Q1 2021 Signify Health Inc Earnings Call
So nearly an hour long comprehensive visit where our contracted providers document approximately 240 data points, which are then audited and shared with health plans to capture conditions and address unmet patient needs.
The findings from these and home evaluations are shared with the patient's primary care physician or specialist to provide a holistic view of the patient, including their clinical social and behavioral needs that we can address through a network of community organizations and social and clinical care coordinators.
More than 90 per cent of the time patients, who haven't and home evaluation engage with their primary care physician or follow up with a specialist.
This is an important statistic for health care and that it helps drive continuity of care and preventative services that can ultimately help prevent adverse events such as a hospital admission or unnecessary readmissions.
At the height of the pandemic last year, our in home and valuations became even more critical as people were trying to balance social conditions and manage their chronic health conditions, while staying home to stay healthy.
Using our member engagement team and proprietary technology, we were able to deploy our 9000 provider network to members either virtually or in person with comprehensive COVID-19 safety protocols.
Customers requested that we deliver against significantly higher goals. Despite the temporary pause due to COVID-19 that occurred starting in late March 2020 are.
Our team was able to successfully pivot and a matter of weeks to offering virtual and home evaluations and support of our customers and their members.
And 2020, we performed over $1 4 million unique and home evaluations, including 500000 virtually.
We believe and customers have told us that help we provided was critical and in some cases lifesaving services. During this period of isolation for so many.
Our unparalleled access to the home through a nationwide network of clinicians provides additional growth opportunities.
Beyond <unk>, we have the capability to perform and home diagnostic services utilizing our expanding device hub, which includes peripheral artery disease testing <unk> and diabetic eye exams among other services.
This is a growing and differentiated part of our business and we're excited about and are investing more and this year.
In conjunction with and IHG. We can also provide social care coordination services to address food and security slip and fall risk access to transportation, social isolation and support.
And the financial resources to afford medications.
I'll refer to this service and IH E plus.
Our network is predominantly focused on use cases mentioned above we are also increasingly diversify and the type of work and the customers who need our services and home.
One exciting area of growth and a Great example is our Biopharma services Division, where were working with some of the largest and most innovative life sciences companies. This.
And this team is helping increase healthy happy days at home for individuals participating in clinical trials or with rare diseases.
Leveraging our same network and home providers.
And the first quarter of 2020, one we launched two oncology support programs, one supporting a pediatric clinical trial and a second supporting caregivers for patients undergoing novel oncology oncology therapies.
We also focused on on.
On helping patients initiate therapy is more quickly and driving persistence and adherence on therapies.
You have pharma industry partnerships, we support a class of multiple sclerosis therapies by deploying our network of practitioners to assess and monitor complex drug initiation protocols and the patients' home.
We look forward to continuing to support all of our partners as they expand their in home service offerings across their portfolios.
We then provide NEC site of care decision support tools and services to facilitate the patients transition to the most appropriate care settings.
As a part of the services, we work with about 3000 post acute facilities across the country and also offer services to help patients succeed once they're discharged home.
Our services include ongoing patient monitoring and reviewing emission protocols and coordinating the transition of home, including social and clinical care coordination.
David do this primarily through the CMS sponsored bundled payments for care improvement advanced or B P. T I a program.
And the BP CRA program, we help drive savings, which we share with the federal government and our provider partners.
And 2020, we drove a savings rate of seven 3% up from five 3% and 2019.
This was a great result, as we worked with our provider partners to continue driving positive patient outcomes throughout the pandemic, creating shared savings and delivering value based payments that have been crucial from any of these providers.
We also successfully helped the same partners navigate through the process of bundled selection for the balance of the PTA program through 2023.
The success of the signify model was reflected and the fact that our customers expanded their participation and the BPA program, even after a year of tremendous challenges for the health care system.
In September of 'twenty, and 'twenty, the CMI directors desk issued a letter state and the episodes will become mandatory post the end of the P. P Ci program and 2023.
We believe this will lead to an increase and growth opportunity. Thanks to our provider partners, who laid the foundation for innovation and value based care.
And 2020, we also launched our commercial episodes of care product offering, which we expect to contribute to the future growth and episodes program size and savings.
Currently have three commercial customers for whom we are designing value based payment programs.
We launched the state of Connecticut, and employer and can be a health plan and the Pacific Northwest.
I'm also excited to announce and we recently expanded into a new geography, the southwest through a contract with superior health plan and Texas.
These programs cover inpatient and procedural care such as sepsis enjoys joint replacement, but also manage condition and chronic conditions, such as maternity substance abuse oncology and diabetes as.
As we expand our commercial episodes of care product. Our goal is to not be everywhere and a shallow way, but instead to go deep and specific regions and use our network effect the stack value based payment programs by adding providers and new risk bearing entities, such as employers Aso's and health plans and a particular market.
We believe that we are just beginning to scratch the surface of our large opportunity, we see before us and value based care.
And 2020, and we performed and home evaluations and only $1 $4 million of the potential 79 million homes, where members are enrolled in Medicare advantage and Medicaid managed care.
We're seeing great demand from our customers, including expansion and diversification opportunities to drive and home growth.
Additionally, what value based spend across the nation for government and commercial lines of business is around 400 billion, we expected that $142 billion of this spend lines within alternative payment models, where there was real downside risk.
And 2019, we managed the program size, representing $6 $1 billion.
Of that $142 billion.
Looking forward the self insured employer market is increasingly moving towards value based payments. This is our sweet spot and we believe it represents a significant tailwind when we have a real first mover advantage with completely aligned incentives to ensure that we're actually driving positive outcomes for our customers by bringing a unique blend of financial technology.
Data and analytics and holistic care services to activate the home care setting.
At signify we refer to our flywheel, which describes what has made US successful and also serves as a roadmap driving corporate strategy, our product portfolio and our acquisition strategy and there are four key components of that flywheel.
First capturing data.
And we received extensive data from our clients and add to it through our interactions with individuals and the home and community. These.
These interactions delivered day to day isn't available and the traditional health care system.
We also capture real time data from providers payers and CMS.
All of this day to leads to number two generating insights, we generate insights through risk stratification predictive modeling and targeted consumer engagement.
And we help guide next set of care decisions and design and price episode of care programs, which leads to number three delivering actions.
To that and we drive access and coordination across the entire continuum.
Ambulatory and acute post acute and the home and pulling our holistic care model and.
And last but most importantly number four we improve outcomes, we put the patient first across the entire spectrum of care by reducing unnecessary facility time <unk>.
Ensuring that there is a better consumer experience and outcome at the end.
And driving more healthy happy days at home.
The flywheel allows us to drive positive outcomes at a national scale by empowering the large adaptive networks that are driving holistic care.
Us to execute and deliver and aligned incentive programs via our episodes or other value based arrangements.
And finally, it helps us to continue to dig deeper and deeper into our large markets, where we want to grow and diversify.
Our model, which is aligned with our customers and their success has driven signify has compelling growth and strong financial performance to date and we believe it will be the core underpinnings for our growth and shareholder value creation over the long term.
Now I'll turn it over to Steve to review, our fourth quarter and full year 2020 financial performance.
Thank you Kyle good morning, everyone I'm excited to be able to present, our strong fourth quarter and 2020 results and addition to successfully adjusted the business to address here.
Pandemic on the company and our customers we grew our business all while working toward and completing a successful IPO.
As I walk through 2024th quarter and year end results I will be referring to the table for the period and earnings press release issued yesterday I would like to point out that we reported revenue GAAP basis, which was reduced by an adjustment relating to equity appreciation for years.
And 2024 year index of the years was $12 $4 million and for 2021, and 2022 day impact will be a reduction from 19 $7 million for each year.
You can see and table on the beginning with the fourth quarter. We had strong total revenue growth of 45%, which is a testament to the strength of our business model and team.
The driver of the growth with HCS revenue, which increased 65% and the fourth quarter as Carl mentioned during the pandemic, we received increased customer demand and to perform evaluations and already paid members engaged as they remain at home.
Italy is a pattern of whaler valuation revenue typically occurs was altered by events and the first half of FY 'twenty.
Historically, the fourth quarter tends to be our lowest revenue quarter for Acs as we work through client member list.
And we made the shift to virtual <unk> two for the second quarter for a short period of time as we ramped up.
And for providers to get us back into their homes.
We successfully manage through the pandemic, giving our customers confidence and our flexibility and scale, which led to an increase and Iot volume and the latter half of the year driving a strong fourth quarter revenue.
Our expectations are that Acs revenue growth will continue to be strong and 2021 and also follow a more typical seasonality pattern, where cost and utilization is better spread out across the year, we expect the seasonality to try and to return to a higher first half for IHG volume compared to the second half of the year with the fourth quarter generally.
And at a lower revenue quarter.
Still on table wider and you see.
Revenue grew 3% and the quarter to $44 $7 million, primarily due to improvements and our savings rate offset by changes and the timing of recognizing revenue between the third and fourth quarters.
And there won't be shy and program, we recognize our revenue attributable to episodes savings based on our estimates of savings realized.
And each quarter, we evaluate if any adjustments to our revenue estimates are required and based on the monthly information we receive from CMS.
And most significant adjustments tend to be and the second and fourth calendar quarter is when we receive reconciliation statements from CMS.
These statements include detailed information about our performance that we use to revise our estimates in light of actual results.
Timing and 2020 and was a little different and the third quarter of 2020, we have sufficient information that savings would be higher and we had originally estimated therefore, we booked and favorable adjustment to revenue and the third quarter ahead of the reconciliation and received in the fourth quarter.
And contrast for 2019 the cash.
Company recorded on all of that revenue related to the savings rate reconciliation and the fourth quarter.
Moving on the table for.
Total company adjusted EBITDA for the quarter increased 46 per se to $38 9 million compared to $26 6 million from the fourth quarter of 2019, driven primarily by strong revenue growth.
And third we had and adjusted EBITDA margin of 22% and the quarter on <unk>.
Eight basis point improvement from a year ago.
<unk> contributed $35 million to total adjusted EBITDA on the quarter with Bts contributing $8 4 million.
And potato and turning to full year 2020 results, we had an extremely strong year in light of Covid and and our first full year as a merged company and you can see our overall revenue growth for the year up 22% was driven by strong growth and Acs and ECS.
Sure. So on rate growth of 20% was driven by an increase and IAG is to more than one 4 million per the year from $1 1.002 million 19.
And EPS revenue growth of 28% was driven by approximately 200 basis point improvement and a weighted average savings rates and seven 3% from 2019 levels demonstrating positive momentum and the significant value we are delivering to our customers participate and the <unk> program.
This substantial improvement reflects our work and helping providers and improve their performance and matured and the PCI program.
To a lesser degree. This also reflects the effect of Covid relief offered by CMS, which resulted in a full X the exclusion of certain episodes.
Partially offsetting the savings rate improve that was a decline and a weighted average program size to $5 $2 billion from $6 1 billion and 2019 the decline in 2020 program side. So it was due to two factors first the overall, our overall reduction and health care utilization and a result of the pandemic and second.
His decision to temporarily allow certain bundles to be excluded from our program. We expect our 2020 one program size on a weighted average basis to approximate 2020 levels. However, as we enter 2021 and we anticipate a program size run rate of approximately $6 billion, assuming that the pandemic continues to subside.
Throughout the year and Covid bundle exclusion diminishes.
On table four you can see that total adjusted EBITDA for 2020 increased 34%, while the adjusted EBITDA margin improved by approximately 190 basis points to 25%.
ACS segment adjusted EBITDA for 2020 contributed $96 $3 million to overall adjusted EBITDA for the year with ECS contributed $28 6 million.
This strong performance was driven by revenue growth due to the higher volume and substantial improvement and the savings rate for ECS, partially offset by investments to grow and commercial products and technological capabilities, where we see ample opportunity for growth.
And as you can see and table three we manage through Covid very successfully in terms of our 2020 cash flow, we increased cash by $26 8 million to end the year with unrestricted cash of $73 million.
We ended 2020 with debt outstanding of $412 5 million.
$77 million and capacity under our revolving credit facility and a net leverage ratio of two seven times.
After factoring in the approximately $610 million and IPO proceeds net of underwriting fees were and are very strong net negative debt and leverage position.
And we plan to use the proceeds to continue and invest directly back from it there and.
And make potential acquisitions, and we will continue to evaluate our capital structure for optimization and light of our stronger financial position following the IPO.
I want to provide a few housekeeping items related to our recent IPO and our financial statements. You'll note that we did not show earnings per share and our results of operations tables and earnings release.
On today's structure that we've put in place and conjunction with the IPO did not incur until February 2021.
And so as we presented for 2020, we're under our prior partnership structure, we will disclose the earnings per share, reflecting our current capital structure beginning in the first quarter of 2021.
There will be a 2020 earnings per unit number disclosed in our form 10-K that we intend to file shortly but it will not be comparable to 2021 EPS and <unk>.
Management will be focused on a revenue and adjusted EBITDA and evaluating the financial progress of the business.
The up sea structure with signify health incorporated as a public company corporate entity will also changed how we account for taxes.
And 2020 as a partnership and tax burden rested on the individual partners and you will note. We did not have any corporate tax expense.
Post reorganization signify health and will be subject to corporate tax on its majority share of income from cured Topco LLC the partnership below and although we will still be required to make some tax distributions to the noncontrolling interest.
We expect that our blended federal and state statutory tax rate will be approximately 25% and 2021 exclude.
Excluding and a stock option activity or non deductible items.
Now I'd like to walk through our 2021 guidance.
To follow and estimates are for the full year and assume that the COVID-19 pandemic set aside throughout 2021 <unk>.
Total GAAP revenue and the range of sovereign and $125 million to $760 million net.
Net of the $19 $7 million reduction and revenue due to equity appreciation rates and.
And total adjusted EBITDA, and a range of $115 million to $160 million.
We are providing and 2021 estimates for several key performance indicators or Kpis for our ACS segment, we estimate and a low valuations from the range of $1 7 million to $1 75 billion right.
Alright.
Segment, we estimate our weighted average program sizes will be on a range of $5 1 billion to $5 3 billion.
And we project that we will achieve a 25 to 50 basis point improvement and our weighted average savings rate from our 2020 levels. We had great momentum going into 2021 and look forward to being able to update you as we progress throughout the year now I'd like to turn the call back to Kyle for closing remarks.
Thanks, Steve.
I'm proud of what our team accomplished in 2023 and truly unprecedented times seamlessly.
Seamlessly pivot to work from home, creating virtual and home assessments and a few short weeks time.
<unk> and our partners through bundled selection, while dealing with the Covid impact on our health care system and generating strong financial results and achievement of which we are very proud.
As a result of the team's efforts, we redeemed a SaaS companies prestigious list of world's most innovative companies from 2021.
<unk> and health category.
SaaS company stated that the recipients of this honor exhibited quote fearlessness and.
Ingenuity and creativity and the face of the crisis on quote.
We adjusted nominal team that truly exhibited all of these qualities and I wanted to thank all signifiers and our network of providers and community workers for a great 2020.
I also want to thank our shareholders, we're going on this journey with us.
Take care of that investment and our company very seriously and we believe we will be able to generate significant shareholder value over time.
We plan to do that by capturing the opportunity in front of us to power and grow value based payment arrangements, while never losing focus on creating positive outcomes and experiences for the millions of lives we touch every year.
We are fully committed to our mission to transform health care is paid for and delivered so that people can enjoy more healthy happy days at home.
Now I will turn the call over to the operator to begin the Q&A session operator.
Thank you Kyle if he would like to ask a question. Please press star one on your telephone keypad and Keith joined US on line today Presti flag icon.
Our first question today is from Robert Jones of Goldman Sachs. Robert Your line is open. Please proceed with your question.
Hey, good morning, Thanks for taking the question title and Steve I guess, maybe just the first one and you touched a bit on this but clearly risk coding was a significant issue for DNA carriers and 2020 from 2021 and just.
And Scott, maybe if you could comment on kind of what youre hearing and and what some of the conversations have been with your MCU partners. So far in 2021 and how they responded to kind of getting this right for next year, obviously as it as it relates to your offering from in home assessments and and.
Any kind of anecdotes about increased appetite or increased and master list and anything of that nature and just to give some context on on how your partners and responding to the risk coding issue I think it would be really helpful.
And what's great for us.
I think everybody saw the importance of the and home presence and general and so we actually exceeded most of our goals for folks and.
2020, which is why you saw the.
On the financial numbers.
As announced.
And so the.
And the majority of the shortfall was actually from physician office visit.
Visits and so obviously during the pandemic a lot of physician offices were shut down or.
Theres delays and electric procedures or other means for folks to go in and where they get and annual wellness visit or some other type.
A visit and with the result and risk and so.
It was a tailwind for us and we saw.
And additional lift at the end of last year, and I think going into this year and we're seeing.
A lot of the plan and realize the benefit.
Again, I think risk coding and Thats one.
Component on it I think that what we're also seeing is the quality and.
On risks and have been merged at almost every managed care organization and that's D and Chief Medical office and medical directors are getting more engaged and I think a lot of folks are excited about our model that brings and connected devices social determinants of health and where we are closing a lot of gaps and care and getting folks.
<unk> engaged with their clinicians when we detected condition or detect on Canadian.
And 90% of the time and we go inside of the home and so I think it's twofold and again, one youre seeing more value that and number two.
Home and that's way more stable and where folks are preferring to get care delivered now more than inside of all providers on a practice for settlement activities.
No that's super helpful and and maybe just one on the ECS side I think in December you talked about the program size from 2020 being about $5 billion and just over 5 billion and looks like now youre, saying you wrapped up the year and $5 2 billion.
Just wanted to understand that dynamic, but then again, but more important question on that side is calling for flat program size and in 'twenty. One you know any context, you can give around implied utilization of the program versus 2020.
Hey, Bob and Steve.
The labor and we look at program sizes. We finished the year strong we've got a solid program size space.
And just to remind everyone. We've got the impact of the pandemic and so we had.
And we had as you mentioned utilization was down we have the way we're thinking about it is we do think the weighted average will be relatively flat to 2020, but throughout the year, we expect particularly in the back half of the year and the vaccination programs that are out there now we will start to see some of that.
Volume rebound and that's the way we're really what we're focused on in 2021 is with our ending run rate and we believe that we can get our ending run rate on program size back over $6 billion, which will set us up for a very strong 2022.
Great I appreciate that thank you.
Thank you.
Thank you Rob Beck. Our next question is from Michael and Danny of Bank of America. Michael Your line is open. Please go ahead.
Thanks, so much and congratulations on a strong first results.
Public company.
Yes.
And you went through a lot of details and I wanted to just dig a little bit further on what signify is and particularly on the HCM side of the business.
You rightly highlighted that youre not a home health business lead on employee goes home health entities that being said, there's a whole host of substitution and competition that seems to be emerging across home health market. So as you think through especially with your partners and the types of other strength since they have how do you think about that competitive landscape and.
How do you think about who is the best match of what you do vs who doesn't have that combination of partnership clubs and.
Great and technology models allow signify and delivering results.
Yes.
And good to hear from you.
And so much of the work that we do has to be done by a top of the license clinician, So a doctor and nurse practitioner or physician's assistant and underneath the direct supervision of a doctor and so that is.
Complete opposite.
And on home Health agency, and meta and the home health workers and that they employ and Phil.
And by regulation cannot do a lot of the work that we're doing inside the home. So we were accurately and zero competition from the home health agencies, and a core part of our HTS business.
I would say the other thing that differentiates us and we're spending $100 million per year and technology and the majority of home health agencies are using third party technology right point click care homecare, Homebase and all of our technology and how.
We've got large outbound call centers.
Very complex 240 clinical data capture point, we run through our proprietary iPad application that's connected into about 12 connected devices and from bringing all of that to bear as a pretty big technology moving.
And we built up around our business, that's really driving a lot of value to our partners and we're investing even more and that technology. This year and we've got more devices, we're looking to connect to and we're expanding the clinical and social data points that we're capturing and excited to home and working harder than ever to build digital connection back into the health system on <unk>.
Make sure that again, we're referring back into gear.
<unk> and when and where they need it most.
And again.
Very different.
Modelled and home health agencies that are helping to.
Take care of low acuity, where inside the home right, we're doing very high fusion, where again the top of the license clinician and there.
Zero substitution from a home health agency for that and so we don't view them competitors on all we think they're great businesses and frequently sometimes we refer out to them to come provider services partners to us.
Great.
Thank you and then Steve a question you mentioned on the potential for M&A down. The road can you just give us again more of his background.
And you need a lot of people, but someone's success, we've had as an organization around M&A historically and why that sets you up for further bolt on acquisitions, especially given the overarching.
Platform.
Yes, let me just referenced a couple of things, though we did this and say our advance.
Acquisitions and put those two companies together then we had the tap acquisition and then we've had the remedy acquisition. So we have a history and we just had the patient blogs acquisition, we have a history of acquisitions and what I would say is we've really built up the infrastructure to.
Integrate these companies quickly and getting up and running and then leverage our scale.
Drive.
The synergies that we have and these.
And these opportunities ahead of us So I think we're well set up to bring on other tuck in acquisition to do the same thing.
Awesome. Thanks.
Thank you.
Thank you Michael and our next question is from Steven Valiquette of Barclays. Steven Your line is open. Please proceed with your question.
Great. Thanks, Good morning, Kyle and thanks for taking the question.
So I guess I'm curious on the ECS segment, where thinking about the savings rate projection of 25 to 50 bps improvement and 21 versus 'twenty.
And my sense, and it's probably every year, it's going to be somewhat challenging from management to make that projection and amount of what the forecast and so I guess I was curious just to hear a little more color on the puts and takes within that projection and again.
And as you the visibility and to provide that range on today and also I'm. Just curious historically have you found <unk> been able to forecast that within that 25 to 50 basis points range or has it been wider deviation.
Yes, I'll, let Steve and into the specific and forecasting and deviation, but just to your first part of your question, it's actually pretty.
Reliably forecast so one of the things that we've seen throughout the beginning of episodes and how we have structured our relationships with our clients and something we're very proud about it as an ongoing change management activity and so they are actually building organizational muscle discipline, better management of and take better transition to home.
And is that our next set of care consideration better readmission program through all of the core levers that we drive continued to get stronger and stronger inside these organizations.
And so it's actually.
General and March forward, and what we've seen throughout the classic version and now reinforced during the advanced version of the program and so just to clarify that one point and then I'll let Steve.
Comment on the <unk>.
Specific on how we forecast and think about it yes.
It's actually been very predictable with.
The change management that we've enacted and you go back and history, 25% to 50 bps is really kind of a steady.
Steady state increase year over year, 'twenty, and 'twenty was a little bit of anomaly I think a couple of things contributed to the 200 basis point improvement. One that was just we really have engaged partners and that makes a big difference from where we're going out there and trying to drive this change management, we have to have engage.
And partners here, we did have some of the Covid eliminations and so those typically came with some higher cost but we.
Think that day.
Everything that we're seeing and driving out their 25% to 50 bps going back to historical is very reasonable and I would say, Steve just one other follow up point.
Because we don't go on with one day to the episodes are bundled with these partners and we're doing this organization and discipline.
Scene, and push us into new programs out and <unk> and a really positive way and so we've got momentum at ACO, We've got momentum in general.
And our transition of homework across other value based care programs with them and finally, and we're hosting a webinar I think on April one and we're in direct contract and conversations with a lot of our partners and how we can desktop and as well and so.
This has always been our goal and we think episodes are a foundational change management element that give.
And really a lot of good hooks into the health system to do a lot of great changes.
Resent the foundation upon which we can execute our value based care and across a battery and different programs and we're seeing that come to reality with our clients and on it.
It's exciting to see the results.
Okay, and that's very helpful color. Thanks.
Thank you Steven.
Have a question from George Hill of Deutsche Bank. George Your line is open. Please go ahead.
Yeah, Good morning, guys and thanks for taking the call and all.
Markets I guess kind of I would ask you as you think about the ETF segment can you talk a little bit about how the company works with payer organizations.
Shift.
Call me valuation volume I guess to.
On the home from from others and box office from another location, where you guys can clearly collect more data and I guess and how do you can you talk about what you guys can do to move that valuation process kind of a win from the annual wellness visits and into a location, where you guys can collect more data and add more value.
Yes, it's great and this is kind of already happened and the good news for the majority of our clients give us.
And 90%, 95% of their roster kind of and the year starts off and it used to be different five years ago, there used to be analytics and logic.
And from the Doctor's office and see if they can do to metro charcoal and Theres been again, a big cultural shift and change and a lot of the managed care organizations, where the acuity visits does not only through me and risk adjustment and also a holistic and nature and preventative in nature and so they count on us to go and into readmission prevention tackle social problems.
And sure Theyre doing care coordination work and our visitor way more holistic on and they used to be call. It five six years ago and this has been a big focus.
Our efforts to diversify and expand the scope of services, we're doing inside the home and I would say beyond that.
Defined.
30% to 40% on average more conditions and.
And situations frankly, when we go inside the home versus someone showing up at the Doctor's office and I'll give you a few examples.
Coming into the Doctor's office, you can't see typically their full battery of note that they're on we go to the med cabinet with them, we get the paper bag and that scenario, we get there until dispensing box, we lay it out on the table and see whats expired look at drug and drug interactions and health get them on a better course for a better and educate medication regimen.
When you take a look and a fresh we assessed all risks and we see that they've got.
Our granddaughter grandson and they have to take care of and we're inside the home or they're carrying for their son or daughter and lead.
Pull all that together holistically.
And.
And our planned partner the better sense of these individuals live a better sense of how to make a positive impact and a better sense of the care and that they actually need and and that was my point earlier on that I mean, it's no longer just the <unk>.
On a risk to growth the risk and quality are from emerged the chief Medical officer and medical directors officers are deeply engaged.
And rolling out and increasingly more programs vis vis and of the home and capturing a lot of this data inform their own and care coordination and.
And.
Social determinant and other programs that they're running either with us or with themselves.
That's super helpful and maybe just a quick follow up for Stephen Collins, you might comment on this too I guess as free.
As we think about kind of the inorganic versus organic growth opportunities I guess, if you guys comment on on whether you see the more attractive voice based on either as more services to the MA plans are more services to provide organizations.
On the beauty for US is there kind of a conversion right you've got provider organizations increasingly want to take more risk and you've got any plans on increasingly.
Acquiring or deeply connecting with more providers and so the beauty of almost everything that we've done and with respect to M&A and on our organic product relative that we're selling them to both payers and health systems right and so it's been a great synergy that we sit and our intersection between our two largest.
This decline and.
I'd also say on.
On the life Sciences side, as I mentioned kind of and the script and we're seeing.
And as those folks increasingly want to get closer to the home.
About how to drive down trial time and increase adhering to.
Trial protocol, it's a lot of the same things that folks want inside of a value based care team and so.
I would say once all of the acquisitions were currently looking for looking at and our and the overwhelming majority of our product roadmap are synergistic with both client bases.
Yeah, and just a follow up on.
George.
We're super excited about the organic growth that we have in front of us on both sides EPS and Acs and so there's a lot of runway for us all of the numbers just to be to clarify or excluding any acquisitions.
Anything that we would acquire would be additional.
Items to add to what we've already and protect our strong organic growth.
That's great I appreciate the question from Scott.
Yeah.
Thank you George as a reminder, ladies and gentlemen, if you would like to ask a question. Please press star one on your telephone keypad, if you've joined US from line. Please press the flag icon. Our next question is from Sean Wieland of Piper Sandler Sean. Please proceed with your question.
Thank you very much and congrats on your first Greg here, So I wanted to pick up on on.
And where you left off with George and.
And just I want to thank you for that.
Realize synergies between that day.
Okay.
Okay.
And I guess, maybe a little and when you described how this flywheel works, but when this flywheel really starts spin and from a clinical perspective as well as the financial perspective.
What does that really mean for the patients and the facility for them from the payer and.
And going forward, how do we really track the execution of this strategy.
And for your company.
And it's a great question, John and thanks, good to hear.
From your the number one thing that we've done inside the episodes and we've added more service and its from me and home side, and we call that transition to home predominantly and it has clinical social and behavioral matrix with a holistic service that we provide and it is going to individuals physically and telefonica <unk> virtually.
And in and around their acute episode or wherever they are they are inside the episode and helping to facilitate a happy and healthy transition home.
And that has drove driven and shared savings up we're seeing engagements III. There we kind of thought initially we have.
30, 40, 50% and engagement rate on this transition services, we're seeing them and the mid 80% right now so we've actually had to staff up and get more.
Aligned to that service quickly and on.
<unk> is what we're doing on inside the episodes and all of that helps reduce costs, while also driving better patient outcome by April one and recovering home, we're facilitating that and making that a reality and keep in mind.
Net or if they have an adverse event.
<unk> cost up and again.
Our poor health outcomes, we lose money right alongside our partners and so this isn't it's not.
Shortchanging and recovery is.
And just giving them the ability to recover when and where they want to and weighted is really safe and sound and better home with our clinical and social tariff is helping to make that a reality and so what we've done is gone out to a lot of our episodic day and taken those and home providers and their day might look like this.
And they start off doing a quality and risk visit inside a home and they do a clinical trial and <unk> and.
And then spend some time, either and acute facility or a post acute facility, helping to transition both directly to their home and so their day to become more multifaceted and nature and we expect that to continue and that is the main synergy we're driving we have nationwide network coverage and every county, and the United States with doctors and nurses and social workers and we're taking.
And then insider episode and other value based care programs and helping to drive shared savings up and so I believe youll continue to see it and the shared savings rate.
And given commentary just on the engagement rate of the transitional home services as well.
And if we could maybe try to quantify it.
What's the what's the if you were to draw the Venn diagram, what's the overlap Hay day between the two segments.
I'm not sure how to best address that question I mean, we've got several of our health system and its contracted now with transitional home services and Thats, where I was kind of mentioned the adoption rate.
Around either acute and where and discharge and retransmission momentum.
With those health systems that are contracted we're seeing north of 80%, 85% adoption rates were touching the overwhelming majority of individuals and episodes and helping to transition them directly into their homes.
Okay. Thanks, so much.
Yes.
Thank you Sean our next question is from Matthew <unk> of William Blair.
Please go ahead.
Hi, good morning.
And just thinking about the commercial market on EPS.
<unk> partners and <unk>.
Can be taken on.
Okay and.
And then the station group.
Can you help us kind of compare contrast, with opportunities and give a sense for what the ECS pipeline looks like maybe in terms of number of opportunities competition and sort of timelines and scale up.
Yes, so they're all a little different which is exciting and we chose and very strategically at the state of Connecticut as an employer. So this is for the state employees.
And as retirees and their houses that are all covered by the state and.
And have gone out and helps us recruit.
And and sign up.
A large number of provider organizations across the spectrum, including some of the largest in the state auto health originate and drive episodes. So that's that's one flavor Cambria regions, which is obviously.
Payer provider partnership and the Pacific Northwest and a few Midwest update.
State and and recruiting provider partners again to health revision that episode, and then superior and Texas, We're starting on managed Medicaid.
So going out and again recruiting provider partners with them and we chose those three strategically because it gave us exposure to all three of those different diabetes care centric book, we're also tapping into commercial populations.
With all three of them over time and so the idea is to start with one of the anchor populations and then continue to diversify and then our strategy and all three of the Geos and Connecticut, Texas, and then largely the Pacific northwest, but can be reasons and to continue to stack more provider organizations and more risk bearing entities.
And to drive more episodic density inside those markets and and back to Sean's question. Once we have density and increasingly more dense and those markets, we're using more and more of our provider networks and those markets to drive transition home services and to engage book that various lifecycle of there.
They're episodic journey and it's really important to note few meeting measure directly all of the savings levers constantly and real time and we're looking at Readmissions. We're looking at net site of care, we are helping to guide and steer all of those.
Savings levers to help drive better and more coordinated care for individuals and that applies to both the PPA. The federal program and these commercial programs as where volume has been on various markets with respect to the pipeline is quite healthy we have several plans that we're talking to several regional and several national employers that we're in.
And really good deep conversations with them and so we feel quite good about the momentum that we're seeing we're being very strategic.
Lot of demand and market for this type of rollout and episodic work right now employers, there and particularly and as those are set up just with medical costs and and looking for a solution and we provide on and so we think we've got a lot of.
Greenfield space, there, but we're being very strategic and looking at markets, where we know we can get a good anchor risk bearing entity and we can staff on to help drive more density and that's really important for us because we're not looking to do this on a shallow and that a really meaningful way with this transformation and when we move in.
Okay. That's really helpful actually I wanted to talk on the last point.
And how you mentioned self insured employers.
Sweet spot for you and I think intuitively.
And that makes sense, but it seems like a lot of technology enabled health care businesses also view self insured employer and sweet spots.
And those kind of curious when you're having conversations whether it's with the C suite and with asset managers and how do you get and mind share moving and top of the list and really.
Get them to <unk> and the solution.
Yes, good and throughout this we're giving them and guaranteed savings Greg when we go and when we create and episodes of the risk bearing entity, we're giving them a guaranteed savings upfront and so it's typically with the CFO hat benefits HR that group I would say is generally engaged.
Cereal and usually the savings and soda CFO and or someone on the finance office is engaged after we have initial meetings.
And we're talking the conversations you usually start and the C suite one of it has been one of those groups and we talk to we've got good relationships with national employer unions regional employee employer group and.
And we work with benefit managers and targeted Tpa and so it's a really diverse set of individuals that we go and coordinate with the help build really sticky solutions that can help us drive that network density and scale.
And so.
Theres not a lot of other folks out offering a genuine episodic program that is focused on guaranteed savings, but also better outcomes for the individuals and I think thats super important to a lot of employers right because these employees.
And their health and wellness and their happiness and side other health programs at Super important for retention and recruiting new talent and it's really hot market right now.
Okay got it and I think I'm at the upcoming on screen and one more.
On the Iot.
Plus side sort of day the basket on services you can offer.
And just wanted to get a sense for how much of a push and push versus pull versus our plans that are coming due and specific needs and then you out and trying to still or are you finding solutions and the vendors selling and the plan again something that intuitively makes sense I wanted to speak and comes from and what that looks like.
Yes, it's a little some plans.
Are coming and asking for a very proactively and we've rolled out with a lot of them and we're seeing great results.
And driving more schedules and a more deeper engagement with individuals and we touched on that this deeper more socially oriented operating and we've built out right and so it's been really good.
Very well received and we're very happy with the initial results.
And we're also spending time educating and other plans right I think <unk> is a big buzzword.
It's hard it's hard for a lot of folks to quantify the downstream value and benefits and.
And some folks there's a whole spectrum from just late referral management to deep community based organization engagement and routing out problem, we do more of the latter.
But it's showing that we're engaging with members and solving our problems holistically arms by just showing kind of conversion rate and engagement rate of the IHG has because of its expanded offering is really clean clean way to talk about value for their clients and we're seeing that on a reality on the market and so we're very excited about.
Work, that's been done and this has been a big integration from an acquisition, we did a few years ago.
It's really exciting for us to see it start to take off.
Okay. Thanks for all the public health.
Yes.
Thank you Mac. It appears we have no further questions. So I'll hand back over to pile on foster for any closing remarks.
Great well, thank you all and that's your interest and signify health and the degree.
Kurt.
And our earnings call price and we appreciate all of you Darrin and and taking the time and give any additional questions. Please reach out to Jennifer and I'll talk to you soon take care.
Ladies and gentlemen, thank you for joining today's call and have a great day you may disconnect your lines.
Okay.
Yeah.