As much as I hate to interrupt the playlist, which I'm enjoying, we'll keep the conference moving along here. My pleasure to introduce Agilon. Agilon's a physician-oriented, value-based care company providing capitated physician services to Medicare Advantage health plans. The company will have 550,000 MA members in 32 geographies and another 125,000-plus ACO REACH enrollees, and is targeting excess of $8 billion of revenue in 2024. Steve Sell, Chief Executive Officer; Tim Bensley, Chief Financial Officer; and Matt Gillmor, Vice President, Head of Investor Relations. So, gentlemen, thanks for joining us. Good to see you. Great to be here, guys. We're going to go off-script just a little bit to start and just hit on Change Healthcare, just because it's, we're two weeks into the power outage there, and I've been asking all the companies and providers the impact. But maybe just a quick summary on, is this having any impact to you? Is this all upstream of you with the health plans, or how should investors think about it? Yeah, well, it's definitely a dynamic time out there, right? So in the Change news, just as to that, I think it really is upstream from us, Gary, so we don't see as much. But our partners, in terms of what they're seeing of effect for our independent groups, not as significant. We do have a few health system partners that are seeing some of the effect on that, working with their payer partners and us in terms of alternative clearinghouses, etc. So not, but not a massive effect to report. Gotcha. Okay, let's back up and go big picture. You know, 2023 was impacted. Your 2024 outlook is impacted by basically higher medical costs and putting some margin pressure, and so much of that seems environmental. You're certainly not the only ones around the MA ecosystem that are experiencing that. But help us think just, you know, sort of conceptually, moving out of 2024 into 2025, hopefully and presumably, you'll get to a place where you'll anticipate you'll see medical margin improvement, EBITDA improvement moving into 2025. How much of that, you know, is going to be reliant upon just broader environment versus explicitly some of the contract negotiations that you'll hope to have with the health plans? Yeah, well, first of all, thanks again for letting us be here. So I think what I would start with is, in the macro environment, we tried to be very careful with our process coming through Q4 to really capture all of the costs and went through a very exhaustive process in terms of additional data inputs. We then tried to take the most sort of prudent approach to 2024 and really take that elevated 2024 trend and annualize that across. I think when you talk about the ability to drive improved medical margin across time, there are things we can control, and there are things that are a little bit more macro. Obviously, from a macro perspective, where the final notice lands will be material. The payer bids and how that will be reflected is a key piece within it. Two of our largest payers have said for 2025 they will be bidding for margin, and that will be kind of a key component, and we'll obviously see that in August or September as we have those dialogues with them. As it relates to the negotiations with the payers, I think we've really been encouraged by what we're seeing, Gary. Already year to date, off-cycle, we've had a couple of payers in which we've been able to get an increased percentage of premium. The situations on those were a little bit different, but I think it sort of demonstrates the value of what we're providing. In one case, it was tied to supplemental benefits and what we were seeing there and sort of the extra exposure that we were taking there. The result of that, as opposed to carving the benefits, was a premium above what we had seen historically. And in the other case, it was in a market in which there had been an aggressive bid different than what we had sort of underwritten at, and we were able to get an elevated premium or capitated rate tied to that. So I think we're encouraged. I think as you look at the macro environment today, what we're providing to these payers is more valuable than ever. We hear that from them. And I think they're open both on an off-cycle basis like we've seen in 2024, but I think a big part of this will be 2025 as we roll forward and negotiate and renew roughly about a third of our book. Gotcha. And just talk a little bit about your visibility into, you know, how a plan is going to bid, what they're going to put in benefits. We know that's set in June. I give that to CMS. The public world doesn't get to see that until October. Does your, if we're thinking about for 2025, does your, you know, contracts for 2025, what supplemental benefits you might be taking versus carving out, what% of premium, does that get negotiated between June and October, or do you get to have some, you know, lead-up into June, or are the plans generally holding that benefit bid, you know, very close to the vest until they've sent it to CMS, or, you know, is any part of that changing at all? Yeah, well, it varies by payer in terms of how early they will share that with us. But our contracts and our relationships give us the right to accept or not accept any sort of plan that's bid in terms of risk from that perspective. We've only had a couple of occasions where we've said we don't want to do that. But I would say if you're asking about the changing environment, the level of transparency is up relative to where it's been historically. I think the dialogue around, do we take responsibility for things we can't control, is a key discussion point. So supplemental benefits, hard for us to manage some of those non-medical benefits that are there. Or if we're in a Stars program or PBP in which we're at 4.25 stars, but the broad network is below 4, and you've lost that 5% bonus. We are actively working with them on how we can be compensated for that or held harmless around that. I would say those discussions are more elevated than they've ever been because of the environment and because of the importance of what we provide to them. Let's hit on that last point a little bit because I'll talk to, you know, investors that are bearish, and they'll just say, well, why would a plan work with Agilon? Why would they carve anything out? Why would they give you, you know, a percent of premium? And I think probably just missing the interconnectivity of your physician networks. I mean, the, you know, how patients are more satisfied, the Net Promoter Score, the clinical quality of care that you're providing, the actual cost saving and bending of the cost curve, you know, the wellness visits, etc. I've probably outlined a lot of them. Yeah, you've hit a lot of the key points. I've been paying attention, but would you add more to that? Or would you say, no, that's exactly why? Because I hear the same thing where we hear payers value-based care provider. If you have a, you know, a clinically integrated physician group with a financial wherewithal, take capitation, the payers can't find enough organizations like that. But in the current environment, trend, you know, cost trend is up. Value-based care has been stressed from a margin perspective. And I think there's just this disconnect where investors feel like the plans don't need you or are not going to want to work with you. You know, anyway, so respond to both. Yeah, I mean, I think it's the opposite of that thesis. I think that more than ever, payers need us. I think if you start from the standpoint of our partners in these markets are these scaled, prestigious groups and operating a Medicare Advantage product line without 25%, 30%, 35% of the adult PCPs in the market through a really reputable group would be extremely difficult. So I think one is just start with who they are. Then you talked about the quality that's provided. You talked about the predictability that's provided. The experience scores are just world-class from this. So all of that is built around kind of the value that's there. I think this flexibility around things like, why would I carve supplemental benefits or not, is it's really the economic power that we have in this relationship to say for us to work together, given the history, we're going to need to have some sort of protection around that. I mean, if you think about the history of supplemental benefits through 2021 and even into 2022, it was a pretty vanilla discussion, right? Set of benefits, dental, vision, SilverSneakers, you know, gym transport, right? And those were included in capitation. There was a modest margin on them. The world has gone to an extreme in terms of these benefits and in particular these cash cards. And that's what's really led to excessive utilization, 200, 300, 400% of the expectations from an actuarial perspective. That's the dialogue we're having. Everything we just talked about that they want from this group, what we can manage in this partnership and the predictability that can be delivered, that does not apply to those supplemental benefits. And so that's kind of the logic. If you want to get the benefit, if you want to be in this global arrangement that has this long-term longitudinal view with patients and continuity that you get all the benefit from, there needs to be some flexibility around that. And I think what I shared at the beginning in terms of what we've been able to achieve to date in this year off-cycle is a great data point for us. So that's what I offer. Yeah, I do think despite the headwind it's caused, it's pretty hard to believe that just the sustainability of the physician networks and the value-based care providers in general works with these cash cards either not getting carved out or accounted for because they're just kind of, you know, how does a PCP group influence, you know, how much of a cash benefit, you know, somebody's going to use? That being said, is there, I mean, you're saying those conversations are going well. Is there any scenario where you think we would ever see Agilon, you know, like Privia last week, they don't have a lot of capitation, but they exited like half of their capitated revenue. Is there a scenario where you could say, hey, in this market with this payer, we just can't get together and it's prudent for us to exit a capitated contract? That would be any more than just like a one-off sort of scenario? Well, we have had two examples in which we have not renewed a capitated arrangement with a payer, two different payers. In both cases, in the high 80% of those members stayed with the primary care doctor and moved to another health plan. And so I think when we talk about measured growth, we talked a lot about this on our Q4 call last week. It's not just the partners that we're working with, but also those payers and how we're working with them. And so I think the really tight relationship is between that primary care doctor and their physician. And so that's the scenario you laid out is possible. I think what I would say today, though, is you talked about the competitive environment. More people are moving away from full risk. We believe we distinguished ourselves in terms of building a market or a model across 13 states, 32 partners, you know, 650,000 senior patients. That is really distinctive, and the value that we provide through that is distinctive. I think that's going to be reflected as we go through these negotiations with folks. If it does come to that, there are multiple payers that we have in a market, four or five, we could live with three or four. Got it. You talked about prudent growth a second ago. So for 2024, revenue is going to be up, you know, 40% again. There's almost another $2 billion of incremental actuarial risk, you know, that's being assumed. Why not turn some of that, you know, growth off? And I don't think you've talked a lot yet about class of 2025. Maybe I'm mistaken. You can correct me. But, you know, so many, you know, one key difference is you guys have ample liquidity. Others hadn't and, you know, were more compelled to sort of turn off the growth. But as you're dealing with trend and margin pressure and, you know, some claims visibility issues upstream, why doesn't it make more sense to slow that rate of growth, focus on the profitability, and then reaccelerate? Well, I think we're doing that. So our class of 2024 was a record class. 140,000 MA members came in in that class. Another 700 primary care doctors came with that. By comparison, the class of 2025 that we announced last week is at least five groups and at least 60,000 new MA patients. So the new class is literally half, less than half of what the prior class was. With that, our geo entry costs go from $75 million in 2023 down to $60 million in 2024. And it's not just the total number, but it's also where we're growing. The class of 2025 is built much more within the existing footprint that we've established over the last six or seven years in terms of the 13 states and those markets. That means we're able to leverage existing clinical programs, existing contracts, existing teams, and sort of the tech and data setup that enables all of that. So I think we are being measured. I think the totality of the growth is down. I think where we're entering allows us to start at better starting points because you're able to leverage that and get up the curve more rapidly. The payer piece that I talked about is really critical. We've emphasized the importance of a full implementation. If you think about our Class of 2024, they are going to have the best year-one performance of any class we've ever had. A big part of that is the ability to have a full 12-month implementation as well as being very selective around those groups. So I think where you do it, who you're working with, the ability to have a really full implementation around that. And then you hit a really key point. We have $500 million of cash on our balance sheet. And so we have the ability to manage through this. Even with this growth for 2025, we're saying $125-$150 million worth of cash burn in 2024. And in 2025, we'd be looking at about $25 million worth of cash burn. So we feel like we have a lot of dry powder. We've been very measured in terms of where and how we're growing and all of that kind of works well. And see, one of the things probably mentioned just to tack onto it is as you're going through all that with that big Class of 2024 and we're pretty selective in who they are, even though it's a big class and it's benefiting for all the things you said, that puts us in a position that even in this environment, that class we expect to be profitable. So we're already on that kind of journey of, hey, we want that growth to be profitable each year. And so it's a pretty unique class even though it's large. When you think about Class of 2024, so I mean, part of it has been this year-long implementation. Part of it's seeing how they performed in 2023, getting new contracts in 2024. How much have you been able to sort of drill down into that Class of 2024? Which payers do they have most exposure to? Because some of the payers have said, we haven't underwritten 2024, you know, very well. So whatever those groups might have done in 2023 may not hold in 2024 if you have over-indexed to Humana, for example, or potentially over-indexed to, you know, Aetna, which increased benefits a lot. Like you're comfortable with that payer mix on Class of 2024 that despite, you know, what the plans have commented on, that this will still be the most profitable class? Yeah, I mean, that class grows heavily into our existing set of payers that we've got contracts with today. We've got good visibility to how they bid. Anytime we do our plan, that includes sort of payer mix shift, I think, as we sit here on this side of it because now you've got pretty good visibility to how it came out versus how you expected it to come out. I I think that mix shift, Gary, is kind of in line with what we expected. And some people who bid aggressively really didn't see a meaningful pickup in terms of share with us. Some of that's where the new markets came in and what the payer options were within those markets. But to answer your question, we feel good about that class for the reasons we talked about. I think we feel good about our payer mix for 2024 across the entire network. Yeah, a big part of the second half of last year would have been, you know, as we've been implementing these markets for basically all of last year, the second half really has a huge focus on, hey, now the plans that have already been out there, they've done all that work. Now we're in negotiation to get our final contract with them. So I think the sequence of how things happens helps us along with giving us some confidence that we've got the right contracts in place. And I think Steve mentioned that two of the big new partners that we have coming in are actually in existing markets as well. So we have a lot of visibility to what those plans' performance look like in those markets too. Gotcha. I'm going to go slightly out of order just a little bit. But this came up with the company yesterday. I get so many questions about this, so I just want to hit this. Just in terms of when you reconcile or settle, you know, with your plans, I think most of that's annual settlement. Some of it might be more frequent. In the year after the performance, right? Gotcha. So if you've basically, you know, underwritten all of, you know, 2023 and you're accruing your estimates of costs and here's what, you know, here's the Medical Margin, we think we've generated that. We have to reconcile that with the plan. If it's a positive Medical Margin, that cash to you is generally coming. Yeah, we get a little bit of capitated payments that kind of move us through the year. But yeah, but the majority of it comes in in the middle of 2024. Gotcha. 2024 cash is really driven by 2023 performance. That's why this. You can see it in our quarterly cash flows. You can always look at Q3 is always a good positive, you know, more positive cash flow quarter for us than the other, because that's where a lot of those settlements are happening. We see the claims payable come down. We see the receivables on the payable come down. Still a little bit out of order. I wanted to hit, there were three key, four key parts of your action plan, but since we've talked most so far about the payers, I'll go. Tangible progress on strengthening payer relationships and outcomes. So we've talked about the payer piece a lot. Anything else to add on that part or? Well, I would just say that the data visibility with them is up pretty dramatically. I mean, the process we went through in Q4 triangulated far more data from our payer partners than we've had historically. In addition to an extra month's worth of claims, we had the ability to look at their seasonality factors and then triangulate kind of their census data against our HIE and data to sort of see what that looked like. So I think that's been progress with them on that front. Then tying to one of the actions around kind of data visibility and analytics, really good progress around this new data pipeline that we've built and working with our top seven payers about bringing in their data in a really structured way that gives us the ability to work with that data across, it'll be 75% of our members through Q2 with those payers. It gives us the ability to work it faster, but also be much more detailed down at that cost of care line. Yeah, I think that's the big improvement. Even with the data that we are already getting today, we'll be able to process the data faster. We'll have it in a more homogeneous way. So it essentially feels like it's our data and we can deal with it the way that we need to. And that's going to allow us to have so much more flexibility analytically around it where we can run very quickly around multiple scenarios and we can do analysis down at a much more granular level than it's, I mean, we could theoretically do it today, but the data is so heterogeneous and it's so much more difficult. This is really going to make it a lot easier for us to do those things. It should put us in a position where we have, you know, significantly can improve the quality of forecasting, but also to the extent that we have better forecasting, obviously we can operationally react to any changes that are going on a lot better. So I think this whole financial data pipeline is going to be, that's going to be a pretty big deal for us since we're pretty excited that we'll have half our members or so up and running on it. We've already got our largest payer uploaded on it. We'll have half our members or so uploaded on it as we're closing Q1. And as Steve said, you know, really all of our major payers to get to about 75% of our membership by Q2. And is there still going to be a lot of lag in that or not? So when we talk to the payers, usually they're like, hey, we see pharmacy claims instantaneously. They can tell you daily inpatient census, although not cost of that. We have pre-authorization on certain outpatient stuff. So how much lag before that goes into your data? Yeah. So right now the paid claims lag, what we're talking about in terms of the financial data pipeline, it just assumes the lag is the same. We're getting data on the same time that we've always gotten it. But we will still have a huge advantage in the speed of ingestion and the ability to get to analysis through it faster. As we go through the year, there are a couple of outlier payers that we want to also work with them to get us data a little bit quicker. And so I don't have anything to announce on that yet, but we'll be working on that as we move through the year. If we get that, that'll just be, you know, gravy on top of the data pipeline we're putting in place. But Gary, we are getting auth data. We are getting that census data from folks coming in. We're able to triangulate that. I think the place where we've had very good visibility is on the inpatient side. And our ability to sort of crosswalk that with what we're getting from the payers is just an added bonus. Yeah, we get that authorization data from all of our large payers on a weekly basis. And we've been supplementing it with other information we get from the payers that Steve talked about earlier around seasonality factors and other things that have really helped us out coming through. You know, as we close the fourth quarter, we'll continue to do those things as well. But this big change of getting this financial data pipeline in place is going to be a big help to us. Steve, you know from your background in California, I mean, a lot of the big IPAs in California, they're delegated for pre-auth and even claims payment. That's not how Agilon has been built. These IPAs are pointing to that, they would say, as a reason why they've had, you know, less volatility of trend, less height of trend, or magnitude of trend, et cetera. Like, do you need to go more in that direction where there be benefit to do either part of that? I don't think so. I mean, the delegated for claims for customer service as part of that model, I think, Gary, if you look at where we've gone in these markets, most of the payers that we work with don't even have the ability to do that. We've gone to these markets that are 100% fee-for-service. I think what we're trying to do is get to the same level of outcome in terms of getting the data in. And then the second piece is just making sure that our expense assumptions incorporate that. So what I talked about on our Q4 step-off and kind of our 2024 guide puts us in a little bit more sort of prudent posture around those two things. But I do think we're creating this market going to these all fee-for-service markets, working with a lot of payers that don't have the ability to do that. And so we get at it through a different mechanism. What's the new relationship with Milliman? Like, what will they be doing for you? Yeah, so we brought Milliman in in October. So they've been working with us since the beginning of the fourth quarter. They're doing actuarial work for us. So just another really professional experienced set of eyes going through all of our actuarial assessments. We continue to use them through, obviously, the close of the fourth quarter. We're using them again in the first quarter. We're also using them as an advisory on how we're setting up this new data pipeline. But right now, it's just been, you know, really helpful to have their experience and expertise in as another, you know, another group looking at our actuarial estimates. At the same time that we're doing that, we're actually building out that capability more robustly ourselves. You know, we brought in some new leadership, a new Senior Vice President that's the head of data solutions, but also owns that entire area. We have a new Chief Actuary that we brought on in Q4. She's building out her team more robustly underneath it as well that'll start taking over some of the things that Milliman's been doing, of course, in the short term. Gotcha. Correct me if I'm wrong if this is not the right way to think about it. But when I look at, there's been a real dichotomy in your MA medical margin performance, or at least versus your expectations and how ACO REACH, you know, has performed. And obviously in ACO REACH, I mean, you just have to do better than everybody else is doing because you have that retro trend factor. And we ended up thinking, man, there's going to be a huge negative retro trend in 2023 because of the expectations CMS had. But lo and behold, by the time we got to the end of the year, it looked like it hit that almost, you know, 7%-8% sort of number they were talking about. So when we think about your model, ACO REACH became more profitable because you outperformed what everybody else was doing in your regions. MA was less profitable because the revenue just pinned, you know, to the capitation agreement. Is that a fair way to sort of look at it and maybe just a validation that, again, you know, broader trend issue was the key issue for 2023 as opposed to something in the business model that isn't, you know, working or? I think so. I mean, I think, you know, in 2023, given a revenue number that calibrates with trend overall effectively, we beat the national trend by 410 basis points. And so in a high utilization environment, we were able to really manage differentially, keep people out of the ER and out of the inpatient. That showed up in our claims experience and that translates into the overall effectiveness of the program. I think, you know, the bull case around this is MA eventually catches up from a cycle perspective, whether it's through the benchmark or whether it's through payer bids. And we've demonstrated a pretty effective ability to manage the total cost and care and quality overall. And so it is the exact same doctors, the exact same clinical programs, the same data and resources that are surrounding those physicians and their patients. That's the logic of what we've built. We only do global risk. We do it with these really prestigious partners. We've built this incredible footprint. I think you saw the success in 2023 in ACO REACH. I think we believe we're going to be able to drive really significant cohort maturation on MA going forward. But what I would say is we did share the cohort data on the Q4 call last week. In those earliest classes, 2018, 2019, 2020, in MA, with all of the challenges we've talked about, we're running $150 PM/PM. Our mature range was sort of that $150-$200. Those are on the low side of that, but they're still there. With the classes of 2021 and 2022, you saw that maturation. You've got the 2023 that started at a lower level and would mature across time. So I think we're encouraged by that, even given the macro environment. The ACO REACH gives us a real leading indicator about where things could go. I think the last point I'd make just quickly because we're out of time. Because of that point you're making, I think people have kind of asked me like, what are the physicians going to do and, you know, how bad? I think with that medical margin in those cohorts, most of your physicians are still doing better financially than they would have done under fee-for-service. And even if the corporate targets aren't being hit at the cohort level, the doctors are doing a lot better consistently still, even in 2023, than they would have done without, you know, having these capitated. No, that's exactly right. I mean, the distributions to our physicians in 2023 versus 2022 were up 14%. They're below what we expected. But I think when people ask us about sort of alternatives or could they leave, what they're receiving is 3-4 times sort of any other alternative out there and dramatically more than they were receiving in fee-for-service. Got it. Gentlemen.