Q1 2021 1Life Healthcare Inc Earnings Call
Ladies and gentlemen, todays conference is scheduled to begin shortly please continue to standby and thank you for your patience.
[music].
Ladies and gentlemen, thank you for standing by and welcome to the one medical first quarter 2021 earnings Conference call.
At this time, all participants on a listen only mode. After the Speakers' presentation, there would be of question and answer session.
To ask the question during the session you would need the press Star then one on your telephone.
The people quite any further assistance. Please press Star then zero.
I would now like to hand, the conference over to your speaker for today.
The salt, we don't head of Investor Relations you may begin.
Thank you operator, Hello, everyone and welcome to one Medical's fiscal 2021 first quarter earnings call.
I'm joined today by Amir, Dan Rubin Chair and CEO of on medical and Bjorn Thaler, Chief Financial Officer of one medical.
A complete disclosure of our results can be found in our press release issued earlier today.
As well as in our related form 8-K.
All of which are available on our website at Investor Day, one medical Dot com.
As a reminder, today's call is being recorded and the replay will be available on our website.
As part of our commentary and we will make forward looking statements.
These statements are based on management's current views expectations on assumptions.
Subject to multiple of risks and uncertainties.
Actual results may differ materially and we disclaim any obligation to update any forward looking statements of our outlook.
Please refer to the risk factors in our most recent annual report.
Updated from time to time buyer of other reports and filings with the SEC.
Our quarterly report.
We believe that the COVID-19 pandemic creates particular complexity when it comes to providing forward looking view of the business.
And we are providing our guidance on a good date basis of recent SEC recommendations.
We would like to specifically caution investors that our future performance will be harder to predict for the foreseeable future.
Our forward looking statements are based on assumptions that we believe to be reasonable as of todays date may 12 2021.
Information contained in today's statements should not be relied upon as representing our estimates as of any subsequent date.
There's no. It has one medical policy to neither reiterate nor adjust the financial guidance provided on today's call unless it is also done through a public disclosure such as the press release or through the filing of a form 8-K.
Today, we will discuss certain non-GAAP metrics that we believe aid in the understanding of our financial results.
The historical reconciliation to comparable GAAP metrics can be found in today's earnings release.
Finally during the call we may offer incremental metrics to provide greater insight into the dynamic of our business.
These details maybe onetime in nature, and we may or may not provide updates in the future.
And with that I shall turn on the call over to unearned yarn for their prepared remarks and to take your questions.
Thank you everyone for joining us today, we are pleased to share of results from our first quarter and update you on how we continue to perform innovate and grow we continued our strong financial performance in Q1, as our human centered and technology powered model continues to deliver results for our growing number of employers and consumers.
We saw a record number of net new membership additions in the quarter as our dedicated team continued to serve our members and communities with service oriented and value based high quality care.
Sure of our team's commitment to innovate we share additional proof points. This quarter on how we can reduce the total cost of care.
We also continued to grow by attracting and aligning with the broad set of distinguished employers and health network partners, who share our vision in transforming healthcare all of these developments are reflected in our strong financial results and further build upon our extreme enthusiasm for the opportunities ahead for our organization.
Starting with our performance. We ended Q1 with 598000 members growing our membership base, 31% year over year Q1 was our strongest quarter ever of net new membership additions as we added 49000 members during the quarter and as we have added more than 140000 members.
Over the past 12 months.
We delivered 121 million in Q1, net revenue, which was up 54% year over year.
We delivered Q1 care margin of $51 million or.
Or 42% of net revenue while at the same time investing in our business.
And we delivered Q1 adjusted EBITDA of positive $4 8 million.
Highlighting the leverage inherent in our model.
These results showcase our momentum and value proposition in the market.
In addition to delivering strong financial results. Our dedicated team members have continued to perform by delivering outstanding service and care to our members clients and community. This.
This has included providing on demand digital health scheduled remote visits and convenient in person current testing. We have also continued to serve our communities with COVID-19, vaccinations and many of our markets are.
Our healthy together program has supported employers as they evaluate return to workplace. The approach. We've also been able to service the wires across the country with a nationwide one medical now digital health services.
By serving as the longitudinal system of care for our members. We've continued to support members ongoing healthy through both remote and in person care for acute needs chronic disease management cancer screening LGBTQ plus care women's health reproductive health sexual wellness behavioral health and other population health.
Condition.
We have continued to extend into carrying for the whole family by growing our one medical for kids pediatric services and into broader mental health needs through our one medical mindset behavioral health solution.
And we have also continued to coordinate care across the continuum of primary care and specialty health network setting to own the complexity of navigating care for our members.
In parallel we've also continued to innovate by further demonstrating our model's impact on reducing healthcare costs, our approach Leverages, our technology platform, along with our own salaried clinical team of virtual and in office providers to better reach out to patients with gaps in care to better support chronic condition care into.
Better coordinated specialty care when needed through clinical and digital interfaces with health network partners.
For example performance data from a large national health plan for one of our markets demonstrated that during the last two quarters, one medical outperformed reported trends in that market. The health plans data showed that on average we reduce the total cost of care for our members through reductions in outpatient professional inpatient and pharmacy.
Cost.
We believe the ability of our model to both the white members and show reductions in the total cost of care demonstrates one medical's differentiated value proposition and how we are transforming healthcare.
As we deliver new heights of performance and advanced our value based innovation. We also continued our strong growth.
Our demonstrated track record of delighting members and helping manage healthcare costs continues to open new doors for growth with an expanding set of diverse employers and premier partners. In Q1, we began new relationships with organizations in industries across financial services healthcare real estate manufacturing professional services Tullow.
Communications retail and nonprofit sectors.
We believe we are uniquely serving employers with the platform that combines 24, seven nationwide inbound and outbound telemedicine and population health with our own salaried providers, along with convenient in person care and testing behavioral health integrated into the primary care for whole person care pediatrics.
Services for whole family care and coordination of specialty care with our partners, we see that our multimodal care model, coupled with our breadth and depth of services and value based care is a strong differentiator in the market.
In addition to growing alongside employers we continue to see long runway for expansion as we continue growing our market presence and our health network partnerships as shared previously we plan on expanding into Columbus, Ohio, Huston, Texas, Milwaukee, Wisconsin, and Raleigh, Durham, North Carolina, alongside Premier Health Network partners.
Also we were pleased to recently announced plans to enter South Florida in partnership with the University of Miami Health system.
And today, we're pleased to announce that we will be entering into the Dallas Fort Worth, Texas Metropolitan area in partnership with Baylor, Scott <unk> White health system.
Our market expansion and provide outstanding opportunities to grow our enterprise and consumer enrollment.
Furthermore, our alignment with distinguished partners allows us to make impactful progress in transforming healthcare by building a more clinically and digitally connected healthcare ecosystem that can deliver more highly coordinated care with greater levels of value.
We also continue extending our health network partnership approaches and just last week announced a new partnership with Perito helps to bring innovative healthcare solution to parade of customer base of over 1400 employers nationwide together, we aim to improve employee wellbeing and support employers and managing healthcare costs.
Of the engagement in our modernized primary care model, we look forward to the opportunity to serve parade of employer clients leveraging our experience with more than 8000 employers today as part of this partnership we're excited to also expand our in person presence in the Midwest and southeast to serve some of those clients in Alabama and Kansas.
City.
With the addition of these new markets. We are on track to go from nine in person market at the time of our IPO last year to 22 in person market.
Beyond the reach of our $24 seven nationwide employer of digital health solution. These 22 markets provide us an opportunity to deliver multi modal longitudinal care in markets, representing nearly 40% of the U S commercially insured population.
In closing this quarter, we advanced how we perform innovate and grow our performance to start the year has been strong and we remain on track to deliver a great FY 'twenty one in line with our initial guidance. Our team continues to deliver impactful care to 598000 members as of Q1.
Innovating through our technology platform and clinical model advancing better health outcomes and better care experiences, while also reducing healthcare costs and we are growing our model's unique ability to delight members and reduce healthcare costs, it's providing a growing number of opportunities.
Multiple key stakeholders see how we can transform healthcare and scale, we continue to grow our nationwide digital health services and with alliance partners for value based and coordinated care. We are on track to expand our multimodal model into 'twenty two market.
We thank all of you for joining our call today and for your continued partnership and our mission now over the Bjorn Thaler, our CFO Bjorn.
Thank you Emil and good EBIT everyone Youll.
We are pleased to share our strong financial results in Q1, which put us on track to deliver on our 2021 outlook.
During today's call, we will briefly discuss our financial results for the quarter as far as our expectations for the second quarter and provide additional color on all of a full year 2021.
First turning to Q1 <unk>.
The expanded our membership base by 71% year over year, ending the quarter with 598000 members.
Q1 marked our third consecutive quarter of.
Net new membership additions as well as the competition was both consumers and employers continues to grow.
As a reminder, all of the membership count continues to exclude virtual only one medical now users and any temporary out of of users. We can flow as part of all the community service during this pandemic.
Turning to revenue.
In total we don't live on $121 4 million in net revenue in Q1.
54% year over year.
Q1 revenue includes an income gain of $1 8 million.
Related to the provider relief fund established under the cares Act, which has been reported as a distinct line items P&L.
Our Q1 membership revenue was 20 points of 2 million of all of those and.
<unk> grew 33% year over year approximately in line with our membership growth.
Our Q1 net patient service revenue was $44 5 million all of those.
30% year over year.
This growth was driven in part by our continued strong membership growth.
It also reflects increased revenue year over year from COVID-19 testing.
Partially offset by a mix shift from fee for service reimbursements to partnership revenue.
As a reminder, we experienced mixed shift as we signed up additional health network partners.
Just wanted to pool of member per month basis in markets. Maybe previously had no partner and we will reimburse on a fee for service basis.
Since August of last year all of our members are now covered by health network partnerships.
We expect this shift to abate going forward.
Our Q1 partnership revenue of $54 $9 million increased 86% year over year.
This growth was driven not just by our strong membership growth and the aforementioned shift from fee for service revenue to partnership left here.
But also by the continued strong results of our healthy together the police to the entry program that we partner with enterprise clients, such as employers schools and universities to help them in the COVID-19 response.
Moving down the P&L, we delivered Q1 care margin of $51 3 million of.
42% of net of revenue.
We were pleased to deliver the strong results while at the same time, making continued investments to fuel our future growth, which included investing in existing markets and it could be on file when new markets.
Moving below cost of care, although the remaining Q1 operating expenses, excluding our non-GAAP adjustments will of $46 4 million.
And we were up 14% year over year as we continue to invest in sales and marketing technology and support functions.
As the result of our Q1 revenue and expense performance. Our Q1, adjusted EBITDA was positive $4 8 million.
One of 4% of net the revenue compared to the loss of $13 5 million of all of those.
17% of net of revenue in Q1 2020.
Turning to our balance sheet. We ended Q1 was the strong balance sheet and liquidity position with $703 $6 million in total cash and short term marketable securities.
Finding us with ample capital to continue to fuel responsible growth.
Yeah.
Let's now turn to guidance.
We expect to finish Q2 was the total membership count in the range of 610000 to 620000 members and we expect to deliver Q2 net of revenue in the range of 111 million of all of those to $118 million.
Please keep in mind. It on Q2 membership guide reflects the historic seasonal trends, we typically saw on our business prior to 2020.
The <unk> units from the higher membership additions in Q1 and Q4.
The more moderate in Q2 and Q3.
Similarly, our revenue guidance reflects the same historical seasonal trend of more moderate fee for service revenue was in Q2 and choose the compared to the colder winter months.
Well, let's do it earlier than anticipated reduction in COVID-19 testing volumes.
For the full year, we are pleased to reaffirm our previous expectations.
We continue to expect to finish 'twenty 'twenty. One is the total membership count in the range of 660000 to 680000, reflecting our strong and growing value proposition in the marketplace.
Also continue to expect to deliver annual net revenue of approximately $465 million.
Two $485 million.
And we'll care margin of approximately $170 million to $190 million.
And when adjusted EBITDA debt approximates the loss of $20 million to breakeven.
Really is two of them does guidance, even in light of the faster than anticipated reduction in COVID-19 testing volumes, we just noted.
As you May recall, we had initially expected COVID-19 testing volumes to decline meaningfully in the second half of 2021 yes.
As we have already seen a meaningful developing testing volumes beginning in April.
At this point, we do not expect testing volume between 200 by your on balance.
The results. This guidance highlights the continued strength of our business and financial model, particularly as we plan to low to 22 markets over the next 12 months and while we continue to invest in our service offering technology and operations.
In closing we were pleased to deliver another quarter of strong financial results and remain on track to deliver a strong 2021.
Our value proposition continues to resonate in the market.
As we demonstrate our unique ability to attract and delight members, while simultaneously reducing healthcare costs.
These trends coupled with our opportunity to expand on a multi modal and longitudinal count to nearly 40% of the U S commercial population.
Continue to provide long term tailwind to our business.
Thank you for your time today, we will now open up the call for your questions.
Thank you, ladies and gentlemen, as a reminder to ask the question you will need to press Star then one on your telephone.
To withdraw your question press the pound key.
Yeah, that's the one to ask the question. Please.
Please stand by while we compile the Q&A roster.
Our first question comes from the line of Ryan Daniels with William Blair. Your line is open.
Yeah. Thank you for taking the question and congrats on the strong start to the year of Mirror I was hoping maybe you could go into a little bit more detail about the relationship you announced with Porretto health I think that's somewhat of a new distribution model for the organization. So any color on how that arose and if there is a revenue share or how that will work from a financial perspective for the organization.
It will be helpful.
Great Ryan Thanks for the question.
Yeah, we're really excited about this relationship is it's just another distribution arm for us to reach in this instance, small and medium sized employers to radar was the captive insurance company was serving about 1400 employers. So it provides us a great way to.
The further distributor ourselves to them and really they value.
Helping small employers.
Not only get great healthcare, but manage their total cost of care and they've seen the impact that our model can make on not only delighting consumers with our high NPS digital health and in person care, but also on on reducing the total cost of care. So.
This allows them to buy.
Bundling in some of their offerings as they go and serve a small and midsize employers.
Okay. That's helpful on them I.
I guess as a follow up different topic, you brought up the pediatric and behavioral offerings and of behavioral in particular has been relatively hot on the market and you can service the.
Both with your physician base and through virtual visits I'm curious for both of those and in particular, the behavioral health of the adoption is taking place on how broadly that's been rolled out across the market. Thank you.
Yes. Thanks, Brian Yeah. This is this has been really exciting I think part of the power of our model is that we are providing a interconnected and coordinated model of care that combined kind of medical and behavioral integration and all of our team is in our organization on our SAB.
Worried model Sue we certainly can provide behavioral health services, but we could also address things in primary care. We can use our group visits we can use our coaches. We can you sort of therapists somebody needs more complex care, we can arrange for.
Seamless referrals through our network of care. So that really is the distinction of our interconnected model of care. Thanks, So much.
Thank you.
As a reminder, ladies and gentlemen that star one to ask the question well.
I ask that you limit yourself to one question.
Due to the interest of time and feel free to free to jump back in the queue. After that one question.
Our next question comes from the line of Lisa Gill with J P. Morgan Your line is open.
Good afternoon, and thanks for taking my question.
I just want to better understand the impact within the quarter and in the guidance as it pertains to COVID-19. So.
All of I heard both Amir MBR on talk about healthy together reentry of the COVID-19 testing kind of.
We think about it you know the COVID-19 testing falling off in April.
So maybe we can start bjarne with.
Is there a number you can give us as to what COVID-19 testing Wednesday, and the net patient revenue in the quarter and then you know kind of a range of what still in your guidance and then secondly, when we think about healthy together is this a one time item how long do you think that those kind of programs last and then lastly, I think I'm just really kind of.
How to think about the business going forward. Once we're past COVID-19 I would expect that the the lower flu also had an impact in the quarter versus what it would've looked like and then the more normalized here. So there's there are weighted to maybe triangulate all three of the Dallas to think about your business on a more normalized basis.
Sure I'll try to give you some color on the on maybe the fuel center sort of on internal ask them you have to jump in on the held it together.
Yeah I think.
As we take the step back on the on the COVID-19 testing.
Yes, if it can take you back to all the our.
Our full year call on what you said is that we expect to continue to do a meaningful amount of testing in the first half of them sort of expense that debt testings.
The bulk of fairly materially in the second half.
As you've heard of I'll say today, and really I think thats been the nationwide.
Yes, the the number of Kobe test has really started to drop meaningfully.
The only as of April and certainly the involved in the.
We have not been in the exception to that.
Yeah, obviously, that's still means that Q1 has sort of of those the dose.
The increased levels of COVID-19 testing that we had expected in there.
And.
As we look at the rest of the yes, certainly we don't expect those numbers to come back in.
I think.
Just take the step back and sort of look at our overhaul of Q2 guidance, but also the guidance for the year.
Yeah. The battery powered off of our Q1 view of valley part of the fixed debt.
As Stuart in the yard.
The need to be managed swing fact chosen SPL, we set the different ways to get to the high end of the guidance for example, and the.
The COVID-19 testing certainly is the headwinds that we will face in the in the second quarter relative to the <unk>.
Initially.
But the embedded cost that we can be confident that we can.
Yes.
The overcome that headwind and therefore, we're able to to trade on the guidance today.
As it relates to flu I mean, we all know that the flu season effectively was non existent in.
In this yellow industries and in many ways.
We.
Just like in the year before had a very successful flu vaccination campaign last year in Q3 and Q4.
So the expects to have a very successful of flu vaccination campaign.
Well.
But certainly on the number of members who presented themselves with flu a flu like symptoms has been a battery of valley modest ease of been two months. So hopefully that gives you a little bit of color just on the volume.
Now I'll hand, it over to you for a while helps the trail.
Yeah. Thank you Lisa and just to add to the earnings comment I'd say with regards to help you together.
Another kind of proof point out there.
As to how we can serve employers today, we shared another powerful proof points on how we can help reduce the total cost of care. In this instance data from one of the leading health plans and one of our market share.
Knowing that we outperformed the market and reduced cost of care of both inpatient outpatient professional services and.
Drug cost categories.
Together with another example, whether it's with testing or whether it's return to the workplace or whether it's this fall with the.
It's the flu campaigns or or if there are boost your campaigns for COVID-19. We believe we'll be well positioned to serve employers across that and of course with their multimodal healthcare needs in person care gaps in care of the population care of that we're seeing behavioral health and.
And care for the whole family.
Yes.
As children and families prepare for going back to school and the summer camps. So we feel kind of very well positioned to continue to serve.
All of those key stakeholders.
Great. Thank you and congrats on a great start to the year.
Thank you Lisa.
Thank you. Our next question comes from the line of Elizabeth Anderson with Evercore. Your line is open.
Hi, guys. Thanks, so much for the question I asked.
Mister car batteries. They are of create out of house, if you're still sort of talking to them and they're they're using that as that as the new sales channel. It sounds like it's a great way to expand out your reach is that look like more of a contribution in terms of dozen members to 'twenty 'twenty two and then in general you know we've been hearing of law.
What about each of our people and seeing so many different like healthcare companies can you talk about what's been really resonating and allowing you to differentiate yourself and continue to grow with so many people are focused on on reaching out to each arm.
Please.
Yeah, Thanks for those questions of Elizabeth.
On the first one on on on Paredo.
For Us. This is just another way that we get out and reach employers. So far as we've noted in the past we serve 8000 of employers and this is of great wafer outs to get reach into the small and mid market side. So I will say it's on.
Another way that we're going out into the market too.
Gain on sales.
And.
And what's nice here, it's with a captive insurance company, that's very focused on not only serving its employees, but saving them money and cost of care and they saw that the power in our model and so it's it's a great.
Additional tool to sell and distribute ourselves.
Going forward.
In terms of then the broader story too.
Employers are its really quite powerful and quite differentiated.
You know, we can delight consumers with 90, plus net promoter score and we can take out between eight and 45% of the cost of care I mean, so reducing the total cost of care and delighting consumers doing this in a multimodal way not just inbound digital health, but outbound digital population health in.
Person care with needed integration with behavioral and medical care for the whole family and if somebody needs of that diagnostic tests that specialty procedure that hospitalization, helping get that referral that authorization that the scheduling integrating those medical records getting that information post discharge owning the complexity of of navigating health.
Care across the continuum of settings and doing that in the way that delivers not only high experience, but but value based care that we believe is quite differentiated in and that's why we say the transformative in the sense that it can delight members and can help reduce the cost of care.
So we're seeing that that resonate really well.
In the in the marketplace.
That's helpful. Thanks.
Thanks Elizabeth.
Thank you. Our next question comes on the line of George Hill with Deutsche Bank. Your line is open.
Yeah, good morning, and kind of a question on the partnership model of Mirror I guess, one of the trends that we continue to see lots of the segments of the employer sponsor book is everybody trying to push of bundled model, particularly as it relates to the inpatient procedures. I guess do you think of your partnership model with your provider organizations is working in concert with employer of sponsors looking at of bundled <unk>.
It'll or is there some contention here around whether the referral of partnership model of primary care works well, if you think about things like surgical bundle.
Yeah, no employers really see us as a powerful tool to help drive in network care whatever their network programs are whether its bundles or anything else. We are in the network provider of that tightly coordinated care.
And we've shown both in.
On the data that we mentioned today and previously from the the debt. The Jama study that that we've shared in the past that we can help drive down that Jama study, we had 26% reduction in drug costs, 33% reductions many of our costs 43, and <unk> 54 in specialty.
And also similarly today, we shared.
Another proof point from a health plan on how we took out costs.
In the similar categories. So no employees very much see us as fitting into their benefit design, we do fit into their benefit design, whether that's bundled or anything else.
But we can also help their employees independent navigate that care on that complexity of care.
Get their record communicate that information avoid duplicative testing has we've integrated our our information.
Together.
Yeah. Thanks for the question George.
Thank you.
Our next question comes on the line of Steph Wissink with Jefferies.
Your line is open.
Thank you. Good afternoon, everyone of you on this is a question for you on the composition of revenue as we progress through 2021, just looking at the partnership versus the patient service.
Is it best to model. The partnership line is a sequential increase quarter after quarter or is there some seasonality to that business as well.
Yeah, Great question.
The.
The partnership line is really where we are getting paid a per member per month fee.
Our health network of partners sizes, so for the most part and yeah.
As soon as all of the same it's fair to look at this as the release of purely membership 11 in many ways.
I E based on.
On the mend boosted when you sign up based on the new members, we take care of all we get E. P. M. P. M from our health net book utmost generally speaking.
Yeah, I think that's probably a good way to think about the snow I will point you back to the fact that over the last year.
We did have this mixed shift in our membership between members debt will not covered by the health net book partnership CBS debt now all covered by the health net of shipping actually since August the 100% of all of the members all of the problems. So on.
<unk> debt our debt.
At Anvil eyes, so to speak in August of 2021, you'll still have a little bit of variability. If you just look at the year over year non bus.
On the quarter over quarter on if you compare Q1 to Q4 or even Q. So the off of last.
The last year.
You sort of see debt sequential trends that the statistical data.
Business.
Thank you.
Thank you.
Our next question comes from the line of Sandy Draper with choice Securities.
Line is open.
Thank you very much.
Yes, My question Amir is thinking about.
The the the new market I would at least from my perspective, you guys have done a great job on or are opening new markets faster than I would've anticipated at the beginning of the IPO and I'm just trying to think about as you announce these new markets, how should we think about the lag or time.
To be adding new members because you put up another really strong quarter of member growth and I know you don't want to break out the number of members of their coming from new markets versus the old markets, but I'm just trying to get a sense of you know as you keep making more and more announcements and some pretty big markets should we think about you know those are of year two years.
What's driving just any context around the opening of new market and then how quickly you drive membership would be really helpful. Thanks.
Yeah, Thanks, Andy Great Great to hear from you.
Really we think about this kind of.
In the long term in the sense that you know we've gone from as you noted nine markets pre IPO to now 22 announced markets and that provides us reach to almost 40% of the commercially insured population in the United States now.
And now we're slightly below.
The low serving 40% of the population, but it gives us this long term ability to our team.
Have that range I mean, the the most recent market we launched at the end of the last calendar year with Austin and that's off to another great start and you know this this.
Multi market approach actually generates this kind of virtuous growth cycle and these positive network effects. So you know with more markets. We can sign up more employers with more employers the sign up more employers you'd become more attractive to multi market employers as you get more employers more consumers noticed.
You get more consumers have more consumers and employers that you. It helps you get more partners and when you get more partners more partners are interested and then we have more present.
More providers when it kind of working our modernized model that helps reduced burn out. So we think about this in a long run the fashion of it.
Expanding.
Our reach across the country.
And and certainly we're excited to.
Be able to reach more and more people in the U S. Now.
Thanks, so much sandy.
Thanks Amir.
Thank you.
Our next question comes from the line of Ricky Goldwasser with Morgan Stanley. Your line is open.
Hey, Thanks, just kind of on leverage <expletive> on for Ricky.
That's the primary care doctor at the corner of back of healthcare and recently, there's been a lot of excitement around health care navigation solutions I'm wondering if you could help us think.
What medical's platform helps coordinate care and navigate patients of the health system and healthcare navigation area, where one medical could add more capabilities going forward.
Yeah. Thanks, Thanks for the question.
We absolutely help navigate and coordinate the patient as we noted on our annual results call.
Touching the member 10 times per.
Per year and that includes not only inbound requests from our members whether it's.
Acute digital or in person care or care for the family, but also outbound population health.
We are their longitudinally over time coordinating with the member not just the they need of referral or or something and we do that as well, but over time thinking about where do they have gaps in care. How can we help them manage their chronic disease is how can we help them with their but theyre ongoing health and wellbeing.
Sexual health reproductive health.
Avoidance of of <unk>.
Cancer through screenings are of course things like vaccinations and index for the whole family when people do need of acute care, we can help on that complexity and indeed navigate that system.
How do you get a referral how do you get an authorization how do you get the schedule how do you get the tests before you get the specialist how do you get the records over them. We helped the do all of that and then post debt information that information gets clinically and digitally integrated back into our system and then you can actually talk to a real life provider.
Primary care provider and talk about what's going on and what's happened now what do we have to do next.
That is exactly on this.
It's kind of interconnect connected system of care that we are sitting in the middle of and we certainly can deliver a lot of those services, but we can also connect into health network partners and others and we can make these interfaces much more coordinated for our members and and that's the part.
The reason why we see such strong.
Net promoter scores and strong retention and strong delight and our model of it it's really quite differentiated and if something needs to be done we're not just navigating you're coordinating it we actually are medical providers as well and that really provides a different level of.
Coordination.
Hum for for the member.
Thanks, so much for the question.
Thank you.
Our next question comes from the line of Richard close with Canaccord. Your line is open.
Yeah. Thank you congratulations on the.
The strong start to the year.
Just maybe spend some time on care of margin here you talk about the.
Testing drop offs in maintaining guidance overall.
Obviously, a strong care margin in the first quarter. If you look at the guidance range as I guess for the year of the care margin would be.
35% to 41% based on the high and low ends of the guidance can you talk a little bit about the progression.
I guess from second quarter, the fourth quarter or is there anything to call out.
Yeah, Great question and thank you for the for that.
Yes, I think about the CEO of.
Obviously, yeah all of all of our guidance reflects the continued sort of stall on the outlook said, we have for the business certainly we feel very good about our Q1 results.
In terms of.
Of membership and close on the revenue.
To your point of St. Jude sort of really showcases and the average that'd be felt in our models of them.
So all of that I, just came out of Shneur on the way down to a true.
So the EBITDA.
If you think of a little bit about the seasonality.
Certainly historically Q2 and Q3 the summer months of months well in all of the of fee for service part of the business tends to have a little less utilization by.
By definition, if you're getting paid fee for service. It does impact a little bit you are you on revenue and again, 60% of our revenue.
Ultimately comes in on the.
On a a sort of maturing.
Trailing in nature of basis, the out of 40% as Delphi for service and given the leverage did you do have in the model I would honestly I would obviously expect debt no the.
The cost of carry on divestments. The calculations, we're going to continue to invest in our work of all of us who's going to continue to invest in the markets that you talked about and that's certainly going to be.
Something that you all see sort of throughout our P&L, whether it's on the key of models from the line or the EBITDA margin line.
Again as the.
Our guidance for the full year is of negative EBITDA.
EBITDA of minus $20 million to the bulk like even obviously can pay out to the positive EBITDA of at least reported in Q1, so you'll see sort of dose the investments as we continue to make them in the Europe.
And then certainly Q4 as we mentioned early on as well.
Typically a quarter.
We tend to see more.
Membership additions, we have the tends to see certainly a list of call the winter months incremental.
Visit relative to flu vaccinations, the flu et cetera.
They have amazing debt disappear in many ways, it's going to give you each of you as well right.
Yeah, we don't know about vaccine booster of faults for COVID-19 for example, lots.
Lots of lots of uncertainties still to come and yes. If it takes you back to all of the guidance philosophy.
We value all of the onset that Oh.
Our guidance is based on the couple of different pathways that you can get to to various different outcomes that you can get to the hire of and it's not like everything has to go out to get the app.
And I think of all our results for Q1 and our guidance for the rest of the you showed up.
Thank you.
Thank you. Our next question comes from the line of Daniel Gross flight with Citi. Your line is open.
Thanks for taking the question guys I'm curious if you're seeing any changes in the acuity of your patient mix out of in person opens up and what assumptions, you're making around in person vs billable virtual and the acuity of those visits for the full year.
Yeah, Great question, I mean, obviously one of the things we talked about the.
Last year. It was did we Oh I had sort of this pent up demand for some of them did you free up K LVL folks. Thanks in the first half of 2020 didn't go in half day of Atlas visits didn't go in and have the ethanol checkups didn't go in half day of the Iconix diseases checks day, when she would have.
Q.
And certainly one of the Siem said, we've seen is this sort of starting to normalize.
We had this pent up demand in Q3, and Q4 that would be broke through and certainly it looks so far this year.
<unk> is starting to return to normal and yeah. I think generally speaking we expect the trend to to continue on E. <unk>.
Given the normal utilization for full time like some of you.
Obviously, we see low book of business instead of you expect going forward.
So hopefully that.
That helps you a wizard of Oz.
The final deal.
Okay I got it thank you.
Our next question comes from the line of Stephanie Davis with Leerink. Your line is open.
Hey, guys. Thanks for taking my question I would love to hear how you're viewing of the advent of the virtual first primary care offerings of the M C.
Is this a partnership opportunity for your team as more folks when of rollout virtual first primary care of it and they look for someone with your sort of outcome are you seeing any pushback from potential employer clients on the market and this is viewed as more of a competition with what you're offering.
Yeah. Thanks for the question of Stephanie Yeah, we really see our model is quite distinctive as we mentioned.
We're now up to 10 engagements per member per year, and so all of our model has always had more digital engagements than in person, but its multimodal and it's not just synchronous video it can be asynchronous it could be outbound digital population health that we as we discussed it could be in person that could be helping coordinate.
Primary and specialty care, it could be helping with vaccines or testing or.
Or navigating it across an ecosystem. So in that regards we see our model is it's very differentiated certainly we see ourselves as an in network provider participating in major insurance networks.
And we.
We certainly believe health plans see us as an outstanding partner and we're delighting members with 90, plus net promoter score and and as we share this month or this call them their own data showing we're helping take down the total cost of care. So that's that's really quite powerful so we absolutely see.
The health plans is as good partners.
For us and I think they see the same that we're good partners for them.
Helpful. Thank you.
Thank you Stephanie.
Our next question comes from the line of Jessica to fan with Piper Sandler Your line is open.
Hi, Thank you for taking the question.
And I think they're interested to know how the credo health, Alabama, and Kansas City locations are going to work with respect of branding membership on.
And maybe health system partnership and whether those locations are included in the full year office guidance on.
And then just separately on free though are there 140 captive members all of renewing them annually for Jan one Jackie Thank you.
Okay.
Great Jessica Thank you for the questions to them as we mentioned before I think one of the exciting things about the parade of relationship is kind of the distribution relationship that gives.
This reached a 1400 small and midsized employers that they have so that's great and.
One of the things that they've kind of always recognized is boy. If you had a powerful primary care model with the right digital health and in person care and salaried providers and right incentives that can really drive value to their mayor of members. They actually decided to try to do some of this on their own.
And said boy this is complicated and so as part of this broader distribution relationship.
The one medical is a if you will taking over there their sites in Alabama, and Kansas City, We will run them. They will be branded as one medical day will be run in in our model and.
Yeah.
That's how that part fits in but but more broadly with any existing or any new sales. They have there is an opportunity for them to sell us bundle of distribute us under different relationships.
Into kind of more.
Employer accounts, which for US is of great opportunity and of course, we also have mark nationwide, one medical digital when medical now digital health.
Services that they can bundle in where we have pretty surprising and digital health of 22 markets or across multiple markets and and also opportunities to bundle of just not our primary but behavioral health or pediatrics and also our coordination of specialty care.
With our health network, so they really.
Our an outstanding partner are they deliver great benefits solutions to the.
Small and midsize employers and we see it as a great fit.
With with the.
What we do.
Yeah. Thanks, so much Jessica for the question.
Yes.
Thank you.
Our next question comes on the line of how interesting with credit Suisse. Your line is open.
<unk>.
Yeah. Good afternoon, guys. This is carlos jumping in front of the lender.
On the question I have for you is.
On a similar note two of the headwinds you spoke about on site testing can you touch on.
You touched upon the booster vaccines, but can you talk more about the the man and trends Youre seeing in the COVID-19 vaccines. Thank you.
Thank you have a follow up follow up question from Ricky Goldwasser with Morgan Stanley. Your line is open.
Oh, sorry, I was answering the other one but it must have been on mute apologies Oh, sorry [laughter] no.
No.
Thank you thanks for the question Carlos.
Yeah in terms of vaccines you know this is something we've been trying to do to help serve our communities and markets. It's not been meaningful economics wise and in total but it is something that we are positioned to do where vaccinating. The most of our markets and.
Should boosters become important and obviously you're talking about you know routine COVID-19 vaccines are.
Are we like to see excuse me of routine flu vaccines are we likely to see combined COVID-19 boosters on flu vaccine are we moving from the pandemic stay to an endemic state where we're gonna have routine do serious I think whatever that future looks like we feel very well positioned to serve on that given kind of our multimodal model.
Our longitudinal relationships of relationships in communities. We continue to also serve our community. We are running the public site for example, and in Washington D C.
<unk> continued to do that and.
Im pleased to do that so I think that's still remains to be seen what the what the fall and winter in the in the future of it looks like but we feel good about our positioning there. Thank you.
Yeah.
Yeah.
Thank you.
We have a follow up question from Ricky Goldwasser.
Ricky.
Can you press star one again.
I'm not showing the key in the queue.
All right I'm not showing.
No further questions in the queue I would now like to turn the call back over to EMEA for closing comments.
Yeah.
Well, great well, we really want to thank everybody for joining us today for your great engagement in our mission and the great questions today, and we'll see you next time thanks everybody.
Ladies and gentlemen, this concludes today's conference call. Thank you for your participation you may now disconnect.
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