Aveanna Healthcare Holdings Inc. (NASDAQ:AVAH) Q4 2022 Earnings Call Transcript

And so we are blessed in the fact that we’ve got a deep bench of 10-year talent. We’re having – we’re bringing some new blood in, some younger blood ends, even the younger folks in, so we can continue to replenish the talent as many of our leaders are in their second and third decade of leading post-acute health care companies. But I don’t worry every night about the quality of our leadership team at any level in our organization. I will say, and you’ve heard us say this before, in the last two years, we took one FTE in payer relations and government affairs to now approaching 20 bodies. So we have significantly increased our government payer relations teams and we continue to invest in those teams because they are producing the greatest outcome for our company.

I’ll also mention that we’ve made significant investments in our clinical outcomes, our data analysis and the ability to prove our value-based story through clinical outcomes. So our clinical team has grown as well. And that’s part of why we talked about cost reductions, and we’ve invested significant dollars in these core areas, at the same time, we’re going to go back through the business and just find areas where we can be more efficient and more effective so that we can truly get our profitability back up towards that 10% goal, we’ve had all along. Thanks, I appreciate the question.

Benjamin Shaver: And just one more follow-up real quick, I appreciate the color you gave on kind of free cash flow conversion, but do you guys have any leverage ratio that you’re shooting for coming out of ’23?

David Afshar: We don’t typically provide guidance on leverage. I mean, obviously, we’d all like it to be lower, as we drive our operating cash and drive our free cash, the ultimate goal of that is to ultimately build cash on the balance sheet and lower our net debt and leverage. So, I’d just say that we’re very focused on operating the business and driving all the benefits that Jeff and I have talked about. And like we said, getting to positive free cash – I’m sorry, positive operating cash in the second half and just driving on all fronts there.

Benjamin Shaver: I appreciate, thank you.

Jeff Shaner: Thanks Ben.

Operator: Thank you. And our next question is from Ben Hendrix with RBC Capital Markets. Please proceed with your question.

Jeff Shaner: Hi, Ben good morning.

Ben Hendrix: Good morning, thank you very much. And just a quick follow-up on those executive – or I’m sorry, on the PD legislation efforts in California, Texas and Oklahoma, just wondering if you could kind of handicap each of those and kind of let us know what your thoughts are on kind of the probability of actually getting those at a double-digit level that you’re expecting, where is the biggest headwinds? Where is the most likelihood and kind of how you’re handicapping that increase overall? Thanks.

Jeff Shaner: Great, question Ben. And yes, I think I’ll state the obvious, and that is the value proposition is the same conversation in every 1 of our 33 states. It’s the same, it’s not unique to California compared to Oklahoma. It’s the same exact conversation, which is just investing an additional $150 to $200 a day in incremental nursing wages in the home saves you between $4,000 and $6,000 a day, right? And it’s – the research shows that our medically fragile patient population is spending anywhere between a minimum of 30, a maximum of 90 extra days in children’s hospitals that is unnecessary for their care because there’s not enough home nursing services. So the research, the conversation is the same across, what’s different is each state has its own budget process, its own set of issues, its own set of priorities.