Surgery Partners, Inc. (NASDAQ:SGRY) Q4 2022 Earnings Call Transcript

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The question is just how quickly that abates. And I think we’ve taken an appropriately conservative posture that says we’ll manage it as well as we have, which we did quite well in 2022. I think there’s opportunity there to have that move in a positive direction even more so than it has which would be an upside to the way we’re looking at the business today. I don’t know, Dave, if there’s anything else you’d want to add?

Dave Doherty: No, maybe just one point, right? And again, we’ve talked about this in the past. We saw this coming back in 2021, and we started to react in advance. And one thing you should know about the culture of Surgery Partners is this is €“ this is a partnership all the way down to the facility level, where everybody is kind of watching out for each other. And so there is this kind of philosophy that we’re going to make sure that everybody is protected inside the system that we have. So we started picking up this and started acting less defensive and more proactively. In 2021 we saw that trend continuing in 2022, and as we just kind of ported out we have a little bit more hedging just in case we have some opportunities there.

Gary Taylor: If I could add one more quick one. On your Class A 2022 that you’ve been appropriately bragging on how well they’ve done. Is that primarily a function of specialists in their case mix, why that revenue is trending so much higher? Or is there something else you’d location or that you’d point to because obviously, you’d hope to replicate that?

Eric Evans: Yes. So I would just say, every year we continue to refine how we target our recruitment team. We use data. We use it in all kinds of ways to understand exactly where people are in the pipeline? How quickly we convert them into our facilities. I think we get better at it every year. Clearly, as we grow acuity we have more higher acuity positions that we can go attract to our facilities. So as we add service clients, we add orthopedics or cardiology that opens up a whole new window of physicians with a unique value proposition. So I think it’s really about targeting. It is definitely targeting that higher acuity mix as we think about growing our facilities, and that’s showing up in our recruitment numbers, and it’s certainly a database approach that we will continue to refine moving forward.

Gary Taylor: Thank you.

Operator: Thank you. The next question comes from Whit Mayo from SVB Securities. Please proceed with your question, Whit.

Whit Mayo: Hey. Thanks. Just wanted to follow up on that on Gary’s last question. Is there any way to frame the percentage of cases that were generated in 2022 from either the class of 2022 or 2021? I hear you on the 140% growth, which is very, very high. But I don’t have a sense of the denominator on this. So I’m just trying to get an idea of how much that may have driven the overall systemwide case growth for the year?

Wayne DeVeydt: Yes. That’s I’m trying to see if I can pull it up real quick while we’re sitting here, if I can €“ just trying to see if I can find it for you real quick. So 2021 cohort was 15,000-plus cases was the starting point from last year. And then how those actually grew into 2022. You can just put the percentage on there, and you’ll be obviously more in the 37,000, 38,000 range. So this gives you a little bit of a flavor or feel for it, but obviously each cohort is going to vary year-to-year. But I’ll just give you kind of an example of one of how that plays out?

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