So our preferred payers value our value proposition. They believe in our value proposition paying us an appropriate wage – sorry, appropriate rate that allows us to pay at least a market level wage, if not slightly above the market level wage. And because of that, we’re seeing in that 10% of our PDS volumes, really the ability to be hiring out in front of the market. And everyone is winning. What we’re staffing is we talked about 15% to 20% greater staffing rates with our preferred payers, we’re bringing children home at a pace of almost five or six times greater than a non-preferred payer. So I think we highlight that to say even though the trends out of the first of the year were positive, our strategy is not to expect the wage market to settle or nurses just to come back and drove, our strategy is to drive rate and reinvest rate into wage and outpace the market specifically in our PDS business.
I would say, in our home health and hospice business, we’re certainly competing with our peer group in that space. And I will say that at least wages have seen in the last three to four months to have settled. And I think settled is probably the best word I can use. They don’t seem to be continue to be going up. And so we’re focused just on retaining, engaging and maintaining the core caregiving staff we have in the home health and hospice side. Hopefully, that was helpful.
Taji Phillips: Very helpful, thank you.
Jeff Shaner: Thanks Taji.
Operator: Thank you. Our next question is from Joanna Gajuk with Bank of America. Please proceed with your question.
Joanna Gajuk: Good morning, thanks for taking the question here. So I guess – can I use this as a follow-up to the prior question, which I didn’t feel like I got the answer here in terms of the preferred payer strategy and the increasing I guess, growth from that. Is that actually specifically included in the guidance or not? Because I guess you made it sound like that you have seen the rate increases in the cost guide, but you didn’t highlight the perfect strategy and whether it’s actually included in the guidance?
Jeff Shaner: Hey, good morning Joanna. Thanks for your question. Yes, in our 130 guidance, it does include the idea of rate increases. I think as we said in my prepared remarks, we’re highly focused on these three states in this year because we feel like these three states are not currently competitive with the market wages for nurses in those states. And we think we think it’s highly, highly important for California, Texas and Oklahoma to move those rates so that we can attract nurses and help solve the value proposition, which is getting patients home, and yes, we did bake the idea of overall rates into our guidance. Now in our prepared remarks, we talked about we are asking in all of those states for double-digit rate increases.
And our full year guide doesn’t – does not fully bake in the idea of these three states giving us double-digit rate increases. It’s overall rate increases. But if you think of California, the last rate increase they gave us, it was July of 2018, and that rate is no longer market. And we talked about that in the last couple of earnings calls. And so we are aggressively lobbying, using media campaigns, meeting with the governor’s office, meeting with legislatures in California. And we fully expect California to give us a sizable rate increase, not because of any other reason, then the value proposition says, if you pay a nurse of fair wage in California, we can staff the cases and we can bring these children’s home. We’ve got research in California that shows us that we save around $6,000 a day.
