Surgery Partners, Inc. (NASDAQ:SGRY) Q1 2023 Earnings Call Transcript

Brian Tanquilut: Appreciate that. And then, I guess, maybe for Dave, as I think about revenue per procedure, obviously pretty strong, and I know some of that is mix. Is this the right sound like level of growth in a route for procedure that we should be thinking about going forward, considering that you’re obviously seeing a lot of growth in MSK or joint replacements?

Dave Doherty: Yes. Brian, it’s a great question. And I think it goes back to the baseline that you’ve set for 2022 going into 2023. The premise there is that we were hitting on all cylinders last year and the growth that we’re seeing inside this — as we start the year is going to be consistent with that. So I think it’s a fair assumption that we’re going to be at the upper end of that long-term guidance range as we go throughout the year. There’s nothing indicating that we’re — we had an odd year in any of the quarters last year and certainly, as we look forward into this year, we seem pretty solid.

Operator: Thank you. Our next question is from Bill Hendrix with RBC. Please proceed with your question.

Unidentified Analyst: Thank you very much. Just wanted to follow up on that last one again, with the 4.8% revenue per case on a same-store basis, clearly above the regular 2% to 3% algorithm, and you talked about acuity, but you’d also mentioned last quarter some upside from kind of holding some of your newer acquisitions into your managed care relationships in some of your markets. I wondered to know if maybe that had some influence too and how can we think about that, especially with some of the new acquisitions and partnerships you formed this quarter?

Wayne DeVeydt: Hey, Bill, this is Wayne. First and foremost, we require all acquisitions to lap an entire year before we even evaluate them for same store. From our perspective, we think that gives you the purest view of how we’re doing. And so we actually don’t benefit from M&A until we show the value we can actually bring a year later. So the good news is this is a real pure view of same-store and we would expect these trends to continue. At least based on our forecast for the year and how we see things, I think we’re going to consistently outperform both on the volume and on the rate side. So as you think about historically, the upper end would have been that 6% same-store kind of revenue, we think you’re going to continue to see us outperform that throughout the year, and we’re going to finish much higher than that for the full year.

Operator: Our next question is from Lisa Gill with JPMorgan. Please proceed with your question.

Lisa Gill: Good afternoon. I also just want to focus for a minute on the partnership. One of the things that stood out to me is that OhioHealth also has the relationship with Privia. You announced last year relationship with Privia. So my first question is, do you see incremental opportunities to partner alongside Privia as they continue to sign on these physician groups? And then secondly, I know you said not much contribution here in ’23, but ramping into ’24 and ’25. Is there any way, Dave, to maybe give us an idea of how to think about how that ramps? And are there any implementation or start-up costs that will be in ’23.