Question-and-Answer Session
Operator
Thank you, sir. (Operator's instruction) And our first question comes from Derrick Dagnan with Avondale Partners.
Derrick Dagnan – Avondale Partners LLC
Good morning.
Will Council
Hello, Derrick.
Derrick Dagnan – Avondale Partners LLC
I want to ask a question on that employee turnover at the facility level on Texas. Do you believe that some of the turnover is related to competitors hiring away some of your talent? Or, is it more that you kind of put the bad or wrong people in the job in the first place?
Will Council
Derrick, it is really a combination of both. About half of the turnover we have experienced have been people that resigned and moved on to something else. And about half have been people that we identified as having weaknesses or identified as being folks that would not follow our prescribed procedures and so we elected to make a move. We feel good about the management we have in place today. It has taken us a while to get a good team assembled, but we feel good about it and feel like they are going to be very helpful as we move forward and try to improve those operations.
Derrick Dagnan – Avondale Partners LLC
Okay. And with the management turnover just the instability there, is there any reason why you are concerned about any issues with professional liability because of a lack of oversight or any issues like that?
Will Council
No. I am not concerned about that. The turnover has affected our marketing efforts outside the facility which generally speaking comes after we had taken care of the patient. So, when you sort of have turnover there, the marketing effort drops off. But taking care of the patient does not. The responsibilities in the facility are well identified and folks know what they are responsible for doing irrespective of whether the administrator or the DON is there. I do not expect it to have an impact on our professional liability exposure in Texas. One factor that does help in the State of Texas with respect to professional liability is there is an effective tort reform legislation there that provides a cap on damages.
Derrick Dagnan – Avondale Partners LLC
Okay. I will ask you a couple of more then jump back in the queue. When you look at the inflation pressures you saw in, I guess, across your entire business, on the food and utility side, is there anything you can do there to control that? Or are you doing anything or is that something we should kind of expect for the remainder of 2008?
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