All right, great. Hi, everybody. Thanks for joining us. My name's Jess Tassin. I cover health care services at Piper. I'm happy to be here with Dr. Shantanu Nundy, Chief Medical Officer at Accolade, and Todd Friedman, Head of IR at Accolade. Thank you both for being here with us this morning. Yeah, thank you. I'm excited to get into some questions that I think could be a little differentiated and get your perspective, Dr. Nundy or Shantanu from the Chief Medical Officer side. Thanks again for joining us this morning. Yeah, thank you. Shantanu, I'd love to start with you. Can you just give us a little bit about your background? What does your practice look like today? What brought you to Accolade? And tell us how your practice as a physician intersects with your role at Accolade as CMO? Yeah, absolutely. Yeah. So I actually started off my career as an engineer. And I actually used to program for financial services companies through college, but then obviously went to medical school. And so for me, I think what I really enjoy is, you know, I think when I think about the health care problem, you know, I think technology alone is not going to solve health care. But at the same time, like, you know, physicians aren't going to solve it alone. But sort of that tech enablement, bringing those both sides together to deliver high-quality care at scale. I continue to practice. So I work at a safety net clinic in Northern Virginia where I live. And so it's a lot of uninsured, Medicaid, a mix of different things. I still do see patients sometimes with Accolade as well in our virtual primary care service. You know, day to day, my role at Accolade is just really focused on our health outcomes. Yeah. So I think it's interesting. As a practicing physician, I guess, just what clinical gap does Accolade fill? So for a commercially insured individual who ostensibly has access to a very broad network of academic medical centers, what clinical needs does Accolade answer? Yeah, I think it's such an important question. Like, I think, you know, you know, I think when you think about health care, I think the biggest question people have is, am I getting the right care at the right time in the right place? Right? So I think we all probably have stories of people that went to the ER and realized they didn't need to wait there for eight hours, right? Or people that got surgery and didn't need to have surgery, or people that got the wrong diagnosis for cancer, right? So I think even when we're lucky enough to have great health systems and academic medical centers and doctors, it still doesn't really get to this essential question, which is, how do I navigate this system in a way that's best for my health? I think that's the place that Accolade has a huge role. So I want to bring up that, I think, one essential question that's embedded in what you just described. So how does Accolade go about proactively engaging members, even maybe before they know that they need health care? And to what extent do you think that that's maybe an opportunity going forward to kind of better engage members on a proactive basis or at a proactive level? Yeah. I mean, engagement is a huge part of the problem that we solved. I think, first of all, it's important to understand, like, the context, right? So we take care of, you know, millions of members who are very different from each other. I mean, there's members we have that will operate a retail store where they're the only employee, and they don't really see other employees on a day-to-day basis. We have other employees who work at a big corporate office, and they're there every single day. And they have a benefits department that's there with them every single day. We have employees that are traveling for work on an almost daily basis, right? So the engagement question that I think we've had to solve over the last 10-plus years is a really foundational one. I think the thing that we've learned is you really kind of want to be available for people sort of anywhere they turn in health care, right? So from the simplest, hey, I lost my ID card, to, hey, I need refills on my medication because I'm about to travel tomorrow, to, hey, I just found out I'm pregnant, and I want to know on my maternity leave. I think what we've done with our data and technology is, regardless of what question you have and what entry point you have into our system, we meet you where you are, and then we immediately use that opportunity to say, what else can we do for you? That's really what we've learned, I think, is critical to get engagement across these very different populations with very different health care needs. I think one thing to add there, Jess, also, this came up last quarter, this idea of member marketing, right? You know, if someone is using Accolade Advocacy and they have access to our care advocates and our doctors and our nurses, you may already be calling in. And so then we can engage with you right there. However, very often, people don't know that. They don't know that they have Accolade. And so this idea that we are running email campaigns, phone campaigns, you know, even mailers, right, to make people aware of the service. And so sometimes that engagement comes very naturally, where companies are taking a very proactive approach to saying, hey, employees, Accolade is the place to go. And sometimes we have to do more of the legwork to make that happen. And so especially if someone's a standalone EMO customer or a standalone Accolade Care customer, we don't have that advocacy engagement engine in place with them, right? In which case, we have to do more of that traditional marketing to let the employees know about it. OK. I think that that's maybe an important distinction to make. Kind of what level of clinical service does Accolade's core enterprise navigation offering include versus the full stack available to Accolade Care customers? Yeah, so I can start. Like, when I think about Accolade Care, I mean, it's basically a super high-quality advanced primary care and mental health practice, right? So if people have a broad range of primary care needs, we can meet them where they are and serve that need. Where I think about the full stack service, it's basically taking that clinical practice and adding population health to it, right? So you have not only the physicians, you have nurse care navigators. You have an NCQA-accredited case management service that actually gets delegated from the plan. You get access to our risk stratification model. So we're not just waiting for someone to have a health need that they identify. We're actually using our data to say, this person actually needs to be in care. And so it's really the difference between, again, like, really high-quality care delivery and sort of population health is how I think about the differences between the two products. Can you give us a sense of just the distribution of those two products across your enterprise installed base? Yeah. So numbers we've given historically. Accolade Care, for quick history, we acquired a company called PlushCare three years ago that at the time was a direct-to-consumer business, still direct-to-consumer, and has grown quite nicely since we acquired them. We launched the enterprise version of that two years ago. And then 2nd.MD, which was our second opinion business, also bought three years ago. So as of last year, we said it was more than 10% of all our membership is covered, has access to Accolade Care. So that's more than a million lives under Accolade Care coverage. Second opinion is a little separate. I'll answer that differently because that's also sold a little differently. But last year, ARR is the number we give every year for bookings. Our bookings last year, more than 80% of all the advocacy bookings included Accolade Care. And then more than 90% of all, or 95% of all the bookings included 2nd.MD. And so we're seeing a really good attach rate for new customers as they come in. And we are also having good install-based upsell. So the attach rate, I'd say right now, north of 10% total lives covered. On the second opinion business, the reason why that number is not as relevant is that's a business which is sold both directly but through health plan partners. And so it's a very high logo count, high volume, high lives count, although less of a utilization, if you will, because it's not necessarily a direct relationship like we have with our advocacy customers. That's helpful. And so just to be clear, when you're talking about the bookings that are attaching to Accolade Care, these are bookings that already have access to the Accolade navigation services or Accolade Advocacy and are adding as components? No, I'm talking about new, so if you're a brand new customer coming in and we're assigning that, it could be someone who's, you know, not a renewal. That wouldn't be part of that ARR number, so a new booking that comes in, an RFP for an advocacy deal, for example, and sometimes that RFP comes in and says, we want primary care, we want second opinion, and sometimes it's in the sales process that our team brings that forward and says, if you're going to do this, you know, is a good chance that 30% of your employees don't have a PCP selected. You know, we're not trying to go replace all of your primary care doctors. We're just giving your employees an easier, accessible option. Yeah. And maybe actually let me jump in on sort of the why, I think, behind the attach rate. I think which is really interesting is, you know, we look at health care broadly, right? You see the shortages of primary care. Like, let's take one specific thing. Let's say you want to reduce hospital readmissions. Maybe five years ago, we'd be able to get you to see your primary care doctor within 48 hours of discharge. Now, a lot of people can't even get a hold of their primary care doctor within 48 hours. So I think that's where customers are saying, wow, if you guys have this advanced primary care practice, we can ensure that every single time someone leaves the hospital, they get to a doctor within 48 hours, which has been proven to reduce readmissions. I think that's a big reason why we're seeing that attach rate so high. OK. I think that that's helpful. Can you kind of help us understand? You, I think, have given us a good sense of the clinical assets. Can you describe the bidirectional data integrations across Accolade's clinical assets, so across 2nd.MD, Plush, Trusted Partner Ecosystem, that kind of allow you to deliver measurable clinical improvements? What exactly is going on behind the scenes? Yeah. Yeah. So I think it's two really important things. I mean, one is sort of closed-loop data exchange, right? So we know that we're not just sending someone to a partner or our own service. We actually know what happens to that member when they're there. And vice versa, we're getting that information fed back to us. Because ultimately, you don't want just a referral. You want someone to actually get access and ultimately drive an outcome. The second thing, which I think is super critical, is we have developed data and technology that allows us to know what member needs what service when. And that part is essential. You think about Netflix, and you know, it recommends the next movie for you. We have this service that essentially, whether you're calling in and there's a bright alert showing up for one of our nurses, whether you're opening up the mobile app, whether you're talking to one of our doctors, it basically prescribes for them what it is that that member needs next for their care, and that's huge. Because I think that level of personalization is what's been missing to sort of crack the sort of engagement nut around all these different ecosystem parts. And so I would imagine that that level of kind of follow-up or clinical, or sorry, technological integration on the back end drives elevated retention or increased retention across both Accolade Care and your Trusted Partner Ecosystem. Is that true? Does that bear out? And are there any kind of key stats that you would flag to us in terms of the retention you're able to generate or anything else that you think the integration is able to drive on the outcome side? Yeah, absolutely. I mean, I think just in terms of pure utilization of those services, we typically see a double-digit increase. Like, we've had customers that have actually had one of those ecosystem partners before having advocacy. Then they add Accolade Advocacy, and we can see what the delta is in pure utilization. And then certainly, when we look at our outcomes, whether it's, you know, avoidance, you know, number of wellness visits, or just total cost of care, we're seeing that it has an impact across those dimensions. So, you kind of mentioned this briefly earlier, but I wanted to focus a little bit on behavioral health. To what extent is behavioral health embedded in Accolade primary care through Accolade Care? And then, just our understanding is that fully- and self-insured employers, too, for the first time, have kind of this heightened compliance burden under the Mental Health Parity Act starting next year. So, can you maybe help investors understand how those increased compliance burdens might be a positive catalyst for Accolade Care if indeed behavioral health is an integrated component? Yeah. I think it's such an important topic. So I think to hit the first part of it, right? So I think what's really critical about our practice is it's employing what we call a Collaborative Care Model. So it's primary care embedded with mental health. And that's not just. That's a model that was developed by the University of Washington decades ago and is really the only mental health model that's consistently been shown to deliver cost savings. So if you look at the market broadly, and there's a lot of standalone mental health companies, and I think they serve a real role, but that improves access, it's never really been proven consistently to deliver cost savings. To have cost savings, you have to have both primary care and mental health sort of under the same roof, actually collaborating on the same platform. So that's sort of the first point. I think the second is, yeah, I mean, mental health, unfortunately, has had a lot of barriers, right? So there's, you know, different copays for mental health versus physical health. There's a limit on the number of visits you can have. I've even had frustrating situations where you actually can't see your primary care doctor and a mental health provider on the same day and charge for them. And so I think all those things create barriers for people to use our service and use the mental health side of what we're doing. And so I'm really optimistic that this kind of legislation is going to be able to remove those barriers and therefore be an accelerator. This is also, I think if I can add one thing there, Shantanu, I think as Accolade went public four years ago and then began to build out a broader set of assets as we bought PlushCare, as we bought 2nd.MD, one thing we recognized was that sort of that navigation sort of 1.0 went to a certain point and stopped, right? We would work with our members and help them understand their benefits and find the doctors. And then we get to the point of actually getting care, and we pass them off, right? And you didn't have that data integration necessarily with the practice, with the psychiatrist, wherever it might be. And so you could kind of track where they gain the right care, but you didn't have that tight integration. And so that's one of the real issues with health care is people will go into these episodes of care, and they may stop, right? They may be broken. There's these sort of interstitial gaps of the data as it flows back and forth. And we knew that by actually extending the role of what advocacy was, right, our nurses, our clinicians actually now touch that point of care more directly, would drive greater adherence to care. Are they taking their medications? Are they getting renewals, et cetera? And so it really was about taking navigation to sort of the next level of what it means to help people understand and access and use the health care system appropriately. That's helpful. So just to be clear, when you mentioned that your practice or that the Accolade primary care practice has embedded behavioral health, what does that mean? Are you employing psychiatrists? Are you employing therapists? Are you dialing them in through, like, some teleconference or video chat method? What exactly is embedded? Yeah. Yeah, really great. Sorry if I missed the basics there. So yeah, so our practice, we have both MD primary care physicians, which is very important, by the way, because primary care physicians, internists, right, we're actually trained in the treatment of mental health. You don't have to always see a mental health specialist in order to get primary care. I take care of a lot of folks with depression and anxiety. So I think that's really important, particularly in a market where so many people are deploying nurse practitioners that don't necessarily have that additional training. And then we have mental health therapists. So that's the primary workforce that we have. And so we're really lucky to have phenomenal therapists. And then we do have a psychiatrist that's available that's more providing a supportive function. And that's actually what the Collaborative Care Model is. The Collaborative Care Model is you keep folks in primary care, you have them have a mental health therapist, but then you have nurses and coaches that are essentially making sure that the member is adhering to their care plan all along the journey. That's that proven model that I was referring to. OK. That's a really helpful. And it's all video based to answer that part of your question. Got it, and so a member who is a member of Accolade Care through an employer or a health plan is able to access mental health services directly, or they need to go through a primary care doc, get a referral, and then get kind of. Directly. OK. Wow. Yep. That's interesting. So I'm curious, have you guys observed elevated demand for Accolade Care in calendar 2024 attributable, do you think, to this Mental Health Parity Act catalyst? And maybe this is a Todd question, but. Yeah, I don't know if I would say the increase in demand for care is true or not. First of all, Accolade Care is so new. We've been selling it for two years. So I think some of the demand is just a natural uptick. And so then, you know, trying to parse that out gets a little harder. You know, mental health is clearly, when you talk to customers, one of the number one priorities they're thinking about. And this is where the discussion begins to engage the CFO suite a little bit more as well, right? I mean, it's sort of like weight management. You start to look at the issues that your members, your employees have, that actually then creates productivity issues. People are going to have to miss work for doctor's appointments or miss extended time for extended leaves or whatnot. They start to recognize that if I can get people the right treatment sooner, right? Number one, it's a better employee experience. Employees recognize that. Like, I want to take care. I want to be healthy, and getting health care is tough. Like, can you take time off of work? Can you see a doctor? Can you find a specialist, et cetera? Can I get an appointment with a psychiatrist, and so demand is up. Mental health is just one of the key drivers of demand across the board for mental health services. So I'm sure there's some underlying element of the Accolade Care model that drives that. But really, the number one selling point for a customer with Accolade Care, when we walk in the door, even if they say, I've got a network already, I don't need more doctors, we'll look at them and say, great, but here's your visit rate. Like, here's the people who can't get in to see their doctors. This is providing you another element. It's not cost you're going to pay per use. You're going to pay per doctor visit the way you do right now. But people have access to care. So when that person comes in now and says, I can't see my PCP for three weeks, I'm going to go to urgent care, this becomes a ride-along. Personally, I have my own PCP that I love. I've seen him for 20 years. And I have an Accolade Care doctor. There's plenty of times where something's happening. I don't need to go wait two weeks. I can go on the phone, get an appointment in 15 minutes or 30 minutes, and see someone. So as customers begin to recognize it's not a replacement of all their PCP network, but essentially a ride-along or an add-on, it becomes a pretty, I don't want to say easy sell. Nothing's ever an easy sell. But the value proposition becomes very clear very quickly. OK. That's helpful. I have a few quick last ones on the enterprise side. And then I do want to move into PlushCare DTC. But just I think you brought something up that's incredibly important. Your PCP, your physical PCP in network, will have access to notes and information gathered by your PlushCare or your Accolade Care PCP and vice versa. Is that an accurate assessment? So So that there is no data. That's correct. Yeah, we share those notes with the health information exchanges, which are available to their brick-and-mortar doctor. Great. OK. That's very helpful. And then just interested to know, you know, how do Accolade's data integrations and the highly technical nature of your solution allow employers to kind of better report on mental health outcomes so that they can address these compliance burdens under the Parity Act? You know, I think this is where we look at what Accolade's been doing for the last 10 years, where, you know, Raj Singh joined the company nine years ago, and one of the first things that we recognized was for this business to grow and scale, we had to really build a data platform that looked at all the information out there in the health care ecosystem and pulled it together in a way that could be actionable by our frontline care teams, by the physicians we work with, et cetera, and so this is an area where I think we don't spend enough time talking about it, to be honest. Like, Accolade's technology platform is really first class ahead of our peer group. We spent a lot of time building out not just the data exchange to be able to consume the information, using AI tools to begin to think about how can we proactively get in front of people's health care. You know, one of the things that Shantanu was one of the builders of was with this thing we called a Clinical Foundation Score. We're looking at, you know, dozens of different data points about members, and it could be their health history, their demographic, their geographic location. Are they in a health care desert and begin to look at someone and say, among all the different data points that will say, what's the right next thing for you to do for your health care? We call it a True Health Action. It's a recommendation for what you should do next. Are we able to look at that and drive? It can be reactive, right? It can be someone who's got 12 maintenance medications for a multiple number of chronic conditions where we can look at that and say, is it possible that when you have 12 maintenance medications, they're probably mostly generics? They're not tripping anybody's wire at a carrier from a cost perspective. But is there a chance that there's some contraindications? You've got some drugs you're taking that actually work against each other. And so are we able to leverage that technology stack and use that innovation to drive a better health care experience, is critical. To the TPE question, our Trusted Partner Ecosystem. This is where we will work with any company. If a customer has a vendor that is not part of our partner ecosystem, we're still going to get the member to that correct partner. However, when we bring someone into the Trusted Partner Ecosystem, there's a number of advantages. Number one, from a vendor selection perspective, we've already done the vetting. So we make the vetting, the selection, the contracting process much easier. More importantly, with those partners, and what we focus on is two to three high-quality companies in each chronic condition, we do a deeper data integration. Shantanu mentioned this idea of closed loop reporting, right, that we can actually look at the member when they go into the partner system, not just throw them over the wall, but track. Are they engaging? Are they using? Are they graduating in and out of the program? How do we pull them back if we have to, and then also the clinical integration. When you send someone to a diabetes program, you send them to a mental health program, that we're not just letting go of them. That we continue to track them both through our nurses and clinicians and our doctors as well. That's helpful. I'm curious, how does Accolade compete with third-party marketplaces and navigation offerings that are kind of endemic to TPA businesses at large national and regional payers? So UHC, for example, has a third-party app marketplace offering the streamlined contracting and data integration as well. We saw it at this purchaser coalition meeting two weeks ago in DC. So I'm curious, just how does Accolade compete with that type of an offering? I can take it if you want, and then we jump in, so I don't think we really view it as competing, so first of all, 2nd.MD is part of those platforms. You know, we get a lot of customers through UnitedHealth, through Aetna, where it's a check the box where someone wants to add it. Our partner ecosystem is, I want to say, a deeper and a different level of integration there. You know, a marketplace where you can just select a service doesn't mean you're saying, I'm going to engage and promote that to my employees. It's making a benefit available, and there's value in that, right? But if you think this is almost the challenge that companies had for the last 10 years, which is I'm providing all these benefits. Look at the list of things I offer, and no one uses them, right? So actually, when we're talking to a company who's thinking about an advocacy platform, because to use one of our trusted partners, you're going to be an advocacy customer. What you're saying is, I'm buying Virta. I'm buying Sword. I'm buying Lyra. And I know now that I have this frontline care team that Accolade provides, which is going to actually get people to those providers if they need that kind of care. And so I don't think we view ourselves as a competitor to the health care marketplace, as you see from the carriers. I think if that's the model of customers choosing to add benefits, that's fine. If someone is using that TPA and they're offering a service through one of those platforms, if they're also an advocacy customer, we're doing the same job, which is to get members to those services. So I don't know if there's anything you'd add to that. No, I think the main thing I would say is I think the huge difference is the outcomes, right? I mean, you know, if you ever open up a benefit page and you just see a bunch of logos on a screen, I mean, that's not, I think, going to solve the health care problem, right? People need to ultimately engage with those things. They need to actually complete those services. They actually need to get to the clinical outcomes to get savings, and I think just more websites and tools isn't necessarily going to accomplish that. OK. That's helpful. Last one on the enterprise side. What types of outcomes or ROIs are employers and payers looking for in the calendar 2025 purchasing cycle? Do purchasers care about anything except cost trend guarantees? And what is your perspective on cost trend guarantees? What do you think the Accolade model is able to produce on a kind of annual basis? Or what are you capable of underwriting? Yeah, I mean, I think first of all, I think what we're seeing just generally across the market the last couple of years is a lot more discernment about hard dollar savings, right? I think there was a little bit of a moment maybe a few years ago we had this sort of irrational exuberance of, hey, there's all these really great ideas out there. And what we're seeing from customers are saying, but now we're sort of in an approve-me state. Like, we have to actually have hard outcomes that are demonstrable. And they're really trying to say, we need to pull back on the number of vendors we have. And I think that's been really positive for Accolade because we have multiple published studies of our outcomes. We have, obviously, the whole methodology we use to calculate cost savings. In terms of where it comes from, it's really from every single part of the health care journey, right? I mean, it's people that, you know, on a Saturday end up in the emergency room. By offering them just-in-time primary care, we avoid that, right? It's the case management that we offer for folks that are high-cost claimants. It's the second opinions for people that are about to get a surgery that they may not need. And there's actually a better alternative for them. So we see savings really across the board, which is helpful because our employees are very diverse. And so that means that we're able to consistently generate those cost savings, regardless if it's a young population, older population, this state, national, distributed. We see that pretty consistently. I'll add one thing. I see the timer, have to go out real quickly. On those PGs, the mix of PGs that are savings-based versus customer satisfaction versus engagement hasn't really changed very much. There'll always be some outliers, really large customers who want, you know, a special focus on cost savings, for example, but that focus has always been there. What's really important, we've seen this in the day that Accolade was founded, was if you want to drive those cost savings, you have to have high engagement and you have to have high customer satisfaction. You know, if you're not doing that, there's a lot of digital navigation tools out there, and their engagement is less than 10%, and so they invest in these sort of cheap and cheerful solutions. They don't get the outcomes they want. What we've recognized is if you're going to drive cost savings, that means engaging people in their health care, so we commit to engaging more than 50%. We actually engage with about 70% of all the populations that we work with, and then customer satisfaction. It's not just enough to say, I took your phone call. The carriers take your phone call, and their NPS scores are single digits or less. You know, we have NPS scores of over 60 for advocacy within our care business, PlushCare, over 90 within our second opinion business, over 90 NPS. So you have to not only touch the customer, whether it's digitally, whether it's the phone, what it might be, it has to be an experience that makes them feel, that was a good experience. I trust Accolade. I'll come back, and so it's not just about the savings. If you don't do the first two, you're going to have a hard time hitting that third guarantee as well. OK. Got it, and so the mix is the same as the general message, but just that these more qualitative outcomes are actually what's driving your achievement against the cost savings benchmark. Correct. Great. I think that's maybe a good place for us to wrap it. Thank you very much, Shantanu and Todd. This has been wonderful. Thanks, Shant. Thank you.