Pito Chickering: Okay, which actually is a great segue. Looking at your sort of guidance ranges with contracting for pricing base we set and contracting with your doctors basically set, is the only variable between the high and the low end simply where the volumes end out? Or what are the components are there between high end versus low end guidance?
Jim Swift : I mean, Pito, I would say that, that is certainly a component of that range. I want to be clear that we have a lot of activity on the operational side, be it in the RCM transition in our practice level plans and in our corporate plans. So there is an execution component in each of those that we wanted to take into account within that guidance range.
Pito Chickering: Okay. Fair enough. Two more quick ones here. With your contracting with your physicians, has there been any change to sort of turnover as these contracts come up for renewal? Is there any change to turnover of those docs on those contracts? Or is it pretty stable?
Jim Swift : It’s been pretty stable. Our turnover is very, very low as we’ve commented before. And with most of these contracts, again, some of them are renewed over a 3-year period. And in the specialties we’re in, we really are the medical home for a lot of these specialties. So I think that really breeds confidence within the clinician pool to remain a part of the organization.
Pito Chickering: All right. Makes complete sense. And then last quick one here. Free cash flow conversion for ’24 should it be pretty similar for as it was in ’23, now RCM’s pretty stable.
Jim Swift : I would think so, Pito. If you look at ’23, it was a little over 70% from adjusted EBITDA to operating cash flow. Our general rule of thumb has been in the range of maybe 2/3 of adjusted EBITDA into operating cash flow. So that’s kind of a good baseline for you to think about.
Operator: Your next question comes from the line of Brian Tanquilut from Jefferies.
Brian Tanquilut: Sorry about the technical distances earlier. Jim, I guess my first question, in your prepared remarks, you talked about structural, tactical and strategic changes that you’re making to the business. Maybe if you can share with us what falls into each of those 3 buckets that you alluded to?
Jim Swift : I suppose when we look at it face value, one is, and we’ve talked about volume in the past, we’re looking at staffing associated with the practices to make sure that we have the right staffing mix in terms of personnel. And within that, is really are we using physicians versus other clinicians such as nurse practitioners or PAs. That’s 1 piece. Two, we know that we have contract revenue in our relationship with some of our hospital partners. And certainly, that becomes an element in terms of rightsizing the support for those practices and making sure that we really are executing with our hospital partners in that regard, and we’ve had some favorable results thus far. And I think as well as the issue that we’ve seen about being back in network in the case of our ambulatory practices that have been adversely affected because as opposed to the inpatient services where the patients do make it to the service largely in those other areas, we are really — those patients are directed elsewhere.
So we feel that there’s going to be a benefit as we get more of our marketing and execution around patient volumes from an elective ambulatory standpoint.
Brian Tanquilut: Got it. Okay. And then maybe since you talked about inpatient, is there anything you’re seeing in the hospital other than a tough comp from last year that kind of like hinders the ability to drive growth? Is it your hospital losing market share? Or is it just the birth rate altogether? Just curious how you’re thinking about volumes.
Jim Swift : I think that part of the volume issue is take the NICU out for a moment, we did not see the large amount of volume this year, this last year that we saw in ’22 related to the other inpatient services such as Pedia Hospitalist, Pedia PDR and Pedia ICU. I think from the standpoint of our inpatient NICU services people talk a little bit about a higher degree of severe prematurity and increasing length of stays, and we’ve certainly seen that. Some of the bread and butter around admissions into the NICU have been variable across the country. So — but again, we anticipate volumes will remain kind of where we are for the time being. But we don’t see any indication of volumes decelerating going forward.
Marc Richards : Yes. And Brian, just as a quick note on that. We did highlight that the fourth quarter had some pretty strong comps that we went against. And we look at our NICU days over 2 years stack, they were actually slightly positive versus 2 years ago. So in our view, looking across as many states and practices where we are providing neonatology services. we usually view it as more appropriate to look at a longer-term time frame to get a better sense of where things are going. And as a result, as we look into ’24, we’re not anticipating within our outlook for the year, any meaningful movement in patient volumes.
Brian Tanquilut: That makes a lot of sense. And then maybe last question for me. Since you guys talked about in-network, how much out-of-network is going to be left in the business, let’s just say, as we exit the year?
Charles Lynch : It’s a good question because you’re asking things that we don’t know about how this year will unfold. But where we stand right now, we’re — our historical experiences are less than 5% out of network position and we’re lower than that as we enter this year, thanks to some of the recontracting we’ve done.
