Q3 2021 Convey Health Solutions Holdings Inc Earnings Call
We achieved outstanding third quarter operating and financial results and now have two solid quarters under our belt as a public company.
Speaker 1: outstanding third quarter operating and financial results and now have two solid quarters under our belt as a public company. Let me start with the financial highlights.
Let me start with the financial highlights which were excellent.
Speaker 1: Net revenue for the quarter of $82.4 million, up 19% compared to last year.
Net revenue for the quarter of $82 $4 million up 19% compared to last year.
Speaker 1: Adjusted earnings before interest, taxes, depreciation and amortization. Adjusted EBITDA of $18.3 million, up 21% compared to last year.
Adjusted earnings before interest taxes, depreciation and amortization adjusted EBITDA of $18 3 million up.
Up 21% compared to last year, and we now expect for the full year, two achieved net revenue of $335 million to $340 million and adjusted EBIT of $67 million.
Speaker 1: And we now expect for the full year to achieve net revenue of $335 million to $340 million and a justity of $67 million to $69 million.
To $69 million as.
Speaker 1: As a reminder, we are a specialized health care technology and services company that helps health plans increase their revenue and reduce expenses. We improve health plan operations for our technology that streamlines complex processes and improves member engagement.
As a reminder, we are a specialized healthcare technology and services company that helps health plans increase their revenue and reduce expenses, we improved health plan operations for our technology that streamlines complex processes and improved member engagement.
We help members access their benefits and to help health plans administer benefits to those members.
Speaker 1: We help members access their benefits and help health plans administer benefits to those members.
Our clients can now include nine of the top 10 health insurance plans.
Speaker 1: Our clients now include nine of the top ten health insurance plans. And while we're critical to the core operations of our clients, we believe we're just scratching the surface of the amount of work we could be doing with each client.
And while we are critical to the core operations of our clients. We believe we're just scratching the surface of the amount of work, we can be doing with each client.
Speaker 1: We operate our business in two segments, technology-enabled solutions and advisory services.
We operate our business in two segments technology enabled solutions and advisory services.
Speaker 1: Our technology-enabled solution segment is currently almost 85 percent of our consolidated revenue.
Our technology enabled solutions segment is currently almost 85% of our consolidated revenue.
Speaker 1: We're actively engaged in M&A. They're a little either strengthened in existing technology or expand our technology offerings in the health plant.
We are actively engaged in M&A that will either strengthen an existing technology.
Or expand our technology offerings in the health plan space.
Speaker 1: Despite our outstanding performance, including our third quarter growing 19% on the top line over last year and the adjusted EBITDA line growing 21% over last year, our stock performance continues to be disappointing.
Despite our outstanding performance, including our third quarter growing 19% on the top line over last year and the adjusted EBITDA line growing 21% over last year, our stock performance continues to be disappointing.
Speaker 1: I think the combination of being a small business, having a small float, and being a very complicated business, has been challenging for the investment community to understand.
I think the combination of being a small business, having a small float.
<unk> being a very complicated business has been challenging for the investment community to understand.
Speaker 1: Of course, I make no apology for the complexity of our business. The complexity of our business is why large, sophisticated, health plans use our technology, because it is difficult and complicated to do what we do.
Of course, I make no apology for the complexity of our business. The complexity of our business is why large sophisticated health plan to use our technology.
Because it is difficult and complicated to do what we do.
Speaker 1: So how do we work our way out of this small and complicated dilemma?
So how do we work our way out of this small and complicated dilemma.
Speaker 1: we intend to fix this dilemma by consistently increasing revenue and earnings for a combination of organic growth and strategic acquisition.
We intend to fix system AMA by consistently increasing revenue and earnings through a combination of organic growth and strategic acquisition.
Speaker 1: I believe that the track record that we are establishing by increasing revenue and earnings will eventually convince investors, even though to don't really understand the complexity of our business, that they should be owners of convey stuff.
I believe that the track record that we are establishing by increasing revenue and earnings will eventually convince investors, even those who don't really understand the complexity of our business that they should be owners of <unk> stock.
Speaker 1: We're seeing success in our advisory business as health plans have really opened up since COVID-19 has recently started to become less of a threat. And our technology team is busy onboarding new members during the Medicare annual election period that extends until December 7.
We are seeing success in our advisory business is health plans have really opened up since COVID-19 has recently started to become less of a threat.
Our technology team is busy on boarding new members during the Medicare annual election period that extends until December 7th.
Speaker 1: As you may recall, most of the expenses for the onboarding of new members and new plans take place during the fourth quarter, and almost all of the benefits for us come in the following year, or year.
As you May recall most of the expenses for the Onboarding of new members and new plans takes place during the fourth quarter.
And almost all of the benefit for US comes in the following year for years.
Speaker 1: As I mentioned and Tim will discuss in detail, we performed very well from a financial perspective in Q3.
As I mentioned and Tim will discuss in detail, we performed very well from a financial perspective in Q3.
Speaker 1: We also performed well from an operating perspective during the quarter, as we made several moves to strengthen the value proposition of our supplementable benefits.
We also performed well from an operating perspective during the quarter as we made several moves to strengthen the value proposition of our supplemental benefit business.
Speaker 1: First, we believe that our retail partnership with a leading thin tech company has dramatically strengthened our value proposition for help.
First we believe that our retail partnership with a leading Fintech company has dramatically strengthened our value proposition for health plans.
Speaker 1: We can now provide what we believe is the best in class OTC solution because we were able to offer a health plan, the option of allowing members to access their supplemental benefits through the retail setting, using a single cash card.
We can now provide what we believe is the best in class OTC solution, because we were able to offer a health plan the option of allowing members to access their supplemental benefits through the retail setting using a single cash card.
Speaker 1: through the home delivery channel or through a combination of the two, which is sometimes a good solution to maintain quality for the plan and flexibility for the members.
Through the home delivery channel.
Or through a combination of the two which is sometimes a good solution to maintain quality for the plan and flexibility for the member.
Speaker 1: It's important to remember that the utilization, that is the percentage of the total benefit that is actually used by members is only 35 percent.
Important to remember that the utilization that is the percentage of the total benefit that is actually used by members is only 35% or so.
Speaker 1: That means there's plenty of upside in them, both the home delivery and the retail.
That means there is plenty of upside in the both the home delivery and the retail channel.
Speaker 1: Of course, we continue to believe that the Home Delivery Channel is the superior channel from a quality and member engagement perspective. And we think over time that health plans will better understand the value of the Home Delivery Channel.
Of course, we continue to believe that the home delivery channel.
Carrier channel from a quality and member engagement perspective, and we think over time that health plans will better understand the value of the home delivery channel.
Speaker 1: In the meantime, we now have what we believe is the best combined solution for the Medicare Advantage Mark.
In the meantime, we now have what we believe is the best combined solution for the Medicare advantage market.
Speaker 1: We're seeing early dividends from that CINTECH partnership and expect even greater returns as we begin the 2023 selling season in the next few months.
We are seeing early dividends from that Fintech partnership and expect even greater returns as we begin the 2023 selling season in the next few months.
Speaker 1: We've also strengthened the value proposition of our supplemental benefits business by leveraging the data and analytics capabilities of our value-based payment assurance.
We've also strengthened the value proposition of our supplemental benefits business by leveraging the data analytics capabilities of our value based payment assurance team.
Speaker 1: utilizing our 28 million member big data set allows us to provide health plans with intelligence that can be transformed into actionable steps that improve clinical outcomes through our OTC supplementable benefits business.
Utilizing our 28 million member Big dataset.
Laos us to provide health plans with intelligence that can be transformed into actionable steps that improved clinical outcomes through our OTC supplemental benefits business.
For example.
Speaker 1: For example, we analyze medical plans data and usage of our over-the-counter benefit for over 250,000 members over a three-year period of time to better understand the connection between usage of the OTC program and the clinical outcomes of these members.
We analyzed medical claims data and usage of our over the counter benefit for over 250000 members over a three year period of time to better understand the connection between usage of the OTC program and the clinical outcomes.
These members.
Speaker 1: We found the correlation to be very strong. As users of our OTC supplemental benefits program who had diabetes had an 8% lower medical cost trend over the three-year period than none.
We found the correlation to be very strong as users of our OTC supplemental benefit program, who had diabetes had an 8% lower medical cost trend over the three year period than non users.
Speaker 1: We also found that users of our OTC supplemental benefit program who had cardiovascular disease had a 7% lower medical cost trend in non-use.
We also found that users of our OTC supplemental benefit program, who had cardiovascular disease.
A 7% lower medical cost trend.
Non users.
Speaker 1: And we found that users of our OTC supplement the benefit program who had a history of slip and falls had at 6% lower medical cost trend than non-use.
And we found it uses of our OTC supplemental benefit program, who had a history of slip and falls had at 6% lower medical cost trend than non users.
Speaker 1: In addition, we determined that users of our OTC supplemental benefit program who had serious burns had a 15% reduction in subsequent ER visits compared to non-U.
In addition, we determined that users of our OTT supplemental benefit program, who had serious burns had a 15% reduction in subsequent ER visits compared to non users.
Speaker 1: Although the correlation between usage of ROTC program and reduced costs is very clear, the cause and effect is a bit harder to determine.
Although the correlation between usage of our OTC program and reduced cost is very clear.
The cause and effect is a bit harder to determine.
Speaker 1: However, it stands to reason that there is some meaningful cause and effect as our engagement with members naturally makes them more proactive with their health, which in turn improve
However, it stands to reason that there is some meaningful cause and effect as our engagement with members naturally makes them more proactive with their health, which in turn improve outcomes.
Speaker 1: If we are able to provide topical antibiotics and bandages for the person with diabetes with a burn, we believe they are less likely to have complications and readmissions.
If we are able to provide topical antibiotics advantages for the person with diabetes with the burn we believe they are less likely to have complications.
And Readmissions.
Speaker 1: we believe if we were able to provide pain walkers handrails and other safety devices for personal as a history of flippin falls they are less likely to have a subsequent flippin fall episode
And we believe if we are able to provide canes walkers handrails and other safety devices for a person who has a history of slip and falls they are less likely to have a subsequent flipping fall episodes.
Speaker 1: So the short story here is that we think there is strong empirical evidence of the effectiveness of our OTC program to improve outcomes for members who utilize their benefits.
So the short story here is that we think there is strong empirical evidence of the effectiveness of our OTC program to improve outcomes for members who utilize their benefits.
Speaker 1: We believe that the strengthens our value proposition for this program as it continues to evolve from a program that was simply designed to attract new members.
We believe that this strengthens our value proposition for this program as it continues to evolve from a program that was simply designed to attract new members.
Speaker 1: to a program that's designed also to retain members and improve both.
Through a program that's designed also to retain members and improve outcomes.
Speaker 1: Why is this gradual shift by the health plans from solely attracting new members to also retaining members and improving outcomes important to our business?
Why is this gradual shift by the health plans from solely attracting new members to also retaining members and improving outcomes important to our business.
Speaker 1: with a plan that is solely focused on attracting new members. They would like to advertise it.
With a plan that is solely focused on attracting new members.
They would like to advertise a very high benefit.
Speaker 1: and then hope that members do not use that gun.
And then hope that members do not use that benefit.
Speaker 1: As a reminder, only about 35% of the dollars available are currently being utilized. So we have meaningful upside in utilization and consequently in our business growth.
As a reminder, only about 35% of the dollars available are currently being utilized so we have meaningful upside in utilization and consequently in our business growth.
And unused benefit.
Speaker 1: An unused benefit has no attentive or clinical value.
Has no retentive or clinical value.
Speaker 1: So we expect plans to begin to embrace higher utilization.
So we expect plans to begin to embrace higher utilization.
Speaker 1: An unused benefit can't yield the improved outcomes that we think are 250,000 number study demonstrates.
Unused benefit can yield the improved outcomes that we think are 250000 members studied demonstrated.
Speaker 1: We believe that the combination of our valued-based analytics and supplemental benefit management programs will help us to drive significant improvements in star ratings, quality of care, and health outcomes.
We believe that the combination of our value based analytics and supplemental benefit management programs will help us to drive significant improvement in star ratings quality of care.
And health outcomes.
Moving to other topics like many companies in the United States, we are experiencing some labor cost pressure and supply chain challenges.
Speaker 1: like many companies in the united states we are experiencing some labor cost pressure and supply chain
Speaker 1: We are confident that we will be able to manage the supply chain challenges, and we expect to be able to effectively manage our labor challenges by leveraging our global footprint, including resources in the Philippines and in Puerto Rico.
We are confident that we will be able to manage the supply chain challenges and we expect to be able to effectively manage our labor challenges by leveraging our global footprint, including resources in the Philippines and in Puerto Rico.
Speaker 1: So we have a bit of headwind due to the labor challenges, but we think it's managed.
So we have a bit of headwind due to the labor challenges, but we think it's manageable.
Speaker 1: Our team continues to execute and operate at a high level and our customer relationships remain strong.
Our team continues to execute and operate at a high level and our customer relationships remain strong.
Speaker 1: We've driven excellent financial results year to date, which is reflected in our updated guidance. And I remain confident in our growth prospects for the next several years.
We have driven excellent financial results year to date, which is reflected in our updated guidance and I remain confident in our growth prospects for the next several years.
Speaker 1: While we are relatively new to the public markets, we have a long operating history with proven results.
While we are relatively new to the public markets, we have a long operating history with proven results.
Speaker 1: We understand our business model is a little complicated and difficult to understand since we don't have a pure cost.
We understand our business model is a little complicated and difficult to understand since we don't have a pure comp.
Speaker 1: That being said, we continue to believe our stock is undervalued and we intend to continue to deliver top line and adjusted EBITDA growth as well as cash.
That being said we continue to believe our stock is undervalued and we intend to continue to deliver top line and adjusted EBITDA growth as well as cash flow.
Speaker 1: Some of you may have seen last week that we changed our name from Convey Holding Parents to Convey Health Solutions Holding Parents.
Some of you may have seen last week that we changed our name from convey holding parent to convey health Solutions Holdings, Inc.
Speaker 1: It isn't a big deal, but we thought it could help eliminate some investor confusion by including the full name used in our go-to market matured.
It isn't a big deal, but we thought it could help eliminate some investor confusion by including the full name used in our go to market materials.
Speaker 1: In closing, I'd like to thank our team for their hard work and dedication. They have done a great job executing to build a terrific business, and I believe we are well positioned to do this.
In closing I'd like to thank our team for their hard work and dedication they have done a great job executing to build a terrific business and I believe we are well positioned for the future.
Speaker 1: Now I'd like to turn the call over to Tim who will review our third quarter 2021 financial results and provide an update to our full year outlook. Tim? Thank you Steve and thanks everyone for joining the call today. I will review our third quarter and year-to-date financial performance and update our 2021 guidance.
Now I'd like to turn the call over to Tim who will review, our third quarter 2021 financial results and provide an update to our full year outlook Tim.
Tim.
Thank you, Steve and thanks to everyone for joining the call today I will review, our third quarter and year to date financial performance and update our 2021 guidance.
Speaker 2: We generated strong third quarter 2021 financial results with net revenues of 82.4 million, and 19% increase from 69.5 million in the third quarter of 2020.
We generated strong third quarter 2021 financial results with net revenues of $82 4 million, a 19% increase from $69 5 million in the third quarter of 2020.
Speaker 2: Technology-nabled solution segment revenue was $69.2 million for the third quarter of 2021. It increased at 15 percent from $60.1 million during the prior years quarter.
Technology enabled solutions segment revenue was $69 2 million for the third quarter of 2021, an increase of 15% from $60 1 million during the prior year's quarter.
Speaker 2: The increase in revenue is primarily driven by 22% growth in data analytics revenue, as well as 18% growth in product revenue and 13% growth in health plan management.
The increase in revenue was primarily driven by 22% growth in data analytics revenue as well as 18% growth in product revenue and 13% growth in health plan management.
Speaker 2: Advisory Services segment revenue was approximately 13.2 million during the third quarter of 2021 and increased to 39% from 9.5 million from the third quarter of 2020. Remain encouraged by the strong growth in advisory services as many of our clients continue to re-engage post-COVID-19 lockdown last year.
Advisory services segment revenue was approximately $13 2 million during the third quarter of 2021, an increase of 39% from $9 5 million from the third quarter of 2020, we remain encouraged by the strong growth in advisory services as many of our clients continue to Reengage post COVID-19, Lockdown last year.
Speaker 2: During the third quarter, we generated positive net income of 3.7 million compared to a net loss of approximately 1.6 million for the third quarter of 2020, a 5.3 million improvement, mainly driven by revenue growth, improved operating margins, lower interest rate costs, and lower COVID-19 related costs.
During the third quarter, we generated positive net income of $3 7 million compared to a net loss of approximately $1 6 million for the third quarter of 2020, a $5 $3 million improvement, mainly driven by revenue growth improved operating margins lower interest rate costs and lower COVID-19 related costs.
Speaker 2: adjusted EBITDA was 18.3 million for the third quarter of 2021, a 21 increase from 15 million in the third quarter of 2020.
Adjusted EBITDA was $18 3 million for the third quarter of 2021, or 21% increase from $15 million in the third quarter of 2020.
Speaker 2: Third quarter 2021 adjusted EBITDA margin improve 53 basis points to just over 22%.
Third quarter 2021, adjusted EBITDA margin improved 53 basis points to just over 22%.
Speaker 2: Interest expense was $3.3 million as compared to $4.6 million for the third quarter of 2020. This decrease reflects lower terminal balances following the Q2 pay down using IPO process.
Interest expense was $3 3 million as compared to $4 6 million for the third quarter of 2020.
This decrease reflects lower term loan balances following the Q2 pay down using IPO proceeds in.
Speaker 2: In addition, in July , we amended our credit agreement to reduce our effective interest rate approximately 75 basis points.
In addition in July we amended our credit agreement to reduce our effective interest rate of approximately 75 basis points.
Income tax expense was $1 1 million for the quarter versus a tax benefit of <unk> 5 million in the third quarter of last year.
Speaker 2: Income tax expenses 1.1 million to the quarter versus a tax benefit of 0.5 million in the third quarter of last.
Speaker 2: Military year-to-date results, confality of revenue was 240.3 million, representing a 23% increase over the first nine months of 2020.
Moving to our year to date results consolidated revenue was $240 3 million, representing a 23% increase over the first nine months of 2020.
Speaker 2: For the nine months ended September 30th, 2021, we reported a net loss of 10.4 million. However, 18 million of that loss was driven by IPO-related I-
For the nine months ended September 32021, we reported a net loss of $10 4 million. However, <unk>.
<unk> million dollars of that loss was driven by IPO related items. These costs included $7 9 million supplier at D&O insurance premium.
Speaker 2: These costs included $7.9 million for prior act, the NO insurance premium, $5 million expense related to the June 2021 extinguishment of death, $2.8 million of public companies,
5 million expense related to the June 2021 extinguishment of debt.
$2 8 million of public company readiness costs.
Speaker 2: and 2.3 million related to the one-time termination of the Management Services Agreement with TPG.
And $2 $3 million related to the onetime termination of the management services agreement with TPG.
Speaker 2: September's year-to-date adjusted $1.49.3 million. They increased the 53% versus the first nine months of 2020.
September year to date, adjusted EBITDA was $49 3 million, an increase of 53% versus the first nine months of 2020.
Speaker 2: This increase is driven by a recurring revenue model, high customer retention, and better-than-expected operating.
This increase was driven by a recurring revenue model high customer retention and better than expected operating leverage.
Speaker 2: Moving to equity balance sheet and cash flow items. Total shares outstanding with 73 million, 194,171 at quarter end.
Moving to equity balance sheet and cash flow items total shares outstanding was $73 million 194171 at quarter end.
Speaker 2: As of September 30th, 2021, cash and cash equivalence total of approximately 36.4 million. And we had 39.5 million available on our revolver.
As of September 32021, cash and cash equivalents totaled approximately $36 4 million and we had $39 5 million available on our revolver.
Speaker 2: Total debt at excluding unamortized costs of 3.1 million was 192.6 million. Well, that was 156.2 million.
Total debt, excluding unamortized costs of $3 1 million was $192 6 million, while net debt was $156 2 million.
Speaker 2: Net cash provided by operating activities during the third quarter 2021 was approximately $16.3 million versus an $8.4 million use of cash during the second quarter of 2021, which is impacted by $13 million of one-time costs related to the DNO policy, public readiness costs, termination of the TPG Management Services Agreement, as well as $10.3 million for the final contingent payment related to the TPG acquisition.
Net cash provided by operating activities during the third quarter 2021 was approximately $2 3 million versus an $8 4 million use of cash during the second quarter of 2021, which was impacted by $13 million of one time costs related to the D&O policy public readiness costs termination.
The TPG management services agreement as well as $10 3 million for the final contingent payment related to the TPG acquisition.
Speaker 2: On a year-to-date basis, our net cash used in operating activities was 4.8 million. Adjusting for the one-time item posted above, adjusted net cash provided by operating activities was 18.5 million.
On a year to date basis, our net cash used in operating activities was $4 8 million adjusting.
Adjusting for the onetime items listed above adjusted net cash provided by operating activities was $18 5 million.
Capital expenditures and capitalization of software development costs were $9 million and $1 <unk>.
Speaker 2: Capital expenditures and capitalization of software development cost will 0.9 million and 1.7 million during the third quarter of the
$7 million during the third quarter, respectively.
Speaker 2: To summarize these balance sheet and cash flow items, we believe our cash balances, credit availability, positive cash flow, and modest levels of debt position as well for both new product development and strategic M&A initiatives.
To summarize the balance sheet and cash flow items, we believe our cash balances credit availability positive cash flow and modest levels of debt position as well for both new product development and strategic M&A initiatives. Additionally, Q3 was our first quarter without incurring one time costs related to our IPO and we were able to combine.
Speaker 2: Additionally, Q3 was our first quarter without incurring one time cost related to our IPO, and we were able to COVID-19% year-rear revenue growth with 18.3 million of adjusted EBITDA, 16.3 million of net cash provided by operating activities, and 3.7 million of net income.
<unk>, 19% year over year revenue growth with $18 3 million of adjusted EBITDA $16 3 million of net cash provided by operating activities and $3 7 million of net income.
As we look forward to our full year 2021 operating results, we recognized our fourth quarter results will be impacted by the expected client implementation expenses, we discussed on last quarter's call. However, despite these additional costs, we are increasing the midpoint of our 2021 annual guidance and now expect net revenues to be between three.
Speaker 2: As we look forward to our full year 2021 operating results, we recognize our fourth quarter results will be impacted by the expected client implementation expenses we've discussed on last quarter's call. However, despite these additional costs, we are increasing the midpoints of our 2021 annual guidance and now expect net revenues to be between $335 and $340 million and adjusted EBITDA to be between $57 and $69.
<unk> hundred 35, and $340 million and adjusted EBITDA to be between 67% and $69 million.
Speaker 2: At the midpoint of these ranges, this would represent a 19% increase in revenue, and a 32% increase in adjusted EBITDA over four year 2020.
At the midpoint of these ranges this would represent a 19% increase in revenue and a 32% increase in adjusted EBITDA over full year 2020.
In closing we delivered another strong quarter and have continued to execute upon our business plan since our June IPO.
Speaker 2: In closing, we delivered another strong quarter and have continued to execute upon our business plans since our June IPO. We'll be finalizing our 2022 selling season over the next 60 days and are currently managing the annual election period for select clients which will help identify trends and volume that will allow us to provide financial guidance for 2022.
We will be finalizing our 2022 selling season over the next 60 days and are currently managing annual election period for select clients, which will help identify trends in volume that will allow us to provide financial guidance for 2022.
Speaker 2: I'd like to thank all of our employees for their hard work and dedication, which help us deliver these strong results. Accurator, we are now ready to...
I'd like to thank all of our employees for their hard work and dedication, which helped us deliver these strong results.
Greater we are now ready to open the call to questions.
Speaker 3: Thank you. We have now reached the Q&A Portage Days call, and I'd like to remind you that if you do have any questions, simply press star for the by one on your telephone keypad. Please ensure that when asking your question, that your line is not muted lately. If you no longer wish to ask a question, or feel that your question has been sufficiently answered, it's star for the by two.
Thank you we have now reached the Q&A portion of today's call I'd like to remind you that if you do you have any questions simply press star followed by one on your path. Thank you Pat.
In short the way of asking a question that your line is not meet you. Thank you.
If you no longer wish to ask a question field. Your question has been sufficiently outfit it staff.
<unk>.
Speaker 3: Office question today comes through Michael Cheney of Bank of America.
Our first question today comes from Michael <unk> of Bank of America.
Good afternoon, congratulations on another nice quarter.
Speaker 4: Good afternoon, congratulations on another nice quarter since you're come public.
Public.
Speaker 4: I want to dive a little bit more into the supplemental benefit side and the 35% of total. I know that this is not something that is necessarily new in terms of usage, but as you think of the different settings to push forward on some of the benefits and the dynamic between the retail versus the home delivery side, what are the true dating factors that you think or what could potentially break the dam if you can convince it otherwise to get those numbers meaning the higher, especially given the value proposition versus the...
I wanted to dive a little bit more into the <unk>.
From a benefit side.
5% of total I know that this is not something that is necessarily new in terms of usage, but as you think about the different settings to push forward on something out benefits and the dynamic between the retail versus the home delivery side.
What are the gating factors that you think or what could potentially break the dam.
If you can convince it otherwise to get those numbers meaningfully higher, especially given the value proposition versus the clearly direct lack of cost for the MA members that youre working with.
Speaker 4: clearly direct lack of cost for the NA members that you're working.
Sure so.
Speaker 1: sure. So in terms of breaking the dam to move to home delivery versus retail?
In terms of breaking the dam to move to home delivery versus retail.
Just breaking that Dan I get that 35% number higher got it. Okay. So let me talk a bit about how we think about retail versus the home delivery and then.
Speaker 4: Just breaking the Dan to get that 35% number higher. Got it. Okay. So, let me talk a bit about how we think about retail versus the home delivery and then I'll go into your specific question. Some energy on this system or tik tok, okay.
And then I will go into your specific question. So during.
Speaker 1: During the course of this year, we've had significantly more wins and losses for next year. However, our lack of a solid retail solution has cost us some business.
During the course of this year, we've had significantly more wins than losses for next year.
However, our lack of <unk>.
Solid retail solution has cost us some business next year.
Speaker 1: again i've been significantly outweigh our losses and we're still working through that but the fact that we have a and outstanding retail solution is going to grow the whole high
Again, our win significantly outweigh our losses, and we're still working through that but the fact that we have an outstanding retail solution is going to grow the whole pie and so there are plans that want a combination of our retail and E mail solution and so we think we've expanded the <unk>.
Speaker 1: And so there are plans that want a combination of a retail and a mail solution. And so we think we've expanded the market in a very meaningful way for 2023 for us.
<unk> in a very meaningful way for 2023 for us by partnering.
Speaker 1: by partnering with who we believe is the best retail solution.
With.
Who we believe is the best the best retail solution.
Speaker 1: We now think that we've got the best solution that's available in the market as a combination of retail and home delivery.
And we now think that we've got the <unk>.
Best solution, that's available in the market as a combination of retail and home delivery.
Speaker 1: terms of breaking the dam, moving utilization up. It's really about moving from a track, then the mindset that Health Plans have, which is what the track members using a high advertised
In terms of breaking the dam.
Moving utilization up.
It's really about moving from attract the mindset that health plans have which is less attract members using a high advertised.
Speaker 1: benefit amount $100 a quarter something like that and let's hope they never use it so they don't have this
Benefit amount of $100 a quarter, something like that and let's hope they never use it. So they don't have this subsequent.
Speaker 1: subsequent outreach. It's just we brought the members in and now we don't really want the benefit to be utilized.
Rich, it's Jeff we brought their members and now we don't really want the benefit to be utilized that's the historical model things like this 250000 member three year longitudinal study.
Speaker 1: That's the historical model. Things like this 250,000 member, three year longitudinal study.
Speaker 1: that shows that members with diabetes have 8% low medical cost trends, cardiovascular disease, 7% lower.
It shows that members with diabetes have 8% lower medical cost trend cardiovascular disease, <unk>, 7%, while our slip and fall, 6% lower medical cost trends and serious burns, 15% reduction in ER visits we're now hitting all of our clients and the market hard with this.
Speaker 1: slip and fall 6% lower medical cost trends and serious burns 15% reduction in ER visits. We're now here.
Speaker 1: all of our clients and the market hard with the study because we believe that it demonstrates in a very meaningful way that these OTC solutions are good answers for members. CMS has recently
<unk>, because we believe that it demonstrates in a very meaningful way.
These OTC solutions are a good answers for members.
CMS has recently.
Speaker 1: changed a couple years ago. Changed the program so that we can now tailor a program for a member with diabetes or a member with cardiovascular disease or someone with congestive heart failure. And so we're going to be tailoring our programs more specifically to make sure that people who have diabetes are getting OTC products that are specifically tailored towards them. So it's going to be a
Changed a couple of years ago changed the program. So that we can now tailor our program for a member with diabetes or member with cardiovascular disease or.
Or someone with congestive heart failure, and so we're going to be tailoring our programs more specifically to make sure that people, who have diabetes or getting OTC products that are specifically tailored towards them. So it's going to be a process.
Speaker 1: but we believe that there's clinical data that we've developed. We've directly linked medical claims to our members is compelling. The other thing.
But we believe that there is clinical data that we've developed we've.
Secondly linked to medical claims to our members.
Is compelling the other thing we.
Speaker 1: We talked about this in previous calls, but members or health plans that had this benefit grew 14% last year versus plans that did not offer the OTC benefit only grew 4%. So there was a very strong, attentive value. And again, this is all work that we've done in conjunction with our Prado Intelligence Group.
You talked about this on previous calls, but members or health plans that had this benefit grew 14% last year versus plans that did not offer the OTC benefit only grew 4%. So there is a very strong retentive value and again. This is all work that we've done in conjunction with our Credo intelligence.
Group.
Speaker 1: and we've got this growth data, which we're now hitting the plans hard with, and this medical claims improvement, which we're going to market with.
And we've got this growth data, which we're now hitting the plan's Howard with <unk> medical claims improvement, which we're going to market with.
Thanks, That's really helpful. And then I know that youre, not giving guidance, yet I'm not trying to necessarily get an actual guidance number but as you think about headwinds and tailwind into next year.
Speaker 4: Thanks. That's really helpful. And then I know that you're not giving guidance yet. I'm not trying to necessarily get an actual guidance number. But as you think about headwinds and tailwinds until next year, you obviously highlighted the performance you had relative to some of the benefits and more wind than losses just now. How do you think about some of the other qualitative moving pieces to think about in terms of sitting here on November 10th? What you can see as positive versus potentially negative contributors assume some of labor inflation would probably be in the latter, but just curious how you think about it.
You highlighted.
The performance you had relative to some amount of benefits and more wins than losses. Just now how do you think about some of the other just qualitative moving pieces to think about in terms of the sitting here on November 10th we you can see as positive versus potentially negative contributors I assume some of that labor inflation would probably be in the latter but just curious how you think about February.
Speaker 1: uh... so i don't have to go to the head windon on the labor and supply chain but we feel like we've got that handled uh... we're uh...
Yes.
I will take a little bit of headwind and on the labor and supply chain, but we feel like we've got that handled.
We're.
We think next year is coming together nicely, but we're early we're in the middle of AEP now we're finalizing contracts, we're trying to determine the number of enrollees that our large clients are going to have because that drives our revenue.
Speaker 1: We think next year is coming together nicely, but we're early. We're in the middle of ADP now, we're finalizing contracts. We're trying to determine the number of enrollees that our large clients are going to have because that drives our revenue. And frankly, it'd be very helpful to the confidence that we have in our guidance that we'll be giving to see early January's behavior patterns of men.
And frankly, it would be very helpful.
To the confidence that we have in our guidance that will be giving.
Early January behavior patterns of members, because sometimes different the way different plans come together the behavior is different and that obviously drives our revenue.
Speaker 1: because sometimes the way different plans come together the behaviors different than that obviously drives our revenue.
Speaker 1: We worked very hard to hit our numbers.
We work very hard to hit our numbers we have.
Speaker 1: We've hit them in the first two quarters and we wanna be sure that we continue to do so. So what I think that means is, we feel good about next year, but we're probably from a practical perspective, not going to be able to give you a real precise answer that we have a high degree of confidence in until our LHQ1.
Hit them in the first two quarters and we want to be sure that we continue to do so.
So what I think that means is we feel good about next year.
But we're probably from a practical perspective.
Not going to be able to give you a real precise answer that we have a high degree of confidence in until early Q1.
Speaker 4: I understood and appreciated thanks for all the color and wrapped again.
Understood and appreciate it thanks for all the color and congrats again.
Great. Thank you.
Thank you. Our next question today comes from George Tong of Goldman Sachs. Your line is open. Please go ahead.
Speaker 3: Thank you. Our next question here comes from George Tongue of Goldman Sachs. Your line is open. Please go ahead.
Hi, Thanks, good afternoon.
Speaker 5: Hi, thanks, good afternoon. So three cues, the big quarter, the big selling season to build the PES book. Can you dive a little bit about, dive into your progress with building that pipeline for next year and how you think December will also determine membership figures as you continue to move to the next level.
<unk>, the big quarter, the big selling season.
To build the tes, but can you dive a little bit about.
Got it into your progress with building that pipeline for next year and how you think December will also determined membership figures.
As you continue to move.
Through the next several months.
Speaker 1: Sure, so in terms of the pipeline for...
Sure so in terms of the pipeline.
For the.
Speaker 1: next year. It really depends on which of our products you're talking about.
Next year, it really depends on which.
<unk> of our products you are talking about so in advisory we've got which is 15% of our revenue we've got a.
Speaker 1: So in advisory, we've got, which is 15% of our revenue, we've got a pretty short cycle, and that's pretty quick. For the Advanced Plan Administration, business, that is a longer cycle, but we feel very good about the pipeline there. But that, in some cases, can be as long as a multiple year process.
A pretty short cycle and that's pretty quick for.
The advanced plan administration business that is a longer cycle, but we feel very good about the pipeline there, but in some cases can be as long as a multiple year process.
Speaker 1: for our supplemental benefits business. We've got a selling season that looks like it's gonna start a little earlier this year for 2023. And that'll start probably in the late December , January timeframe and could go as late as, kind of October , November . We're wrapping up trying to finalize things for next year right now.
For our supplemental benefits business, we've got a selling season that looks like it's going to start a little earlier.
This year for 2023 and that will start probably in the late December January timeframe and could go as late as kind of October November.
Wrapping up trying to finalize things for next year.
Right now.
Speaker 1: And then in the value-based business, again, very good pipeline, that tends to be a little bit shorter, shorter prof.
And then in the value based business.
<unk> very good pipeline that tends to be a little bit shorter shorter process.
Speaker 1: In terms of your December question, we'll have a very good idea by the middle of December . What the enrollment numbers are going to be for our health plans, which drives significant amounts of our revenue, but it's not a real until January that we see the behavior both on the cost side and on the revenue side for our supplemental benefits is impossible.
In terms of your December question.
We all have a very good idea by the middle of December.
What the enrollment numbers are going to be for our health plans, which are which drives <unk>.
Amount of our revenue, but it's not really until January.
We see the behavior, both on the cost side and on the revenue side for our supplemental benefits business.
Anything to add to that.
Speaker 2: Yeah, I think as Steve mentioned, that membership, that'll kind of conclude mid-December, really drives our advanced plan business, or roughly 25% of our consolidated revenue. So obviously, big swings there, and we're rooting on our big clients, obviously, to have a very busy ADP. Yeah, and it obviously also impacts the supplemental benefits business, because larger membership yields higher usage of those products. Thank you.
Yes, I think as.
Steve mentioned that membership that will kind of conclude mid December really drives our advanced plan business or <unk>.
5% of our.
Roughly 25% of our consolidated revenue so.
Obviously big swings Darren.
Moving on our big clients, obviously to have a very busy AEP and it obviously also impacts to supplement the benefits business because larger membership yields higher.
Higher usage of those products.
Right Yeah, no it makes sense.
Speaker 5: Historically, the advisory segment has served as a tip of the spear, if you will, for additional cross-bellying of PES solutions.
Historically the advisory segment has served as a tip of the spear. If you will for additional cross selling of Ges solutions. So given the recovery in advisory Whats your outlook for cross selling activity have you started to see traction and do you have.
Speaker 5: So given the recovery and advisory, what's your outlook for cross-selling activity? Have you started to see traction and do you have evidence or anecdotal evidence of effective cross-selling between the lines of business.
Evidence or anecdotal evidence of effective cross selling between the lines of business businesses, Yes. So we've really been in this.
Speaker 1: Yeah, so we've really been in this advisory business for, I guess, what about three years, Tim, and it's been a gradual process, but I would say that every quarter of the year,
Advisory.
Business for I guess, what about three years' time and.
And it's been a gradual process, but I would say that every quarter, we're operating more and more as a single integrated unit. So on the first kind of a year or 18 months that advisory business was was much more stand along that it is now now we have <unk>.
Speaker 1: we're operating more and more as a single integrated unit. So in the first kind of year or 18 months.
Speaker 1: That advisory business was much more stand-alone than it is now. Now we have regular calls, we're looking at market opportunities.
Regular calls where were looking at market opportunities and that advisory team is is really helping to drive relationships and.
Speaker 1: And that advisory team is really helping to drive relationships and new opportunities within plants.
And new opportunities within within plants.
Got it thank you.
Great. Thanks.
Speaker 3: Our next question today comes from Anne Samuel of JP Morgan.
Our next question today comes from Anne Samuel of Jpmorgan.
Speaker 6: Hi, Anne. Hi, guys. Thanks so much for taking the question. Maybe first, you spoke in the prepared comments about being actively engaged in M&A. I was wondering if maybe you could speak about some adjacencies that might round up the portfolio or what you're looking at.
Hi, Ann.
Guys. Thanks, so much for taking the question maybe first you spoke in the prepared comments about being actively engaged in M&A.
I was wondering if maybe you could speak about some adjacencies that might ramp up for <unk>.
Youre looking at.
Speaker 1: Yeah, good question. So we're really focused on companies that will either improve our existing offerings.
Yes.
Yes. Good question. So we're really focused on companies that will either improve our existing offerings.
Speaker 1: or will provide new technologies or services that are clients need, especially in Medicare Advantage. More specifically going down a level, I could see us doing more in population health management, social determinants of health, CMS.
Or will provide new technologies or services that our clients need, especially in Medicare advantage.
More specifically going down a level I could see us doing more in population health management.
Social determinants of health CMS.
Speaker 1: It looks like for the first time is contemplating standardized measurements for social determinants of health. And so that's in the area that is of interest. And as you probably know, a majority of health outcomes are determined by social determinants of health like nutritious food, transportation, income levels, social support, pollution, things like that.
It looks like for the first time is contemplating standardized measurements for social determinants of health.
And so that's that's an area that is of interest then.
As you probably know a majority of health outcomes are determined by social determinants of health like.
Nutritious food transportation income levels, social support pollution and things like that.
<unk>.
Member acquisition lead generation couple of areas that we think are interesting.
Speaker 1: member acquisition lead generation couple areas that we think are interesting. Those values are tough and we're not likely to chase value in that area. Supply chain, efficiency, clinical management, utilization management, network management, risk adjustment, really anything that will either improve our current offerings or add technology offerings to our portfolio.
Those values are tough.
We're not likely to chase value in that area.
Supply chain.
Efficiency clinical management utilization management network management risk adjustment really anything that will either improve our current offerings of our AD technology offerings to our portfolio.
That's great that's a really robust list.
Speaker 6: That's great. That's a really robust list. Look forward to seeing what you add. Maybe I just won on the model. The fourth quarter guide that looks like at the midpoint applies a little bit of EBITOM margin contraction. It was hoping maybe you could provide some color on the factors there. Is that labor pressure? Is that cup compares? Or is that just kind of spending ahead of your new and roll is coming in on January 1?
I look forward to seeing what you add.
And then maybe just one on the model in the fourth quarter guide it looks like at the midpoint implies a little bit of EBIT margin contraction I was hoping maybe you could provide some color on the factors. There is that labor pressure is that tough compares or is that just kind of spending ahead of your new enrollees coming in on January one.
Speaker 1: Sure, I'll have 10 minutes of that. It created, and it's a very discreet item that we've talked about before. So, you know, we've mentioned before, we had a significant upsell in our advanced plan business with an existing client, where we're essentially combining two national plans into a single plan for a long-term advanced plan engagement. However, you know, we have a significant amount of implementation costs.
Sure I'll have Tim came answer that we have created and it's a very discrete item that we've talked about before so we've mentioned before we had a significant.
Upsell in our advanced planned business with an existing client.
We're essentially combining.
Two national plans into a single plan for a long term advanced plan engagement. However.
We have a significant amount of implementation cost.
Speaker 2: associated with that. The members and the revenue contribution go live on January 1st of 22, but here in the second half of the year, we are spending some money to get those members and those plans consolidated into one. Those costs have shifted primarily towards the out of the third quarter towards our fourth quarter.
Associated with that the members and the revenue contribution go live on January one 'twenty two.
Here in the second half of the year.
We're spending some money to get.
To get those members in those plans consolidated into one.
Those costs have shifted primarily towards the out of the third quarter towards our fourth quarter may be a good quantum it.
Speaker 2: maybe a good quantum, it's a rough number, but approximately $3 million of kind of cost that will...
A rough number but approximately $3 million of kind of cost.
That will.
Incur in the fourth quarter that should be nonrecurring.
Speaker 2: incur in the fourth quarter that should be non-recurring starting in 22. That'll contract the margin of it as well as they simply just are EBITDA number. But I think if we sat around and looked at a long-term model and return on that investment over the six-year term in the agreement, I think we would be all very.
And 'twenty two that will contract the margin a bit as well as simply just our EBITDA number.
But I think if we sat around and looked at our long term model return on that investment over the six year term of the agreement I think we would be all very pleased.
Great. So fair to think that the leverage will come early 2022.
Speaker 6: Great, so fair to think that the leverage will come early 2022 then.
Speaker 2: Absolutely, the revenue contribution from that will begin January 1st of 2022.
Absolutely yes.
Revenue contribution from that will begin January 1st of 2020.
Great. Thank you.
Speaker 3: Our next question today comes from Stephen Balaquais of Blockleys.
Thank you. Our next question today comes from Stephen about a class of Barclays.
Hey, good evening good afternoon, everybody.
Speaker 4: I guess without looking into specifics, your three of our customers gave some updates on their Medicare Advantage geographic expansion plans for a 22, which looks fairly encouraging from our perspectives. And further, CMS has recently projected 9.7% overall Medicare Advantage membership growth for 22.
I guess without going into specifics.
With the largest customers gave some nice updates on their Medicare advantage geographic expansion plans for 'twenty, two which looks fairly encouraging from our perspective and further CMS has recently projected nine 7% overall Medicare advantage membership growth for 'twenty two.
Speaker 4: And finally, the other notable data point, we saw some commentary that the deviation in the level of benefits within MA, they'd be getting a little bit tighter on some of your major customers. So I just wanted to get your own perspective on these collective data points going to 22 for just overall Medicare advantage and how this may preliminarily set the stage for growth for conveying next year.
And finally, the other notable data point, we saw some commentary that the deviation in the level of benefits within the MAA to be getting a little bit tighter amongst some of your major customers. So I just wanted to get your own perspective on these collective data points going into 'twenty two for just overall Medicare advantage and how this may primarily set the stage for growth for us.
Or it can be next year.
Sure I'll ask John at the end here, if he has anything to add to it but we're very fortunate to be in a market that.
Speaker 1: Sure, I'll ask John at the end here if he has anything to add to it, but we're very fortunate to be in a market that's growing at the pace that our market's growing. The expected growth next year is higher, even than our historical growth. And as you point out in our supplemental benefits business, and our
Growing at the pace that our market is growing.
Expected growth next year is higher even than our historical growth and as you point out.
In our supplemental benefit business and our.
Speaker 1: Advanced plan administration business, which those two combine for about 75% of our business. We're directly tied to success of our plan.
Advanced plan administration business, which those two combined for about 75% of our business. We are directly tied to success of our plants and so we're.
Speaker 1: and so we're, we think, you know, the trends are very good for us. I'm not just in the last year, I'm in the next year, but long-term. John Spiel, do you have anything you want to add to that?
We think the trends are very good for us not just in the last year or in the next year, but.
Long term John do you have anything you want to add to that.
Speaker 2: And I know you hit it right on the head, Steve. Yeah, I think in some of the other comments you had in there on some of the blended data points.
You hit it right on the head Steve Yes, I think in some of the other comments you had in there on some of the blended data points.
Speaker 2: We are seeing and continue to see some innovation in the MA space.
We are seeing continue to see innovation in the MA space.
Speaker 2: And so being able to be partner with those winners, they're able to kind of be able to spend more on some of those more innovative ideas. And so I think that's going to continue to be a nice fail win for us. And as they continue to differentiate.
And so being able to partner with those winters.
They are able to kind of be able to spend more on some of those more innovative ideas and so I think that's going to continue to be a nice tailwind for us.
<unk> continued to differentiate.
Speaker 2: in this sort of growing market, and most continues to see that in 22 and beyond. Del Surewater pozyed in?? rac get
And there's sort of a growing market and will continue to see that in 'twenty two and beyond.
That's great okay. Thanks.
Speaker 3: Our next question comes from Richard close of Khanical TNT.
Our next question comes from Richard close of Canaccord Genuity.
Hi, Richard Great. Thanks.
Speaker 4: Yeah, thanks for the questions here. I know in your comments, you said that COVID, we're getting beyond COVID, but when you look at some of these MA primary care providers, obviously medical costs, expenses.
Yes, thanks for the questions here.
I know in your comments, you said that Covid.
And beyond Covid, but.
When you look at some of these MAA primary care providers, obviously medical costs expenses is running.
Speaker 4: is running pretty high, considerably high in some cases.
Pretty high.
Considerably.
Some cases.
Speaker 4: I'm curious either in your advisory or as you're going out selling
I'm curious either in your advisory or as you're going out so.
<unk>.
Speaker 4: your discussions with the plans. Are they bringing this up with you guys at all? And is this potential positive for Kinbay? Or should we think of it as a possible negative? Any thoughts in it around that would be helpful.
In your discussions with the plans are they've made bringing this up with you guys at all.
Potential positive for convey.
Or.
Should we think of it as a possible negative.
Thoughts in and around that would be helpful.
Speaker 1: But you are still on. When I read.
Sure so.
When I said.
Speaker 1: code that we were kind of moving past COVID or something to that effect. I didn't suggest that it wasn't still a factor. I just suggested that the point was, health plans are willing to meet with us. And that's important and meet in person because our technology is complicated. It's not easily understood. And despite the fact that Zoom works reasonably well, actually getting in a room with a prospect is a better solution.
Co that we were kind of moving past COVID-19 or or something to that effect I didn't suggest that it wasn't still a factor I just suggested that.
The point was health plans, who are willing to meet with us and thats important and meet in person because.
Technology is complicated it's not easily understood and despite the fact that zoom works reasonably well actually getting in a room with a prospect is a better solution.
Speaker 1: in terms of, you know, our go forward.
In terms of.
Our go forward.
Speaker 1: There are some programs that we're talking to, health plans about potentially implementing next year around the outreach to employer groups or to members that will help with testing, but we're really in the early phases of that and whether that produces additional in criminal learnings or not is hard to know now.
There are some programs that we're talking to health plans about potentially implementing next year around the outreach to employer groups or two members.
That will help with testing.
But where we're really in the early phases of that and whether whether that produces.
Additional incremental earnings or not is hard to know now.
Speaker 4: Yeah, I guess I'm just curious in terms of obviously there was a lot of deferred medical visits in 2020. And so from a risk coding, risk sharing.
Yes, I guess I'm just curious in terms of obviously there was a lot of deferred hope.
Deferred medical visits in 2020.
And <unk>.
So from a.
Risk coding Russian.
Speaker 4: perspective, you know, I mean a lot of the documentation isn't there maybe this year and so there's you know some headwinds with respect to the M8 plans to a certain extent and I'm you know you guys are
Perspective.
I mean, a lot of the documentation isn't there maybe this year and so there is.
Some headwinds with respect to the M&A plans.
To a certain extent.
You guys are.
Speaker 4: between the health plans and the members. And I'm curious and engage them. I'm just curious whether that's driving height and demand, the critical role that you guys play is sort of driving height and demand from the plans that they need to step up engagement with their members. And are you seeing anything along those lines?
Between the health plans and the.
The members and I'm curious and engage I'm just curious whether that's driving high in demand the critical role that you guys placed.
Sort of dragging and demand from our plan.
Need to step up engagement with their members are you seeing anything.
Along those lines.
Speaker 1: Um, you know, we we saw, um, a little bit. Um,
We saw.
A little bit.
But I would say nothing too extreme.
Speaker 1: But I would say nothing too extreme. And our numbers really get locked in. So if there are headwinds that the MA plans are experiencing, our benefits are all locked, filed through CMS. And so those headwinds don't really affect us on a day-to-day basis. John Steele, do you have anything you want to add to that?
Our numbers really get locked in so there are headwinds that the MA plans are experiencing our benefits are all all walked.
<unk> filed through CMS, and so those headwinds don't really affect us on on a day to day basis of John do you have anything you want to add to that.
Yeah.
Yes, I mean I think it's.
Speaker 2: Yeah, I mean, I think it's, you know, the impact for us is probably fairly neutral. We, I think what we are seeing is, you know, there's a lot more.
The impact for us is probably fairly neutral.
I think what we are seeing is theres a lot more.
Speaker 2: emphasis that's being put around the engagement of members, which obviously plays to our ability to engage in them because they're coming to us on a pretty frequent basis. As people are starting to look like for example on star ratings, you know, there was a lot of a past that was given this last year. So a lot of people had elevated starings, I think.
Emphasis is being put around the engagement of members, which obviously plays to our ability to engage with them because they're coming to us on a pretty frequent basis.
People are starting to look like for example on star ratings.
There was a lot of our past those given this last year. So a lot of people had elevated starting to I think kind of looking at that going forward. There is more we're seeing more emphasis on how can we impact star ratings going forward through the member experience and the member journey.
Speaker 2: kind of looking at that going forward. There's a more, we're seeing more emphasis on how can we impact our ratings going forward through the member experience and the member journey. So I think, you know, we are starting to see that come.
I think we are starting to see that come to be more how can we maximize each member interaction.
Speaker 2: more how can we maximize each member of interaction and that's that that I would say is a very positive discussion that we're having with our plans that we believe will be a good long term tailwind for us.
Now I would say is a very positive discussion that we're having with our plans.
We believe will be a good long term tailwind for us.
Speaker 4: Okay, that's exactly what I was looking for. If I could ask one additional question, maybe on the supplemental side, you guys talked about the hub, and I'm just curious if there's any updates on that in terms of how you're thinking about, maybe introducing that.
Okay.
Exactly what I was looking for if I could ask one additional question.
On the supplemental side, you guys talked about the hub.
And I'm just curious if theres any updates on that.
Terms of how youre thinking about maybe introducing that.
Yeah.
Yes, John do you want to take that.
Speaker 2: Yeah, for sure. Yeah, so I mean, we're right now out talking to plans on the hub and as far as bringing all of the...
Yes for sure Yes, I mean, we're right now talking to plans.
On the hub and as far as bringing all of the.
Speaker 2: a more cohesive member experience to all the different supplemental benefits to help navigate through. I think those are, you know, again, early discussions. But, you know, really that's something that we're looking out from a 20, you know, we really come to life in that 2023 benefit period as we kind of work through with them on this upcoming selling season. But the initial discussions around
More cohesive member experience to all the different supplemental benefits to help navigate through I think those are again early discussions.
But really that's something that we're looking at from a <unk> really.
<unk>.
To life in that 2023 benefit period, as we kind of worked through with them on this upcoming selling season, but the initial discussions around.
Speaker 2: bringing again, it kind of goes to that, having a more common number of experience and being able to access those benefits that.
Bringing again, it kind of goes to that having a more common member experience and being able to access those benefits.
Speaker 2: As Steven mentioned, are important for not only a recentive basis, but now that we're also adding into that dialogue, how we can actually impact medical cost trends, that actually also helps accelerate the utilization of some of those on benefits because there's actually a cost savings on the other side that they can start to factor into their upcoming vids, which is important aspect to each year's compensates.
As Steve had mentioned are important for not only retentive basis, but now that we're also adding into that dialogue, how where can actually act.
Medical cost trends.
That actually also kind of helps accelerate sort of the utilization of some of those benefits because there is actually a cost savings on the other side that they can start to factor into their upcoming bids which is kind of important.
An important aspect to there.
Each year's competitiveness.
Okay. Thank you very much.
Thank you.
Thank you we have reached the end of today's Q&A session and the <unk> on behalf of the COVID-19, I'd like to thank Youll see our attendance and wish you a very pleasant rest of your day and you may now disconnect your lines.
Speaker 3: Thank you. We have reached the end of today's Q&A session and the end of day's call. On behalf of the Conlay team, I'd like to thank you for your attendance and wish you a very pleasant rest of your day and you may now disconnect your lines.
Yeah.
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