And for the year, our inpatient surgeries were up two and our outpatient surgeries were up 2.5. So a slight migration, if you will, into the outpatient setting. And we think that will be generally consistent as we push into 2024, we do have a number of ambulatory surgery centers that have opened or will open in 2024. We’ve made a few acquisitions in certain markets with ambulatory surgery centers, and we continue to invest in our hospital operating suites as well as improve our processes just as we are improving our emergency room processes with our revitalization program. And we think that will continue to be a value add for our patients and for our physicians and help us with our volume pursuits. So that’s how we’re judging the surgical space.
If you look at cardiac underneath that, our cardiac volumes continue to grow very robust and are actually growing in the mid-single digits. And we think, again, that’s reflective of our overall program development, expansion into new service lines underneath cardiac and responding again to our patient needs and physician needs in ways that we believe are productive for our organization.
Operator: Excellent. Our next caller – excuse me. Our next question comes from the line of Jason Cassorla with Citi Group. Jason, please go ahead.
Jason Cassorla: Yes, great. Thanks for taking my question and best of luck in your retirement, Bill. I just wanted to follow-up on the professional fee environment. You noted there was some deceleration in professional fee spent growth, if I heard that correctly. But maybe what is your expectation for physician costs or professional fees growth embedded within 2024 guidance. And then on Valesco, it sounds like from your comments, Bill, that Valesco would generate $150 million of negative EBITDA next year versus the $200 million or so headwind for 2023. Is that a fair way to look at it or any other color that would be great? Thanks.
Bill Rutherford: Yes. Let me add in and thanks for that. I think Valesco is a little lower. We’re about $150 million of both years, but obviously in 2023, we add a nine months versus 12 months next year. So we see a kind of run rate improvement as we go through the quarters during the year. On pro fees, we, as we said, have seen a decline in the sequential rate of growth. We have multiple initiatives underway embedded in our guidance next year is holding that professional fee growth perhaps to 8% to 10% versus this year where it’s been closer to 15% to 20%. So we are looking for a step change and we’re confident in our initiatives and the activities we have to be able to begin to bend that trend line.
Operator: Great. Thanks, Jason. And our next question comes from Scott Fidel with Stephens. Scott, please go ahead.
Scott Fidel: Hi, thanks. And I’ll echo my congrats to Bill. And then my question is, would be curious in terms of how you’re thinking about the whole broader debate on just the pent up demand recovery in the seniors population. And based on all your data and analysis, sort of where you think the Medicare utilization trends are now at this point relative to sort of pre-pandemic levels and returning to the baseline, certainly, felt like there was some quite a bit of that recovery played out in 2023, but interested in sort of what inning you think we may be in that process at this point. Thanks.
Sam Hazen: This is Sam. It’s interesting. I’m just looking at a trend line here, and I don’t have it beyond this time period. But in 2019, this is a composite view of Medicare. So it has both Medicare and Medicare Advantage. Our Medicare admissions grew 2.6%. You throw out 2020 and 2021 grew 2.1%, 2022 grew 3.4% and 2023 grew 4%. So is there acceleration on our trend? Yes. Obviously, there’s aging baby boomers in the mix there, number one. Number two, we think we’re taking out market share, so to judge overall utilization patterns around that is really difficult for us. There’s population growth in our markets. When you look at adjusted admissions on the same combination payer class, again: 3.7% in 2019, 5.3% at 2021, 4.7% in 2022 and 5.7% in 2023.
So a slight acceleration, but a function we believe of aging baby boomers and a number of beneficiaries moving in the program, population growth for us in market share gains. So it’s hard for us to judge underneath that, whether or not there’s some structural change in utilization, that’s almost impossible for us to discern with the data that we have.
Operator: Great. Thank you, Scott. And our next question comes from the line of Sarah James with Cantor Fitzgerald. Sarah, please go ahead.
Sarah James: Congratulations on the retirement, Bill.
Bill Rutherford: Thanks.
Sarah James: You guys said that the impact of the two-midnight rule ramps through the year. So it ramp as opposed to flipping a switch, what are the mechanics of that stage implementation? Is it retaining your staff? Or is it assuming some delay in benefit from claims denials and getting the payers on board? And then when would it be fully ramped? Are you talking midyear exiting 2024? And is there anything that HCA can do to pull that forward?
Bill Rutherford: Well, I mean, the rule goes in effect in January. So I think the impact may ramp over time. It’s a notable change for the payers. So we’re working them very closely on the administration of those plans and making sure it’s operating as described on there. And if it does, we should see it equally throughout the year. And so we’re working closely on it, but it’s a pretty big change for the payers. And so there might be some administrative differences as it gets implemented through the year. But we hope very quickly, we’ll be able to work our way through that and begin to see some benefit as we go through 2024.
Operator: Thanks, Sarah. And our next question comes from Lance Wilkes with Bernstein. Lance, please go ahead.
Lance Wilkes: Great and congratulations to both Bill and Mike. Can you talk a little bit about labor supply that you’re seeing? First, in the past a couple of quarters ago, I talked about like demand that have been turned away at the hospitals; if you could just note if there’s still any of that? And then how kind of hiring pipelines and are there particular areas that are more plentiful or areas that might be bottlenecks? Thanks.
Sam Hazen: This is Sam again. Thank you for the question. We finished the year roughly. I don’t have the exact average here at 90% acceptance rate. In other words we weren’t able to take roughly 10% of the patients who were referred to us through our transfer centers and such. That improved throughout the year as we went from maybe the mid- to high- in the first part of the year, to a little better than that in the second half of the year. We’re still below where we were in 2019. But what we have seen is more patients coming through our transfer centers and other patient navigation program that we did in 2019. So we feel good about the inflow if you will. We are still at times in situations where all of our capacity is not open and available, and that’s what generates these situations where we can’t receive the patients that are coming through these navigation programs and transfer centers.
