Start with the next presentation. Joining me is Kevin Hammons, President and CFO of Community Health Systems. Thank you, Kevin, as always, for joining us at the conference. We truly appreciate it. I thought, you know, Kevin, just was going back and forth. I thought maybe the best place to start is make sure just a review of the kind of recent results and comment of some of the four initiatives that you've kind of got laid out for on the call into the market right now. Maybe we just review those to kind of level set for the audience. Sure. Thank you, Larry, and thank you for hosting this. We really appreciate being here. Thank you, everyone, for joining today. You know, coming out of the third quarter, we did experience some of that normal seasonality that we historically had always seen in the third quarter, particularly around surgeries that were a little bit softer in the third quarter. But it was more just normal patient behavior, as people were taking vacations, I think getting back to kind of some normalcy in their lives. What we were able to do largely, though, is step over some of that, at least the earnings impact of some of that normal seasonality, with very strong admissions and outpatient business around clinic visits and so forth. So as we continue to grow our business, continued to have made investments in the outpatient side and bringing on new specialists, we did have a very strong and actually sequential increase from the second quarter in both admissions and clinic visits. So I think that's giving us momentum, excuse me, some momentum into the fourth quarter and certainly a more positive outlook into the future as we, you know, are seeing some of that growth and investment start to take hold. As we go into 2024, continuing to focus on growing net revenue, we're making a number of investments across the organization, continuing to expand certain service lines, some higher acuity service lines, making some investments in even in inpatient, adding beds in a number of our markets, continuing to focus on cost, reducing costs as well. We've talked about a number of initiatives over the last several quarters. Actually, our Margin Improvement Program, which dates back to the fourth quarter of 2019, that we've continued to make progress on, but more recently, adding our ERP investment, which we think will extend our expense reduction initiatives and give us some additional runway for that. Great. Thank you. Can you touch on, you've talked about investments in service lines. I think you've added, say, 500 beds or so, I think, over the last 4 or 5 years, and the outpatient strategy. Can you just maybe dig a little bit deeper on that and say, you know, to what you're exactly targeting on the, the investments in the inpatient side and, and the footprint in the outpatient side, which obviously has been a big topic the last couple of years? Yeah, absolutely. And you know, I get still pretty excited about, because although we've divesting a number of hospitals, you know, over the last few years and continue to take some opportunities for some opportunistic divestitures, you know, we have made these investments on the inpatient side and added over 500 beds over the last couple of years, which is the equivalent of a couple hospitals. So although we haven't acquired anyone from a scale perspective, we were adding beds. Our strategy is largely local. You know, one of the things we've done is we've kind of migrated towards becoming more of an operating company versus a holding company. If you go back a number of years, historically, CHS was a little more of a holding company, and we've migrated over the last five or six years into more of an operating company. Really developing kind of a playbook of strategies that hospitals can pick from, or each market can pick from, that we you know have a consistent means of executing on those strategies, but not every market needs to pick every strategy. So for those markets that we have capacity needs and are growing kind of that inpatient business, those are markets where we're adding some of the inpatient business. In other markets, we have sufficient capacity on the acute side, but we're targeting more of the outpatient service lines. Okay, great. Is from a, I think, year to date, you're kind of between 2%-3% on a same-store admits, and you're a little higher in 3Q. I mean, is that a, not to, you know, put your perspective on guidance, but is that a level that you think is a comfort level in terms of just where you think the base business is on a go-forward basis from a volume perspective? Yes. Yeah, I think kind of that, you know, low single digits, kind of 2%-3%. Okay. on a baseline perspective is the right way to look at it. Okay, great. Thank you. Couple of questions, which I'm sure you've labored over the evolution of your investment in labor, and obviously contract labor is down materially, certainly from a couple of years ago. You're what? Mid-50s in this- Yeah, fifty-four. $54 million. Is that a fair level, the baseline today, I think, where you can run contract labor at that level and not have to concern yourself with spikes? And then can you talk about that in terms of your investment in labor as part of that conversation, if you will? I do. I think kind of mid-50s is a good baseline. If we just continued on throughout next year, holding flat at that level, you know, contract labor come down somewhere in the $50-$60 million year-over-year compared to 2023 because we made progress throughout the year. I do think that there's opportunity as we get, you know, into the back half of 2024, continue to bring contract labor down even further. I would say, you know, fourth quarter, we're looking at contract labor being relatively flat. Flat, okay. With third quarter. Historically, fourth quarter and first quarter was the higher of contract labor, largely because of our footprint in some of our hospitals in Florida, that we scale up, you know, for some of the seasonality, which kind of ends after Q1. So those have typically been our higher quarters for contract labor. So as I think it remains flat here, Q4, Q1, and then some opportunity for- Okay. Continued improvement. So just to frame that, it's gonna move 50s in Q4 and kind of opportunity potentially in 2024 as it relates to contract? Correct. Okay. I know there's been these gives and takes in the industry and you spoke about it on your call, but professional fees, physician fees have been a challenge for the industry, growing challenge. And then you've talked about insourcing and the opportunity it may create, and you gave some metrics around, so on and so forth Can you talk about where your mind is-- mindset is on, you know, professional fees and physician fees as we look into 2024? Is that a headwind? Is it a tailwind as you bring these contracts on, or is that a little TBD? I still think it's a little bit of a TBD. I would say we're not ready yet to say that we can make material reductions to make it a tailwind. I think we're at a point where we're mitigating any additional increases in the professional fees. We're seeing, you know, some progress. We insourced the former APP physicians, and they're now our physicians, and that has been beneficial. We saw about a $4 million EBITDA benefit in Q3, and that was only really up and running for two months. Right. But I think we get a little more traction on that, and then expanding into some of the anesthesiology- ... areas of insourcing and those benefits, I think, will help us mitigate any additional cost increases. Okay. Did you take, if you don't mind me asking, the APP contract, did you take all those APP contracts, or did you outsource some of those, or was it a mix? It was a mix. It was a mix. Yes. Okay. Yeah, there were a couple of markets that we were already in progress of moving to other third-party providers. But the majority of them, we brought in-house. Brought in-house. Okay. We've heard a lot of different data points for some providers in that space. I mean, what, as far as bringing on those contracts, what are the biggest challenges that you face in, in the insourcing opportunity? You know, the challenge is more of a timing challenge of getting the physicians credentialed. Mm-hmm. And then it's really running a little bit of a different business than we've historically run. So, but we were able, with APP and that, kinda in the course of that, we brought on some of the administrative team as well- Mm-hmm ... from APP. So recruiting the physicians, scheduling, billing for those physicians- Different ... is different- than the acute care business. Yep. And if I may ask, the contracts that you brought in-house, the APP, and the ones that you moved to another, I'm assuming third-party provider, what's the driving metric as to what drives that decision, if you will, whether to bring them in-house or leave them out third party? It was largely availability of contracts with the payers. Of the payers? Okay. That was it. Okay. Okay, great. Margins, I think, quarter, were a little short of 12%, almost at 12. Your, you know, your long-term guide is kind of, you know, mid-double digits. Give a sense of your thought process and timing to get there and some of the, I don't call it hurdles, but some of the initiatives to get there in Project Empower and so forth. Can you tie that in- the conversation as well? Yeah. So, you know, this is not gonna happen overnight. We're looking at kind of a three- to five-year plan to get there. I think we're well underway. You know, Project Empower, which helps give some additional runway to our Margin Improvement Program, will be significant, not only in helping us, you know, pick out some of the additional kind of software costs as we move to a single integrated platform, but just as we manage data differently, it gives us significantly more insight into some of our data with the expanded capabilities- Okay ... of the ERP, as well as it will allow us to move all of our finance, supply chain, kind of administrative functions into a shared service environment, which is much more efficient- ... than processing things locally- Right - in each market. So there's some savings opportunities there. As we continue to grow and leverage our fixed cost structure, that will certainly also increase, you know, our margins. Yep. And I think we're, you know, kind of at that point where additional growth will help, you know, accrue to the bottom line at a higher rate. Right. Okay. So, from bouncing around a little bit, but, from a top-line perspective, can you speak to managed care contracting? I believe you said that more than half of your contract for 2024 was booked alread Can you talk about kind of the increases that you're seeing in this kind of inflationary environment? Are you gaining some leverage given, you know, kind of the cycle that we're coming out, coming out of with the payers? Sure, we are. So we're seeing kind of 4%-6%. You are. - managed care contracting, very similar to what we saw in 2023, and that's about 100 basis points higher than we had historically- been getting in kind of managed care contracting. So it is, you know, if you think about maybe roughly a third of those contracts roll over each year- We're still seeing some additional benefit, and I think we have another, you know, year or two left on seeing that kind of benefit, particularly with inflation. A couple of years that- Mm-hmm. You can still push this through. Okay. Okay, great. Audience, I didn't do this in the last meeting, but if there's any questions, just raise your hand at any point in time. I don't want to dominate the space here. Go ahead, Krista. Maybe one question on acquisitions, sorry, disposals, because everybody's very focused on that. How do you feel about some of them closing, given the FTC dynamic? It's becoming a bit more complex in general. So that's the first. And then in relation overall to acquisitions and to disposals, how has the landscape changed with hospitals doing better this year? Is there more opportunities to sell more other non-core assets, maybe in some markets? I heard some rumors that some other assets are for sale, so curious about that. Thank you. Sure. Thank you. So we have, you know, really two deals in flight, which is a variety of assets in Florida, and we expect that to close this quarter. And we're seeing, you know- Right ... there does not seem to be any roadblocks, so we're very confident that one's gonna close this quarter. The other one in flight is our North Carolina asset. That is being reviewed by the FTC, and we do not expect to hear from the FTC until Q1. And then we'll just kind of go from there based on the response we get. So I do think, you know, the FTC and that environment has changed a little bit, but we continue to have some inbound interest. I believe the overall landscape of potential deals is still very viable. And actually, I think there's probably a, you know, a few more deals out there now than we've probably seen over the last maybe 18 months or so. Thank you. Just one follow-up. On the one in North Carolina, is there—what's the backup? And with regard to North Carolina, was that backup, like a date that was right behind the other one, if that you could fall back as a fallback scenario, if the FTC were to be complicated? There's not currently. I mean, we could potentially pursue another buyer, or actually just continue to run the hospital if the FTC were to block that deal. Just a follow-up there. Is the buyer in the market now, typically, maybe I'm answering my own question here, but typically a not-for-profit player today? Which is a little bit different than maybe we've seen in the past. It's a combination. We're seeing both the for-profit and non-for-profit buyers in the market. Yes, we are. Okay. Okay, great. Jane Gill, do you have a question? Just gonna ask on the integration of the APP physicians. We saw obviously HCA kind of with a big disappointment as it was integrating some of the APP practices, and USACS undertook to pay some of the salaries since they hadn't been paid since May. I'm just wondering your experience sounds different and much faster integration and more cost savings. I'm just wondering if you can give us some color and details on why you seem to have achieved cost savings and integration at a faster rate than these providers. Thanks. I'm not sure I have enough information about what some of the others have done to make a good comparison. I can speak to what we did. So, you know, we were very quickly when we heard about APP, when they reached out to us to indicate they were going to cease operations, reached out to kind of the parties on their side that were necessary, and struck a deal, you know, quite quickly, within a couple of weeks. We brought their physicians on. We met with all those, their physicians, upfront to kind of explain, you know, what was happening. We took over all the contracts kind of in place. So we stepped in the shoes of APP in terms of owning the contracts that they previously had. Immediately got to work on getting those physicians credentialed so that we could bill for them under our plan. That has, you know, taken, you know, some time, but the bills now are going out, so most of those physicians are now credentialed. I think one of the differences, at least as I understand it, is, as I previously mentioned, Larry, we brought on some of the administrative team that was previously working for APP. And that's the team that did the scheduling for those physicians, that did the billing, and does the recruiting. So bringing that team over is well in place, and some of the leadership team that was managing those physicians that we brought on really allowed us to keep that business intact. Just following on that question as well, did you have to, as you're really saying in this context, pick up any of the kind of legacy professional liability and/or just the wages, quite frankly, of those practices? We did, yes. You did. Was it- -relatively nominal? It was relatively nominal. It was, okay. We'd heard that some contracts had been fairly material from some other players. Was that a one-time cash payment, or what was that? Yeah, we picked up kind of the tail coverage and then ongoing coverage as well as some salary and arrears. Okay. Mm-hmm. So effectively, that was our acquisition cost of the business. Gotcha. Thanks. And just following up on that, do you think the APP situation was unique in that you were able to have profitability because of the situation of being in a distressed state? Or does that help you decide to target other service lines that you may have outsourced previously and see it as a potential contribution to your firm going down the road? And I mentioned that because you also mentioned higher acuity service lines. If you kind of extrapolate a little bit more on sort of what sort of higher acuity service lines you might be targeting as you go forward. Thanks. So I would say our experience with the APP and insourcing those physicians does suggest that, you know, we may pursue that further in other areas. We are not targeting to be a full, fully insourced model. That is not our objective here. But where it makes sense, I do think there are opportunities for us to continue to insource some of those physicians. And in fact, we have taken that same model and rolled it out to some of our other hospitals, as they've seen the benefits and said, "You know, hey, can we insource our whether it's emergency room doctors, hospitalists..." And we're also looking at insourcing some of our anesthesiologists. In terms of higher acuity service lines, you know, we're really talking about, you know, cardiology, orthopedics, neurology, some cancer treatment centers that we've opened up. So those are generally the higher acuity services that we're looking at. Good. Could you comment on the Medicaid Supplemental Payment programs submitted by the state of Mississippi to CMS? Any color on the timing? Have you been in touch with the state government officials, and have you assessed what any potential impact to your earnings as a result? And then following on, could you maybe comment on your view of your operations in Mississippi, Merit Health, and have you been investing in that system, or would you consider disposing of it in the future? Thanks. So I don't want to get too far out ahead of what the state has done. We have been in contact, very close contact with the state. They have submitted the plan to CMS, and the state has put out, you know, some numbers around what they believe the incremental benefit is, by hospital for every hospital in the state. At this point, again, not to get too far out in front of that, our experience has been CMS can make changes to what's been submitted. They may also change the timing of when it's effective. So until we get that information out of CMS, we haven't really commented in terms of, you know, quantifying how much it'll be to us. What has been submitted, it would be effective... The request is for it to be effective July first of 2023. So there'd be a retroactive piece, but we don't know that CMS will approve that. I think there was one other question. The operations in Mississippi, Merit Health, is it core, are you investing? Oh, sure. Or would that be, you know, potentially divested in the future? You know, we have you know, a pretty good presence in Merit. We have made some investments. It... I would not say it's been a core, you know, a core market, but it is one we think there's you know, certainly some potential for, getting this program through will be very meaningful to the operations in Mississippi. Can you walk us through your change in cash flow guidance for 4Q and for 2023? And you talked about some one-time nature to the tax recoveries and so on. Can you provide those components and kind of timing about the differential around, you know, the shift in 3Q? Sure. There were a couple of things. So, you know, one component was really accounts receivable, but as a result of some system conversions in earlier in the quarter, it caused some billing delays, and those bills, you know, are all out, and we expect that to those to be collected, and the majority of that cash should be coming in in the fourth quarter. And I believe that was around $60 million. Then the tax component, we did anticipate having a tax refund this year of in the $100 million range. We still anticipate getting that refund, although it's not coming this year. So I would expect that in the first half of next year. And then the last item that I recall here is the 163(j) interest- Mm-hmm. - deduction. We anticipated that to be rolled back, and it has not yet been rolled back, but we understand there's bipartisan support in Washington to actually do that and make that happen. That will also add to, or the fact that it wasn't rolled back resulted in us becoming a cash taxpayer in 2023. But when that gets rolled back, assuming it does, we should be able to get that back as well. Okay. And can an idea of, you know, kind of sizing that? Yeah, that was about roughly $75 million. It's about 75? Okay. Yeah, and that maybe one other item in regards to our conversation about APP. You know, insourcing those physicians, getting them credentialed, we did have a little bit of a delay in getting the bills out. Okay. That was roughly $20 million. That was a claims delay that you- Yes. It's on the call. Okay. Just, by the way. I don't know if there's any questions in the audience in regards to that, Jed, 'cause- Yeah. With regard to the outpatient strategy, that sounds very exciting. I was wondering whether you are able to sort of have more details on that, like how many ASCs you have now versus you had two years ago? How many urgent care centers now versus two years ago, or freestanding ERs or freestanding radiation centers, just so for us to see quantitatively a bit more what, what really changed. So we have about 50 ASCs today, roughly 20 freestanding emergency rooms, and I believe 60 urgent care centers. We're adding kind of in terms of freestanding EDs, 2-5 each year. In terms of ASCs, kind of in the, you know, 5-8 range each year that we've been adding. We have ambulatory surgery centers in 85% of our markets already, so we have a good presence in all of our meaningful markets with ASCs. The markets where we don't have one are the most rural markets, where it probably doesn't make sense, and there's no need to have an ASC in those markets. So we believe we're adequately covered, but continue to look for opportunities, you know, in our existing markets where there may be, you know, an option to add another department with some existing physicians. If maybe there's a practice out there, you know, that is a leading practice in the community that's not affiliated with us, if there's an opportunity to affiliate with them and pick up an ASC, we'll look to do that. Just an extension of the cash flow question, if I well, and I think I know the answer, but if you monetize Bravera, I think your fourth quarter had a pretty good cash flow metric here. Deploy 100% of that to debt reduction? Yes, that's correct. That's where you're gonna go with it. Okay. Yes, that would be correct. I want to confirm that. Okay. I don't know if there's any more audience questions. If not, I'll ask you the dreaded question of GLP-1, which- Maybe. Just, I guess two questions I have. Okay. There's one, maybe we don't have time to get to that, maybe. You kind of mid-seventies assets to hospital markets as well. If I were to ask you 3-5 years down the road and ask you what your ultimate footprint would look like, is there any way you could size that today? In terms of when you look at core markets and- Sure. core assets and where you want to be. So is that a fair question? We don't have a target size. You know, I think we'll continue to look opportunistically. I think in the near term, there could be some additional divestitures, but similarly, we're looking at some acquisition opportunities. Okay. We have done that over the past, I would say, year to 18 months. Nothing has come up yet that we- ... you know, have moved forward with. I think it's a little early for us, given just where our financial position is. Right. But if we wait till the balance sheet is, you know, right for doing acquisitions, we're probably a little bit late to the game. So we're out there looking already, so that as soon as, you know, we're kind of in the right financial position and we could make a move, to do an acquisition, we would certainly like to be back in the mode of acquiring hospitals as well. Would they be existing markets or potentially new markets? I think we're initially starting to look at existing markets and where we can expand within the existing market, and I think it's an important for us as we try to leverage our fixed cost structure. Going into a new market, you know- ... would add more fixed costs versus expanding into an existing market. But eventually, I could see us getting into new markets as well. New markets. Okay. I keep saying last question. One last one: Could that, assets outside your kind of core, could it be in the IRF behavioral, could it be in that footprint within an existing market? It could be, yes. It could be. We've expanded into kind of both behavioral and other post-acute services, generally through partnerships- Yep ... because it's not our core business. So, you know, we've done some work with Acadia and with Select Medical, and others to joint venture- ... in some of those markets. markets. Okay, great. Thank you, everyone. Thank you, Kevin. Thanks. Thank you. Thank you, Tom, for taking the time and joining us.