Madeline Mollman: Great. Thank you. And then one more on the infusion suites. I think you’ve talked about you’re seeing like a 10% nursing productivity uplift in the suites, but the suite so far has not been fully ramped. Can you talk about how you’re thinking about that productivity uplift going forward as you add more suites and as they ramp up to full capacity?
Mike Shapiro: Yes, Madeline, it’s a great question and great to hear from you this morning. Look, as we talked about — in reality, our AIS expansion strategy is about two years old. We really let the fuse on this in late 2021. And so as we’ve talked about, we have quite a disciplined model that would project that by the first anniversary around to month 15, these are breaking even, i.e., the nurse productivity is paying the utilities, the rent and insurance and cost of the facility infrastructure. We’ve said that by the second anniversary of opening these — and again, some of these — these are based on the earlier tranches of the sites that we’re opening. We’re seeing about a 10% productivity uplift, which is great from two perspectives because number one, that helps us with our cost of service and helps our margin expansion.
It’s also a growth enabler because think of it as we’re adding additional nursing hours, which is a scarce resource. We have not yet tested the upper bounds of what ultimately that productivity uplift. And I think it’s safe to assume that with our ops teams in the field, we would expect that ultimate productivity to be well north of 10%. Because candidly, none of our centers are operating anywhere close to full capacity nor do they have to for them to be a growth enabler and a margin accretive investment for us.
Madeline Mollman: Great. Thank you so much.
Operator: Our next question comes from the line of Lisa Gill with JPMorgan. Your line is open.
Lisa Gill : Good morning, John, Mike. Just want to follow up on one thing to start, and that is, Mike, on the implied fourth quarter revenue. Historically, if I look back at the last few years, you don’t see a deceleration between the third and fourth quarter. Is there anything that’s shifting this year versus what we’ve seen historically?
Mike Shapiro: No. I mean, I think if you look at our revised guidance, it’s consistent with the comments that we made on the second quarter, we would expect, given a number of dynamics that things will be a little bit flat relative to the third quarter. The only thing I would say on the acute business, where we’ve seen some of that subside back down into the first — into the low single-digit, Lisa. We did still have a number of transitionary patients last year when a couple of the competitors exited, we did take a flood of patient transfers, which does create a little bit of still year-over-year headwind. There’s some pricing involved as well. But overall, we still see and would expect volumes to be solid going into the fourth quarter.
Lisa Gill: Okay. Great. And then my second question is around managed care contracting. So if I think about this time of year, can you just remind us like how should we think about managed care contracting? And kind of going back to one of your earlier comments, talking about working with managed care, getting more people into your infusion suites. Is this something that happened on an annual basis? Is this a three-year type of relationship? And as you have those contracts come up renewal, is there anything that you would call out that you would say is different on a go-forward basis with the relationships you have across managed care?
John Rademacher: Yes, Lisa, it’s John. Most of our contracts are evergreen. So they’ll have an automatic renewal within them. Some of our larger national programs, there’ll be a three-year on that. So we don’t really come up to the edge every year waiting for the drum roll to see if we renew or not on that. They pretty much continue to flow through that process. We have been working across the spectrum with the largest to the smallest health plans, looking for ways for us to help them bend the cost trends. And some of the conversations that we’re having certainly focusing around site of care initiatives that they have looking at different cohorts of patients that they’re focusing on are things that happen on a regular basis.
And they don’t necessarily only happen once a year, they happen through our quarterly business reviews and other aspects that we are undertaking as a partner, not only to demonstrate the value that we’re bringing them, the satisfaction of their members, those types of things. We’re doing that on a pretty consistent basis with our team of dedicated professionals in the market access area. I’d say some of the conversations have been focusing really on that, site of care initiative around looking at specific areas of focus, depending on the payer. We certainly have been talking to them about some of the cost of nursing and trying to make certain that we are getting rate increases where we can, where contracts will allow us with cost of living adjustments and/or with some renegotiation in that process.
And I think that folks understand some of the pressures on health care providers in recruiting and retaining clinical talent in today’s environment. So I’m not going to say that it’s easy, and Mike and I continually remind everybody that no one’s coming to us saying that they want to pay us more. But I think when you can put a strong back base behind it and you can demonstrate the high-quality care that we’re providing, the ability to have those conversations and see some rate increases is something that we are focusing on. And again, having those conversations across the board.
Lisa Gill: And John, if I could just sneak in one more as it pertains to staffing. You talked about retaining staffing around nursing, et cetera. Can you just talk about the current environment? Do you feel like it’s — I mean, obviously, it was really challenged for a number of years? Do you feel like it’s better if people like we’re at this equilibrium? I know like there continues to be pressure from a wage perspective. But anything else you would call out to us as we think about the cost from that side?
John Rademacher: Yes. I would say it has stabilized. It’s not easy by any stretch of the imagination. And I’d remind our team that we’ve got to recruit our team every single day. And we’re looking for ways to put programs in place to provide appropriate incentives and other aspects to make certain that we are an employer of choice and that we have a high value proposition for the team. The ability that we have with Naven, and Naven continues to expand its length of nurses that it has in its roster as part of its network. The ability for us to tap into that has allowed us to continue to grow as well as the recruiting that we’re doing at Option Care Health for full-time nurses within our environment. So it’s not easy, Lisa, but I’d say it’s not as crazy as it was, say, 18 months ago at the peak of some of the challenges that everyone is feeling in health care.
Lisa Gill: That’s very helpful. Thank you so much.
Operator: Our next question comes from Joanna Gajuk with Bank of America. Your line is open.
Joanna Gajuk: Good morning. Thank you for taking the questions. So a couple of follow-ups. I guess on the very last point on Naven. Can you give us an update on integration there? I guess there was a new system you were introducing and you added a third smaller asset recently to the platform. So can you give us a flavor where we stand and especially on this new system, are you also getting traction with biopharma when it comes to the, I guess, staffing their clinical labs and whatnot? Thank you.
Mike Shapiro: Thanks, Joanna, it’s Mike. Yes, I mean, look, Naven’s just been a fantastic headline. We — John and I couldn’t be more pleased with the progress we’ve made. The platforms are fully integrated. We’re on one technology stack. We’ve got one jersey, the Naven Jersey now. And the team has been really gaining traction both around recruiting now that we have a national presence in one national platform. As John said, we continue to recruit both our existing nurses as well as new nurses every single day. And I’d say that the platform is having a great degree of traction. Both in terms — and again, we operate that as an independent platform to maintain a wall between Option Care and Naven for separation purposes. But most importantly, Naven is continuing to support growth on the Option Care Health side.
