Q1 2021 Tabula Rasa HealthCare Inc Earnings Call
[music].
Good day and thank you for standing by welcome to the Q1 2021 Tabula Rasa Healthcare, Inc. Earnings Conference call. At this time, all participants are in a listen only mode. After the speaker's presentation, there will be a question and answer session.
Ask a question during this session you will need to put star one on your telephone. Please be advised that today's conference is being recorded if you require any further assistance. Please press star zero I would now like to hand, the conference over to your speaker today, Kevin Dill Corporate Counsel. Please go ahead.
Thank you and good morning.
Kevin Dill corporate counsel for Tabula Rasa healthcare.
The company intends to avail itself of the Safe Harbor provisions of the private Securities Litigation Reform Act of 1995.
Certain statements made during this call will be forward looking statements within the meaning of that law.
These forward looking statements are subject to risks uncertainties and other factors that could cause tabula rasa healthcare's actual results to differ materially from those expressed or implied by the forward looking statements.
These risks and uncertainties include the developing nature of the market for technology enabled healthcare products and services.
And potential changes to laws and regulations that may impact our clients.
For additional information on the risks facing tabula Rasa healthcare, please refer to our filings with the SEC, including the risk factors section of our 10-K filed on February 26 2021.
A recording of this call is accessible through a link on the Investor Relations page of our website and it will be available for 90 days now.
Now I'll turn the call over to Dr. Calvin Knowlton, CEO, chairman and founder of Tabula Rasa healthcare.
Thank you Kevin.
<unk> Investor and analyst Thanks for joining our earnings call for the first quarter of 2021.
After my opening remarks, you will hear updates from Dr. <unk> knowlton covering important pace industry developments.
Kevin Boesen on sales.
And Mr. Brian Adams, who will cover our financial results.
Also with us today and available to take questions is our newest leadership addition, Dr. Christel, Linda Tadlock, who is our chief client officer, and EVP of pharmacy benefit solutions.
As a reminder, this conference call and webcast is accompanied by a Powerpoint presentation available at the IR section of our website and I would encourage you to download the slides to follow along with our prepared remarks.
Let me begin by thanking our team members for an incredible first quarter of recovery as we emerge from the COVID-19 pandemic. Thank you team.
In this section I want to underscore the fact that we are passionately pioneering a new digital frontier.
<unk> use of medication with med wise.
We are taking the drug disposition sciences from academic research to real world application for people with chronic conditions, who take multiple medications.
Today I will cover three points.
First.
Our quality outcomes persist.
We continue to publish in peer reviewed journals evidenced debt interventions driven by net wise and the derivative med wise risk score reduce healthcare costs.
We have constantly demonstrated in pace in.
An enhanced medication therapy management.
And in an array of <unk>.
Payer groups.
That using midwives dramatically reduces adverse drug events.
Which manifest materially as life enhancing decrease in Ford Europe.
ER visits hospitalization re hospitalizations and now reduced risk of premature death.
The latest research regarding the value of Med wise was published three weeks ago, and the journal of patient safety.
Searchers at dark net a non for profit Research Institute at the University of Colorado.
Demonstrated that a higher med wise risk score was independently.
<unk> associated with an increased risk of debt.
Further underscoring the value of net wise to improve the safe use of mitigation.
The study concluded that intervention for patients with a high <unk> risk score can lessen the risk of premature death.
On average certified <unk> advisor pharmacists reduce the.
<unk> risk score by 5% to seven units.
Which translates to improve patient safety and reduce premature mortality.
Please read the article in the journal of patient safety per specific information you will find this study along with our other published research.
At our website www dot <unk> dot com click on R&D pillar and then on the lower debt publications and reported.
Second.
While our quality outcomes continue we now have a tailwind catalyzing precision pharmacotherapy.
So <unk> has been using pharmacogenomics insights for a decade now it.
It has not been considered customary in medical practice.
That mindset may be quickly changing however, thanks in part to the $834 million judicial judgment in Hawaii.
Against Bristol Myers and Sanofi.
The court essentially emphasize that ignoring patient specific pharmacogenomic data.
Especially when FDA Black box warning is disregarded Kent.
Can evoke serious liability.
We have seen a huge uptick in inquiries about our <unk> based services and have plans to offer them more broadly.
<unk> is the only system available debt.
Simultaneously analyzes drug gene pairing as well as competitive inhibition.
Competitive inhibition occurs when a person is taking a combination of medications that happened to go through the same metabolic pathway.
The effective drug metabolically collide, causing higher or lower blood levels than expected, which leads to adverse drug events.
Many of our peer reviewed papers attest to med wise, the impact reducing <unk> eliminating competitive inhibition.
Enhancing healthcare quality and reducing total medical costs. These papers also can be found on our tier HC website under R&D and then publications.
You know ameliorating competitive inhibition is our most common pharmacotherapy intervention in med wise, almost 50% of our interventions have to do with ameliorating competitive inhibition.
The third point I'd like to make in addition to our team of quality outcomes and broadening our pharmacogenomics precision focus.
Is that we are enhancing our efforts.
Of stimulating per cabinet regulatory advances.
We are working diligently to ensure that the new administration has a solid understanding regarding trh's. These medication risk reduction focus.
And solid outcomes.
There are exciting developments related to our federal and state endeavors. In addition to the pending state Medicaid Medicaid medication risk reduction legislation, we met with CMS centers for Medicare and Medicaid innovation last week to show them, the clinical and financial impact, we have made and the enhanced medication therapy management.
Ma'am.
Specifically with those members assigned to US who had net wise risk scores greater than 2014.
Our statistically significant outcomes reduce all the economic clinical and humanistic net metrics mentioned above including lesson, Inc. Premature death.
This was in the.
40000 members subset.
As I said that had a risk or greater than 2014.
In other words, while we had been provided full information monthly from CMI on about 305000 total members.
That is part a b and D data, we only are intervened on the 40000 members with med wise risk scores greater than 2014.
For those whom we intervened upon the clinical and economic results were material.
We have engaged a notable DC firm.
Consulting firm for CMS in CMI.
To assure that the leaders of the regulatory agencies understand our novel results.
We also have three papers in peer review right now, which document our clinical and ROI success in MTM.
In addition to the possible expansion and adoption of our MTM model.
We have positioned our safe use of opioids initiative in the forefront of the regulators.
There continues to be a significant opportunity to improve the opioid epidemic.
With med wise initiatives, such as ours that prospectively predict what multi drug combinations interfere with metabolic disposition.
In particular, triggering unintended overdosing.
Which all can be mitigated by offering current times a day administration.
This is again, the pharmacokinetics science of competitive inhibition.
Which is an innovation and application that only <unk> has mastered.
Furthermore, we recently published two papers using <unk> simulation.
Demonstrating that the repurposed drugs used in the COVID-19 raised the net wise risk score significantly when added to real world current medication regimens.
In the two studies.
Combined with combining them there were 540000 patients that were reviewed and stimulated.
We are now formulating approaching both pharma companies and the FDA.
With the unique opportunity to use Trh's. These real world Med why simulation model, both in clinical trials and in regulatory review.
In summary, we are seeing tremendous positive synergy for the broad application of med wise for three reasons.
The economic clinical and humanistic outcomes.
Resulting from our novel application of drug disposition science are becoming public knowledge and the rationale of reducing premature death is compelling.
<unk> precision pharmacotherapy, whereby <unk> is the only comprehensive pharmacogenomics drug Jean Pierre and competitive inhibition knowledgeable provider is heightened by judicial judgment.
And number three regulatory tailwind are gaining traction on the federal and state levels recognizing.
That an optimized and safe medication regimen is actually an ethical right for every person as well as being clinically and economically beneficial to society.
I want to make one last point.
For you to remember for you and your family.
Adverse drug events are an unnatural unnatural disaster.
Adverse drug events are caused by humans.
Who lack the tools to make better decisions.
Med wise can remedy this ubiquitous trial and error based medication problem.
<unk> is the first company focused solely on the personal and precision precision application of medicinal science.
And by doing so tiara HD is making a huge impact reducing morbidity mortality medical expenditures and premature deaths.
Yeah.
In addition, all of our outcomes are documented and peer reviewed publications I will now turn it over to <unk>.
An important point Cowen. Thank you I'd like to start by thanking our clients for their amazing efforts to vaccinate in some cases up to 90% of their participants along with a good percent of their staff, it's incredible to witness their unwavering leadership and focus on the seat share.
And Tabula Rasa, we believe that elders deserve to be fulfilling lives on their own terms, our mission and our passion is to help the elderly agent place with dignity and independence. That's why we created the most comprehensive and integrated suite of solutions and services available we.
By the support pace administrators need to operate their program effectively.
Passionately and successfully and we are seeing positive signs through our pace census of a return to pre COVID-19 organic growth or better.
Turning to Catalyzing policy. The first four months of 2021 have been extremely active and encouraging from a federal policy.
Perspective, as the New administration has placed an emphasis on seniors aging in place. This of course was in response to the high death rate in the nursing home population.
Industry sources estimate that there are $2 2 million pace eligible individuals across the country today, but the current market penetration is less than 3%.
I want to highlight several important developments referenced on slide three and four each of which have the potential to significantly accelerate the growth and the size of the pace market starting with the American Rescue plan Act or ARPA signed into law in March.
The ARPA includes a 10% increase to the federal Medicaid assistance percentage for home and community based services.
This targeted increase of $13 billion in federal matching funds is intended for states to intensify their HCV ex effort, which are defined to include pace for the 12 month period, starting April 1st of 2021.
Also in March of this year, the home and community based services HCS Access Act of 2021 was introduced this.
This proposed bill added <unk> as a mandatory Medicaid service.
H CBS waivers were first authorized and 1981 day.
They allow older adults.
And the individuals with intellectual and developmental disabilities eligible for Medicaid to receive services and support in the home or community setting as opposed to an institutional setting.
As in nursing homes.
With demand for HCV as far outpacing access waiting list enrollment has increased each year since 2010, and now exceeds 800000 people according to industry sources.
In April the President unveiled the American jobs plans, which include $400 billion aimed at expanding access to home and community based services and extending the longstanding money follows the person program.
To put the $400 billion into perspective for the most recent fiscal year reported 2018 national spending accounted for 56% of the total Medicaid long term care senior services or $72 billion.
Then on Thursday April 15th U S. Senator Bob Casey of Pennsylvania, Chairman of the Special Committee on aging introduced the pace plus act to help medically complex low income seniors and people with disabilities age in their home and communities the paste perfect with strengthen and expand access to <unk>.
The program and help relieve pressure on the growing Medicaid Hdds Waitlists slide.
Slide four in our presentation covers the important elements of this bill.
Supporting these exciting legislative efforts most favorable to pace is in April publication by the Milken Institute Center for the future of aging and financial innovation Labs.
Port titled New approaches to long term care access for Middle income Americans highlight that by 2029, 54% of middle income seniors will not be able to afford the care they need.
Slide five highlights Pes is one of two integrated care programs that can be scaled with the aim of aging at home independently and reducing the overall cost of care.
Finally on Friday April 30th Executive director of the National Pace Association, Sean Glim Route.
At the Milken study cited pace as an effective program for caring for seniors in the community in my view, we are only at the beginning of this long overdue and very positive discussion about the future of older adults I've never been more optimistic about the future of pace as I am today.
Finally, a few weeks ago, the National Pace Association hosted its 24th annual Spring Policy Forum.
The recurring theme with changing the default mindset that exist across healthcare for seniors and high risk individuals to emphasize home based care over institutional care.
One example of where this exists is the department of Veterans Affairs, which participated in the two day event and highlighted the need for the federal government to reallocate more dollars to HCS and pace versus the traditional default nursing homes.
In short we are excited about the feature to scale the pace program exponentially to more Americans.
Tabula Rasa healthcare is ready with its full suite of solutions to expand pace for current clients help new pace organizations as they start and to support those interested in exploring and investing in pace pace should be considered these solution for aging in place and long term care in the U S as opposed to facility based care.
Kevin.
Thanks Ursula.
I'd like to provide an update on our sales activities to date. The continued growth of the sales team a pipeline and progress towards our 2021 revenue growth target.
I'm happy to report that first quarter sales were on target with our internal expectations. Our payer sales were up 41% compared to Q1 of last year and accounted for 62% of first quarter bookings.
Additionally, our payer pipeline as of the end of April is up 14% since the start of the year.
As we published more outcome data like the studies presented by Dr. Calvin Knowlton, Inc.
Interest in <unk> continues to expand to new models of care.
One example is a new contract signed this year with signify health.
Beginning in Q3 signify health pharmacists will utilize our <unk> platform to prevent hospital readmissions in support of their episodes of care solutions.
Signified health recognized med wise is the only technology proven to predict and prevent re hospitalizations caused by adverse drug events.
Before I address our community pharmacy sales I would like to say that we are inspired by community pharmacists across the United States. During the COVID-19 pandemic, our 15000 plus community Pharmacy partners play a critical role in managing COVID-19, and Trs <unk> is proud to have supported their efforts.
By providing COVID-19 test kits.
State and federal vaccination database integrations.
Contactless vaccine registration.
And med wise medication risk mitigation solutions for COVID-19 treatments.
Community pharmacy sales have grown significantly after COVID-19 related reductions in 2020 community pharmacy bookings during Q1 were up 20% compared to Q4, 2020 and up 66 per cent compared to Q3 2020.
In addition to the solutions mentioned sales growth is being fueled by the launch of med wives for community pharmacies as well as our partnership with Ehealth to support enrollment for the millions of Medicare patients that use prescribe wellness pharmacies.
We are optimistic about continued growth throughout 2021 with the pending launch of a suite of solutions for 5000, Mckesson Health Mart pharmacies.
And the pace market as Dr. <unk> Knowlton discussed we are also seeing signs of recovery with multiple service offerings.
Additionally, our pharmacy benefit services solution pharma starch acquired in 2020 is driving new cross sale opportunities in both pace and non pes markets.
Pharma star in our peak Tpa offering now support three Medicare advantage startups with two of the plants also using our med wise MTM solutions.
Last I'll address our progress towards our 2021 revenue target our revenue target for new sales is unchanged that effectively $21 million.
The first quarter, we have closed approximately one quarter of this target, which is consistent with our internal projections.
We expect to close a large part of the remaining GAAP during the second and third quarter of 2021, and my confidence remains high based on our pipeline and record number of requests for proposals in the first quarter. This increase in pipeline and Rfps is directly linked to the growth of the sales team that is on schedule for 2021.
We have continued to hire experienced and seasoned sales representatives growing the business development team by 40% to a total of 40.
I'll now turn it over to Brian.
Thanks, Kevin.
As you can tell from Cao Ursula and Kevin's comments, we remain very bullish on the potential for Tabula Rasa. This year. In addition to guidance I'm going to focus my commentary around two key areas influencing our growth prospects for 2021.
Census trends and lead wide sales progress.
First as we've been disclosing throughout the year paced enrollment has continued to improve each month as more participants get vaccinated and pace centers begin to reopen in.
In addition, paced operators have adapted well to serving more people in their homes since the pandemic began and are now shifting their focus to growth.
While our census during the first quarter was essentially flat with Q4 2020, and our pace pharmacy services business. We saw approximately 1% net enrollment in both March and April on a sequential basis, the strongest consecutive two month period since the pandemic began.
In addition, our preliminary enrollment numbers for May suggest a continuation of this positive trend with 1% sequential growth.
These growth rates are slightly ahead of our expectations at this point in the year, an encouraging sign that pace growth rates may return quicker than we have forecasted.
Second our bed wise win rate continues to accelerate with much of the success in the payer market, where we are concentrating our investment from a sales and marketing perspective.
I'll remind you that we've adjusted our approach to our MTM business. This year, which was reflected in our guidance rather than having an end of Q1 and Q2 is the strongest periods during the year as we've experienced in the past we have taken a more balanced approach to delivering clinical intervention to better manage staffing and enhanced profitability.
Yes.
On the surface during Q1 and Q2 this year the progress Kevin's team has made on the sales growth may not be as evident as we are rebalancing MTM workload and successfully back filling the previously disclosed client attrition from last year.
We have multimillion dollar contract expansions with several national payers, new clients, beginning services and an unexpected increase in demand for our support from payers and pharmacies due to the continued focus from pharmacies on the vaccine rollout.
We believe all of these factors will drive quarterly sequential revenue growth in the Med <unk> Division this year.
In addition to the growth in bookings payer programs that experienced COVID-19 related delays in 2020 are off to a very promising start.
Revenue contributions from new agreements signed in 2020, with United Healthcare, Humana, and well care increased 10 times in the first quarter of 2021 versus a year ago, placing us in a potentially favorable position versus our initial projections.
Last our full year guidance remains unchanged and we are introducing second quarter guidance as follows revenue.
Revenue in the range of 85 to $82 5 million.
Which represents growth of 5% to 7% compared to a year ago and sequential growth of 5% to 8%, which is consistent with the quarterly revenue progression, we projected with our full year guidance.
Adjusted EBITDA in the range of five 5% to $6 5 million.
Which represents margin of six 8% to seven 9% and a significant improvement as compared to the first quarter of 2021 due to higher revenue across our two major operating segments and disciplined cost management.
With that I will turn it over to Dr. <unk> Knowlton for closing comments.
Thank you Brian to close we are encouraged by the early signs of 2021 across our key end markets are bolstered by the tailwind of our unique med wise applications, which are yielding solid outcomes and are aligned with our novel value based contracting.
Operator, please open the call for Q&A.
Thank you as a reminder to ask a question you will need to press star one on your telephone service.
Question comes from Apache.
Please standby will be compile the Q&A roster.
Our first question comes from Sean Dodge with RBC capital markets. Your line is now open.
Thanks.
Morning.
Maybe starting on med wise it looks like.
Bookings during the quarter were very strong.
Your overall revenue guidance, obviously assumes quite.
Quite a bit of acceleration in med why revenue it sounds like youre tracking towards debt could you just kind of walk us through the progress youre, making there and any any changes in your level of confidence in those mid wise targets for the year.
Yes.
Hey, Sean I'll take that one thanks for joining the call. This morning.
As we said on the call or in my remarks is work.
We're confident the hiring that we've done.
The pipeline that we have in place does support.
Where we're where we're going to be the second half of the year.
Okay and then.
I guess, Kevin and Kelly you both mentioned that the journal publications in raising awareness of adverse drug events, just kind of more broadly.
<unk> significantly ramp your efforts around that over the last 18 months.
Can you maybe talk about the impact Youre seeing these journal publications have on the sales process.
Being able to put this type of data these types of outcomes validated into the hands of prospective clients.
How meaningfully is that shifting the conversations you're having now with them.
Yes, Sean that's a great question as well and I think that's one of the things that we've been really excited about as we.
Come out of the pandemic and really focus on COVID-19 conversations is really what does that what does the future look like and what's important to health plans and so having.
Some critical studies published this last year that validate our hospital reductions further cost reductions. It's pharmacogenetics is involved and then.
That the recent article that looked at that debt.
Debt Association between risk scores and premature death has really heightened awareness around.
MTM programs and adherence based programs and how ours can can really be differentiated instead of just looking at chasing certain metrics can you have meaningful improvement and so I think when you see the health plans really looking at that and seeing.
How we've integrated as a company and what the differentiator is really are those those studies are are really driving some conversations and a lot of momentum.
So maybe just kind of tying that to the <unk> bookings.
41% increase from Payors year on year in the first quarter can.
Can you attribute that is that just just having a bigger sales force and just kind of putting more and more kind of grid or wood behind it or is this you think really.
Kind of a lift from these broader awareness and maybe kind of the industry approach and a little bit more of a tipping point.
It's both we've done a great job recruiting in the sales team that we have is fantastic.
We've been able to.
Bring in some some really top notch experienced.
Healthcare professional sales representatives, so that certainly accelerating things in addition to the research.
Okay, great. Thanks again.
Thanks, Sean.
Thank you. Our next question comes from Ryan Daniels with William Blair. Your line is now open.
Hey, Good morning. This is Jared haase in for Ryan Thanks for taking the question Brian.
Brian I guess this is maybe one for you just on the guidance just curious how you would sort of characterize your level of visibility at this point.
Obviously, it sounds like from everything you guys had mentioned.
No everything thus far has been largely going kind of in line with expectations due to the numbers in Q1 were mostly in line with guidance, but it sounds like paces as maybe.
<unk>, maybe playing out a bit better than what was originally contemplated when you gave the guidance.
So just trying to get a sense of how youre thinking about visibility and sort of the potential swing factors.
Related to sort of maintaining your outlook for this year.
Thanks Gerrick.
I would say in general outlook remains unchanged, we do see some.
Encouraging data coming out of PE.
Slightly ahead of where we expect it to be at this point during the year.
I think the numbers that we're seeing are more reflective of enrollment rate.
Second half of the year.
So maybe a slight upside on the PE side.
Kevin and his team have been able to close successfully at a quarter of the sales target, which is right in line with where we expect it to be so.
Don't see too many material deviations from the initial guidance that we gave in February and the assumptions associated with that if I could just add one thing to that too also.
We had our largest organic growth months.
And pace.
Last month.
<unk>.
As of this morning.
Eclipsed by another 10% on top of it.
So there is no question the trajectory there is three months in a row now.
10% growth.
For each one on organic so we are pretty confident what's happening there.
Yeah.
Okay. That's good.
Wait to hear.
Kevin maybe if I could follow up on a question related to your prepared remarks, I think you mentioned the business development team grew by 40%.
Just based on the bookings activity in Medway. So I'm guessing those are mostly oriented around that segment versus the pes segment, but just any color you can kind of give us as far as are those generally more senior level executives sales executives that are kind of ramps up pretty quickly. Here. Obviously, you guys have expressed a lot of confidence in being able to hit the new sales goals over the next couple of <unk>.
So I'm guessing that's the case, but.
Just any more flavor you can give us around the composition of those new hires and level of productivity and things like that.
Yeah. Thanks, No you are correct.
That's the target that we went after as far as growing net sales team our experienced executives primarily in the payer space, that's where we see.
A lot of growth opportunity and that's where we're seeing the acceleration.
Thank you. Our next question comes from Sean Wieland with Piper Sandler Your line is now open.
Thank you good morning.
You called out the payer market.
<unk>.
My words, not yours, and inflection point that Youre seeing there I was curious could you dig into that a little deeper specifically.
Within the payer market, what what markets.
What channels within the payer market is there something that you can put your finger on this causing that inflection point.
I think great question.
Similar to what I've said before I think that payer market coming out of that singular focus on COVID-19 is really looking at health outcomes reductions in total cost of care hospitalization.
I think that's where our differentiators are so I think thats driving it we're seeing that across.
All of the core markets that were really in Medicare Medicaid.
Self insured employers.
No.
We're seeing that universally.
And to to ask about the signify deal we're seeing a lot of these high growth what we call primary care to point out businesses at.
At risk primary care models seem to be growing like a weed.
Maybe a comment on signify and then more broadly speaking for these new models of high growth primary care do you have any any strategy for executing in that market.
I think that's a great point I think it aligns nicely with our value proposition.
Our ability to provide value based contracting and so with that signify health I mean their focus in there.
Their benefit is going to be derived from our ability to help them for that.
Re hospitalizations and the focus on doing that through preventing adverse drug events is something that nobody else can do so that's going to start at a pretty good size and we do expect that to escalate quickly and to your point I mean, there is other folks within that space that our sales targets for net.
Okay. Thank you very much.
Thank you. Our next question comes from Stephanie Davis with SBB Leerink. Your line is now open.
Hey, guys. Thank you for taking my questions and congrats on the quarter Jackson.
Thats going to good morning, everyone I've got a two parter on that first one is for Kevin one for Brian.
Kevin I'd love to hear a little bit more about the genesis of the new sales per.
How much of that is a function of certain products, gaining traction with payers in a post COVID-19 world versus from the market Research studies and thought leadership campaign to highlight last time, we chatted and how much of it is just a function of the relationships being brought in by your new hires.
Yeah, Stephanie I think those are really the key three drivers.
The relationships definitely help in terms of what we were focusing on bringing in some folks and so that has accelerated the sales cycle for sure but.
Those folks go in and the ability to really have the proven outcomes.
In an environment, where people are really focused on.
The quality of the care and so I think all of those things have really come together nicely and that's driving a lot of the results.
Seth if I could add one thing. This is Cathy we had yesterday with one of these types of <unk>.
<unk>.
At the end of the call the gentleman said to us the medical directors should though so you are not pushing the risk down to the physicians then right you guys are actually taking the risk.
You said you were taking the risk as long as we have a certain amount of uptake of our recommendations you said well that's unique to everybody I've been talking to give me this value based song and dance and then they say at the end.
We're not taking risks that goes back to the physicians. So I think it's really novel overdose.
Understood.
Compelling for the payers in that one now Brian because he's been quiet in this question and hearing the new pace of wins.
I wanted to hear how that compares to your new wins assumption baked into guidance since on the low end you said before it doesn't bake in any new wins and it sounds like you've already gotten that and the midpoint. So we assumed in line productivity with last year.
Would it be safe to say, then net lease trending at or above the midpoint for this year to date.
Thank you for the question Stephanie I appreciate it.
Yes, I think it.
The.
Bogie that we had out there for Kevin and the sales team would put us right at the midpoint. So I think we're trending nicely towards towards debt right now.
I think we've got a lot of nice tailwind with Calvin mentioned pace census continues to improve which is exciting to see the traction on the sales side is great cross selling continue to accelerate.
Between.
Kerr mentioned businesses. So there's a lot of very positive activity and I think at this point.
I'm comfortable saying, we're trending nicely towards that midpoint.
Alright awesome. Thank you guys keep up the good work.
Thanks, Doug.
Thank you. Thank you. Our next question comes from David <unk> with <unk>. Your line is now open.
Hi, Thanks for taking the question Jimmy.
Can you expand a little bit on the med wise healthcare revenue trend.
Down year over year about 13%.
Any comments on like Med safety I would think with like the dark sea deployment.
Vaccination offers net safety demand will increase.
Not decline just any color there would be very helpful. Thanks.
Sure. Thanks, Dave for the question I'll start and then the team can jump in there is really two factors at the beginning of the year that we previously disclosed one being the attrition that we had coming into the year with a rather large client that is a headwind.
Second is that we are taking a more balanced approach this year to the delivery of our MTM services. So.
In years past, we've had a spike at the end of the first quarter and into the second quarter.
We are looking at that a little bit differently this year to better manage staffing and profitability.
So we've rebalanced the workload and pushed some of that out from the first quarter, which is why youre seeing a bit of a dip it if not highlighting the success that Kevin and the team are having on the sales front.
But it is in fact, there and so.
You had those two other other pieces that are really offsetting all the good things that are happening on the payer side.
That's very helpful. Thanks, and then while I was there with attrition why did that commvault.
Yes.
Evaporate at the start of the year and then what would the growth has been weak.
Screwed that one contract.
Talk to you about the.
The growth that we would have seen and then maybe Kevin can jump in on on Cvs.
Is the growth that we would have seen if you normalize everything and we didn't have the attrition would have been between 5% to 10% on the payer side for.
This first quarter.
Yes, and I think relative to that client attrition that Brian relating to referring to that as Cvs that we've disclosed previously.
And that is a just a.
Different direction that Cvs Tech, we still have a small agreement in place with them.
So nothing nothing new on that.
David One thing you brought up that I just wanted to touch on is the vaccine rollout and how thats impacting our business.
We are seeing some favorable activity as it relates to that because many of the pharmacies that typically would deliver.
Components of this clinical pharmacy programs where payers.
Are tied up with supporting the vaccine rollout and so.
That has put us in a position where many of the payers and even pharmacies in some case returning to us to help support so that could be a real favorable tailwind going into the second half of the year.
Okay, great. Thank you very much appreciate it sure.
Thank you.
To ask a question you will need to press star one on your telephone.
Our next question comes from David Grossman with Stifel. Your line is now open.
Thank you.
Congrats on some of the prepared remarks Kelly.
If I understood. It right you were talking about the.
CMS pilot for MTM.
If we go back to last year in the fall there was a study out.
We're fairly pessimistic about the outcome.
The pilots a day, but it sounds like if I'm understanding your comments right that you've had some follow up conversations.
With them to share your own data could you just expand on that and what the response was in.
If I'm understanding this correctly how that may change.
Debt Korea, where we are with the pilot.
Sure. Thanks for the question.
We had.
When we applied for this when we were selected back in 2015.
Full disclosure of what we do what we do is we take a large cohorts, we risk stratify it and find out the people that are at risk for medication.
Safety problems and Thats, the people to whom we intervene CMS.
CMS knew that.
The northern Plains aligns to request programs, obviously knew that.
People, who are the ones, who didn't know where the actuaries that came at the end to do the analysis and what they did on the analysis and our group. They looked at all 305000 people well the effect that we did and they are looking for 2% change in medical spend and the effect that we did had a change it was under 2% because they spread it.
Across the whole 305000 people instead of looking at the 40000 people that we intervene demand where there were high risk and what we can work on.
We will explain that to the people at CMS they recall debt.
What day recollection was.
And then we said to them look we have three peer reviewed papers that we wanted to there were ready to publish our results.
Are you going to stop us from publishing them, because we werent publishing that bluecross programs want them published.
And they said no you can publish them.
So.
And that's the same model that's the exact same model, we're doing with the Medicaid programs the same model.
Georgia is $1 8 million were not going to deal with $1 8 million Medicaid, we're going to risk stratify and find the top probably mid teens percent debt or risk or above 2014, and that's the ones who are going on here.
Intervene on along with the local community pharmacies, and that's why we want to propagate throughout the country non Medicaid program. So.
We're very clear on what we're doing somehow got lost in the translation.
Homogenize that over the whole 305000, and so now we had to go and straighten them out and now they get it so that's kind of the story.
So what is the outcome.
As a result of new kind.
Kind of pointing this out.
So were.
Where the pilots going and what the opportunity might be more near term.
Well the desktop comments that we're going to publish in this stuff that's really the best outcomes because we can use this model with all sorts of other people.
CMS does have or semi does have an option to expand or.
Continue certain programs as they choose to and one of the things that we argued with them and why we got this consultant group involved we said look we've made a profound out.
Impact on People's lives Biscuit thousand People's lives.
And we think it's unethical.
Just drop it now at least for the people, who we intervene than we would like to see expanded to include that were extended to include them. We just think it's unconscionable when you've helped people and we showed them. The graph show a lot of stats on this but basically when we do a medication safety review the impact last for about six months and then they.
Get back up to where they were and the reason is because they are seeing a lot of docs, along the way and things are getting changed and we're integrating.
Retrospectively.
The contrast of that is in pace, where we intervene prospectively before every medications taken so we get like a 14 to one row clearly.
But in the MTM, it's about a four to five <unk>.
Retrospective.
So our goal is our long term goal is to do everything prospectively using local community pharmacists as the ground force Master of the Air Force.
And when you will see a lot better results that way, but that's going to take a while we understand that but anyway. That's kind of the that's kind of my best effort trying to explain it I hope that's helpful. Right no. Thank you very much of that debt.
Basically this transmission too I think there was a question about earlier about just the.
Pace of revenue growth accelerating in the back half of the year. So Brian you talked about rebalancing your.
MTO delivery model in terms of kind of.
More evenly pacing it through the course of the year so can.
Can you quantify just how much impact that's having.
Our growth in the first half versus the second half.
Okay.
It sounds like a lot of that revenue would have come in the first half.
And it may be skewing. The comparison, so I don't know if you can.
Somehow quantify that for us.
Of course, so we know how much of an impact.
That they have on the back half of the year just by virtue of this rebalancing effort.
Yes, David I would say that the most.
<unk> quarter is Q2.
That's where we have historically seen the largest bump in revenue related to completion of comprehensive medication reviews, and so I think youre going to see a more.
Gradual sequential growth going from Q1 to Q2 three years to four.
In the high.
High single digit range probably.
On a sequential quarter over quarter basis versus.
What you saw in previous years, where Q2 was was a real significant jump up and then kind of a step down.
In the following two quarters.
So that's the quarter, where you will see the most impact from a comparative standpoint.
It doesn't like it spread into the third and fourth quarter.
Some of it will yes, some of it will get it right the third and fourth quarter Thats right.
And Thats why youre sort of assets, how much can you give us a sense of how much debt.
Of revenue.
So.
I wouldn't necessarily quantify it.
From that perspective, I would just assume that you are trying to look in terms of modeling.
<unk> got.
This gradual sequential growth quarter over quarter there is some.
The attrition that we talked about and some other things that are underlying those.
Those assumptions so got it.
Okay.
Got it. Thank you and then just one last one if I could.
Your pace numbers, if I understood you.
We're up.
Month to month, I guess March April and they are expected to be up again in may.
And I believe the census data is down modestly if I'm remembering right. So.
So if you can speak to that as to why your results are different is just that.
Youre dealing with the bigger organizations are maybe that some of the newer stuff coming on that they actually start grid, it's actually started to bring out.
Curious if you have any insight into what your data is a little bit better than theirs, David I'm going to let <unk> give you the real answer but I'll just give you a footnote ahead of time debt we have.
Pace.
Admissions come in the first week of every month that fit EMS allows you to omit people towards just a few days after the month and then.
Not like long term care, where you can go into the nursing home anytime you want.
So we are we have firm numbers actually for me.
Right now and it is what I said it was much higher even than it was in the lab.
A few months right. So we've had so many expansion locations and startup organizations that even started last year that have had to postpone or reduce their expectations as far as growth and we're really seeing the effects of that along with.
Having added three programs in the first quarter.
And having <unk>.
Numerous contracts that we expect of existing clients that will fuel our organic growth and net.
Startup.
Just one thing to add to that David would be debt.
We have a high concentration of programs in California, which typically are enrolling a much larger percentage of Medicaid only members and those are not reflected in the P&L.
Figures so.
Those programs are growing quite.
Quite rapidly so.
It's an additional data point for you.
Brian.
Great. Thank you.
Thank you. Thank you.
Thank you.
And this concludes today's conference call. Thank you for participating you may now disconnect.
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