Question-and-Answer Session
Operator
(Operator's instruction) Your first question comes from the line of Justin Lake - UBS.
Justin Lake - UBS
A couple of questions here. First, on the patient care cost, those were up about $3 in the quarter. Given that the EPO dosing sounds like a decline, down sequentially, I am just curios what is driving that and if that is a sustainable run rate or we might see some decline as we go through the year.
Richard K. Whitney
Yes, Justin, you are referring to the sequential increase in operating cost?
Justin Lake - UBS
Correct.
Richard K. Whitney
Yes, it is a, a big part of it is the impact of Q1 in the short treatment days and so, I think as I mentioned in my comments that about 2/3 of the increase that you are seeing there is related to labor increases. We do have some fixed labor cost about a third so you are seeing some impact just of spreading the labor cost over fewer treatments and then we have the seasonally higher payroll taxes which are material in the quarters. So, that is the biggest part of the story as well as fixed facility operating cost we would rent and things like that that are spread over fewer treatments.
So, there were some offsets of the EPO but I think we where experience sequential operating cost increases in line with where our expectation would be for this time of the year.
Justin Lake - UBS
Perfect, and now just a couple of quick numbers question, the revenue per treatment breakdown was very helpful. It sounds like most of that was sustainable, Rich. Am I missing anything there or this is a good run rate if we think about going the rest of the year?
Richard K. Whitney
Yes, based upon the drivers of the revenue per treatment increase, I think this is a sustainable rate absent any changes on the private pay side.
Justin Lake - UBS
Perfect, then just on the M&A, you spent $40 million to acquire seven centers. Can you just give us a patient down there?
Richard K. Whitney
Yes, and I guess the one thing I was reflecting Justin the $1.50 of the increase was the lab related to the seasonal testing as well as the Medicare rate increase. About 2/3s, a little bit more of that relates to the seasonal testing so I think you can think about a little more than a $1 per treatment of the sequential increase, all else being equal as not being sustainable as we move through the year.
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