Illinois Litigation Impact
Q: How does the Illinois verdict affect your business strategy?
A: The unprecedented jury verdict in Illinois is under appeal, and we believe there is significant uncertainty around its ultimate outcome. At this time, it is not impacting our approach to the business or capital allocation plans. We are focused on challenging and resolving the case through the legal system.

Margin Recovery Outlook
Q: What's the outlook for margin improvement in both segments?
A: We expect margins to recover as we return to normal growth levels. Opportunities include strong revenue performance, better expense control, manageable wage inflation, and reduced physician expense growth. Supplemental Medicaid payments also contribute significantly to margin recovery without adding incremental expenses.

Medicaid Supplemental Payments
Q: How do Medicaid supplemental payments impact your results?
A: Increased Medicaid supplemental payments benefit providers with higher Medicaid utilization like us. This quarter, we received $10 million to $15 million of out-of-period behavioral dollars. We anticipate more states will implement or expand programs, boosting supplemental payments throughout the year. Regulatory changes are generally favorable, allowing states flexibility until 2028 to adjust programs.

Guidance and Potential Revision
Q: Will strong Q1 performance lead to guidance revision?
A: Although we exceeded internal and consensus expectations in Q1, we don't typically revise guidance after the first quarter. If positive trends in acute volumes and behavioral pricing continue into Q2, a guidance revision is possible.

Labor Cost Trends
Q: What are the trends in labor costs and premium pay?
A: Premium pay decreased by approximately $20 million from the same quarter last year , but remains elevated due to robust acute care volumes. Wage inflation is decelerating, and we've made productivity adjustments. Reducing premium pay further will be challenging unless volumes moderate.

Behavioral Volume Growth
Q: What's driving confidence in behavioral volume growth?
A: We expect behavioral patient day growth to improve to about 3% this year. Underlying demand is strong, evident from inbound inquiries. Staffing improvements and stabilization of Medicaid disenrollments bolster our confidence in incremental volume growth throughout the year.

Capital Allocation and CapEx Plans
Q: Any changes to capital deployment or CapEx plans?
A: No significant changes at this time. We continue investing in acute care areas like emergency services and high-acuity surgical services, as well as outpatient facilities. In behavioral health, we're expanding inpatient capacity and investing in outpatient developments and telemedicine.

Regulatory Changes Effect
Q: How do recent Medicaid rules affect supplemental programs?
A: The new Medicaid rule doesn't cap supplemental programs but focuses on hold harmless agreements. About one-third of our supplemental payments are under agreements CMS objects to. States have until 2028 to adjust, and we believe there's flexibility to maintain these payments.

New Hospital Opening
Q: What is the impact of opening West Henderson Hospital?
A: West Henderson is scheduled to open in late November or December. Initial financial impact will be minimal, with some preopening costs and early operating losses offset by improvements at our existing hospital. We expect significant population growth to drive a successful opening, similar to Henderson Hospital five years ago.

Competitive Landscape
Q: Are supplemental payments affecting competitive dynamics?
A: We haven't observed significant changes in competitor behavior due to increased supplemental payments. While these payments benefit providers with high Medicaid utilization like us, they haven't notably altered strategic actions in our markets.