Good day, ladies and gentlemen, and welcome to the Second Quarter 2011 Tenet Healthcare Corporation Earnings Conference Call. My name is Jeff, and I'll be your operator for today. [Operator Instructions] As a reminder, this conference is being recorded for replay purposes. I would now like to turn the conference over to your host for today, Mr. Thomas Rice, Senior Vice President, Investor Relations. Please proceed, Mr. Rice.

Thank you, operator, and good morning, everyone. Tenet's management will be making forward-looking statements on this call. These statements are based on management's current expectations and are subject to risk and uncertainties that may cause these forward-looking statements to be materially incorrect. Management cautions you not to rely on and makes no promises to update any of the forward-looking statements. During the question-and-answer portion of the call, callers are requested to limit themselves to one question and one follow-up question. The presentation Tenet is making today includes non-GAAP financial information. A reconciliation of this information to GAAP can be found in the appendix. At this time, I will turn the call over to Trevor Fetter, Tenet's President and CEO. Trevor?

Thanks, Tom. Good morning, everyone. This quarter was very straightforward for Tenet. Consistent with our outlook, adjusted EBITDA was $277 million, up 3.4% relative to last year's strong second quarter. Adjusted admissions grew by 1%, our third consecutive quarter of positive growth on this metric. Our inpatient business had both total and paying admissions that were essentially flat year-over-year in a period that was clearly a tough environment for many in the industry. We're pleased that surgeries grew by 1.1% and emergency department visits were strong. We are achieving our performance milestones in the core growth strategies of building our active medical staff and enhancing physician alignment through our physician relationship program. We had some volume headwinds early in Q2. The month of April was weak, but volumes improved as we moved through the quarter. Acuity was flat relative to last year with commercial up and Medicare down, both within ranges that we see quarter-to-quarter. Commercial revenues as a percent of total patient revenues continue to climb due to a combination of pricing increases and moderation in the negative volume trends that we saw over the last several years. In the second quarter, commercial revenues were 42% of total patient revenues, the highest level in more than 5 years. Earnings growth was helped by increases in commercial pricing, continued tight cost control, Health IT incentive payments, favorable developments on bad debt and growth in adjusted admissions due to our outpatient acquisitions. Q2 earnings were hurt primarily by hits to Medicaid revenues, some of which are specific program changes that are nonrecurring. Our pricing statistics are diluted by the rapid addition of outpatient business, but overall, this is a good thing because we're adding high margin business to our portfolio. While our program of adopting advanced clinical information systems remains a…

Thank you, Trevor, and good morning, everyone. Trevor provided a good overview on the quarter, so I will focus my comments on providing some incremental color on revenues and bad debt, as well as recent actions impacting our balance sheet and a few comments on our outlook. You may have noticed that we did not post slides this morning to accompany our comments. We have, however, updated our standard investor book slides for the current quarter, including the outlook, cash walk forward and HIT slides, which you can access at your convenience via our Investor Relations webpage. You don't need to rush to look at them now as my comments will hit the key points. In looking at revenue in the quarter, there was a sharp $30 million decline year-over-year in effective Medicaid pricing in the second quarter. This was made up of the reduction in Missouri that we are protesting; the shift of Georgia Indigent Care funding from the second quarter of last year to the first quarter of this year and of more disreductions [ph] in other states. However, in your assessment of our current earnings power, I would only include about $10 million to $12 million, so the $30 million is being reflective of continuing year-over-year reductions. Also, I would encourage you to note that no revenues associated with the extended California Provider Fee program were recognized in this quarter, even though the approval of $26 million in revenues for the first half is a relative certainty. Because this $26 million is related to the first half of 2011, many, perhaps most of you, will be tempted to back these revenues out of our third quarter results. If that is your intent, then to maintain analytical consistency, you should reflect the relevant share of these revenues or…

[Operator Instructions] Our first question comes from the line of Justin Lake with UBS.

This is Andy Valen in for Justin. I was just hoping we could drill down a little bit more on the acuity levels. You had said they were well within normal ranges with Medicare down and commercial up. Can you give us a little detail on what the normal ranges are and then where they were in the quarter, perhaps by month?

Sure, Andy. I'm going to ask Steve Newman just to comment generally on acuity. Steve?

Acuity was stable in the quarter. And I think it -- from a payer mix perspective, it was certainly within the range that we see from quarter-to-quarter. But it was interestingly really impacted by some positive and negative shifts. For example, our major trauma, which is very high acuity business, was up 3.8% in the quarter. This is a result of a lot of focus on our development of emergency services, CapEx investments and our physical plants for emergency and that sort of thing. On the other hand, as we mentioned in the prior call, for Q1, we've seen a decrease in the loss of the OB care. So our OB deliveries were down less than any time in the last 2 years. That tends to decrease the acuity. So I would say, Trevor, that acuity was pretty stable across the company during the course of the quarter.

All right, great. And one quick follow-up on the Medicaid HIT incentive payments. Can you give us an update on what's included in guidance from there and whether what you recorded in this quarter was a portion of what you were expecting?

Sure, this is Biggs. The $25 million we recorded in the quarter brings our total for the year to $50 million. What we included in our outlook before and was reflected in our HIT multiyear slide was $40 million. So we are $10 million ahead. Some of that $25 million in the quarter was forecasted for later in the year and some was not. So at the end of the day, what we have is a $10 million raise in our HIT outlook, and there's still $10 million of opportunity associated with the Medicare meaningful use elements of that in the fourth quarter. But that was a little more sensitive to timing, and so at this point in time, we'll treat that as upside.

Our next question comes from the line of Matt Borsch with Goldman Sachs.

Yes. I'm just wondering, as you talk about the progression of volume trends during the second quarter, did you -- do you have any observations on what others in the industry saw? Because the general observation that we heard had been more that the volumes were weakest in June, but apparently, you saw the opposite trend. I'm just wondering if you had any thoughts on that.

Yes, Matt. This is Trevor. The -- we did -- obviously, we had a chance to listen to all of the calls, and I can't speak to why anybody saw any particular trend. But ours was very clear that April was weak, May and June were stronger, and that improving trend has continued now through the month of July. So I would attribute it more to our strategies and the execution, particularly of the physician alignment strategies that we have been pursuing for several years, as well as improvement in a variety of service lines in which we have invested.

And as you look at how trends have been developing, are there any regional variations that you can identify of significance?

Yes. I mean, the regions always perform differently, but in this quarter, actually, we were pleased that the balance between the regions was much more uniform than what we've seen in the past. I think that contributed to that relatively stable-to-growing set of statistics that we put out in the prepared remarks.

And my last question on a different topic, and I apologize if you already covered this, but how far do you think you have to go on the supply cost initiatives as you look beyond this year? Is there a long-term percentage or number you can point us to?

You and Shelley [ph] have followed us for a long time, so you know that when we talk about supply costs, it's a series of very discrete initiatives on high-value items, as well as on the utilization of low-value items. People tend to think of these initiatives as being all about price. They're actually much more about utilization, elimination of waste, selection of the appropriate items. And so there's -- we believe that there is far more opportunity there. It's obviously harder than just negotiating price with vendors. But when we talk about our Medicare Performance Initiative, it's encompassing the supply cost initiatives that we envision going several years out.

Our next question comes from the line of Sheryl Skolnick with CRT Capital.

As we look at your earnings here and as we look at your guidance for the second half, just to keep things focused in the near term while Dr. Steve is still there, as I recall, there was a bit more weighting towards the back end of the year, Biggs, than there was at the front end of the year when you gave this guidance, granted that you don't give quarterly guidance, but that was the commentary. And so I'm curious as to what you -- if you could review for us what you expect to accelerate or perhaps decelerate relative to a stable and strong first half that will make the second half comparisons perhaps on the EBITDA line a little more robust?

Okay. The -- I think the big driver, second half, when you think about it is -- California Provider Fee, as I said earlier, is not recorded yet for the follow-on first half of this year, so that's $26 million. There's another $12 million from Pennsylvania that we expect in the second half. There is a potential upside on California for the second half of this year, provider fee, which is modeling presently at $37 million, but that's not in our outlook at this point because we think that it's pretty questionable whether that would get approved by CMS by the end of the year. Unless -- I pointed it out, because it's -- we think it's a likely event, just not clear whether it will happen this year or roll into next year. There's already talk about $10 million of upside that's left on HIT incentives, which is not included in the HIT outlook that we gave, the slide that's out on the web in the investor book, but we're certainly going to try and still achieve that on the Medicare incentives. Then beyond that, MPI has always been back-end loaded. Those savings grow over the course of the year. We expect that will still be the case. Acquisitions on the outpatient side and Conifer business, which is -- both of those are growing -- activities will grow in the second half over the first. And then we expect that there's upside from continuation of the favorable trends we've seen out of May and June. We just -- it's a ways to go here, but we're certainly leaving the first half on a positive note, as Trevor's already talked about in the way the quarter was progressing. On a more mechanical basis, but it's a notable item, FICA second half versus first half contributes $20 million, although we cap the compensation limits on FICA. So that's always an expected lift in the second half that people have a tendency not to think about. Q4, too, I guess -- a long-winded answer but I'll hit one more. The -- Florida is a very seasonal business so Q4 traditionally gets a lift as volumes and results go up in Florida, so we would expect that again this year. So that probably leaves us with a stronger Q4 than Q3. But, anyway, hopefully, I have addressed the overall question, the first half and second half.

You have, and if I could drill down on the one of them. The MPI savings, I noticed a slight reduction in length of stay just maybe 1/10 of a day. But at what -- if you could sort of work through it so -- I mean, what's in the back of my mind here is the Street's obviously extremely nervous about the prospect for a 2% across-the-board cut in total Medicare program costs and reflected that in most everyone's stock price yesterday in a very significant way, to say the least. And one of the worries that you always have there is that it's a price cut that perhaps can't be mitigated. And my thought was for companies that are working on initiatives like the Medicare Performance Initiative, I'm wondering just at what point we can start seeing the real powerful savings above and beyond the supply cost, not that they're diminishing those, but above and beyond those that reflect the really hard things that there are to do, the improvements and we'll call it, productivity, efficiency, throughput and reductions in length of stay, and then the recapture of quality-based payments. So when do we start seeing that? And what has to happen in the hospitals for us -- for that to become a significant mover of cost reductions and margin improvement through the MPI?

Sheryl, I would say this. Although we've been working on MPI for the last 2.5 years, we have so much more to do, so much more in both length of stay, but as well as the clinical standardization process. Each week, we identify opportunities to drive down the variable cost of care, both from a supply perspective. One of the things we've never talked about on these calls is blood utilization. It is a huge, very expensive issue with a big opportunity for us to drive standardized, evidence-based practice. We've worked on the acquisition costs and -- but the utilization savings are 5x what the reduction in the acquisition per unit cost is. My sense is that with potential additional cuts, we just redouble our efforts. And the external environment is really helping us galvanize the physicians. And as we do alignment activities with our doctors, whether they're comanagement agreements in expensive areas like cardiology, orthopedics or spinal surgery, or whether we employ our physicians or whether we align better with our hospitalists and intensivists, this all has the potential to drive down not only length of stay, but total cost of care as we move toward a even more prospective payment system.

I just would add to Steve's comments, Sheryl, that there's a slide out there on the web that we put out there in June to give some reasonable reflection of what we expect out of MPI and productivity initiatives based upon those which were already identified over the next 5 years. And that slide totaled $280 million, which is $30 million more than what we had in the 5-year outlook. Also importantly, included in that slide was besides the DRG-related effort and supplies-related effort, was a productivity initiative worth $60 million, which is going into effect now. Now we expect to achieve about $15 million of that this year and hit the $60 million run rate next year. But that gives us the opportunity then over the near term to outperform the $50 million a year. So as we put that initiative in place, there should be greater visibility from a productivity standpoint. And as I said, maybe enable us to beat the total $50 million a year and bring more of it forward to offset any other pressures.

That's wonderful. And a very quick one, what was your observation rate in the quarter?

12.3%.

[Operator Instructions] Our next question comes from the line of Art Henderson with Jefferies & Company. Arthur Henderson - Jefferies & Company, Inc.: Trevor, in your comments, you talked about commercial pricing coming in at the upper end of the range. As you look out to 2013, can you remind us kind of what that range was? And if that's, I think you previously had said 5% to 7%. Is that correct?

Yes, that's right. And I said we were coming in at the upper end of the range. We've been very pleased with what we've been able to accomplish in commercial pricing, and it's fundamentally based on a value proposition to the payers about quality and efficiency, a very efficient low-cost revenue cycle and very high degree of transparency and honesty in terms of putting valid claims forward. So we -- I like where we're positioned relative to our local competitors in terms of our relationship with managed care. Arthur Henderson - Jefferies & Company, Inc.: Okay, that's great. And then on the follow-up, obviously, in light of this deficit reduction bill and the 2% that Sheryl was referring to, Trevor, just how vulnerable do you think the hospital sector is in particular as you look forward to incremental cuts near term versus something that might -- you've given up quite a bit already in terms of the healthcare reform bill, so I just was curious to get your thoughts on how vulnerable you think the hospital space is.

Well, okay, that's a hard question. Who knows? But let's look at the bigger picture. So you're right to point out that we gave up a lot already. It's always good to remember that you have an industry of which 80% is comprised of not-for-profit hospitals that don't have, in the aggregate, an enormous ability to absorb cuts. And every congressman understands this and they are really understanding it now with the mobilization of a grassroots effort across the industry, both not-for-profit and investor-owned. Also very important, as you analyze, we're all doing our homework at the same time, I think -- on the 2% approach, rather than jumping right to the conclusion that, that is what is going to happen, let's not forget that, that 2% kicks in after a series of failures to reach agreement prior to that and doesn't kick in until the end of this year in terms of knowing that, that's the outcome. And then if it even does kick in, it's the cuts are not effective until October of 2012. So you have quite a long period of time here before we would be dealing with any cuts. And then I think the most important thing that was pointed out to us yesterday evening was that when you think about this 2%, you have to start subtracting from it Medicaid, and you have to start subtracting Medicare Part C and Part D. And you get, at least by one piece of analysis I've seen, you get down to a potential cut under that method for hospitals that is $45 billion over a 10-year period beginning in October 2012. And if some of your fears in analyzing a particular company might be on these various provider fees, those wouldn't be at risk until 2014 or potentially later. So at least, it's hard for me ever to know what Wall Street is thinking out there, but it seems like maybe they're thinking about a worse case than might be the worst case scenario in actuality for hospitals.

Our next question comes from the line of Tom Gallucci with Lazard Capital Markets.

This is Colleen Lang on for Tom this morning. Biggs, given the number of moving parts with Medicaid this quarter, do you still expect to see cuts in the $30 million to $60 million range for the year? And can you discuss just the general outlook for Medicaid in the second half of the year relative to the first half now that we have more clarity on state budgets?

Sure. I did mention in the prepared remarks that we -- sitting here now in August, we have much more visibility in the Medicaid pricing for the rest of the year. So I'll ask Biggs to comment specifically on how it relates to our guidance.

Sure. The $30 million to $60 million number did encompass all the risks which have unfolded. Obviously, disappointed by some of it. Don't think that the Missouri cut should have occurred, so we're protesting that one. But with the Missouri cut, it puts us at the upper end of that range, $30 million to $60 million of incremental, if you will, 2011 Medicaid hits compared to what we had coming out of 2010. The -- in terms of how all that spreads and if you kind of put together a global analysis of everything, the recurring, if you will, coming out of last year, cost was around $10 million a quarter for the reductions that were put in place primarily July 1, 2010. And then on top of that is the $60 million of incremental for this year, bringing the total above $100 million. In the second half, what we think there will be is about a $50 million greater hit in the second half compared to the first half. So a little bit more of the detrimental effect, it'll be in the second half, as a result of these recent round of cuts.

Okay, great. And then just can you remind us how many employee positions you have at this point and where you expect that number to be over the next few years?

Yes, Steve?

Yes. As we said previously, our intention was to add 300 employee positions for the next 2 to 3 years, and we're on track to do that. As of the end of the second quarter, we had a little over 600 employed positions. So we're on track to hit our goal for 2011. And I should add that in addition to employee positions, we're certainly increasing our alignment activities with those that are affiliated. For the first 6 months of the year, we've added 382 physicians to active staff, net of attrition. Our outlook for the year was to add 800, so we're right on track to hit our 2011 guidance in terms of both employee positions as well as total active medical staff addition.

Our next question comes from the line of Adam Feinstein with Barclays Capital.

So well, I guess, maybe just as a starting point, there's been a lot of questions about mix this quarter in all of the calls. And I guess just as a starting point, when we look at your overall revenue mix, your managed care revenues were up about 150 basis points as a percentage of your total, Medicaid being down. So I mean, that looks like an improving payer mix there. So I know you talked about the pricing coming in at the high end of the range, but certainly, just wanted to get more clarity as you guys think about your overall payer mix. And then just have a quick follow-up.

Okay. Actually, I think one of the best ways to think about payer mix is to drill into what we're seeing in some service lines, Adam, because we're-- if you remember our targeted growth initiative, for example, we made a very deliberate move beginning several years ago to invest in certain service lines that would differentially attract commercial business since its margin is so much higher than all of our other business. So I'm going to ask Steve to give you some more commentary on some of the service lines that are growing, doing particularly well, what that says about payer mix because I think that's the right way to look at it. Steve?

Okay, Adam. I think that our investments are certainly paying off, both in terms of CapEx, as well as our physician alignment activities. One of the targeted areas that we've been working on for the last 18 months has been in the area of spinal surgery. And in the quarter, our spinal surgery was up 4.3% compared to the same quarter prior year. Another area we've been investing in is growing comprehensive urology surgery programs, and we've done this by targeted investments in technology, including robotics. And in the quarter, our urology surgery was up 4% compared to the same quarter prior year. It's interesting, when we grow one of these comprehensive urology programs, we get the minimally invasive business, but the big margin business is the non-minimally invasive business that comes as part of growing the comprehensive urology business, the open surgical procedures, if you will. So we can differentiate ourselves from our local competition and take market share in some of these high revenue, high margin businesses with intermediate-term investments, both in aligning medical staff as well -- capital expenditures to grow technology. Our orthopedics was stable in the quarter compared to Q2 of 2010. That's pretty remarkable to have orthopedics stable, understanding the pressures of decreased utilization across the market. In fact, you could make an argument that the drop in utilization in orthopedic procedures and our being stable actually equates to taking market share in orthopedic surgery. So I feel very good about our focus, the alignment of our capital expenditures, our physician development activities, with those service lines that we've identified that the population is going to need as it ages through the commercial age group and into the Medicare age group.

Okay. And just a quick follow-up, and I'll get back in the queue here. So, Biggs, you talked before about this, the revenue per adjusted admit should be about 2.8% if you just take the different pieces and back into it relative to the 0.6% in the quarter. So do you think in the back half of the year, we should model in 2.8%? Or is there still -- I guess it gets hard with all the puts and takes with the provider fees and some of the other things that tend to bounce around between quarters.

Yes. I think, set aside provider fees, there wasn't any in the second quarter, so they're not in there. That would provide lift if they come in, in the remainder of the year. The remainder of the year, I think we will still have some reductions in Medicaid where I talked about that, still expect our imaging volumes to grow, although some of that will anniversary the compact or the discounts to our gross charges to pricing the uninsured. We'll still continue, but I'll note, once again, those will wash out against bad debt. So those things will continue. On the other hand, in the mix overall, there was payer shift, payer mix shift, which we expect to reduce in the second half as we continue to see what we believe will be a moderation of what has been the negative trend there. And also -- I mean, we're getting into some of the more finite stuff that wasn't in my summary comments, but there were also lower stop-loss payments for this quarter, which -- those things bounce around, so that easily could come back in, in the third and fourth quarter. So I would say I would expect it to be plus or minus the 2.8%, depending upon how all those factors play out, provider fees, one directional -- these are things in the other direction. But it's going to vary by quarter, and it's really not too predictable. But for the most part, while all these things don't really end up falling to the bottom line, it just depends upon what the effective margin rate is on the individual drivers.

Our next question comes from the line of John Rex with JPMorgan. John Rex - JP Morgan Chase & Co: So just -- actually, I wanted to follow on that most recent line and just see if you could give us any insights in the -- kind of maybe narrowing the gap or helping explain the gap in terms of where your revenue yields fall and kind of what we've been seeing more broadly over the past couple of quarters. And I think you've highlighted a few here, but it just seems like it's a still, fairly kind of several hundred basis point gap that we are seeing from the others. And do you have any insights into why you'd be trending so differently?

Okay. Well, the -- maybe a few things just from -- making sure there's a good baseline understanding of how we do our statistics to begin with. First of all, HIT incentive revenue is not included in patient revenue because of the way the regs are constructed. It says it's not for delivery of patient care, it's for completion of system implementations, and so we didn't put that into patient revenue, so it's not in our stats. Others may have it in their stats. I don't know. Also we don't include physician revenue on employee positions in our patient revenue for the sake of these stats. And of course, growth in Conifer is also not included because that's not patient revenue. So there's a number of elements of revenue which we have, which are growing, which are not in the stats, and that may be creating some apples-to-oranges. Beyond that, I can drill into greater detail on some of the things that I already talked about and quantify a little bit, but the things that people might not otherwise think of, as I said, we had the increase in or decrease, if you will, in our pricing of the uninsured in certain markets where we just felt like it was the right action from a competitive standpoint in a tough economic environment. And that was at a 0.5% or a 50 basis point move in the overall price per adjusted admit number. Once again, that's offset by lower bad debt expense, so it doesn't fall to the bottom line. I think the payer mix shift was worth about 0.5%. I would expect others have that as well or possibly even greater, but I don't have visibility. And then, I hate to go there, but the whole adjusted admission process is an estimation of how to combine inpatient and outpatient. And if you instead do a weighting of our visits, pricing growth and our inpatient pricing growth, you get a number about 0.4% difference. So that also is a driver of the stat. I mean, there's still -- everything's directionally correct, but it has some measurable effect as well. So that is some of the things, I think, that people otherwise wouldn't see. The Medicaid hits are apparent. The imaging volumes we've talked a lot about. So when you put all those together, it explains the difference for us. And as I said, some of that just really doesn't fall to the bottom lines, so it's more optics than reality. John Rex - JP Morgan Chase & Co: That actually helps, to quote some of that. And then you had mentioned in the acuity topic, which has been the topic, you mentioned a decline in Medicare CMI. I don't think it was much, the way you characterized it, but were there just any specifics in terms of categories, and say, cardio's been getting spotlighted here in terms of where you might saw declines?

I would say that you're spot on. We certainly saw what everyone in the industry has seen with a decrease in cardiac CAT and electro-physiology procedures and cardiovascular surgery. We're seeing more cardiovascular medicine than surgery. But we've seen these trends years ago, and we prepared ourselves by diversifying the focus of our hospitals, that in the first half of the decade, we were very focused on cardiovascular disease to mainly outpatient cardiovascular care. And we're in the areas that will drive acuity on an inpatient perspective over the next 10 years based on not only technologic improvements, but the demographic changes. John Rex - JP Morgan Chase & Co: And do you have a handy stat there just in terms of what the decrease in cardio surgeries or what it was in the quarter? In your Medicare book, in particular, I'm thinking about.

Our overall was down approximately 3%, which I think is consistent with what others in the industry have seen.

Our next question comes from the line of Ralph Giacobbe with Credit Suisse. Ralph Giacobbe - Crédit Suisse AG: Maybe I missed it. Did you guys actually give what the Medicare CMI was for the quarter and year-over-year?

No. No, we prefer to just talk about it in terms of ranges because it -- otherwise, you don't have any basis for comparison versus a, say, a company with much larger portfolio that would be expected to have different ranges or less volatile. Ralph Giacobbe - Crédit Suisse AG: Sure. But what about just your year-over-year change for your own company?

Yes, no, we're just not talking about it, Ralph, sorry. Ralph Giacobbe - Crédit Suisse AG: Okay. And then on the bad debt side, obviously, better than expected. I just want to make sure, I mean, that's just related to just the declines in the uninsured? Or was there anything in terms of changing your discount policy, anything we need be aware of there? And then just in terms of your comments of favorable resolution of aged accounts, can we get just some more color on that?

Sure. This is Biggs. The bad debt expense, there were 3 drivers. It was lower volume, it was the change in the pricing to uninsured, so both of those things drove lower revenues. And the pricing initiative, that wasn't broad-based, that was a few markets, but nonetheless, it has an effect. And then the third thing is the resolution of the older accounts. And what that comes down to is routinely -- it varies in amounts, but routinely, we reach resolution with managed-care payers on older receivables, and as we do that, typically, it's a pickup. And this quarter, we had that, and like I said, we have most quarters and will have in quarters in the future. But it was one of the drivers. Ralph Giacobbe - Crédit Suisse AG: I mean, can you quantify that amount?

The amount associated with that on bad debt expense, I don't have the exact number, but I think it was between $5 million and $10 million.

And our final question comes from the line of John Ransom with Raymond James. John Ransom - Raymond James & Associates, Inc.: Just trying to normalize a little bit the second quarter trends. What I've got is you got a $30 million headwind from Medicaid and a $10 million additional payment from HIT. So that would leave you kind of $20 million year-over-year. Anything else that we should think about year-over-year in terms of the EBITDA trend? And then you said $5 million to $10 million on the recovery of bad debt. Anything else we should think about?

I'm sorry, I didn't follow the first part. You're talking about...

What John's basically saying is you got a net headwind of $20 million, negative on Medicaid and positive on HIT.

Well, the -- to reiterate, if you're looking at the quarter... John Ransom - Raymond James & Associates, Inc.: Yes, I'm just trying to get a normalized quarter-over-quarter EBITDA growth.

So normalized in the quarter, you need to take the $20 million out of Medicaid, $10 million of which was just a movement to the first quarter of this year to the second quarter last year, right, in Georgia. And you need to take out the $10 million on Missouri, which was a retro hit. Then kind of below the radar, there's a $5 million hit we took on a discount rate in medical malpractice, which we certainly expect to reverse. As a matter of fact, we did it today, and then hit with more than reverse because interest rates have changed. The -- then there's, yes, growth in positions, salaries and wages, which has occurred, but there will be benefits later on associated with that in total between relocation costs and salaries and wages. That's a $6 million bill [ph]. So there's future benefit associated with that, so something to consider in terms of how you normalize this versus what kind of expectations there are for growth in revenues following. Those are, I think, the big things. John Ransom - Raymond James & Associates, Inc.: So what does that net to? I mean, again, I kind of come up with $20 million, but I was trying to double check that.

Net-net, you're in that territory. John Ransom - Raymond James & Associates, Inc.: And then Missouri was $10 million. How much of that is going to be at the back half? Was that a onetime? Or is that going to be $10 million a quarter?

No, it will not be $10 million a quarter. That $10 million reflects a full year. John Ransom - Raymond James & Associates, Inc.: Okay, so it should all...

Going forward, it's worth about $2.5 million, which is why I said that the recurring element of the $30 million was in the $10 million to $12 million range. John Ransom - Raymond James & Associates, Inc.: Okay. And then you talked about a $37 million California Provider Fee. That's in addition to what you're getting this year. So if you got that in the first quarter, you would be plus $37 million, less $63 million you got this year, so kind of a $25 million-ish sort of net change?

Well, actually, what they're doing in California is constructing now a multiyear program, which then we would expect to have a more efficient approval process. So it's actually possible that next year, if it wasn't approved until next year, that there will be that $37 million. And then -- or $36 million to $37 million, and then another $72 million on top of that representing the full year 2012 fee. So when you start to add everything together, even with the $63 million this year that we had on the California Provider Fees, and I'm not giving guidance for next year yet, but it's possible that next year's total provider fees will actually be bigger than this year's, even including the $63 million in this year's. John Ransom - Raymond James & Associates, Inc.: Great. And then just lastly, a couple of nits. Outpatient mix, I know one of the goals of the company is to grow your outpatient to total. Where do you think you'll be by the end of the year?

Hard to say, John.

Yes, I think a lot depends upon the ultimate timing of the acquisition. We've got our acquisitions targeted. We know what each of them should drive based upon when they're actually brought on board, but I think that the timing is subjective enough to where it doesn't make sense for us to give an absolute. John Ransom - Raymond James & Associates, Inc.: And is Conifer -- when do you think Conifer would have meaningful revenue from non-Tenet hospitals? Is that a 3-year, 5-year, 2-year, what's your goal there?

Well, I think it could be 1 year. It could be 3 years.

I think that it just depends upon whether or not we're able to bring on board some very large systems as clients. And there are large systems that are interested in us.

All right, ladies and gentlemen, that will conclude today's conference. Thank you for your participation. You may now all disconnect, and have a wonderful day.