Norman Rosenberg: No, David, I think your assumption is a good assumption if only because when we think about that exit rate, we’re not thinking of it in terms of certain nonrecurring or seasonal items that are going to happen in the fourth quarter in December. It’s really simply a matter of looking out over the horizon, trying to figure out when we get to use that term again, a more normalized margin. So if we were there as an exit rate for 2023, that does become at least from a model standpoint, that does become the starting point for 2024, in our minds.
David Grossman: Right. And as Phase 2 of the changes that you’re making in your model for the normalization project, do those benefits get realized in 4Q? Or should we think of that as being a tailwind in 2024?
Anthony Capone: No, I think you’ll see the benefits of those in the first half of ’24.
Operator: The next question we have comes from Pito Chickering from Deutsche Bank. Please go ahead.
Kieran Ryan: You’ve got Kieran Ryan for Pito. Thanks for taking the question. Just wanted to hit on the transportation side first. Is there any reason that the step-up in segment margins there shouldn’t be viewed as like a new run rate going forward with potential to move even higher just as the leased hour mix continue to rise?
Norman Rosenberg: Yes. That’s certainly the driver of the margin on the medical transportation side. We’re converting — for every new contract signed is a leased hour — and even the old contracts we’re going back and converting those to leased hour, which is obviously improving margin. So we expect it to stay where it is and increase as we better the mix on the transportation side. Then it’s really improving.
Anthony Capone: Yes. I mean there’s a lot of good things that are taking place sort of behind the scenes that are driving that number. A lot of which you can see in our 10-Qs and other reporting. So our average price per trip is going up, and it’s not just the general inflation, it’s because we’re taking we’re taking more ALS trips or CCT trips, there is BLS trips. We’re taking higher acuity trips. We’re really — I call portfolio management, right, both in terms of what the portfolio trips looks like and what the portfolio of different markets look like. So as we’ve talked about, we shut down the California transport market. That alone gets our margin higher. Lee alluded to this in his prepared comments a few minutes ago that we’re looking at all of our transport markets and determining which ones have the scale that we need to continue with it.
And then have the margin profile that continue with it. So when you go through that kind of pruning process is sort of almost a self-fulfilling thing where the margins go higher. But in summary, to answer your question, yes, we look at the number that we’re seeing today as something that’s a launching pad for a better number going forward. And it’s really the result of a lot of different margin enhancement projects that have taken place over the last 12 to 18 months.
Kieran Ryan: Great. Thank you. And then just on the RPM side, I was just wondering if you had any thoughts on just kind of your early efforts there? What kind of traction you’re seeing with customers and just kind of how big a part of the discussions that service line is in some of these new deals that you’re negotiating. Thanks.
