Hello and welcome to the Tenet Healthcare Corporation's Third Quarter 2020 Earnings Conference Call. I'd now turn the call over to Regina Nethery, Vice President of Investor Relations for Tenet.

Thank you. We're pleased to have you join us for a discussion of Tenet's third 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 thanks everybody for joining us today. Our third quarter results I believe underscore the operational discipline that we put into action on an ongoing basis. As the pandemic has continued to evolve in ways, we have successfully met each sharp turn with a carefully coordinated and active response, every step we've taken remains anchored by our commitment to the highest standards of quality and safety. We're very pleased with the performance each of our business segments during the quarter despite the COVID-19 case surge which was above 60% in late to high in August compared to the second quarter across our system, we delivered a solid performance in every part of our business. While we experienced the surge, we safely handled caring for COVID and non-COVID patients notably our performance overall for the quarter was strong in delivering EBITDA at $621 million without grant income. Additionally our free cash flow was 26% above 2019 before grant and Medicare advance dollars were considered due impart to significant improvements from our Conifer operation. However due to the new guidance issued by HHS in September which was marketedly [ph] different than the original guidance we had in June, we had to reverse $70 million from Q2 in grant dollars thus lowering our reported Q3 EBITDA to $551 million. We strongly believe this guidance from HHS does not recognize the structural differences across complex networks involving multiple hospitals including mixed differences in reimbursement levels in the different service areas, capital investment made in 2019 and early 2020 to effectively improve patient access and quality as well as the incredible loss of experience in the shutdown that needed to be recovered to ensure sustainable operations. We continue to discuss these details with HHS in hopes of a more balanced outcome. None…

Thanks Ron and good morning, everyone. I also want to thank our frontline caregivers and employees across the company for their incredible efforts and exceptional executions in these very difficult times. I begin my remarks with Slide 5. As you can see there, we produce a very strong quarter from several perspectives. Our adjusted EBITDA of $621 million before the $70 million grant income reversal due to the new government guidance was substantially above our expectations. For the quarter despite the surge in COVID in many of our markets and also the EBITDA was above consensus estimates when we exclude the grant numbers that were in the consensus numbers. We generated very strong net revenue per case growth in the hospital and ambulatory businesses due to a mix of higher acuity cases and a more favorable commercial [indiscernible]. Our continued tight control of cost mitigated the impact of incremental expenses from the pandemic including higher temporary labor and premium pay and PPE cost. We also generated solid free cash flow in the quarter of $331 million or 26% growth even if you exclude stimulus monies we received. And we were pleased to be able to timely access the capital markets and eliminate any significant debt maturities until June 2023 while also reducing future annual cash interest payments by about $50 million. While we typically do not comment on consensus, we realize that the level of stimulus grant income in the consensus is not always readily apparent to everyone. We estimate the third quarter consensus estimate reflect an average EBITDA benefit to grant income of about $70 million. This compares to the $70 million negative reversal of grants we had to record this quarter due to the new guidance. Turning to our individual business unit each segment continues to execute well…

Thanks Dan. I've really no other comments to add I think we've covered everything. I think it will be smart, if we get into questions. So we've got about half an hour I guess dedicated less to cover questions. Operator?

[Operator Instructions] our first question today is coming from A.J. Rice from Crédit Suisse. Your line is now live.

[Indiscernible] it sounded like you guys have obviously been trying to do assessments in the market data analytics around these different hotspots and you sort of had a unique portfolio where you have some markets that were hit early on pretty hard and then you're in other markets that have had hotspots develop. Can you maybe just drill down a little bit on how you feel you are being able to predict where the next hotspots are going to be? What you've learned in terms of managing through a hotspot and also assessing how the communities managing through that hotspots and then coming out the other end and recapturing deferred procedures and things like that?

Okay, long question there. Saum, you want to handle it?

Sure, A.J. thanks for the question. In terms of predicting where the hotspots are going to be, I mean we obviously follow very carefully a lot of the public health information that's available with respect to new testing, positive testing, incident rates and - you can really track the spread of the virus that way pretty quickly. Obviously by the time, these cases are hitting our urgent care center or emergency departments. It becomes quite obvious there's going to be a surge. I mean what we've learned is generally speaking there is somewhere between four to six-week cycle that you'll go through in a market where there is a COVID surge. Usually there's a couple of weeks of ramping up, you end up spending about four weeks kind of it at a high-level plateau that mix includes both med surge and ICU patients and then it sort of ramps its way down. Our priority during that phase obviously is maintaining very good throughput and operations within our environment separating COVID from non-COVID care. Our focus on having adequate PPE and testing has allowed us to make sure that we are able to process those patients adequately but also keep our staff safe. We've not had especially in recent surges any need to shut down procedures or elective surgeries, that's a very important point because we want to maintain access for the community and then as those cases ramp back down, we ramp back up very, very quickly that's probably the most important thing that I focus on which is at the end of that six weeks period that recovery work is a playbook that we've got down from having had a number of markets go through surges and our September results are very much a reflection of that, if you look at the COVID activity in the quarter. It was very much spiking in the first part of the quarter. By the end of the quarter, those cases have ramped back down. We are very capable of getting back to normal business, getting anything that was deferred on the schedule and most importantly working with our community and doctors to ensure the patients in the communities realize that, they can come back into the hospital for necessary care and that really is why, when you look at September the results reflect basically our ability to get back to business as usual from patient care and from an earning standpoint.

Okay, great. Thanks.

Thank you. Your next question today is coming from Josh Raskin from Nephron Research. Your line is now live.

I wanted to ask about the increase in revenue per adjusted admission. I'm just trying to break out the buckets there. How much of that is coming from actual COVID patients. It sounds like that was a bigger impact than I had expected. How much of it is mix specifically commercial and how much of it is actual acuity and then within that how are you and your physicians partners prioritizing the patients and the procedures that come back? At first, it sounds like you're getting more of the high acuity and more of the commercial back and I assume that's similar in ASC.

Josh, its Dan. I'll start off, Saum can address the last point. The 17% growth in the revenue per case on the hospital side, all three of those components have some element to it. The predominant factor driving the growth in the net revenue per adjusted mix is due to the higher acuity cases. Now listen COVID is part of that, right. But that's not the primary driver of it. You have the mix of higher acuity cases. You have a stronger commercial mix compared to our overall volume trends which makes sense to a large degree Medicare patients are probably a little more reluctant to seek care unless it's necessary. So the commercial trends are more favorable than the overall trends. There's also the growth in the revenue yield due to our contracting physician. We've been very clear about that overtime. We're very well contracted this year into next year. Our growth just from negotiated rights depending on the facility can be depending on the payer can be 3%, 4%, 5% or so. So they've all played a part. I would say in terms of I mean just to address this COVID and the revenue yield from that. I would say this, before I turn it over to Saum, yes in aggregate the net revenue for COVID cases is higher than the overall net revenue per admit. But you got to keep in mind you have to case mix adjust that right. There is obviously incremental cost carrying for those type of patients and when you case mix adjust that right, it's very similar to what our overall net per admission is. And the other thing I'd point out in terms of the mix of the COVID patients. COVID patients related to commercial payers is roughly 20% of the total COVID cases. The other 80% is either Cares, Medicaid or uninsured as you all know obviously the commercial reimbursement would be a more favorable than the other payers. But again it's very important to consider the fact, that case mix adjust the particular type of services and consider the incremental cost associated with them the profitability isn't necessarily there a lot of people think is there. I don't know, if there's anything else you want to add, Saum.

Yes, I mean I'd make a couple of points to again just thinking about what I said which is the most important thing to really look at, is the nature of the recovery. So let me frame it this way. When you think about the number of COVID cases from the beginning of the quarter declining at the end of the quarter and we're basically able to maintain and rebuild the business at roughly 10% under prior year. The thing I would tell you is that, the commercial standpoint about the commercial admissions performed better than that and more importantly given our long-term strategy of building a base of higher acuity procedures and services. Our commercial surgeries and you can see the surgery numbers look more attractive even the commercial surgeries were performing by the end of the quarter better than those averages. Surgeries are not really relevant in the COVID environment. So what we did was we built back consistent with our long-term strategy. The strength in the surgical environment that we have been pursuing for the last couple of years including having a number of markets that were performing better than prior year especially in commercial surgeries. If you say what's driving that, well I mean even over the last four or five months and primarily in the last quarter. We've opened up and built two new trauma programs, we have a new and expanded neuro surgical and spine program in South Florida across multiple hospitals that's been coordinated, big push in surgical oncology and building a network in San Antonia. I mean there are just a number of things in rebuilding the strength in our business very specifically consistent with our long-term strategy that we've continued to execute on over this period of time and that's helping to drive the strength and the recovery. As I pointed out before the COVID cases may come and go, even on a commercial basis because the cost of those cases are high. I would never want to substitute a COVID commercial case for the types of business that we're building. We obviously do the best we can to take care of those patients. But we're very quick to recover in the normal lines of business that we've been strategically focused on.

Perfect, thanks.

Thank you. Your next question today is coming from Justin Lake from Wolfe Research. Your line is now live.

This is Eugene on for Justin. Thank you for the question. As a follow-up to Josh's question earlier, are you able to quantify the number of COVID related admissions during the quarter. And I think you said, COVID mainly impacted July and August. So can you comment on how your admission volume and acuity where tracking towards end of September and possibly early October? Thank you.

This is Dan. Let me address couple of those points. The COVID inpatient census and the third quarter was about 15,000 cases and as we pointed out in our remarks, it's roughly 60% higher than the second quarter. One thing it's important to keep in mind with the previous conversations we were just having. The sequential change in earnings from August to September is was not due to the mere growth in overall cases. In fact our admissions were actually about 1% lower in September compared to August. So you see the impact of the COVID cases have on earnings. In August when the COVID cases were higher than September, it did, it had an impact on earnings that sequential growth in EBITDA from August to September was not just due to while cases were higher normally because that's sequentially what happens. Our aggregate volumes in September were roughly down 1% compared to August. But you see the growth in the earnings from August to September as the COVID cases declined.

Thank you. Your next question today is coming from Phil Chickering from Deutsche Bank. Your line is now live.

I'll sort of ask same question in a different way. There's obviously a pretty big debate on the investment community of value sustainability of hospital EBITDA observed during third quarter. So a multi-part question, any chance you can give us or how much your EBITDA in third quarter came from COVID and to more specifically, how much you saw in September. I understand it doesn't give a whole picture or at least help or understand how that works. And more importantly, can you give us color on your October trends, what you're seeing, where you're seeing in November OR scheduling blocks of times and then walk us through sort of headwinds and tailwinds to help us think about the revenues and margins over the next few months.

Well, that's three questions. We'll do our best, so Dan do you want to start?

Phil, it's Dan. Let me try to address then Ron or Saum can fill in. In terms of we obviously have provided EBITDA by service line. But again I'll go back to when COVID levels were much higher in August it had an impact on our earnings. In August you can see the sequential change from August to September again our aggregate volumes from August to September were roughly flat or down about 1%. Let's just call it flat. But earnings increase and large part that was due to COVID cases leveling off and coming down. The COVID cases have substantially more cost associated with them particularly is patient ends up in the ICU. And as I said earlier, yes, the revenue per COVID case that we've experience per admit so far is higher than our aggregate per admit. But again the CMI or the acuity pedo [ph] as you know of those cases it's higher and that brings with it incremental cost that's why I said when you case mix adjust it. It's pretty close to what our average net per admission is. Saum, I don't know if you have anything else you want to add.

Yes, I mean a couple of things. I think it's important to realize the nature and mix of our COVID activity given the markets we're in and the types of - especially types of urban centers that we have as Dan pointed out earlier, are not, they're not mix enriched [ph], in fact relative to our average it's slightly below our commercial mix. So we're dealing with a lot of work in the Medicare and Medicaid and even uninsured space with respect to the COVID care. The least we're seeing in our system again a consequence of some of the markets that we're in. So when you look at September again, I don't have any other way to do this, but just continue to give additional examples of what we're doing to drive the recovery. So in addition to some of the stuff I mentioned before. I mean we've had expansions in many of our surgical service lines very consistent with our strategy over the last couple of years. We've built the robotics in [indiscernible] in El Paso, we have got rehab facilities that we've expanded in South Carolina. We've got CT surgery program that has gone through material expansion in parts of Texas. I mean our point has been continuing to advance the strategy of expanding surgical service lines for the community as a way to drive and be prepared to manage the recovery overtime recognizing that some of the lower acuity business that was in hospital. Let's say very low acuity ER visits may take a long time to come back and so we're not trying to create a replica of what 2019 looked like from a mix. We're looking at where the market is headed and we're trying to address that market as part of our recovery. Not surprisingly the comments that Ron made earlier about USPI. We're tracking exactly the same way. The expansion of our physician staff there has been in primarily higher acuity specialties number of orthopedics programs and even the number of orthopedics cases for example in that environment has grown materially because we're basically servicing where the demand is rather than trying to create a replica of 2019. I think that's going to end up serving us well overtime rather than trying to wish for everything that was in the hospitals including the low acuity business to come back and it ought to drive an enhanced earnings profile because of the case mix intensity in that revenue per case that becomes more sustainable.

Any color on the October or November trends or schedule impacts? Thanks.

We don't show any signs of a shift from the strength that we saw in our September recovery as I look forward and look at any metric whether it be our scheduling of cases at USPI or the hospitals from a surgical standpoint or high acuity service standpoint that we're looking at this point in time at all.

Thank you. Your next question today is coming from Whit Mayo from UBS. Your line is now live.

I wanted to shift topics a little bit and go back USPI, maybe for Saum or Brett. The 1,100 new dockets I was wondering if you could frame that relative to your current base and I think I heard Saum say that in terms of specialties. I think ortho was certainly an additional benefit there. Are we syndicating more equity to these doctors or these doctors that are just moving their business? I guess I'm trying to sort of frame how sustainable you think the volume is from the new 1,000 dockets.

Yes, Brett. Please comment.

How is it going, Whit? So just to back up a little bit we've certainly seen an increase in the number of physicians that are interest in operating in the ASC setting, it's without question. And as Ron mentioned we've added over 1,100 physicians to our medical staff just this year and that's partly as a result of COVID. But I think the increase is more related to our ongoing business development and service on expansion activities and there's no questions from physicians are moving more of their business to ASC as a result of patient preference related to COVID. But others are simply continuing to find a more efficient side of care for their surgical patient. If you going back to your question related to how much of an improvement that is over our base. You think we have about 4,000 physician partners across the portfolio about 10,000 physicians on our medical staff. So this represents in a nine-month period over a 10% improvement and the number of physicians on our medical staffs overall. I don't have a specific breakdown in terms of how many of those are partners versus non-partners as you know some most physicians join our medical staff, they make sure it's a good fit for them, good fit for the patients and good fit for the overall partnership and then at some point down the road, they may exercise the opportunity to actually buy into a partnership. But that's not our focus day one. Our focus is making sure that we bring in the right high-quality physicians to our medical staffs that they're happy with the service that we're delivering to them and their patients and then overtime we add those physicians potentially as partners to our facility. So I think the number and the amount of physicians that we've added to our medical staffs over the first nine months is clearly better than we have in historical years and again primarily I think a result of our business development activities and our service line expansion activities and to a minimal degree a result of the COVID related activity.

Perfect. Thanks a lot.

Thank you. Your next question today is coming from Brian [indiscernible] from Jefferies. Your line is now live.

I guess I'll follow-up in that comments from Brett and Saum's comment earlier to few questions. So you got to think there's a structural change that's happening, that's actually not a bad thing we're either pushing more procedures or visit either to the ASC whether it's joint replacements or ER visits that are low acuity going to urgent care and how do you think, if that's the case. What should be the margin outlook going forward?

That's a good question. And let me clarify what I said before, which is we're focused on is understanding where the demanding is today and making sure that we're leading the charge in helping to service that demand by shifting our focus into the areas where we see that activity happening. In other words, the higher acuity surgical, higher acuity emergency department even our - we track very carefully even our emergency department visits by acuity level and at the higher acuity levels we're performing better than we were in prior years. So those data have lag to them. But when we look at our own data, we're convinced in our high acuity ER business, we may be moving market share and so again we're very focused on that. The clarification I would offer is, I'm not yet committed to saying that there is a major shift in the demand pattern that's permanent as a result of COVID especially in the lower acuity areas. When I look at the lower acuity areas in particular that are down quite a bit. For example they're much more down in pediatric visits than in other services especially in the emergency department. Schools are not back online. Sporting programs that kids are in are not back online. I don't know that's some sort of shift from the ER to the urgent care setting. I just think demand is down because activity is down because of partial stay at home orders that are still active in many of the markets we're in. And I would say that's true for a variety of other activities that result in ER visits and you're not going to get a broken bone fixed and set necessarily at urgent care centers permanently in the future or in other centres. So I actually think some of that demand will come back as the communities fully open back up, schools fully open back up and other things. But it may take sometime and so my point was attempting to work that side of the question right now doesn't make a lot of sense. But again I'm not yet committed to the concept that demand has gone forever from hospitals. We'll see how that plays out over the next year or two. And it's clear the telemedicine won't be able to service a lot of those types of injuries and stuff that drive a lot of low acuity ER visits. It will go somewhere it's just a question of how much will come back to hospitals. Does that help?

Yes, no that's exactly what I was hoping for. Thank you appreciate that.

Thanks. Your next question today is coming from Kevin Fischbeck from Bank of America. Your line is now live.

I wanted to get a sense of how you're thinking about the incremental profitability of volumes returning back to normal. I guess obviously usually you're thinking about - volumes coming with a nice fixed cost leverage. But if we're talking about lower acuity volumes coming in, how should we think about that and then I guess incrementally you've been able to manage labor does that get more difficult as long as it's coming back? I'm just trying to think about to get into play of low acuity and potentially labor cost pressure as volumes come back and how would you think about incremental margin [indiscernible] normalized growth? Thanks.

Yes, I can start and Dan you can maybe add on. It's a good question because as you move to higher acuity mix obviously, you're going to need more support and staff especially in ICU and critical care units and other things. Thus far, we have not seen a tremendous amount of pressure related to the work that we're doing more strategically in expanding on those areas. I would point out again as COVID surges come through. We've had the use fairly significant amount of contract labor in the quarter especially in the first couple of months in the quarter that affected our cost. We've been very, very disciplined about using the question that was asked earlier I think by A.J. about the predictability of these COVID surges and declines. We've basically gotten pretty good at just estimating how much contract labor we're going to need for how many weeks and then shutting it off. Sometimes in advance of the surge disappearing because we know what the curve is going to look like and that really is reflected in our September results from the standpoint of managing margins. The other thing I would say is, there is no question about the fact that the foundation we've laid over the last couple of years to have a more daily driven management process in our not just labor productivity but labor mix that we're utilizing for patient care has served us well and probably has accelerated some of our recovery, we've no intention of changing from that approach to management even if the COVID activity dissipates or goes away more permanently with the vaccine. We know it's our responsibility to continue to drive efficiency in that setting. Probably the more important opportunity looking forward for us is also in the area of service in many cases which are labor based. So many of the services that we have either partnered with outsourcers or others where we're really working on managing the productivity of that staff at the same time and that will result in incremental opportunities for savings as we right size effectively to the portfolio of cases that we're seeing in hospital these days.

I'll just add to that, that it also spills all the way through the whole concept that Saum has talked about also spills through that we talk a lot about all the way back through our overhead and our overhead operations. Our global business center will continue to play major role in better allocation of overhead and better allocation of support since that's 24x7 type operation and its staffed accordingly and it can be a very responsive and it's done a great job through the pandemic. We've actually more than doubled the size of it through the pandemic even while it was going on, so that has proven to us to be a great source of balancing workload and balancing in the right places with really good talent. But at the same time being able to be much more responsive to our facilities on 24x7 basis.

Dan, do you have anything else you want to add?

Probably [indiscernible] the only thing I would add Kevin is, you'll recall before the pandemic occurred that we've been focused over the past several years realizing about $450 million of cost efficiencies since we've started this back in 2018 and we're fully on track for that for this year and as we talked about last quarter too. As a result of pandemic we've dug deeper. We've identified more efficiencies that we've been realizing or will realize into the future and it's really across all the cost elements of our cost structure whether its labor management, supplies or other operating expenses. Saum's point about some providers that were in other operating expenses. We've been renegotiating contracts improving SLA or service level requirements and it's had an impact. We also with times will take action to terminate a contract even it'll cost a little bit of money to get out of it, if long-term the return is going to be better. We'll obviously will keep working on this and we feel very good about our ability to continue to manage cost well.

The last point I would add to Kevin is that, we've added a significant amount of analytics and we look now in a much more database driven finite level, where we add people what are they doing, what's the impact of that? Is there a better way to do it? Where do we automate? Where don't we automate? So we approach all of this I think with a much clearer vision and the pandemic to Dan's point has enhanced and pushed us to question just about everything. So I think we become much more effective at this and you know over the next year we'll even continue going deeper. So I hope that answers your questions.

No, it's perfect. Thanks.

Thank you. Your next question is coming from Ralph Giacobbe from Citi. Your line is now live.

Just wanted to ask about the EBITDA trajectory. You've been running at a monthly level of about $220 million for I think [indiscernible] four months and then the dip in August. I think you mentioned was really to some of the COVID activity and maybe some seasonality. I guess the question is, typically we see a seasonal ramp into the fourth quarter. do you still expect that to be the case in higher EBITDA run rate or is that maybe unlikely to move from that $220 million just given the underlying circumstance? Thanks.

Two questions. Dan, do you want to jump first?

Certainly. Three out of the last four quarters have been in that $220 million territory as you've mentioned as we talk about our August numbers were more moderate because of COVID. It's certainly we obviously haven't provided guidance. We're certainly working towards that and then some, the fourth quarter as you know is typically sequentially stronger particularly on the ambulatory side as well as the hospital side as patients have met their deductible in a given particular calendar year. Sometimes we have seen a little bit over the past couple of years people have maybe managed to look back a little bit differently than in the past. Last quarter in the fourth quarter was incredibly strong. We'll have to see, we don't know right. We'll have to see how it plays out, this year. We're obviously working toward driving incremental volumes in the fourth quarter and you've seen the trajectory with the ambulatory business, some improved nicely. Again just putting COVID aside for a second because if there are significant spikes obviously, you'll have some type of impact. But we're going to be working for sequential growth and I think the big variable is ultimately going to be two things. One, level of COVID and two the comfort and level of patients returning to facilities whether they're hospitals or surgery centers for elective care.

Okay, fair enough. Thank you.

Thank you. Your next question today is coming from Gary Taylor from JPMorgan. Your line is now live.

Just a quick one. As we're trying to look through all the COVID impact on all the operating metric etc. just trying to get a sense of the underlying recovery in the commercial business that you've talked about. It's difficult to look at the revenue mix because that includes your much business, it also includes COVID. So is there any additional detail you could provide just on commercial adjusted admissions excluding COVID commercial case mix index excluding COVID, is there anything additional [indiscernible] color to provide on that?

Gary, its Dan. As I pointed out earlier, our COVID cases related to commercial payers or exchange payers is roughly 20% of the total COVID cases. Which as Saum pointed out as slightly lower than our normal pure commercial mix? The other 80% is either uninsured, Medicare or Medicaid. So that's the mix of the volumes from a COVID perspective.

I'm sorry. I was saying if you would exclude COVID and we look at underlying commercial adjusted admission growth excluding COVID, is that up, down or flat year-over-year? I'm just trying to parse out the impact of the COVID.

Again as I said earlier, the commercial trends are more favorable than the overall trends for the hospitals. You see the monthly percent of recoveries for the overall admissions, the overall visits, surgeries. The commercial trends are more favorable than the overall trends.

Well that's helpful. But if we exclude COVID, the admissions are down 20% so commercial is down less than 20% I guess that's within 2Q, okay.

I mean again, obviously the hospital volume trends in aggregate have not recovered to pre-COVID level and that's being the same thing with commercial. The commercial rebound has been stronger than the overall rebound.

Okay, just [indiscernible].

The only additional point I would add there is, the point I made before which is, I look more at surgeries and because that's not really a COVID related activity and the strength in surgeries and in particular in commercial surgeries is probably the best area to really look at with respect to the recovery and as I pointed out earlier. Our strength in surgeries and in particular to Dan's point commercial recovering better in commercial surgeries is the strongest marker I have when I look at a comparison across different lines of business there and I feel very good about that.

And Saum to that point, Gary wasn't specifically asking about USPI. We obviously had very favorable payer mix with our commercial mix outpacing governmental more specifically Q3 commercial was up 34 bps while Q3 governmental was down about 30 bps, so overall a positive trend in that regard.

Are those revenue rates [ph], right?

Correct.

Thank you.

Do you want to do one more?

Sure.

Let's do it one more and then we'll wrap it. Operator, one more.

Certainly. Your final question today is coming from Frank Morgan from RBC Capital Markets. Your line is now live.

This one's real quick. Dan you called out your acceleration in your CapEx program, how you up those numbers and I think one of the things you called out was COVID related CapEx? I'm just curious what that would be. Thanks.

This is Dan. So yes, the incremental investments that we're going to make is roughly $100 million, it's predominantly related to growth capital opportunities let me be clear. But there is some additional spend that we believe is necessary to appropriately care for COVID patients. And Saum, is there anything else you want to add to that?

Yes, I mean examples of that would be, there are just equipment and supplies and things some of which are more capital related think about some of the purchases of ventilators and other things that might be relevant in that space. The other infrastructure there's a little bit of infrastructure spend in there just because as we pointed out earlier, we've been so disciplined about making sure that we minimize our infections of our own staff because that is again that is probably the most important marker in my mind to being able to maintain support in the hospital for always continuing elective work. So we put infrastructure into some of our hospital separation of COVID from non-COVID care areas and things of that nature, so that it's more structural and again it's on spirit of keeping that environment safe and also creating an important perception who is in and out of the hospital that they're not going to be exposed.

[Indiscernible] working, just good.

I think that's it. We appreciate everybody joining. I'm sure there'll be some follow-ups but we thank again. We feel we had a very good quarter and we appreciate the time you gave us to ask your questions, hopefully they're clarifying and straight as could be. So with that, I'll guess operator we'll conclude the session.

Thank you. That does conclude today's teleconference and webinar. You may disconnect your lines at this time and have a wonderful day. We thank you for your participation today.