be multiples higher in terms of the outpatient growth. Okay. You just gave guidance for 2025. I think at a high level, the organic EBITDA growth that you've guided to is, call it mid-single digits, five, whatever it is. That excludes any of the unannounced outpatient development activity that you might see. I sort of think over the next three, five years, you should be growing faster than that as you buy things, build things. How do we think about that long term? Is it high single digits? Is it low double digits? What's in your mind the way that you think about the. Yeah. I'd be a little bit low to put a precise number because of the vagaries of M&A activity. You're right to think that given that our expectations for our long-term growth algo do not include M&A, whether in new markets or the in-market build-out, that it'll be north of the algorithm that we've provided. It's not going to be linear. That's, I think, the key takeaway. I just mentioned, like with our ASC, we could see significant de novo development with that ASC strategy. That could have a very lumpy pattern to it because it's going to take 12-18 months to stand up an ASC. In the near term, you may not see that acceleration that you will a couple of years out, again, just depending on the character of that build, whether it's de novo or M&A. One of the big earnings drivers for you this year and the past year has been from DSH payments. Maybe just give us an update on the contribution that you've feathered into your guide this year, what we know, what we don't know. I'd just be curious, new administration, Oz, we don't know yet. What sort of your team is telling you in terms of CMS and maybe how they're approaching some of these payments? I don't know. Yeah, why don't I start on the financial? Then, Marty, you can speak to the outlook. From a financial perspective, we're expecting, we have been expecting, 2025 to be about a $140 million step up from 2024, driven by DPP contributions. What we didn't have full visibility to was the retroactive approval of New Mexico that happened in November of last year that allowed us to record $65 million in revenue from New Mexico DPP into 2024. As a consequence, contribution from DPPs is expected to step up instead of $140 million, now $75 million, which is just the $75 million above the $65 million. That's our current expectation within our guide. Marty, you want to address kind of the long-term outlook? Yeah. No, I mean, these DPP programs obviously are a more recent phenomenon for Ardent, but they're not new to the industry. These programs started under Trump 1.0 in 2016, 2017. A lot of our peer companies were already benefiting from these. This was a bit of a catch-up. 2024 was a catch-up year for Ardent with our Oklahoma, New Mexico programs going live. What we know historically is that once these DPP programs get approved, they are reapproved annually. There has not been a state that has had an approval that has not been reapproved. There has been some noise and bumps, I think, with Texas a couple of times over those years, but it has never not gotten through. Now, just given the size and the magnitude of these programs and the amount of coverage that this is offering to states and their citizens, it is really hard to see this walk back. We do know that New Mexico's application was submitted in mid-December right after the 2024 program was approved. It was substantially the same application for 2025. There is no reason to believe that that would not be reapproved. It is also compliant with the 2028 CMS directives that were published under the last administration. We do know recently that there has been correspondence between CMS and the state, which would suggest that things are continuing to move in Washington despite the headlines that you read. We do not have a formal approval for 2025 yet. If you look at historically, those things were taking 90-120 days to get approved. We are still well within that window. With the change of administration and waiting for CMS confirmation of the head of CMS, we do not expect to necessarily see something before that action takes place. If you just look at what's going on despite the headlines, the other headlines of the people that are impacted by these programs and the state pushback, even from the National Governor's Convention recently with a Republican governor presiding over those ceremonies and just uniformly saying bipartisan that we need these programs in our states. This would be a very big step backwards for everybody if something were to drastically change. Now, we do hear things about work requirements. I think that has, from the people we talk to in Washington, probably more legs and something to give the Trump 2.0 administration to say, "Look, we did something." We think these programs are very durable over time. Yeah. The The fact, did you have a question? I just had a question on the volume that you said 3%. How much of that is you said you expected to go away from the 2:00 midnight? Is that an effective decision? No, a 2:00 midnight rule because it started over a year ago. For 2025 over 2024, we would not expect a volume impact from 2:00 midnight. Having said that, to Marty's earlier point, our markets are growing roughly three times faster than the U.S. overall. That is, to us, a significant rising tide. As we said on our earnings call, we continue to see strong demand. We think the concept of that we're still saying pent-up demand does not make any sense to us. We think good, durable demand. Not only is the country getting older and sicker, but we are seeing indications that the younger people are also getting sicker. Our demand curve continues to be, our demand outlook continues to be, very strong. Maybe just unpacking that a little bit further. When you dive in and analyze some of the service lines, are there any particular service lines that when you reflect back on 2024, maybe not necessarily early 2025, but just what looks like it's sort of outperforming what otherwise would have been your expectation, maybe underperforming? I mean, we hear cardiology, we hear oncology, we hear orthopedics. So anything stand out to you? No, I think we've focused on rationalizing some of those services to make sure that we can maximize the capacity that we have. We are trying to focus on those. Generally speaking, I'd say that there's strong demand across all those services you just mentioned. We're trying to make sure we're optimizing our facilities to be able to take care of that higher service demand, such as cardiology, orthopedics, spine, neurology. Those are services that we're emphasizing. While we're then trying to shift some of those lower acuity volumes and patients out to our outpatient environment, we've got a very strong, healthy clinic system. We've got a number of contracts that have some type of quality incentive metrics or value-based care metrics embedded in them. It behooves us to help the patient get the care in the best place they need that, whether that's an inpatient or outpatient environment. That lower acuity patients going home earlier from the hospital with our BioB utton technology and sort of being able to transfer those patients out and home quicker or keeping them out of the hospital to begin with, which sounds the antithesis of traditional hospital math as all volume is good volume, while some volume is better than others. We are trying to optimize that footprint to be able to make sure we can care for those higher acuity patients, principally in those high procedure areas you mentioned. Maybe just spend a second on the exchanges. You do not have as much exposure based on either volume or revenue as maybe some of your peers where we have the expiration of the enhanced tax credits coming. I am curious how you are thinking about that. My sense is maybe we get an extension. We will see. Just maybe frame the numbers around that. That might be helpful. Yeah. Our 3.6% of our revenues are health exchange-based, a little bit less on the percent of volume. We do believe that that's just a function of the markets that we're in. Again, these mid-size urban markets, we've got a lot of small, mid-size employers that have strong traditional employer-sponsored health insurance. We haven't seen a huge rise in the ICHRA programs or things that are driving some of those exchange volumes, maybe in some of the larger, major metro markets. We think that those mid-size urbans that we're in are helping us to keep the good, strong commercial mix in place. Related to the exchanges, I'm with you, Id. I do think that this administration will find a way to do something to help preserve coverage and access. Again, these are the voters that helped elect Trump. I think that they'll find a way to do it their way, maybe not do it exactly the way it was before, but come up with some surrogate that is going to help preserve and protect access. I think that that has Trump as a populist president. At the end of the day, I think he's going to try to find a way to make that work. I want to shift towards IT. And you guys have had a pretty interesting agenda around investments in technology. I mean, you partnered with Epic for one on the EMR side, but you've done a number of other investments that I find to be somewhat creative. So maybe just elaborate a little bit more on what those are, what you're doing, what you hope to extract out of those investments. Yeah. It started with Epic. Epic is the KLAS, a leading EHR system. It has really become a lot more than that. It is the clinical operating backbone for our system, both in the inpatient and outpatient clinic environments. They have been a great partner. I think we are Epic's only true for-profit that has really embraced them. We have one instance of Epic across the entire company. It was a significant investment we made. While we are a private company, that has served us well. Most all the major academics use Epic. That has been sort of a prerequisite with any conversation that we have had about joint venture partnerships. That is a bit of a moat that we have protecting the strategy against others that might come after it because we have made that investment. It has also allowed us to think about other things that we're able to do on top of that beyond Epic. We've got a great relationship with Judy and Sumit. They know that we're going to be pro-Epic. They're constantly putting R&D into their platform. We're going to try to stay ahead of them. Things like ambient listening, this is the latest thing that we've rolled out in a pilot way. We partner with a company called Ambience. They've been great to work with in helping doctors be doctors again. Rather than doctors sitting at their keyboard typing like everybody here in the room is doing, they're able to just have a conversation with their patient. The AI is capturing that note. It's providing better documentation and history than we were likely getting before as humans just trying to capture the most salient points. We think that that's going to be helpful in our value-based care efforts as we're closing care gaps and addressing social determinant of health considerations that previously were probably just being talked about but going undocumented. All of those things have been a boon to our physicians. That's one of the best technologies we've been able to roll out where I get emails and texts from doctors saying, "This is the best thing Ardent's ever done for us," helping us to just really be doctors again. We will be ultimately taking that into the inpatient environment to help with our nurses. We've partnered with different companies to help with virtual nursing, helping to reduce falls at the bedside. That is something that we do not want to have happen. Obviously, when a patient comes in and people do fall when they are trying to get out of bed. This technology is helping to reduce the number of falls at the bedside. We have got wearable monitoring technology that is allowing us to have basically minute-by-minute monitoring of patients throughout their hospital stay in a med-surg environment, which typically you would only take vitals four to six times a day. We are able to detect if somebody is getting better quicker and being able to send them home or if they are deteriorating, preventing that patient from crashing and ending up in the ICU. We have seen a reduction in mortality rates in the inpatient environment as a result of that technology. We have seen a reduction in our length of stay. We were also able to follow that monitoring home. We've heard of hospital at home. We're not doing anything substantially in that area, but we are doing hospital to home and being able to monitor patients in a post-acute environment. We've seen benefit of that where patient deteriorated, and we were able to bring them back to the inpatient environment and stabilize them or intervene telephonically and get them the medications that they need. Those are a few examples of some of the technology we've rolled out. We really see promise in technology sort of catching up and helping our caregivers, the technology to help them versus the other way around where our caregivers have been working for that technology. Given the labor shortages that our field has seen, the industry has seen, we do believe that technology is going to be that equalizer. We are using it some in the back end, and we expect to advance on that to help reduce our overhead G&A structure. At the bedside, if we can't find enough doctors and nurses as an industry, we have to find ways to retain the ones we have. We've seen our nursing retention improve significantly. Our turnover rates were down about 600 basis points where we've rolled out the virtual nursing and the BioB utton technology. The nurses just feel safer that they've got other people working in there. In our test market where we did this in Texas, we reduced our turnover rate to just sub 10% in nursing, which is almost unheard of. We will be looking to scale these technologies across the company and hopefully achieving similar results. When we can support our caregivers and take some of that burnout and that stress off of them, we believe that's going to help us retain the workforce that we have. We've seen the benefit of that. Back on maybe just one last one on pricing, maybe a multi-dimensional part to this question. You set out for, I think, 3% as sort of the composite rate expectation. Inside of that, any one payer that is growing faster than that? Maybe elaborate on just the contracting with your commercial plans. I think you have been trying to achieve some incremental yield above and beyond what you've normally been getting in your annual rate updates. Sure. Yeah. As you can imagine, embedded in our expectation for pricing is a little bit more from commercial than government payer sources. If we look at just the recent history, clearly through the pandemic and into 2025, we've been targeting above historical norms, call it 3% type COLA increases with our payers. We've been getting nearly 5% or in some cases more than 5% for several years now. I would say this cycle, probably a little bit less than that from the last couple of years, but still well north of historical kind of COLA type increases. We've talked about the inflationary pressures we've experienced, hospital-based providers being the most acute over the last 12- 18 months. We continue to feel strongly we have to be compensated in order to keep up with those inflationary pressures. We have had really good success with this latest contract cycle. I am sure at some point, if inflationary pressures sort of go back to more historical norms, we will be looking at more historical type of commercial rate increases. We are still pushing for significantly north of where we have historically gotten those. We have had real good success with our 2025 cycle. We are already now into our 2026 contracting cycle. Great. With that, we are out of time. I appreciate it, guys. It's been great.