All right, good afternoon, everyone. Thanks for joining. We're gonna get started with our last company session of the day. We've got UHS joining us and Steve Filton, CFO. Thank you for joining.
My pleasure.
I wanted to start with the current state of the acute care market to begin. There's a lot of questions on utilization. Maybe just give us your latest views on what you're seeing broadly from a macro utilization perspective in the acute care setting.
Yeah. So look, I think, you know, and I've made this comment. I would say during the last month, you know, there, there's been a... I think, you know, some volatility in particularly acute care volumes. You know, a lot of the companies, I think, talked about March being a softer month. We generally attributed that softness to the calendar dynamics. But, you know, as I sit here in mid-June and take a look at both of our business segments, I think, you know, they've generally performed well, and they've generally performed, I think, slightly above our expectations. I think acute care volumes have been particularly strong, and I know investors are very focused on the idea of, you know, how sustainable is this sort of elevated level of volume growth.
And I don't know that anybody has a precise answer to that question, but it certainly appears as if, you know, whatever March softness the provider community sort of talked about was really calendar related. I think volumes have remained pretty strong in Q2. Now, again, how sustainable that is, I think still is an open question. But, you know, again, I think the two factors that really contributed to our outperformance in Q1, which were acute care volumes and behavioral pricing, have both generally continued into the second quarter.
Okay. And one way I frame this is we've certainly had really strong growth levels, you know, certainly in the first half of last year that were unsustainable. They've come down. But from a procedure volume, just level of, you know, patients flowing through the system, that has not been an unsustainable. That's my characterization. I'm curious if you think from a level of patient demand perspective, we've been at levels that are unsustainable?
No, I think that the crux of your question, and because a number of people have sort of framed it this way, is that if you look at what pre-pandemic patient levels were like in acute care, and you assume that the pandemic never happened, and you just index those levels forward for normal annual growth rates, that here in 2024 , we're still short of what those levels would otherwise be. I think that's not an unreasonable approach to this. It does make an assumption, however, that everything else has remained constant, that utilization patterns didn't change, that the accelerated mortality rates resulting from the pandemic didn't have an impact. Again, I will, I'll be honest, Jamie, I'm not smart enough to tell you that I'm ... You know, I know that that's true or not true.
So I think we've probably been more cautious and more conservative than others in saying: Look, we do expect acute care volumes to moderate, but have been candid about saying that they haven't yet. You know, we're not rooting for them to moderate, but wouldn't be surprised if at some point they moderate. This idea of some of the strength in those acute care volumes being this bolus of deferred and postponed care during the pandemic that's finally being exhausted.
I guess if you asked me two years ago, and we were expecting, I think a lot of people were expecting normalization and, you know, some deferred care, some combination of both. And that would present itself in electives and in surgical volumes, and those have been strong, but it's actually medical admissions, so nonsurgical volume that's been really strong. What does that tell you, or, you know, should tell us about sort of the state of utilization and what's going on?
Yeah, you know, it's a great point, and I think, you know, from our perspective, it's the elevated utilization, at least from our perspective, and I think consistent with a lot of the payer and other provider commentary, has been in that Medicare population. And that's the population that I think tends to have more medical admissions, more age-related, you know, illnesses and diagnoses than the younger population, who tends to be more procedure oriented. So I think that's sort of it's consistent with this idea that it's the Medicare population, at least to date, that has been driving this elevated utilization.
And I guess a longer-term question on this: How are you planning strategically in terms. As has the environment at all changed your, you know, maybe its capital allocation decisions or how you, you know, design facilities to, you know, more ORs, more cath labs, more, you know, the things needed to accommodate, you know, a potentially sustainable, you know, higher utilization environment?
Yeah, I mean, I think if you think about it, you know, whether acute care admissions or adjusted admissions grow at sort of a more historical 3%-3.5% level, or a more elevated level of, you know, 5.5%-6%, which we've been sort of growing at, I don't know that that affects our capital deployment decisions as much as... You know, I think what we've talked about is diversifying our capital spend so that we have a greater presence, a more fulsome presence, I would say, along the broader continuum of care in both of our business segments.
Meaning, we know that more and more care is, you know, shifting over the years out of a more traditional inpatient setting to more, you know, ambulatory settings, whether that's ambulatory surgery or freestanding imaging, or even, you know, more access points. We've had a lot of success in our acute care division with freestanding emergency departments. We probably had none of those five years ago. We'll probably finish this year with 30 or so, some odd, you know, FEDs around the country. That's been a real, I think, attractive point of entry to the system with patients. It relieves some of the pressure on our existing hospital ERs. So that's been a, you know, a growth dynamic.
I think it's more that idea, you know, not so much adjusting to the exact level of, you know, admission growth as much to the changing ways and the changing settings in which care is delivered.
Okay. I guess on that point, you know, some of your peers have talked more, you know, specifically about outpatient strategies. Is this a newer, you know, strategic direction for you? I mean, it sounds like over the last five years, there's been some change, at least on the freestanding ED side, but is this a new kind of strategic direction for the company, or you know, how has that piece of it shifted, you know, over the last three years or so?
Yeah. No, I, I don't think it's new. I mean, obviously, you know, I know, I know you've been, you haven't been doing this quite as long as I have, but I know you've been doing it for a while, and, you know, obviously, the shift from in to outpatient has been ongoing for at least a decade, maybe a decade and a half. As an example, I mean, I think we had at least one freestanding ambulatory surgery center in almost every major market in which we operate, sometimes more than one. So it certainly has been a dynamic for a number of years. And again, I think the point, sometimes when people hear me or hear, you know, us collectively as, as in, you know, traditional inpatient providers talking about a shift to outpatient, they sort of think that we're losing that business.
That when it shifts from inpatient to outpatient, we're losing it, and that's not true at all. I mean, our outpatient surgical growth, as an example, has been growing faster than our inpatient for a number of years, reflective of the fact that these procedures are just moving... They're really not even moving what I would describe as location. They're just moving in the way that we're being reimbursed for them. But we're still providing a lot of that outpatient care, and we're very focused on providing it in a way that physicians are gonna find most efficient and comfortable, and patients are gonna find most efficient and comfortable.
And I think we're doing so in a way that, you know, patients having an outpatient procedure today is gonna find the registration process, the recovery process, you know, everything about the hospital experience to be more customer-centric or patient-centric than it was ten years ago. You know, so we're accomplishing that, and that doesn't always, by any means, need to be accomplished with a freestanding center. You know, I think a lot of the motivation behind doing freestanding centers is to do that in partnership with a physician group, et cetera, which again, I think sometimes makes tons of sense. But I think some of the convenience and patient experience sort of dynamics can be accomplished without a freestanding.
Okay, that's helpful. I wanna talk about revenue per adjusted admission. In 2022 , I was expecting this to, you know, decelerate as there was normalization in patient mix, and that hasn't occurred at all. It's continued to be really strong. You know, some of that's been the Medicaid supplemental payments, some of it's been commercial pricing. What are you seeing in terms of just the sustainability of revenue per adjusted admission? And maybe you can touch on the Medicaid piece specifically. You know, one question we get is just are these programs mature enough to assume they'll continue in future years? What's the funding environment gonna look like longer term? Any perspective on that?
Yeah. I mean, my almost four-decade history in the business suggests that once a reimbursement program is established, it's difficult, whether it's, you know, at the federal level with Medicare, at the state level with Medicaid, to dramatically reduce or eliminate programs like that because the providers become, you know, really dependent on those. And I think that's really true even more so with these supplemental Medicaid programs, because those programs are designed to help the biggest Medicaid providers or the providers with the biggest Medicaid utilization. And very often, these are the safety net hospitals that come to literally rely on those programs for their financial survival. And so I think, you know, it's unlikely that the states would have a motivation to do away with them.
You know, CMS came out with sort of a recent pronouncement about these programs, and in no way did they suggest that there was a cap on growth. They talked about the program and, you know, all in Medicaid utilization, Medicaid reimbursement shouldn't exceed commercial reimbursement. I think that's a pretty tall order and leaves a lot of headroom for the programs to grow and certainly to be sustainable. So yeah, I think that, you know, there certainly could be some tweaks in the individual states. You know, program amounts can go up or down a little bit.
But I think broadly, you know, however long you wanna go back, for the last three years, five years, 10 years, the programs have steadily grown, and maybe the rate of growth will slow, but I don't think we're gonna see any significant retrenchment in these programs in the future. Because I think, again, the Medicaid, the biggest Medicaid providers that have come to depend on these programs, literally for their financial survival, and wouldn't be able to survive without them.
Any programs or states you're watching, as you know, potentially adding supplemental Medicaid funding?
Yeah. I mean, so we certainly are aware that there are states that don't have programs, that are looking at implementing the programs, and there are states that have programs that are looking at expanding them. We tend not to discuss those because, first of all, I'm not sure we have the most up-to-date information. But secondly, I think until the programs are submitted, you know, there's a formal program submitted for, to CMS for approval, is really at the point that, you know, we have publicly disclosed these programs. I think for our acute hospitals-...
Sort of doing the mental checklist, I think, you know, virtually all of our major markets have these programs, with the exception of the District of Columbia, which, for purposes of Medicaid, you know, functions as a state or with its own, you know, separate Medicaid program. I think on the behavioral side, there's probably 10 or 15 of our states that don't have programs that could. So, you know, I think there is some additional potential, you know, tailwind impact, but, you know, not as great as what we've seen in the last few years. But I still think there's some room for some, you know, incremental headroom here.
Okay. Just on your commercial partners, obviously, there's a lot of moving pieces in this space. But, I'd love to hear just one, if the contracts being renegotiated today are still getting the, you know, 150 or so basis points of incremental pricing relative to, you know, kind of the longer term trend? Two, if you've seen any, you know, changes in payer behavior around denials or just, you know, activity to manage utilization, given some of the pressures that they've publicly talked about. And also just the inpatient status change that started this year, if there's been any benefit yet or what you're seeing there.
Yeah, so I think, you know what, the crux of your question alludes to the fact that what we have said is that, you know, beginning probably the middle of 2022 , as inflation, you know, became kind of a, you know, kind of a more embedded part of the business, we started, as we were renewing our managed care contracts around that time, to get 125-150 basis points, you know, bigger increases. I think reflective of the fact that we were dealing with higher costs, particularly wage costs, et cetera. And I think that has continued, and we're not seeing a ton of pushback from the payers in terms of contractual pricing.
I think where we're more likely to see pushback is in the other couple of examples that you raised, which is a higher level of denials, a higher level of what we would describe as patient status changes, where we would submit a patient bill as an inpatient, and we will get it back paid as an observation or outpatient. I think we saw a big increase in that level of activity end of 2022, beginning of 2023, as I think overall utilization really kind of stepped up. You know, going back to sort of our, I think, the very part of our initial conversation, I think the payers responded to that because they had become much less aggressive about denials and patient status changes during the pandemic because utilization was already kind of at a depressed level.
But as utilization increased, I think they kind of returned to sort of a, what I'll call their, you know, more normal practices. And I think that's kind of where we are today. We are paying attention or focused or sensitive to the idea that we could see an uptick in denials or patient status changes. I would say that I don't know that we're seeing that yet or now, but, you know, we're very sort of focused on responding to that if we do.
Just specifically on the Two-Midnight Rule and how that affects patient status, have you seen any change in your business year to date as a-
Yeah. So we've generally answered that question in the negative, saying no, and I know that's a little different than some of the commentary of our peer providers and, quite frankly, some of the payers as well. But as we look at the metrics that I was sort of, you know, alluding to earlier, you know, the rate of denials or the rate of patient status or observation status changes, we're not really seeing a measurable impact. So that, you know, objectively, I don't think we see evidence of that. Subjectively, when we ask our own employees who this is what they deal with day-to-day is, you know, denials and denials appeals, and we use outside firms to help us do that as well.
They kind of give us that same feedback subjectively, that they're not really seeing, you know, measurable behavior changes on the part of payers as a result of the two-midnight rule change. So we would say no. I mean, obviously, we think the change can only be helpful to us, and I think in the long run, we think, you know, it will be most helpful as we go through appeals and we go through, in some cases, litigation or arbitration. Using that argument, I think, will be helpful to us, but I would say to date, we haven't seen a big change.
Okay, that's helpful. Let's go to the behavioral side for a minute. You talked recently about the demand backdrop and, you know, that's been some of the basis for your expectation of improving volumes here. It's been a little bit slower, I think, recently than your longer term expectations. I just... What, what's your latest reflection on what's been holding back that business and your level of confidence in getting to, I think is, you know, 2%-3% long-term target there?
Yeah. So again, I think you know framed the question you know absolutely appropriately. You know, like we talked about, like in the most recent quarter, our patient day, year over year, same store patient day growth or just the patient day growth was, like, 2%. We were anticipating something closer to 2.5%. So the gap is small, but it's a gap. I think we attribute it to a bunch of different things. I think the impact of Medicaid disenrollments has been higher on the behavioral population for a couple of reasons. Number one, it seems to be more weighted to the child and adolescent population. We clearly see more child and adolescent populations on a relative or proportional basis in behavioral than we do in acute.
Also, as those patients get re-enrolled in a commercial exchange product, to the degree that they do, those products tend to have a higher deductible. You know, so if a product has a $10,000 deductible, a lot of behavioral patient bills won't even reach that limit. So, you know, early in the year, we're seeing that some of these patients who have commercial exchange coverage are still struggling for that coverage to be effective early in the year. We think that will obviously get better as or medical costs. We talked about, I think, in the back half of 2023, a handful of our residential facilities that struggled with a very you know, nuanced, kind of specific regulatory referral issues. Those facilities, I think, have been improving their resolve, but it's been a little slower than we thought.
While I think we've made a ton of progress on the labor front, filling more of our vacancies, you know, we still find that in some markets and some geographies and for some positions, and it may vary by geography. In some geographies, it could be nurses, it could be therapists, it could be non-professionals, our mental health technicians. We still struggle in some markets in filling the positions that we need to accept more patients. I think all those things combined have contributed to what's a slight, but definitely a shortfall in what our expectations for behavioral volume growth would have been or should have been.
I guess on the forward, do you still have confidence in the kinda 2%-3% and that's a sustainable level you can achieve?
Yeah, I mean, I think our again overall view is that the intermediate longer term sustainable level of growth in behavioral is sort of revenue growth, same store revenue growth in that 6%-8%. We've been hitting those numbers for a while, although we've been more reliant on pricing growth than we've been on volume growth. We think that as time goes on, pricing growth will moderate a little bit, but you know volume growth will continue to improve, even if it's only incrementally.
Historically, bed count growth, capacity growth has been a key piece of the growth algorithm for the behavioral business. Not so much in the last few years, in part because of just the labor dynamics. Are we at a point now where because the labor environment has improved and you can, you know, hire more readily, you can start to begin to get back to, you know, I think historically, 400-500 beds per year?
Yeah. No, and I think, you know, frankly, in the number of years pre-pandemic, those numbers were even closer to, like, 600 or 800 bed additions a year. And you're right, during the pandemic, you know, that, you know, in some cases, I think we were down to a 100 , 200 . And, you know, it was just a... It was a very sort of straightforward kinda notion that if we couldn't staff the beds that we had, what was the point of building new beds? But you're right, as we make more and more progress on being able to staff those beds in those markets where we think the demand supports it, I think over the next few years, you'll see us resurrect our bed addition programs to kinda get closer to those historical levels.
You mentioned pricing that's been really strong in this business as well, the last, you know, couple years. You guys sort of made more aggressive comments than you have historically, a couple quarters ago around your approach to some of these contracts and, you know, potentially walking away from a lower quality contract. I guess, where are we in that? And I think you've always framed this as, you know, it's a continuous process, and it's... But what's the environment like in terms of just your ability to continue kind of the trajectory of above normal rate growth?
Yeah, So again, I mean, I think you, you know, you've framed it very appropriately. I think, you know, during the pandemic, where we were clearly, and in this case, when I say we are, I'm gonna say the industry more collectively were capacity constrained. We took a hard look at some of our lowest paying payers, which pretended to be managed Medicaid payers, and we went to those payers and said: "Look, if we're turning patients away." It only made sense to us to turn away those who were not paying us what we viewed as a market or competitive rate. And that, you know, we either gave formal notice of contract termination or suggested that we would give notice if, you know, the payers didn't increase their rates.
You know, because I think we had a view that, you know, one way or the other, if we had patients waiting to get into the facility, we would admit the patients who were paying us fairer, you know, kind of more competitive market rates. And I think that strategy has clearly been an effective one. And, you know, behavioral pricing increases, you know, per patient day or per adjusted patient day increases, which I think for years averaged, you know, generally 2%- 3%, during the last several years have averaged closer to 6% or 6.5%, and that's been pretty sustainable.
Now, we predicted that those, you know, percentages would moderate some, partly because as we're getting these increases and we're now into year one, year two, in some cases, these increases were anniversarying the impact, et cetera, so the year-over-year impact is not as great. The other, which I think is probably a longer term dynamic, is as the industry, again, collectively is able to admit more patients, is able to solve the labor problem, I think some of the leverage that we will have over our payers is gonna diminish, and the pendulum will shift a little bit, and we won't have that, you know, again, that same ability to sort of demand those increases.
But to be fair, you know, much like acute care volumes have remained stronger than we originally anticipated they might, behavioral pricing has remained stronger for a longer period of time than we thought it might. And, I think, again, that trend, at a minimum, will continue for acute care.
Okay, that's helpful. Let's go to the financial side of things. You guys have had some margin pressure, you know, since 2019 . Much of this has been in the acute segment. Behavioral has been a lot more stable. So on the acute care side, I mean, I guess just where are we in some of the labor pressure dynamic? It feels like that's been more manageable, but maybe still elevated. And then the physician subsidy expense, it sounds like that was in line with sort of what you were expecting in the first quarter. But you know, it's not clear to me that that's entirely stable. There's still a lot of, you know, things that are impacting that market. So just where are we on the cost side for those two pieces?
Yeah. So I think on the physician expense side, we do largely believe that that dynamic, which has been very volatile, you know, I'm gonna say for at least us, back half of 2022 into, you know, much of 2023, has really stabilized, and I think the issue there is that... this business of physician, well, the people we call hospital-based physicians, mostly emergency room doctors and anesthesiologists. These are people who don't have a private practice of patients, but only see patients in the hospital setting, that the profitability of those businesses diminished pretty significantly in the last several years.
I would say mostly as a result of the No Surprises Act, which limited the amount that those doctors could bill for out-of-network patients, but also just broad pressure from the payers who've had some pretty public disputes with some of the larger pro-hospital-based providers about the rates that they were billing, et cetera, so we just saw those businesses largely become less profitable, regardless of whether they were being run by some of the sort of bigger, you know, name companies or by kind of a smaller regional group, or even if they were being run by the hospitals themselves employing the doctors.
And so as those business economics were sort of reset, and either we were paying greater subsidies to our incumbent providers or greater subsidies to a new provider, or we were bringing the doctors in and employing them ourselves, one way or the other, those businesses were less profitable, and that was reflected in a sort of higher cost. You know, the way I think we framed it is that physician subsidy expense was, like, 6% of acute care revenue a few years ago, and it's now 7.5%. I think that 7.5% is pretty stable, and I don't feel like we feel like that's increasing some, but that 150 basis point of margin decline is not easily recoverable.
We can probably drive some efficiencies that you know incrementally in that business to reduce our costs. We can try and recover some of that from our payers, but you know that's a tough nut to get over in terms of recovering acute care margins. I think on the wage side, we've made a lot more improvements. I think the overall you know as we've been disclosing the amount of premium pay has diminished by you know more than half since the height of the pandemic. We've gone from $150 million I think the height of you know in the first quarter of 2022 a quarter in premium pay to $65 million-$70 million in the last couple of quarters. I think we've been unable to reduce further from that level because of the strong acute care volumes.
I do think if acute care volumes begin to moderate, one of the offsets to that will be an ability to reduce premium pay further. So, you know, and we're not paying nearly as many incentives, sign-on bonuses, loan forgiveness, all those kinds of things that we were paying at the height of the pandemic, so I think that's been helpful, too. And finally, I think we've made some productivity gains. We've had some headcount reductions in our, you know, in both of our businesses, quite frankly, and I'm gonna say the last two or three quarters, that we have been reluctant, I think, to make at the height of the pandemic when labor was so challenging. So I think all those things are contributing to a better labor/wage environment. You know, and I think that's been helpful to recovering at least some of those acute care margins that had been diminished or deteriorated during the pandemic.
Okay. And on supplies, I mean, this is only about you know, mid-teens percent of your revenue on the acute care side of the business. There seems to be a more firm tone from you know, medical device companies around their pricing strategies. Is any of that showing up or you know, material enough to impact margins? Is it manageable? How would you frame it?
Yeah, I mean, if you look at it, and as I'm sure people do, you know, I think the supply line has probably been the most controlled expense line over the course of the last several years. And I think one of the reasons for that is those supply contracts tend to be more longer term, you know, than wages, et cetera, which is sort of, you know, much more subject to sort of real time adjustments. And I think what the manufacturers are suggesting is that as these contracts, the longer term contracts expire, they would expect bigger increases. And I don't really quarrel with that.
I will say that I think this is an area that, you know, the industry has exercised, you know, its purchasing power, mainly through, you know, a handful of very large group purchasing organizations. So I think that the leverage that these manufacturers have to really extract, you know, I'm gonna say excessive or, you know, really large increases, I think is somewhat limited, but I wouldn't be surprised to see some, you know, pressure in the next couple of years on that line. I don't think it's gonna be a huge drag on earnings or margin, but I wouldn't be surprised if we see slightly higher increases in supply expense than we've been seeing over the last several years because I think we've been contract protected.
Okay. Taking a step back, I mean, you had a 16.5% margin in the acute care segment in 2019. Last year, like 11%. You've talked about being able to get back, you know, some of that margin over time. What's your latest thinking on just the cadence of improving margins and really, I guess, where, you know, mature or, you know, peak margins once you kind of digest some of these headwinds and tailwinds?
Yeah. So I think if you think back and, you know, at a very high level about what caused the deterioration in margins, you know, during the, you know, I'll call them the COVID years, we saw that COVID business crowd out both, I'm gonna say, physically and psychologically, other higher margin, better paying business. So, you know, we had, you know, COVID patients, basically medical patients, that, you know, had a lower margin than some of the elective surgical patients that they were replacing. I think over time, and we talked about this early in the presentation, you know, we've gotten back to kind of more normal surgical elective levels. That covers some of the lost margin. The wage expense, particularly-...
You know, we never really, we didn't have all the, the positions to fill in the acute business during the pandemic, but we had to, you know, we were traveling temporary nurses or overtime with our own employees, et cetera. I think that's gotten a lot better, and that's been a big, you know, improvement there. So, you know, again, I think that, you know, a lot of what has caused the margin deterioration, and the last thing I'll comment on is, I think, a kind of a geographic disparity. I think a couple of our peers, you know, 10 and HCA, have recovered from their pandemic, you know, losses and margin contraction faster than we have. I think a lot of that is geographically determined.
They've talked about, and we've talked about places and states like Texas and Florida recovering from the pandemic, you know, more strongly and economically strongly than some other, you know, states. The challenge for us is that those companies have a bigger proportional footprint of the places that we tend to have a bigger proportional footprint, Nevada especially, but California, D.C., have been somewhat slower to recover. But I think what we've seen in the last several quarters is Nevada especially recovering, really gaining some traction, and that tends to have a much bigger impact on our business. So, yeah, I think, you know, our margin recovery and acute care certainly has accelerated, you know, in the last year or so, and I think, you know, is likely to continue.
There's not a lot that, you know, should prevent that other than things we've already talked about, you know, the difficulty in recovering some of that physician expense, et cetera.
I guess very specifically, is there, you know, it's lower than the 65% that you were at historically. There's sort of some structural costs and headwinds. But do you have a view on what the right kind of target is over, you know, the next two to three years that you can get back to in acute?
Yeah. So again, what I would say is, I think we feel like we can get pretty close to pre-pandemic margins in the acute division, maybe not get all the way back. And conversely or alternatively, I think we get back on the behavioral side, not just the pre-pandemic margins, but something slightly above that. Just because I don't think the behavioral division faces some of the same sort of structural challenges in terms of the physician expense, in terms of some of that impact of inpatient to outpatient shift that the acute business does.
Okay. We got about a minute left on, but one short-term and one long-term question. So the short-term one which is very typical. You guys rarely, you know, irrespective of what's going on. I guess, how are you feeling about the momentum in the business broadly? You've already signaled you're tracking towards kind of the higher end of the range. If trends were to continue, I guess, you know, have trends continued, and how should we think about the guidance that you have out there at this point?
Yeah, as I said earlier, you know, again, I think the couple of metrics that really were primarily in Q1, acute care volumes, behavioral pricing, have really continued into Q2. So, you know, unless something happens, you know, in the next few weeks, I think, you know, that we had an expectation, and I think, you know, that guidance would likely be raised at the end of the second quarter, and I still think that's the case.
Okay. And, a little bit longer term, just free cash flow priorities. Historically, you've been very aggressive at share repurchases. I think you've repurchased, like, 30% in the last five years of your share count. Is that, you know, a key use of cash? How should we think about that?
Yeah, I mean, you know, we said going into this year that our intent was to devote, you know, most of our free cash flow to share repurchase. I think we became a little bit more cautious about that in Q2 as a result of this verdict we had in a malpractice case in Illinois. I think we paused a little bit as we try and sort of figure out exactly what our cash needs are gonna be there, even just in the short term. But I think more broadly and over time, you know, it could change, and we could find a really compelling acquisition. But I think, you know, the likelihood is that over, I'm gonna say the intermediate term, we still devote, you know, the greatest portion of our free cash flow to share repurchase. We still think that's a pretty compelling investment for us.
Perfect. Well, I think with that, we can leave it there. Thank you, Steve.
Thank you. Appreciate it.