Greetings, and welcome to the Tenet Healthcare Corporation Second Quarter Earnings Conference Call. Today's call is being recorded. It's now my pleasure to introduce your host, Regina Nethery, Vice President of Investor Relations. Please go ahead.

Thank you. We're pleased to have you join us for a discussion of Tenet's second quarter 2020 results, including an update on the impact of the COVID-19 pandemic. Tenet's senior management participating in today's call will be Ron Rittenmeyer, Executive Chairman and Chief Executive Officer; Saum Sutaria, President and Chief Operating Officer; and Dan Cancelmi, Executive Vice President and Chief Financial Officer. Our webcast this morning includes an accompanying slide presentation, which has been posted to the Investor Relations section of our website, tenethealth.com. Listeners to this call are advised that certain statements made during our discussion today are forward-looking and represent Tenet management's expectations based on currently available information. Actual results and plans could differ materially. Tenet is under no obligation to update any forward-looking statements based on subsequent information. Investors should take note of the cautionary statement slide included in today's presentation as well as the risk factors discussed in our most recent Form 10-K, subsequent Form 10-Q filings and other filings with the Securities and Exchange Commission. With that, I'll turn the call over to Ron.

Thank you, Regina, and thank you all for joining us today. April, May and June, in our view, represented 3 different stories, with each month having unique characteristics and challenges to navigate, mitigate and overcome. The pandemic quickly forced us to revisit every aspect of our business at an incredible pace. Importantly, it required us to adapt our response at every step to simply care for our patients, protect our teams and ensure we could maintain our ability to serve the public's health needs. Starting with April, it was, by any measure, an unprecedented moment, creating an immediate urgency across every aspect of our business. We already discussed April in some detail in our June update, so I'm not going to comment beyond the facts as shown in our slides on volume and in Slide 6, which we did add for transparency purposes, on monthly EBITDA, that April was a significant negative financial impact to the company. Driven by the mandate to eliminate electric surgeries and stay-at-home orders, while ensuring every acute care hospital was fully opened and staffed as well as some USPI facilities, our revenue took an unprecedented drop, with our most profitable margin business, USPI, taking the greatest immediate hit as our revenue dropped by over 80%. Added to that was a cost to restructure the entire company to respond to pandemic by relocating our teams to home, adding new tracking systems and deploying resources to ensure information was actually dispensed made April quite an interesting challenge. But April proved we could move quickly in unison and with determination, focusing on patients and moving decision to action in an effective and efficient manner. We never allowed ourselves to be overwhelmed. As we entered May, we developed a stage reopening across the network. We implemented separate care pathways…

Thanks, Ron, and good morning, everyone. I also want to thank our caregivers and employees across the entire company. We're very proud of their incredible capabilities and continued dedication to exceptional patient care as well as a team-oriented approach that is allowing us to adapt quickly without impacting the quality of care for our patients. I'll begin my remarks with Slide 4. Our patient volumes, cost management and earnings significantly improved as the quarter unfolded. For the entire quarter, we generated net income from continuing operations of $88 million compared to $24 million last year, and our adjusted EBITDA in the quarter was $732 million, which was significantly better than our expectations and analyst expectations even excluding stimulus grant income we received. As we moved through the quarter and restrictions were eased, we carefully ramped up our facilities to provide essential health care services for the communities we serve. We were also diligent in adding back resources to meet the care demand as it grew through the quarter, rather than simply adding back costs at pre-COVID levels and assuming the volumes would return. We certainly appreciate the stimulus relief aid received quickly from the government, and we were able to recognize in the P&L $523 million of grant income, which partially offset the significant amount of expenses required to keep our hospitals open and our lost revenues as a result of the pandemic. As you can see in our release, our operating revenues declined $912 million compared to the second quarter of last year. Let's turn to Slide 5 and review how our volumes evolved over the past several months. We've been pleased with the volume improvement since the low point in April. As a reminder, through mid-March before the pandemic took hold, we were off to a good start…

Thanks, Dan. I have nothing else to add. So why don't we just move right to the questions.

[Operator Instructions]. Our first question today is coming from Ralph Giacobbe from Citi.

So the July trends, obviously, were helpful. Can you maybe just give us a little bit more sense of trends by either state or major markets since your footprint, obviously, covers areas currently in hotspots and other areas that sort of hit peak earlier? Just trying to get a sense of variance there.

Ralph, it's Saum. Just a couple of points about July. As you know, the -- from the news, the COVID hotspot activity that's probably affecting our markets the most on the Hospital side would comprise Arizona, Texas and Florida. That's obviously different than what we saw in the first part of the pandemic surge, April and May. So the markets have changed. The strength in July reflects -- of the volumes reflects a couple of things. The first is, obviously, our ability to have learned and managed the COVID cases in the first wave and now being able to, in parallel, perform good COVID care but also maintain, in a responsible fashion, elective work in the hospitals despite COVID surges. And then the second thing is, the markets that Dan referenced earlier, Massachusetts, Michigan, and some of the other areas, maybe in California, that had initial COVID surges, demonstrated ability to recover those markets back to normal as their COVID cases have come down. And we feel very good about the fact that we can see markets that really went through a significant surge and the ability to bring them back into a normal range very, very quickly. On the USPI side, the strength in the markets is broad-based. We continue to see strength in the markets even where there's COVID hotspot activity because these centers, especially the ASCs, are really a respite from the activity in the hospitals. And increasingly, we're seeing physicians making choices to come into those ASCs to perform necessary care. And that's reflecting -- that is reflected in the strength of the ongoing volume recovery that you see on the USPI side.

Okay. That's helpful. And if I could squeeze in just one follow-up. When I look at the monthly EBITDA, the $218 million in June, I guess, why wouldn't that be sort of a fair baseline or run rate as we think about the back half, especially if most of the volume metrics will seemingly get better as we move through the year? Or maybe you can help us with factors like seasonality or pent-up demand or maybe cost coming back up as to reasons why that wouldn't be fair.

Ralph, it's Dan. Now, listen, certainly, we were pleased with June. As I mentioned, we basically hit our original budget for June despite volumes obviously being substantially lower than what we would -- we originally anticipated. If someone had asked me at the beginning of the year, "Hey, do you think you can hit your June budget if your hospital volumes and surgical volumes are going to be off 10% to 20%?" I would have said, "I don't know about that, that seems like a stretch." So I do think that's certainly a very good indicator of the actions that we've taken, as Ron pointed out that it will be able to stick. And as we move through the rest of the year, obviously, it depends on various markets and how COVID moves up or down. But we think that's a reasonable baseline to move forward, ultimately, depending on what happens from a COVID perspective.

Our next question is coming from Pito Chickering from Deutsche Bank.

To follow up on the June EBITDA, very impressive considering the impact to volumes. So a few questions there. What was the pricing mix in June? Just trying to understand what the revenue impact was in June. Can you give us just some more hard details exactly what the cost containment was during June and the sustainability of that as you roll into the recovering back half of the year? And then I have a follow-up.

Pito, it's Dan. The mix, I would -- let me frame it this way. The mix between the various payers, Medicare, commercial, Medicaid and uninsured, I would say the commercial mix was very much in line with our overall volume trends. And in July, in fact, it's gotten even better. The commercial trends have improved in July. Not surprisingly, in the quarter, the Medicare volume was a little bit softer than the overall volume metrics, and on the Hospital side as well as on the Ambulatory side and for logical reasons. But it wasn't dramatic, but it was somewhat softer than the overall volumes. Medicaid was pretty much consistent with the overall trends, maybe slightly better. And then uninsured, the numbers are much smaller there. But uninsured volumes were a little bit lower than -- or I would say a little bit -- the decline was a little less than the overall. But the mix was good. And the mix is fine in July, which is very encouraging. From a pricing perspective, pricing was strong, whether it's on the Hospital side or whether on the USPI side. Number of reasons, one, the level of higher acuity procedures that were retained and performed in our facilities. It's a math issue, right? A lot of the lower acuity business wasn't there in the quarter. And the revenue per unit for the lower acuity business is lighter than the higher acuity stuff. So there's a natural impact on the overall metric, but pricing was strong and between the mix and by payers. So it was encouraging, as Ron pointed out. Listen, as we continue to build back the lower acuity services for the rest of the year, that overall metric, the net revenue growth on a per adjusted admission basis or per case basis, it will moderate as the lower acuity stuff comes back, but -- and we are very well positioned from a commercial managed care contracting perspective. And so we've got good visibility into pricing moving forward. So we're pleased with the revenue yield that we've been able to realize.

And then sort of a follow-up there. August is typically a slow month and surgeons take vacations. Any color from hospitals about how they see surgeon demand in August? And do you think that the docs are motivated to work through the backlog and provide good growth on easy comps?

Pito, it's Saum. A couple of thoughts. First of all, in looking back over the past few years, I mean August doesn't soften that much. We tend to have a pretty good cycling through the summer of -- and staggering of physician vacations. This year, I would say, on a qualitative basis, because of the COVID surge that we've seen in July, many of the specialists are booking cases into August pretty actively, actually, and we feel very good about that. And when you look at the Ambulatory business, in particular, on the Ambulatory surgery side, they're performing almost 100,000 procedures a month. And the vast majority of those are new procedures that are booked and not deferred cases from a backlog. And that's a testament to the fact that the physicians are running their offices and attempting to ramp up their offices to full throttle to what they were before because they have ongoing demand. So we actually feel pretty good about the strength and the trends all the way from the upstream activity to what ends up -- what they end up choosing to put in our facilities downstream looking into August. I actually think that on a go-forward basis, as the cycle of the COVID surge, which peaked in the second or third week of July in places like Arizona and Texas, Florida is still pretty high, if those numbers continue to come down and create more capacity, we'll see a similar -- we'll see a similar type of effect in the Hospital business as well.

Our next question today is coming from Whit Mayo from UBS.

Maybe for Brett or Saum, I'm not sure Brett's on or not, but I wanted to hear more about some of the changes that you guys made with scheduling and block time in the quarter. Are you making any modifications to that going forward? Not sure if you're giving block time yet, just wondering what the response was from your physician partners.

Go ahead, Brett.

Whit, it's Brett. Yes, I think we did a good job flexing down quickly to match the sharp drop-off in demand in a short period of time obviously when COVID hit. We flexed down by about 65%. Similarly, our governing boards and our operators have done a very good job as we've ramped back up our volume. Related to ramping up our capacity and staffing, it's obviously very demand driven, but we've put in place an algorithm to continue to ramp up our capacity and staffing in a very thoughtful and data-driven manner. Our goal for our utilization and staffing is built off our most efficient and high-margin month, which is December. So if we can continue to ramp capacity with this high bar for efficiency, we'll ensure we don't kind of over rotate in terms of opening up too much capacity for the level of demand at any one point in time. So generally speaking, I think we did a good job ramping down capacity quickly, and obviously, with the opposite intent of ramping up capacity slowly as demand came back.

And maybe just my follow-up for Ron, just any updated perspectives on some of the offshoring initiatives, how that's tracking versus plan. I don't know if there are any productivity metrics that you can share. Just any surprises that may have developed in the quarter.

We have over 900 associates now in Manila, and they're doing very good. They also had to shelter in place, the country required that. So we were able to bring them up within a week, pretty close to a week, from home. We had a very good -- from day 1, built a very good business continuity process, which typically is good over there just because sometimes typhoons and other storms do hit and requires that. So from experience, we knew that. And therefore, we started that way. But we came up very fast, and we've had very good support. Performance is high 90% level. We added -- throughout this whole process, we continue to place more people over there. So we've done some of that, not major numbers, but some of that. And look, it's going to continue to develop, and we'll probably double in place going forward without any issue, maybe even more. We'll see how it develops. But right now, we're very comfortable with the process. We've got a defined schedule laid out for the next 6 months, and we follow it pretty, pretty religiously. We -- it's interesting. We started this last February, and it's gone incredibly well. I don't know how else to describe it. We've been able to hire incredibly highly talented people. From a financial standpoint, I think Dan would agree that from a financial standpoint, we've really added some outstanding talent. And so support-wise, we've been very good. So we're very pleased with it. It will continue to grow, but we're doing it in a methodical way. And so far, I've got no concerns other than we've watched very closely during the pandemic, but they've gotten through all of it. So we'll see where it goes. But I'm very comfortable with what we've got and where we're going.

Our next question is coming from Kevin Fischbeck from Bank of America.

Great. I wanted to ask about that, again, the June kind of run rate number. You've said a few times that the CARES money isn't really enough to fully offset what the impact has been so far. But I guess you didn't book the full CARES money that you received so far. Should we expect the rest of the $850 million to be booked at some point in the back half of the year kind of on top of that June run rate?

Kevin, it's Dan. We'll be able to recognize a fair amount of it. I can't say with precision the exact amount at this point. It will be dependent on the amount of lost revenues that we have to absorb as well as additional costs for the remainder of the year. Listen, if everything got back to normal, and we were above -- at or above pre-COVID levels, that would be -- that's a great story. And if we probably wouldn't end up recognizing as much. But obviously, COVID levels have spiked, as we pointed out, in certain markets here in July. So we'll be able to recognize a lot of the money in the back half of the year.

And that's by hospital.

Yes. Thanks, Ron. But it really is a good point. It's -- you look at it on a hospital by hospital basis.

So some hospitals, they were way short. Other hospitals were over. So we can only recognize based on need. And again, it's allocated by hospitals. So it's not allocated for the system. And therefore, we have to work through that yet to figure out how that's going to work.

All right. Great. And then as far as the volume ramp that you guys are talking about, I guess you mentioned that a lot of the volume seems to be new volume coming in rather than working up in inventory. But your volumes were down 20% in Q2. So where is that 20% of volume, I guess, as far as in this process to returning back to the system? Is there some percentage that you expect won't come back? And any early thoughts based upon the markets that aren't seeing COVID as to how that will play out in the COVID hotspots today?

Kevin, it's Saum. Let me break this down between the Ambulatory business and surgery centers versus the hospitals. First and foremost, we're not anticipating that there was volume deferred that won't come back at some point in the Ambulatory business. The rescheduling of cases continues. It just -- all I'm saying is it's a minority of the cases that are being scheduled at this time and going into July and August, that is certainly the case. The vast majority are new cases that were not specifically deferred. There are cases that are higher acuity. This really breaks down by service. There are higher acuity cases that have come back faster. There are lower acuity cases and some types of preventative procedures where people may delay those cases for 4 or 6 months. But based upon our relationships with those patients and physicians, we fully anticipate that those cases will come back into the USPI environment. It's just a question of when. Not everything is getting rebooked immediately. On the Hospital side, it's a little bit different, you have 2 types of deferred care. The first type of deferred care has been the reduction in emergency department and elective outpatient-type visits that were the result of probably a bit of people feeling fear of coming to a hospital setting. Those emergency visits, eventually the patients will come back, but I'm not sure there's a makeup on those types of visits, right? They're emergency visits. They come back when they have a need. And the good news is into July, we're seeing a very strong trend in all of our markets towards further recovery in the outpatient and emergency department arenas with the same trend Dan described earlier, the commercial side demonstrating significant strength relative to the overall mix. From a deferred elective surgical standpoint in the hospitals, we worked down a lot of that deferred activity in June and July, but it's staggered based upon the COVID hotspots. So those facilities that did not have any COVID surge in the early part of April worked down a lot of those cases in May and June. Those happen to be the markets that are seeing a little bit more of a surge right now. So we're building a second deferred list, which we will work down in August and September. And then as I noted earlier, the markets that were hotspots in April and May, places like Detroit and Massachusetts, they're ramping back up in June and July, and we're seeing consistently strong results and volumes there, working down deferred cases but also booking new cases. So it's not going to be one answer for every market across the portfolio. It's really going to depend on when the COVID surges come and how we work -- work them down and then ramp back normal operations.

Your next question is coming from Sarah James from Piper Sandler.

I was hoping to get a better understanding of how much of the pressure you're experiencing right now is related to demand versus capacity. So maybe you could tell us what percent of capacity is your OR schedule operating at currently? And are you able to flex locations across your systems, suggesting alternate locations for a surgery that may have an open slot?

Sarah, it's Saum. Let me just make a few general comments on that rather than getting into specific OR utilization. First of all, in our hospital markets, we have, where possible, cohorted our COVID care in order to have scale of expertise, care processes and other things available so that we're providing the best possible care to those patients. That has also been important to creating some capacity in space in order to allow people with needs, whether emergent or related to their chronic conditions, to have ongoing access to surgical and procedure-based care or even medical admissions that are necessary for those patients. And that's been an important part of how we've managed, especially in our multi-hospital markets. From an ambulatory perspective, I would say that the ability to manage our operating room capacity effectively the way Dan described and Brett described, has been critical to creating capacity without necessarily bringing back all of the costs related to having the centers fully opened all at once. So we are not short capacity in the ambulatory environment. We are managing the OR utilization to high levels. In fact, better than we managed it last year. And then we're bringing operating rooms back online as the demand continues to grow, consistently grow in the ambulatory surgery environment. So we feel very good about that. It also means that on a prospective basis, as the volume comes back, we are very confident about the ability to perform that business at consistent margins.

Great. And just a follow-up there. It sounds like you're able to see the timing of the initial surgical referrals for your ASC business. So are you able to see how much of the previously referred surgeries you've already rebooked? Are you able to calculate that?

Yes. So let me, again, emphasize a couple of different things. One is, if you think about USPI on an ongoing basis in the surgical business, it's about 100,000 cases a month roughly. It's a rough number that are performed there. And again, the vast, vast majority of those in July and going into August as we look out at the schedule are new cases and not deferred. The cases that were deferred that have been rebooked, which supported the demand that USPI saw in May and June and also into July, dropped off pretty quickly from the standpoint of what percentage were deferred and rebooked versus new cases. Again, that is not to say that certain types of procedures, GI, aerosolizing procedures and things like ENT and others have not been deferred for a longer period of time. So we continue to maintain those lists. Some of those may end up being deferred for 4 or 6 months, but we continue to maintain those lists, and I'm sure those cases will, over time, trickle back into USPI based upon the relationships we maintain with those patients and physicians.

My next question is coming from Frank Morgan from RBC Capital Markets.

I was hoping you could maybe bifurcate between the markets that are actually back above 100% pre-COVID levels. I know that the averages are very impressive that things are improving. But is there still an opportunity on a lot of the markets where you're still below 100% of the pre-COVID levels? And then the second question was just in terms of, you think about your ability to adjust your staffing with these ebbs and flows that you had with demand. Is this just part of the new normal going forward? I mean is this a model of staffing that's sustainable over the long term?

Yes. So two comments there. The first -- to your first question, remember, we exited the middle of March and entered this pandemic with a fair degree of momentum in our volumes and the growth and development of our service lines across the Hospital and USPI portfolio. It was not our intent this year to simply deliver 2019 volumes. So our goal is not to -- that we are measuring ourselves against 2019 volumes for the purpose of these discussions, our goal is not to end up at 2019 volumes. We had made investments and plans to grow the business beyond that, and that's what we're continuing to maintain our focus on as we look forward. We won't be satisfied when we hit 2019 levels. And that's an important thing to realize in the Hospital and the Ambulatory business. So those markets that were really hit by COVID early on are recovering. And yes, they still have more opportunity to come back. Some of the USPI centers that were in states that were hit by COVID hard, examples, New Jersey, Southern California, they also are continuing to recover and have more opportunity to come back. The good news is that the facilities on the hospital side that didn't have a COVID surge really ramped back up in June, very, very well. And now that Texas, Arizona and Florida have had a real COVID surge, we know how to deal with that. We know it's a cycle, we know the cycle will go down and we'll ramp them right back up like we're doing in the other facilities. So in short, I would say, internally, we maintain our goals above the 2019 levels. To your second question, Ron alluded to this in his comments. The pandemic has been an opportunity for…

We've really also, I think, as part of that, taking the basis that there are no fixed cost. I mean we really do believe that the concept of fixed cost, variable cost, I mean, it is real, we're not denying that. But we cannot excuse the -- some of the overhead and stuff on the basis that it's fixed. So we are really pushing harder to variabilize everything we look at. And therefore, it makes us more aware of where we spend money, where we spend capital, how we spend capital. It's changed the whole approach, I would say, to our cost management. So...

Our next question is coming from A.J. Rice from Crédit Suisse.

Maybe just to follow up in discussion a little bit about your employee base. To what extent, either looking back at some of the hotspots you had early or some of the new hotspots are you having to pay hero pay to any of your workers? And then as you think about Massachusetts, then Detroit, some of the markets that have come out the other end a little bit, we've been hearing anecdotally, at least, some talk about people being burned out and maybe a little bit of a pickup in turnover. Are you seeing that in any way? And just comment on your use of temporary labor throughout all this. How has that trended? And are you having to use that to deal with hotspots now?

This is Ron. We haven't done anything different on pay. We pay our people well, and we ensure that people get paid timely and appropriately. We certainly pay over time, and we have been -- we've had a fair amount of overtime and premium pay, but we manage that also very tightly, which helps reduce burnout. But clearly, where we have pressure points, people are working a lot of hours. And it's not just the front line employees, it's the support staff, it's the team, it's the people in this room. Everybody has been pretty much engaged since April with minimal time really that you would normally think about, especially over summer. But turnover has not been exceptional anywhere significantly that we've seen. But Saum, do you want to add more color? I mean I'm talking about as a corporation. But go ahead.

Yes. I just -- I want to add a little bit of color to that because I think the caregivers across the industry and certainly all of our facilities have been working extraordinarily hard with a great degree of commitment to patient care. I think, and I'll emphasize it again because I think it's among the most meaningful things we've done during this COVID crisis is, we committed early on to a COVID care framework and set of processes that would minimize the exposure to our staff related to COVID. And a lot of the workflows, the PPE processes, the choices we made around purchasing those supplies was built around that principle. And the reason we did that from day 1 was we knew that this pandemic, once we began to understand it, could last for a very long time, and we wanted to do everything we could in the Ambulatory business and the Hospital business to minimize those risks to our caregivers because we knew they would be putting in long hours for an extended and potentially multi-surge type of pandemic, and that's what we've seen. And so I think that's actually serving us well. And look, we're grateful for the support that we've gotten from nurses that have traveled around the country, nurses within our own system, from USPI that have traveled to support other hospital markets and, in select cases, support that we've received from the federal government and the Department of Defense in terms of both nursing and physician capacity in markets where it was necessary. All of those things come together to hopefully create a more sustainable environment for the workforce. But look, I will acknowledge it is hard work. I'm sure there are caregivers that are tired, and we're very committed to continuing to have rotations in order to make this sustainable for them because they've done a great job so far.

Okay. And maybe my follow-up...

And we happen to be aware...

Go ahead. I'm sorry.

No, I'm just saying, we try to be very, very aware of that, market by market, location by location. Even here.

Sure, of course. Yes. It's sort of a sign of the times that we're this late in the call and no one's asked you about Conifer, but maybe I'll do that. One of the issues and thinking about how it's performing, it's not easy just to go back and use last year's base because, obviously, you've got some divested hospital dynamics that are going on as well as the less claims related to COVID that they get paid a percent of handling. Can you just maybe give us your feeling for how they're doing? And any comment on any of the initiatives that the new management team is taking there? And any update on the spin-off thinking?

Well, as I said earlier, the spin-off, we said, even without the pandemic, I mean we're still -- even with the pandemic, we're -- we still see that as something that we're on track and we're working against the schedule. So I mean, that is moving forward. As far as performance, I'll let Dan talk about it in a minute, but from my standpoint, they had an excellent quarter. They were on top of things. They did a really good job on collections for us and for their other customers. They were on top of all that. Communication was good. The management organization. Like I, said, we've added two really super good people. And the organization has been very resilient and has done very well. So Dan, I mean, specifically, do you want to touch up some points?

Yes. A.J., listen, Conifer had a really, really strong quarter from a cash collection performance perspective, getting bills out the door, following up with payers. And I would put a good word out for the payers, too, they've been very cooperative through all those, too. So Conifer's performance was very, very strong in the quarter. And obviously, you can see it in our cash flows. So we're very pleased with how they responded during this crisis. Their overall numbers from revs and EBITDA and expenses, Conifer continued to do a good job managing costs and finding additional efficiencies. And they're obviously a big part of our Global Business Center initiative as well. So all that continued. I mean the biggest pressure Conifer had on their numbers was the top line, predominantly due to their clients and their hospital clients or physician clients with their revenues tail off. And so as their customers' revenues go down, in many cases, under the contracts that Conifer has, that there's -- including Tenet, there's an impact on their client fee income, so to speak. So rebounded, obviously, it will continue to rebound as hospital customer has continued to recover as well. But we're overall, very, very pleased with Conifer performance in the quarter.

Our next question today is coming from Josh Raskin from Nephron Research.

Just one question here. I guess what changes permanently externally to Tenet as an organization that you're reacting to? And maybe within that answer, specifically how you're integrating telehealth into your workflow, how that's impacting downstream procedures?

Josh, it's Saum. I just want to make sure I understand the first part of your question. When you ask about permanent changes, are you talking about in our cost structure? Or are you referring to external market changes that may become more permanent?

Yes. No, I meant more external market changes that are becoming more permanent, site of care, things like that.

Yes. Okay. So a few thoughts. And actually, the telemedicine place is a good place to start. So I think as we indicated in some of our updates through the quarter, we have implemented both consumer-based telemedicine and also hospital-based specialty to specialty telemedicine capabilities. We had over 190,000 visits in the quarter from a telemedicine standpoint within our physician business. And we had tens of thousands of hospital to hospital telemedicine visits from a transfer standpoint. So we've ramped up those capabilities incredibly quickly. We have -- also for our COVID care environment, seeing tens of thousands of visits with -- we literally have a care algorithm chat bot, for example, on our website that patients have been using to figure out whether they need to be seen immediately, whether they need to get a test, et cetera. So I think the virtualization of some of this care is definitely something that seems to be more permanent. I mean the executive orders yesterday only reinforced that from a telemedicine standpoint. We feel very good about our level of preparation there from a primary care and specialty standpoint in order to continue to take advantage of those opportunities for care in that setting. Look, the other thing that I think is going to be really important is ensuring that patients feel safe in the emergency department setting. I continue to believe that the emergency department setting is one that will recover based upon the types of cases that we see down right now. For example, there's a significant decline in pediatric visits to emergency departments. Whilst schools have been off, sports have been off. As those kinds of things start to come back, we will see a significant increase over time back to normal levels for those types of emergency department visits. So I think we're going to have to put effort into ensuring that for a very long period of time, we maintain the communication about the safety of our ER environment. And then I don't know if it's permanent, but I certainly think for the coming year, at a minimum, ensuring the high degree of safety that we have in our ASCs, in a setting where we don't see any COVID transmission, is going to become an important site of care choice for doctors to make for some of their low acuity procedures and creating capacity in that environment without adding infrastructure is something we're very capable of doing and are already doing. And I think over time, that will lead to a more permanent change in the utilization rates of those assets. And that's only a good thing because it's a fixed cost base from that standpoint.

Operator, we have time for one more question.

Our final question today will come from Gary Taylor from JPMorgan Chase & Co.

Given how well you guys have done on expenses over the years, finding new staffing models and expenses is pretty impressive. Commended for that. I want to make sure I understand what you're saying. It sounds like you're saying the end result of this, as we get back to a normalized operating environment, is really a permanent increase in your expectation for consolidated margins. I want to make sure I'm just understanding that.

Gary, it's Dan. Yes, the various actions that we have taken are permanent and will be sustainable. So as we recover from a volume perspective and get back to growing the business, the cost actions that we've taken will help support driving margin growth.

Got it. And do you have a June '19 EBITDA number that we could compare that $218 million to?

Yes. No, we didn't do monthly reporting last year. But I would tell you, Gary, it's very -- Ron pointed it out in his remarks that June this year compared to last year, when you exclude the grants from this year's June, was relatively consistent.

Got it. And then last question, just thinking about cash flow, you've been -- continue to point out that excluding all the Medicare-accelerated payment cash or CARES Act, stimulus funds, et cetera, no material cash burn. Of course, the quarter benefits from as revenue declines, a decline in working capital primarily driven by a decline in AR. So as your revenue recovers, theoretically, seemingly, there would be growth of AR, growth of working capital again that would weigh on cash flow. Is there any obvious offsets to that if we get back to higher quarterly revenue in the next couple of quarters?

Yes. So when you think about our cash flows in the back half of the year, without providing any specific numbers, assuming we have to repay the Medicare advances based on the current terms, that would obviously be a use of cash in the quarter. As revenues grow, sure, your receivables are going to start increasing. But one thing I would tell you that's very encouraging about Conifer's performance that we've really been encouraged by is the time from bill to collection [indiscernible] a quarter which will help to mitigate the natural growth in receivables as the business ramps back up. Unfortunately, we're not providing specific cash flow numbers for Q3 or for the back half of the year in total, but we're very satisfied with where we're at from a liquidity perspective. And we feel comfortable that we'll be able to manage through the ups and downs as working capital changes based on how the business recovers. Thanks, everyone. We appreciate it.

Thank you.

Thank you, Operator.

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