The last thing they want to prioritize is remedying the environmental service departments or rightsizing the dining departments and getting their food spend under control, all of those issues which they can very easily of shift to Healthcare Services Group. So we would view any increase or uptick in a transactional environment to be beneficial for the company. But you’re correct that we have to work hard and we have to maintain the business that we currently have through the possibility of ownership or operator transitions.
Unidentified Analyst: Great. Maybe just one follow-up. I know that you negotiated a lot of your contracts back in ’22 to give it an annual inflation that’s more tied to wage increases. Do you have a sense of what the underlying rate increases on the contracts are running, I assume it will be around maybe 3% to 5%? Is that the right way to think about it?
Matt McKee: Yes. Not as much of an annual increase but the goal was to be able to capture inflationary increases on both the food, the supply and the wages in something closer to real time. So we really went out of our way to sort of mirror and mimic the parameters that were put in place in the dining agreements relative to food inflation, whereby those are generally captured and passed through on a quarterly basis, typically tied to CPI food at home. So see that food at home for Q4 was 50 basis points — I’m sorry, it was 50 basis points in Q4. We saw a little bit of a downward movement to 40 basis points in Q1. So that is the dynamic that’s in play. On the food, we did attempt to mirror that with respect to wage inflation.
So that was down from 1.5% in Q3 to 0.8% in Q4. So there’s a little bit of a lag in the availability of those data. But that’s generally where we’re at. We continue to see a slowdown in the inflation that disinflation, if you will. And the goal is, of course, related to all of the above inflationary increases to pass those through in as close to real time as possible.
Operator: As of right now, we don’t have any pending questions. I’d now like to hand back over to the President and CEO, Ted Wahl. Thank you.
Ted Wahl: Okay. Thank you, Ellie. It’s an incredibly exciting time for the company as we’re rounding the turn of what has been a prolonged recovery for the industry. The challenges we navigated the past few years have further solidified our value proposition, the durability of our business model and our market-leading position. The company’s underlying fundamentals are stronger than ever and with the industry at the beginning of a multi-decade demographic tailwind, we are very favorably positioned to capitalize on the opportunities ahead and deliver meaningful long-term shareholder value. So on behalf of Matt and all of us at HCSG, I wanted to thank Ellie for hosting the call today. And thank you again to everyone for joining.
Operator: We’d like to thank everyone for attending today’s call. We hope you have a wonderful day; stay safe. You may now disconnect the discussion.
