Pediatrix Medical Group Inc (MD) 2023 Q3 法說會逐字稿

Ladies and gentlemen, thank you for standing by. Welcome to the Pediatrix Medical Group, Inc. Third Quarter 2023 Earnings Conference Call. (Operator Instructions) As a reminder, this conference is being recorded.

女士們先生們，謝謝你們的支持。歡迎參加 Pediatrix Medical Group, Inc. 2023 年第三季財報電話會議。 （操作員指示）謹此提醒，本次會議正在錄製中。

I would now like to turn the conference over to your host, Charles Lynch. Please go ahead.

現在我想將會議交給主持人查爾斯·林奇。請繼續。

Thank you, and good morning, everyone. I will quickly read our forward-looking statements, and then we'll get into the call. Certain statements and information during this conference call may deemed to be forward-looking statements within the meaning of the Federal Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on assumptions and assessments made by Pediatrix's management in light of their experience and assessment of historical trends, current conditions, expected future developments and other factors they believe to be appropriate. Any forward-looking statements made during this call are made as of today, and Pediatrix undertakes no duty to update or revise any such statements, whether as a result of new information, future events or otherwise. Important factors that could cause actual results, developments and business decisions to differ materially from forward-looking statements are described in the company's filings with the SEC, including the section entitled Risk Factors.

謝謝大家，大家早安。我將快速閱讀我們的前瞻性聲明，然後我們將進行電話會議。本次電話會議期間的某些陳述和資訊可被視為 1995 年聯邦私人證券訴訟改革法案意義內的前瞻性陳述。這些前瞻性陳述是基於 Pediatrix 管理層根據其經驗做出的假設和評估評估歷史趨勢、當前狀況、預期未來發展以及其他他們認為適當的因素。本次電話會議期間所做的任何前瞻性陳述均截至今日，Pediatrix 不承擔更新或修改任何此類陳述的義務，無論是由於新資訊、未來事件或其他原因。該公司向美國證券交易委員會提交的文件中描述了可能導致實際結果、發展和業務決策與前瞻性陳述存在重大差異的重要因素，包括標題為「風險因素」的部分。

In today's remarks by management, we will be discussing non-GAAP financial metrics. A reconciliation of these non-GAAP financial measures to the most comparable GAAP measures can be found in this morning's earnings press release, our quarterly report on Form 10-Q and our annual report on Form 10-K and on our website at www.pediatrix.com.

在今天管理階層​​的演講中，我們將討論非公認會計準則財務指標。這些非 GAAP 財務指標與最具可比性 GAAP 指標的調整表可在今天上午的收益新聞稿、我們的 10-Q 表格季度報告和 10-K 表格年度報告以及我們的網站 www.pediatrix 中找到。 . com。

With that, I'll turn the call over to our CEO, Dr. Jim Swift.

接下來，我會將電話轉給我們的執行長吉姆·斯威夫特博士。

Thank you, Charlie, and good morning, everyone. Also with me today is Marc Richards, our Chief Financial Officer. Our disappointing results reflected relatively soft patient volumes and persistent practice-level cost inflation. We plan to take meaningful steps to address this shortfall since we firmly believe that our current operating results do not reflect the full earnings potential of this great company. To go a step further, we believe that Pediatrix is a unique organization. We represent both the largest singular service provider for newborns in the U.S. as well as the largest group of maternal fetal medicine clinicians in the women's health sector.

謝謝你，查理，大家早安。今天和我在一起的還有我們的財務長馬克理查茲 (Marc Richards)。我們令人失望的結果反映了相對疲軟的患者數量和持續的實踐水平成本膨脹。我們計劃採取有意義的措施來解決這一不足，因為我們堅信我們目前的經營業績並不能反映這家偉大公司的全部獲利潛力。更進一步，我們相信 Pediatrix 是一個獨特的組織。我們既是美國最大的新生兒單一服務提供者，也是女性健康領域最大的母胎醫學臨床醫生群體。

Our network affiliated practices provides critical services to women, babies and children, often in their time of greatest need. We have been successful in maintaining a predominantly in-network relationship structure, a key differentiator as we have navigated the challenging implementation of the No Surprises Act. And against a rising interest rate environment, our debt structure has allowed for prepayment of floating rate borrowings, and more important, our cash flow profile has enabled us to do just that.

我們的網路附屬機構通常在婦女、嬰兒和兒童最需要的時候為他們提供關鍵服務。我們成功地維持了以網路內為主的關係結構，這是我們在實施《無意外法案》時所面臨的挑戰的關鍵區別因素。在利率上升的環境下，我們的債務結構允許提前償還浮動利率借款，更重要的是，我們的現金流狀況使我們能夠做到這一點。

With all of this in mind, we intend to take significant steps designed to support and bolster our core business to generate a stable gross margin profile as we continue to address cost trends and make any necessary changes to our service line footprint.

考慮到所有這些，我們打算採取重大措施來支持和加強我們的核心業務，以產生穩定的毛利率狀況，同時我們繼續應對成本趨勢並對我們的服務線足跡進行任何必要的改變。

Let me list our areas of focus. First, we intend to make structural changes a priority in our ambulatory practices to enhance the earnings potential of the broader organization. There are wide variances in the financial performance across individual practices within our organization, whether viewed by geography, specialty or subspecialty or any number of other perspectives. We have always taken a proactive and careful approach to portfolio management to ensure that we are dedicating the right resources to the right places to narrow these variances. We will expand these efforts, identify further actions we can take in the near term to improve practice performance where possible and take these steps as quickly as we can.

讓我列出我們的重點領域。首先，我們打算將結構性變革作為門診實踐的優先事項，以提高更廣泛組織的獲利潛力。無論是從地理位置、專業或次專業或從其他角度來看，我們組織內各個實務的財務績效都存在很大差異。我們始終採取積極主動和謹慎的投資組合管理方法，以確保我們將正確的資源投入到正確的地方，以縮小這些差異。我們將擴大這些努力，確定短期內可以採取的進一步行動，以盡可能提高實踐績效，並儘快採取這些措施。

Second, we intend to confront the labor cost challenges that we're facing head-on to mitigate costs while also remaining competitive in the clinician environment. We will continue to work with our affiliated practices to review overall staffing needs in order to ensure optimal models that, first and foremost, support the highest quality of patient care, but also are aligned to the current needs of each practice.

其次，我們打算正面應對我們面臨的勞動成本挑戰，以降低成本，同時在臨床醫生環境中保持競爭力。我們將繼續與我們的附屬診所合作，審查整體人員配置需求，以確保最佳模型首先支援最高品質的患者護理，但也符合每個診所的當前需求。

Third, given our financial strength and liquidity, we will focus our capital allocation priorities to build on our core as we have communicated previously. Given the dislocation that has occurred across the physician service industry over the past several years, we believe that we are favorably positioned as the organization of choice for high-quality practices in need of a national platform in which to collaborate with peer clinicians.

第三，鑑於我們的財務實力和流動性，我們將把資本配置的重點放在我們先前溝通過的核心。鑑於過去幾年整個醫生服務行業發生的混亂，我們相信，我們處於有利的地位，成為需要一個與同行臨床醫生合作的國家平台的高品質實踐的首選組織。

Lastly, as we disclosed this morning, we have made the decision to transition into a new vendor for revenue cycle management services. We did not make this decision lightly given the importance of this function to our practices and to our overall operating performance. However, our experience over the past year underscores our conviction that a true hybrid model incorporating an internal team focused on front-end functions is the appropriate structure to generate optimal performance for Pediatrix. Our decision to make this change reflects our need to migrate more quickly and completely to our hybrid model that we believe can be accomplished with our existing vendor.

最後，正如我們今天早上所揭露的那樣，我們決定轉型為新的收入週期管理服務供應商。鑑於此功能對我們的實踐和整體營運績效的重要性，我們並非輕易做出此決定。然而，我們過去一年的經驗強調了我們的信念，即包含專注於前端功能的內部團隊的真正混合模型是為 Pediatrix 產生最佳性能的適當結構。我們做出這項改變的決定反映了我們需要更快、更全面地遷移到我們的混合模型，我們相信我們現有的供應商可以完成這項任務。

Additionally, we observed a regression in RCM performance during Q3 to past challenges that we have seen in AR, DSOs and other metrics. We are focused on turning to a chapter where we rely on our own team where it makes sense and on an outside RCM partner for the areas where we simply cannot master efficiencies, and we expect to begin this transition prior to the end of 2023.

此外，我們在第三季度觀察到 RCM 表現相對於我們在 AR、DSO 和其他指標中看到的過去挑戰的回歸。我們的重點是轉向在有意義的領域依賴我們自己的團隊，在我們根本無法掌握效率的領域中依賴外部 RCM 合作夥伴，我們預計在 2023 年底之前開始這一過渡。

As we have discussed at length this year, we've been building our internal team, which we believe will help minimize any potential disruptions while we transition to a new third-party vendor. Our current vendor will continue to provide services through a transition period as we make the switch to a new vendor. While this transition period will likely result in some duplicative costs, we believe this too will help mitigate potential transition risks. We will be as transparent as possible in terms of what expenses are temporary as compared to underlying and ongoing costs and performance of our go-forward revenue cycle management activities.

正如我們今年詳細討論的那樣，我們一直在建立內部團隊，我們相信這將有助於在我們過渡到新的第三方供應商時最大程度地減少任何潛在的干擾。當我們轉向新供應商時，我們目前的供應商將在過渡期內繼續提供服務。雖然這個過渡期可能會導致一些重複成本，但我們相信這也將有助於減輕潛在的過渡風險。與我們未來收入週期管理活動的基本和持續成本以及績效相比，我們將盡可能透明地說明哪些費用是臨時的。

All told, we believe these steps can meaningfully enhance our operating effectiveness, put us on a path to sustainable, improved gross margins while ensuring that Pediatrix can continue to provide best-in-class support services to our affiliated practices.

總而言之，我們相信這些步驟可以有意義地提高我們的營運效率，使我們走上可持續、提高毛利率的道路，同時確保 Pediatrix 能夠繼續為我們的附屬機構提供一流的支援服務。

With that, I'll turn the call over to Marc Richards.

這樣，我會將電話轉給馬克理查茲。

Thank you, Jim, and good morning, everyone. I'll provide some additional details for the quarter. Our adjusted EBITDA for the quarter was roughly $15 million below our internal forecast primarily driven by practice-level operating expenses and also impacted by soft patient volumes. Within our top line results, our same-unit pricing growth primarily reflected year-over-year recovery in both revenue collection rates and payer mix against a very challenging quarter in 2022.

謝謝吉姆，大家早安。我將提供本季度的一些其他詳細資訊。我們本季調整後的 EBITDA 比內部預測低約 1500 萬美元，這主要是由於實踐層面的營運費用以及軟患者數量的影響。在我們的頂線業績中，我們的同單位定價增長主要反映了收入徵收率和付款人組合相對於 2022 年充滿挑戰的季度的同比復甦。

At the practice level, our year-over-year expense growth was evenly divided between salaries on the one hand and incentive compensation and benefits on the other. This underlying salary growth accelerated by roughly 100 basis points as compared to the second quarter of this year when we saw some deceleration. Finally, our total G&A expense declined slightly year-over-year, somewhat mitigating practice-level cost growth.

在實務層面，我們的年比費用成長一方面是薪資，另一方面是激勵性薪資和福利。與今年第二季我們看到的一些減速相比，這項基本薪資成長加速了約 100 個基點。最後，我們的總管理費用較去年同期略有下降，某程度上緩解了實踐層面的成本成長。

Based on our third quarter results and our updated forecast for the fourth quarter, we are updating our outlook for the full year adjusted EBITDA to a range of $200 million to $210 million, which contemplates a similar contribution in the fourth quarter to what we reported for the third quarter.

根據我們第三季的業績和對第四季度的最新預測，我們將全年調整後 EBITDA 的預期更新為 2 億至 2.1 億美元，預計第四季度的貢獻與我們報告的類似第三季。

Finally, as Jim referenced, we continue to reduce our borrowings during the quarter. We generated just over $81 million in operating cash flow. We repaid the remaining $40 million in revolver borrowings during the third quarter with a full revolver capacity of $450 million available to us, and we ended the period with $21 million in cash.

最後，正如吉姆所提到的，我們在本季繼續減少借款。我們產生了超過 8,100 萬美元的營運現金流。我們在第三季償還了剩餘的 4,000 萬美元循環借款，並提供了 4.5 億美元的全部循環能力，並在該期間結束時擁有 2,100 萬美元的現金。

With that, I'll turn the call back over to Jim.

這樣，我會將電話轉回給吉姆。

Thank you, Marc. Operator, let's now open the call for questions.

謝謝你，馬克。接線員，現在讓我們開始提問。

(Operator Instructions) We'll go to the line of Brian Tanquilut with Jefferies.

（操作員指示）我們將與 Jefferies 一起前往 Brian Tanquilut 的隊列。

I guess my first question, as I think about practice-level expenses and how you're looking to address that, are there levers that you can pull, whether it's adjusting clinician wage rates or subsidies that you can ask for from the hospitals that we should be looking for?

我想我的第一個問題是，當我考慮實踐水平的費用以及您希望如何解決這個問題時，您是否可以利用一些槓桿，無論是調整臨床醫生的工資水平還是您可以向我們的醫院要求的補貼該尋找什麼？

Brian, I'll start with that. From the subsidy standpoint, it is one of the things we do look at, especially when we're looking at the OGI and new startups to make sure that we do have the available revenue to us when we bring clinicians on. So that's certainly something that we'll look at going forward -- we always look at on an annual basis.

布萊恩，我就從這裡開始。從補助的角度來看，這是我們確實關注的事情之一，特別是當我們關注 OGI 和新的新創公司時，以確保我們在聘請臨床醫生時確實有可用的收入。所以這肯定是我們未來會關注的事情——我們總是每年都會關注。

As far as the comp -- the framework, we have the fixed and variable comp. But I think we're trying to look at what the right mix of that is. As we've seen -- on the variable comp, as we recovered in the RCM areas through the year, we've seen some variable comp has gone up, but we do need to look at it through the lens of which practices have both a variable comp structure and just a base cost structure. And we're going to look at all of those things together.

就補償－框架而言，我們有固定補償和可變補償。但我認為我們正在嘗試看看什麼是正確的組合。正如我們所看到的，在可變薪酬方面，隨著我們在RCM 領域這一年的恢復，我們看到一些可變薪酬有所上升，但我們確實需要透過哪些實踐同時兼顧這兩個方面來看待它可變的薪酬結構和基本成本結構。我們將一起研究所有這些事情。

Got it. Okay. And then maybe as I think about the rev cycle side, what were your learnings from the RCM transition years back that you think will make this transition smoother as you look for a third-party vendor -- bring in a third-party vendor and go hybrid?

知道了。好的。然後也許當我考慮轉速週期方面時，您從幾年前的 RCM 過渡中學到了什麼，您認為這些經驗將使您在尋找第三方供應商時使過渡更加順利 - 引入第三方供應商並繼續雜交種？

Yes. I'll start and all of us can speak to it, right? I guess what I've learned is I know more about rev cycle now than I ever wanted to in my entire clinician career. So I think we understand very much probably it's rooted in what we described. We believe that our services are unique. Our service is unique at the bedside for the patients in terms of finding out as simple as things like the name of the baby and the insurance of which parent. And so we just believe we need to have people closer to the bedside that start the process on the front end in a more complete fashion. That's why we've invested alongside our current vendor of having people here who are employed through Pediatrix that are undertaking those tasks and while we're adding in significant resources as we make this transition. So I think we're going in eyes wide open. Our entire leadership team, our entire operations team really is tightly involved in this transition. Marc, I don't know if you have any other comments.

是的。我先開始，我們大家都可以談談，對嗎？我想我學到的是，我現在對轉速週期的了解比我在整個臨床醫生職業生涯中所想了解的還要多。所以我認為我們非常理解它可能植根於我們所描述的內容。我們相信我們的服務是獨一無二的。我們在床邊為患者提供的服務是獨一無二的，可以找出嬰兒的名字和父母的保險等簡單資訊。因此，我們相信我們需要讓人們更接近床邊，以更完整的方式在前端啟動這個過程。這就是為什麼我們與目前的供應商一起投資，讓透過 Pediatrix 僱用的人員來承擔這些任務，同時我們在進行這項轉變時也增加了大量資源。所以我認為我們要睜大眼睛。我們整個領導團隊、整個營運團隊都緊密地參與了這項轉變。馬克，我不知道你是否還有其他意見。

No, I think that's well put, Jim. I would say that we certainly learned a lot from the last transition, and those lessons learned will be applied in spades to what we plan on doing over the next 12 months or so.

不，我認為說得好，吉姆。我想說，我們確實從上次過渡中學到了很多東西，而這些經驗教訓將毫無疑問地應用到我們計劃在未來 12 個月左右做的事情中。

Jim, if I can just throw a quick follow-up. I mean you've been there for a while. And before you transitioned this to an external vendor, things seem to be working okay, it wasn't broken on the rev cycle side. So is this pretty much like just bringing it back to how you ran things prior to bringing RCM back in the day?

吉姆，我能快速跟進嗎？我的意思是你已經在那裡有一段時間了。在您將其轉移給外部供應商之前，一切似乎都運作良好，在轉速週期方面並沒有出現問題。那麼，這是否很像將其恢復到恢復 RCM 之前的運作方式？

No. Brian, we're going to have an outside vendor for much of the back end. The problem, and what we identified when we made the decision to transition, is that obviously, the labor costs were an issue. The turnover with labor was always an issue. And then there was a big component that we expected in our current vendor that there was going to be a technology solution available to us because we were going to have to invest millions of dollars on a technology transition. That never happened. We do believe that there are vendors out there who can and will help us with that. But I think the -- we looked at it through the cost of maintaining a workforce and a technology on -- in the previous setting and knew that there are efficiencies by bringing in an outside vendor, hence the reason we made that change.

不，布萊恩，我們將有一個外部供應商來負責大部分後端工作。問題以及我們在做出轉型決定時發現的問題是，勞動成本顯然是一個問題。勞動力流動一直是個問題。然後，我們期望目前的供應商有一個重要組成部分，即我們可以使用技術解決方案，因為我們將不得不在技術轉型上投資數百萬美元。從未發生過。我們確實相信有供應商能夠並且願意幫助我們實現這一目標。但我認為，我們在之前的環境中透過維持勞動力和技術的成本進行了研究，並知道引入外部供應商可以提高效率，因此我們做出這項改變的原因。

Finally said, what we learned and what we believe and we will strongly stand by is that it has to be a hybrid model. We have to own the front end and what we do at the level of patient care and at the physician practice level and then have a vendor who has more efficiencies on the back end.

最後說一下，我們學到的、我們相信的、我們堅決支持的，那就是它必須是混合模型。我們必須擁有前端以及我們在患者護理和醫生實踐層面所做的工作，然後擁有一個在後端效率更高的供應商。

(Operator Instructions) We'll go to the line of Kevin Fischbeck with Bank of America.

（操作員指示）我們將前往 Kevin Fischbeck 與美國銀行的專線。

This is (inaudible) on for Kevin Fischbeck. So the first question is just regarding non-same-store revenue. So it sounded like non-same-store revenue was a headwind to growth. So what drove that?

這是凱文·菲施貝克（Kevin Fischbeck）的（聽不清楚）。所以第一個問題只是關於非同店收入。因此，聽起來非同店收入是成長的阻力。那麼是什麼推動了這一點呢？

It's Charlie. You'll notice through the course of this year that, that's largely been the case, not at a very material fashion, but in something of a fashion. And I think there's some comparability in that to what Jim mentioned around our review of our footprint and our portfolio. We have had some practice exits and the like through the course of this year as we reviewed the portfolio and our footprint. And that's where you see that net negative in the non-same unit side.

是查理。在今年的過程中，你會注意到，情況基本上就是這樣，不是以非常物質的方式，而是以某種方式。我認為這與吉姆在我們對我們的足跡和投資組合的審查中提到的內容有一些可比性。今年，當我們審查投資組合和足跡時，我們進行了一些退出等實踐。這就是您在非同一單位一側看到淨負值的地方。

Okay. I guess I just have one follow-up. So we've been hearing from the hospital companies a lot about increased professional fees. Do you have an ability to go back and get subsidies to offset the margin pressure?

好的。我想我只有一個後續行動。因此，我們從醫院公司聽到了很多關於增加專業費用的消息。你有能力回去獲得補貼來抵銷利潤壓力嗎？

Well -- sorry, we have had great relationship with our hospital partners. And as it relates to those fees and the structure of those fees, we've done very well to continue to place those fees when we need them. We're not somebody -- and you need to understand that we're not reliant to a large extent on those contract fees. However, for those services that have smaller volumes but higher intensity, we do look at that. And so we will, whether it be on new opportunities in OGIs or whether current pressures result in increased costs, we will go back and see what we can do on those fees with our health systems.

嗯——抱歉，我們與醫院合作夥伴有著良好的關係。由於它與這些費用和這些費用的結構有關，因此我們在需要時繼續收取這些費用方面做得很好。我們不是什麼大人物，您需要了解我們在很大程度上並不依賴這些合約費用。然而，對於那些數量較小但強度較高的服務，我們確實會考慮。因此，無論是 OGI 的新機會還是當前的壓力導致成本增加，我們都會回去看看我們可以透過我們的衛生系統對這些費用做些什麼。

Thank you. And with that, we've exhausted the queue at this time. Please continue.

謝謝。就這樣，我們現在已經排完了隊列。請繼續。

All right, operator, thank you, and thank you, everyone, for being on the call. We are -- I am available with the team throughout the rest of today, and please reach out if you have additional questions.

好的，接線生，謝謝您，也謝謝大家參與通話。我們 - 今天剩下的時間我都會與團隊在一起，如果您有其他問題，請與我們聯繫。

Ladies and gentlemen, that does conclude our conference for today. Thank you for your participation and for using AT&T Event Conferencing. You may now disconnect.

女士們、先生們，今天的會議到此結束。感謝您的參與與使用 AT&T Event Conference。您現在可以斷開連線。