Release Date: February 20, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: Can you elaborate on the embedded same-facility volume growth and pricing expectations for 2025? A: Kasandra Rossi, CFO, explained that for volume, they experienced some acceleration in the latter half of 2024, with NICU days up nearly 3% and births up slightly. However, for 2025, they are assuming flat volume. On pricing, payor mix was a significant tailwind in 2024, but they expect it to level off in 2025. Managed care is expected to remain stable, and they anticipate some improvement in revenue cycle management (RCM) collections.
Q: Are there opportunities for improved economics in NICU management relationships with hospitals? A: Mark Ordan, CEO, stated that they maintain strong and continuous conversations with hospital partners, which is a core part of their operations. However, they are not currently projecting any increase in hospital contract revenues.
Q: What was the earnings tailwind from the improving payor mix in 2024, and how does it affect the overall performance? A: Kasandra Rossi noted that payor mix contributed significantly to pricing growth, accounting for about a third of the 6% pricing increase in Q4. Mark Ordan added that while structural changes in payor behavior might sustain this trend, they cannot definitively predict its continuation.
Q: How are you approaching capital allocation given your strong cash position? A: Mark Ordan emphasized the importance of maintaining a strong balance sheet in turbulent times, which provides opportunities, including potential M&A. They will work with the Board to determine the best course of action, considering options like paying down debt or returning cash to shareholders.
Q: What are the key areas of optimism for Pediatrix in 2025? A: Mark Ordan highlighted two main areas: strengthening hospital relationships and improving recruitment and retention of clinicians. These efforts are crucial for their future success and are a focus for the company moving forward.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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