Good morning and welcome to the Earnings Call of the Fourth Quarter of 2023 of Rede D'Or. We have today Paulo Moll, the President; Otávio Lazcano, the VP of IR Financial Statements; and the CEO of Health and Dental SulAmérica. We will have the event lasting 1 hour, and the recording will be available at the IR website of the company after the first presentation. We're going to continue with the Q&A. Before continuing, we would like to clarify that any statements that are placed in this earnings call regarding the business perspectives of Rede D'Or projections, operational goals, and financial goals are based on beliefs and premises of the board of directors, based on information that is currently available. Forward-looking statements are not a guarantee of performance. They involve risk and uncertainties. They're referred to future events and circumstances that may or may not occur.
Investors should understand the macroeconomic conditions, industry conditions, and other operational factors that might affect the future performance of the company and might lead to results that are materially different from those of the forward-looking statements. I'll give the floor to Mr. Paulo Moll, and he will start the earnings call. Mr. Paulo Moll, the floor is yours.
Thank you. Good morning. Let's start with the highlights, operational highlights of the fourth quarter of 2023. Let's start with the net revenues. BRL 12.7 billion gross revenues in the fourth quarter of 2023. In the year of 2023 closing, we get to BRL 50 billion, EBITDA consolidated, BRL 1.5 billion fourth quarter of 2023, and BRL 6.4 billion in the year of 2023. And remember that if we consider the financial results of the assets, insurers' restricted assets, we would have an adjusted EBITDA of BRL 7.4 billion.
Net income, BRL 668 million in the fourth quarter of 2023, getting to BRL 2.2 billion in 2023. Adjusted net income, with the exclusion of the amortization of the portfolios of SulAmérica because of the M&A, we would get BRL 721 million in the fourth quarter of 2023. Rede D'Or standalone, we have BRL 7 billion in the fourth quarter of 2023. Growth in regards to the fourth quarter of 2022, 8.5, 7.4, 4.4 percentage points. And we have the growth that is pulled by the growth in ticket, which is 8.5% looking at the fourth quarter against the third quarter, 8.4 if you consider the full year comparison 2023-2022. Occupancy, 74%. They very much align with the seasonality, with an occupancy that is very strong, along with our best years, getting to 79, 79.5%.
Good growth in surgeries, and I'd like to highlight that we've done several movements all throughout the year where we had forgone a few contracts because these contracts we had a bit more difficulty in the receivables, or they might be a bit more difficult in the future. We focused on profitability, and this is translated in our numbers. Nonetheless, we are growing in the number of surgeries 5% in the fourth quarter. 120,000 surgeries in the closed year of 2023, a growth of 6.2% year-over-year, 498,000 surgeries. Materials and medications. We are seeking the number of 2019. We are close to that. We delivered 19.6% in this fourth quarter, with a drop of 1.2% in regards to the fourth quarter of 2022.
If we adjust the oncology weight in our revenue composition, we are much aligned to what we did in 2019, and we continue to see opportunities to dilute this expenditure line all throughout 2024. Talking a bit about Rede D'Or standalone, we got to BRL 1.4 billion in the fourth quarter of 2023, growth of 17.2% year-on-year. We would like to highlight the result of 2023 of BRL 6.3 billion, with a growth of almost 20% year-on-year. Here, I would like to highlight that we had a lot of value creation, specifically if you consider the difficult year in the healthcare sector and the many challenges that we are facing, as we have commented in the adjustments from several contracts.
And it shows the capacity of our team in executing the plan, and we're getting very close to our highest level of a w e got to 86.4% mark in the loss ratio. We have a great and an important recomposition of the reserves of the company. This is a movement that we understand is necessary and impacts the consolidated loss ratio. Looking at the beginning of 2024, we are seeing, once again, an improvement, sequential improvement, in the way that we have it quarter-over-quarter. This is due to the several initiatives of the company: renegotiations, control of claims, fraud, fighting frauds, and, great work done in administrative expenses reductions.
At SulAmérica, we've brought over 7% of administrative cost, improvements in regards to the premium to below 5% of our deliveries in 2023, from 7%-5 %. Adjusted EBITDA SulAmérica. That, adjustment, therefore, the financial revenue of the, assets, we did BRL 300 million in the fourth quarter of 2023, closed year in 2023, BRL 993 million. Also, qualitatively, we've had progressive improvements in the claims. We had the 80% in the selling of SulAmérica with co-participation products. This is significant in regards to the records.
You can comment it, but also in the retail. We've done products with a reimbursement that is modular, more restrictive, exercising a greater control of the consolidated loss ratio. Anyway, let's talk about the expansion of Rede D'Or. We're going to have a great year in April. We're going to start the operation. We are doing the conditioning, and we have the Hospital Memorial Star in Recife in the middle of the year. We have the teams being trained. We have the new Vila Nova Star here in São Paulo, and we have Aliança in Salvador.
In the third quarter, the beginning of the operations of Macaé D'Or, and towards the end of the third quarter, fourth quarter, we have the new Brasília D'Or, very advanced in the works. Hospital São Luiz at Alphaville, and São Luiz at the city of Guarulhos. Very important and expressive year. We are very excited with the deliveries on these projects, either by the growth of the hospital structure that we understand that we have a great opportunity and a repressed demand and a capacity to earn market share, and also the possibilities of servicing other areas that are the unmet patient needs. I'll give the floor to Otávio so we can continue with the presentation. Before that, I'd like to highlight the consolidated number, very important, in 2023 at Rede D'Or. We generated in the company.
It consolidated, in 2023, BRL 5.5 billion after the payment of income tax and social contribution tax. That was enough to fully finance the investment cycle of the company. We have a CapEx that is BRL 2.9 billion. This is enough to pay our financial line expenses, net expenses, of BRL 1.88 billion. This operational generation financed the entirety of the net expenses of the company, and we still have a cash working capital of BRL 600 million. In the last line, after the payment of the payment over our own interest on capital, we have BRL 245 million before the financial capture. And it shows the enormous capacity for the execution of our team here at Rede D'Or in a sector that had a challenging year, the operators, with the claims still very high.
We're continuing with the contracts that are with a volume, I wouldn't say representative, but some of the cases, still significant. So, the challenge of growing the operations, seeking more profitability, and having this cash generation level shows, once again, our capacity of the team of seizing opportunities. I would like to congratulate everyone for 2023, the year of 2023. Otávio, continue, please.
Thank you, Paulo. Good morning. Let's start reminding you. All the numbers, all the analysis here, they're following in accordance with IFRS 4, so we can understand the we can benefit the reader and the user so they can under so you can understand better the financial books of the company. The IFRS 17 of the company, the impacts are all described on number two in our financial statements. I'm at page 5, starting with the graph on your left.
The company reported in the third quarter of 2023 an average occupancy rate of 76.4%, absolutely aligned with the record of the company for the fourth quarter of the year, average occupancy 79.5% on average. Then we have 673,000 patients a day. This is aligned with the records of the company for the fourth quarter of any year. On the right, you can see 120,000 surgeries for the fourth quarter of 2023. This is an increment of 4.9% if you compare it to fourth quarter of 2022. One year, 490,000 over that in surgeries, a growth of 6.2% in the surgical volumes. So, on the left, on page six, the company reported at the end of 2023 9,096 operational beds, actually. On your right, you have the reported of the total beds at the end of the FY, 11,737 beds.
Here, we have Memorial Star with 650 beds and approximately 100 beds that are from smaller projects. All throughout 2024, the company will have the launch of enterprises, investments, Vila Nova Star. We'll continue with the 140 beds, Aliança Star also, 146 beds, Macaé, 100, well, New Barra D'Or as well, over 200 beds , Guarulhos, many beds, and Alphaville, 212 beds. All the number of beds fully working after the usual ramp-up of the enterprises of the company. Page 7. Company reported in the fourth quarter of 2023 the total, gross revenue, BRL 7 billion and BRL 22 million. Growth of 8.7% in the comparison with fourth quarter 2022. Results of the growth of the patient days, 0.2%, and an average increase of the ticket of 8.5%.
At the center of the page, the company reports the average growth, the total gross revenue, BRL 28.4 billion, growth of 10.3%, an increase in the patient day volume, and an increase in the average ticket of 8.4%. Page eight. The company reported in the fourth quarter of 2023 a gross revenue that stems from oncology, BRL 615.715 million, a growth of 15.8% in the comparison with the fourth quarter 2022. This is due to the number of infusions increased and the average ticket on oncology, on the average ticket, sorry, of 11%. The gross revenue, once again, from oncology at the center of the page in 2023, BRL 2,736 million, a growth of 17.3% in regards to the previous FY, an increase in the infusions, and an increase in the average ticket of 15.3%. Page nine. On the left.
Company reported cost with hospital services in the fourth quarter of 2023, BRL 4.8 billion. This is a growth of 6.1%, a growth that is lower than the growth in the gross revenue in the same window of time that allowed for the growth of the, growth margin that allowed for the growth of BRL 1.4 billion in the fourth quarter of 2023. In the same way, at the center of the page, the company reported the total cost by hospital services, BRL 19 billion , a growth of 18.8% if you compare it to the FY 2022, a growth that is lower than the, growth of the, gross revenue of 10.3% that allowed for a growth of 15% of the gross margin in 2023 for BRL 5.9 billion, a growth of one percentage point in the gross margin to 23%.
On your right, we have BRL 261 million of general and administrative expenses in the fourth quarter of 2023, value that is aligned with what was reported in the previous three quarters. Taking into consideration here the one-off, the reversion of the provision for contingencies of the third quarter. This number, when you have it against the revenue of the company, is stable all throughout the year. In the year, we have BRL 735 million of general and administrative expenses when adjusted to the non-recurring events, BRL 1.1 billion, a growth of 11% facing 2022, aligned with the gross revenue in the same period. Page ten. Once again, to your left.
The company reported EBITDA the accounting in of BRL 1.4 billion in the fourth quarter, growth of 17.2% facing the fourth quarter of 2022, an accounting margin you can see here on the slide. In the center of the page, the accounting EBITDA in 2023, BRL 6.346 billion, a growth of 19.7% in regards to the FY 2022, a margin EBITDA of 25%. On your right, the company reported the net income and consolidated, of BRL 668 million in the fourth quarter of 2023, respectively. Here, the adjustments are related to the amortization of the SulAmérica portfolios and the costs for the release of synergies once we incorporate SulAmérica. The company reports a net adjusted income of BRL 2.1 billion and BRL 2.3 billion, respectively. On page eleven. On your left.
SulAmérica reports the net revenue in the fourth quarter of 2023, BRL 6.9 billion, almost 7, a growth of 8.8% when you compare it to the fourth quarter of FY 2022. In the year, 26, almost BRL 27 billion , in 2023, a growth of 14.6%. Top right, the consolidated loss ratio drop of four percentage points between the fourth quarter of 2023 and the fourth quarter of 2022, seven percentage points, actually, in the year, a drop of 2.1% from 86.4% of consolidated loss ratio 2023 facing 88.5% in 2022. Still down, a stability in the number of health and dental beneficiaries. Page 12. The company reports total assets of over BRL 90 billion, including real estate, the applications of cash and cash equivalents, BRL 33 billion. If we exclude the technical reserves, then we have BRL 17 billion.
We have a net debt of BRL 16 billion, BRL 16.8 billion, and the net debt over the EBITDA 2.3x. The net debt, including the insurance provisions, BRL 11.5 billion, which results in the net debt over EBITDA still lower of 1.8 billion, 1.8x. The indebtedness of 5 years in the third party, well, the average cost of debt, we are working CDI +1. We don't have revenues in euros or dollars. On the right, the debt amortization schedule until the indebtedness. Page 13. Last page. We are starting on the left with the monetary cash flow reconciliation, starting with an EBITDA reported of BRL 6.359 billion. Moving to the right, we have the working capital positive of BRL 1 billion. We have thereafter, on the right, the other balance sheets item of BRL 474 million, negative.
That adjustment is necessary, and it's referring to the PIS and COFINS over the financial revenue and the ISS over the insurance of Rio de Janeiro, sorry, and ICMS saved BRL 99.4 million that impacted positively the EBITDA of the company. Then, the adjustment for the reconciliation, correct reconciliation. On the right, we have BRL 741 million of leasing expenses. Thereafter, BRL 602 million of taxes paid, resulting in an effective adequate. Thereafter, on the right, the investments of BRL 2.9 billion, including BRL 767 million in greenfield projects, BRL 588 million in big brownfields, BRL 411 million in brownfields, BRL 314 million investments in maintenance, BRL 355 million in IT Rede D'Or investments, other BRL 65 million of investment in IT SulAmérica, capitalized interest rates of 200 over 200 million reais, the acquisition of real estate, BRL 42 million, among other less relevant items.
On the right, we have the consumption, the use of cash, resulting in the financial activities of the company, BRL 1.3 billion. The result in the balance between capture amortization of debt revenues, net revenues of the company, while the cash, you can see BRL 1.2 billion. On the right, we show some statistical data, the average days of receivables, inventory, and payables outstanding exclusively of the hospital sector. Therefore, I finish the presentation, and we're open for the Q&A session. Thanks.
We will start the Q&A session. Should you want to ask a question, please click and raise your hand. If your question was already answered, you may leave the line. We request that the analysts to limit themselves only to two questions so that more people can take part. First question. Samuel Alves, BTG Pactual. The floor is yours.
Good morning, Paulo, Otávio. Good morning, everyone. Two questions on our side. First, I wanted to know more about the improvement of the consolidated loss ratio of SulAmérica. This is an improvement, quarter-on-quarter, more shy than the seasonality could suggest in the beginning. But just so we can understand, or maybe get something else, some color, if it was a growing frequency above the seasonality on the record of the fourth quarter, if you have any information on how that evolved all throughout the fourth quarter, that would help us understand.
That's the first point. Second, regarding the drop in depreciation and the financial results quarter-on-quarter, based on our analysis, this seems to have happened because of a reevaluation of the right of use. Was there a one-off gain in the fourth quarter in regards to this accounting reevaluation of the rights of use? And can you quantify that? That's it.
Thanks. So, let me get the second question. We had a change in practice in the accounting of IFRS 16, no impact in the result, impact only in the balance. And we had just a provision of CPC of assets, and we decelerated the depreciation of some assets, and that has an impact in the financial results of the company. Hi, Samuel. This is Raquel. Thank you for the question. To answer, I will allow myself to do a recap of the year. We can see a gradual improvement, very consistent, responsible of claims. You know the sector, and you know that the actions here have a maturation that has, you know, 12-15 months from the inception. And every month of 2023, new actions were taken, including 2024, giving you this spoiler.
I can list, as an example, several of these actions, such as the renegotiation of the oncology and medications that we've mentioned in the conversation, renegotiation of the policies of materials, medications, the bid in regards to the renegotiation of home care and transition, very incisive, representative of the reimbursement in the problem. There is an increase in the provision that reflects the more conservative management of SulAmérica of the claims. Each of these actions, they happen, and that has a reduction of 1 point, over 1 point over 2023, and a reduction of almost 8 points in regards to the fourth quarter of 2022. When we look year-on-year, the picture is very positive, reduction of 2.3 points. Since the administration of the company, we have the satisfaction of a result that is showing very to be very consistent and continuously improving. Thank you.
Thank you, Otávio and Raquel. Good morning. Next question. Ricardo Boiati, Banco Safra. The floor is yours.
Good morning, everyone. Paulo, Otávio, and Raquel. My first question is in regards to the evolution of the ticket in the hospital services. There is an increase of 8.5% year-on-year. I wanted you to explore the main components. I think that there is a tip that the complexity should have increased with an increase of 5% in the volume of surgeries. But if you can elaborate in that issue of complexity, the readjustment of the tables and also mix of contracts that you observed all throughout the quarter would be interesting. Second question. Given that we closed the first quarter, can you comment, if possible, on how you saw the operations in the first quarter of 2024, specifically if dengue fever might have had a perceptible impact, whether it's claims or any other points? Thank you.
Thank you for the questions, Boiati. This is Paulo. About the ticket. The color that we can give you is that our readjustments, they are along the IPCA plus two. Since we had the lower inflation in the year, you can consider that to get to that 8.5% in the growth of the ticket, what we have here is the gains and mix, mainly complexity, and maybe a contract of the lower discontinued ticket that doesn't have a big impact. They were smaller contracts. But there are some contributions, of course. About the at the beginning of 2024.
Our limitation, of course, to talk about the first quarter. We have that. But as Raquel has said, SulAmérica, we continue to see sequential improvements. This is what we have told you. And we continue to see this in the first months of 2024. And in the case of Rede D'Or, specifically from the middle of January, we can also see the occupancy of the hospital is very strong. The case of dengue fever, of course, it has a higher impact in emergency, not so much, you know, the admittance to the ICU. But I don't think that there is a financial impact here in the consolidated of the company that is significant.
There is a flow, of course, of services that is more heavy-duty in our emergencies, with our care of adjusting our teams so we can continue to have a good experience of the clients that seek our emergency rooms. Along with dengue, we have, long more, research for COVID, which has impacted the, workflow in our emergency rooms that will be normalized over the next few months. Thank you.
Next question. Joseph Giordano from J.P. Morgan. Hi. Good morning, everyone.
Good morning, Paulo, Otávio, Raquel. Thank you for taking my question. My question is in two fronts. The first, looking at that issue of the improvement in the public healthcare system in the country, I wanted to hear from you. Do you see any movement for the change in regulatory changes in the individual plans? That would be the first, question. The second point, well, thinking about the trajectory for normality. I know that it's very difficult to do the predictability exercise with the news mentioning that this is another increase of 25% in the prices. So I really wanted to understand, how do you see the normalization of the ROE in SulAmérica? And the financial side.
For Paulo. When we look at the clients, a great deal of that comes from the accumulation of receivables that is higher. We imagine that maybe the worst was past us, and we would be at a more stable regime. There are the adjustments of receivables over the last quarter. But I wanted to hear from you. How are these renegotiations for the monetization of receivables? We have the tickets. I wanted to understand how that affects your receivables.
Well, thank you for the questions. Can I get the first one and the third? And then I'm going to get to Raquel to speak of the second. Well, first, in regards to regulatory issues, we've discussed there is the demand, of course, of several operators, the technical review of the individual, portfolio. So that, obviously, will go through the analysis of the agency. It's predicted in law. And we've seen cases of transfer, portfolio that we've applied that it's been applied. This is the theme of highlight in regulatory. In regards to the receivables, we should highlight that there is an increase in the number of days that's concentrated, with a few payments of our great partner that slipped from December to January. We've had an improvement. I wouldn't say complete improvement and normalization, but partial already in January due to this concentration.
But I'd like to highlight that we have basically, you know, the accounts receivable is stable if we compare it to the third quarter, and with a great quality. So we've tried to be sensitive to the demand of operators for some more days, or maybe in the update process. But we have a lot of tranquility in the quality of our receivables. And the movements that we've done were along that direction, qualifying our main partners in relationships, including their concentration, and decreasing the ones that we had the expectation that we had more delays and more difficulties. I'm going to give the floor to Raquel to speak about the second question.
Right, Joseph, thank you for the question. Of course. Last year, there was a readjustment cycle, very big for the recovery of the market itself, as you've seen, all the operators. This continues to be the adjustments of the claims. Even though there is an improvement, consistent improvement of the results, there's still a cycle of another 12 or 16 months. So speaking of the readjustment, the pool that we should get over the next few weeks for the operators, basically here, we see a number that is significantly less than the year of 2023. But a readjustment, still two digits, very important for those of us that for those that are receiving. Speaking of prognostics. Once again, everything that we planned has a maturation time.
Last year, we invested very much in claims, but we invested in products. So to have the we have better products, and we're going to get better fruits from our labor with these new products in the future. We launched 23 products with the modular reimbursement. What is the base? So the base of the pyramid for all the operators there? There is a reimbursement, exams, medical honorarium, therapy. For what we launched in a modular reimbursement, specifically for wholesale, there is a reimbursement in emergency. All the rest is within the inner network. The modular reimbursement, there is the reimbursements for emergency, and there is also for honorarium. As you go up the pyramid, of course, you get to the full reimbursement.
That, so that's why we call it a platform of products that is much more intelligent. So these 23 products that were launched all throughout last year have over 100,000 lives implemented, considering February of 2024. Certainly, this will bring a better management of the claims and a better relationship with the beneficiary with the healthcare plan. Co-participation, Paulo also commented at the beginning. We see a growth of co-participation.
He mentioned the percentage, 83%, with the contracts with co-participation. This is not news. We've heard about this for a long time. This is for the small and medium-sized companies. 30% is the selling of the modular, the only product available, and co-participation. So people are choosing co-participation. That generates a more, a better utilization. Also with entrepreneurial insurance, there is a change in the big companies, in the big hiring companies, even those that had co-participation, 10%, 15%, going to 20%, 25%. It's growing to 25%. These are excellent news. Reimbursement. What we started from last year continues. We get, at a certain moment, a participation of the reimbursement in the claims over 14% of representativeness. Now we have one higher digit, 9.7%, 9.8%.
This is due to a very strong work of the entirety of the team, over 140, over 20 communications through the COAF, of suspicious financial activities, biometrics for reimbursement. So you have to have the disbursement invoice for the reimbursement. And that generated an invitation for all for inviting to over 2,500 users to leave. And this shows our strength in management. And mainly, we will have the claims that will be more management that will be more consistent in the future. Well, also, your question. I wanted to reinforce the message at the beginning. Maybe the way that you should follow more efficiently our cash flow is looking at our operational cash flow. Even though there is a small number of increase in the number of days, there is a record year for the company.
There is over BRL 5.5 billion in operational cash after the payment of the income tax, which is enough to pay the investment flow. We are at the peak of the investment flow and to pay the financial net financial expenses of BRL 1.88 billion and still have a cash generation of over $600 billion. That is only negative when we have the payment after the interest over own capital of over BRL 180 billion. This is to highlight that this is a year of strong cash generation, always trying to improve. We are working with our days on receivables. But I think that the company shows a lot of resiliency at a difficult moment, bringing this record cash flow. Thank you.
Next question. Fred Mendes, Bank of America.
Good morning, everyone. Thank you for the call, Paulo, Otávio, Raquel. I have two questions. If we can go back to SulAmérica, and correct me if I'm wrong, we have the understanding that when Rede D'Or did the M&A, there is the smaller the more efficiency in the reimbursement, and that can impact the NPS. And you will release the NPS and having the lives. How about the specification of this a bit below on the claims quarter-on-quarter? So I wanted to understand if this is a little bit more, or is it business as usual, or that's the trend.
That's the first question. And maybe the second one, more so we can plot it, more technical, with the interest over net revenue, 7% of the revenue, and it went to 5.1% this quarter. So I just so we can model if this is more efficient, or it was a one-off, and then it should go to the 5.6%.
Thank you. Hi, Fred. Thank you for the question. Well, from what I understand, you saw last year a strong movement of the operators, SulAmérica, in regards to the regulation of reimbursement that impacted the experience of the company, of the client. Your doubt is, if in the fourth quarter there is an effect of maybe, you know, stopping this management. No, the main effect that you can observe in the fourth quarter is more connected to the reserves with more being more conservative. Now, the point that you talk about the client experience is very important. If I can show the main point that we have in 2024 is how to retain the good clients in-house. Keeping the aquarium full so that in moments of economic growth, they can multiply. We learned on 2023 to treat differences.
There is even the implementation of a board of concierge to give differentiated services for those that we have as differentiated. That's in rollout. There is a premium differentiated that will be available. So NPS is part of the contract of management of 100% of the executive of this company, whether if it's business area or corporate. This is an obsession for us, of course, without any loss to the results. Thank you.
Well, in regards to the second question, we, from time to time, take the credits or PIS and COFINS over the canceled, non-submitted revenues from the paying parties. To model that model that on time, 5.7%, 5.7% in the fourth quarter that dropped to 5.1%, it's within the best income well, the best management of the taxes of the company to keep them under control.
Okay, thank you, Otávio. Thank you, Raquel.
Next question. Vinícius Figueiredo.
Good morning, everyone. Thank you for taking my question. I wanted to explore in detail the results of SulAmérica. I think that with the questions of the colleagues, it was approached. But a thing that I noticed over the last quarters, we had a strong growth in revenue, mainly due to the pass-on of the tickets. But in the fourth specific quarter, when we look at from the third through the fourth quarter, there is a deceleration. So I wanted to understand if there is a more seasonal component that we should take into consideration for the ticket. Can that impact and maybe be a part of the explanation for the claims not having improved, according to the record? And the second point is another follow-up in the questions of well, following up on the question of Samuel.
There is a review of the assets that Otávio has commented. There is the deceleration of the depreciation. And with that, when we look at the depreciation plus the interest over rent, it dropped. So I wanted to understand if this threshold that we see in the third quarter is the threshold for 2024, or will there be a carryover of a one-off effect in the specific quarter, just so we can try and model this better.
Hi, Vinícius. Let me start. Well, first of all, there is a growth of average ticket of all the portfolios last year that was very expressive. Of course. I'm going to give you an example of entrepreneurial. I have an adjustment applied to 2023, talking about company. It's 22%. So this is a historical record when we look at the previous years. You're going to tell me, "Well, Raquel, how do I correlate this adjustment with the growth of ticket that I see in the records?" Well, that involves a seasonality in regards to the big contracts, the small business companies, medium-sized companies that is adjusted in May.
And there is another important point that we want to do a recomposition of the results of the big contracts of the big portfolios that not necessarily are going to focus on the ticket. So if I have 24% of the readjustment and an increase of co-participation plus a contractual extension, certainly I will choose the second, because we will have more consistent growth, like I say, in the future. So the determinant of the response is that there isn't any response in what we have done before.
A point that we haven't mentioned, and it's good that everybody has in mind, is 2023 is a year that is expressive in all the portfolios, specifically all the entrepreneurs' portfolio. So we had the cleanups on the southern region in Joinville. We had cleanups also here. So that impacts, in a certain way, the numbers that you're looking at. But we're planning a more consistent threshold.
Well, Vinícius, the change in practice and the following IFRS 17 adoption is repeated on page 16, 17, on the financial statements, the impact in the. It's BRL 1 billion. In the expenses, yes, there was a smaller expense in the fourth quarter. And from now on, it's going to be in the middle of the road between what was the expenses in the fourth quarter and the previous three quarters.
Well, thank you very much. Thank you, Raquel and Otávio.
Next question. Maurício Cepeda, Morgan Stanley.
Hi, Paulo, Otávio, Raquel. Thank you for the time. Let's go back to the working capital that you were discussing. There is an increase on the accounts receivable, specifically the drop in the contract. But also, I see that the client that the denials that the of the claim has increased in the number of accounts receivable. And there are some receivables with an aging that is older, above 80-180 days. And it seems that there isn't the bad debt provision for all this volume of the older. The first question would be, is there any possibility that will reflect on a structural change of what is the recurring level of claims, denial of the claims, and also the paying party in the worst cases?
The second question, going back to SulAmérica, you mentioned several examples of what you have done in fighting costs, frauds, also some redesigns in regards to modular reimbursement and co-participation. Do you think that somehow you have strategies to make the networks more restricted, even if that involves the partners that will give you more control, which is the claim of the portfolio, than simply responding to a claim that is completely outside of the breadth of the scope that you have?
Cepeda, all throughout the FY 2023, we the company has made a lot of administrative decisions. So we can see in the accounts receivable, you can see the bad debt. We increased the provision in hospitals that were recently acquired, the financial demonstration, 5.4%. That trajectory is reflected on the administration of the company in the market dynamic today, present.
In regards to the coverage of receivables that are overdue, more time on page 62 and 63 of the books, we have the provision of BRL 1 billion over BRL 1 billion. And on the next page, we have receivables that have been due of over BRL 1 billion. So we have a provision of BRL 400 million superior to the volume of the accounts receivable that is over one year. And I would like to remind you that there is always the work of the recovery of the titles. We're always recovering one or two years, sometimes beyond two years, titles that are here overdue, of course, reflected in the aging list of the company. So nothing abnormal here.
Hi, Cepeda. This is Raquel. Yes. In regards to your question, in regards to the products with a more restricted network, notably at the basis of the pyramid, this is part of the strategy for many, many, many years before... Well, you can see the products that were launched in 2018. And, of course, they are being perfected. So we are learning on how to do this. It is fundamental that we have the alignment of incentives amongst the participants on the value chain. So the product is not a problem of the operator, and it starts to be an issue that has to be administered by all the involved parties, including the service provider.
So this is analyzed with the regional and cultural issues. And, of course, the competitors, they change a lot the more that we leave from this obvious axis of Rio and São Paulo. We have more players. Rede D'Or is part of this strategy. In others, not so much. We have others being launched in commercialization. Thank you, Cepeda.
Thank you, Raquel. Thank you, Otávio.
Next question comes from Gustavo Miele, Goldman Sachs.
Good morning, Paulo, Otávio, Raquel. Thank you for the presentation. Now, I wanted to go over two points. First question, trying to reconcile that "stability" quarter-on-quarter that we saw in the operational goals of the company. So, saying that you have an ongoing wrap-up of Campinas that should be something about 20 beds per quarter, I wanted you to correct me if I'm wrong in this point. Maybe here there is a closing of 20 beds quarter-on-quarter, so mature and organic. So I wanted to understand if this understanding is correct.
Is this closing more due to seasonality, or is there any point that you can mention? Also, the second question is more for Raquel. I just wanted to get a quick update of what would be the KPIs of SulAmérica. Do you see the levels of claims and readjustment of prices similar to the corporate portfolio of SulAmérica? And do you see any type of variation that is relevant in the number of lives for this type of product?
Thank you, Miele. As you know, in the fourth quarter, we have, obviously, a smaller volume. The hospitals, to keep the good profitability, they do small, I would say, small adjustments in the size of the operation, in the size of the availability of headcount, and consequently, in the number of operational beds. That happens every year. L ooking at 2023 as a whole, it wasn't a year that we grew the number of beds that we imagined at the beginning of 2023. But due to these decisions of discontinuity of some contracts. So that has nothing to do with the ramp-up of the new hospitals of Campinas. Campinas is above the planning.
We are expanding the beds this week, and we are getting to a larger amount of beds than what we project for the 12 months of operation, remembering that we stopped operating at the end of May of last year. So where we had the impact all throughout 2023 and the reduction in the number of beds was where we had the discontinuity of contracts that were important for these specific hospitals. For example, two of our hospitals in Brasília, or also our hospital in São Luís, Maranhão. This big operator that we discontinued the contracts, and it was representative. The good news is that in 2024, we are restarting, and we have the same number of beds as we had before. The removal of this partner. We have a strong volume this year. From mid-January, we had the demand that is high. Pinpoint the fourth quarter of this adjustment.
The most important in this question is the analysis of this year of 2023. The impact is more of the same sort of Rede. We didn't have the growth that we expected. The ramp-up of the new beds. Well, we had the other brown fields. We have São Vicente. There is a hospital that we started last year with 80 beds, and it delivered all the growth, where 180 beds, and it's full occupancy. I think we got to 90% of occupancy some previous weeks. We're very satisfied with our organic growth and enthused with the beds that we have for all these structures that I just mentioned. I'll give the floor to Raquel.
Thank you. Gustavo, in regards to the National Direct . Well, in terms of readjustment, yes, because we have to remember that this is aligned with the portfolio. We have to remember that this is part of a pool. We have the readjustment. And in the entrepreneurial, it's a part of a contract that has a lot of plans. The National Direct is one of those plans. But, of course, they help with that with that result. What we've seen in terms of KPIs, it's lower frequencies, conversion for the admittance, TMI that is lower, and the reimbursement, modular reimbursement, which is which are the premises of this type of product, also help a lot in this result. These are difficult products for the competition, and we have a privileged position in regards to the competition.
Thank you, Paulo. Thank you, Raquel.
Next question, Leandro Bastos, Citi.
Hi, everyone. I just have one question on our side. I wanted to get the message for the commercial for SulAmérica. You commented that this is for the claims, but on the basis, do you still see a lot of space for the cleanup of the portfolio, or can we imagine that this is the acceleration of growth?
Hi, Leandro. Thank you for the question. Well, SulAmérica has 4,000 commercial employees. Selling is the focus of all the areas of the company. Even though there is the movement in the base of the beneficiaries of the company, considering the cleanup, we have to mention the historical record of selling. Between healthcare and dental, we have 1,700,000 lives sold. This is a historical record in the 129 years of the company. All this appetite and this aggressiveness. Commercial is, for this year, in the fourth quarter, a very important, relevant movement for the corporate and wholesale. We do not think that it's going to be different this year.
Since we don't have any more questions, the Q&A session is adjourned. We would like to give the floor to Mr. Paulo Moll to close the call.
Well, thank you very much for our participation in the call of results.
We will see each other in the fourth quarter call. Have a nice day. Well, the earnings call is closed. Thank you very much for your participation. Have a nice day.