Option Care Health, Inc. (NASDAQ:OPCH) Q4 2022 Earnings Call Transcript

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So in short, we feel good about using our employee nurses, and we think that, that will accrete to a higher penetration over time. The team is energized now that we’ve brought the spin in Infinity organization together to create that truly unified national platform. And we would expect, as we continue to add to our nursing roles that would predominantly be more of a per diem nature, but also one of the things that the team is doing a spectacular job is, providing incentives and motivations for those per diems to provide us with more of their — our capacity, so that not only are we increasing the number of per diem nurses, but we’re also, over time, increasing the number of hours that we’re getting out of those resources.

John Rademacher: Yeah. And the only thing I’d add to that, Matt, is, look, I mean, when we run our staffing models and take a look at it, where we have density of patient population, we will be recruiting full-time nurses. I mean, where we can leverage that effectively, we will. And that is a big part of our strategy from that. But now having the ability to augment that with the per diems with the nursing network moving forward and continuing to serve others in the marketplace, other market participants with that, it just gives us a significant amount of flexibility to utilize our own full-time nurses to the fullest. But then when we need additional capacity, our first default is to utilize that nursing network and the network of per diem resources that are available through that.

Matthew Larew: Okay. And then you referenced the cost base is sort of the new normal in that $12 million to $15 million incremental weighted to Q1. As you think about then the — your new normal cost base, what are the areas where maybe there are pockets of persistent problems in terms of year-over-year inflation where are the areas there might be some improvements? And what are focus areas for you to start work on — start to work on gaining leverage on this new cost base?

Michael Shapiro: Yeah. I think the reality, the way we’re thinking about it, Matt is, we don’t see clinical labor costs going down. We don’t see medical supplies and transportation costs and mileage reimbursement rates going down miraculously as some of those oil derivative supplies go up and price with oil miraculously, the prices don’t drop as oil resets. And so look, our procurement team is the best in the industry, and they’re laser-focused on squeezing basis points. But I think our expectation is that this is the new world order, and we don’t expect those key inputs to go down. As always, and one of the things that I think is a benchmark of this team is how hard we fight to maintain quality, but also focus on efficiencies of running our pharmacies and infusion center networks.

A lot of that comes through the technology that we deploy to make sure that we’re as efficient as possible in the clean rooms. We’re interacting with our patients as efficiently as possible and utilizing those finite clinical resources and minimizing waste. So I think it’s a little bit of the all of the above. It really comes from the patient referral to administration of the therapy. We’re constantly looking at every facet of our cost structure to figure out how we maintain superior quality in a more efficient manner.

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