Saum Sutaria: Yes, no, listen, I think the – first of all, the capital allocation priorities in terms of the four categories that we’ve talked about, obviously USPI, again, I can’t emphasize enough, being importantly supportive of our acute care hospital portfolio to maintain them strong and very desirable assets by all stakeholders is really critical to our overall strategy. The deleveraging that we’ve talked about, and then obviously, the share buyback program that we have authorized, all remain absolutely important priorities to us as we look forward. Now, you point out really, it’s a really important point, which is a little bit of my commentary at the end of my prepared comments about we’re entering a new era for us, which is important for us to collectively think about.
And if you think about on this call and what I’ve alluded to, it has raised the question about where are we thinking about leverage targets which we have not given specifically in the past, what are our capital deployment priorities going to look like and how will they be different? There are some people that would ask, and we certainly would consider, are there enhancements in our capital allocation, into our acute care portfolio, in our more high return markets that we still have with us that make sense. And then obviously, the USPI question of deploying additional capital into that segment, and I think we’ll have more to say about that as the year goes on, frankly. But those things are all on our mind. Look, specifically on USPI, we talk about historically $200 million to $250 million, now closer to $250 million in capital allocation every year.
But the fact is, if you go back over the last five years and just look at what we’ve spent and average it out over those five years, it’s been quite a bit, quite a bit higher than $200 million to $250 million. We will continue to seek opportunities to add high quality ASCs to our platform, and obviously are comfortable going above the $200 million to $250 million if those opportunities exist.
Jason Cassorla: Great. Thank you.
Operator: Thank you. Our next question comes from the line of Stephen Baxter with Wells Fargo. Please proceed with your question.
Stephen Baxter: Yes, hi. Thanks. I was hoping you could talk about your expectations for payer mix in 2024 and how that’s been factored into your guidance. It obviously looks like there’s significant growth coming on the exchanges, so I’m wondering if that’s something you’ve explicitly considered either from a volume growth perspective or inside of your payer mix guidance and kind of how you think about better payer mix could materialize in your guidance range? Thanks.
Sun Park: Hey, Stephen. Good morning. It’s Sun. Thank you for the question. Yes, for 2024, first of all, in 2023, our payer mix remains quite strong, as we said previously, with managed care steady around 70%. And that’s what we’re sort of expecting in our 2024 guidance to stay pretty steady. Your question on the exchange volume, yes, we are tracking that as well, and could potentially be a tailwind or an opportunity in 2024, but we’re not assuming anything material from that in our 2024 guidance.
Saum Sutaria: I mean, the other thing I would say in particular with the exchange growth is that I just would remind the group that we feel pretty good about how well we’re contracted in the exchange environment in the states that we operate in. Both applicable by the way to the acute care portfolio, of course, but also applicable to our USPI platform. So just as a note on that.
Operator: Thank you. Our next question comes from the line of Jamie Perse with Goldman Sachs. Please proceed with your question.
Jamie Perse: Hey, thank you. Good morning. I wanted to get your assessment just of the current ASC landscape in terms of competitive activity and new competition in states as well as on the funnel, just new procedure categories that are moving in, moving off the inpatient only list, and eventually out to ASCs. Just any perspectives on what you’re seeing in the market and sustainability of ASC over the medium term. And then just any comment on if there was a surgical day impact in the fourth quarter? Thank you.
Saum Sutaria: Okay. I’ll leave the surgical day question till the end, because I honestly don’t know. Look, on your first set of questions, a few things. Okay. So, one is that we have been – obviously, we spend a lot of time talking about orthopedics, generally speaking, and obviously, the more traditional things like GI and ENT and things of that nature, ophthalmology. But the fact is, we have been focused on diversification of our platform for a long time. I mean, take as an example, shoulder surgeries. We have had for over a year now, an innovative program that has helped us grow and develop all the protocols for our ASCs, where we do orthopedics, to add shoulder surgery to that. Now, the numbers are not as big as hips and knees, for example, but we’re well prepared to do that.
And part of our physician recruitment strategy has been to focus on physicians with shoulder – interest in shoulder surgeries in the ASC setting. Just as an example, I think you guys are well aware of our urology strategy, where we think there’s a very nice opportunity, especially with high quality groups, to move further into the ambulatory surgery setting. We had been growing and expanding some of our bariatrics capability there, which, again, in the ASC setting, has been reasonably stable despite the GLP hoopla over the last year. And so – and then obviously growing and expanding some of what one might consider vascular or cardiovascular. But in a measured way, as we look forward from that standpoint. So I feel pretty good about the fact that our business development and strategic teams are thinking steps ahead.
