Sam Hazen: And Bill, as we mentioned on the last call, we have acquired some land for future expansion in some of these fast-growing markets that we serve, and that’s put some upward pressure on our capital spending. But we believe those are long-term good decisions for us.
Operator: The next question comes from Jason Cassorla with Citi Group.
Jason Cassorla: Yes. Great. Just wanted to ask a little bit more on the labor front. Thinking about all the efforts and programs you put in place contributing to the better turnover and hiring trends, I guess, is there a way to help frame what inning you’re in as it relates to these efforts? Where do you like to see some of the outputs on turnover retention kind of move to? Or any other thoughts on the labor front and the trajectories there?
Sam Hazen: Yes. This is Sam. Thank you for that question. As I mentioned, we have invested very heavily in our people agenda over the past few years. We’ve increased our capacity within our recruiting function. Our recruiting efforts are yielding strong hiring, and we believe that will continue on into the latter half of the year. Our retention efforts with respect to responding to our employees’ needs so that they have the necessary resources and tools to be effective in their day-to-day jobs, we’re getting better at that. That’s helping turnover. Turnover is approaching pre-pandemic levels, especially in the nursing area. We are a few points above pre-pandemic. But if you annualize the second quarter turnover, it would suggest less than that.
So we’re encouraged by that, and we do believe we have opportunities to continue improvement in that area. With contract labor, as Bill mentioned, we expect to see improvements as we move through the last half of the year. And then I’m very excited about our workforce development initiatives. We continue to invest heavily in Galen College of Nursing. They’re expanding each quarter, it seems, into new markets and establishing new relationships and new opportunities for people and for our company. And then we’re also investing in our — what we’re calling our Centers for Clinical Advancement, which is our ongoing clinical education for our people so that they can upskill their capabilities and competencies and put them in a position to either deliver better care or grow in their own individual career.
So what inning are we in? We’re in the middle innings in some of the areas. And so we will wait to see how the latter half of the year plays out. But all in all, I think tremendous results. We’re very competitive, we believe, across the organization with our compensation and benefit programs. And as I mentioned earlier, we’ve been able to navigate through these difficult periods and maintain margins. I think our labor costs — again, if you just look at 2019 as a proxy, our labor cost in 2023 are below as a percent of revenue 2019. And again, that’s in the very — in the face of a very difficult labor market.
Operator: The next question comes from Jamie Perse with Goldman Sachs.
Jamie Perse: Can you comment on seasonality expectations for the third quarter? Anything beyond normal seasonality from a headwind or tailwind perspective that we should be thinking about? And I think normally, revenue is down slightly and EBITDA down maybe mid-single digits to high single digits. Is that the right way to be thinking about the third quarter? And anything in July that’s informing that? And then there was an earlier question on backlog that may not have been fully answered. I’d love your thoughts on that as well.
Sam Hazen: We mentioned at the end of the fourth quarter that we were starting to see normal seasonality patterns materialize. And we’ve seen that so far through the first half of this year, and we think that will continue on into the second half of this year. The third quarter is not as strong as the fourth quarter. The fourth quarter is always the strongest quarter of the year for us given the outpatient activity and deductibles and so forth. And so we think the third and fourth quarter will be similar in patterns to pre-pandemic seasonality. And that’s what’s reflected in our guidance.
