Ardent Health (ARDT) 2026年第三季度财报电话会：上调EBITDA指引

核心要点

• Ardent Health公布2026年第三季度营收为16.2亿美元，调整后EBITDA为1.38亿美元，主要得益于就诊量改善及劳动力成本下降。
• 调整后住院人数同比增长2.9%，急诊就诊量增长1.7%。手术量同比下降1.9%，较第二季度改善100个基点。
• 薪资、工资及福利支出同比下降4.3%，占营收比例为39.9%，下降300个基点。合同工薪酬支出下降45%。
• 管理层将2026年调整后EBITDA指引区间的下限从4.85亿美元上调至5亿美元，调整后区间为5亿至5.35亿美元。
• Ardent仍有望在2026年通过IMPACT计划实现至少7000万美元的成本节约。管理层预计，在计入新举措前，将有2000万至2500万美元的结转效益延续至2027年。
• Ardent计划剥离其持有的堪萨斯州医院股权，该交易预计将于第四季度以11倍EBITDA的估值完成交割，并将使公司的利润率表现提升40个基点。

关键财务数据

业务与运营表现

Ardent患者漏斗前端的需求指标依然保持积极态势。紧急就诊量增长9%，影像检查量增长4%，医生问诊量增长1%。患者集中调度中心的呼叫量增加15%，接诊病例量增加9%。

公司正致力于通过降低预约排期和财务门槛，将上述需求转化为实际手术与诊疗服务。医生转诊流失率改善了400个基点，同时患者自主预约量增长15%，相比之下第二季度增幅为5%。

管理层表示，手术量下降的部分原因是公司在选定市场中主动退出了部分低利润率业务。预计这种业务精简带来的影响将在未来数个季度逐渐减弱，但业务组合优化仍将持续。

Ardent的IMPACT计划仍是其提升运营效率的核心举措。该公司在2025年实现了500万美元的成本节约，预计2026年将至少实现7000万美元。目前的推进项目涵盖劳动生产率、患者就诊流转、供应链合同、收入周期管理表现、支付方合约谈判以及人工智能赋能的临床工作流程。

Ardent的环境临床文档技术已累计处理150万次就诊，并在其2000名受聘及附属医疗服务提供者中得到约900人的应用。管理层指出该技术带来了约8%的生产率提升，并表示其推广应用目前仍处于早期阶段。

公司还同意将其持有的堪萨斯州医院股权剥离给合资伙伴。管理层表示，该资产不符合Ardent的长期战略。该交易预计将于第四季度完成交割，并为内生增长和潜在收购提供额外的资本灵活性。

管理层业绩指引

管理层表示，目前提供详细的2027年业绩指引尚为时过早。然而，在计入新项目或其他有利及不利因素之前，2026年IMPACT举措的结转效益预计将在明年带来2000万至2500万美元的收益。

风险与关注重点

• 平价医疗法案医保交易平台（Exchange）相关住院人数同比下降7%，而自费住院人数出现类似幅度的增长。Ardent表示，目前的业绩表现与此前预计的2026年Exchange相关3500万美元影响相符。
• 收入周期拒赔率仍处于高位，不过最终拒赔情况较上年同期略有改善。
• 商业保险及Exchange相关的住院手术量依然承压，反映了管理层所讨论的消费者及宏观经济层面的制约因素。
• 医疗补助（Medicaid）的工作要求、Exchange参保人数持续流失、免赔额上升以及自付费用提高，可能会对2027年的支付方结构和患者负担能力产生影响。
• 预计2027年专业服务费通胀率仍将高于整体通胀水平，不过管理层预计其增速将低于2026年。

分析师问答要点

支付方合约谈判： Ardent在2027年的合约已锁定85%，2028年已锁定75%。管理层表示，随着公司利用市场透明度数据争取更高的报销比例和更优的合同条款，谈判博弈变得更加激烈。

手术转化率： 管理层将推迟或放弃手术主要归因于医疗机构接诊能力、转诊速度、预约排期渠道以及患者的经济约束，而非病源流失至竞争对手。公司正通过分期付款计划和收入周期支持来缓解这些障碍。

2027年IMPACT效益结转： 管理层预计，2026年举措的年化效应将在2027年贡献2000万至2500万美元，其中不包括明年启动的新项目收益。

并购战略： Ardent表示其并购储备项目令人鼓舞，但仍将聚焦于处于成长型中型城市市场的医疗系统，在这些市场中，公司的规模和运营专长能够有效提升利润率。管理层指出，市场上虽有更多困境资产可供选择，但公司强调将保持耐心和审慎严谨的态度。

资本配置： 公司在第三季度回购了1100万美元的股票，今年迄今累计回购2400万美元。在回购授权额度增加2500万美元后，截至季度末仍有4800万美元可用额度。

财报电话会议完整实录

完整财报电话会议逐字稿

管理层陈述

Operator

Ladies and gentlemen, thank you for joining us and welcome to the Ardent Health Third Quarter 2026 Earnings Conference Call. [Operator Instructions]

I'll now hand the conference over to Dave Styblo, Lead Investor Relations. Dave, please go ahead.

David Styblo

Thank you, operator, and welcome to Ardent Health's Third Quarter 2026 Earnings Conference Call. Joining me today is Ardent President and Chief Executive Officer, Dave Caspers; and Chief Financial Officer, Alfred Lumsdaine. Dave and Alfred will provide prepared remarks and then we will open the line to questions.

Before I turn the call over to Dave, I want to remind everyone that today's discussion contains forward-looking statements about future business and financial expectations. Actual results may differ significantly from those projected in today's forward-looking statements due to various risks and uncertainties, including the risks described in our periodic reports filed with the Securities and Exchange Commission. Except as required by law, we undertake no obligation to update our forward-looking statements.

Further, this call will include the discussion of certain non-GAAP financial measures, including adjusted EBITDA. Reconciliation of these measures to the closest GAAP financial measures is included in our quarterly earnings press release and supplemental earnings presentation, which were both issued yesterday evening after the market closed and are available at ardenthealth.com.

With that, I'll turn the call over to Dave.

David Caspers

Thank you and good morning. When we spoke with you last quarter, I outlined a clear set of priorities: deliver more consistent financial results, grow EBITDA, deploy capital effectively and execute against our commitments in a way that creates long-term shareholder value. Underpinning that is sharper operational execution, continued advancement of our IMPACT program and a relentless focus on the factors we can directly influence. Lastly, I indicated I would be performing a portfolio review to assess the long-term strategic fit of our assets. I'm encouraged by the tangible progress we are making against those priorities.

We delivered strong third quarter financial results that reflect improving fundamentals and disciplined execution. We generated adjusted EBITDA of $138 million, increased adjusted admissions by 2.9%, improved expenses and produced $122 million of operating cash flow. Importantly, that progress was driven by areas we can directly influence, including our labor management. Despite the inflationary environment, we reduced SW&B by 4% year-over-year in the third quarter, which helps position the enterprise to produce durable earnings and sustainable performance improvement.

Key volume metrics improved sequentially. Emergency room visit growth accelerated and admissions improved, which are positive signals for the top of our demand funnel. Meanwhile, the challenging surgical volumes we experienced earlier in the year trended better in the third quarter as we accelerated efforts to make it even easier for our patients to access care. At the same time, we continue to advance IMPACT program initiatives that are strengthening the enterprise for long-term success. We realized incremental savings in the third quarter and remain fully on track to achieve our target of at least $70 million this year.

Additionally, our IMPACT program continues to drive greater efficiency while strengthening operational execution and consistency. Our overall progress and momentum give us the confidence to raise the midpoint of our adjusted EBITDA guidance by 1.5%. During the third quarter, we also took action to optimize our portfolio. We announced a definitive agreement to divest our Kansas hospital ownership to our joint venture partner. We are proud of what that partnership accomplished since 2017, including stabilizing the campus, preserving access to care and expanding services for the community.

Additionally, we significantly improved the financial performance over the last decade. As I discussed last quarter, we are taking a disciplined approach to portfolio management, evaluating our assets based on their long-term strategic fit and ability to create shareholder value. Our portfolio review determined Kansas was not the right long-term fit for Ardent. Ultimately, we agreed to monetize the asset at an accretive multiple of 11x EBITDA. The transaction, which is expected to close in the fourth quarter, will enhance our margin profile by 40 basis points and give us flexibility to redeploy capital towards growth that generates long-term shareholder value.

Taken together, our third quarter performance and recent strategic portfolio optimization demonstrate meaningful progress against the priorities I outlined. Importantly, all of those activities anchor back to executing on our 3-part growth strategy, which we continue to execute on with rigor and discipline. I'll spend the rest of my time speaking to that progress. The first pillar of our growth strategy is operational excellence to strengthen margins. That work is guided by our IMPACT program, which is a multiyear strategic imperative to optimize operating and financial performance.

It includes initiatives to enhance revenue and improve our cost structure through higher efficiencies. These are squarely within our control and help drive greater standardization, staffing optimization and improved patient flow. We realized $5 million of savings from IMPACT in 2025 and, as I mentioned earlier, we expect at least $70 million this year. We continue to identify additional opportunities to extend those benefits over time. It's important to note that IMPACT is not simply about reducing expenses. It's about becoming more efficient and improving performance. It consists of redesigning work to streamline throughput and maximize return on existing assets.

Virtual care and AI are enablers on this front. Our ambient technology partner allows our physicians to see more patients and ensure appropriate coding capture. Meanwhile, the enterprise rollout of our virtual care platform is expediting discharge time and improving safety, including for those with a high fall risk. We are also strengthening our payor contracting capabilities through a more disciplined data-driven approach focused on improving reimbursement rates, optimizing contract terms, enhancing revenue cycle yields and building stronger, more sustainable payor relationships.

The second pillar is strategic organic growth in our core business where we're building on our leading positions in faster growing midsized urban markets. We are using Capacity IQ to concentrate on growth in service lines where we see the greatest opportunity. This includes optimizing access, reducing leakage, shortening wait times and making better use of all of our inpatient resources; operating rooms, imaging equipment and ambulatory assets. The top end of our demand funnel remains healthy. During the third quarter; urgent care visits increased 9%, imaging was up 4% and physician visits grew 1% over prior year.

Augmenting that funnel is our centralized patient logistics hub, which we recently stood up to optimize placement and transfer activity. During the third quarter, total call volume was up 15% and accepted cases increased 9%. Following softer 2Q volumes, we are encouraged by surgery trends that improved in the third quarter. We continue to focus on converting demand into procedures by making it even easier for patients to schedule and access care. Those efforts are gaining traction. During the quarter, we reduced physician referral leakage by 400 basis points while self-scheduling appointments grew 15%, up from 5% in 2Q.

Our third pillar is strategic capital deployment. Our priorities include reinvesting in the business to drive organic growth, disciplined M&A and maintaining flexibility for other strategic activities. We operate from a position of strength with over $750 million of cash and a conservative net leverage ratio of 2.5x. We plan to deploy capital toward organic growth opportunities that strengthen our positions in midsized urban markets and that support care teams. This work is guided by Capacity IQ. We are also applying data and consumer insights to better understand patient needs, strengthen patient acquisition and retention and improve access to care.

From an inorganic growth standpoint, we take a disciplined approach to M&A. Our criteria consists of identifying strong assets in a growing midsized market with significant opportunity to drive financial accretion, all while preserving balance sheet flexibility. We are encouraged by our M&A pipeline and thoughtfully evaluating opportunities that meet our strategic and financial criteria. As part of that, we are particularly interested in systems where we can enhance margin and optimize performance by leveraging our larger scale purchasing power and our operational expertise.

In looking forward, I'd underscore that executing on our 3-part growth strategy is foundational. Strong consistency is established over time and requires a disciplined operating cadence to advance 3 key elements of excellence: excellence in care, excellence in our culture and excellence in our business.

Our 25,000 team members and over 2,000 employed and affiliated providers are the foundation in everything we do. I want to thank them for the excellence and dedication they bring to patient care we deliver every day. They are the reason 72% of our hospitals earned an A or B safety grade from Leapfrog, well above the national average of 59% and the reason 13 Ardent hospitals earned recognition in U.S. News & World Report's recent ranking of best hospitals.

With that, I turn the call over to Alfred, who will provide additional detail on our third quarter financial performance.

Alfred Lumsdaine

Thanks, Dave, and good morning, everyone. Thank you for joining us on today's call. We reported third quarter revenue of $1.62 billion and adjusted EBITDA of $138 million driven by strong execution and cost discipline. I'm very pleased with this performance, which reflects significant progress against a number of key initiatives as we continue to focus on controlling the controllables. We view Q3 as a largely clean quarter and accordingly believe these results provide a strong durable base for growth as we finish 2026 and look ahead to next year.

Importantly, we experienced improved sequential volumes in Q3 driven in part by our efforts to help patients access care both at the top and bottom of our demand funnel. Adjusted admissions growth accelerated to 2.9% year-over-year compared to 2.3% in the first half of 2026 and ER visits grew 1.7% year-over-year, which was an improvement from the 1.5% decline in the first half of the year. Additionally, admissions were up slightly in Q3 after declining 1% last quarter.

Surgery trends improved as well decreasing 1.9% in the third quarter, which was 100 basis points better than the performance in the second quarter. And consistent with our experience in Q2, about half of that surgical decline was due to our intentional rationalization of certain lower margin service lines in targeted locations. As Dave mentioned, we've been executing on a number of initiatives to enhance utilization and reduce access barriers for our patients. We're addressing financial hurdles through payment plans, shortening the time it takes to see a physician and pursuing other initiatives to optimize surgery conversions.

Denials remain elevated although final denials improved modestly over the prior year quarter. That's an encouraging development as we continue to leverage our revenue cycle strengths to improve revenue conversion and enhance revenue yield. In parallel, we're maintaining an intense market-based focus on payor recontracting to optimize yield through improved rates and contract terms.

Turning to expenses. We made substantial progress this quarter driven by IMPACT program initiatives. Total salaries, wages and benefits expense declined 4.3% year-over-year. SW&B represented 39.9% of revenue in the third quarter, an improvement of 300 basis points from the same period last year. Contract labor efficiencies contributed to this progress. Contract labor spend declined 45% year-over-year and contract labor expense represented just 2.0% of SW&B in the third quarter compared with 3.5% a year ago.

Year-over-year professional fee expense growth moderated to 7.4% in the third quarter compared with 10.4% in the second quarter and 12.9% in the first quarter. I'm pleased we delivered on our previously stated expectation for growth to slow to the high single digits in the second half of 2026 and we expect to sustain this improvement in the fourth quarter. Separately, supply expense growth was a modest 2.6% year-over-year.

From a payor mix standpoint, exchange admissions declined 7% year-over-year, which was similar to the 8% decline in the second quarter while self-pay admissions increased similarly. These exchange and self-pay trends were manageable and largely contemplated in our guidance. Medicare and Medicaid admissions increased modestly between 1% and 2% on a year-over-year basis. Non-exchange commercial admissions remained down year-over-year, but improved compared with the second quarter of this year.

Moving on to cash flow and liquidity. We generated operating cash flow of $122 million in the third quarter. Year-to-date 2026 operating cash flow was $258 million, up 5% from $247 million in the prior year period. These results were achieved despite a delayed quarterly supplemental access payment in New Mexico of $37 million, which we received in early October.

Turning to investment. Third quarter capital expenditures were $49 million. We typically see a step-up in CapEx during the fourth quarter and would expect this year to be no different. We repurchased $11 million of stock in the third quarter bringing our year-to-date total to $24 million. Our Board of Directors recently authorized an increase to our repurchase program by an additional $25 million. Inclusive of this increase, we had $48 million remaining under the share repurchase authorization at the end of Q3.

We ended the third quarter with total cash of $766 million and total debt outstanding of $1.1 billion. Our total available liquidity at the end of the third quarter was $1 billion and we finished the quarter with total net leverage of 0.8x and lease adjusted net leverage of 2.5x.

Turning to guidance. We are raising the lower end of our 2026 adjusted EBITDA outlook to $500 million from $485 million while maintaining the upper end at $535 million. Our updated range is therefore $500 million to $535 million compared with $485 million to $535 million previously. This represents a 1.5% increase at the midpoint reflecting strong execution, core business improvement and improved full year visibility. For revenue, we continue to be biased toward the lower end of our $6.4 billion to $6.7 billion range.

As I wrap up my prepared remarks, I'm extremely proud of the progress our team has made this year despite very fluid industry and macroeconomic dynamics. We continue to strengthen our operating model and we remain focused on building on our performance, generating strong cash flow and creating long-term shareholder value by aligning our people, capital and assets with the highest value opportunities.

With that, I'll turn the call over to the operator for the question-and-answer session.

Operator

[Operator Instructions] Your first question comes from Matthew Gillmor with KeyBanc Capital Markets.

分析师问答

Matthew Gillmor

I heard both Dave and Albert talk about strengthening payor relationships and recontracting and you obviously had a great outcome in New Mexico earlier this year. I was hoping you could dimension kind of the go-forward opportunity and some of the work you're doing with the payors to help realize that.

David Caspers

Appreciate your question, Matthew. Our team is so focused on operational excellence and part of that excellence of course is how we use data to find the best solutions and the best opportunities for us nationally and market by market. And so we are pleased with the work that's been going on and we feel optimistic about the future. But for those specifics, I'm going to turn it over to Alfred.

Alfred Lumsdaine

This has been a big year in terms of recontracting. Not every year is created equal and 2026 had an inordinate number of key renewals, some we continue to work on. Currently though we're 85% contracted for '27 and even further, 75% for 2028. We've cited the one negotiation in New Mexico and it has been a continuation of the same strategy throughout the year I would say. If I had to characterize our negotiations, they've been a little more contentious as we have been able to utilize transparency data to really ensure that we're being paid appropriately in the markets for the work that we're doing. And I would say the results have been consistent with what we achieved in New Mexico with other renewals. We're real proud of that team that was reconstituted into a revenue integrity unit this year and the results they've achieved.

Matthew Gillmor

Great. And on the surgical trend, it sounded like you all are pleased with some of the recent momentum. I wanted to see first, if you could characterize that momentum. Did that improve throughout the quarter? And then also help us think through the impact of service line rationalization. Will you start to anniversary that at some point or are there additional service lines that need to be rationalized such that you'll still have a little bit of a pressure on it for the foreseeable future?

David Caspers

I think one thing you'll hear across this call is the consistency in how we feel about the top of the funnel. So the top of the funnel; urgent care, physician visits, imaging, transfers; all very strong. Our ability to ensure and reduce -- ensure access and reduce friction as we move patients through the journey is the efforts we're really diligently focused on. That's why operational excellence is so important to us. And our ability because that pipeline is strong to get those patients the access and placement they need in the schedule with their budget and options in mind is really, really critical.

Alfred Lumsdaine

Just to the second part of your question in terms of the intentional rationalization. I think we mentioned in our opening comments about half of the surgical volume decline was attributable to intentional rationalization, which was comparable to Q2 in terms of it being about half now because the decline was lower, of course the impact of the intentional rationalization was lower. And that is an indication that there is some amount of sunsetting going on and we would expect that to continue. But yes, we will always continue to focus on optimizing our surgical procedures too and focusing on the highest margin and volume opportunities. So again I would say there will be -- it won't go away, but it will reduce over the next several quarters.

Operator

Your next question comes from A.J. Rice with UBS.

Albert Rice

Just to maybe follow up on that question on the surgical side. Inpatient seems to be under pressure more than outpatient, that's been the case I think for a little bit. But is that -- I mean if we're thinking it's elective procedures related to the public exchange, then I guess I would have expected to see more impact on the outpatient side. Is your rationalization skewed in one area or the other? And any other thing when you drill down on the service lines as to why it's skewing on the inpatient side so much?

Alfred Lumsdaine

Sure. This is Alfred, A.J. Yes, I would say a couple of things to your question. I mean one, I think the markets we're in likely as you compare across the public peer set are going to be a little bit different. We likely saw just again given that we're in smaller metro areas, a little bit more of an impact from the inpatient-only list, there's movements there as well as just the continued movement of procedures from inpatient to outpatient.

The good news is we've quantified the impact of inpatient to outpatient and it's relatively benign. I can't say it's 0, but we mentioned last quarter that it was about a $1 million to $2 million impact specifically related to the inpatient-only list impact. In addition, where we're seeing the biggest volume degradation from an inpatient surgical standpoint is in those commercial insured and HIX procedures as well, which again I think is indicative of the macroeconomic environment we're in and consistent with what we saw in Q2.

Albert Rice

Okay. And then obviously as you've gone through the review of the portfolio and thinking about moving forward strategically getting everything on track. How should we think about development from here; JVs, acquisitions, opportunities for inorganic growth? Is that still a little ways out or do you feel like the company is ready for that? And what kind of a pipeline might there be on those type of transactions?

David Caspers

Appreciate your question there. This is Dave. The focus on having a strong foundation enables us to prepare as we find the right opportunities. One of the things that I'm really pleased with about our platform is that we're a bit ambidextrous. The right opportunity sometimes will or will not have JV partners. We know how to succeed in both of those environments. We are encouraged by the pipeline that's there. We are diligently looking at options to create a future that is right for the long-term value of Ardent. That's where we're positioning. The team with the foundation with an execution engine is working hard to create that visible path.

Operator

Your next question comes from Ann Hynes with Mizuho.

Ann Hynes

So when you look at all the various initiatives underway to drive organic revenue growth, which do you believe have the greatest potential to contribute over maybe the next 12 to 18 months and which should we think about more as longer-term opportunities?

David Caspers

Yes. I appreciate your question. One of the foundational work we're doing is obviously really, really important and that's why this operational excellence matters so much. You've heard us mention over and over again the power of the IMPACT program. We really view IMPACT as such a strong vehicle for our future value creation. The power of that vehicle is in how our teams identify what's ahead in order to improve care efficiency, in order to maximize our team culture and to lift business value. And inside of that IMPACT pipeline; whether it is productivity work, care efficiency work, inventory work, contract improvement work; that IMPACT engine will be a trustworthy, reliable component for us that you will see us continue to create strong value. Alfred, anything you would add?

Alfred Lumsdaine

Just tailgating in and I think Dave touched on this already, Ann, in his comments. As you think about the near term, as we look at the top of the funnel and all of the metrics that we capture and measure are very healthy in terms of growth. So for us, there's a lot of, we'll call it, embedded growth or backup growth that we just need to unlock by reducing friction and ensuring that we're making the process of converting the top of the funnel to the bottom of the funnel easier.

Ann Hynes

Great. And then just going into next year, I'm sorry if I missed this, but have you outlined maybe high level tailwinds and headwinds we should consider for next year?

Alfred Lumsdaine

Thanks for the question. We think it's too early to speak to '27 in terms of any level of specificity. But of course that's not -- your question was really around headwinds and tailwinds. Tailwinds I think are pretty well known broadly as we think about Medicaid work requirements, as we think about HIX, as we think about just premium increases further driving higher deductibles and higher co-pays. So obviously those are again well known throughout the industry. As we think about tailwinds, Ann, clearly our IMPACT program, which is a multiyear initiative.

So we're not going to stop at the $70 million this year. We're going to continue to load the conveyor belt with opportunity. And we'll have the pull-through from the existing programs and the wrap of that into next year as well. And then obviously you probably saw the finalization of the OPPS last night and that should have a modest tailwind for us as well. And again I cite that just as specific examples of certain headwinds and tailwinds. We look forward to providing a fulsome bridge when we report year-end results.

David Caspers

This is Dave here. One thing I really appreciate about our team and our strategy most is that we work really hard to control the controllables and to improve those things that are within our objective to maximize the value no matter the headwinds or tailwinds that come. And that is the foundation that is building consistency and reliability for our future.

Operator

Your next question comes from Ben Hendrix with RBC Capital Markets.

Benjamin Hendrix

Just a couple questions on the capital plans. I noticed the CapEx guidance downticked a little bit $15 million. Just wondering if that's just a change in emphasis in any particular area or just a timing issue pushed to 2028. Any thoughts there?

David Caspers

Yes. Our commitment to organic and inorganic growth is consistent and strong. I'll let Alfred answer any timing questions, how that sits. But our focus on ensuring our teams have what they need, our focus on leveraging Capacity IQ to make the smartest and best decisions remains very strong.

Alfred Lumsdaine

Yes. And just specific to the takedown in the 2026 guidance range. One thing I would point you to that the range at the beginning of the year of $225 million to $265 million was essentially double the width of the range from 2025 and it reflected just the number of potential projects in the pipeline that we were under including in our evaluation. The new range, $210 million to $250 million, still gives us a ton of flexibility as we close the year. And importantly, the change really has no impact on our deployment of maintenance capital and our commitment to the growth activities that we have underway.

Benjamin Hendrix

Great. And then among in that range of opportunities as we kind of think about service line rationalization, is there any kind of -- how much capital are you allocating to backfill towards some higher acuity, higher margin type capabilities within your existing footprint?

David Caspers

Dave here, Ben. You are thinking right on the money on how Capacity IQ drives us to smart demand, smart acuity and smart patient care. We are definitely aimed in that direction to be sure that the tools that the team needs in order to grow that business are lined up, that the facility maintenance happens in a way that expedites access and care. But that is the thinking of Capacity IQ. It is a disciplined, smart growth approach that grows access, care and margin at the same time.

Operator

Your next question comes from Craig Hettenbach with Morgan Stanley.

Craig Hettenbach

Question for Dave. Just as you think through the M&A pipeline and as you've stated, you have enough financial capacity. Are you seeing any changes in the marketplace in terms of potential assets up for sale or how are you thinking on what's a reasonable time line to execute on M&A?

David Caspers

Craig, thanks for your question. I'm going to emphasize a disciplined approach to smart growth. We are very thoughtful on finding exactly the right opportunity. And as we probably mentioned too many times, it's really important for us when we find these opportunities that they're system-level opportunities, that they're urban midsized markets that show a population growth greater than the national average, it's really important to us. Yes, there are a lot of distressed assets available and a growing list of available distressed assets. But it's really the discipline to find exactly the right ones. We are patient and thoughtful and prepared.

Craig Hettenbach

Got it. And then just a quick follow-up as the IMPACT program becomes kind of ingrained in your operating culture there, what are some things as you look forward, additional potential levers you can pull on that to continue to move that forward?

David Caspers

Yes. I appreciate your question and you are spot on. IMPACT is a way of life for us. That strategy is a way of life for us. And it will always have a conveyor belt of projects and opportunities that strengthen our value; whether it is workforce enhancements with productivity, whether it's optimizing supply chain with contracts and drug lists, whether it's AI efficiencies that make care efficiency easier or it's revenue cycle excellence tools. You're going to see that we're going to keep that conveyor belt very full, very focused because, frankly, that's what sharpens our execution and improves our value.

Operator

Your next question comes from Kevin Fischbeck with Bank of America.

Kevin Fischbeck

Great. I wanted to ask about this initiative to improve surgical or procedure completion. It's not clear to me what exactly the issue was prior and what kind of procedures are really being scheduled here? Was this volume going to a competitor? Was it just not happening? Can you give a little color there?

David Caspers

Yes, absolutely. Kevin, thanks for the question. I think first of all, the trends you see nationwide represent that this is a bit of an issue for the industry based on the consumer pressures. But there are other factors and those other factors -- to be a little more specific on what operational excellence means. Those other factors: number one, ensuring that our providers have the right capacity and availability especially in the specialty provider space for us to progress a patient through their needed journey.

Secondly, referral teams and referral speed are really important and the placement and access of referrals is critical. As that patient moves down that pipeline towards the OR, revenue cycle excellence in terms of helping the patient prepare for their financial responsibility and helping them to solve problems is really, really critical and it can't be overstated. The customer needs support in that area. We're supporting them in that area and it takes a little bit longer to move the patient through that.

And at the same time, managing your professional fees in the OR so that your efficiencies are not wasted. That is a balancing act that requires a great deal of orchestration across those 4 or 5 levers. And to be very specific, those are the areas that the work is getting done so that the top of the funnel that has that help can flow through in a way that the customer gets what they need in the time line that they can get it accomplished.

Kevin Fischbeck

Okay. Is it more about capturing volume that just maybe never would have happened or is this frustration at the patient level that they may go to a different provider or a different competitor to get that procedure done?

David Caspers

I don't think it's competitor shift. It's a national trend and it's about us making sure we capture every opportunity we have and we don't lose that patient and they don't postpone what they need done based on their financial situation.

Operator

Your next question comes from Jason Cassorla with Guggenheim.

Jason Cassorla

I wanted to ask first just on the uninsured utilization behavior. As you're seeing individuals lose coverage and going uninsured, are you seeing those sort of same individuals utilize your emergency rooms at an elevated rate compared to when they were previously insured? And like how do you think about that from a bad debt perspective, including like where you're at on reserve levels? Just anything on the potential uptick of folks that lost coverage and just utilizing the system a little bit more? And how do you feel about that from a bad debt or reserve level consideration to start?

Alfred Lumsdaine

Sure. Yes. Thank you for your question, Jason. Yes, like, I think, consistent with the entire industry, we've certainly seen an increase in self-pay. There's good news there for us. It's been largely consistent with what our expectations were coming into the year and has tracked pretty closely with the change in volumes on the exchange side. So again perhaps not surprisingly in either case. So again my short answer, Jason, would be very consistent with what our expectations. We sized the exchange impact for us coming into the year at $35 million and we are performing very consistent with that initial expectation set.

Jason Cassorla

Got it. Okay. And maybe just a follow-up. Regarding the IMPACT program, I know you're looking to generate I think $70 million of absolute EBITDA benefits from it this year. Can you help in terms of how we should think about what that would imply from like an annualized run rate or like a fourth quarter exit rate for us to think about for next year? I'm getting to something close to like a $20 million, maybe higher kind of benefit as what you've implemented this year kind of runs into next year. But just any thoughts around how we think about the impact, the flow-through of that into the fourth quarter as well as the benefits into '27 would be helpful.

Alfred Lumsdaine

Sure. Thanks for the question, Jason. Yes, I think Dave has been clear as we think about IMPACT, it's not a project, it's a way of life. And so when you think about a conveyor belt, it moves at a -- we'll call it at a constant speed. So to your point, there will be a wrap into next year and there will be growth from Q3 to Q4 as we consistently load initiatives into our IMPACT set of initiatives. So to go back to the genesis of the question though, we would expect that wrap from the $70 million to be, call it, if you just kind of do the math of normalizing, it would be in the $20 million to $25 million range. Now again I would go back and would caution not to, as you think about next year, too early to put full quantification on all the headwinds and tailwinds. But if we just isolate on the wraparound of this year's initiatives before we get to next year's initiatives, we would put that as a $20 million to $25 million tailwind.

Operator

Your next question comes from Sean Dodge with BMO Capital Markets.

Sean Dodge

Maybe just on the professional fees, you all were able to manage those really well this quarter. What are you doing there that's been effective in continuing those? And just maybe how should we be thinking about the trend or growth now in professional fees going forward?

David Caspers

Sean, Dave here. As our teams focus on operational excellence and strengthening margin, it gives us very clear lens on how we best optimize and perform in the operating room and other areas where we leverage professional support. Teams have been very diligent about all of that work and it's paying off. And of course it takes time and it's delicate to hold and it is an important part of how we perform on an ongoing basis. So I'm very pleased at how our teams are negotiating through those situations, how they're organizing through those situations and how they're optimizing through those situations without hampering any potential volume.

Alfred Lumsdaine

And if we just look at the numbers underneath of it, Sean, I think it's been good progress this year; 13% in Q1 year-over-year, 10% Q2, call it 7.5% Q3. We've been clear that we were expecting a decline to high single digits over the back half. And that trend may not always be linear, right? You can have a little bit of spikes in any quarter. I would always focus you to kind of think about it longitudinally. We would expect that next year it will still be an above inflationary rate of increase in this area, but we would expect the overall rate of increase in '27 to be lower than what we experienced on the whole in '26.

Sean Dodge

Okay. Great. And then the rollout of the ambient documentation tool that, Dave, you mentioned in the top part of the call. Is that done now? Do all the clinicians have access to those capabilities? And you said it was very impactful in helping drive productivity and enabling them to see more patients each day. Is there any kind of quantification you can share around like how much of an enhancement it has been for productivity for the business?

David Caspers

Sure. First of all, we reached our 1.5 million encounters mark and we're picking up speed, which is great. Secondarily, of all the things that have benefited providers that they feel most excited about, this is one of those tools that is good for efficiency, it is good for the patient care, it is great for the providers' way of life to get some time back. We have about 900 providers of our total 2,000 that are up and running, 2,000 employed and affiliated. So we have a ways to go. And those tools and technologies are finding new places to connect dots to improve things.

So we're very early on. And if I had to say even what base we're at, we're at first base moving forward with this and a long ways to go. It will have impact over time to strengthen coding, et cetera, and drive care efficiency. What we do know for sure is the math and science shows about an 8% productivity gain. Today, we are at that mark as we look to advance more providers in the future and use it in places that demonstrate even more value. But we're very encouraged by the results.

Operator

Your next question comes from Scott Fidel with Goldman Sachs.

Sarah Conrad

You've got Sarah Conrad on for Scott. I was hoping you could give us some framing on the OBBA implementation and the impact to payor mix as we go into 2027. Specifically, do you think with the continued ACA attrition and also the Medicaid work requirements, that we'll continue to see that one-to-one transition into the uninsured population? And just separately, how are you thinking about the puts and takes of the evolving state-directed payment environment?

Alfred Lumsdaine

Sure. Thank you for the question. I'll start with your comment on the 1:1. We would actually, as we have looked at the data of just an exchange patient who came in saw us in '25 and then saw us again in '26 and were they uninsured or did they have other coverage. We actually found a majority showed up with other coverage, whether that was could they have found commercial coverage, whether they were able to qualify for Medicaid out of the exchange book.

So we would expect that -- while I would certainly expect it will have an impact on uninsured, continue to have an impact similar to what it was in 2026. Again I would expect a significant amount of that population to find other coverage. So yes, we've talked about clearly these will be another headwind as we go into next year. The Medicaid work requirements will be, I'll say, new above what we saw from a '26 perspective. but too early to talk about as we think about all of the headwinds and tailwinds for next year to put a quantification on that as we really do our work of preparing for next year.

Sarah Conrad

And then on the reduction in salaries, wages and benefits this quarter, can you break out the benefit from like the workforce reduction versus contract labor and how much of the quantified $15 million to $20 million of those workforce reductions that you had sized are now going to be in the fourth quarter? And just generally how should we think about the run rate of this line going forward?

Alfred Lumsdaine

Sure. This is Alfred. Yes, clearly we're very happy with all of the progress we've made. Clearly, it's been the biggest component so far in terms of the pull-through of our IMPACT initiatives and in controlling the controllables. And clearly, the reduction in contract labor has been a significant component of controlling SW&B. As we've said, it's gone from 3.5% of SW&B all the way down to 2%, which reflects a 45% reduction so relatively. But we continue to focus on other aspects of SW&B; whether that's our overhead load, whether that's our efficiencies and our organization structure; all 3. So again I would say in the quantum of opportunity, that's been the nearest and earliest for us to actually have and the largest component of our $70 million impact this year.

David Caspers

Adding on to Alfred's answer here, which is sort of implied, but I want to make it really clear. Our HR teams are doing an exceptional job at picking up the pace on speed to hire. I bring this up because it would be easy to imagine the contract labor going back if all we did was constrain that. That is not what's happening. Operational excellence runs all the way through who we hire, how we hire, the speed to onboard to ensure that what we're building is sustainable and durable over time.

David Styblo

Operator, why don't we go ahead and take one more question?

Operator

Your next question comes from Benjamin Rossi with JPMorgan.

Benjamin Rossi

I guess I'll just ask about your forward strategy. In the presentation, you listed your 3-part strategy and some of the focus on organic growth in core markets. In building your market position, when you refer to these high value service lines or specialties, where do you still need to close the gap with your competition? And is there any way to think about how that restructuring may impact your volume cadence in the coming quarters as you drive the strategy forward and anniversary some of your existing rationalization efforts?

David Caspers

Yes, I appreciate your question. And I think it ties nicely to how we think about a disciplined approach to capital spending. It is imperative as we do our work and deliver our care that we do not disrupt or interrupt volumes or financial value. So we are thoughtfully organizing whether it is updating ORs, whether it is cath labs, CVORs, whether it is opening up new units or it's standing up command centers or it's ensuring that our future for surgery centers is strong. Those elements will be stood up and improved as we make the changes that are informed to us by Capacity IQ. It is our objective of course to be very disciplined in this smart growth that access, care and margin all have to improve at the same time. So if you're looking for us to take a step back as we take a step forward, that won't happen.

Benjamin Rossi

Great. And I guess just as a follow-up, you mentioned a lot of the changes with IMPACT and accelerating some of the program elements on operating costs and strategic projects. I guess within your JV model, just curious how your partners have reacted to the changes and whether you're getting any pushback to the operational rigor being put forward.

David Caspers

IMPACT of course has been very strong. Our JV partners obviously operate in the same business environments that we do and experience many of the same challenges we do. You are astute though in noticing that we're moving a little faster by pulling hard work forward so that we can set the company up for advantages by doing so. That does come with some pressure and pain. And as we navigate our future to be excellent in all 3 categories; excellent in care, excellent in culture and excellent in the financial value that we create for one another; that is an important part of us doing that well in a JV structure today, tomorrow and in the future.

Operator

That concludes the question-and-answer session and this concludes today's call. Thank you for attending. You may now disconnect.