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spk01: Good morning, and thank you for joining us today for Select Medical Holdings Corporation's earnings conference call to discuss the fourth quarter 2022 results and the company's business outlook. Speaking today are the company's executive chairman and co-founder, Robert Ortenzio, and the company's executive vice president and chief financial officer, Martin Jackson. Management will give you an overview of the quarter and then open the call for questions. Before we get started, we would like to remind you that this conference call may contain forward-looking statements regarding future events or the future financial performance of the company, including without limitation statements regarding operating results, growth opportunities, and other statements that refer to Select Medical's plans, expectations, strategies, intentions, and beliefs. These forward-looking statements are based on the information available to management of Select Medical today and the company assumes no obligation to update these statements as circumstances change. At this time, I will turn the conference over to Mr. Robert Ortizio.
spk04: Thank you, operator. Good morning, everyone. Welcome to Select Medical's earnings call for the fourth quarter 2022. As I have done in previous calls, I'll first give some overall commentary on the quarter before providing some details on each of our four operating After that, I'll turn it over to Marty Jackson, who will provide further detail on our progress throughout Q4 and an outlook on labor costs for Q1 for the Critical Illness Recovery Hospital Division. As most of you are aware, and we've discussed in detail throughout 2022, our most significant headwind has been staffing challenges in our Critical Illness Recovery Hospital Division. This past quarter, we've seen some encouraging signs and results as we head into 2023. Our critical illness recovery hospital division salary wages and benefits to revenue ratio improved each month throughout the quarter. I'm extremely pleased that our combined focus on recruitment, training, and retention of personnel has begun to yield positive results. This would not have been possible without all the efforts of our company and colleagues during an extremely challenging macro labor environment. The progress achieved reducing labor costs has resulted in an 80% improvement in our Q4 critical illness recovery hospital divisions adjusted EBITDA compared to the same quarter prior year. Our focus on labor continues to yield positive results in 2023. As previously highlighted, we believe one of our company's greatest strengths is our diversification. Even as the Critical Illness Recovery Hospital Division struggled with labor headwinds, both our inpatient rehab and concentric divisions continued to exceed expectations this past quarter. The inpatient rehab division exceeded prior year Q4 revenue occupancy adjusted EBITDA. We recently announced a definitive agreement with our joint venture partner, Ohio Health, to acquire Reunion Rehabilitation Hospital in Dublin, Ohio, which will feature 40 private rooms and be renamed Ohio Health Rehabilitation Hospital. We've also reached an agreement to enter into a joint venture with Atlanticare, a leading multi-service healthcare system in South Jersey, to build a new inpatient rehabilitation hospital. Intended upon regulatory approval, the hospital will be called Bacharach Institute for Rehabilitation and is slated to open either in late 2024 or 2025. As previously noted on our last call, we are expanding our partnership with UPMC to open a second inpatient rehab hospital in central Pennsylvania. The development pipeline for inpatient rehab division remains strong, and the division is poised for a successful 2023. Concentra had another successful quarter and has done a tremendous job offsetting the decline in COVID-related testing and evaluation services for prior year with increased workers' comp volume in their existing centers. Concentra's workers' comp volume continues to be strong in 2023. This past quarter, Concentra opened three de novo clinics, two in Pennsylvania and one in Green Bay, Wisconsin, with a new joint venture partner. Concentra also acquired a center in Tulsa, Oklahoma, along with transitioning 18 outpatient work net centers and three outpatient physical therapy centers from our outpatient rehabilitation division into 17 full-service Concentra centers in Pennsylvania and New Jersey. Concentra has a strong pipeline of development opportunities with signed purchase agreements for three fold-in acquisitions in Pennsylvania and Connecticut, expected to close in Q1. along with signed leases for three new medical centers in Ohio, Virginia, and Florida that we expect to open the latter half of 2023. In addition, there are several more acquisitions and de novo opportunities in advanced stages that should provide further growth throughout the rest of 2023. Our outpatient rehabilitation division surpassed prior year revenue for the quarter, but did experience elevated cost margins in labor and other operating expenses compared to Q4 prior year. Thus far in 2023, we have seen improvement in positive results in both our outpatient volume and cost margins when compared to the same period prior year. The division has 43 executed leases for de novo clinics which are scheduled to open throughout 2023. There are also many additional opportunities that are under consideration. Overall, when compared to prior year Q4, we experienced revenue growth of 1.4% and a 7.6% increase in adjusted EBITDA. The impact of the reinstatement of Medicare sequestration was $9 million headwind when comparing Q4 to prior year same period. For the quarter, total company adjusted EBITDA was $148.9 million compared to $138.4 million in the prior year. Our consolidated adjusted EBITDA margin was 9.4% for Q4 compared to 8.9% in the prior year. CARES grant income was recognized in Q4 of this year as well as Q4 prior year. This quarter, we recognized only $630,000 of grant income compared to $8 million in prior year Q4. At this point, I'll provide some further data points as commentary on each of our operating divisions. Our critical illness recovery hospital division adjusted EBITDA margin was 8% for the quarter compared to 4% in prior year Q4 and 2% in Q3 of 2022. Our salary, wages, and benefits to revenue ratio improved 10% compared to prior year and 8% compared to prior sequential quarter. Nursing agency rates decreased 33% and nursing agency utilization decreased 52% when compared to prior year Q4. Nursing agency rates increased 7% while nursing agency utilization decreased 17% compared to Q3 of 2022. Orientation hours. increased 28% compared to prior year Q4 but decreased 22% compared to Q3 2022. Nursing sign-on and incentive bonuses dollars decreased 35% from prior year Q4 and 24% from prior quarter. Revenue decreased 3% compared to prior year compared primarily related to volume occupancy decreased from 71% to 70%, while our revenue per patient day remained consistent compared to prior year. Thus far in 2023, we have seen an increase in occupancy compared to the same period prior year, as ICU volumes within our referral short-term acute care hospitals have increased. On the development front, in January, We opened a rehab distinct part unit in our Springfield, Missouri Critical Illness Recovery Hospital, and in February we opened a 31-bed satellite of our current Toledo Hospital Critical Illness Hospital. We'll be opening three hospitals with J.B. Partners in the first half of this year in Jackson, Tennessee, Tucson, Arizona, and Alexandria, Virginia. We also have an agreement to open a critical illness recovery hospital with a rehab distinct part unit in Chicago with our joint venture partner, Rush University System for Health in 2024. As previously noted, our inpatient rehabilitation hospital division continued to perform very well compared to prior year Q4. Revenue increased 10% with patient volume increasing by 4%. Occupancy was 85% compared to prior year which was 83%. Revenue per patient day increased $123 from $1,888 to $2,011. The adjusted EBITDA margin for inpatient rehab was 23.6% for Q4 compared to 18.2% in the prior year. Concentra continued their strong performance with revenue increasing over prior year by 1% in spite of the declining demand for COVID-related testing and evaluation services. Prior year Q4, these services generated $10.4 million in revenue and $4 million in adjusted EBITDA compared to $1.6 million in revenue and $600,000 in adjusted EBITDA in Q4 of this year. The revenue decline from COVID testing services was offset by positive performance in our centers. Center volume increased over prior year in both work comp and consumer health, but was offset by reduction in employer service visits, resulting in a visit decrease of less than 1%. Consenters adjusted EBITDA margin was 15% compared to 17% in prior year Q4. Our outpatient rehabilitation division experienced an increase of 1% in net revenue, with patient volumes increasing by 3% compared to same quarter prior year. Net revenue per visit remained flat at $102 in spite of a 3% decline in Medicare reimbursement rates. Adjusted EBITDA margin decreased compared to prior year with a decrease in margin to 6% from 10%. The decrease in adjusted EBITDA margin is primarily related to an increase in both labor and other operating costs. The increase in labor is primarily attributed to a decrease in clinical productivity in Q4 compared to prior year. The increase in other operating expenses is primarily comprised of an investment in our outpatient electronic medical record systems, along with travel expenses returning to pre-pandemic levels. Thus far, in Q1 of this year, we have seen improvements in volume, revenue, and expense margins compared to the same period prior year. Earnings for fully diluted share were 22 cents in the fourth quarter compared to 37 cents per share in the same quarter prior year. Prior year Q4 had a tax benefit related to our purchase of Concentra's remaining membership interest along with lower interest expense on our debt, which had a positive impact on Q4 prior year EPS. For the full year, earnings for fully diluted share were $1.23 compared to $2.98 per share in the prior year. In regards to our allocation deployment of capital, our Board of Directors declared a cash dividend of 12.5 cents payable on March 15, 2023 to shareholders of record as of the close of business on March 3, 2023. This past quarter, we did not repurchase shares under our Board-authorized share repurchase program. We will continue to evaluate stock repurchases, reduction of debt, and development opportunities. That concludes my prepared remarks, and with that, I'll turn it over to Marty Jackson for some additional financial details, and then we'll open the call up for questions.
spk05: Thanks, Bob. Good morning, everyone. Consistent with the prior two quarters, I'd like to provide some additional details with the progress we've made regarding our labor costs within the Critical Illness Recovery Hospital Division. This past quarter, we had a sequential reduction from Q3 to Q4 in our total RN agency costs and our utilization of agency. We did have a modest increase in our RN agency rate from Q3 to Q4. The reductions we realized were 8% in agency costs, this representing a reduction of $2.5 million on a quarter-over-quarter basis, and a 17% drop in utilization of agency from 21.9% down to 18.1%. Agency hourly rates increased sequentially by 7%, from $86 to $92. Consistent with prior quarters, we did experience a reduction of our agency utilization as the quarter progressed from October to December of 13%, ending the last month of the year at 16.8%. We fluctuated within the quarter in both RN agency costs of $9.3 million in October, $9.5 million in November, and this decreased to $8.4 million in December. And our agency rates, which were $88 in October, $99 in November, and this decreased to $91 in December. This quarter, we saw a 21% decline in orientation hours compared to Q3 of 22. We experienced a 39% decline in orientation hours as the quarter progressed from October to December. Other areas we saw improvement compared to the sequential quarter was in declining nursing sign-on and incentive bonus dollars of 24%. An area of opportunity we mentioned last quarter was hospital administration costs, and we did experience a modest benefit from the third quarter. We expect a continued decline in this area over the next several quarters. Overall, our SW&B to net revenue ratio improved over 8% compared to the third quarter, from 64.7% to 59.8%. We experienced an 11% reduction in our SW&B to revenue ratio from October to December. It dropped from 62.7% down to 55.8%. With the strides we've made in the past quarter and the progress we have seen thus far this quarter, we are confident in our ability to achieve our previously stated target for critical illness recovery hospital SW and meter revenue ratio of 55 to 57% for the first quarter of this year. Moving on to our financials, in Q4, equity and earnings Unconsolidated subsidiaries were $6.8 million. This compares to $11.2 million in the same quarter prior year. Primary decline in earnings was the result of decreased earnings of a few of our unconsolidated joint ventures. Net income attributable to non-controlling interests was $10.2 million. This compares to $16.5 million in the same quarter prior year. The decrease is primarily due to our purchase of the membership interest in Consentra in Q4 of 2021, which we now own 100% of the voting interest. Interest expense was $47.3 million in the fourth quarter. This compares to $33.3 million in the same quarter prior year. The increase in interest expense was primarily attributable to an increase in the one-month LIBOR rate compared to Q4 of 2021, as well as borrowings made on our revolving credit facility. The interest rate on $2 billion of our term loans is capped at 1% LIBOR, plus 250 basis points spread through September 30th of 2024, which provides us with a level of protection and predictability moving forward in the current interest rate environment. At the end of the quarter, we had $3.9 billion of debt outstanding, $97.9 million of cash on the balance sheet. Our debt balance The end of the quarter included $2.1 billion of term loans, $445 million in revolving loans, $1.2 billion in the 6.25% senior notes, and $104.7 million of other miscellaneous debt. We ended the quarter with net leverage for our senior secured credit agreement of 5.96 times. As of December 31st, we had $148 million of availability For the fourth quarter, operating activities provided $12.5 million in cash flow, of which included $1 million recouped in the quarter related to repayment of Medicare advances. As of the end of 2022, all Medicare advances have been repaid. Our operating cash flow in the quarter is also reduced by $53 million for repayment of deferred FICA taxes, all of which have been repaid then. Our day sales outstanding, or DSO, was 55 days at December 31st of 2022, compared to 52 days December 31st, 2021, and 53 days at September 30th, 2022. Investing activities used $57.2 million of cash in the fourth quarter. This includes $55.3 million in purchases of property and equipment. $5 million in acquisition and investment activities, less $3 million in proceeds from the sale of assets during the quarter. Financing activities provided $34.4 million of cash for the fourth quarter. This was primarily due to $65 million in net borrowing on our revolving line of credit, offset in part by dividends on our common stock of $15.9 million. As stated previously, we did not repurchase any shares under a report authorized repurchase program this quarter, but have the capacity to purchase an additional close to $400 million shares. This program remains in effect until December 31st of 2023 and was further extended or earlier terminated by the Board. We are issuing our revenue outlook for 2023 and expect revenue to be in the range of $6.5 to $6.7 billion. Capital expenditures are expected to be in the range of $190 to $210 million for 2023. We will address our business outlook for adjusted EBITDA and earnings per common share later in the year as the labor market further stabilizes and is more predictable. This concludes our prepared remarks at this time, and we'd like to turn it back over to the operator to open the call.
spk01: Ladies and gentlemen, if you have a question or comment at this time, please press star 1-1 on your telephone keypad. If your question has been answered or you wish to remove yourself from the queue, simply press star 1-1 again. Again, if you have a question or comment at this time, please press star 1-1 on your telephone keypad. Please stand by while we compile the Q&A roster. Our first question or comment comes from the line of Justin Bowers from Deutsche Bank. Mr. Bowers, your line is open.
spk09: Hi, good morning, everyone. So just starting with LTAC, it sounds like there's a lot of development activity going into 2023 and into 2024. Can you just give us a sense of how many additional beds are planned for 2023, and then just wanted to clarify what the SWB was in 4Q, and then the exit rate in December, I think you said 55.8. Is that sort of where you're trending now in the segment for during the first couple months?
spk04: Thanks, Justice. Bob, let me address the first part of your question which is development on the critical illness. Yes, I think that over the last year we have seen an increase in development opportunities and deals. that we're signing. Interestingly, many of those, you'll notice, are also joint ventures, which is a bit of a departure of what we've seen in the past. To your specific question, I don't have exactly the number of beds that will come on, but around probably, you've got to think about it, 110 to 120 new beds that will be coming on with current signed deals. And our expectations, just based on what we're seeing out there is that we may see more development opportunities on the critical illness side. In the norm, they will be hospital within a hospital, but there may be an occasional freestanding. But if we do a freestanding, it'll typically be in conjunction with a rehabilitation hospital distinct part unit. So if you look at the model for that, not necessarily of this size, but if you look at our project in Chicago with Rush, that is what we're characterizing as a post-acute care building that has both rehab and critical illness beds in the building. And we have a few more of those that are in progress in the development pipeline throughout the country. I do think that that's a testimony to an appreciation of the role that LTCH, or in our case, critical illness, plays in the continuum of care in a post-pandemic world where you have a greater recognition of the importance to decompress the intensive care units of large acute care hospitals. And they are more interested in having those in their market and in their continuum of care on a go-forward basis. So on the salary, wage, I'll turn that over to Marty and let him address the second part of your question.
spk05: Yeah, Justin, on the FW&V as a percentage of revenue, we are experiencing what we saw in January, and for the most part of February, we are in that 55% to 57% range.
spk09: Got it. And then maybe just a follow-up on outpatient rehab. It sounds like volumes and margins are improving year over year. And the question would be, do we expect that trajectory to persist in 2023? And sort of what changes have you made in the segment there to ensure that that happens?
spk05: Yeah, on the outpatient side, what we've seen is we've had some difficulty actually throughout the entire year of 22 with a lot of COVID call-offs. And what we've seen is that's really trending downward now. So with that trending downward, we'll be able to see what we believe is a lot more patients. I think the other thing is just the clinical efficiency, which we've really focused a lot on, which is when we talk about that, we're really talking about visits per therapist per day. We're seeing that increase.
spk04: I think it's proper. Your characterization of us feeling confident about the trajectory and what we see in the early part of the year gives us some good confidence that we have some good momentum on the outpatient side.
spk09: Appreciate it. I'll jump back into you.
spk02: Thanks. Operator, you want to let the next question through? Operator, are you there?
spk04: For the participants on the call, we're showing that the call is still connected, so if you bear with us as we get the operator to let the next question in the queue through. For the participants on the call, it looks like we're having a problem with the operator, the manager of the call. So why don't we give it another minute or two, see if we can admit people into the call to ask questions. Okay, for those on the call, while we're waiting to admit more questions, why don't Marty and I give some more commentary and maybe we anticipate some of the questions that we've gotten. We have gotten some questions in the past about the seasonality of the Concentra segment, and Marty, you want to address that?
spk05: Sure. One of the things we've noticed with some of the analyst reports is they're talking about the drop-off. from Q3 to Q4. You know, if you take a look at Concentra pre the pandemic, historically what we've seen is about a 390 basis point drop. So, and when I say that, I take a look at years 2016 through 2019. And that's really just a reflection of seasonality. So we thought that was important to point out.
spk04: The other question that we typically get, and just as an update, we do have some people on the call line that are working on restoring the ability to let questions in. But while we continue, Marty and I do get questions from time to time about allocation of capital. Certainly, as we progress through 2023 with increased EBITDA generation over last year, we do expect that leverage will continue to come down, but we do have a target over the next year or two to bring leverage down considerably from where we are right now. At the same time, we do have, we are allocating capital to development activities. And I think what you can expect to see through 2023 is not any big transactions, anything that could in any way be perceived as transformational. But we're seeing great opportunities for one-off transactions in each of our divisions. You notice I commented on the individual transactions and deals that Concentra is doing with fold-ins. We certainly would like to sign a couple of the big rehab joint ventures with large systems. And on the LTAC side, we'll continue to see opportunities to do hospital within a hospital. And outpatient can continue to grow through de novo signed leases as well as small acquisitions. So I think we're ready to let in the next question. So if someone's in the queue, I think we've restored the question line.
spk03: Thank you. Our next question comes from Ben Hendricks from RBC Capital Markets. Your line is open.
spk06: Hey, thanks, guys. Given the staffing progress in critical illness and the roll-off of training hours, how do we think about the timeline from here to pre-pandemic margins? And what are those key levers that you can pull to affect that timing? Then related, you know, what do we need to see before you get enough comfort to provide full-year guidance? Thanks.
spk05: Yeah, Ben, this is Marty. We anticipate for 23 that we will probably remain in that higher range, 55% to 57% in 23. Remember, it's not just the expenses that we see, but it's also the increases that we're getting on our contracts. We would anticipate that that would go into 24 and possibly even 25 to see us get back to historical range, which is in that 52%. With regards to comfort, I think that we're continuing to gain comfort with where we are on the labor side. And, you know, I think we're going to evaluate this first quarter, see where we are, and then make a determination as to whether we provide guidance on EBITDA and EPS moving forward. And whether it's next quarter, the quarter after that, we'll have to wait and see.
spk04: You know, and as we feel comfortable, even if it is before the next quarter's earnings release, I mean, we would – we would certainly consider putting guidance out after the first quarter, but even before we file the queue. That's a topic of discussion internally at the company because we do appreciate the analyst community would like to see us give some more guidance on EBITDA and EPS and when we feel comfortable. We just don't want to go out prematurely and then have to constantly revise it and update it. But I do think that you will see it at some point during the first half of this year.
spk03: Thank you. Our next question will come from William Sutherland from Benchmark Company. Your line is open.
spk07: Hey, good morning, guys. I was curious, Bob, as you look across the four groups, is hiring been an issue as far as being able to kind of run those groups at the productivity levels that they're built to do?
spk04: Well, it's a great question, and I think the answer is that it varies in each of the divisions. I mean, it's kind of very evident how difficult it has been in the critical illness recovery hospital division because we were competing with short-term acute care hospitals for highly trained near ICU-level nursing staff. I think it's well known that that has just been a really big challenge the past year. Now, on the rehab side, you'd think, well, a specialty hospital is a specialty hospital, but the rehab employment tends to be a bit more sticky because of the nature of the work and the longer tenured employees that are there being a little bit more therapy-driven as well as some nursing. So the rehab hospital division hasn't been near the challenge, anywhere near the challenge. that the critical illness has been. Outpatient has been a little bit of a surprise, I mean, and for a different reason. It is impacted by the macro labor environment, particularly on our front desk people, but it's also because of the smaller nature of outpatient clinics that a call off for illness or suspected illness or pre-COVID test really disrupts the efficiency of that business model. I think you've seen that to a lesser extent in the outpatient, but it still exists. And as we commented earlier, we seem to be coming out of that here now. And then that leaves Concentra. Concentra, because of the nature of that business, they have had their staffing challenges, of course they have, as every employer has, but the nature of the Consentra Medical Center is that it puts stress on the existing staff when they're short staffed, but the volume does not fall off because it's a walk-in business. So what we see there is potentially increased wait times and those kind of difficulties, but you haven't seen it show up in the revenue or the margin line. But, you know, each of these businesses have a little bit of a different dynamic. Speaking of Concentra, we've talked about this in the past. They will have a bigger challenge in a really down economic cycle. That will be a bit of a headwind, which we certainly have not seen to date, mainly because that whatever downturn in the economy we've had, it's really not hit labor. And as employers are still hiring, Concentra is going to continue to have a robust business. So I hope that answers your question.
spk07: That's helpful color. How should we think about the high and low end of the revenue range? I mean, I know a lot of things get thrown in as you put together your model, but what would be some of the key factors for being at one end or the other?
spk05: Yeah, it's really a census bill. When we take a look at... you know, since it's on the specialty hospital side, certainly, and, you know, the volume on the outpatient rehab side. Consent is probably pretty predictable, but, I mean, that's the reason we put a range in there, just because of uncertainty there.
spk07: Okay. And I think I appreciate your hesitancy to guide on EBITDA before, you know, you have a real handle, but it feels like with all the information you provided that there's a range there that I think you guys have a sense of, and I'm just kind of curious what else you kind of need to see at this point.
spk05: Yeah, Bill, we just need to see consistency. If you take a look at what transpired at the end of 21 and all through 22, there was a lot of fluctuations, and we just need to see a period of time where we can kind of predict what's going to happen in the next couple of quarters.
spk04: Yeah, Bill, as I mentioned earlier, this has been the subject of a fair amount of discussion internally with the management and with the audit committee of our board. Of course, where we stand here, we could give guidance with a fairly wide range and would feel pretty confident on that. I think it's just more of a philosophical thing internally that if we're going to come out with guidance, we'll try to make it in a little tighter range as we've done in the past. We just don't want to come out with guidance and then have to revise it. I think that that's just a style thing for us relative to other companies that may be providing guidance now rather than a view that we have that much uncertainty about the business.
spk07: Right. So it doesn't really have any, you know, it's not an issue, it sounds like, in terms of your overall view of the business. So that's appreciated. Thank you. All right, that's it for me.
spk04: No, it does not. And that's well said, and that's clear. I mean, this is not a signal that we think that the business is going to be that volatile across 2023. It's really just more of a signal that since we suspended guidance, that we just want to be pretty comfortable and have a pretty tight range before we issue again. All right.
spk07: Thank you, Jeff.
spk03: Thank you. And our next question will come from Miles Highsmith from Deutsche Bank. Your line is open.
spk08: Hey, good morning, guys. Thanks for taking my questions. I had just a few clarifications and then a couple of questions after that. I think you gave these, so I apologize if I'm re-asking, but I was hoping four numbers for the full quarter of Q4, if you'd be able to give me the agency rates on a dollar basis. the full quarter utilization rates percentage-wise, and then the Q4 on a dollar basis, the total agency costs, and the Q4 investment nurse costs on a dollar basis. And then I have a couple of follow-ups.
spk04: Sure, Miles. Let's see.
spk07: You've got a lot there. Yeah, that is a lot, Miles.
spk05: Come on, Miles. Okay, okay, Miles. Get your pen and paper ready. I'm ready. Q4 RN agency expenses was $27.1 million. The Q4 RN hourly agency staffing rate, $92. And the... Utilization rate in Q4 was 18.1%.
spk08: Okay, great. And did you quantify the Q4 dollars related to investments in nursing? No, we did not. Okay. Thanks. And then just a couple others. I guess, is there any way you'd be able to just characterize the proportion of your, you know, more recent hires that are in that kind of seven to eight week period where they're training and you have some duplication still, maybe Q4 versus Q3 or however you might be willing to characterize it. And then just lastly on the potential for EBITDA guidance, I definitely heard what you said in the last call or response. I'm just wondering if seeing that stability, is that largely LTAC still or critical illness still, or is it now a function of needing to see kind of where productivity is also on the outpatient rehab side or other variables?
spk04: Well, while Marty's looking for that earlier stuff, I'll comment on the second part of your question. I would say yes, it's probably critical illness and outpatient. Those are the areas that we would see the greatest improvement. If you look at the business and even over the last couple quarters, the rehab hospital business and the concentra has been pretty stable. And critical illness obviously is the one that would have the most improvement over 2022 because of the labor environment, which is, as you see it, as Marty pointed out, We're giving you monthly splits on how that has increased. So you can see that the improvement in the staffing in critical illness is, I think, fairly dramatic. And so if that continues, that's obviously going to be the biggest mover. Outpatient, to a lesser extent, but the same thing. You're going to see more improvement in the outpatient and in critical illness than you will see in inpatient rehab and concentra, which has been pretty stable.
spk05: Yeah, Miles. On a sequential Q3, Q4 over Q3, we saw a 21 percent decline in the number of orientation hours. So, obviously, it's coming down. And then within the quarter, from October to December, we saw a 39 percent decline. So, you know, a lot of that is running off. Now, there's still going to be orientation hours, because we're going to continue to have hiring but we're getting back much more towards normal processes as opposed to what we saw over the past five quarters.
spk08: Got it. Okay, that's super helpful. Thank you so much, guys. Appreciate the detail. Sure.
spk03: Thank you. And I am showing no further questions from our phone lines, and I'd like to turn the conference back over to management for any closing remarks.
spk04: Okay. Thank you, everybody, for joining us, and we apologize for the delay the white space there in the middle of the Q&A. Thanks for your questions and look forward to updating you again next quarter.
spk03: This concludes today's conference call. Thank you for your participation. You may now disconnect. Everyone, have a wonderful day.
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