Ted Wahl: Well, I think the ultimate lever are the ongoing positive trends related to labor inflation that Matt highlighted, but ultimately, it was the completion of the contract modification work, which we didn’t see the full benefit of. We saw some modest incremental benefit. The full run rate of that will be reflected in Q4. But we did, in fact, exit the year with the run rate of cost of service in line with that 86% historical target. Beyond that, I think annually, there is an actuarial review, which is where you’d see some, let’s call it, property and casualty insurance – variability depending on the trends and our – how we’re trending from a claims management perspective. But quarter-to-quarter, as we sit here today, business execution, obviously, it’s – we don’t talk enough about that.
It’s difficult to execute on the day-to-day in this business. So that would be one potential factor that could impact our success or lack thereof relative to managing the services in line with our budgets. The other would be CECL, which I spoke about earlier, which is – based off historical rather than prospect performance. So that could have some variability to it as well. But otherwise, from an underlying business perspective, we had conviction that we’re in a good place heading into 2023.
Unidentified Analyst: Great. And just one more question from me. I know we had talked about labor quite a bit and this improvement throughout the year. Can you kind of just size what that looks like in Q4, I guess, maybe in terms of like net hires and how that’s trended throughout the year?
Ted Wahl: Yes, we don’t have those data specifically with respect to Q4, but just from a directional perspective, we certainly saw improved trends across the board as it relates to our ability to fill vacant positions, to hire employees, to train them appropriately. And then just as importantly, to retain our current employees. So we certainly put a lot of resources into it. We’ve leveraged technology – significant partnership between our home office here in Pennsylvania, supporting our field-based representatives. So really significant progress, there in the number of applicants that we were receiving – our ability to retain employees and certainly, that has a trickle-down effect into facility level, offering our management folks to flexibility to appropriately staff, the facilities to deliver the services as required.
Unidentified Analyst: Thank you.
Operator: There are no further questions. I will now turn the call back to Ted Wahl.
Ted Wahl: Okay well, great. Thank you, Angela, for hosting our call today. In the year ahead, our day-to-day focus will continue to be on operational excellence and execution with the goal of delivering on our operational imperative of customer experience, systems adherence, regulatory compliance and budget discipline, cash collections with the goal of collecting what we bill and growth with the goal of opportunistically adding new business from our growing pipeline of future client partners. We’re excited about our rebalanced capital allocation strategy, which prioritizes more proactive, impactful and enduring ways to create shareholder value. Our future investments in organic growth drivers, inorganic growth opportunities and opportunistic share repurchases will not only accelerate value creation, but most importantly, best position the company to deliver sustainable, profitable growth over the long-term.
So on, behalf of Matt and all of us at Healthcare Services Group, thank you again for joining the call.
Operator: This concludes today’s call. You may now disconnect.
