The Ensign Group, Inc. (NASDAQ:ENSG) Q4 2022 Earnings Call Transcript

Barry Port: Thanks, Suzanne. We want to again thank everyone for joining us today and express our appreciation to our shareholders for their confidence and support. We know that this year will be not without some unique challenges; however, we’re encouraged by our operational strength and our core business. As always, we want to recognize our talented field leaders for their heroic efforts, along with those of our nurses, therapists, and other frontline care providers who continue to provide an industry leading example of life enriching service to our residents, coworkers, and our communities. We’re also appreciative to our colleagues at the service center who are working tirelessly to support our operations, enabling us to succeed in spite of the challenges we faced. Thank you for making us better every day. We’ll now turn the — turn over to the Q&A portion of our call. Carmen, can you please instruct the audience on the Q&A procedure?

Operator: And it comes from the line of Ben Hendrix with RBC Capital Markets. Your line is open.

Ben Hendrix: I just wanted to ask about your skilled mix momentum. Clearly, we’re seeing evidence of your higher acuity capabilities, but also some COVID and respiratory impacts in there as well. How should we think about steady- state mix for your same-store portfolio? And then from a modeling standpoint, how should we think about skilled mix evolving through the year?

Barry Port: Yes. I’ll just — I’ll speak generally about it and let Suzanne fill you in on any other insight she has. But as we compare kind of where we are today from a skilled mix standpoint to where we were both last quarter and last year, and even pre-COVID. We are pretty confident in the strength that we’re building and the momentum that we’re building in our ability to continue up the acuity chain and attract sicker patients, which is ultimately, the goal to be the best resource for our hospitals and managed care partners is always at the forefront of what we’re thinking and that means an evolution towards being nimble and adaptive to what their needs are and their needs include ensuring that we have the capability to care for a more acute patient.

So as we look at the impact of COVID this quarter, certainly, it was a little bit higher than the same quarter last year, but comparable to kind of where we were last quarter. What we see is that even though there was more COVID activity this quarter than there was in the same quarter last year, it’s not much. And so, what that indicates to us is on a steady state basis, even in quarters where we’re not really impacted by COVID, we’re still fundamentally higher than where we were kind of going into this pandemic. And that momentum, just it just continues. And so we’re encouraged by that. Anything you want to add to that, Suzanne?

Suzanne Snapper: No. I think you said it really well. I think one of the things that we’ve been noticing for the last couple of quarters is a little bit less dependent on the waivers and maybe that COVID and our skilled mix isn’t as aligned. And so that, I think, as Barry mentioned, I think we’re really excited for where we are and the relationships that we’ve made throughout the entire year with our manned care partners continue to be strong and as we continue to see that portion of the skilled mix build.

Ben Hendrix: Just a quick follow-up. You’ve noted that states have been supportive of the PHE roll off and the soft landing there. But is there any cadence — quarterly cadence considerations we need to be thinking about as we think about the second half of the year?