Introducing Tenet Healthcare. Tenet's one of the largest providers of hospital services, as well as the largest provider of ambulatory surgery center services, and revenue cycle management. With us today, we have Saum Sutaria, who's the CEO, we have Dan Cancelmi, who's the CFO, and Will McDowell from Investor Relations. I think, Will, you had a few things you wanted to start off with? Yeah. Thanks, Kevin. Just, in the course of our presentation today, we'll be making some forward-looking statements. I would suggest you refer to our cautionary statement in our most recent, earnings release, as well as SEC filings, for the background information there. Just gonna turn it over to Saum for 2 opening comments. Thanks, Will. We're pleased to be here. you know, it's been a very good start to the year for us as we reported the first quarter. you know, as I mentioned on our earnings call, this is an important time for us because this post-pandemic environment is starting to take shape. you know, we can see the momentum from a patient demand standpoint. We can certainly see the momentum in our business in the high acuity strategy that we've been pursuing, both in the hospitals and in our ambulatory surgery business, and that's very good news. You know, we've been waiting in some ways for the timing of this, though expecting that it was gonna come, and we're delighted that we have an operating platform in both businesses that's efficient enough to translate the volume that's returning to margin. We're seeing a broad-based, you know, broad-based demand for services, emergent services, elective services, low acuity, obviously high acuity, given the amount of time and energy we've spent focusing our hospitals on specifically working on that market share. Similarly, at USPI, you know, we're three quarters in to reenergizing our organic growth approaches. We've taken some important steps to focus further on the higher acuity areas there as well, like orthopedics, and I'm pleased to report that through April, we don't see any change in positive trends in both the hospital and the ambulatory surgery business from a growth perspective. Our M&A prospects, in particular on the USPI side, remain very strong. Remember, we have a very unique platform in our ability to acquire or develop centers and deliver a lot of synergies based upon the Tenet portfolio. The pipeline is strong and our ability to consistently take assets that we acquire and drive them down in multiple is as strong as it's ever been. We feel very good about that. The further we integrate the two businesses, the better we do also in the area of supply chain, which is obviously a very important lever. As you start to get higher and higher acuity services into the ASCs, the supply cost intensity goes up and your ability to negotiate on the supply chain side is a very important lever in the profitability of that business going forward. Finally, Conifer continues to do well. We're pleased to see third-party revenue growth in the first quarter. We're pleased to see strong margins. We have an ongoing agenda to continue to offshore and automate activities there in order to improve the performance of the business. From a corporate standpoint, you know, we, as you know, from a capital allocation standpoint, have been very clear that we think the best use of cash in the business is accretive acquisitions within the USPI business, but we remain committed, as we have been, to delevering the company. As you know, we have a share buyback plan that's in place that we have been active in over the past couple of quarters. Our priorities there and discipline there around capital allocation, which are a hallmark of the company, have not changed. With that, Kevin. Sure. I'm happy to take questions. I mean, I guess one of the things that I'm trying to get an answer to, throughout this week from everybody is just Q1 volumes were strong across the board for providers, for, you know, med tech companies. The managed care companies seem to say that's not a problem. Just wanna understand, and maybe just focus first on the hospital side of things, what you think kind of drove that strength? Why all of a sudden was Q1 the quarter where the low acuity started to come back in? Right. Yeah, I mean, it's important to note that, relative to last year in Q1, if you take out COVID, because that's really what we pay attention to, the non-COVID inpatient volume strength, which represents what we think would be ongoing demand, was very strong. 14%, if I recall, for our business. Yep. That, that's a very good sign. I think there's two or three things. First of all, you know, we have gotten certainly more efficient as we've been forced to get in terms of our service levels in the intake channels that we have. The emergency department, direct admissions. We're very active in terms of our states that we operate in being acceptors of transfers when other hospitals are struggling. Those tend to be higher acuity cases with sicker people that we're better positioned to take care of. You know, other hospitals have a choice about where they end up sending those transfers, and we've been very active in our outreach to ensure that other hospitals and physicians can be comfortable that they're gonna get good care and sent back. That has been helpful to us in terms of our volumes. You know, I think, Kevin, there is, you know, there is an underlying demand piece across the industry that people are reengaging in their healthcare. I'll tell you as a proxy, for the last two years, I've talked about. I watch our physician business, the employed physician business, to look at how volumes are trending in the office relative to pre-pandemic, to get a sense of, are people fully reengaging their healthcare. Is our office environment running at full tilt? Hospitals, ASCs, all of those things are generally downstream to the offices. Our employed physician business is seeing volume strength like we have not seen over the past couple of years. That suggests to me that even in the outpatient setting, in particular, our employed physician base is mostly specialists, is seeing strength. That, that's a very good sign because usually outpatient activity like that gives you a good feeling for the next, you know, two quarters in terms of what people may engage in from more of a hospital or ASC-based standpoint. I do think that we're seeing reengagement. The other thing that we're seeing, of course, is some of the lower acuity work that's been deferred coming back into the, into the facilities from a hospital standpoint. I mean, I think Dan has talked about on multiple calls that the Medicare business will come back at some point. Our ability to manage cost in that environment and earn a margin, positive margin in the company, on Medicare business is important. We welcome that, we welcome that back to improve capacity utilization, and it just puts a premium on disciplined cost structure. Yeah. I guess when you said that the trends and again, let's still stay on the hospital side, in April remained strong. Are you thinking about it from an absolute volume perspective, or are you thinking about it from a year-over-year growth perspective? Because it feels to me like on the hospital side, what happened last year was COVID spike, non-COVID dropped, COVID dropped, but non-COVID didn't quite pick up in March the way that it used to in normal peaks and, you know, peaks and valleys. It feels like the non-COVID had an easier comp in Q1 than it will have in Q2 or Q3 or Q4. Like, the year-over-year growth, if that stays the same off the tougher comps, that's different than utilization is back, and it stays at that level. Yeah, let me make two points there. One is, I don't disagree that the non-COVID comp was easier based upon the amount of COVID we saw a year ago. 14% is still incredibly robust, right? I mean, that's a significant volume challenge to facilities that have to do something very different than if you were just taking care of respiratory illness because it hits the operating room, it hits the procedural areas like cath labs and other things in a very different way than COVID volume would. I think that I would just say it was stronger than we expected. We knew the rebound was gonna come at some point. It was stronger than we expected. To answer your question directly on what we're seeing, you know, into today, it's on a non-COVID volume basis, you know, we're seeing strength, continuing into this quarter already. It's year-over-year, Kevin. Okay. All right. I guess, let's pivot to the USPI because there may be slightly different drivers or dynamics to that. Last year, I guess, USPI underperformed. Can you talk a little bit about what kinda drove the underperformance, and then, you know, why it's coming back so well this year? Let's just start with... Maybe you can cover kind of some of our growth numbers from last year. I think USPI underperformed some very aggressive expectations that we put out there. USPI was still, from a volume and net revenue standpoint, net revenue standpoint, within our range that we would say from a long-term standpoint. Let's take that off the table for a second, and then we'll go into what's going on this year. That's right. You know, overall volumes last year grew 2%. Our, our long-term, you know, expectations are 2%-3% on a, you know, same facility basis. EBITDA growth was approximately almost 17%. Very strong growth. Admittedly, it was, you know, below very high expectations that we had. I mean, USPI has continued to demonstrate, you know, over the past six, seven years, revenue growth and EBITDA growth of, you know, double digit 11%-13%. You know, it was a good year last year. Very strong. Continued to have very strong margins. It was just, you know, we, in terms of the third quarter performance, they were below our expectation. COVID had an impact on that. The impact of COVID on patients and our employees in the third quarter. The pace of buy-ups under the second SCD transaction were just at a different pace than the first transaction. Some of that had to do with delays in, you know, supply chain issues, but also the stage of the maturity of the second transaction centers compared to the first transaction. The first transaction, those centers were at a more mature stage. The second transaction, more of a combination of mature centers but also centers in development. You know, we've said this a number of different times. We don't wanna force a buyup in terms of relationship with the physician. They need to be comfortable where the center's at in its maturity stage. Forcing something, doesn't make sense in the long term. Looking forward, you know, if you think about the volume strength at USPI this year, there's a few things I would say. First of all, qualitatively, I think what we assumed would happen last year, which was a totally unimpacted year from a COVID standpoint in the ambulatory surgery business, obviously didn't happen. This year, qualitatively, is a bit of what we expected last year. The, the point to take away from this is that we don't think necessarily about the USPI business having year-to-year or quarter-to-quarter trends. This business has a sustained and long tailwind of growth on a multi-year basis, given the setting in which these surgeries are happening, in which new procedures are coming into that environment, in which physicians are getting comfortable getting into ambulatory surgery centers as a place in which they can do their work. From a long-term standpoint, you know, nothing about last year versus this year outperforming, for example, changes our view that this business has a nice tailwind of organic growth. Then you obviously couple that with a very unique M&A engine, and we think we have a lot of opportunity to scale in a fragmented market, which is why strategically, we are absolutely not changing directions in terms of what we're doing, and we think it has a lot of potential to create significant free cash flow value for shareholders and obviously resources to help us deploy capital back into USPI, but also delever at the same time. It, it really, our focus there has not really changed. From a growth standpoint coming into this year, one of the nice things is that we have been focused strategically on certain areas, right? We wanted to have the return of the GI business come back into the facilities. We wanted to see our platform investment, first of its kind in really scaling up urology as a big growth opportunity in the ASC business succeed. It is based upon the numbers we saw in the first quarter. We have a very unique opportunity there across the country to grow that. Obviously, you know, our strategy going back three or four years was that we were a large player in orthopedics. SurgCenter was a very strategic acquisition because it was 90% roughly orthopedics. We solidified a leadership position in what we think is going to be the biggest growth vehicle in ASCs over the coming decade, which is the orthopedics area. Our bone and joint work, including hip and knee replacements in the first quarter, were quite strong in the ASC business. We want to continue to grow in some of those types of services because that's where we're providing a tremendous amount of value to all the stakeholders, government and commercial entities, because we're doing that work, you know, at a fraction of the cost it could get done in a more expensive setting. Yeah. I guess when you think about the volume growth for the industry, I guess maybe you can answer both on the hospital side and the surgery center side. One of the things we're trying to figure out is, yeah, we're back above 2019 levels, but we're not necessarily back above what you would have thought 2019 should look like if we trended it forward. Like, if you're 107% above in USPI, you would have thought 2%-3% growth. You would have thought you should be 8%-12% above by 2023. We're not even back to that trend line yet. Like, is that the right way to think about it, that there still is? Well, the right way to think about it is, you know, roughly 1 million-1.2 million people died prematurely. I mean, there's no other way to characterize it other than that. Those people would have been, generally speaking, multiple chronic illness type of people that were unfortunately affected by the pandemic in the most negative way, and they probably would have created demand over the next five years. I mean, actuarially, they probably would have, you know, had some period of time in which it was a more smooth mortality line than it ended up being. I think for our industry, you know, the tailwind will come. The aging population is still growing. The population with chronic illness is still growing. I think as we move further away from the pandemic and that population of that sick in the last five years of life repopulates after those premature deaths, I think that's gonna be another tailwind for the provider industry in terms of demand that we see returning to the environment. That's why I'm bullish about a high acuity strategy in the hospitals over the next five years, because those services are gonna be necessary. They were necessary pre-pandemic, they're gonna be even more necessary now. As hospitals have diverged into all things to all people type of hospitals and hospitals that are really focused on taking care of the sickest of the sick and getting their operations and technology right to do that, we think that's gonna be an advantage in the acute care hospital side. Obviously, the USPI side is, as I said, you know, there's a demand tailwind there that will continue to grow, I think. Yeah. No, it sounds like you read our, mortality note. we go into that our, ourselves. I agree with that 100%. I guess when we think about the Q1 EBITDA performance, Q1 was strong. Your guidance doesn't really seem to assume that this persists. It sounds like, you know, that the volume strength you've seen continuing into April so far, you know, labor, you've seen some progress on labor. Why isn't the Q1, you know, beat more, you know, why aren't you assuming that persists at this point? Well, we exceeded our EBITDA guidance in the first quarter by roughly $57 million. We raised our guidance by $50 million. We effectively raised our guidance for the first quarter B. We, you know, USPI was raised $20 million, the hospital we raised $30 million. Listen, we're off to a good start to the year, all businesses, all three of the businesses. You know, obviously we're very encouraged, but it's early. You know, we'll continue to watch the trends and, you know, we'll update the guidance appropriately when we get to the end of the second quarter and see where we're at. Okay. I'm 0 for 3 so far this morning, trying to get people to raise guidance at our conference. Sounds like you all will in Q2, so that's good. As far as labor costs, you know, how do you think about that? Like, where are we in the normalization there? You know, it seems like there's clearly improvement off of last year, but it also still feels like we're still in a tight labor environment. Like, how much, how much longer do we have to go before, and what is the new normal? Should we expect higher labor costs for a while? We, we certainly made some progress in the first quarter. You know, just stepping back, you know, our operators have really done a phenomenal job managing our labor through, you know, the past several years. I think it's fair to say our contract labor management has been best in class. You know, we saw, you know, in the fourth quarter as an example, our contract labor costs were about 7.3% of our SWB, and first quarter it was roughly 6%. Certainly progress. As we moved through the fourth quarter, we saw monthly sequential improvement. Listen, I mean, 6%, we're still assuming some moderation as we move through this year. Availability of that type of labor and the bill rates have come down. They're not at the levels where certainly we would want them to be, we're not expecting to return to our contract labor percentages as that we saw before the pandemic, which were roughly 2%-3%. We're not assuming that happens this year, and we don't even know at this point whether that would be the case next year. What we are very encouraged by is there is continued to be some moderation, in the rates, and that will enable us, as those rates continue to moderate, it'll enable us to open up more capacity because the economics will make more sense in terms of staffing certain lower acuity services, and to be able to generate a margin. You know, we made some very conscious decisions last year to manage our capacity, based on the level of the cost of that contract labor, and it just didn't make sense to staff certain services at the levels we otherwise would have preferred to. In terms of, you know, continued moderation this year, and, you know, that obviously assumes there's not another significant spike. We're obviously very pleased to see where the, at least the trend line is heading. Yeah. That's a kind of interesting concept. You guys are saying that, and throughout the pandemic said certain service lines make sense when labor is $80 an hour, they don't make sense when labor is $150 an hour. Like, how much has that thought process impacted your volume growth? Like, were you leaving, you know, 2% of volume on the table, but now the labor costs are coming down, you can recapture some of that? How would you think about labor then? We haven't quantified it, but there's no question about the fact that given the diversity of markets that we operate in from an acute care hospital standpoint, where even our net revenue structure and service line structure can be different, the thought process market by market about how we open up capacity in order to generate a margin that we're comfortable with, given the cost of doing business there, is a very ongoing and very active process for us. You know, again, we've said this before in terms of the diversity of markets we're in on the hospital side have had a very different experience, even with respect to COVID and how the states have opened up differently in some areas versus others. Similarly, contract labor experience is not uniformly the same across the different regions, and the union environment is not the same across the different regions. Our view is that we should continue to manage our capacity and manage to margin, which is what we've done a very good job of so far before fully opening, you know, fully opening the doors, not knowing, not knowing necessarily what would come through those doors from a cost structure standpoint. Believe me, we're testing all the time in various areas, adding back services, examining how we do with them. Is there demand? Is the margin reasonable? Can we scale? Can we recruit physicians to build that service up? Sometimes it works, and sometimes it doesn't. I mean, I would agree with you that in the short term, we're still in a relatively fragile environment from a labor standpoint. The trends are going in the right direction, right? Labor costs are coming down. The market, contract labor, the market's more fluid. The need for all kinds of overtime and premium pay to get people to take extra shifts has moderated, so that additional expense is moderating. There's still a shortage in the end of the day of nurses, and this becomes an execution game of attracting people to your hospitals versus others. I think to Dan's point, that's why I wouldn't forecast next year normalizing from a contract labor standpoint yet, because we don't know that that's gonna be the case. Most important for us is to overcome that cost, if it happens to last for a couple, three years, with high acuity services that have the net revenue intensity to overcome that cost. That's what we're about in the acute care hospital side, and that's why we believe we can continue to generate margins in that business. What kind of wage growth do you need to keep making progress on this? It feels like there's always that trade-off of, well, you could reduce contract labor to zero if you just raise wages, you know, dramatically. Like, what kind of wage growth should we expect? By the way, I mean, you should give your view on that. I actually think that is the problem, which is you could increase wages incredibly. I mean, you could increase them twice the normal rate, and I still don't think there would be enough staff to come in and take full-time. I think that is the issue, which is there's still somewhat of a structural shortage. I think all of the organizations out there, including ours, who continue to work and build relationships and help local nursing schools scale, this is an important initiative to produce more graduates that we can all bring into our environment and train. Yeah. Contract labor will never be entirely eliminated. I mean, there's always gonna be some level for contract labor for providers. We obviously would like to get back to, you know, our normal levels of 2%-3%. Again, making progress, but, you know, we're not saying we're gonna get there this year. I think it's too early to tell about next year as well. At your prepared remarks, Saum, you mentioned about capital deployment. I think, you know, spending money on the USPI acquisitions makes a lot of sense and particularly because of the pro forma multiples you can drive out of that. I guess the thing though that's interesting, you mentioned a commitment to deleveraging, but then you also talked about the share repurchase dynamic. I mean, how are you making that thought process? I know that paying down debt doesn't necessarily move the needle dramatically versus doing share repo, but at the same time, it sends a signal to the marketplace that you really are focused on deleveraging. How do you think about buying back your own stock versus making a little bit more progress on deleveraging? Well, I mean, first of all, our viewpoint currently, and even when we started doing the share repurchases, is that given the market conditions that are out there, the company's undervalued. I mean, it's a pretty simple point of view, right? When you start to look at any kind of comparable on the businesses we own and how advantaged our ASC business is from a margin standpoint, I mean, those margins mean preferential partnerships with the best physicians who are looking for those margins, right? There's nobody else that can deliver that type of result in an ASC, that also affects our M&A agenda, our building agenda, et cetera. We're relatively selective in what we do. We see a lot of things that we turn down, if we don't think they're of the quality that we would like to acquire and build into the USPI portfolio. We also have good checks and balances with some of the leading health systems in the country that look at what's strategic in what we're building from a market standpoint, and even then, we have a good pipeline. Again, our capital deployment there is clear. Deleveraging through earnings growth is obviously really important from that standpoint. USPI has a lot of potential to do that, also the cash that USPI generates can fund its M&A plus some, right? That's another important lever to help with deleveraging. You know, in terms of the share buyback side of it, as I said, company's undervalued. We're in the, you know, we've been in the market, from that standpoint to support the stock. There are just some macroeconomic environment issues that have driven that, in addition to other things. We think we'll be on the right side of that coming out of this if you take a little bit of a longer-term view. Yeah, I guess with the refi that you guys are just launched, you're basically pushing out the entire bond offerings. You're keeping that capacity- Mm-hmm. For cash, basically, I guess, for things like repo and M&A, 'cause that, I think that signals that you're not really looking to use cash to pay down debt, at least in the near term. No, I wouldn't say that entirely, Kevin. We looked at the market and the opportunity there. We thought it made sense to extend maturities out. Now we have no noteworthy debt maturities until 2026, so it provides us with a lot of, you know, flexibility in terms of how we deploy capital. That doesn't mean that, you know, we wouldn't be committed to, you know, retiring debt outright with, you know, available liquidity depending on other investment opportunities. Okay. You know, this shift to volume to the outpatient side, you know, you guys are in a unique position because you're both a hospital company and a surgery center company. We've heard some of the pure hospital companies talk about how the shift to ortho is largely done, that it was 80% inpatient, now it's 80% outpatient. I feel like there's a disconnect in here, like inpatient to outpatient does not necessarily mean inpatient to ASC. Sure. Like, so how do you think about that shift to ASC out of the hospital inpatient? Like, where are we in that progression? Let me be clear about one thing. We're in the ASC business in orthopedics because we see the market expanding over the next decade, not capturing a shift. I mean, if you look at the history of the ASC business, going back a very long way, and the procedures that were done in hospital settings versus the ASC, the moment you put them into a more convenient, easier, high service level environment, those markets expand. I would credit ASCs with being a critical driver for the relatively successful penetration, for example, of screening colonoscopies in this country in terms of that growth, for example. We're in this strategically because the market, we see the market expanding in a lower cost, higher service level environment. Whether 80% is moved from inpatient stay of one or two days to outpatient, hospital-based outpatient, the ASC environment will, we think, continue to grow, okay? As you get better at doing that in the ASC environment, you can have patients even with comorbidities and other things in that environment from an orthopedic standpoint, for example, that you take on. There may be some migration of HOPD to ASC, right? Over time that continues, and we think we're well-positioned to capture that. I think the biggest area over time will be new people that might not have considered what they were doing, finding an easy, convenient way to avoid long therapy and pain and other things, and say, "Let's just go get this done in an ASC." Like that, I'm in and out, and it's a great service level, and the market will expand. Both commercial and Medicare, I think that's another really important point here, which is the market is pretty broad from that standpoint, especially as the population ages. The one last question I guess that I'm gonna ask all the companies is, you know, looks like we're heading into a recession. You know, how do you think about the growth of your business, I guess, both the hospital business and the ASC business during a recession? There's puts and takes around demand, around costs, how do you think you guys will be growing? Well, I guess I would say probably the most important thing about a recessionary environment that could emerge is that the benefit of the coverage options from the ACA probably represent the most important protection that we have not seen in prior recessions. You know, the rest of it comes down to focus on execution. You know, high acuity demand tends to be more inelastic than elastic, right? People are sick. You know, from our standpoint, discipline about how we deploy capital in that environment. Further discipline. Actually, I'm gonna try to squeak one last one in. Redeterminations, how are you guys thinking about that? Is that gonna be a net positive for the business or? Watching it very closely. We have not assumed at this point any significant upside from it or nor downside. Our Conifer team, we have dedicated resources watching this very, very closely. It's early, obviously. Some of the states have just started the redetermination process. We're watching. We're tracking it daily in terms of statistics. We've broadened our communication channels, upfront registration, materials, our websites links to various enrollment options. Conifer's always done a really good job with eligibility enrollment, whether that's finding a patient who's eligible for Medicaid or maybe some local, or county type of funding. So we feel really good about, you know, ability to, you know, get a patient to the right coverage options if that occurs. We're tracking it very closely and, you know, we'll see how it plays out and, you know, see what it means down the road for us. We feel good about our ability to stay on top of that and make sure we provide or at least find coverage options for patients if they roll off of Medicaid in that particular state. All right. Great. I think that's all we have time for. Thank you very much. Thank you.