Still good morning. My pleasure to have the team with Ardent here today. We've got Marty Bonick, the Chief Executive Officer, and Alfred Lumsdaine, the CFO. Guys, thanks for joining us here today. I get a little distracted with- Yeah, thanks for having us- ... the ocean- ... in sunny Miami. ... out there. I know. Better than a normal office view. Maybe next year we'll just do it on the beach next year. I maybe just to start, there's been a common theme kinda coming out of earnings that several hospital systems have sort of framed, call it a new earnings tailwind that's developing with some cost efficiency opportunities, and AI, and other technological advancements. You guys have embraced a lot of the investments into digital capabilities for years now. I'm kinda curious to hear a little bit more about some of the investments that you think will drive some returns this year and can become a, you know, an incremental source of earnings growth. Yeah. I can probably spend the whole time talking about it. I think AI and this technology really has the opportunity to transform healthcare as we know it. You know, for so long this industry's been kind of impervious to technological advances that you've seen in other parts of the economy, whether it's banking, finance, and, you know, technology, logistics, what have you. You know, we will always be a very human-centered industry and human-centric industry, but I think, you know, we need to get our caregivers taking care of the patients and not working for the technology. We installed Epic. We have one instance of Epic across the entire system, and, you know, I've challenged our team to think about this because we take it for granted. It's, it's a great system. It's the leading system in the country, and they're making a ton of investments in a lot of things around AI to help everything from the nursing workflows to the documentation and coding to, you know, how we schedule surgeries, how we work with our payers. They're constantly advancing. What they're doing is a great start, and that's the platform level. We're constantly benefiting by those advances. Some of the things that I think, you know, as we think about how to transform the industry, come into what we call care transformation, our impact initiatives, that we talk about improving margins, performance agility and care transformation. That care transformation is really where the opportunity is. You know, almost half of our, upwards of 1/2 of our expense is labor, and we have to find a way to bend that cost curve. We announced a partnership with hellocare.ai that is gonna do virtual sitting, virtual nursing, and virtual attending for us, but it's another platform that we can build with and scale with as we continue to grow. We'll be rolling that out throughout the system. Now, there's a cost to that technology, and so as I think about technology, there's a little bit of an earnings drag as we implement this before we're gonna see the benefit. But we believe that the virtual sitting will pay for the cost of the technology largely, and then we're gonna get the benefits from virtual nursing, virtual attending. Over time, you know, we expect that we'll be able to either stretch productivity ratios or, you know, just give our nurses the support that they need so that we can bend the cost curve of inflation, improve our turnover, reduce contract labor. We've seen this prove out in the early signs of what we've done. Ambient listening is another one. Now we've rolled this out in our outpatient environment in our clinics, and the doctors are seeing better productivity, better satisfaction. It will lead to better quality of documentation, which will lead to more accurate coding, and better reimbursement over time. The next step is to bring that into the inpatient environment. You know, our nurses spend, you know, roughly 1/3 of their time documenting in computers. We've installed these systems, but they've not been productivity improvements to the industry by and large, but I see that changing as we get into that ambient listening. As the nurses are taking care of patients, they're automatically documenting that, and, you know, we're gonna get better quality of documentation. Same thing with the physicians. We've not brought that into the inpatient yet. It's coming and that's gonna be something. Cumulatively, all these things add up. In the beginning, we're making some bets and some investments to be able to drive that longer term productivity improvement, but that's, you know, how we're seeing the world. What about on revenue cycle? You mentioned that. Just where are you in the evolution of technology, AI, whether it's code capture, yield- Yes. ... or just, you know, there's just all this back and forth with payers creating a lot of friction around denials and whatnot. Where do you think you're seeing the biggest impact? Yeah. I mean, we're partnering with Ensemble Health, they're investing a ton into AI machine learning in their technology stack. They purchased an AI company last year. I know they're integrating that, we're the beneficiary of those improvements. As we look at the denial rates across the country, even though they're elevated for us, we're still coming in below benchmarks in the industry. We saw days, DSO improvement, as we exited last year, and we're hopeful to see that trend continue this year, based upon that technological improvement that they're making. So their investments become our, you know, revenue yield at the end of the day. Okay. The one other part on that, you know, we are an Epic client, as I mentioned before. Epic is working with some five of the largest payers, five large health systems. We were a part of that last year. There's some demonstration projects that we're collectively working on to sort of take the friction out of the middle. Payers have expenses in adjudicating these denials. We have expenses in fighting these denials. We're working on a handful of initiatives and seeing some early signs of progress there. Some of these payers are, you know, sort of embracing Epic's payer platform and what we can do to electronically adjudicate electronic. You know, this is still a very human manual process, fax machines and phone calls, better quality of documentation using the electronic systems we have to be able to pass information among and between the payers and providers. We are seeing some early signs of improvement. I think that that's a great opportunity for Epic to be that convener between the payers and platforms to use technology to take out some of that friction in between. Big focus from the investor community around the expiration of the subsidies this year. You guys framed up, you know, a modest headwind, what, $35 million or something like that- That's right. ... this year. Maybe talk about how you see the redistribution of coverage and, I don't know if you'd be willing to share any kind of like quarter to date observations, whether or not you're seeing shifts to self-pay or anything right now that would validate or invalidate those assumptions. Really the question is like how do you think about the slope of that $35 million this year? No, it's a, it's a good question. Maybe beginning with the end. You know, it'd be too early to speak to any trends. We don't have visibility. I guess what we can speak to is that we actually saw enrollment increases in our primary states on average. Right. Oklahoma was down 15%, but Texas was up, New Mexico was up substantially. Across our system we saw enrollment increase about 3.5%. As you know, with the grace period, we're very concerned with what happens later in the year- Right. ... as you see potentially premiums not being paid, and you might have significant disenrollment. We're still very cautious as we approach the year. You know, our underlying assumptions was that we would see a 20% disenrollment across our states, our markets, and of that, we'd see maybe 10%-15% move into commercial coverage with the rest moving to self-pay. Of course, what nobody knows is what is the utilization patterns across those. You know, are those actually lower utilizers who are dropping out? We had a 30% assumption around reduction of care for that cohort that we would expect to drop out. We think, on the whole, our $35 million estimate is, you know, modestly prudent as we think about it. We tried to think through, you know, kind of... You know, I don't wanna call it worst case. I can always construct worst cases, but again, a very prudent and sober view of what might happen with those exchange volumes. Again, still very early in the year, not outside of just understanding what has happened from an overall enrollment standpoint, we don't really have visibility yet into how the utilization will, and what may happen to that cohort who may disenroll later in the year. Did you study New Mexico and why you think it was up so much? That was one of the states that jumped off the page to us. Yeah, they were very aggressive, the state was, in terms of, putting in, state funding for- Yeah. ... in lieu of the federal subsidies. We do think... Again, you know, great on the surface, right? We don't know where... 'Cause enrollment in the state is up 20%, but if that is actually coming out of, if some of that enrollment's coming out of traditional commercial, it's actually a potential negative to us. We just, you know, we're very much in a wait and see mode. Yeah. I think you talked about this on the earnings call, but we've got that rural fund of dollars that have been thrown at all the states. Any new developments, updates, the number of hospitals that you own that you think might qualify? Yeah, I mean, as you look at our footprint, we've got a mix of primary, secondary, tertiary hospitals. Those primary hospitals largely in rural footprints. Those, you know, would say maybe upwards of 1/3 of our hospitals might qualify by a lay person's definition of rural. Now, each of the states, you know, have been awarded their allocations from the Federal Government. To date, only New Mexico has put anything out, they talk about the process they're going to be developing, there's still no terms in terms of an actual application. How they're gonna distribute these funds is to be determined. There's a lot- Okay. ... of scrutiny right now, with, and some, you know, some Democrats actually leaning out and pushing CMS to put some stronger oversight to make sure that these programs are used the way they were intended to be. There's a lot of technology vendors now coming up to, you know, the states and trying to, you know, claim some of these allocation of funds. How they distribute them is to be determined. you know, as we look at our footprint, we would expect to see some benefit. We did not put anything in our guide because it's just impossible to quantify what that could look like today. If you think, if you look at the CMS intention behind these rural funds, it wasn't just to pay bills and keep the doors open, it was actually to improve access to, you know, embrace technology that's going to help drive affordability and accessibility in rural medicine. We believe that the partnerships that we've engaged in and the technology that we're deploying in the rural environment as well as our metro environment, would make for a strong application when those things come out. Thus far, you know, there's not been anything to apply for. We are working with our government relations teams and our states proactively to try to influence that process and make sure that the monies are going to where the care is being delivered. Thus far, there's not any timelines or criteria in terms of how they're gonna divide those out. Okay. All right. There's something. Yeah. We'd be surprised- It's coming. ... if we didn't receive something. Again, to Marty's point, exactly what and the timing is impossible to predict. You know, again, trying to be prudent, we didn't include- Okay. ... anything in our guide. There's somebody around the organization that's taken a stab at it, I'm sure. I mean, there's estimates, I mean, it would be irresponsible to sort of throw numbers out there at this point. No, I'm just kidding. This past year you had some challenges, you've had challenges, ongoing challenges with payer denials and maybe just talk about that for a minute. There was some AR write-down and whether or not you think that's getting better or worse, or any of the corrective plans that you put into place to try to address this and eliminate the friction points going forward. Yeah. Two separate issues. One, I might address the write-down first, because that's very much a one-time event where we migrated to a new system- Right. ... of recognizing revenue, off of a, an internally developed system to the industry standard, which is a product called RCA, that a company called Kodiak owns. They handle revenue recognition for 2,200 hospitals nationally, and it's kind of the gold standard. That was done in order to create a very scalable, you know, I'll say, model for revenue recognition going forward. That model is modestly more conservative in terms of upfront recognition of reserves, and as a consequence, accelerated $42 million in recognition, and that's very much a one-time, won't be repeated, has no impact on recognition going forward. Second, to the first part of your question, payer denials, we very much did see a step-up, particularly in Q3, and particularly in the back half of Q3, both from a initial denial perspective and from a final denial perspective. As a consequence, you know, we did take our guide down last year. We saw a very modest improvement in Q4. Nothing that, you know, I wouldn't say we would call it a trend at this point. Maybe, you know, just a nugget of optimism going into the year. We are not, as we created our expectations for 2026, we did not incorporate improvement from what we saw over the back half of 2025. You know, we see it year-over-year as a $50 million headwind combined with also a step-up in professional fee expense for us. We see those two things being a $50 million headwind year-over-year, simply lapping the first half- Right. Right. Right. ... of 2025. Right. Most of this is isolated to Medicare Advantage? I would say it's all the managed products- Okay. ... really. You know, exchange, managed Medicaid. Yeah, any of the managed products. You know, the traditional commercial where the payers are largely a TPA, not much of a change, there where it's really largely, the behavior's largely driven by the employer. Okay. You're one of the few acute care operators that leads with a joint venture model. I think that's a attractive partnership model for a lot of the nonprofits that might be evaluating, you know, some alternatives over time. Just maybe talk about the JV model, why you think it's a differentiator in the context of development activity. Yeah. It's proven to be a great model for us as we've grown the company, particularly academic institutions. We've got nonprofit partners, foundation partners, for the academic medical centers, you know, everybody wants to grow, not everybody has the integrating or operating experience to be able to do that. Not everybody has the balance sheet. You know, some of the academic centers have really gotten hit hard with some of the cuts to NIH funding, they're having to think about where do they invest their dollars for expansion. While everybody wants to grow, you know, they have to, you know, manage within the confines of what they have. Last summer, we brought on a new chief development officer, who's got 17 years of working on sort of that sell side advisory services. Got a lot of contacts. You know, we've got, I think, 10 different conversations going on with academics wanting to learn more about our model, see if there's an opportunity to deploy that model in their region. We see that as a great opportunity where we can bring our operating experterience and integrating experience to that and help them grow. We benefit by the name recognition that they have, and, you know, can have speed to market execution quicker. Our East Texas model is sort of the poster example of this. You know, East Texas Medical Center was a large nonprofit system that did well until it didn't. When we partnered with the University of Texas, and created UT Health East Texas, we painted the town, you know, Texas burnt orange, and, you know, has really just been a game changer in terms of market perception, market share shift, and our ability to recruit specialists, and or advance the quality and acuity of services that we offer. The academic halo that comes with those physician appointments is something that has allowed us to recruit in physician partners that would've been very difficult otherwise. They're benefiting, we're benefiting. We're seeing the combination of a proverbial 1 + 1 = 3. We're excited about that. You know, we are being very selective in our new hospital growth. We passed on a deal right after the IPO that was probably a good pass in hindsight. We had a good academic partner that we liked, but we couldn't get there on price. We're gonna be very disciplined in where we deploy capital, particularly where our valuation is. We wanna be able to see that whatever we do is gonna be accretive in the near term, the first couple years call it, to the shareholders. You know, we think that there's opportunity out there, and particularly as we continue to lean into technology to create a better operating structure and a more durable, you know, transformation of our clinical processes, that should be attractive as we look for new markets to go into with the implementation of the 340B cuts. We think that the confluence of the regulatory environment and the technology advances are going to come together and benefit us as we look for that. We're gonna be very, you know, strategic and disciplined in terms of where we're going. We had several deals last year that we were liked the partners, but just didn't like the situation, and we're not gonna enter into a situation if we don't think we're gonna bring value. Right. When I look at Ardent, one thing that has stood out to me over the years is that it appears that the organization is under-earning, you know, relative to the peer group around the outpatient footprint, which does present opportunities for you to fill in selectively, certain access points. You did an urgent care transaction last year? Two years ago? Both. Last year. Yeah. Yeah. Yeah. I think there were some positive proof points that you've been able to, drive some market share there. Maybe just talk about like where you are around the evolution of outpatient, how you're thinking about the various, you know, areas, ASC, urgent care, imaging, et cetera. Yeah. Well, we were very clear up front, when we went public, in our roadshow that, you know, we are in fast-growing markets. We're growing two to three times the average of the U.S. population, and we've got very strong leading positions, number one or two in the majority of markets that we operate in on the inpatient environment. We were behind on the outpatient side. We led with urgent cares because we were able to get some attractive purchase prices that would have equated to what it would have cost us to self-develop these when you consider working capital and time to build and ramp of into these services. They were available, they were attractive, and it helped us go from really hardly any market share in the urgent care to, you know, leading market share through these transactions. The proof points on those, about 40% of those patients, now that we've got them all on Epic, we can see were new to our system. We track unique people that we treat in each of our markets, about 40% of those patients coming into those centers are new, and about 15% of those patients have follow-up services within 30 days. About 40, approaching 40% are seeing follow-up services within six months. All of those are great feeders into the system. If they don't have primary care, we're getting them into our primary care clinics or follow-up specialty appointments, all of those were great. The margins, you know, the margins are positive on those urgent cares, the more positive margins are on the ASC side, and you referenced some of our peers, who have large investments in, either whole ASC companies or, you know, integrated in their markets. We've only got a handful of ASCs right now. Now, we've got two that we're building right now. There's another one we're looking to potentially acquire. We know that that's an opportunity for us to continue to build into higher margin accretive business. With the expiration of the Inpatient Only list, we know that there's going to be a continued gradual shift into the outpatients. Yeah. We wanna make sure we can shift and catch those patients. You know, last year I think we were the only public company that had positive surgical growth, and that was including a lot of rationalization of some high volume but low acuity outpatient services. If we had the outpatient ASCs, we would have moved them in there and we would have seen even more growth. So that is an area that we said from the outset that we would do. We'd start with the urgent cares, grow into imaging centers, grow into ASCs, and, you know, that's what we expect it to ramp up as we go into this year and continuing from there. Is there a preferred way that you would expect to accelerate the growth with your ASC strategy? I mean, buy versus build versus partner, or is it very situational to each market? It's very situational. You know, that being said, you look at where our trading multiples are and where the ASCs are typically trading. You know, I'd say that we're going to see much more activity on the de novo build versus the buy. Selectively, you know, there may be some instances where we buy if there's both an offense or defensive nature for that. You know, we can build these things much cheaper than we can buy them in this environment, and it'll take a little bit longer, and so that's why we're accelerating some of our CapEx this year just to put more shovels in the ground, so to speak. We're gonna do that in a very disciplined and paced way over multiple, the next several years. Yeah. Remind me the restrictions around the master lease agreement with Ventas. When you add... It really only relates to on campus, right? If you add a physical building on the campus, is that part of the Ventas agreement and all the other stuff is carved out? Well, it's only three of our eight markets that, you know, we have that issue and, but it is a market level. That being said, there's not been a project that we've brought to Ventas that they've not been supportive. Yeah. We wanna grow, they want to grow. You know, by growing these, that just adds durability to the markets and our ability to make good on those leases. Yeah. You wanna talk quickly about the malpractice charge from last year and confidence that you can provide that that's isolated to one very- Yeah. ... specific situation or the one very specific- Yeah. individual? Sure, yeah. The charge we took, you know, $54 million at the end of Q3 related almost entirely to a single physician, and an escalation of as his as the statute of limitations was about to toll, and you have some very aggressive medical malpractice backdrop and, you know, I'd say some high profile cases inside of the market. You know, we think the we're confident the charge that we took was, you know, very much tied to again, physicians no longer with Ardent and a statute of limitations that's now expired. Having said that, New Mexico has been a very litigious market, you know, one of the worst in the country from a medical malpractice overview. In fact, the state just passed a medical malpractice reform capping medical malpractice claims at $15 million plus $6 million in punitive. You know, it's another attempt. It's been a challenge in the state to recruit physicians because of this backdrop, the state is very much trying to address it. You know, having said all of that, there's still, I'd say at the, at an industry level, a lot of negative sentiment around doing business in New Mexico from a medical malpractice insurer perspective, and premiums have been raised for the entire everybody practicing inside of New Mexico. That's where, while the situation I mentioned was very much a one-time- Yeah. ... charge, there is an ongoing just, doing business and cost of doing business in New Mexico that there is some optimism, you know, in a year or two as there's, as the new law takes effect, that there can be downward pressure on those, insurance premiums. Okay. Very familiar with New Mexico. Does that law apply to all healthcare providers, or is it just acute care hospitals? It does. There's varying levels of caps based upon the physician provider level, small hospitals or health systems. At least, it's a step forward. The governor signed that into law last week at actually the campus where we're developing a joint venture hospital in Valencia County. It was a great way to sort of just be a positive reaffirmation of helping doctors come and want to stay in that community. Yeah. It was a step in the right direction in, taking it away from, trial lawyers that have gotten overzealous- Mm. ... and really damaging healthcare for New Mexicans. Yeah. In light of sort of the macroeconomic environment that we're in, and, you know, we've seen some job losses, creep up, how do you guys think about the impact on your business in the event that we start to see rising unemployment? There's always been the school of thought that we were all trained like, "Oh, demand's gonna go up or it goes down," and then you got the social safety net in there with the ACA. How are you guys sort of thinking about the employment backdrop across your markets? Yeah, of course, you know, we think coverage is a good thing. You know, I would say, yeah, you know, there is the thesis that, you know, as people become more nervous and/or go onto COBRA, there can be a utilization spike. I don't know that we think too much about that in terms of the near term. You know, we think obviously traditional and commercial coverage is a positive for us. Long-term if, you know, if we saw a spike in unemployment, you know, that would be at least a modestly negative headwind to the entire industry from that perspective. You know, it is, of course, you know, as coverage expansion has taken effect over the last, you know, many years and as we have seen more coverage available, you know, it is, that's obviously an offsetting positive with the, of course, some uncertainty around the exchange, and the expiration of the subsidies. We're certainly, like, well off the high water mark for, you know, clinical wage inflation that we sort of saw escalate post-pandemic. I feel like we've been two years into sort of this normalized environment of just very stable trends. No apparent spikes across the country on nurse inflation. How is that tracking within your markets? Are there any subspecialties of the clinical staff that you're seeing more apparent inflation or less? Really nothing that we'd call out. We're into multiyear now of holding the average hourly rate below the average inflation rate. Not that we're not, of course, providing market type adjustments, but we've been able to more than offset that through the management of premium wages and overtime. Average hourly rates have been, you know, below the average rate of inflation, and we continue to see that as a positive. We, as we talked about from the outset, as we think about being able to leverage technology, I mean, you know, I don't think any of us believes we're ever in a world where there's enough nurses or doctors, and how can technology allow us to leverage those caretakers greater across the enterprise as we grow. Again, we would expect that to be a tailwind as we think about suppressing, you know, those types of inflationary pressures. Yeah. Our impact initiatives, you know, are squarely aimed at that. How do we continue to improve our retention and, you know, recruiting abilities, and, you know, providing a work environment that people wanna be in that's easy for caregivers to deliver that care is going to allow us to keep those. Through that improved turnover metrics, we've saw a reduction in our contract labor, finishing in fourth quarter at 2.6% of total SWB, which is the lowest it's been since the pandemic where we were sort of in the low to mid- 2% range. We're approaching those pre-pandemic levels, and that was the best we've seen. Our impact focus initiative around productivity is driving those results that we saw a strong momentum leaving the fourth quarter and gives us good confidence going into the beginning of this year that we actually raised those target levels about $15 million in our guide. It's hard to believe that just years ago people were offering up assistance on down payments on mortgages and relief on student loan debt to... Well, I mean, you still have, not on the mortgage side, the student loan side, you know, in terms of, you know, trying to bring those nurses in. Those first couple years are the most critical, if you can get those nurses integrated into your system, it, you know, there's still a good focus there. We've got a lot of partnerships, with our academic partners, you know, trying to develop and grow our nursing programs in our regions. We've gotta, you know, address the supply. That will also help. Yeah. Yeah. With that, we're out of time. Thanks, guys. Really appreciate it. Our pleasure. Thanks, man. Yeah, enjoy the day. Appreciate it. Thank you.