Tom Vo: Oh, there’s more to go. And so we’re a portfolio company, as you know, and we are constantly reviewing every single hospital in our portfolio on a monthly basis to make sure that they are performing. Currently, there are a few hospitals that are not performing as expected. And so what happened with the No Surprises Act was that with the decrease in reimbursement, the hospitals that were performing well three years ago may not be performing as well this year. And so we are always looking to improve the performance of these hospitals. And so our plans for these hospitals are to initiate all the revenue growth protocol, which I could go into later, as well as all of the cost cutting measures that I could go into later also, and give them a period of time to turn around.
And so if that still doesn’t work, then the next step would be to do an analysis to either sell that facility to another operator or shut the facility down. So once again, this is a continuing process, not just for the underperforming hospitals, but for all our hospitals in our portfolio.
Bill Sutherland: Just a continual process of optimization. It sounds like it doesn’t sound like you’ve got like a list that you’re concerned about to not continue with for the foreseeable future.
Tom Vo: That’s right. Of the 21 hospitals, I would say that there are a few that were trying to turn around, but for the most part, most of the hospitals are doing well.
Bill Sutherland: Got it. Warren, maybe over to you. In terms of the population health side, how do you see the growth outlook there for the remainder of the year and into next year?
Warren Hosseinion: Yes, thank you for the question, Bill. We are continuing to grow the side of the business. We currently have three IPAs that are operational. One in [indiscernible], one in Houston, and one in South Florida. All three of these had a strong annual enrollment period at the end of 2023, resulting in Nutex Health almost doubling our Medicare Advantage lives under management. Looking forward, we are launching our IT in Phoenix, Arizona this year, and then we plan to launch one to two more new IPAs each year going forward around our other facilities.
Bill Sutherland: Got it. So you provided a same store number this quarter, which is helpful. How are you kind of focusing on expanding that the same-store number going forward? Because I think there’s some service enhancements that you guys have started to put in place.
Tom Vo: Yes. So, Bill, absolutely. So we definitely believe in growth both internally as well as externally with new locations. So internally, over the past 12 months, we have put several initiatives that we think will be very beneficial to the company. So, we have protocols in place for all the hospitals in our network to, number one, increase ER volumes, and that’s through marketing and patient referral, physician referral, so on and so forth. Number two, is once a patient goes into our ER, we want to keep them at our hospital. So, we want to increase the observation status of those patients. And then from there increase the inpatient as well, because we want to maximize the use of our inpatient service lines. And then we also have outpatient service lines such as imaging, so CT, X-ray, MRI, ultrasound labs.
So we want to increase those service lines also. For about six of the hospitals, we actually have a pretty robust initiative for medical treatment of behavioral health conditions. So conditions such as alcohol intoxication, alcohol detoxification, or benzodiazepine addiction as an example of these treatments. And then for about four hospital, we’re starting to do some outpatient procedures, such as interventional pain procedures or interventional radiology procedures. And so far we’re seeing some positive results from a lot of the initiatives. And so hence, that’s why you see the 5% to 6% quarter-over-quarter growth from both a volume as well as a revenue side. So that’s on the revenue side. On the expense side, we have also implemented a few cost cutting initiatives.
And with that, I’d like to ask our Chief Operating Officer, Josh, to describe some of the things that he’s working on, and we’re working on both from a hospital level as well as a corporate level. Josh, are you on?
Josh DeTillio: Yes. Good morning, everyone. Yes. So, as Tom said, on the cost side, we’ve been working very hard in the last number of months, both at the hospitals and at corporate. Our three biggest costs are our labor costs, our contract services, and our supplies. For labor, we’ve worked very hard with our teams to maximize productivity at the hospitals as well as corporate, and we’ve leaned down in certain areas. We put in some new tools like staffing matrices, and we’re looking at implementing some new scheduling and productivity software. And it’s always a balance. And with the significant volume growth that we’ve had over the last several months to ensure that we’re staffing appropriately. I would also add that we’ve not experienced the staffing shortages or turnover or increased labor costs like other health systems, as our teams are highly engaged and love our model and love their jobs.
Contract services has also been a big improvement for us in cost, and there’s a lot more to come. We’re really working hard to leverage our size and scope with vendors. Historically, we’ve had 21 different contracts for certain vendors where we’re shifting to larger corporate contracts to take advantage of bulk purchasing and discounts. On the corporate side, we’ve had a number of consultants that we’ve eliminated, insurances that we’ve renegotiated, and we’ve continued to whittle down spending on temporary employees, staffing agencies, and our legal spend. On the supply side, we’ve been working very closely with our distributors and GPOs to ensure we’ve got the right contracts with the most advantageous pricing for medical supplies and pharmaceuticals.