Good afternoon. I would like to welcome you all to the agilon health Fourth Quarter 2023 Earnings Conference Call. My name is Erica, and I will be your moderator for today. All lines are on mute for the presentation portion of the call, with an opportunity for questions and answers at the end. If you would like to ask a question and you have dialed in on the phone, please press Star followed by one on your touch phone keypad. I would now like to pass the conference over to your host, Matt Gillmor, Vice President of Investor Relations, to begin. So Matt, please go ahead. Thank you, operator. Good afternoon, and welcome to the call. With me is our CEO, Steve Sell, and our CFO, Tim Bensley. Following our prepared remarks, we will conduct a Q&A session. Before we begin, I'd like to remind you that our remarks and responses to questions may include forward-looking statements. Actual results may differ materially from those stated or implied by forward-looking statements due to risks and uncertainties associated with our business. These risks and uncertainties are discussed in our SEC filings. Please note that we assume no obligation to update any forward-looking statements. Additionally, certain financial measures we will discuss in this call are non-GAAP financial measures. We believe that providing these measures helps investors gain a better and more complete understanding of our financial results and is consistent with how management views our financial results. A reconciliation of these non-GAAP financial measures to the most comparable GAAP measure is available in the earnings press release and Form 8-K filed with the SEC. Please note that Steve and Tim will be referencing a slide deck posted to our investor relations website during their prepared remarks. With that, let me turn things over to Steve. Thanks, Matt. Good afternoon, and thank you for joining us. On today's call, I would like to walk you through the following elements: Our final results for Q4 2023, our updated guidance for 2024, an update on our member and market unit economics, a progress update on our 2024 performance action plan, and finally, our growth outlook for the class of 2025. Before I get into the quarter, let me provide some context. agilon and the Medicare Advantage industry are navigating through a complex transition period, and we are taking significant steps to help mitigate the impact of this evolving environment on our business, including strengthening our reserves, as well as focusing on the targeted actions we outlined in early January. While the near term dynamics are negatively affecting our financial results, demand for our platform has never been stronger as we continue to deliver significant value to patients, payers, and our PCP partners. The underlying fundamentals of our business model remain intact, reflected in member economics, member growth, quality outcomes, and physician NPS scores, and we are well positioned to accelerate performance over the medium and long term. Let's now turn to the quarter. Our medical margins for the fourth quarter in 2023 were $51 million below the midpoint of the guidance range we provided in early January. This was driven by $38 million from costs and revenue attributable to the fourth quarter and $13 million of development attributable to previous periods. Relative to our guidance from January, the higher costs in our final 2023 results were driven by two factors. First, as we completed our financial closing process in February, we received updated data, including relatively complete claims data from our largest payers, as well as additional information such as seasonality factors and census data, completed our analysis of this data in mid-February, which indicated that medical costs for our members were higher than our previous estimate for 2023. Second, in light of this new information and the dynamic utilization environment, we have strengthened our reserves as we close 2023. Our team developed a range of reserve scenarios, and we reserved at the high end of our estimates. That the completion factor assumptions used in our 2023 close are significantly lower compared to the actual completion factors from 2022. We believe this is a prudent approach given the environment, and expect to carry this forward. Turning to the 2024 guide, we have also lowered our 2024 medical margin guidance by $155 million - $425 million at the midpoint and lowered our 2024 adjusted EBITDA guidance by $87 million to -$38 million at the midpoint. Our updated guidance assumes the $38 million medical margin shortfall attributed to the fourth quarter 2023 is not seasonal and will persist into 2024. It should be noted that our revised guidance assumes a gross cost trend of 7.9%, less the impact of our strategic action items and a net cost trend of approximately 6.6% in 2024. This is 250 basis points above our prior 2024 expectation and on top of the 7% medical cost trend we observed in 2023. Despite our higher utilization assumption, we expect to grow our medical margin by 40% in 2024 and drive meaningful gains in adjusted EBITDA. As I noted before, agilon and the Medicare Advantage industry are navigating a challenging transition period during 2023 and 2024. Healthcare costs among the senior population are rising faster than contemplated in CMS benchmarks and plan bids, which may be driven by post-COVID pent-up demand. We do think it's important to recognize a few things. First, Medicare Advantage has a relatively short repricing cycle, and the program is designed to adjust to changes in utilization. Over the next 12-24 months, we expect CMS benchmarks will reset to reflect the rise in utilization, and many of our health plan partners will adjust bids and benefits to recapture margins. We expect this repricing cycle will benefit our financial performance in future periods. Second, we have a strong balance sheet, with approximately $500 million in cash and short-term investments. Even with the further moderation in our 2023 performance and 2024 outlook, we have significant resources to support our growth and ongoing actions to drive performance. Now to a refreshed view on the unit economics of our business, as outlined in the slide presentation on our investor relations website. For this commentary, I'll be referencing slides nine through 13 of the deck. As we have consistently shared, our business model is driven by member growth and the ongoing maturation of member and market cohorts. While the macro environment has clearly impacted our overall unit economics in 2023, there are some very important takeaways from the data. First, as we show you on page 10, despite the negative 2023 utilization environment, our members that came on the platform from 2018 - 2020 are sustaining medical margin performance at attractive levels of roughly $150 per member per month. Our 2021 and 2022 member cohorts are showing positive margin progression. By comparison, our 2023 member cohort, representing approximately one-third of our membership, shows the impact of higher utilization and starts off at $25 per member per month. Second, as we show you on page 11, while we have repeatedly talked about our member and PCP growth and its impact on margin progression, we are separating out the impact of compounded mid to upper teen same-store growth on the performance of our market cohorts. What the data shows is that our three earliest market classes, with annual growth rates of 12%-24%, have seen between a $36-$86 per member per month reduction in medical margin due to new member dilution. This is not dissimilar from the impact that new markets have on the platform, as they also take time to mature as risk adjustment and our medical cost management levers improve. Said differently, our strong same-store growth has created an embedded opportunity in our earliest markets to focus on new doctors and their senior patients to drive performance of those markets. This data aligns well with our 2024 performance action plan as it is fully within our control. Finally, our growth algorithm of growing markets, growing members, and growing medical margins remains intact, albeit with a more measured and narrowed focus, given the macro environment and its impact on our results. Pivoting to our performance action plan that we discussed with you in early January. We continue to make progress against our plan, which will position us to accelerate our path to profitability and cash flow generation. As a reminder, our plan includes the following four elements. One, expanding support for primary care doctors joining the platform in mature markets. Two, leveraging our strong payer relationships. Three, addressing our data visibility gaps. And Four, boosting our operating efficiency. Today, I wanted to provide you a brief update on our progress. Let's start with PCP onboarding and education. As a reminder, we provide structured training to primary care doctors during our implementation process with new groups, but we historically have not provided the same training to new physicians joining veteran practices. As outlined in our newly released cohort data, the strong same-store growth with doctors joining the platform in our earliest markets has created variation in these new physicians' understanding and performance in our partnerships. We are on track to deploy this training to 90% of the doctors in our targeted mature markets during the first half of 2024. We expect these efforts will improve our BOI performance and clinical program enrollment in the back half of the year, supporting our financial performance in 2025 and beyond. Next, payer strategy. We have been encouraged with the dialogue and level of engagement with our payer partners in recent weeks. As many of you know, we partner with leading physician groups that typically represent 20%-30% of the independent primary care capacity within each local community. Payers rely on our partners to offer a comprehensive network and benefit and our consistent track record of quality and cost performance. From a visibility standpoint, we are now receiving detailed data for supplemental benefits from most of our large national and regional payers. We believe this will enable agilon to understand and better forecast these costs, which was a source of volatility in 2023. Additionally, we have been able to negotiate targeted changes in our percentage of premium rates in key markets. This reflects that payers want to partner effectively with agilon and our groups over the long term. We expect to make continued progress, deepening our engagement with payers during 2024 and for 2025. For data visibility, this month, we began onboarding data from our largest payer into our new financial data pipeline, and we will begin ingesting data from other large payers over the next several months. We expect to onboard data for over 55% of our membership during the first quarter and 75% of our membership during the second quarter. This data pipeline will enable our internal teams to process and analyze payer data faster and with much more detail, which will improve our forecasting and operations. We are also expanding the use of the Minerva platform we acquired in 2023 to support clinical program enrollment, and we will better leverage HIE and ADT data to impact transitions of care. Final area of focus is operating efficiency. We have taken targeted actions to reduce our platform support to 3% of revenue in 2024. Additionally, we have reduced our geographic entry costs by $10 million in our updated 2024 guidance to reflect a measured approach to our growth. Now let's turn to growth with the class of 2025. Given the current environment, we are taking a measured approach to our growth. This is reflected in the quality of groups we are bringing on the platform and the longer implementation cycle we have been able to achieve in recent years. I'm pleased to share that the class of 2025 new partners will include at least five groups with more than 60,000 new MA members. This will expand our network to include 36 physician groups and 3,000 primary care doctors. And as I mentioned, we have lowered our geographic entry cost to a range of $55 million-$65 million, which is down from our prior 2024 estimate of approximately $70 million. It's important to note that this lower range still contemplates the potential for additional senior patients in the class of 2025 to come on the platform or for incremental onboarding costs associated with the class of 2026. In closing, I want to offer three important takeaways. First, agilon is navigating through a transition period for our company and the Medicare Advantage industry. Medical costs are temporarily outpacing revenue benchmarks during 2023 and 2024. agilon and the industry, including CMS and our health plan partners, will adjust to this new environment, supporting our ability to return to a more normalized margin trajectory over time. Second, we are taking significant actions to improve our performance against this dynamic environment. From a forecasting perspective, this is reflected in the significant strengthening of our reserves exiting 2023 and our reset guidance for 2024, that assumes recent utilization remains elevated. From an operating perspective, we are executing against the action plan we have outlined with a focus on best-in-class execution on factors we can directly control. Third, and finally, our business model is working. Demand for our platform has never been stronger, and we are delivering significant value to patients, payers, and our PCP partners, even in a difficult environment. This is reflected in the updated member cohort information we have shared, which is translating into significant economics to our PCP partners, reinvestment into local primary care, and our ability to drive consistent improvement in quality measures across our network. We remain confident in the strength of our platform and physician network, as well as the long-term opportunity for agilon. With that, let me turn the call over to Tim for his comments. Thanks, Steve, and good afternoon. I'll cover two items before we go into Q&A. First, additional details on our 2024 guidance. Second, balance sheet and cash flow expectations. I'll reference several of the slides during my comments. Starting with guidance details. You can see our updated projections for 2024 medical margin on slide five of the presentation. We now expect our medical margins to be in the range of $400 million-$450 million in 2024, which compares to our prior guidance midpoint of $580 million. The primary drivers of the change includes, first, the lower starting point in 2023 medical margins, which Steve addressed. Second, our assumption that higher costs from 2023 will carry forward into 2024, including a reduced outlook for the class of 2024. Third, a partial offset from higher revenue associated with stronger performance and our burden of illness documentation efforts as we close 2023. We are now assuming a cost trend of 6.6% for 2024, which is 250 basis points over our previous 4.1% assumption. I wanted to note that these are net all-in trends after the impact from our clinical programs. Our gross trend assumption for 2024, excluding these programs, is now 7.9%, compared to 5.3% previously, and it's in line with the trend we observed in the fourth quarter, 2023. On slide six, I wanted to call out some of the Adjusted EBITDA dynamics that impacted our 2023 results and how those dynamics work in 2024. During 2023, the relatively modest growth we generated in medical margins of $8 million created negative leverage to our consolidated adjusted EBITDA. This was due to the prior year development we recorded in 2023, which lowered our medical margin. Additionally, we had a handful of markets in an EBITDA loss position, including several markets from the class of 2023. Because of this, we had higher operating expense growth relative to medical margin growth. For 2024, we expect this dynamic will reverse, with medical margin growth driving more flow through to adjusted EBITDA. One key dynamic is that we expect the class of 2024 will be profitable from a market EBITDA perspective, and we don't expect prior year development to recur. From a balance sheet perspective, as Steve mentioned, we have approximately $500 million of cash and investments and minimal debt. Our available cash and investments include $495 million that is consolidated on our balance sheet and another $21 million of off-balance sheet cash associated with our ACO REACH entities. Based on our updated guidance, we expect to use $125 million-$150 million of cash during 2024. For reference, our cash flow realization is offset from our medical margin and adjusted EBITDA performance by about 12 months because of the timing of our settlements with payers. Based on this, our 2024 guidance would result in 2025 use of cash of about $25 million, with an expectation of positive cash flow in 2026 and beyond. With that, operator, we are ready to take questions. Thank you. If you would like to ask a question during the Q&A session, please press star followed by one on your telephone keypad. If you change your mind at any time, please press star then two. We will pause for a moment. We have the first question on the phone lines from Lisa Gill of JP Morgan. Your line is open, Lisa. What are your overall views on, you know, when we think about utilization trends, it seemed that, you know, in some of your comments that maybe you think some of this is pent-up demand, or is this the new normal, and you feel that ultimately CMS and the health plans will adjust to this new normal when we think about bids? So that would be my first question. I just want to understand how you're looking at the current environment as to whether you think this is the new normal, or you think there's some level of pent-up demand. Lisa, thanks for the question. I guess I'd start by saying I think we're operating in a very dynamic utilization environment, and what we've communicated today sort of tries to demonstrate the respect for that environment. We obviously have seen an acceleration in trend in Q4, stepping up to a Q4 trend level of 7.7%. Our assumption into 2024 is that utilization continues at that level. And so we see it persisting. In looking at the data that Tim talked about, we didn't see a tremendous set of seasonality within that, but concluded that this will persist, and that's been reflected within our guidance for 2024. We do expect, as we said, that benchmarks will catch up with this. We'll see what the final notice looks like when we get that later in Q2. And we have been encouraged, as we've talked with some of our plan partners about their plans for 2025 in terms of their bids, and specifically that they will be focused on bidding for margin. And that's obviously material as it flows through to us. So our belief is that it is ongoing, and it's going to be at this elevated level at least through 2024. Then if I just think of some of the elements in the 2024 guidance, I just want to better understand, you know, the impact of V28, the Two- Midnight Rule, and then the comments that you made around supplemental benefits. So, is, is the comment around supplemental benefits that you have less risk around some of the supplemental benefits based on negotiations with managed care? If you can just help me to understand those three, that'd be great. Thanks. Sure. Our revenue guidance for the year includes the impact of V28, which has that rough 2% impact we've talked about, offset by our actions and the other elements in revenue. The Two- Midnight Rule is factored into our inpatient assumption in 2024 and is part of that trend that Tim and I laid out for you in 2024. Then supplemental benefits, as we look at the relative change from 2023 - 2024 across the mix of our payers, we do not see nearly as great an escalation as we saw 2023 over 2022. Our payer conversations right now are focused on our ability to mitigate those things we can't control, like supplemental benefits, whether that's through a carve-out, whether that's through a corridor or capping that. So it's a combination of those things, Lisa. Tim, anything you'd add to that? I think that's right, right on. And by the way- Great. So we are. Yep, go ahead. No, no, you go ahead. I, I said no, that that's great. Go ahead. No, I was just going to say, just to tag on, just to quantify the supplemental benefit issue, we do expect it to be like a slight headwind in 2024- Yeah - over 20 basis points or so, but, you know, that's coming off a very big headwind that we had in 2023, so. Okay. I appreciate the comment. Thank you. We now have the next question from Justin Lake of Wolfe Research. You may proceed with your question. Thanks. Wanted to first kind of go through this bridge that you laid out for us, today versus the January fifth, specifically on the medical cost side. So you have $250 million a year of medical costs, PMPM, kind of, you know, headwind, versus $141 million before. So you had $38 million of incremental new costs in the fourth quarter, is the way to think about it? And did you just multiply that by another three quarters to annualize it, to kind of drive that delta? Yeah, yeah, Justin- Is that what I'm looking at here for [audio distortion]? Yeah, that's a great question, and I think the change of $38 million is total medical margin. We had a little bit of incremental revenue. I think the full change, so the way we look at it is, we essentially went into the fourth quarter looking at all the things that Steve just went through, and how we essentially have been refining our process and making sure that we get to a number that we feel is, we're gonna be adequately reserved for the end of the year. We actually added $68 million of medical expense to our final close, versus what we were guiding to in early January. Of that $68 million, about $13 million of it is actually for some incremental membership that we realized, so we've added about $55 million of actual cost to our reserves. To get to your point, and I think you were pretty close to the number, in the fourth quarter, we added about $40 million of that $55 million, with the other $15 million in the previous quarters. That $40 million incremental, that total incremental, with the $40 million going into the fourth quarter, leaves us with a trend on base medical expense that is accelerating in the fourth quarter, and Steve talked about some of these numbers. Our full year base medical trends are without, without supplemental benefits, is 7% now for 2023 for the full year. The fourth quarter accelerated to about 7.7% for the full year. We've taken that 7.7% base medical expense and essentially assumed that, slightly higher than that, for our full year, for our full year 2024. Essentially, yes, we've taken that fourth quarter step up and flowed that through into 2024 guide. Okay, and then just a couple things on trend. One, you know, can you tell us, you know, some of the breakdown here of what you're seeing specifically, you know, one of the companies is out there talking about inpatient and, you know, seeing some pickup in short stays even before the Two- Midnight Rule. What are you assuming for that? I don't know if you gave an answer to that question that Lisa asked on the Two- Midnight Rule specifically. What is, you know, what is the impact that you're assuming there? You know, maybe you could tell us the pickup in short stays, you know, versus total admissions, like, how much pressure does that put on total admissions? Then lastly, on ACO REACH, you know, there was, there's been some discussion that CMS is seeing trends higher in the fourth quarter, and they've, they've kind of talked to the ACO REACH plans about that. Can you give us some numbers there in terms of how much trend CMS is, is reporting in the fee-for-service program, in the fourth quarter versus, you know, what they've seen year to date to kind of maybe measure that pickup versus MA? Thanks, guys. Sure. So I'll take the first one, and you take the ACO. So Justin, in terms of trend, we are seeing some step up in terms of inpatient medical. It is in line with what we considered within that overall trend. And the Two-Day Rule is definitely contributing to that, but it's still in line with what we've laid out for Q1 and within the full year. The other categories that we are seeing, you know, stepping up is the ones that we've talked about before, which is the surgeries, principally in the outpatient side, but also seeing some inpatient surgery. A lot of that was in Q4. Some may have been driven by exhausting maximum out-of-pocket and some just sort of induced utilization around that, but also specialty costs in Part B drug. Yeah, and just on the ACO REACH side, we are also seeing an acceleration in our ACO REACH numbers in claims expense in the fourth quarter, similar to what we're seeing on the MA side, so that's certainly coming through our numbers. The one thing that I think part of your question is, it's a little bit different in ACO REACH. As those claims increase, that will actually go into the final calculation for the retro trend adjustment. So, you know, as overall Medicare fee-for-service claims are going up or costs are going up, the revenue will adjust up as well. And that's allowed us, from our perspective, to pretty much hold, and we've booked our final ACO REACH close, pretty much in line with where we had guided. The full year national ACO REACH, Justin, is at 6.8%, and our performance came in at 2.7%, so we beat that national benchmark by 410 basis points. That 6.8% on the national trend is pretty similar to what we're seeing for the full year on the MA side. So it's what I was referring to. Yeah. Was there a pickup there in the fourth quarter? Did CMS come to you and say, "You know, we're revising that number up? CMS doesn't come to us and say that. [audio distortion]. They just give us the claims data, and they give us the Medicare fee-for-service reference population data on a monthly basis. Okay. I'll follow up off line. Thanks, guys. Thanks, Justin. Thank you. We now have a question from Ryan Daniels with William Blair. Hey, guys. Thanks for taking the questions. Let me start with the big picture one, just on your relationship with your managed care payers. Given some of the headwinds you're seeing, I know you've talked about, you know, getting better data feeds and maybe restructuring some of the contracts. One of your peers today actually moved down the risk adjustment, or risk scale, I should say, to do some partial risk and move away from full capitation. I'm curious if you've debated internally if that's a strategy you'd consider pursuing, or if you're just gonna kind of stick with it through the storm here, given the trends you see longer term in the business and the cohorts? Yeah, Ryan, no, listen, I really appreciate the question, and we obviously are in a volatile environment, as we've talked about. I think we believe the future is value-based care and full risk value-based care. I think we've building a differentiated model, and it made significant investments at the market and the platform to make that a reality, and I think we've got lots of data points like the one I just shared on ACO REACH, or locally with our payers, that we can outperform that fee-for-service environment. But specifically to your question, I think we're in this transition period in terms of MA funding and plan bids, and we're doing it against a backdrop of an elevated utilization environment. And so what we're doing is we're actively tuning our payer economics and our risk sharing. That, we're doing that two ways. One is in terms of an increased percentage of premium for capitated business that we've got, and we've been able to have some success around that. We've got more conversations actively going. And the second is reducing our exposure for elements that are really out of our control. So supplemental benefits, star scores outside of the ones that we control around that, or just aggressive bids that lead to far higher utilization assumptions than were laid out from an actuarial perspective. And so that tuning, Ryan, gets reflected in a variety of ways. But I think that's the way we're looking at it. I think our payers are looking for us to do more. We're just looking for an economic and a risk-sharing arrangement that sort of balances the environment. Okay. It makes sense and super helpful color. And then I'm curious, based on that commentary, especially about, you know, reducing your exposure to things that are outside of your control, which I think is noteworthy, how receptive are the payers to this? Do they kind of appreciate that, yeah, you shouldn't be penalized for, you know, these things that you can't control, and we're looking for you for other value adds so that they're willing to negotiate? And how big of a piece of your book of MA business has gone through that level of negotiation? Thanks. So, so to date, we're relatively early in that. We have had some success across some very key markets, across a couple of payers. We've got it going with, with many payers right now, Ryan. I would say the value that we provide is very evident to these payers, particularly in this utilization environment, and they wanna have a strong primary care supply chain, and our groups represent the, the largest and sort of most prestigious groups within their communities, and so it's very important. So that is factored into our discussion, and we'll, we'll give you an update on, on the next call in terms of how that's progressing, but I think we're, we're pretty optimistic. Okay. Thank you for the comments. Thank you. We now have Jailendra Singh of Truist Securities. Your line is open. Hey, guys. How you doing? This is Eduardo on for Jailendra. Thanks for the question. Hey, Eduardo. Just on the bridge, it looks like the class of 2024 medical margin declined more than the total medical margin, relative to your January expectations. Is there anything that you're seeing which makes, I guess, you more cautious on the class of 2024 versus the rest of the book? So the class of 2024 assumption reflects the full step up in the utilization trend that we talked about across the entire book. I think it drops from $76 PMPM - $52 PMPM, is the math on that change. So that is the- what's driving the change that you see there. And then just on the, I guess, the gross medical cost trend, impact being 7.9% versus the net being 6.6%, you know, that rough math sort of points to the clinical programs having a roughly $50 million impact on your year two plus lives in 2024. I guess, first, does that sound right? And can you discuss, I guess, which programs you see being the largest contributors to this trend benefit? Yeah, the math is right on. We think that, you know, there's a little bit of supplemental benefit headwind in those numbers as well, but the overall value of those clinical programs for us should be about 100 basis points in 2024. And Eduardo, what I would say is all of our clinical programs, palliative, renal, high-risk management, are focused on reducing unnecessary ER and inpatient visits. We had really good success in 2023 with those, with at inpatient medical down 2%, which is far better than, sort of what we've seen nationally. And I think we're expanding those to more markets and enrolling more patients in those programs based on a more accurate assessment. So those are the things that are giving us the confidence around the numbers you just laid out. Thanks. Thank you. We now have Whit Mayo of Lee rink Partners. Hey, I think just one clarification, a lot of numbers. What was the actual cost trend for the full year in 2023? I hear 7.7 for the fourth quarter and close to eight for the gross trend this year, but how does it compare yet to the full year? For 2023, Whit? Yeah, yeah, yeah. Yeah, absolutely. So our base claims trend, so this is without, supplemental benefits all in for the full year. We're now, with the incremental reserves that we booked, will be 7%. So our 2023 full year trend was 7%, and then the fourth quarter accelerated to 7.7%. If you include the supplemental benefit effect, the non-medical, that 7.0 that Tim talked about, Whit, goes up to 8.2% for 2023. Okay. Just remind me, the% of your claims that you've completely settled at this point for 2023. Yeah. So right now, but it's, it's a great question because one of the things that we did when we went in and, and went through all this process to make sure that we're adequately reserved for the full year, is we compared what our assumption is right now for full year completion rate to what it would have been for the same group of markets. So year two plus markets back, knowing now what we know for our full final costs in 2022, what it should have been in 2022. Last year, at this point, our completion rate with December pays and final full year incurred, what the real costs were, would have been at a completion rate of about 76.5%. We're assuming a completion rate right now on an apples-to-apples basis of about 75%. So, you know, we would have assumed that, you know, we're about 150 basis points more conservative. But in the meantime, now, between then and now actually closing, we've been able to see our January pace as well. So a whole another month of data, which is actually two more months of data than we had when we guided in early January, and we're just up over 80% complete. Okay. Whit, in- One, one last- Sorry, go ahead. No, go ahead, Steve. Well, I just was gonna give the context of, in the assessment we talked about receiving in February, doing the analysis from some of our largest national payers that are more complete than the composite that Tim talked about. But also in that, were updated seasonality factors and census data, because the world is moving for everyone, and so that was all incorporated into the scenarios that we talked about and ultimately where we landed on that, that most conservative scenario. Sorry, one last quick one. Just the change in the geographical entry costs this year, I thought that was largely a set rate for physician, you know, compensation ahead of the future implementa-- What really changed there? Yeah, so it's really one of the largest parts of our geographic entry costs are the incentives that we pay to physicians in year zero to complete their annual wellness visits. And the higher completion rate we get, obviously, the better that is for us because it allows us to, you know, have a positive impact on next year's revenue, as well as do a better job of getting our members enrolled in all of these clinical programs we're talking about. We actually finished the year at a much stronger rate than we had been projecting, particularly in a couple of large markets, and that drove our 2023 number up. Of course, in 2024, that number will be lower, because of the size of the class of 2025 compared to 2024. Okay, thanks. Thank you. Our next question comes from Elizabeth Anderson of Evercore ISI. Hi, guys. Thanks so much for the question. Appreciate all the additional color on what you're seeing in the data visibility. I remember a couple of weeks ago, you were talking about some of your, sort of, percent completion, you know, for the 2Q, for 3Q, for 4Q in terms of data visibility. Can you kind of give us an update on sort of- I don't know whether it's changed since the beginning of January in terms of that or sort of where your expectations of where you'll be, say, at the end of 2024? Thanks. You're talking about the financial data pipeline? So, so the financial data pipeline, Elizabeth, that I talked about in my remarks that we're standing up this year, we are receiving claims already from our largest payer, and we'll have many more of our largest payers. Talked about in Q1, that'll be north of 50% of our members will be covered within that, and by Q2, we'll have 75% of those based on our seven largest national payers. What that does for us is it gives us the ability to really have a very consistent data set across three-quarters of our members. It allows us to be faster with it, and to be far more detailed at the cost of care category level than we have been able to historically, because you're kind of wrestling very different data sets. So it effectively becomes our data set that as soon as it's updated, we have that ability to just move with it that much more rapidly. I think that's what you're referencing is where we're at on that progression, and we're on track and encouraged by that. That will be a component as we come back and start talking to you in future calls on, you know, the assessments we're making. Got it. That's super helpful. Thank you. Thank you. We now have Sean Dodge of RBC Capital Markets. Your line is now open. Yeah, thanks. For the class of 2025, if we look at the composition of that, can you kind of help us compare and contrast that to the 2024 class? You know, should we think about this being a group that also launches with relatively strong year one medical margins? Or will these, you know, again, given the composition, should we think about this being more like the 2023 class? So we, thanks, Sean, for the question. We have a really strong class of 2025. Very excited to be implementing them right now. As I said, it's at least five groups and 60,000 senior patients, and it will be at least one new state for us. You know, if you think about it in sort of comparison to the class of 2023 and 2024, you're gonna see a greater concentration of these new groups in existing states and markets than what we've seen. We think that's really prudent. You're able to leverage existing contracts, clinical programs, infrastructure around that. So that, that helps a lot. It is also, in contrast to, like, the class of 2023 and 2024, it's less diverse. You've got more sort of multi-specialty groups and, and primary care and not as many different types of groups within those. And then, as we just talked about, kind of the geo entry costs really account for the potential for more membership than that 60,000 I talked about in the class of 2025, or in longer implementation cycles for the class of 2026, so some early onboarding costs for that. So that's sort of the complexion of that group, and we'll be sharing details on each one of these groups here in the coming period. Okay, and maybe just quickly on that last point. Should we think about this being kind of what the class of 25 ends up looking like? Is it prudent, given kind of the backdrop, to pause here or just be a lot more selective in who you're including? Or do you think 25 could continue to grow? Well, I, I think so. So 25 is that we said at least, right? So five groups and 60,000. So there is the potential for that to grow. I do think we're very prudent in terms of, in particular, our payer contracts. Now, this class is in the footprint that we sit in today, so you're able to leverage a lot of existing footprints, so there's probably not as much of a dynamic on that. But a big part of this is sort of the, the pull-through on, on these groups. But that's, that's sort of where we're at right now, at least five groups, at least, at least 60,000. Okay, great. Thanks again. We now have Stephen Baxter of Wells Fargo on the line. Yeah. Hey, thanks. So I just wanted to ask, you know, at this point, as you look back at sort of the cohort progressions, especially the older cohorts, has there been anything that structurally changes your view of the company's ability to get back to these economics over time? I mean, one thing that we've been thinking about is that, you know, on the health plan side, they have two levers to really deal with this. First, they have kind of the repricing, but then they're also seemingly cutting a lot of corporate overhead, so they might not even be necessarily getting back to the same medical margins that they would have had on a pre-COVID basis. As we sort of think about it, just wondering if you could provide some thoughts around, you know, the potential achievability of those economics and I guess what looks like it'll be a pretty different environment going forward. Thanks. Yeah, Stephen. I mean, it definitely is a dynamic environment, and you've got the elevated utilization. I appreciate you're asking about the cohort data. I mean, I think clearly elevated costs impacted the member cohorts and the market cohorts that are in the deck that's on the investor website. I think we're encouraged when you look at the member cohort data, which is basically members that came on in 2018, kinda how they're performing across time, 2019, same thing. If you look at the classes of 2018, 2019, and 2020, they are progressing or sustaining near $150 PMPM. That's on the low side, but we've talked about that $150-$200 is sort of where we're shooting for, and obviously, we've got some that are north above that. The market class data, what we've shown you for the first time within that, is the impact of dilution from mid-teen same-store growth year in, year out. And so it's very impactful in terms of what you're able to drive across those markets. And our action plans are focused on, you know, we've added 400 providers and 100,000 MA members since the initial year one. Those are dragging those markets. So you see a $36 PMPM impact in the market class of 18, an $86 PMPM impact in the class of 19, and a $44 PMPM impact in the class of 20. Those are dragging those market numbers that you see on the next page. And so our opportunity is, in that action plan I talked about, around addressing PCP variability. How do we focus on those new doctors? How do we focus on those new patients? How do we get them more educated and understanding sort of the elements of the value-based care model, and really what's available to them within the care team to drive that improvement? We see that as a major opportunity for us to drive those up. And so I, I think we believe based on 2018, 2019, and 2020, you can get members to that level, and with markets, we've got to be able to accelerate and drive that cohort maturation for those newer members and newer PCPs at the same level. So that, that's kind of how we're thinking about it. That's a lever we can control. You've talked about levers outside of our control, like how plans file their bids and their benefits. We are encouraged based on what we're hearing around that and how they're thinking about 2025. That would obviously flow through dollar for dollar to us. That's part of that payer economics and risk-sharing discussion that I talked about. Then there's obviously what will happen from a benchmark perspective and how much of this accelerated utilization will be captured within that. We think we're in this 2-year cycle. We think those elements should improve the spread, 2025, 2026, 2027, but we're really focused on what we can control, and we see this variability with newer doctors and with newer members as a great opportunity for us. Okay. Thank you for the color. Sure. We now have George Hill of Deutsche Bank on the line. Yeah, thanks for taking the question, guys. And Steve, this is kind of like a big-picture question for you, which you talked about some of your health plan partners bidding for margin for five. But there's kind of guardrails around what they can do, right? Based upon what the final rate notice looks like, the TBC, how close they want to bid to the benchmark, and impact the rebate levels and things like that. So I'm wondering kind of from where you sit, what do you think about the margin expansion potential in 2025? And kind of like, like, I'm gonna kind of use that as the proxy. What can that look like for you, for you guys? Because some of your health plan partners talked about, like, needing to increase margin, you know, low double-digit $ per member per month as you look out to 2025. I'd be interested to hear how you think about those moving pieces at a big picture level. I think the math is, if you do a $10 PMPM adjustment in terms of a bid across 500,000 seniors in MA, I think it's an annual number of $60 million, right? So that, if you talk about low double digits, that gives you, you know, the ability to sort of dimension what that could look like. And that's one element of this, George. And so I think we've had conversations with people. Some people are thinking more than that. Some people, you know, I think, are still trying to figure that out. But I think that's one piece of it. But I will come back to, you know, what I was just talking to Steven about. The thing we can control is really around this variability in the new docs and the new patients. We think that can be very material in terms of the improvement that we can see from that, that perspective as well. And then there's just this natural maturation in the cohorts, right? In a very difficult year, you're seeing us projecting a 40% step-up in medical margin from 2023 - 2024. A big part of that is this class of 2024 that comes on, great experience, longer implementation. But I think if you think about our business, as members mature across time, you should see this natural evolution, and this spread should correct, from where it sits today. Thanks, George. We now have Adam Ron of Bank of America on the line. You may proceed with your question. Hey, thanks for the question. I'm gonna ask something very similar to what's been asked already, but maybe from a different angle. So the payers are also talking about 2025 in terms of actual margin improvements. So, like, Humana is saying something like 100, 150 basis points of margin. If most of that comes from, you know, cutting rebates, and they've given a number, something like $40 at the max, looking at some ways of looking at it. On a percentage basis, if they're talking about 100 basis points of margin, would that be higher for you? Just because if that does come in the form of rebates, it's a higher percentage of the capitated benchmark. And just separately, is there a way that they do cut benefits and somehow it doesn't flow to you? Because you're talking about, you know, carving out risk on supplemental benefits, and if supplemental benefits are the things that are getting cut and you carve them out, does it somehow not end up impacting your P&L? Just trying to understand, like, how much visibility you have into that and, like, how much capacity payers have to cut benefits and not flow it into agilon. Yeah. So, I mean, I'll just back up, Adam, to what I said, which is we are really trying to tune our payer economic and risk-sharing arrangements in this environment. Utilization is up, and we're managing that. We should probably be receiving a larger percentage of premium. That's part of the dialogue that we have with them, given the consistency of performance from a quality perspective that we're delivering for them and for their patients. So that's kind of a big part. The things outside of our control, how do we look at that? Do we corridor it? Do we cap it? Do we carve it? I mean, I, you know, getting into sort of future scenarios about what gets changed and how that flows through, I don't have a perfect crystal ball on that. But I do think this idea is we are delivering an incredibly valuable service for them, and we are trying to look at a sustainable model for them and for us that works around that. So that's sort of a general answer to your question, but a lot of dialogue with them as they think about their 25 bids, as they think about 25 markets, and how our partnerships fit within that. Yeah, I appreciate that. And then just two really quick follow-ups. So G&A, I think, like platform support costs are based on the current guidance of, like, 3% of revenue and last year's performance. I think they're growing in, like, the mid-teens. Is that a reasonable way to think about 25 as well, just on a dollar basis for platform support costs? And then finally, I think, you know, the Adjusted EBITDA in 2023 was around, you know, -$90 million. Is that how we should think of operating cash flow losses in 2024 as well, since we're talking about a one-year lag? Thanks. I think. Yeah, I think on the first one, you know, a little early for us to be guiding to platform support costs for 2025, but we would expect that we're gonna definitely continue to get leverage out of our platform support costs and continue to drive, you know, platform support, support costs growth will be obviously well below what our revenue cost growth or what our revenue growth is. So, you know, specifically, a little early to say, but yeah, we'll continue to get leverage for sure. On the cash flow numbers, what we talked about for 2024 is that our expectation is that we'll burn somewhere between a hundred and twenty-five and a hundred and fifty million dollars of cash use in 2024. If we hit our guidance for 2024 that we put out there, you know, the way our cash flow works is there's kind of a delayed impact of the medical margin and EBITDA that we're generating in 2023, has a big impact on our 2024 cash flow. 2024's guided performance will have a big impact on 2025. If we can deliver our 2024 guidance, which of course we expect to, our 2025 use of cash would go from down to about, like, $25 million or $30 million. And then that would put us on a good trajectory to be positive cash flow in 2026 and beyond. Yeah. And Adam, what I would say is just we're seeing tremendous leverage on the efficiency side from the investments we're making in technology and the centralization, standardization of activities that we're doing, like chart reviews that previously got done within local markets. And so I think just the scale that we've got, there's a tremendous opportunity, not just in things like discussions with payers, but also from an efficiency perspective for us to drive further around that. So I think as we continue to grow, there's gonna be far greater leverage from that perspective. We get very good leverage against our operating costs in our existing markets. I mean, most of the incremental costs we add year- over- year to our platform support costs is because we're adding markets. As our existing market base becomes a bigger and bigger part of our overall membership, we just get really good leverage out of costs in those markets. It's another benefit of growing in your existing footprint. Agreed. Thanks so much. Thank you. We have no current questions on the line, so I would like to hand it back to the agilon management team for any final remarks. Well, thank you. Obviously, we're living in a very dynamic environment. I think our 2023 results and 2024 guide we've shared with you are clearly impacted by those, but we feel like our targeted action plan is on track, and our business model is working. I think when you look at our cohort data, even in a difficult environment, it shows the value we're providing to physicians and sort of what the long-term opportunity is within the business. We look forward to talking with you all soon. Thanks for joining us. Thank you all for joining the agilon health Fourth Quarter 2023 earnings conference call. You may now disconnect your lines, and please enjoy the rest of your day.