Amedisys, Inc. (AMED) Q4 2022 Earnings Call Transcript

Amedisys, Inc. (NASDAQ:AMED) Q4 2022 Earnings Conference Call February 16, 2023 11:00 AM ET

Company Participants

Nick Muscato - Chief Strategy Officer

Paul Kusserow - Chairman & CEO

Scott Ginn - EVP, CFO & Acting COO

Adam Holton - Chief People Officer

Conference Call Participants

Brian Tanquilut - Jefferies

Matthew Larew - William Blair & Company

Justin Bowers - Deutsche Bank

Joanna Gajuk - Bank of America Merrill Lynch

Andrew Mok - UBS

Tao Qiu - Stifel, Nicolaus & Company

Benjamin Hendrix - RBC Capital Markets

Benjamin Mayo - SVB Securities

John Ransom - Raymond James & Associates

Scott Fidel - Stephens Inc.

Gary Taylor - Cowen and Company

A.J. Rice - Crédit Suisse

Operator

Greetings and invited to nan Amedisys Fourth Quarter 2022 Earnings Conference Call. [Operator Instructions].

It is now my pleasance to present your host, Mr. Nick Muscato, Chief Strategy Officer. Thank you. Please spell ahead.

Nick Muscato

Thank you, operator, and invited to nan Amedisys investor convention telephone to talk nan results of nan 4th fourth and twelvemonth ended December 31, 2022. A transcript of our property release, supplemental slides and related Form 8-K filing pinch nan SEC are disposable connected nan Investor Relations page of our website.

Speaking connected today's telephone from Amedisys will beryllium Paul Kusserow, Chairman and CEO; and Scott Ginn, CFO and Acting COO.

Before we get started pinch our call, I would for illustration to punctual everyone that statements made connected this convention telephone coming whitethorn represent forward-looking statements and are protected nether nan safe harbor of nan Private Securities Litigation Reform Act. These forward-looking statements are based connected accusation disposable to Amedisys today. The institution assumes nary responsibility to update accusation provided connected this telephone to bespeak consequent events different than arsenic required nether applicable securities laws.

These forward-looking statements may impact a number of risks and uncertainties, which whitethorn origin nan company's results aliases existent outcomes to disagree materially from specified statements. These risks and uncertainties see factors elaborate successful our SEC filings, including our Forms 10-K, 10-Q and 8-K. In addition, arsenic required by SEC Regulation G, a reconciliation of immoderate non-GAAP measurement mentioned during our telephone coming to nan astir comparable GAAP measurement will besides beryllium disposable successful our Forms 10-K, 10-Q and 8-K.

Thank you, and I'll move nan telephone complete to Amedisys' Chairman and CEO, Paul Kusserow.

Paul Kusserow

Thanks, Nick. Hello, everyone, and invited to nan Amedisys Fourth Quarter and Year-end 2022 Earnings Call. It's a privilege to beryllium backmost and talking to you each again. In a fewer short months I've been backmost arsenic CEO, I've had nan chopped pleasance of spending clip successful nan section pinch our clinicians who supply nan highest-quality attraction to their patients wherever they telephone home. What you do connected a regular ground is genuinely inspiring and reaffirms to maine much than ever that nan early of Amedisys is bonzer and unique.

Despite a choppy 2022, our 20,000-plus associates person successfully steered america to present results that we tin really beryllium proud of. As I've returned arsenic CEO, nan 2 questions I get are: one, what's changed?; and two, what are you going to attraction on?

Our world has decidedly changed. There's nary mobility astir it. As nan philosopher Heraclitus said, "You tin ne'er measurement into nan aforesaid stream twice," and that's surely nan lawsuit successful our industry. Our world is quickly evolving, but mercifully, nan trends are moving towards Amedisys and our industries, not distant from us.

There's a caller paradigm driven by consumerism, demographics, advances successful attraction transportation and costs of driving attraction into nan home. Various elements of our world are evolving astatine different speeds. Regulators, immoderate of our Medicare Advantage partners, are moving much slow than we would like. Others are seeing wherever this is going and are actively innovating pinch america to meet america wherever nan world is evolving towards.

Change creates opportunity. Accelerated alteration creates move opportunity. We're successful a clip of accelerated change, hence, my excitement and enthusiasm for really we person positioned ourselves and nan opportunities that will come.

So what's different? First, location is simply a important objective labour shortage, particularly successful nursing. COVID did a number connected field-based clinicians. Demand is outstripping proviso much dramatically than ever. This is apt to continue. The winners successful our world will beryllium those companies that person nan capacity to fulfill nan demand.

Second, our operation of payers is changing. Medicare Advantage is increasing faster than fee-for-service. Some of our Medicare Advantage partners are enlightened and are moving pinch america to unafraid nan labour capacity they will need. Others are trying to play nan aged crippled of debased per sojourn rates and expecting successful an inflationary situation to support their rates artificially low. The manufacture conscionable can't do it, neither tin we.

When scarcity increases, request goes up, and we are now successful a caller world wherever we must prime which visits we return aliases won't take. We're moving done this now, giving each our partners an opportunity to understand what's going connected successful this emerging environment.

Helping thrust this alteration is consolidation successful our industry, scarcity of proviso and progressively agelong lengths of stays successful hospitals, which are driving an already stretched business into further losses. Many of our payer partners are talking astir accrued post-acute walk overmuch owed to deficiency of readiness successful at-home care. We are nan astir businesslike replacement of each nan post-acute options, and we'll summation our stock of post-acute walk arsenic we move up nan acuity spectrum.

Home wellness and Amedisys successful peculiar are nan astir cost-efficient replacement of nan post-acute options, and we will summation our stock of post-acute walk arsenic we move our measurement up nan acuity spectrum. So increasingly, payers will beryllium coming to location wellness and we judge disproportionately to Amedisys arsenic we are arguably nan only institution taking existent post-acute risks. So changing times, breathtaking times.

Now really are we going to spell retired and get what's ours? The reply is 4 strategical initiatives, which we deliberation will champion thrust our caregiving and business results. They are, one, people. As I said, luckily, nan world has changed. It's each astir recruiting, processing and retaining our clinicians, which drives our expertise to turn and proceed to supply nan best-in-class objective value Amedisys has go known for. We're quickly emerging into a capacity-constrained industry. Those that person nan workers will win. We're nan best, but that isn't bully capable successful this environment. We're going to beryllium better.

We'll proceed to beryllium nan champion spot wherever clinicians want to travel and present nan highest-quality attraction successful nan home. We're seeing beardown results early on, particularly successful recruiting arsenic we doubled down connected our attraction present arsenic January was our highest azygous period of starts successful Amedisys' history.

Two, growth. As capacity becomes a foundational issue, we will person to take our partners carefully. This is simply a caller world for us, and we will not beryllium commoditized. We will thrust predictable results and outpace nan industry's maturation successful some location wellness and hospice while managing our precious objective capacity to make judge that we tin return each nan patients that are coming to us. As Medicare Advantage continues to outpace fee-for-service growth, we request to align pinch partners who tin salary america capable to present nan value attraction that's needed for their members.

Next, objective optimization and automation. We must region arsenic overmuch of nan administrative load from our attraction halfway unit and let them to build a focused attraction halfway civilization wherever clinicians want to beryllium truthful that they tin supply nan highest-quality attraction to our patients. These are self-initiated ratio moves. It's wholly successful our hands to thrust this initiation successfully, which we will do.

And last, Contessa, our high-acuity conception genuinely differentiates america from our title while opening up wholly caller markets and maturation opportunities successful places few, if any, others tin go. It is up to america to spell show you each what this highly innovative plus tin beryllium by continuing to turn it and making it profitable. High-acuity, risk-based attraction successful nan location is nan future.

We spot nan tremendous demand. Our partners are asking for more, and we're committed to giving them more. It's a bully business erstwhile request for your merchandise is truthful strong.

These are nan large 4. That's what we'll measurement ourselves on. We'll study retired to you connected these measures and their impacts arsenic we advancement done nan year. Now let's dive a small deeper into each and what you should expect successful 2023.

Growth and group are joined astatine nan hip. As I mentioned, request for our services is astatine an all-time high, while entree to clinicians to fulfill this summation successful request has been challenged. In bid to work nan accrued number of referrals, we must person nan objective capacity to do so.

As we proceed to excavation successful our labor -- into our employees' data, we person recovered that 66% of objective turnover happens successful twelvemonth 1, a move we are aggressively changing. As mentioned, our enhanced talent acquisition squad has done a awesome occupation bringing much qualified clinicians connected board, but we must support them erstwhile they are here. In fact, from August 2022 done January 2023, we had 26% much nursing starts than January done July of '22, and January of 2023 was our champion period ever for wide offers.

So what other are we doing astir staffing? We are going further and creating an unrivaled group acquisition present astatine Amedisys by simplifying our administrative processes, enabling our caregivers pinch devices to make their jobs easier, improving our activity improvement for our 550 dues, streamlining onboarding -- our onboarding processes, investing successful our labor and rolling retired an enhanced use package specifically focused connected aligning pinch what is important to our clinicians.

The operation of these activities will genuinely alteration Amedisys to clasp its position arsenic nan wellness attraction employer of choice. It will alteration our turnover, summation our objective capacity and successful turn, proceed to supercharge our growth. We've done it before. We'll do it again, and we will update you connected really we're doing.

Growth has been and ever will beryllium a cardinal inaugural for Amedisys. Although nan measurement successful which we deliberation astir maturation has been challenging arsenic our markets look different coming than they person successful nan past, nan request for our services successful location wellness is astatine an all-time precocious arsenic patients and payers proceed to admit and request that much and much attraction tin beryllium delivered successful nan home. That is wherever patients want to beryllium and nan costs are little than immoderate different tract of attraction while we present outcomes that are adjacent and successful galore times amended than organization care. Hospice is nan same: precocious request to dice pinch dignity astatine home.

We cognize that nan manufacture complete nan mean word should beryllium increasing astatine a mid-single-digit pace. What has been different for america has been wherever nan maturation is coming from. Historically, fee-for-service has been our main driver of gross growth. However, arsenic Medicare Advantage penetration continues to importantly outpace fee-for-service growth, we must deliberation otherwise astir really and wherever we grow. Amedisys has been astatine nan forefront of moving pinch Medicare Advantage plans for nan past number of years.

We person executed innovative lawsuit complaint statement pinch our partners astatine CVS and Aetna and figured retired ways to activity strategically pinch our convener partners, and astatine nan aforesaid time, person taken marketplace stock and fee-for-service. We person developed awesome relationships pinch immoderate plans who admit really our value and standard differentiates america from our peers.

That said, not each plans are created equal. And for those plans that proceed to position america simply arsenic a inexpensive per sojourn supplier and won't admit that labour ostentation is existent and effort to simply cram little rates and little utilization connected us, we will nary longer beryllium moving pinch them. We conscionable can't spend to. We person a finite magnitude of objective capacity, and we must beryllium paid successful a mode that allows america to supply value of attraction pinch nan fantabulous outcomes Amedisys is known for. If plans do not want to partner pinch america connected reasonable terms, we will person to cancel contracts and defer our capacity to our strategical partners who worth our results.

In bid to let our clinicians to attraction connected what matters most, diligent care, our attraction halfway leadership, focusing connected building civilization that recruits and retains nan champion people, we will proceed pinch nan objective optimization activities we rolled retired successful nan 2nd half of 2022. We want to region arsenic overmuch of nan administrative load arsenic is imaginable successful our attraction centers. This will not only thrust improved and focused culture, but it will let america to standard our infrastructure successful a much cost-effective mode while building successful yet different furniture of ratio and accuracy crossed our processes.

To date, we person centralized our unpaid and bereavement services crossed our hospice locations, our intake functions crossed location health, and we person a number of different pilots group to rotation retired successful 2023. As Scott will discuss, nan effect of these initiatives will thrust astir $20 cardinal successful costs savings successful 2023, and we should spot different step-up successful savings arsenic we participate 2024.

Finally, Contessa, our innovative high-acuity attraction acquisition that closed successful August of 2021, has not been immune to nan impacts of infirmary capacity and nan labour situation that has had its effect connected wellness attraction services. Though we admit we are down our original plan, we are increasing nicely and planfully. We person tremendous condemnation for what Contessa does, wherever it will return america and nan maturation imaginable for its lines of business.

In fact, successful Q4, full admissions from Hospital and SNF astatine Home were 482, representing a 69% maturation complaint year-over-year. For afloat twelvemonth 2022, we treated 607 patients successful our infirmary and SNF programs, representing 100-plus percent maturation year-over-year.

Contessa is focused connected mining and increasing our halfway partnerships while executing 2 to 3 caller partnerships a year. The patients we admitted to these high-acuity models proceed to make affirmative objective and financial outcomes. Our diligent restitution remains successful excess of 85%. And these programs proceed to present connected value by driving down repetition hospitalizations erstwhile compared to accepted attraction pathways.

Our expertise to trim patients' full costs of attraction done high-touch objective guidance continues to way pinch our expectations for MLR performance. We are besides excited pinch nan caller regulatory improvement successful this space. As portion of nan Omnibus spending measure that became rule connected December 29, 2022, CMS extended nan acute infirmary attraction at-home inaugural until December 31, 2024. While Contessa's activity began overmuch earlier nan nationalist wellness emergency, nan CMS inaugural began during nan pandemic arsenic a measurement to reside nan safe description of infirmary capacity.

With this recognition, an extended acceptance of Hospital astatine Home programs by CMS, our position is that we are apt to spot acceleration of nan proliferation of high-acuity, in-home programs successful years to come.

Lastly and astir importantly, I've been retired visiting our JV partners. And nan biggest rumor they person pinch america is they want much faster, a bully business to beryllium successful erstwhile your customer's main rumor is they can't get capable of what you have. We are focused connected scaling our operations up. The imaginable of each of our partners is enormous.

As Scott will laic retired successful our 2023 guidance, gross astatine Contessa will beryllium astir $50 cardinal driven by accrued measurement from our existent JV partners, caller measurement from JVs we person precocious signed but not implemented. And possibly astir excitingly, our caller consequence business pinch Blue Cross Blue Shield of Tennessee to supply palliative attraction services astatine home. This caller innovative business really showcases nan powerfulness of a mixed Amedisys and Contessa objective asset. And we are thankful for our partners astatine Blue Cross Blue Shield of Tennessee and their desire to disrupt really wellness attraction is provided to their high-acuity Medicare Advantage members.

In our palliative attraction at-home model, Blue Cross Blue Shield of Tennessee's members tin person palliative attraction successful personification aliases via telehealth from Amedisys' clinicians, including doctors, caregiver practitioners and nurses astatine nary further cost. We started pinch a mediate Tennessee rollout successful January and person plans to grow to nan full authorities arsenic we beryllium retired capacity successful nan model. I'm incredibly excited by this opportunity, and you each should beryllium expecting much innovative partnerships for illustration this to travel successful nan future.

Much for illustration our halfway lines of business, our pipeline of early maturation opportunities stay beardown and exciting. We proceed to make important advancement successful our pursuit of nonstop relationships pinch wellness systems, looking for nan starring broad attraction at-home partner arsenic good arsenic wellness plans willing successful innovative value-based arrangements for in-home services, including palliative care.

In different news, we announced yesterday that we will beryllium divesting nan operational information of our individual attraction statement of business to Houseworks, a Massachusetts-based usability of individual attraction assets and turning -- and successful turn, adding Houseworks to our individual attraction network. We proceed to judge successful nan request for and nan value of individual attraction services arsenic a cardinal portion of whole-person care. And arsenic such, we are committed to continuing to push to turn nan utilization of our individual attraction network.

As we proceed to activity connected statement invention pinch managed care, having entree to individual attraction services crossed our nationwide footprint will beryllium a cardinal worth driver. Our committedness is to statement and build networks pinch individual attraction astatine this point, not to ain it.

With that, I'll move it complete to Scott, who will return america done our Q4 capacity and a much elaborate reappraisal of our operational and financial capacity for nan 4th and our projections for 2023. Scott?

Scott Ginn

Thanks, Paul. For nan 4th fourth of 2022 connected a GAAP basis, we delivered nett income of $31.7 cardinal aliases $0.97 per diluted stock connected $562 cardinal successful revenue, a gross summation of $3 cardinal compared to 2021. For nan afloat twelvemonth 2022 connected a GAAP basis, our nett income was $119 cardinal aliases $3.63 per diluted stock aliases $2.22 cardinal successful revenue. For nan quarter, our results were impacted by income aliases disbursal items, adjusting our GAAP results that we've been characterized arsenic noncore, impermanent aliases onetime successful nature.

Slide 14 of our supplemental slides provides item regarding these items and nan income connection statement items each accommodation impacts. For nan afloat twelvemonth of 2022 connected an adjusted basis, gross grew $25 cardinal aliases 1% to $2.2 billion. EBIT decreased $38 cardinal aliases 12.5% to $262 million. EBITDA arsenic a percent of gross decreased 190 ground points to 11.7%, and EPS decreased $0.94 to $5.01. The cardinal drivers of our alteration successful EBITDA were nan reinstatement of sequestration during 2022 and losses from nan acquisitions, which negatively impacted EBITDA by $47 cardinal for 2022. Adjusting for these items, our bequest operations improved $9 cardinal complete anterior twelvemonth and a twelvemonth pinch a important displacement successful business operation and continued costs pressures.

For nan 4th fourth connected an adjusted basis, our results were arsenic follows. Revenue grew $3 cardinal to $562 million. EBITDA decreased $5 cardinal aliases 7.6% to $60 million. The reinstatement of sequestration and acquisitions reduced EBITDA by $13 cardinal complete anterior year. Performing a akin normalization, our indebtedness for afloat twelvemonth results successful $8 cardinal year-over-year betterment successful bequest performance. EBITDA arsenic a percent of gross decreased 90 ground points to 10.7%. EPS decreased $0.02 to $1.16 per share.

Now turning to our 4th fourth adjusted conception performance. Keep successful mind, segment-level EBITDA is pre-corporate allocation. In location health, gross was $343 million, up $5 cardinal aliases 2% compared to anterior year. Revenue per section was $30 -- was up $38 aliases 1.3%. The summation successful gross per section is simply a consequence of a 3.2% summation successful reimbursement, partially offset by nan reinstatement of sequestration astatine 2%.

Total same-store admissions were up 5% driven by maturation successful our per sojourn payers. Business and committee costs per sojourn accrued $6.64. An summation successful costs per sojourn was driven by planned costs increases, an summation successful net labor and nan effect of little visits. G&A accrued astir $4 cardinal chiefly driven by acquisitions.

Segment EBITDA decreased $4 cardinal to $60 million, which is inclusive of a $7 cardinal effect from nan reinstatement of sequestration and acquisitions. EBITDA separator declined 140 ground points to 7.4% arsenic our summation successful gross per section and nan alteration successful visits per section were not capable to flooded labour pressures and a changing operation of business.

Now turning to our infirmary conception results. For nan 4th quarter, gross was $198 million, down $7 cardinal complete anterior year. Net gross per time was down $1.42. The 3.8% complaint summation was offset by nan reinstatement of sequestration and gross adjustments.

Hospice costs per time decreased $3.24 chiefly owed to objective optimization and reorganization initiatives, little staffing levels and little contractor utilization. EBITDA was $44 million, up astir $3 million, which is inclusive of nan antagonistic effect of $4 cardinal from nan reinstatement of sequestration. G&A decreased $3 cardinal owed to objective optimization and reorganization initiatives and little staffing levels.

Our business improvement strategy of shifting our referral patterns has resulted successful little admit volume, which allowed america to offset immoderate of nan emblematic Q4 seasonality astir discharge rates. We are very pleased pinch our 220 ground constituent betterment successful EBITDA separator contempt census pressure. The operation of a adjacent complaint update and our objective optimization initiatives positions nan conception for beardown capacity arsenic our census recovers.

Turning to our full wide and administrative expenses. On an adjusted basis, full G&A was $189 cardinal aliases 33.6% of full revenue, up 80 ground points. Excluding acquisitions, G&A was flat. Sequentially, G&A is up $7 cardinal driven by higher inducement compensation costs, little gains connected nan waste of fleet vehicles and nan seasonality-driven summation successful wellness insurance.

For nan quarter, we generated $41 cardinal successful rate travel from operations, which includes $27 cardinal successful repayment of deferred payroll taxes. For nan year, we generated $133 cardinal successful rate travel from operations, which includes some nan costs of deferred payroll taxes successful nan existent 4th and nan $34 cardinal paid successful Q3 for nan ZPIC settlement. Our nett leverage ratio astatine nan extremity of nan 4th was 1.5x.

As you tin spot connected Page 16 of our supplemental descent deck, we're initiating our guidance ranges for 2023. Our guidance ranges are adjusted gross of $2.244 cardinal to $2.274 billion, adjusted EBITDA of $230 cardinal to $240 million, and adjusted EPS of $4.13 to $4.36 connected an estimated 32.9 cardinal shares outstanding.

Before I spell into much specifications astir our 2023 guidance, I deliberation it is adjuvant to punctual everyone that changes successful our existent 2023 outlook compared to our thoughts arsenic we began 2022. First, our expectations for 2023 included a location wellness Medicare complaint update of 2% to 3%, which would person added $20 cardinal to $30 cardinal successful EBITDA. Secondly, we anticipated being further on successful our high-acuity conception and expect a simplification successful EBITDA losses. Additionally, 2023 will beryllium nan first twelvemonth since 2019 that we will not use from nan suspension of sequestration aliases nan add-back of COVID-related costs.

Normalizing for nan $13 cardinal successful sequestration and $6 cardinal successful COVID costs results successful a 2022 starting constituent of $243 cardinal arsenic we span to 2023. Beyond nan sequestration and COVID costs, location are respective cardinal factors impacting our 2023 guidance, which are outlined connected Slides 17 and 18 of our supplemental slides.

These items dwell of nan following. Higher-than-normal labour costs and enhancements to our use plans consequence successful astir $45 cardinal headwind; support successful mind, our first half of 2022 results were impacted by raises fixed successful August of 2022; an inducement compensation headwind of $23 million; continued operation displacement distant from episodic past to per sojourn resulted successful a $14 cardinal headwind; different items totaling astir $10 million, specified arsenic an summation successful nan mileage reimbursement complaint for our commissions and higher proviso and freight costs; and last, nan divestiture of our PCL statement of business, which contributed $6 cardinal segment-level EBITDA successful 2022 and was budgeted to lend $4 cardinal of EBITDA betwixt May and December of 2023.

We expect gross growth, separator improvement, objective optimization, reorganization initiatives and a hospice complaint summation of 3.8% to beryllium our cardinal drivers successful overcoming nan mostly of nan headwinds. Keep successful mind that while nan industry's location wellness complaint update is expected to beryllium 0.7%, our modeling suggests a level update for our operations successful 2023. As such, nan nett pricing update for nan location wellness and hospice segments for 2023 is $14 cardinal nett of sequestration reinstatement.

Some further items which are emblematic arsenic we move from Q4 to Q1 are: nan effect of 2 little almanac days estimated to effect costs arsenic EBITDA by astir $2 cardinal and an summation successful payroll taxes of astir $2 million. Some impacts caller for 2023 are an summation of $3 cardinal owed to 2023 inducement compensation. Keep successful mind, 2022 was impacted by capacity coming successful below-plan metrics. This summation is astir $2 cardinal higher than anterior year. And an summation of $2 cardinal related to COVID costs, which will beryllium nary longer added back. Additionally, successful anterior year, our sequential alteration from Q4 to Q1 included a $7 cardinal use from nan 2022 location wellness complaint update.

Despite nan important headwinds for 2023, demands for services stay strong, and I'm assured that nan plans we person successful spot for 2023 will position america for early success.

This ends our prepared remarks. Operator, please unfastened up nan statement for questions.

Question-and-Answer Session

Operator

[Operator Instructions]. Today's first mobility is coming from Brian Tranquilut of Jefferies.

Brian Tanquilut

I guess, conscionable my mobility connected nan guidance, Scott, really admit each nan colour that you've given. But possibly arsenic I deliberation astir nan bridge, right, I mean, conscionable immoderate item that you tin springiness america that would item your assurance successful nan achievability of this fixed benignant of for illustration nan guidance way grounds past year? And past possibly for Paul, really are you reasoning astir guidance-setting this year? And what do you request to do to present and execute connected these targets that you've group for net this year?

Paul Kusserow

Yes. I tin -- fto maine conscionable commencement disconnected successful position of what our expectations are. And Scott has been -- we've been moving connected this for a agelong clip and really reasoning it through. It's conservative. We do person to deed marks, for sure, successful this environment. But I deliberation what we've done, and Nick has been really bully helping america pinch this, we're pulling connected nan correct levers.

So if we do nan correct point successful position -- peculiarly successful position of turnover and -- which has a large travel through, we are capable to spell backmost to immoderate of nan payers and renegotiate immoderate of these contracts, possibly move immoderate to lawsuit complaint thrust down. I'm assured we tin thrust down nan Contessa losses arsenic we excavation successful deeper to nan clients. So I consciousness very -- but I'm ever this way, I'm ever very optimistic astir this. I deliberation I deliberation we person a batch to opportunity grace over, and I consciousness very bully astir it.

But we do person -- this is simply a twelvemonth of tremendous execution. And I consciousness bully astir Scott successful nan COO seat. So I deliberation he's going to thrust nan results well. So I'll move it complete to him aft I group him up for this.

Scott Ginn

I admit it. Brian, surely a batch of thought and a batch of learnings complete nan past mates of years from a guidance perspective. I deliberation if you look backmost and benignant of deliberation astir really to position this, I would opportunity that I deliberation there's much predictability successful immoderate of nan outcomes. I deliberation there's still a batch of moving parts astir mix. We talk astir labour will still beryllium a challenge. But we are seeing immoderate -- a small spot much consistency successful hospice discharge rates.

The measurement is beardown from a location wellness perspective. It's to beryllium really do we negociate that capacity. So I deliberation there's capable levers and opportunities successful nan twelvemonth for america to perform. And if you spell measurement backmost historically and you tin benignant of look astatine really we've done immoderate things, is that we astir apt were a small spot much fierce connected nan apical statement successful nan past and near much room connected nan costs side. I deliberation we took a different attack for that. We ever pulled down connected costs. We're importantly nether what we thought past year, but not capable to flooded nan misses astir nan apical line.

So I deliberation we were much thoughtful and gave ourselves much tally complaint moving into 2023. So I consciousness bully astir what we put together. But we're 1 period successful and truthful far, truthful good. And we'll talk again aft different quarter.

Paul Kusserow

Yes, it's been a bully start.

Operator

The adjacent mobility is coming from Matt Larew William Blair.

Matthew Larew

Maybe I'll conscionable heap a mates present connected nan MA side. One would beryllium conscionable successful position of nan Aetna deal, if you could conscionable springiness america an update connected really that has been progressing aft nan affirmative update you gave past quarter. And past wrong nan MA book, I deliberation you'd referenced that astir half of that gross guidelines was successful nan process of being moved over. Just either what's contemplating guidance aliases much of what your expectations are successful position of erstwhile and if that portion is over?

And Paul, is location benignant of a cutoff astatine immoderate constituent present wherever you're going to adhd negotiations and benignant of move connected to nan different business? Just trying to deliberation astir really you're pressuring nan payers to benignant of get pinch nan program.

Paul Kusserow

Yes. We've been sitting down pinch rather extended maps. And again, we -- arsenic I talked astir successful nan prepared remarks, we judge that nan paradigm is changing. And I deliberation pinch nan absorption, arsenic we talked astir past night, there's 3 -- traditionally 3 large players, 2 of them are going away. And truthful we're nan large independent one. And I deliberation a batch of group are coming to america and trying to fig retired really to get that capacity that perchance could beryllium absorbed into nan 2 ample MA players that are going to beryllium taking retired nan 2 competitors.

So I consciousness that it's going to beryllium a very, very different paradigm pinch capacity constraints. So we're astatine nan array pinch each nan large payers. As I talked about, we've gotten a batch of anecdotal grounds that post-acute costs are going up. I've decidedly heard pinch immoderate ample infirmary systems that person gone to bid that nan magnitude of enactment is simply a important problem because of nan inability to discharge into nan home. So again, that's pushing demand.

So arsenic nan -- arsenic we are capable to unafraid each nan -- nan large point for america is securing that labour proviso and making judge we person it. And past I deliberation astatine that -- past we want to spell backmost and commencement to do our ain utilization pinch lawsuit complaint for illustration we've been doing pinch Aetna and past springiness that backmost to them successful position of capacity.

So Aetna is going well. It's early days, but it's going well. And we're intelligibly engaging pinch nan remainder of nan manufacture to bring immoderate others complete nan statement truthful that we tin person lawsuit -- much lawsuit complaint deals versus per sojourn deals.

I don't know, Scott, did I miss anything?

Scott Ginn

I deliberation you covered it. I deliberation that we spot that arsenic an opportunity arsenic we negociate it. I deliberation 1 thing, arsenic you look astatine our -- we've called retired immoderate objective optimization initiatives retired there. Centralization of intake is 1 point we did, and I deliberation that gives america -- will springiness america a amended visibility into nan due guidance of our capacity, which we'll speak a batch into really we woody pinch nan managed attraction issues going forward. So we deliberation there's a batch of opportunities there. And we expect to beryllium fierce astir nan array to get nan correct rates that we deserve.

Paul Kusserow

Yes. And successful places -- I guess, fto maine conscionable reply your mobility straight also, Matt. If we can't get amended contracts and we person different places to return our business, we'll commencement to either cancel those contracts and commencement to move our business. So we intelligibly person been looking astatine nan maps and studying. If we person to get to that level, we'll do it.

Operator

The adjacent mobility is coming from Justin Bowers of Deutsche Bank.

Justin Bowers

So a 2-parter for me. One, conscionable connected hospice. It sounds for illustration discharge rates are stabilizing, and we cognize that's been benignant of an industry-wide rumor during nan pandemic. But arsenic you look guardant to 2023, really do you parse retired benignant of your expertise to execute versus what whitethorn aliases whitethorn not beryllium immoderate lingering structural challenges successful nan rumor pinch nan hospice guide? And past Scott, if you could conscionable thief america span 4Q to 1Q 2023 pinch each nan moving parts, that would beryllium helpful.

Scott Ginn

Yes. Sure, Justin. So from a discharge rate, you're perfectly right, we've seen stabilization astir those. I deliberation we're seeing it much predictable. The patterns lucifer up to what they person been historically. They're conscionable still astatine a higher rate. So that -- it hasn't precisely returned, but I consciousness for illustration we've sewage a bully statement of show there.

I mean, I deliberation what it's pushed america from an admit position is really watching our referral sources. And we ran done immoderate periods wherever we had precocious high-churn patients, which took a toll successful our commissions. And we looked astatine data. If you person much than 6 deaths successful a month, nan propensity of turnover is overmuch higher. So that became a interest for us. So I deliberation we've gotten much directed successful really we're really look astatine our referral sources and arsenic we negociate it.

And we've guided to astir a 3% ADC growth. That will beryllium a slow and dependable slog passim nan year, but I deliberation it's achievable and I consciousness bully astir what our teams person successful spot going forward.

If we deliberation astir conscionable going to nan Q4 to Q1, Q1 is going to beryllium interesting. And we've ever said to talk astir year-over-year and sequestration issues. Remember, we'll still person sequestration successful nan comps successful anterior year. So nan Q1 margins are going to beryllium nan toughest ones because they had a afloat sequestration use successful Q1 of past year.

As we deliberation astir nan locomotion forward, I called retired immoderate items that surely were impactful, and immoderate of them are normal seasonality, 1 astir nan 2-day differential successful days connected hospice, which is astir $4 million, payroll taxation reset is astir $2 million. And we do put backmost our STI and LTI plans. That's astir apt different $3 million. So you've sewage astir a $9 cardinal sound going from Q4 to Q1.

This twelvemonth is moreover going to beryllium a bigger rumor because we person nan COVID costs rumor coming in. That's different $1.5 cardinal to $2 cardinal because we will not beryllium adding that back. And past past year, we had a $7 cardinal bully feline for complaint summation connected location health. So that's not going to beryllium present this year. So past year, we were positive $1.5 million. So I would opportunity that number is going to beryllium person to a 50 type of a number successful this twelvemonth erstwhile you benignant of put each those pieces together.

Operator

The adjacent mobility is coming from A.J. Rice of Credit Suisse.

A.J. Rice

I mightiness conscionable inquire a small spot much connected nan labor. Paul, you're talking astir being judge you differentiate yourself. And I cognize 1 point you guys person talked astir is making judge there's immoderate substance subsidies and truthful forth. I wonderment if you'd talk much successful a tight marketplace really Amedisys is going to differentiate itself among nan labour excavation and get that incremental nurse. I don't deliberation it's paying more. And past specifically to understand really tight it is, are you turning distant measurement astatine this point? Or are you capable to get -- screen nan measurement that you want to get that's coming your way?

Paul Kusserow

Yes. In definite cases -- I'll reply that, but we person our awesome caller Head of Human Resources here. I'm going to punt to him because he's sewage each nan details, which frankincense far, he's done a awesome job. But yes, are location -- are we turning distant business successful definite markets wherever we're having a difficult clip hiring? Yes, we telephone them NTUCs, and we do person NTUCs. I deliberation nan mobility that I'm ever looking pinch NTUCs is there's immoderate I don't mind and there's others I do mind.

So -- but successful general, we're beautiful accommodating, and we make it activity because we person a bully PRN excavation and we tin bring that to work. We don't for illustration bringing successful contractors to do it, but successful definite cases, we've done that. And that's what we're trying to do is bring that pool, our PRN pool, truthful that we tin return attraction of it that way.

But successful general, our NTUCs are rather nether power and only successful a mates places. I'll move it complete to Adam to talk astir really we're doing competitively and why we're going to nutrient immoderate of nan awesome results we opportunity we're going to produce.

Adam Holton

Yes. Sure. Thanks, Paul. And A.J., awesome question. I'll conscionable item a fewer things. Obviously, connected nan people, labour side, it's 2 parts of nan equation: it's bringing talent successful nan door, and past it is keeping them here. I'll item connected nan talent side. Paul alluded to January was our champion period of offers. On nan objective side, I would conscionable opportunity it was 15% amended than we've ever done before. And this comes connected nan heels of a very, very beardown Q4 arsenic we looked astatine benignant of offers and starts. So this is simply a -- we're emotion really bully astir nan inclination that, that benignant of highlights.

To your circumstantial mobility astir really we're differentiating, there's a fewer things I'd constituent to. I deliberation successful nan 2nd half of past year, our talent acquisition squad and our operators did a really bully occupation of operationalizing really we looked astatine attraction centers successful need. So we target wherever our biggest issues are and really focused connected that.

And past I would opportunity connected nan 2nd portion is we are opening up nan aperture arsenic we look astatine pools of talent. The bully news for america is location are truthful galore nurses successful nan U.S. And I deliberation that we've seen that arsenic we've gone done nan pandemic, nan request to look astatine not conscionable benignant of nan halfway of location wellness nurses, but there's tons of incredibly talented nurses successful nan infirmary setting, those who person conscionable precocious graduated. And we put nan support mechanisms successful spot to person them do really well.

The past point I'll item connected nan acquisition broadside is we've made immoderate investments precocious from a exertion standpoint that really is putting america astatine a different level successful our expertise to find, pull and simplify nan process of bringing successful talent.

The different broadside of that equation, surely is nan retention side. That's ever nan harder piece. I deliberation we person continued to beryllium amended than our peers arsenic it relates to retention. But we're targeting beautiful large numbers successful position of bringing our retention of moreover higher connected nan objective side. And there's a fewer cardinal things I would benignant of item astir benignant of really looking astatine from a attraction standpoint, operationalizing really we look astatine our turnover. And 1 of nan things I've been really impressed, amongst different things joining nan Amedisys team, is erstwhile our leaders attraction connected thing and pinch nan rigor that we've ever had astir things, nan numbers move and nan outcomes are there.

And past again, Paul alluded to earlier, we did a beautiful important finance astir our use level to make judge that we are starring nan battalion arsenic it relates to supporting our group pinch an unrivaled caregiver experience. And past a batch of activity and finance has been put into really we are processing our leaders to make judge that they're taking attraction of nan group successful nan measurement that is deserved and needed. So those are a fewer of nan things I would benignant of item arsenic we look astatine nan things that are connected our plate.

Paul Kusserow

So you asked, A.J. and Adam delivered, truthful thanks.

Operator

Our adjacent mobility is coming from Ben Hendrix of RBC Capital Markets.

Benjamin Hendrix

What are your plans for nan proceeds from nan individual attraction divestiture? Specifically, are you're marking immoderate of that for reinvestment into nan PC web strategy aliases to different developments? And past related to that, you noted really beardown reception among location PC providers erstwhile you announced that web strategy immoderate years ago. Just wondering if you tin update america connected really that's grown and really impactful that could beryllium arsenic a apical statement publication complete nan agelong term.

Scott Ginn

Let maine -- I'll commencement pinch conscionable nan proceed mobility and fto Paul talk a small spot much astir nan network. So from a proceed perspective, we person a robust M&A pipeline, and we're excited to person that. We've sewage immoderate bully opportunities up of us. Right now, we're sitting connected -- astatine nan extremity of 12/31, thing drawn connected our revolver. So certainly, a batch of barren powder, and this would adhd to it.

I deliberation a buyback is ever thing we tin deliberation about. We person $100 cardinal authorized nether -- from our Board of Directors. So we tin do that. But I deliberation my contiguous desire would spot wherever we're going is M&A pipeline first. I mean liking rates person creeped up. We're sitting astatine a 5% complaint connected that revolver astatine this point. So that's somewhat meaningful. So correct now, we'll benignant of clasp it a spot and spot if we tin get immoderate deals complete nan decorativeness line. If not, we surely tin bargain backmost immoderate banal astatine an opportune time.

Paul Kusserow

Yes. And Ben, bully mobility connected nan individual care. We person a network. So we've put that together. We've conscionable added Houseworks who -- nan CEO of Houseworks who utilized to tally our individual attraction business. So we sold it backmost to him. So we're very -- and a batch of nan needs are based successful nan Northeast. So we consciousness bully astir that.

Our superior partners are Brightstar and WellSky, and truthful we screen almost each nan ZIP codes successful nan U.S. So erstwhile we request them, we've been integrating them in. It's mostly been a-- fundamentally been chiefly focused connected moving nan business successful nan 3 states we're in, but we're going to move that. And nan logic why we deliberation this is nan correct clip to commencement to move nan web is, peculiarly pinch Contessa scaling up, there's a batch of request for individual attraction successful there, peculiarly pinch a higher-acuity diligent to make judge that their activities of regular surviving are taken attraction of, their societal determinants, that benignant of thing, which is what this group is bully at.

So I deliberation we're going to beryllium employing that web beautiful heavy done Contessa. Also arsenic we move into nan palliative attraction business, we do request individual care. I was retired visiting immoderate attraction centers past week up successful New England and was conscionable looking astatine really they were staffing. And again, I deliberation there's going to beryllium much request for individual care. So we expect successful coordination pinch nan objective attraction that we're delivering some connected nan location wellness and hospice side. So I consciousness very bully astir really that's going to grow.

But we built it now -- nan section of dreams, we built it. And we're going to make judge they come. And I don't cognize what we're going to beryllium expecting from a apical statement growth, but this business will turn because we put together a alternatively unsocial asset, peculiarly for our benefit.

Operator

The adjacent mobility is coming from John Ransom of Raymond James.

John Ransom

Paul, erstwhile you sewage backmost nether nan hood and looked astatine Contessa, what do you deliberation nan halfway rumor is successful position of it being slower to ramp? Do you deliberation it's conscionable your infirmary partners being much bureaucratic than you thought? Or is it payers resisting, doctors resisting? What do you deliberation nan existent is present is there?

Paul Kusserow

I deliberation everybody loves nan idea, and I deliberation everybody is addicted to nan idea. I deliberation erstwhile we really look astatine nan complication of implementing nan thought -- again, I went to immoderate large systems and really dug successful to spot what's going on. It's making judge nan hospitalists, nan folks moving nan ERs are each bought successful reselling, reselling, reselling. I deliberation that's it.

I besides deliberation that immoderate of nan hospitals are plugged up. And particularly, I deliberation we're -- there's immoderate large benefits for america though. As their magnitude of enactment continues to spell up, they're going to person to find ways to decant a batch of these patients and push them elsewhere. And that's what Contessa is very bully at.

And past we've been talking pinch them astir saying, if you're really having magnitude of enactment issues, these DRGs are nan ones you don't want to get locked up successful nan infirmary system. So I deliberation a batch of it's moving done convincing them that nan 111 DRGs that we do target that mostly are not moneymakers for these hospitals are what's appropriate. So I consciousness bully astir that, peculiarly pinch nan magnitude of enactment pressures connected nan financials for nan hospitals.

On nan payer side, it's -- connected nan payer side, they return a while to do risk-based programs. They want to look astatine nan corridors, they want to look astatine our algorithms. I consciousness successful nan Tennessee woody that we conscionable closed and announced, that took a year. And what we ended up was a really bully woody pinch nan folks, but it was very fair. But I deliberation that going done that workout was good. We're going done nan workout pinch different payers.

Again, nan worth proposition of Contessa is truthful bully from nan position of nan providers, nan payers, nan patients. You get a trifecta pinch that. And I deliberation that yet is what's pushing Contessa through. But they -- but our -- very clear, we've heard -- I've heard successful each 14 partners I've gone to see, they want more. And truthful that's what we're figuring retired now is really to scale, get location faster because I deliberation we've been slow retired of nan gate.

Operator

The adjacent mobility is coming from Scott Fidel of Stephens Inc.

Scott Fidel

Two speedy questions. First, conscionable connected Contessa. It would beryllium adjuvant if you tin locomotion america done nan afloat twelvemonth nonaccomplishment anticipation and past really you expect that whitethorn benignant of inclination complete nan people of nan twelvemonth successful position of nan quarters. And past second, conscionable if you've sewage a position connected operating rate travel expectations for 2023.

Paul Kusserow

You want to return that one?

Scott Ginn

Yes. Sure. I'll show you. Just from a nonaccomplishment perspective, we're beautiful overmuch level to wherever we are precocious this year. I deliberation we came successful astir a $30 cardinal EBITDA drag. I deliberation that will benignant of beryllium successful that scope again adjacent year. And from a -- really to deliberation astir nan timing, that I would opportunity astir apt 54% of that losses will beryllium successful nan first half pinch astir 40 -- nan remainder of it, nan 46%, successful nan backmost half.

You're going to person immoderate early 4th loading astir immoderate of this consequence from nan accounting from a risk-based perspective. So you'll person a small spot heavier costs perchance early connected there. So that's what we spot that from a position perspective. I deliberation we consciousness bully astir really that develops passim nan year.

From a rate travel from ops, we're looking location around, I'd say, 2 10 cardinal to 2 15 type of cardinal dollar number, which is beautiful beardown for us. Had a decent twelvemonth this twelvemonth moreover without -- pinch nan payback and deferred. We had that ZPIC payback that I mentioned successful my prepared comments. So we expect different beardown twelvemonth of rate travel from ops arsenic we span into a twelvemonth pinch astir to person different $50 cardinal successful rate coming connected to nan waste of PCL pinch only 1.5x levered. So we would beryllium very excited astir getting immoderate of these deals that we person successful this pipeline closed.

Paul Kusserow

Yes. We for illustration it. Do you want to talk a small spot astir nan pipeline? What you're looking at? What we like?

Scott Ginn

Sure. I deliberation nan 1 point to really benignant of update from our dialogues astir apt successful nan past is we talked to a batch of heavy, dense connected location health. We want to do mini location wellness deals. I deliberation 1 I'd opportunity that -- a batch of JV conversations successful nan pipeline now, which has been new. And I deliberation Contessa is really -- which has driven that. More hospice coming successful lately, which has been interesting. And I deliberation we're fresh to -- nan woody that we tin get done diligence and has nan champion fresh geographically will beryllium nan 1 we get done. So a batch of awesome deals, a batch of things that person travel into play recently, and we consciousness very bully to person specified a afloat pipeline.

Paul Kusserow

Yes. Low leverage, afloat pipeline and little prices. So it's clip to spell retired and buy. So we're focusing connected that.

Operator

The adjacent mobility is coming from Tao Qiu of Stifel.

Tao Qiu

I'd for illustration to inquire astir nan location wellness sojourn per episode. That number dipped further to 12.5 successful nan 4th quarter. I deliberation past quarter, you guys mentioned that nan metrics would stabilize astatine 13.2 to 13.4. Is location immoderate structural logic that could support visitation little than nan stabilized level for longer? And what's a bully number to usage successful our presumption for nan year?

Scott Ginn

Yes. I deliberation nan unit -- immoderate of nan unit astir that is you do spot immoderate softer visits and higher lupus coming retired of nan vacation months into nan wintertime months. So that's coming down a bit, stepping down. It's astir apt not unusual. I deliberation capacity issues surely play into that, unfortunately. We don't for illustration to spot that effect nan attraction astir patients, but it's nan reality of wherever we are today.

I would expect -- and if you get past year, I deliberation we were successful nan 13-ish type of range. I deliberation you would spot america astir apt hover astir there. I deliberation you'll still -- from a costs perspective, we'll beryllium little astir apt successful Q1, and they'll astir apt moreover out. But I deliberation successful that 13, 13.2 is astir apt a scope that makes sense. But you won't get backmost location instantly conscionable from nan dynamics coming disconnected of vacation months and truthful forth. And Q1 will astir apt enactment beautiful light.

Operator

The adjacent mobility is coming from Whit Mayo of SVB Securities.

Benjamin Mayo

I think, Paul, 1 of nan reasons that you and nan manufacture person taken Medicare Advantage successful nan past is that your referral sources asked for it. They frankly require you to return it. And historically, it conscionable feels for illustration they've been intertwined to a degree. And truthful really do you ringing obstruction nan consequence that if you spell down nan way of going retired of web aliases cutting disconnected MA referrals that you could inadvertently effect your fee-for-service, too? It conscionable feels going down this path, location is consequence that nan strategy could disrupt wide operations. Just really do you deliberation astir that dynamic?

Paul Kusserow

No. That's a awesome question. Thanks. Yes, truthful I've been retired -- obviously, I don't want to commencement to opportunity that I'm going to commencement to redirect business unless I spell retired and fig retired pinch nan group that are directing nan business. So I've been retired talking to discharge planners, lawsuit managers, talking pinch our CTCs who are successful nan hospitals, talking pinch nan folks who are retired location successful -- our relationship executives who are talking to doctors.

And nan rumor is -- it utilized to beryllium -- arsenic you alluded to, it utilized to be, I'm going to springiness you a bundle and there's bully worldly successful nan bundle and there's not-so-good worldly from a business perspective, and you return nan full bundle aliases you spell to nan backmost of nan line. And that's really -- erstwhile location was ample capacity, we took that.

Now you spell to nan discharge planners, and location is conscionable return it. Whatever you tin take, take. And since our value is truthful good, we're ever astatine nan first of nan statement successful position of -- because we've been producing connected STARS.

So I deliberation we tin person much superior negotiations pinch these folks. And I've talked to them astir this. And I deliberation -- and since managed attraction is absorbing a adjacent magnitude of nan capacity of our competitors. I deliberation that capacity will get steered towards our competitors, which is lower-paying business.

So I deliberation successful general, it's going to -- I deliberation it's, again, a caller paradigm. I deliberation it's a caller conversation. We sewage 850 salespeople who sewage to spell retired and person these conversations. But I'm comfortable because magnitude of enactment is specified an intensive unit correct now. I deliberation they conscionable want to get group retired of nan infirmary bed. So I deliberation it's going to move to our benefit. Again, it's for illustration successful a capacity-constrained environment.

Operator

The adjacent mobility is coming from Gary Taylor of Cowen.

Gary Taylor

I had 2 questions. The first connected Contessa, I cognize nan past mates of quarters, you've fixed EPS dilution. It benignant of seems for illustration that's moving possibly $8 cardinal aliases $9 cardinal EBITDA nonaccomplishment a quarter. And truthful possibly that's location betwixt $30 cardinal and $40 cardinal EBITDA nonaccomplishment successful '22. I conscionable want to make judge I had that right.

And past from nan 3rd quarter, I thought -- I mightiness not retrieve this, but I thought location was a reasoning possibly that would amended $20 cardinal aliases so. So I guess, I conscionable want to get to benignant of -- is that astir wherever you were running? And really overmuch betterment is embedded successful nan '23 guidance for Contessa.

Scott Ginn

Yes, you're correct connected apical of that. We did for nan afloat year, Contessa mislaid astir $30 million. I would opportunity we're going to proceed connected pinch that benignant of $30 cardinal type of loss, we think, which is embedded successful our guidance correct now. Do we get up of that and outperform? Potentially. But correct now, we're considering it from a nonaccomplishment perspective, level year-over-year.

I deliberation if you spell backmost successful my prepared comments, we would person thought -- I deliberation we would person brought down Contessa astir apt astir $10-ish cardinal astatine nan beginning. But I deliberation immoderate developments successful palliative attraction arsenic we guidelines up that programme arsenic good arsenic immoderate slowness successful hitting immoderate of nan -- wherever we thought we would beryllium pinch immoderate different JV relationships, I deliberation we're behind. I deliberation we've acknowledged that, but I deliberation we consciousness very bully astir wherever this is headed from a semipermanent perspective.

Paul Kusserow

Yes. And I deliberation what we've besides done is we've brought complete immoderate really bully caller clients that we are ramping up connected -- immoderate prestigious ones. So Memorial Hermann, Baylor Scott & White, University of Arkansas are doing really absorbing stuff. So we're going to jump successful connected those because we deliberation that, one, there's a tremendous extent of business that we tin spell successful and person really bully contributions. And we've made that choice, and I deliberation it was a bully choice.

Operator

The adjacent mobility is coming from Joanna Gajuk of Bank of America.

Joanna Gajuk

So erstwhile it comes to your guidance, you talk astir a 5% measurement maturation target for location health. So wrong that target, what do you presume nan Medicare group work measurement maturation to beryllium versus nan non-Medicare? Because including nan Medicare, astatine slightest nan measurement you disclosed, nan Medicare fee-for-service gross has been declining precocious azygous digits, while nan different portion is increasing overmuch faster. So that's nan first portion of nan question. And I conjecture it's tied to my 2nd mobility astir staffing. So do you request to turn your objective staff, nan 5% successful location wellness and 3% successful hospice, connected a nett ground to thrust nan volumes? And I guess, really did you do successful position of nett staffing past year?

Scott Ginn

Yes. So first, connected nan growth, we guideline to 5% growth. That full admit growth, really didn't springiness a color. We haven't really fixed a batch of colour connected Medicare. But I would opportunity that successful bid to support -- and moving that, I would opportunity we had immoderate flimsy maturation successful Medicare business going forward. I deliberation we're being beautiful blimpish astir that number based connected what we've seen pinch enrollment numbers arsenic good arsenic utilization. Utilization of nan Medicare use for Medicare enrollees really came down successful that backmost half of nan year, which has astir apt amazed nan manufacture a bit. We've seen it arsenic we look astatine information from competitors crossed nan board. So we still judge we're taking stock moreover successful a marketplace that's depressed. So we'll proceed to do that. But that will surely -- arsenic it develops passim nan year, we'll beryllium point we'll watch closely.

From a staffing, we're going to person to proceed to turn staffing. I deliberation location are definite markets wherever we do person amended opportunity connected Medicare, wherever we were astir apt lighter staffed. Our Northeast region is an area that we person immoderate opportunity. So we're focused, and Adam alluded to really having immoderate focused attraction halfway calls wherever we really request to get staffing in. So we'll proceed to do that. And we're going to 1 connected one, adhd staff, slow down nan turnover and make judge each these objective optimization initiatives that our clinicians tin beryllium arsenic businesslike arsenic imaginable wherever we maximize productivity. That's really our extremity for 2023.

Operator

The adjacent mobility is coming from Andrew Mok of UBS.

Andrew Mok

Just wanted to travel up connected Contessa. Was hoping you could springiness america a spot much item connected nan financial outlook and clip statement there. You mentioned unchangeable operating results, I think, for '23 from an operating nonaccomplishment perspective. But it sounds for illustration there's a batch of activity pinch respect to JV partnerships. So conscionable funny erstwhile nan gross from those JV partnerships will materialize successful results. And what's nan caller clip statement to break moreover from each of this?

Nick Muscato

Andrew, this is Nick. I tin return that one. This is 1 of those questions wherever we're going to reply pinch it. It depends, right? And I deliberation a batch of that is limited upon which statement of business wrong Contessa is increasing and wherever nan payer liking has been, right? So we person our halfway group of associated task partners coming wherever we're doing Hospital astatine Home, SNF astatine Home, and we'll look to turn that number into nan future.

You're going to spot immoderate further measurement opportunity wrong benignant of that halfway business group arsenic JVs that we executed but were not implemented successful 2022 travel online successful 2023. So that will beryllium a partial driver of nan apical line. And past arsenic you tin spot successful benignant of nan span that we laid retired successful nan guide, nan palliative business has nan opportunity to turn apical statement beautiful importantly arsenic we get amended acquisition and much acquisition pinch that business. There should beryllium immoderate net that travel on pinch that.

So you could spot immoderate important step-ups successful gross successful nan coming years, particularly onshore much palliative deals. And that's not going to straight consequence successful a moderation of those losses. So it really depends connected which statement of business is increasing nan fastest.

We proceed to activity each day, for illustration Paul said, pinch our associated task partners to summation measurement to work their needs. That is evidently a cost-effective measurement to thief effect that nonaccomplishment number. Not fresh to travel retired and springiness circumstantial guidance astir erstwhile we get to breakeven because we request to spot really immoderate of these caller statement developments play retired complete nan people of this year. But arsenic soon arsenic we person amended statement of show astir that, obviously, we will fto you guys know.

We do deliberation that, arsenic we stated past year, we're astatine benignant of nan nexus from a nonaccomplishment perspective. So things will only amended from here. But again, it's conscionable going to dangle connected what those payer relationships look for illustration and what those infirmary relationships would look for illustration arsenic we move passim 2023.

Paul Kusserow

And I deliberation conscionable to adhd to what Nick is saying, Andrew, is we -- nan palliative -- if we do palliative right, we tin lick a batch of nan nonaccomplishment issues pinch 2 aliases 3 much palliative deals. So we're retired pushing those very difficult and having a batch of conversations. So we're hopeful we tin do that.

And again, we've sewage 12 highly bully partners, 14 each in, but 12 really bully places to spell very heavy and proceed to -- we'll proceed to attraction connected increasing those 5, 10x what they presently are today. So again, we conscionable person to play wherever we already are and excavation deeper. So we position nan opportunity arsenic reasonably adjacent astatine hand.

And nan different point is, arsenic these prestigious systems travel to america and want to partner pinch us, we judge that we're going to proceed to return them. And past hopefully, arsenic we do that, we'll get much businesslike astatine getting them up to standard faster than what we're doing now.

Operator

The past mobility coming is coming from John Ransom of Raymond James.

John Ransom

Just nan connectRN investment, I cognize nan dream was to effort to merge a gig staffing exemplary wrong your location wellness business. Where is that going comparative to your first expectations? And what are nan plans for that successful 2023?

Nick Muscato

John, acknowledgment for nan question. I would opportunity erstwhile we talked astir nan connectRN investment, we talked astir benignant of a 2-part phasing of really we utilize their services. One, benignant of utilizing nan level arsenic is to thief america find contracted unit successful areas of acute need, which we did benignant of successful nan Northeast past twelvemonth and had a mates of pilots moving for specifically benignant of that Phase 1 implementation.

Phase 2 has ever been what I deliberation is nan much absorbing opportunity, particularly arsenic we talk astir capacity constraints and this move of group coming connected to Amedisys and past transitioning to portion clip and past to PRN. So we person a ample untapped capacity opportunity wrong our PRN staff. And we are now piloting successful 2 of our location wellness regions. And we'll beryllium rolling this retired apt to nan remainder of nan statement passim nan year, utilizing that level to connection our PRN workforce shift-based labour pinch nan hopes that we get an further mates of visits retired of those folks a week.

Like Scott said, I think, connected this call, those are group that are already credentialed, already provisioned. They cognize our system. And truthful successful a world wherever capacity is key, if we're capable to thrust further productivity retired of that group, that's a large offset to imaginable contractor costs that we spot successful our costs per visit. So that aviator is rolling retired arsenic we speak today.

I deliberation we would astir apt sewage to this constituent a small spot faster than we thought we would conscionable benignant of fixed nan need. And truthful nan connectRN squad has been incredibly receptive and adjuvant to helping america deliberation done what is simply a very differentiated benignant of staffing strategy wrong location health, and we'll look to benignant of maximize that opportunity passim nan year.

Paul Kusserow

Yes. And conscionable to travel up connected Nick, John, I was retired successful Wakefield, Massachusetts wherever we were piloting connectRN and sewage immoderate nonstop feedback astir really successful a very constrained labour environment, it was enabling them to return attraction of much patients truthful -- arsenic good arsenic helping them build retired a PRN pool, truthful bringing successful extracurricular folks arsenic good arsenic taking and making our existing excavation much efficient. So we consciousness bully astir it. And that's nan future, peculiarly arsenic nan gig system kicks successful to wellness attraction workers who want that level of independence. This is going to beryllium a cardinal thing.

Operator

At this time, I would for illustration to move nan level backmost complete to Mr. Kusserow for closing comments.

Paul Kusserow

Well, convey you very much. I admit it. I want to convey everyone who joined america connected our telephone today. I would besides like, again, to convey each of our caregivers who delivered yet different awesome 4th of results. Thank you for each you do. Thanks for taking attraction of nan patients that really request us. So it's overmuch appreciated.

I'd for illustration to convey each of you connected nan telephone arsenic good and connected nan webcast for your liking successful Amedisys and attraction successful nan home, and I'm looking guardant to seeing you each retired location connected nan roadworthy successful nan coming weeks. Until then, return care. Thanks for listening.

Operator

Ladies and gentlemen, convey you for your participation. This concludes today's event. You whitethorn disconnect your lines aliases log disconnected nan webcast astatine this time, and bask nan remainder of your day.