Welcome to agilon health Guidance Update. I will now hand over to Matthew Gillmor. Thank you, operator. Good morning, and welcome to the call. With me is our CEO, Steve Sell, and our CFO, Tim Bensley. 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. Following prepared remarks from Steve, Tim will join us for a Q&A session. With that, I turn things over to Steve. Thanks, Matt. Good morning, and thank you for joining us on short notice. Our call this morning is intended to provide an update on how 2023 is finishing and our first look at 2024. As called out in our press release, a significant increase in medical and non-medical costs during 2023 has had a material impact on our full year results. I will walk you through what has changed since our last update, why our confidence in our business model remains high, and how these factors impact our revised guide for 2023 and our initial guide for 2024. My comments this morning will follow the presentation found on our investor relations website. Before I dive in, let me give you three framing thoughts. First, we are clearly living in an elevated utilization environment that is challenging, and we assume that environment will persist through 2024. Second, our 2023 underperformance was largely driven by two issues: a forecast that failed to recognize these elevated cost trends and a data and analytics gap that led to our being late in both recognizing the magnitude and source of the utilization shifts. We can do better on both of these items and, in fact, have made significant strides in the last few weeks. Finally, growth has been a source of differentiation as we have become the destination for primary care doctors looking to move to value. But one aspect that we failed to appreciate was that material growth in mature markets has brought a significant number of new primary care doctors, and there is a low-hanging fruit opportunity to do a better job in terms of onboarding and educating these newer doctors so they fully understand and can perform well in our model. Now, as we turn to slide three in the presentation, we are lowering our 2023 guidance for medical margin to a midpoint of $350 million and adjusted EBITDA to a midpoint loss of $62 million. Higher cost trends became visible to us starting in mid-December as we closed our November results. We recognized at that time that we were seeing cost trends that were 2x-3x higher than what we had seen in 2022 in key areas like specialist costs, outpatient surgeries, and Part B drugs. In the face of this change, we made a proactive decision to both adjust our Q2 and Q3 completion factors and increase our Q4 utilization assumption. We are carrying the higher utilization assumption into our initial 2024 Adjusted EBITDA guidance of $40 million-$60 million. Given the lower baseline and the elevated utilization assumption for 2024, we have made the decision to withdraw our 2026 outlook. While 2023 has not played out as we expected, we continue to drive value for primary care doctors. In fact, this year we have reinvested over $200 million back into local primary care, which is up $40 million from last year. It is very clear to us that we have a lot of work to do. We have identified a targeted set of actions we believe will drive performance in 2024. These include boosting our operating efficiency, leveraging our strong payer relationships, addressing our data visibility gaps, and expanding support for our new primary care doctors. On slide four, this is a chart that we showed you in November. Let me show you what has changed here in terms of medical margins. The most significant change has been in core medical performance, which is $110 million lower than our previous projections. $90 million is from higher costs, and you can see from the call-out box how that falls across the quarters. These are the elevated costs I just spoke to in terms of specialists, outpatient surgeries, and Part B drugs. $20 million of the core medical change is from negative revenue revisions tied to two Year 1 payers, which provided updated data to us in December. The other change is an adjustment in terms of net prior year development, which resulted in $3 million of lower revenue from Part D settlements. On slide five, you can see how utilization has accelerated from 2022 to 2023. When we talked about areas in which our business model is working well, I would point out significant progress in terms of hospital inpatient costs. In fact, the clinical programs for renal, palliative, and high-risk management that we shared with you on our Investor Day have driven a net decrease of 2.6% in terms of inpatient medical, which is roughly 10% of our total costs. This was not enough to offset a significant step-up in terms of utilization in key areas like specialists, Part B drugs, and outpatient surgeries, which are running 2x-3 x higher than last year. Our new projections assume these trends will persist through 2024. In fact, when we look at outpatient surgeries like hips and knees, we believe we are about 60% of the way through a backlog of pent-up demand from COVID. On page six, you can see that despite the 2023 headwinds, we have made significant progress against our mission to increase value for primary care doctors. On this slide, we show you our Year 2+ partners, which enables you to see our performance on what is essentially a same-store basis across Medicare Advantage and REACH. By taking better care of patients, we have increased our combined medical margins by 19% and generated 22% better economics for our partners, despite the difficult year. That yielded a 13% increase in terms of gross profit for Agilon on a same-store basis across our Year 2+ partners. While this was below our expectations for 2023, it demonstrates the power and leverage inherent in our model. At our company, we are constantly looking to adjust our people, processes, and technology to changing market dynamics. For 2024, we have identified a clear set of actions to improve performance, balance risk sharing, and enhance predictability. For operating efficiency, you will see that our OpEx leverage has improved from 4% in 2023 to 3% in 2024 due to our ability to leverage both corporate and market investments that drive more efficiency and performance in 2024. From a payer perspective, our relationships have never been stronger. We have found our payer partners willing to work with us to more economically manage the elevated utilization environment and to adjust for excess supplemental benefit costs. It's important to our payers that they have a very successful delivery system, and in particular, a strong primary care delivery system. Through an alignment of mutual need, our recent conversations have reflected that reality. Better data visibility and analytics is a real opportunity for us, and we have executed changes in terms of our internal and external data and actuarial teams, and externally created much better alignment with payer partners. Finally, there is a real opportunity to better onboard and educate new physicians in our existing markets and reduce performance variability. Turning to page 8, when we talk about opportunities in our mature markets, this market is a great example. This market has seen 40% growth in primary care doctors and 75% growth in members. In addition to opportunities with payers in a new value-based care partnership, the big opportunity in this market is to focus on the 30% of primary care doctors that have joined post the market implementation. If we do this right, we should be able to move these new 76 PCPs from $34 PMPM of medical margin up to the $161 PMPM level that our veteran PCP partners are seeing. On page 9, we have outlined our revised guidance update for 2023. Based on the macro utilization trends that we are projecting through Q4, we are lowering our 2023 medical margin outlook to a midpoint of $350 million, and our Adjusted EBITDA outlook to a midpoint of -$62 million. Our 2023 revised outlook also reflects substantial investments that allowed us to add 270,000 members and 1,200 PCPs on the platform via the classes of 2023 and 2024. On page 10, our 2024 guidance assumes another year of high medical costs, with a 5% medical trend that matches what we have seen in 2023. This year, one key area of step-up will be a combined $150 million of incremental medical margin from those large new 2023 and 2024 classes. Operating leverage acceleration from technology investments and centralized activities will yield $20 million of incremental improvement. Page 11 shows you a straightforward medical margin bridge. From a $375 million incurred medical margin starting point, you can see the impact of our Year 2+ classes with a $228 million lift in revenue, a $141 million offset from a 5% medical cost trend, less the impact of our clinical initiatives, and $20 million in non-medical supplemental benefit costs. Finally, you see a $127 million lift from the Class of 2024, which is an all-time high level of $176 per member per month. A few call-outs on the impact of this class. First, it reflects our entry into a very mature managed care and value-based care market of Dallas, Texas.... This is important in that it both expands our TAM beyond 100% fee-for-service markets, and it also provides a much higher year 1 starting point for this group. Second, this class also reflects our addition of 2 health system partners in Dayton, Ohio, and Western Michigan, that are coming on in existing markets and leveraging existing infrastructure and contracts, which is also yielding a higher than average year 1 starting point. The output is a midpoint medical margin forecast of $580 million for 2024. So in conclusion, we have had a challenging year, driven by a forecasting miss in an evolving environment, coupled with our data visibility issues. We are going to manage through these higher utilization levels via our initial 2024 guide and our action plans, but these headwinds have created a delay in our market cohort maturation. But when we look at the power of our business model, there is a clear long-term opportunity built around the following key factors. First, the demand for a new primary care model that rewards patient outcomes has never been higher, and the continuing pain of the fee-for-service system only accelerates that demand. Second, the agilon platform is driving more value each year to our existing primary care doctors, making the case even stronger for prospective PCPs looking for an alternative. Third, membership growth continues to accelerate, creating long-term value with the addition of 270,000 members in the classes of 2023 and 2024. And finally, as we've talked about in our mature markets, variability in the system is our opportunity, and in fact, it's a central reason the company was created. The value proposition is so compelling that primary care doctors in every kind of medical group in the country are joining our network. We will now go to questions. Welcome to the Q&A portion of the call. To join the queue to ask a question, please press star five on your telephone. Again, that's star five on your telephone to ask a question. The first question comes from Justin Lake from Wolfe. Please, can you unmute your line and ask your question? Hey, Justin, are you there? Hey, operator, we can't hear Justin. I will move to our next question, and, I'll come back to Justin and see if the line is working okay for him. Give me a few minutes. Okay, our next question is from Lisa Gill, from JP Morgan. If you could unmute your line and ask your question. Hey, operator, did the participants need instructions on how to unmute their line? Is there a button they need to hit? No, they should be able to speak. Could you see if you could ask your question, Lisa? I'm on the line. Can you hear me? Hey, Lisa. We got you. Great. All right. I figured out something correct today. First off, thank you for doing this instead of next week. So I appreciate that from my end. Just really want to understand something a little bit better. And you talk about the visibility going into 2024 and addressing data visibility. Just given the number of revisions in 2023, what are some of the differences of the level of visibility you now have going into 2024? And I appreciate your comments around elevated utilization trends. We have been seeing that, but really it's more on the visibility side and the data that you're getting, for example, from the payers, et cetera. Like, how do we get more comfort that you do have that level of visibility going into 2024? Yeah, thanks for the question, Lisa. I mean, I, I think when we look at this year, we've got this macro utilization that's up, but from our perspective, it's a forecasting issue, and then this visibility on, on a data lag. To your question about what's changed is, we've really worked intensively with our payer partners to be getting claims data's information in faster. And so we've got payers that a year ago would have been on, on a two-month lag, that are moving to a one-month lag. We're getting it earlier in a, in a monthly cycle. So those things are very powerful for us. We also have really, as I said in my prepared remarks, kind of overhauled our data and actuarial teams, both in terms of internal and external resources, Lisa. So we've got a lot of external data points. from a few firms that we're laying in with the payers, and then, you know, Tim and I and our data team are spending a lot more time with the leadership and the plans, talking about exactly what we're seeing and what that means for us. So I think it's a combination of those things that has given us better visibility. That's led us to, you know, the actions that we've taken in terms of revising the guidance and increasing the trend assumption for 2023, and then the projection out to 2024, basically maintaining it at these higher levels. So more wood to chop on that. I mean, this is a key area for us, but I think the combination of how we're forecasting to incorporate that and these other data points, as well as the work to improve it, is a key part of that. Steve, just as a follow-up to that, like, if I think about the comments that you made around physician interest in Agilon and these types of platforms, is the reduction in your guidance is that hurting you in any way in attracting or retaining physicians? Because my guess would be right, that the payment to them, the maturation timeline is longer. So is that having any impact when we think about the outer years of attracting new physicians? Lisa, I mean, I think there's great alignment between our physician partners and us. Both of us are very motivated in terms of driving improvements in medical margin by delivering great patient care. You know, what we tried to show you in the presentation was that even in a difficult 2023 year, we showed a 22% increase in terms of the physician economics and a 13% increase in our Agilon gross profit. So we're making progress year-over-year. It's not at the level that we had initially projected. Then I'll just say what I ended with my comments with, the alternative in fee for service is just so difficult for these docs, that I think the fact that we continue to show improvement, there's alignment around how can we get better. For example, this onboarding of PCPs in these existing markets, so we can really narrow that gap relative to their, their veteran partners who have the benefits of that learning when we stood up their markets, I think are all things that we can do to address that. Lisa, this is Matt. One thing I might add to Steve's answer is the value prop that we offer physicians is really, really compelling, and the magnitude is really impressive. So we're obviously disappointed that we're not achieving our expectations this year, but the value prop is still highly differentiated and very sizable. So just to throw that out there. Lisa, Tim, maybe just to Matt's point, to dimensionalize that, Steve talked about the 22% increase for that all of our partners that have been here since 2022 or before, in terms of what is being pushed back to them or what they're getting reinvested. That number is over $200 million now, so it's a very important number as well, that we're essentially sharing back to the partners and reinvesting in our PCP groups. Great. Thanks for all the comments. I'll see you next week. Thanks. Thank you. The next question, we'll go back to Justin Lake. If you could ask your question, and we'll see if we can hear you there. How is this working now? We got you, Justin. We got you. All right. Thanks for the question, and bearing with me. So just to follow up a little bit on Lisa's question around the docs. You know, I'd like to go backwards and, you know, when you look at your doc groups now, some of the, you know, obviously, you know, the Year 1 docs are, you know, are much lower margin. But are there any doctor groups that aren't seeing, you know, profitability that are out beyond Year 1? Are there any kind of, you know, one-off, two-off? Are there any that, you know, just aren't making it through the process of kind of ramping? So, we do have markets that are off of our projection, Justin, in terms of these mature markets that are below sort of the levels that we obviously forecasted at. In terms of Year 2+ markets that are running negative relative to where we're at today- Yes, Justin, you asked me about other individual doctors in those Year 2+ markets that aren't getting any, that aren't generating any profitability. Yeah. Start there, just like, you know, I guess, you know, individual docs feels a little bit, you know, could be pretty variable. I was actually asking more about, you know, individual markets. Are there individual markets that are losing money overall? Is there anybody that you're actually having to take a loss on? So yes, at the market level, we do have some groups with our revised utilization assumption that would run at a loss for 2023. So that they're off the trajectory that we would be laying out for those. So that- Only one. There's one market that says that. Sorry, Justin. We had one market that dipped below break-even mark, even in 2023 with these revisions. Got it. What happens there? Like, do you... Did the docs start, you know, do you start thinking about saying, "It's just not gonna work in this market," or what has been, you know, some of the issues in that market specifically? ... So in that market specifically, I mean, it's some of the categories that we're seeing nationally, but they're more exaggerated. So Supplemental Benefits has been an issue, in which there was a material change in that, and we saw the impact of that. Nationally, we ran $24 million over our expected budget for the year in Supplemental Benefits, but proportionally, this market was higher around that. We've seen some of these outpatient surgeries running heavier than what we expected and the cost of those surgeries. So this opportunity for alternative sites of care for that surgery delivery is another opportunity which is there. In terms of, you know, the things to do around that, Justin, I talked about the work we're doing with payer partners, and that's one of the markets where we're pretty actively engaged around the economics and, and the magnitude of the change from one year to another, and the ability to sort of have an economic arrangement that works for the payers and works for us, so we can have kind of a sustainable delivery. And I-- as I said, I think there's pretty good alignment around that. Primary care doctors and, and health plans have this mutual interest, and the health plans need a really strong primary care delivery system. So that-- those are the things that we're working on. Okay, and I apologize if I missed it, but did you give a cash flow number associated with the 2024 guidance? We did not. But at this point, what we're saying is due to the much lower 2023 guidance that we just put out, our projection, again, to positive cash flow in 2024 is gonna be pushed out to 2025. Okay, so how much revision is there in 2023, and how much do you burn in 2024? Yeah, so right now- What's the updated 2023 cash flow number now, and what's the 2024 cash flow number? Yeah. So right now we would expect to end 2023 with over $500 million of cash on hand, unrestricted cash on hand. That's about $150 million cash burn year-over-year from 2022, and that number will be approximately cut in half in 2024, and then bring us to- The burn. The burn will be cut in half in 2020. I'm sorry, not the cash, the burn from $153 will be approximately- Right. Yeah. And then, 2025, we would expect that to then turn back to positive cash generation. Got it. Thanks for the time, guys. All right. Thanks, Justin. Next question comes from Jailendra Singh from Truist. Your line is now open. Please ask your question. Thank you, and thanks for taking my question. Can you guys hear me? We can hear you. We got you, yeah. Okay. Yeah. Okay, so my first question, you know, the medical margin guidance reduction of $105 million-$110 million in 2023, can you provide more color around, like, how much of that have you already experienced or observed, and how much is your estimate? What I'm trying to understand is, and I know this is not a traditional approach, but are you building any cushion in your 2024 guidance for any negative PYD? So thanks for the question, Jailendra. I mean, I think we laid out proportionally where this extra $110 million sort of breaks out across that, or $90 million of cost breaks out across the quarters. $18 million in Q2, $31 million in Q3, and $41 million in Q4. And so you can see sort of the progression across time, and what our expectation is as we go into Q4. We are at, like I said, a 5% overall utilization expectation, and we think that's prudent. But the goal here is to really set a strong foundation to step off from 2023 as we go into 2024, and to make sure that we have really appropriate expense assumptions around that. Yeah, and Steve, the only thing I would add is, and, and Steve talked about this a bit in his prepared comments, but the, the changes that we have made to, particularly as we close November, now as we're closing December, to work with payers, to get better data, to get some accelerated additional information about what we think is happening to utilization. Obviously, was a big part of what led to this, adjustment to our medical margin and, and medical expense outlook. But what that also does is just give us greater confidence as we're closing out the year, that we're, we're closing with reserves that are, that are now appropriate, and we're not, and, you know, we're not building in or anticipating prior development continuing into 2024 as it did, in 2023. Just a quick clarification there. Steve, so, how much complete data do you have? Is it through August or September? What our completion rates are? Yes. Yeah. Completion factor in the statement. Yeah. So at this point, we would be highly complete. You know, it takes a while to be 100% complete, obviously, in any quarter, but we are highly complete for Q2. You know, I don't, I don't want to quote a specific average completion factor for Q3, but obviously less. And then for Q4, you know, I'd say we have very good visibility into October. Now, some better visibility into November than we would have had because of some of the accelerated information we had from payers. And then, you know, December obviously is still, you know, largely incomplete. Okay, and then my follow-up was around, like, your decision to withdraw your long-term outlook. I understand recent trends are creating uncertainty, but, are you assuming these trends are more permanent in nature than temporary? And, clearly looks like your margin ramp assumption you have shared in the past, to getting to, like, 200+ PMPM, no longer a good reference point. I'm just trying to understand your confidence in the long-term earnings power. I know in the first couple of questions, we spent time on the long-term thesis around, you know, attracting provider group. But earnings power, like, how should, you know, investor group or us get comfortable around that, on the viability of this business model from long-term earnings power point of view? Well, I think that the thesis remains intact. I mean, what I said is, I think this is a timing issue, and our cohort maturation is off. You know, the decision to pull the 2026 guide is really based on this utilization being elevated. It's a pretty material change in 2023, north of 5%, projecting 5% again in 2024. And given that uncertainty, that was kind of that key driver around that. And so I think that becomes the key part of us as we look at this maturation. We believe we can drive them up. The question is, will it be at that same slope that we had looked at historically? And that utilization piece is a critical element around that. Thanks, guys. Hey, Jailendra and Steve, just to go back to the- Yeah. Previous question, because the other context, probably that's as important, is not just what we're assuming for completion factors, but what are we assuming for the actual utilization rates that we're building to our overall outlook? And just to reinforce one of the things that Steve said earlier, and one of the other things that gives us more confidence, we are actually projecting, as we've flowed through the year now, that Q4 utilization rates will be at the same elevated levels that they were in Q3 and before. So, you know, previously, and when we gave guidance in Q3, we thought we were seeing some moderating of those rates. We're no longer projecting that. So even though we have a lower completion factor in Q4, obviously from the visibility that we have from real claims coming in, we are projecting as if when those claims are complete, that they're going to be at the higher utilization rates that we've seen coming through Q3 now. Got it. Thank you. Next question comes from Whit Mayo from Leerink. Your line is now unmuted. Please go ahead. Thanks. Yeah. Steve, can you maybe spend some time addressing the steps that you're taking to improve the physician variability, what you're doing, how you're holding the team, the physicians accountable for these changes? And, you know, given the rapid physician growth that you've had in some of your legacy markets, do you feel at some point that some of these physicians may not be an appropriate fit within your model? Thanks for the question, Whit. So, I think there's a real opportunity for us, Agilon, to do a better job in terms of onboarding and educating our physician partners. We've done a extremely good job in our new markets, new partners. I just talked about adding 1,200 PCPs in the Class of 2023 and 2024. But we are also growing so significantly in our existing markets as other docs want to join in, but the example I gave in this one market in the presentation was 30% of those docs have not had that onboarding and orientation. So we're taking the same team, the physicians who've been working with new folks, to go back and literally go through kind of the basics of the Agilon partnership. What are the key things they need to be doing around access and quality and cost management, how they leverage the care teams that are around them and the resources that are there. And so when I showed you this example in here and the opportunity of improvement, $161 PMPM for those veteran PCPs, $34 for the newer PCPs. That's a real opportunity for us to improve as we move those new PCPs up, and they understand sort of what are the key things that can drive success, in the model for themselves and for us. And so we work with our partners always, and they are the ones who are really sort of clear-eyed about who fits within this model. And so we operate at 50/50 within a partnership, so they're the ones that are really making those calls, and they've done a pretty good job on that. So I think this is more an issue of this gap. There's an opportunity for us to do onboarding here and work and educate these newer PCPs. Okay, thanks. Then maybe just one other question. I've had a few emails here. People trying to understand, you know, the new markets, Dallas, Dayton, Western Michigan, what specifically makes these groups come in at a higher starting point? I mean, I know you said that they were mature, you cited some infrastructure, but maybe just unpack that comment a little bit to give us the confidence on the medical margin, for next year or this year. Yeah. So this class comes in at $76 PMPM, by far the best that we've seen to date. And it's obviously a very large class. I mean, I think the significance is where these markets are at in terms of sort of value-based care, infrastructure and maturation. And in Dallas, this is a market that has seen a lot of progression, and our partner, Catalyst, really outstanding group, has got a tremendous amount of experience around this. And so they come into a market with some existing infrastructure. They're a scaled player, and then our partnership together should really sort of turbocharge that. So that's it sort of the market and where that is at and our partner and kind of what they've done historically. In these markets in Western Michigan and Dayton, Ohio, we're the one that's there. We're the one that changed the market. We have existing partners that are there. Two health systems are joining, one in each one of these markets, but they take advantage of existing contracts, existing infrastructure, existing teams that are there, and they've got a very full and robust implementation. We've talked about the Class of 2024 having a very full, longer period than any class we've had historically. And so I think when it's the combination of those things, those markets will start at higher than an average Year 1 starting point, and they're all large groups. So that's really the combination of those things is what drives that. No, that's helpful. Thanks a lot, guys. Yeah. The next caller is Stephen Baxter from Wells Fargo. Your line is now unmuted. Please go ahead. Hey, thanks. A couple of questions for you guys. So I wanted to ask on the 2023 cohort assumptions and the guidance for 2024, you know, it seems like you're not really expecting a whole lot of improvement there on a PMPM basis. You know, usually that'd be a pretty big step up in the second year. So just trying to understand, you know, is that totally offset by the higher trend? And I guess just broadly, you know, where should we look at the, the 2023 cohort contribution expecting to come in for 2023? And then a couple of follow-up thanks. So Steve, we called out in the medical margin bridge sort of the year 2+ step up that you would see from 2023 to 2024. Obviously, strong revenue up year-over-year, offset by the higher cost trend and the Supplemental Benefits. So that will be, you know, an important part of the step up. But within that sits this Class of 2023 that takes a very meaningful step up year-over-year. And so the Class of 2023, taking that step from Year 1 to Year 2, is a very meaningful part of that, and then obviously this Class of 2024 coming in. The Class of 2023 adds 130,000 members and $23 million of that incremental medical margin that we show you in the bridge for those year 2+ markets. Steve gave the PMPM for the Class of 2024. Tim's gonna provide the PMPM for the Class of 2023 in just a second. So we'll give it to you. Okay, got it. Yeah, I was thinking it was like 15 PMPM, and I think, you know, historically, when I think about the curves, it felt like there was something steeper than that typically factored in, but, yeah, it, it sounds like one of the higher trends is part of the answer there. So just the other couple of questions I had, anything different about ACO REACH contribution, either in 2023 or in 2024, that you wanted to flag? And then this last question would be, you know, I assume the answer is probably not, but can you talk about whether the financial results you're seeing this year compel you to think about growth in any different way? Is there any thought to growing more slowly or maybe approaching market selection differently to hone in on more markets that potentially look like Dallas and contribute early on the way those partners are expected to? And then I guess just finally, what's the messaging going to be to the physician groups about the challenges you've seen this year? And do you think this is gonna create any, you know, challenges as you look forward to adding future classes, you know, some of the performance in 2023? Thanks. There's a lot of those questions. So, first question, the ACO REACH contribution this year will be in line with what we expected, I think, coming in at $39 million. Next year, roughly in line with that. So, that's point one. New markets that we're looking at, I mean, we're working the Class of 2025, the Class of 2026. I think this opportunity to grow in existing states and existing infrastructure is one that continues to be a part of that, Steve, because it's not just Dallas, but in Dayton and Western Michigan, you're getting that benefit of a new partner coming in with the existing geography. So that's a key part of it and making sure you get the right partner around it. And then... Go ahead. If you want to sort of... Oh, sorry, I didn't mean to interrupt. Well, let me do the messaging one, and then we'll come back. And then the messaging to our partners is, you know, our business is strong. We're aligned around driving medical margin across time. We showed you in here, even in a very difficult year, the progression that our Year 2+ markets are seeing across their entire panel. And so the message is, you know, we're aligned to really go drive it. What are the areas that are driving the differences, and how can we better work around that? We're taking Agilon this responsibility on really working this onboarding and education with the PCPs that are newer, and there's a better opportunity to drive performance there. And then we're working extensively with payer partners. What's the site of service for hips and knees? And so we're doing it in partnership with them. I think that they are very aligned and feeling good about where we're at. But we talk with them regularly about that, and I've got a great advisory board that gives us feedback around this. Tim, you want to add? Yeah. Yes, and Steve, I think your, your math was right, but just to, you know, to quantify it in terms of a PMPM, that Class of 2023 over a year, we're gonna run about a $39 PMPM this year, which is just a little bit below. That's again, up to about $54 next year, or $54 is the assumption that we have in our build for next year. So, you know, about a $15 increase PMPM year-over-year, across those 130,000 members. Thanks, Stephen. Our next question comes from Gary Taylor from Cowen. Your line is now unmuted, if you could ask your question. Hi, good morning. Just had a few additional at this point. I guess one, maybe just, a little request, but I know at the last Investor Day, we had that cohort update, I think, for multiple classes, and I guess I'll just register a, a hope or a request that we could see that again, either, you know, either at year-end or maybe next Investor Day, just to understand it, because just, trying to model all the cohort development would be easier with an update. So I'll just register that. I appreciate the 2023 information you just shared. I wanted to make sure I understood. You're talking about is, is the difference between the 7.6% trend you're showing on slide eight for 2023 and the 5% you're talking about carrying to 2024. The 5% is just Year 2 trend, and the 7.6 is the overall company trend. Is that right? No, Gary, the 76 was a specific mature market. Yeah, the 5- Oh, okay. Across- I got you. The entire network. This was an example of mature markets, and we've got a lot of new docs that we can go educate. But we showed you this market ran an even higher trend than our, our network average, and what the things that were driving that was the PCP variability issue that we talked about, but also outpatient surgery running at higher trends than what we saw across our network, and then supplemental benefit costs. So it was a market example, but the right number is, is that 5% trend across the network. Okay, got you. Yeah, I see the sub, subtitle there now. My other question would be, unless I missed it, what about ACO REACH? Is there... Is all of this cost issue that you're describing today really in the MA book, and ACO REACH is still performing better as it had through the first three quarters, or is there anything significant to say there? Yeah, Gary, our expectation for ACO REACH as we close out the year is consistent or right in line with what we said at the end of Q3. I would say we are seeing some additional cost pickup in ACO REACH as well. The only thing I would say, it's not going to be as dramatic a pickup versus our last expectation as MA, because we just have really more complete, more current information from CMS, so we're able to stay up with it pretty well. The other thing is, even as we're seeing some increased costs, there's also increased costs overall in the reference population that'll make the retro trend adjustment less punitive than we would have assumed. So some incremental costs, somewhat offset by some lower or less punitive retro trend adjustment, and we believe ACO REACH will be, you know, pretty much in line with what we said at the end of Q3. Just one more for me, if I appreciate it. I know you, I mean, so much of—I mean, the majority of the medical margin improvement you're expecting in 2024 is coming from this Class of 2024. I think two other analysts have sort of tried to delve into more detail on that. I guess mine would just be, is it? I mean, really, does this—how much of this comes down to that there's particular reasons why, this group of physicians and patients are going to be at a more advanced coding level than you might initially see in an initial class? Is that a big part of this initial, you know, this Year 1 per member per month expectation? Well, it's, I think it's the three partners I talked about that are coming on in markets where we have more advanced infrastructure, and they get to take advantage of that, and in the case of Dallas, they've actually got a great track record around that. You know, the revenue that you come on with is a component of that, Gary, but also just, you know, knowledge and savviness around managing the cost of care side. So it is both of those things, but it's really a function of you're in a market in which you got a lot of infrastructure, you've got a partner who's pretty savvy on that. And then the last thing, as I said earlier, is we've had a full 12-month implementation that gives us a lot of visibility and comfort around that. Okay, thank you. The next question comes from Elizabeth Anderson. Your line is now unmuted. Please ask your question. Hi, guys. Thanks so much for the question. I have a question on a couple of sort of cleanup things. With the $20 million negative revenue revision from those two plans, can you talk a little bit more about that? And is that something that just along with your sort of data and visibility improvements, you don't expect to happen again or just sort of help us think about that. And then if we think about the new geography costs being up $2-$4 million for 2023 versus your prior expectations, is that what you're talking about in terms of, like, additional onboarding for physicians going forward? But more color on both of those would be helpful. Thank you. ... Yeah, Elizabeth, thanks. Hey, on the first question, it really was two data update issues for two new regional payers in two of our new markets. So we've worked with the two payers on that. We understand, you know, what the change was and why it was, and so that should not be a recurring issue on that $20 million revenue. I think we caught it, we understand what was causing it, and we work with those payers to make sure that it doesn't repeat. On the second part of the question, which is? So the higher new geo costs, Elizabeth, is really a result of a larger Class of 2024 and the onboarding, to use your word, expenses that occur in that year zero of implementation, incentives around Annual Wellness Visits, the things that you want to do to get patients in, so you have an appropriate baseline, and as you move to January first, that you're in a good position to really manage that population. So that's really the driver. Got it. Thank you. The next question comes from Jack Slevin. Please ask your question. Hey, thanks for the question. Two more for you. A lot of the ones that I wanted to touch on have already been asked. One, just on the revenue PMPM side, for Year 2+, trying to get an understanding of the shift in language there. Using the bridge on slide 11, I'm computing something like a 5% step up in rev PMPM for Year 2+, versus, I think the last commentary you had said 1%-2% positive for 2024. Just trying to understand the gap there and get the commentary on some variability in PCPs and some new PCPs in existing markets, but struggling a little bit to understand why that wouldn't have been known. So any color there would be helpful. And then the second piece, little surprises hasn't been touched on yet, but, you know, first, you know, Tim, best wishes and good luck in retirement, and, and just sort of curious to hear high-level thoughts on, on what you might be looking for, in the profile of a new CFO. Thanks. Sure. So the question on the revenue assumption for the Year 2+ markets, I think what we said it was going to be at least 2.2%, and we're obviously doing better than that. You know, Jack, one of the big things we invested in in 2023, that's really working very well for us across all of our markets, is a centralized physician medical record review process that gets better information to all of our docs across the markets for the visits with the patients, and they have the ability to acknowledge and understand the conditions and the disease burden that various patients might have. And so new program set up for us, working very well. You understand how RAF works. I mean, the work that gets done in 2023 drives what happens in 2024. We have shared that we had, like, 6x the level of chart reviews in 2023 than we did in 2022. That's tied around some of these centralized, standardized resources. And so we're getting some real economies of scale and efficiency, but we're getting some real performance out of that. So that's the piece around that. You know, I mean, we did put out the announcement about Tim, and I just want to thank him for everything he's done. He's not leaving. I mean, he's here for the next nine months, and we're working through a search right now. But he's been really impactful, helped to build and scale our finance function and take our company public. So you know, huge, huge thanks to him. In terms of a new CFO, I think you need to really understand this business. This is a risk business. It's complex. Understanding health plans, understanding risk contracting, understanding reserving, are all key elements of that. Understanding physicians and how you work with different physician entities, I think is really important. But those are the things that, you know, we've talked about, as we look at this, and, you know, we expect to, you know, have a good search. Got it. Thanks. Yeah. Thanks, Jack. Our final question comes from David Larsen, from BTIG. If you could unmute your line and ask your question. Hi. Can you talk a little bit about the utilization you're seeing with the specialists and the Part B drugs? Are those... Is that on oncology services, or is it obesity and diabetes management? Any detail there would be very helpful. And then also, like, do you enter into new markets where Agilon is bearing 100% risk? So if you're an oncology specialist, your cash is based on cost plus, initially at least. So like, can you maybe talk about the incentives that are in place, especially in the early years, for the specialists to use lower-cost Part B drugs? So, thanks very much. Appreciate it. Yeah. So, David, thanks. So, you asked about Part B drugs, and you asked about specialists. So in our markets, Part B drug, you know 40, 50, 60, sometimes even more percent of that spend is oncology, and it is, you know, oncology infusions. And so there's a, you know, site of care opportunity that you've got that can reduce that cost. The changes in the 340B rates, that occurred back at the beginning of last year, you know, definitely have an impact and show up in that Part B drug spend. You know, when we talk about sort of the collaboration, the relationship we have with our payer partners, this is one that, you know, we're kind of working together on this 'cause it's a really meaningful change across the system in terms of those costs. Kind of united, we have the opportunity to potentially move some of those sites of service. In terms of specialist costs, you know, the specialist costs are kind of associated with the activities we talk about. So, ortho specialist costs tied to hips, knees, et cetera, is definitely an area of opportunity for us. I think site of service is a big one. We talked about that market example that we gave you. A mature market that's grown a lot. There, we've entered into a value-based care partnership with a partner to take some risk around that and to help us guide to lower cost settings. And that, the benefits that we have with our primary care doctors is we can really guide referrals to those specialists. So those are examples of the types of things that we're working on. The incentive is we've got the total cost of care, we've got partners that are oriented to working through that, and we are trying to guide to the most cost-effective specialists. Many of our groups have specialists within them, and so they're incented and aligned with us in terms of managing that, and so, that, that's how we're handling it. Okay, thanks very much. Mm-hmm. All right, operator, are there any further questions? We have no further questions. I would like to pass back to Mr. Sell for final remarks. All right. Thank you all for joining us. I just wanna close by saying it's been a challenging 2023, but I think we see really a great long-term opportunity in our business, and the thesis remains intact. And I think you can see it in terms of the physicians that are joining us, what we're doing for them, and just this opportunity around variability over the long haul. So thanks, everyone. Talk soon.