Wayne DeVeydt: So first and foremost, as we go back to the simplicity of the algorithm of the 2% to 3% volume and then 2% to 3% rate, we clearly expect to be north of the 2% to 3% on rate. I think we would tell you that what we’re seeing both on the Medicare side and the final rates that came through, and more importantly, coupled with our initiatives on the commercial front give us high confidence. I €“ Dave, I’m going to let you chime in. I think you just shared the stat with our board the other day, the idea that what percentage that we currently have under contract as we go into this year to give our shareholders some high confidence in why we believe we will be north of that 2% to 3% on the same-store.
Dave Doherty: Yes, happy to. And this does go into the confidence that we speak to going into 2023. Our managed care initiatives constantly underway. As you know, Kevin we do, generally speaking, every three years, and then we’ll pop in, in an off-cycle. It’s €“ we find that we’re way outside of market and there’s opportunities that kind of exist. And so that component of our rate environment, we’re 97% locked in as we head into 2023. In other words, our rate environment and what we kind of project going forward is, for the most part, locked in. Now the difference, obviously, there’s some additional opportunity that we’ll see as we acquire new companies and we bring that managed care sector to bear for those. And on the other side of the P&L, on the supply chain side and on the labor side, of course, we’ve talked about labor every quarter last year.
I think you know what our story is there. But on the supply chain side, we have the similar dynamic in that most of our cost is protected by the GPO, which has proven to be very favorable for us. And inside that GPO, similar to our managed care contract, they generally follow a three-year cycle. And again, our relationship with HPG has given us an enormous amount of visibility so we can predict with a high degree of certainty where we’re seeing inflation. Generally, it’s going to be in contracts that are up for renewal inside the HPG contract, and then those contracts that are outside of the GPO. And so you can isolate pretty clearly which of those supply costs may be subject to a higher rate increase than normal cost of living. And a large majority of our spend, in fact, is already locked in for 2023.
So again, good strong visibility out to the supply chain side and our forward look on inflation. Although not as high as the managed care rate side is still very strong on the supply cost side.
Eric Evans: Yes, David, I might just add just to get a little more color there. A couple of things on the managed care side that are favorable for us. Number one is just the pricing transparency rules. As that data gets kind of bedded through a more public €“ in almost every market, that’s a winner for us, right? It gives us an opportunity to talk about our value story to push for appropriate rate increases for the value we’re creating. We always balance with payers the volume versus rate discussion. We want to be a value player. We’re never going to be the price leader, but we certainly want to be a place they want to steer business to and want to find ways to grow with us. And then the last thing I would point out that’s really changed, I think, the dynamic the last three or four years for the ASC space is as we continue to add higher acuity service lines: Joint, spine, cardiac, it provides us the opportunity to show the difference in the value creation for payers and for the health system.
