Welcome to the Q4 2013 Tenet Healthcare Earnings Conference Call. My name is Brandon, and I'll be the operator for today's call. [Operator Instructions] Please note this conference is being recorded. I will now turn it over to Mr. Thomas Rice, Senior Vice President of Investor Relations. You may begin, sir.

Thank you, operator, and good morning, everyone. Tenet's management will be making forward-looking statements on this call. These statements are qualified by the cautionary note on forward-looking statements contained in our Annual Report on Form 10-K. [Operator Instructions] At this time, I will turn the call over to Trevor Fetter, Tenet's President and CEO.

Thank you, Tom, and good morning, everyone. We ended 2013 on a strong note, reporting $444 million in adjusted EBITDA for the quarter and $1,342,000,000 for the year. Earnings for both the quarter and the year were toward the high end of our outlook range. While admissions headwinds persisted throughout the year, our inpatient trend strengthened in the fourth quarter. In fact, we reported a stronger admissions trend in each sequential quarter as the year progressed. While inpatient admissions were disappointing for the year, we achieved many key performance milestones and exceeded our targeted objectives in other areas. Our emergency departments and outpatient businesses generated solid growth throughout the year. We accomplished our pricing objectives, and our cost control was better than we expected. Conifer also had a great 2013 and is well-positioned to have even stronger years in 2014 and '15. The integration of Vanguard is proceeding smoothly, and the synergies we've identified should become increasingly visible in our results as we move through 2014. It's still early, but I'm very pleased with the opportunities that we have created through the combination with Vanguard. This is a transformational acquisition that strengthens our positioning in the market by, among other things, increasing our scale, broadening our geographic footprint into attractive markets, creating a larger platform for Conifer and adding a new health plan business line. We also gained some very talented people at all levels in the organization and some innovative programs that are already enhancing our overall operations. With that as a quick introduction, let's take a closer look at the key elements driving our earnings growth. This analysis is summarized on Slide 3. We held the decline in same-hospital adjusted admissions to just 50 basis points in the fourth quarter. This was comprised of 3.3% growth in outpatient…

Thank you, Trevor, and good morning, everyone. I will spend the next few minutes reviewing our 2014 outlook, including some color on the anticipated impact from the Affordable Care Act. As we mentioned in our earnings release, our 2014 outlook for adjusted EBITDA is $1.8 billion to $1.9 billion. Our first quarter 2014 outlook for adjusted EBITDA is a range of $350 million to $400 million. There are a large number of items impacting our outlook for 2014 EBITDA growth. In addition to the Affordable Care Act, other important items include Vanguard synergies; the California Provider Fee program; health information technology incentives, net of program costs; our Performance Excellence Program; outpatient acquisitions and de novo development; and Conifer's growth, including the continuing integration of our Catholic Health Initiatives business. Slide 4 summarizes the assumed impact on 2014 for each of these items. Let's discuss them one at a time. The first phase of Vanguard synergies will make an important contribution to EBITDA growth in 2014. When the transaction was announced last June, we estimated the synergies in the range of $100 million to $200 million over a 2-year period. We expect $50 million to $100 million of this aggregate target to be realized in 2014. The Vanguard integration is proceeding smoothly, and we are increasingly confident that the synergies ultimately generated by us over the long term will exceed our initial estimates. Conifer has already taken control of the revenue cycle operation for the legacy Vanguard facilities, and our performance excellence teams are deployed in Vanguard's hospitals. The results of these efforts will become increasingly visible in the second half of the year and into 2015. We did not assume any material contributions from Vanguard synergies in our first quarter outlook. Turning to the California Provider Fee program, we expect…

Yes, thanks, Dan. On Slide 8, we summarize the strategies that we believe have placed us in a very advantageous position for Health Care Reform. We conceived and executed these strategies around 3 sets of initiatives: exchange contracting, outreach and enhanced effectiveness in engaging the consumer. From Day 1, we embraced the idea of the exchanges and have succeeded in positioning our hospitals to gain market share. 100% of our hospitals are now in networks of every metal type in their markets, and more importantly, 97% of our hospitals are in the networks of at least one of the 2 lowest-cost silver plans in their markets. As you probably know, HHS has reported that more than 60% of people buying insurance on the exchanges are choosing silver plans. Because the young invincibles will often buy a bronze plan, the silver plans are also more heavily weighted with high utilizers. We're very pleased with this position, and I want to thank our managed care team for working very hard over the last year to get this done. We believe we've created a first-mover advantage that gives us a strong position in our markets and expect this to result in incremental insured patients at attractive price points. As we've shared with you in the past, we've been successful in having the value of our hospitals properly reflected in our exchange pricing, which is within 10% of our commercial rates. The second part of our strategy is an active outreach program. This is a joint effort between Conifer, our hospitals and more than 300 local community groups and navigator organizations in our markets. This program, which operates under the branded name Path to Health, is educating newly eligible individuals with information about the exchange and Medicaid coverage opportunities. It also provides enrollment assistance…

[Operator Instructions] And from Deutsche Bank, we have Darren Lehrich on the line.

I guess, when we look at your ACA guidance, it strikes us as somewhat conservative, but I guess not surprising given all the uncertainties early on here. I think the question is just with respect to your Medicaid conversion assumption. And I would like to just get your thoughts on why it wouldn't be higher given your footprint in some of the expansion states. And then if I could, Dan, maybe just get some numbers from you or some ranges on just the total number of uninsured admissions and the total number of uninsured ED visits for the combined company. Those were numbers, I guess, not found in your 10-K.

Hey, Dan, do you want to take that?

Yes. Let me go through a couple of your points. In terms of the Medicaid conversion that we outlined on the slides, what we did, Darren, was go through state-by-state where there is expansion already, notably California, and modeled it based on when we anticipate a state will actually extend its Medicaid program. So, for example, in Michigan, they are going to expand their Medicaid program but that does not come online until April 1. So there's a little bit of a delay there. But literally, Darren, we went through hospital-by-hospital, state-by-state, and that's how we also ended up with that estimate. Now we also took into consideration -- we looked at some of the guidance that was in the CBO most recent report and also used that as a benchmark to look at as well. So we think we've been fairly deliberate here and comprehensive in terms of looking at the Medicaid volume that is going to convert from uninsured. And listen, that volume is going to continue to grow as you move through the year, even in states where they've already expanded. So one thing, so far in 2014, it probably wouldn't surprise anyone, California is probably ahead of most states, and we're seeing that so far, at least 1.5 months into -- for the year. Now your question about the total number of uninsured, if you give me one second here, I can grab that for you. It's approximately -- admissions is about 40,000 -- say about 40,000 -- say about 50,000 admissions on a full year annual basis. And in terms of visits, again that was on the combined company.

Right. We're estimating about 575,000 ED visits uninsured, is that in the ballpark?

No, total visits are approximately 675,000 on an annual basis. Again, that's legacy Tenet, legacy Vanguard.

Okay. And that's for ED, or is that...

That's total. That's total.

From JPMorgan, we have Justin Lake on the line. Justin Lake - JP Morgan Chase & Co, Research Division: First question on 2014 guidance. Looking at all the moving parts, 2013 run rate plus your headwinds, tailwinds that you laid out there, it doesn't appear like there's -- I'm having a hard time, I guess, backing into the -- what your organic growth assumption is for EBITDA of the combined company. Can you kind of lay out for us what you think the underlying growth rate of this business is x all the moving parts that you talked about here?

Sure, Justin. This is Dan. If you go to the slide where we outlined some of the key items impacting our earnings in 2014, we take the midpoint. It's a little bit north of $100 million, say $110 million. And in terms of the base earnings of the company, a lot of people, in terms of that number, they were sort of taking a midpoint of our guidance in the fourth quarter of about $425 million. So if you take that and sort of annualize it, you can say $1.7 billion as a starting point. So you've got $1.7 billion. And if you take the midpoint of some of those items, or the aggregation of those items, $100 million or so, it's about $1.8 billion roughly. And then one way to look at it would be to get to the $1.850 billion. The midpoint of our guidance is another $40 million, $50 million. Now I will point out, Justin, that when you think about some of those items on that slide, some of them are fundamental operating business practices that we've been deploying for years, such as our Performance Excellence Program. So if you added the $50 million related to the Performance Excellence Program to the $40 million number that I just mentioned, you'll be probably in the neighborhood of $80 million, $90 million. So it's a little bit more robust. And if you exclude the Performance Excellence Program -- we don't think you should. I mean, that's fundamental. That's been ingrained in our DNA, and our operators are doing that day in and day out. So listen, 2014, from an organic growth perspective, there's obviously pressure on that organic growth. As we mentioned in our assumptions, we are assuming negative inpatient volume headwinds of about 2% to flat. So that obviously is a pretty big headwind against organic growth. And if there's some -- if that alleviates, obviously that will certainly help drive incremental growth in our core business. Justin Lake - JP Morgan Chase & Co, Research Division: Okay. But is it also fair to think about Medicare rates? I mean, you mentioned the ACA rates as kind of a call-out as well. Is it reasonable to think that Medicare rates are likely to be in this flat to up slightly range going forward regardless of how we got there? Or do you feel [indiscernible] back to kind of 2% to 3% at some point?

Yes, I mean, there clearly is -- they've outlined some of the estimates going forward. And listen, you're going to see continued pressure on some of the elements within the market basket -- numbers that they ultimately come up with. Based on what we're looking at right now, that's the assumption. There is $50 million of incremental Medicare rate pressure this year, as well as the rate pressure related to another quarter of the sequestration cuts that we didn't see in 2013 because it wasn't implemented until April 1. Justin Lake - JP Morgan Chase & Co, Research Division: Okay. And then just my follow-up is on -- one of your guidance points for reform was that about I think you assumed there that 5% of existing commercial admissions move into the exchange. So if I think there's about 150 million people insured commercially in 2013, that would be about 7.5 million people moving into exchange products in addition to whatever the uninsured moved in. It just seems like a big number. So one, why do you think that? And two, can you tell me what the headwind from that is?

Well, when you think about some of the estimates that the CBO has out there, that migration ramps up over time. And when we looked at it and we modeled it in a number of different ways, we landed on that there could be a migration of up to 5% this year. Now one good thing is that our Managed Care team, led by Clint Hailey, has done a very good job negotiating pricing that's essentially consistent with our existing commercial rates, within 10%. So if someone does migrate from an existing commercial product to an exchange product, the delta between the rates may be nominal or potentially up to 10%. Now one thing it all depends as well is what type of commercial coverage did they have in the past? If they had one of -- they're referred to many time as mini-med plans -- they may have had very high deductibles and they're moving into a better insurance product, so we would be very pleased to see that type of patient migrate to an exchange product.

From Barclays, we have Joshua Raskin online.

Just a quick clarification on '14. Is Emanuel in the guidance or are you guys waiting for that to close?

This is Dan. There is a small element in our guidance for Emanuel, but it's insignificant.

Okay, okay. And what about the Connecticut hospital that Vanguard was looking at?

No, we have not included in the outlook anything related to the Connecticut hospitals.

Okay. Got you. And then you mentioned in your prepared remarks that you might be out of network with a large health plan later this year. Is that a national plan or is that just a significant glue-in -- I mean, any way to sort of size the potential impact there if that would occur? And maybe when does your contract expire, et cetera?

This is Trevor. We signaled that because we're in a process of a lot of renegotiations, as you can imagine, integrating Vanguard and Tenet together. And we have assumed because it's in early stages, that it is a national plan that we could be out-of-network for some period during the year.

And Trevor, when does that potentially occur?

In the second half.

Okay. So we've got some time on that one. And then just last clarification. Vanguard used to break out the health plan, premiums and expenses. I know it's not as significant an item obviously, as it used to be, nor is it for the overall combined entity. But maybe where are you putting those revenues as premiums and those expenses? And then any expectation in terms of the combined -- I'm sorry, the EBITDA impacts in 2014 from the health plan?

This is Dan. The revenues are included, and I'll call -- I'll refer to it as our other revenue category. They're not included in patient revenue. And the expenses would be in their natural element for the employees, obviously in SWB. Claim payments would be under operating expenses, those categories. In terms of -- you mentioned about Vanguard did use to break it out. The health plan business is not as material to the combined company. But I will say and mentioned this on our call in November. The contract with the State of Arizona that expired on September 30 of 2013, our book of business under that contract is now about half of what it was. So there's about $10 million to $15 million of earnings pressure on a quarterly basis compared to Vanguard's former earnings run rate.

From UBS, we have A.J. Rice online.

First, just to ask about beyond just the health plan. You've now have Vanguard for a little while. Surprises, non-surprises. I know you've got a cash flow estimate for the entire company. Vanguard was going to be negative, so it's good to see that you can -- with it combined, it can be positive cash flow. Is there any change to the timing or anything on the capital commitments with Vanguard as well? So just sort of an update on the Vanguard from your perspective.

I will give you a few thoughts, A.J., this is Trevor. And then I'll ask Dan and also Keith to comment. I am very pleased. I mean, I think if there's a big surprise, is that there's so few surprises. And one of the very pleasant surprises, as I mentioned in my prepared remarks, is that we've really been able to retain so much talent within Vanguard at all levels of the company. So you go into the hospitals, you have some really innovative programs going on in lean data management. They're very complementary but also augment what we've been working on for a long time in performance excellence. In the area of clinical quality, the trajectory of Vanguard was very strong. Same thing for Health IT in some of the larger markets. And in some of the smaller markets, we have an opportunity to really conform to what we've been doing in Health IT, and I'm very pleased about that. Some of the talent that we've obtained on a regional operator level is outstanding and very pleased to have that added to the DNA here within the company. I can't say enough about the development pipeline. So I'm going to ask Keith to comment on that. And I guess, I'll go in order of this. I'll stop. But Keith, I'll ask you to comment on some of the exciting opportunities we have in development. And then Dan, you can kind of pick it up in what A.J. was really getting to, which is what about on the financial side.

Thanks, Trevor. A couple of things, A.J. We obviously continue to have a strong pipeline on the M&A side. We also are involved on a company-wide basis sort of on actively looking strategically at our portfolio and optimizing that. So I think we'll see some things happen this year. On the capital projects, you kind of mentioned, and I will say and Dan mentioned it before, we have a New Braunfels hospital that was under construction and will open this summer. That's a terrific market, one of the fastest -- the fastest growing in Texas and one of the fast-growing in the country in that quarter between San Antonio and Austin. So we're really excited about that. That's the largest project that was underway at Vanguard. In addition to that, the large ED expansion. The first phase of that, opened a new ED at Sinai-Grace a few weeks ago in Detroit. The Heart Hospital, if you will, is on track for this summer. And really, we are now in the phase where these things will start opening during '14 into early '15, and we're now in the final planning phases for the Children's Hospital tower, which will start probably a run from '15 to '17 because it will have to be phased because of just the logistics of that. So all of those things I think are very positive and on track. And on the M&A side, we see a lot of opportunities to continue to upgrade our market positions and upgrade the whole portfolio in general.

A.J., this is Dan. In terms of assessing the underlying operations, several months after the transaction was consummated, to Trevor's point, no major surprises, which is -- some kind of surprise in this type of transaction, so incredibly pleased there. As we continue to really dive deeper and deeper into the operations and assessing operational improvements, cost efficiency synergies, whatever the right buzzword is, we're becoming increasingly confident that over time, as we mentioned in our remarks, that we'll be able to achieve and exceed those synergies estimates that we put out there. So a lot of work gone on there. We couldn't be more pleased with how that's proceeding. To your point about the free cash flow -- and we've talked about this before. In '14, as Keith mentioned, there's a number of projects that will start winding down, and some of those assets will start coming online. And, I mean, it's not only done in New Braunfels and Detroit, but also in San Antonio as well, some very nice projects. And we obviously focus on free cash flow, and it's going to be a continued focus. And we expect that to grow as we move through '14 and certainly, as we get into '15, when some of the CapEx levels will start coming down somewhat.

From Morgan Stanley, we have Andy Schenker online.

Real quick, on admissions and adjusted admissions growth going forward, obviously you gave same-hospital growth. When we think about Vanguard's contribution, are they going to see growth similar to those ranges?

Yes, those are ranges for the combined company on a same-hospital basis.

Yes. So just to be clear, when we refer to -- when we use the phrase same-hospital referring to 2014, it's the whole company is voted [ph] then combined for the entire year. Same-hospital in Q4 is a different story.

Okay, that's helpful. And then thinking about 4Q here specifically, obviously net patient revenue per adjusted admission for the whole company was much lower than same-store, implying much lower value for Vanguard. Can you kind of talk about maybe the moving pieces in there? I mean, how much of it is payer mix, maybe acuity, and then versus simply Vanguard's rates with commercial payers being below yours? And if that is part of the case, then what is the opportunity there? Obviously, you guys highlighted the Aetna relationship. But as these other contracts come up for renewal, is there really an opportunity to lift those rates with Vanguard?

Yes, in terms of our pricing, actually we couldn't be really more pleased with our negotiations to-date. We were pleased with our realization in the fourth quarter, and it was in line with our expectation. And you mentioned, yes, there's some pressure from the mix, and the inpatient volume headwinds obviously have an impact on that metric. So that puts pressure when you're looking at year-over-year type of revenue per adjusted admission. So that certainly has a part in it. But listen, our overall acuity was pretty strong, and so we were happy to see that in the quarter.

From CRT Capital Group, we have Sheryl Skolnick online.

First, I'll just clarify for the record that your guidances and your budget are approximately equal at the midpoint of your guidance range? That's sort of the first clarification, that, that's correct. Right, Dan?

That's correct.

Okay. For the record, I thought there was an error in my report this morning, just for the record. Moving on, though, if you could discuss a little bit about what's happening with your margins. We've talked about the top line and how you're going to drive top line and the pressures thereon. But as I look at the way the helpful slides that you've given with the things that are in and out of 2014, it looks to me like 2014 could be well be a year in which the costs, not on a per adjusted admission basis per se but where the costs are rising about as fast, perhaps even a little bit faster, then your anticipated revenue on a same-store basis is growing. Not real surprising when you've got a lot of reimbursement pressure, but I want -- I'd like to have an understanding of what's in that selected other operating expense line item that you call out that appears to be rising a little bit faster than your same-store revenue, assuming the midpoint of the adjusted admission guidance and the midpoint of the net revenue per adjusted admission growth guidance.

Sheryl, this is Dan, I'll take that one. In terms of -- so our assumptions are 1.5% to 2.5% growth on adjusted -- revenue per adjusted admission; and in cost, in the same range. When you look at -- one of the things when you look at our absolute costs on our income statement, there are rising costs. And when you're looking at year-over-year, a large part of that relates to -- the Conifer business is continuing to grow. That drives costs up, but it doesn't add anything to your volume statistics. So what we do is we exclude -- when we provide this cost metric...

It's only hospital operations.

Yes, it's your fundamental hospital operations, it excludes like the health plans, it excludes Conifer. So when we think about the costs as we move into next year, obviously we would have a traditional type of compensation increases. But our Performance Excellence Program is continuing to drive favorable labor management practices, and we continue to achieve savings on the supply chain. And so one of the obviously the key variables is as your volume goes up or down, it has a pretty big impact on that metric. And so if you're -- if we're in the 2% negative range, that's obviously going to have an unfavorable impact...

No, I understand. That's why I asked the question at the midpoint, Dan.

We think we can -- we feel very confident that we can manage our costs appropriately to drive the growth that's in our guidance for 2014, despite the various headwinds that we tried to lay out in fairly large detail.

Okay, because I mean, I'm struggling with 2 concepts. One, if I take your 2013 performance and try to make it apples-to-apples. The way you've done sort of one way is to look at the fourth quarter as a proxy, but we know that, that's got some items in it that are lumpy and may have occurred in the quarter that may represent -- that may not occur in every other quarter -- provider fees, the EHR income is going to be different, et cetera. So it's really hard to get a run rate for the company right now, but if I think about it from the perspective of I'm trying to do a pro forma for the prior 12 months and compare that to the pro forma -- to the estimates for the forward 12 months, I keep coming up with an EBITDA for the company that was in the neighborhood of $1.77 billion. And if I'm in that neighborhood and I'm getting to $1.8 billion to $1.9 billion, I'm really not understanding where there's growth here, okay? And that's my concern. Because that's why I'm asking, is it margin pressure because your costs are rising as fast as your revenues? Because you're not getting a full year impact of the positives? Is it that it's going to take several more years before reform actually is accretive? Is it that it's going to take several more years that Vanguard is accretive and all those things are happening at the same time? Is that what's going on here?

Well, one thing: when you look at -- and I mentioned this a little bit earlier, but when you look at Vanguard's previously reported results -- the 2 most recent ones were in the June quarter and in the March quarter -- you have to adjust those results, at least $10 million to $15 million per quarter and get that out of the run rate.

For the health plan?

For the health plan, the fact that it's a different contract now. And so when you think about it from an operating base, if you use $425 million as a midpoint and you annualize that, and you get around -- roughly around $1.7 billion, when you take those items that we've outlined on the slide, they give you about $110 million if you just pick the midpoint. And you'd, say, get a little bit of $1.8 billion and then arguably you add on some additional core organic growth. Now as I mentioned earlier as well, I think the PEP, our Performance Excellence Program, cost initiatives is part of your organic growth. So we look at it as there is some organic growth, and we're fighting the headwinds of a pretty tough inpatient volume environment. And when we have to assume that there's going to be inpatient volume trends in negative 2% to flat, that puts pressure on our operation.

Right, okay. But we're in the same ballpark in the way we think about the trailing 12-months is somewhere in that $1.7 billion-ish range?

I think that's fair.

And as a base to compare your performance in 2014 to an evaluated, however, we're going to evaluate it on the growth, okay. That's fair enough. And the share count that you're using for the full year is going to be 100 million shares?

Yes.

From Bank of America Merrill Lynch we have Kevin Fischbeck online.

I just wanted to dig into your assumption around the reduction of insured in your markets. It sounds like to me that you're kind of assuming that the reduction in insured volumes will relatively match the reduction in the uninsured in your markets. I guess, how do you guys think about the concept of the people who are sickest getting coverage and potentially representing a bigger part of your existing volume? It sounds like you're specifically targeting people who've been to your hospital in the past and I want to see how you thought about that dynamic potentially making a bigger impact.

This is Dan. Listen, we've modeled this in a hundred of different ways. Certainly, we literally go into a particular service area that the hospital is in and we try to make a judgment as to the current uninsured book of business. And Conifer provides an incredible amount of assistance and help here with the level of detail that they have through years and years of managing our revenue cycle business. And so we have a lot of visibility into just some overall uninsured trends that we have been seeing historically and that we're seeing currently. And so we have not -- admittedly, we pointed out on the slides, we have not assumed any incremental utilization from the individuals who do convert. But we literally tried to go through, based on our knowledge that we've gained through the years on our uninsured population as well as the opportunities that are out there in the market, whether a state has expanded its Medicaid program or not, and then also look at some of the assumptions that the Congressional Budget Office just outlined, I believe, 2 or 3 weeks ago. So we took that all into consideration in developing our -- basically our conversion percentages.

Okay, but it basically is the way I framed in that it's kind of a straight one-for-one? You're not assuming that these are the people who come to your site disproportionately getting coverage?

Well, I would say one thing, because we have been asked periodically in terms of the frequent flyers and what extent or what level do we see typically in our portfolio. Now it varies by hospital, as you can imagine. At some hospitals, it's not necessarily real -- a large portion, but at other hospitals, it's fairly significant. If you had to aggregate in total the frequent flyers, maybe in the 40% to 50% range of our uninsured book of business.

Hey, Kevin, Dan mentioned that we have all these insights through Conifer. Steve Mooney, the CEO of Conifer, is here with us. Why don't you just, Steve, talk to us briefly -- because it's a topic of interest to everybody -- about what you're doing in order to help us identify those people, reach out to them, get them the information they need, get them qualified, and then work with the hospitals on a basically a development strategy for that population?

Yes, sure, Trevor. Yes, Kevin, this is Steve. So Dan was saying, clearly we've had a program. It's called our Medical Eligibility and Counseling services program for years within Tenet, and that program has been extended pretty heavily since we developed Conifer back in 2008. At the point now we have about 625 advocates around the country operating that program, the balance I think is 22 states, of which former [ph] of those are certified application counselors. And Trevor mentioned some of the items in his brief remarks, but we're generating programs to kind of outreach. We have patients -- so we have individuals on-site to help educate them on the programs that are existing. We have obviously a lot of data pools that we can pull within as to who was in our hospitals before, that were not insured and who are maybe in for a certain service, to reach back out to them and understand how we can get them qualified for the exchange program. We're obviously doing outreach programs to the Path to Health program and have the inbound traffic from that with call centers, help an individual get qualified for the programs and starting to quantify where that's coming from and how we can further outreach in those particular communities to help those patients. So a lot of significant kind of data analyzing and kind of analytics driving some of our activity to hopefully get a greater level of flow for not only for individuals that were coming to our hospitals and the exchanges but who -- those in our hospitals before that might be ill or others in those particular locations that we can start having that traffic back in.

That's very helpful. And I guess just last question then on the ramp up, I guess, assumed in the guidance, and we think about, if somebody posts a synergy number and the ACA impact is going to ramp through the year without much impact in Q1. It sounds like to me that you're thinking that by Q4, you're going to probably have a run rate number for both of those of at least $100 million, maybe like $125 million exiting the year before you can build on that for 2015. Is that the right way to think about it?

Yes, this is Dan. Yes, those will certainly grow as we move throughout the year. And let me just give you a couple of examples of why they build. So, for example, when Steve and his Conifer colleagues go into and start assessing the revenue cycle operations of the former Vanguard facilities, you don't necessarily go into that revenue cycle unit, flip the switch Day 1, convert all the systems, drop all your people in there and start employing your best practices that you built up over 10, 20, 30 years. So that's a gradual process. And as you capture synergies incremental as you move along through -- as we move along through the year. And keep staying on revenue cycle, for example, even when we get to the end of 2014, we won't be done. That's going to be an ongoing, continuing effort as we move through '15 and even into '16 as we continue to convert certain practices and systems that the Vanguard facilities had under the Conifer umbrella. Same thing on supply chain and performance excellence. You go in, you're evaluating practices there. We're learning from the Vanguard colleagues of ours. A lot of great practices that we're taking, we're going to apply and have been applying in our facilities. They're doing the same with some of our practices. But again, they -- as you move through time, they continue to build as you continue to look for benchmarks and best practices to most efficiently manage your cost structure.

From Crédit Suisse we have Ralph Giacobbe online. Ralph Giacobbe - Crédit Suisse AG, Research Division: First, I just wanted to clarify that, did you say guidance assumes that you do go out-of-network with that large plan you mentioned? And if that's true, I just want to make sure, would that be a meaningful swing if you did come to an agreement?

This is Dan. Certainly, when we assessed our guidance for 2014, we took that into consideration. It's an evolving situation. We're not necessarily going to get into all the details in which payer it is, but it's certainly -- the possibility of that was considered when we built our guidance. I'm not going to sit here and say specifically there's an x amount of dollars in the guidance for that... Ralph Giacobbe - Crédit Suisse AG, Research Division: But I think you could -- assign a probability.

Yes, there's a probability that we've put into our range. Ralph Giacobbe - Crédit Suisse AG, Research Division: Okay. All right, that's fine. And then, I guess, maybe switching topics here, what's been your -- can you give us a sense of what your historical rate has been in signing people up for Medicaid that were previously eligible? And also if you had this data, of what percentage of your self-pay volume is in Medicaid expansion states?

Yes, Steve Mooney can speak to the success rates in signing people up. And while he's doing that, somebody will dig for the second part to your question.

The success rate, when individuals are actually -- we qualify them for the program, we kind of do a screening process. We have a pretty robust tool. It helps us determine linkage, which over the years of Tenet, it's -- we're actually assuming a ramp up of our old days to now just getting shovels and modeling what programs they qualify for and what state or local county programs. When we qualify them through our program, we actually get them linked because we know sometimes individuals don't meet the spend down requirements, they cannot be cooperative, things of that nature. We are typically in the range of around 90%. Ralph Giacobbe - Crédit Suisse AG, Research Division: 90%?

Yes, 90%. Ralph Giacobbe - Crédit Suisse AG, Research Division: Okay, and then just if you had the self-pay volume in Medicaid expansion states.

Yes, we're going to have to get back to you with that one.

Yes, I don't have the exact number in front of me. But certainly, California, there's a large percentage of the uninsured related in the state of California. But keep in mind, as we've mentioned through the years, there's the uninsured populations in Florida and Texas -- 2 states that are not expanding or sizable.

From Wells Fargo, we have Gary Lieberman online.

This is Ryan Halsted on for Gary. One quick one on guidance. The selected item -- the $50 million headwind on the two-midnight rule, I guess I just wanted to clarify, is that based on when it goes into effect in 4Q? Or is that assuming some continuation of a trend in the shift away from one-day stays?

This is Dan. Let me try to clarify one comment you made. The two-midnight rule is in effect. What the recent discussion that you probably noticed -- it came out a week or so ago -- simply addressed when the Recovery Audit Contractors, or the RACs, will be actually going in and assessing those claims and potentially issuing denials related to that. But the two-midnight rule, it's in effect right now. And there's various protocols that have to occur for an admission to qualify under the Medicare program. And that went into effect in October 1 of '13, and we're certainly complying with that. And it's going to continue as we move through the year.

Okay, that's helpful. And then, I guess, on the -- I was hoping you might be able to share some of your initial experiences, successes with the ACA enrollment, especially California, which has had some early success. I thought maybe you might be able to share some of your experience.

Yes, I mean, we've obviously -- this is Dan again. We've been analyzing that basically on a daily basis. What we have seen so far in California is very encouraging in terms of when we look at growth in the individuals who are eligible, and that we're actually seeing in our facilities. And as Steve mentioned, his medical eligibility unit is on top of this, 24/7. And we are seeing increased activity and increased success in getting people qualified for the Medi-Cal program out there.

And our last question is from John Ransom from Raymond James. John W. Ransom - Raymond James & Associates, Inc., Research Division: Most of my questions have been answered, but maybe Keith, could you talk about what pricing looks like these days for hospitals as a percent of revenue or however you want to look at it?

Sure. Keith?

Well, I think John, I really -- it's all over the map on pricing. We really continue to look at the same kind of models that we always have in the sense that we look to get to enterprise value accretion within a year to 18 months on anything strategic even. So that could translate into a higher or lower percentage of revenues, but I don't think you can take -- because markets are so different in terms of mix pricing. If you go down the list, you can't really assume that a dollar of revenue has sort of the same value across multiple geographies. So it will be kind of all over the map still. John W. Ransom - Raymond James & Associates, Inc., Research Division: And do you see more opportunity as a result of the ACA? Is it going to sharpen the winners and losers in these other markets so that models that could have competed 5 years ago can no longer compete?

I think that's very much true. In fact, I think clearly, folks are looking at how we get paid evolving over the next several years into more either bundled or as it moves towards more risk for the providers than just what we see today in value-based purchasing, which is a risk that we all have today. I think you're going to see folks looking for the ability to access larger blocks of lives to take that responsibility on and for them to do that, there's going to be some consolidation, particularly in urban markets, and I think there will be winners and losers. You're already seeing some of the narrow networks put/pull together in certain markets. So that's kind of a sign that you'll have networks competing with networks, which by itself will draw people into either completely economically integrated relationships like in acquisitions or mergers or potentially partnerships, where the parties are very economically aligned around taking care of patients on as a group -- as a population group, if you will. So I think there are a lot of different arrangements you'll see, but clearly, the trends that we see towards accountable care strategically and the different organizational structures that are put together for that will drive some more consolidation in markets that are particularly fragmented today. John W. Ransom - Raymond James & Associates, Inc., Research Division: And then just finally. This is going to be for Dan. Dan, all the spending in the ACA is driving up D&A costs. Can you give us an idea what peak D&A might look like in the out years when you're finished with all the spending?

John, this is Dan. So we obviously outlined our depreciation and amortization guidance for next year. And one of the things, if you compare it to our previous run rate of the 2 organizations, it is higher. But certainly, that's attributable to the various projects that are coming online this year either in the earlier part of the year or in the latter half of the year as well. So there is a ramp there to some degree. And as Vanguard had close to $400 million to $500 million of projects on their books, good projects that are going to eventually come online here in the next year or so, and so as those projects come online, although we haven't obviously put guidance out for 2015, but you should expect depreciation to have an uptake as those type of projects eventually are closed out and they're operation -- operating on a day-to-day basis.

Ladies and gentlemen, this concludes today's conference. Thank you for participating. You may now disconnect.