So though we as a company, Healthcare Services Group continue to see challenges, our experience in hiring and retaining employees and managing wage rate increases is modestly better than the industry averages. So there’s a similar story of notable differences market-to-market. But generally speaking, we’re seeing ongoing improvement. And on a same-store basis, we were net positive in increasing our number of employees, and that’s an improvement certainly versus ’20 and ’21 so in summary, ongoing challenges, but encouraging trends on the labor front. And then to your final question with respect to sort of the overall inflationary environment, CPI for all items for the quarter was 0.4% that compares favorably to what was 0.5% in Q3. And just for context, you might recall that there was a 2.6% increase in both Q1 and Q2 of 2022 so improvement there.
More specifically, food at home inflation was 1.1% for Q4 and that was the lowest spend since Q1 of 2021. So modest improvement there as well, whether that continues directionally, certainly we’ll keep an eye on that. And then on the wage inflation again, we spoke to it a bit, but specifically in the nursing and residential care facilities, wage inflation in Q3 was around 1.2%, and that’s down from 2% that we saw in Q3. And maybe even just for some further context, the average annual wage inflation for the five years preceding COVID was 2.4% annually. And we’ve certainly seen substantial increases since then with 3% in 2020, 5.7% in 2021 and 6.4% in 2022. So clearly, we have gone out of our way to better capture all of the above noted increases and our customers have been doing their best to lobby the various specifically state-based agencies to get the requisite reimbursement increases to better capture those costs.
So directional improvement is how I would sort of summarize.
Ted Wahl: And I would only add one thing, A.J., to Matt’s remarks, and that would be to underscore the last trend – the final trends he gave on the labor inflationary side, where the hockey stick kind of adjustment between 2021 and then 2022. Just to underscore one more time how significant the achievements and the conclusion of our contract modification initiative was having now for the majority of our clients, a much more mechanical kind of data-driven labor adjustment that’s reflective of actual experience. That’s contractually required, as opposed to what we – what served the company well for decades, but up to and including 2021 so a big achievement. And I think Matt’s – the information Matt just shared just further underscores the reason why.
A.J. Rice: Okay great, thanks a lot.
Ted Wahl: Thank you, A.J.
Operator: Your next question comes from with William Blair.
Unidentified Analyst: Yes, hi thanks for taking my question. And congrats on the nice quarter here?
Ted Wahl: Thank you.
Unidentified Analyst: With respect to a more flexible capital allocation strategy, what sort of investments are you adhering – for near-term opportunities for instances investments in tech, tuck-in or any other quick wins that could help drive better margins or at least growth in 2023? Thank you.
