Question-and-Answer Session
Operator
(Operator Instructions) Our first question comes from Robert C. Wetenhall, Jr. - Royal Bank of Canada.
Robert C. Wetenhall, Jr. - Royal Bank of Canada
Could you talk a little bit about why payroll and employee benefits as a percentage of sales declined so much?
Kristine B. Ponczak
From a payroll perspective I think as a percentage of revenue the biggest driver behind the percentage coming down I think is attributable to the improvements around uncompensated care and that inherent growth in revenue as a result of that. As that revenue number is moving up and those uncompensated care dollars are falling down to the revenue line, it’s helping us bring that percentage down. In addition to that, during the first quarter we did have a $700,000 positive adjustment due to lower runoff claim payments from the prior year that we were able to record in the quarter so that also assisted.
Robert C. Wetenhall, Jr. - Royal Bank of Canada
Is any of the improvement in DSO related to the rollout of the EPCR system or is it just better collections on a more aggressive basis?
Kristine B. Ponczak
I would say that we have about four markets that we have rolled the EPCR out in at this point. We are not attributing any of the reduction in DSO at this point directly to the EPCR rollout. We want to give that a bit more time. So I would characterize the five-day reduction as more just the initiative focused around collections of the old receivables and processes around the collection of AR in total.
Robert C. Wetenhall, Jr. - Royal Bank of Canada
Is that $360+ APC cash number kind of sustainable do you believe for the rest of the year?
Kristine B. Ponczak
From an APC perspective, yes. I think as Jack said we were pleased with $361. Over half of that $13 improvement was a result of improved collections which we certainly believe are sustainable and expect to continue that going forward. We have a couple of things happening in APC.
Of course the primary components driving APC are uncompensated care and rate increases, and we’ve spoken about the initiatives around uncompensated care and what’s driving that. But also with regard to rate increases, exclusive of other factors that are occurring, drivers behind it are that we as Jack mentioned received two positive ambulance reimbursement buyer notifications, both of which will continue to we believe propel APC.
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