Pediatrix Medical Group (MD) Jefferies Global Healthcare Conference summary

Strategic focus and portfolio management

• Emphasis on core strengths in high-risk maternal and neonatal care, maintaining strong relationships with health systems and clinicians.

• Initiated exit from underperforming ambulatory specialties, including primary and urgent care, to focus on core inpatient services.

• Portfolio rationalization driven by financial performance and operational focus, with disposals of negative EBITDA practices underway.

• Growth strategy centers on hospital-based specialties, especially maternal-fetal medicine (MFM), leveraging operational density in key markets.

• Future re-entry into primary care pediatrics is possible, but current focus remains on core services.

Core business performance and market trends

• Demand for services is stable, with persistent strength in MFM volumes and stable NICU volumes despite flat or slightly declining birth trends.

• Increased NICU admissions and length of stay observed, possibly due to higher maternal and infant risk factors.

• Maternal deserts near metropolitan areas are driving more high-risk pregnancies to MFM practices, supporting ongoing growth.

• Q1 reported a 2.5% same-store volume increase, attributed to internal operational levers rather than external birth trends.

Regulatory and operational developments

• No Surprises Act (NSA) initially posed headwinds, but improved arbitration processes and advocacy have led to more favorable payer negotiations and high in-network presence.

• NSA-related arbitration now affects only a small portion of revenue and is not materially impacting results.

• Revenue cycle management (RCM) transitioned to a hybrid model with an internal team and new vendor, Guidehouse, improving control and efficiency.

• RCM transition expected to complete in 2024, with G&A as a percent of revenue targeted to remain at or below 2023 levels.