Hey, welcome, everyone. Thanks for attending. I'm Scott Schoenhaus. I'm the healthcare technology analyst at KeyBanc. I'm pleased to have RCM here, and Jennifer Williams, Chief Financial Officer, joining us here today. For those of you that are new to the story, RCM is a technology based revenue cycle management platform, offering additional modular solutions, you know, a three-pronged revenue stream that services large hospital systems in helping with their margins and cash collections. With that broad overview, I'll pass it along to Jennifer. Thanks. Thanks so much for having me here. Certainly excited to, to be here and the opportunity ahead of us. I'd like to start off, Jennifer, by asking you: what are you seeing in the hospital end markets currently? You've guided to low single-digit utilization. For those of, that are not healthcare, we are at a tech conference, so there might not be people that are understanding what healthcare utilization is. really measures like the kind of the visits, at hospital that we're seeing. where are we in the hospital end markets in terms of, you know, procedural volumes, elective surgeries, broad utilization? maybe comment on that first. Sure. Overall utilization, as you indicated, we guided to low single digits for the year, and our, you know, what we're seeing year to date is materially in line with our expectations. There are a couple of things to unpack there. Utilization is driven off of a combination of volumes, and volumes in some of the public provider information that's out there have seen what I would say is kind of mixed reviews, stronger volumes in some quarters. In Q2, we saw some of those volumes come down. Volumes are generally up, kind of in the mid-single digits, some in the high single digits for the year, but that's volumes. What we're also seeing is some of it's mix. When you look at inpatient versus outpatient, we're seeing higher volumes in outpatient, which makes sense, kind of return from COVID, more elective surgeries in outpatient. Typically, outpatient visits come at a lower, what we call acuity, so lower cost per transaction or claim. It's a mix of both volumes and acuity that kind of drives what we guided to of total utilization, which is in that low single digits. You know, for those of you that may not be familiar with the story, what's important ultimately to us is cash collections. We're collecting cash on behalf of the providers. It's really important when you look that you look at both volume and acuity when you think about what cash is going to be collected, because cash is what informs our revenue streams. We receive a percentage of the cash that we collect on behalf of our customers. Not only is it the cash, but our cash is on a lag. If you think about our Q2, we just reported earnings last week. Our Q2 base fee revenue was based on cash collections, let me think about this, get it right, from December, January, February. That, that's the cash collections that informed our Q2 base fee. That's on like a four-month lag from the quarter that we're reporting that revenue in. If we can, you know, continue to see volumes, or should they continue to increase as we go through the year, that would really not have an impact on our revenues until late 2023 or late 2024. Maybe for the newer investors here, can you talk about how your fee structure is, is set up, on, you know, your established accounts, legacy accounts, and some of the newer accounts, and how it ramps up? Maybe briefly just discuss the nature of the NPR and the fees, just an overview of that segment of the net operating fees. The Net operating fees... Yeah specifically. In our, what we call our end-to-end contracts or operating model, operating partner contracts, there's really two pieces of revenue. It's base fees. As we talked about, that's cash based on the cash that's coming in. It's really based on a percentage of a provider's net patient revenue, or what you'll hear us talk about, NPR. Typically, providers will talk about their cost to their revenue cycle operations on a metric of a percentage of NPR. An average that we use for contract modeling in the market is 4% of NPR. If it's a billion-dollar system, you know, think about 4% of that is what it costs them for their overall revenue cycle operations to run it, to operate it. When we go in and, you know, enter into a contract with a customer, again, these are really large, end-to-end, sticky, long-term contracts, usually 10-year contracts, and we base it on a percentage of NPR, but on a discount. We're giving clients a discount, immediate cost savings out of the gate on what is their current cost to collect. That's a real value, you know, proposition for us, in that we're telling a CFO, "You can save X dollars immediately this year out of the gate." The second piece of that is not only is there cost savings to a system when they enter into a contract for us, and that's one of the benefits, but over time, as we ramp and we transition, we deploy technology, we deploy our global resources, we also expect that there's better benefits. There's better yield and, you know, upside in revenue for these providers that they should expect coming out of the contract once they start doing, you know, a partnership with us. We have the ability to share in the upside when we do that, and it's called incentive fees or gainshare revenue. That's another component of our revenue in these end-to-end contracts, where we have the ability to earn back a piece of the discount that we're giving them upfront. That only comes with improved bottom-line results for the system as well. I wanna talk just about, kind of the competitive environment. You know, you talked about your value proposition of immediate cost savings to these large healthcare providers. Is most of your wins coming from hospitals that are doing this in-house and you're just taking on the labor, or is it are you seeing competitive RFP processes of other revenue cycle management players at these large hospital systems? 70% of the market is still in-source today. There's incredible opportunity, and that's really the biggest competitive opportunity for us and where we see the most opportunity, are systems that still are doing their own revenue cycle operations. You know, as we've talked about before, these systems are under incredible financial pressures, and we're starting to see a number of hospital CFOs start to explore opportunities of how they can achieve savings and better outcomes. We're the, the, the natural home for them as they start to think of, of landing their revenue cycle operations with another partner. Yeah. For tech investors that are new to healthcare, margin compression at large hospitals, all hospital systems, has been a very big theme over the last several years with labor inflation, combined with lower, as we talked about, lower procedural and elective volumes that are now starting to come back. They were pressured from a top-line perspective and a bottom-line perspective, and a natural benefit for demand for your product offering. We haven't touched about the Cloudmed business, which RCM acquired. Jennifer came over from Cloudmed, was the CFO of Cloudmed. Lee is currently the CEO of RCM, is also the CEO of Cloudmed. A very accretive acquisition, running at north of 40% EBITDA margins. I, I backed into organic growth rates of over 40% as well, over the last several years. A really, really high-growth, high-margin business. Maybe we can talk about a little bit about generally what Cloudmed does and how it's used in tandem with the RCM, legacy RCM offering and what you're seeing in that, in that business journey. Sure. We talked a little bit about the R1 business model and these large end-to-end enterprise contracts of outsourcing revenue cycle operations. Cloudmed is... Historically, it's more of what we call modular or a point solution, more technology-focused, where there's a technology rules-based engine and a technology data platform, where hospital systems can you know, we take the data and ingest the data from hospital systems. Think about it more on the back end. When you, if you look at revenue cycle operations, you have the front end, you know, patient intake, patient registration, coding, all the way back to reimbursement. At the end of the day, when reimbursement happens and the reimbursement isn't a full reimbursement, there's an underpayment, there's a denial, there's some reason why that reimbursement didn't happen as expected, the hospitals have to react to that. Hospitals don't have the bandwidth, in many cases, the processes, the technology, to be able to deploy resources to address that. They would partner with Cloudmed. Cloudmed has a number of solutions that are more safety net. It's a fee-for-performance, contingency-based revenue model, where hospitals pay Cloudmed a percentage of the findings on revenue, and typically in the, you know, 20%-25% range of the incremental findings that we would find on behalf of the systems. It's, it's more of a modular or a point solution. Cloudmed would be addressing one specific pain point, one specific challenge that the solution or the, the, the system is experiencing, and come to Cloudmed and ask Cloudmed for their help in addressing it. The beauty about bringing Cloudmed and R1 together is that Cloudmed has a ton of data. 95 of the top 100 systems over 400 systems, visibility across approximately $800 billion of NPR. There's a lot of insights that Cloudmed brings and a lot of data that they bring. With that, one of the key themes and, and, you know, investment thesis of the combined acquisition of the two companies is the ability to cross-sell and upsell. Not only R1 did have some modular solutions, it was a small% of their business, but when you combine it with Cloudmed and all the customers Cloudmed has, we have the opportunity to further penetrate Cloudmed customers with incremental solutions we can sell into it. Patient experience through the VisitPay acquisition, some of our Physician Advisory Services that we can, we can upsell and cross-sell into the existing Cloudmed customers. One of the things that we're really excited about is for Cloudmed customers that are very pleased with the services and the value Cloudmed has brought, is thinking about: How do we further partner with them? If they're already using two or three or four or five solutions on the Cloudmed side, how do we further penetrate and upsell and ultimately convert a couple of Cloudmed customers into end-to-end enterprise operating model? Those are long sales cycles. Yeah. We haven't, you know, seen that come to fruition yet, but I would expect that to happen over the next couple of years, and that's part of what we expect with the combination. Are those, you know, top 100 hospital systems that are legacy Cloudmed customers, those are all in-house solutions, I'm assuming as well, when you're trying to upsell them to the end-to-end? That they currently do it themselves? Yeah, exactly. Yeah. Most of- Not using another vendor, right? Most of them... I mean, just look at the market in general... Yeah So goes the market, so goes our customer base. Okay ... that most of those are in-sourced today. Because the penetration of just having visibility into the 95, just naturally, those are gonna be health systems that are gonna be in the end-to-end pipeline. Yeah. No, of course. I don't know if you've ever given this context, but I'm gonna ask, Jennifer: what percentage of your current customers, how many solutions, how many modular solutions on average does each 1 have? Have you ever given, like, averages around that? We have, and it's very low penetration. Okay. Again, as we think about opportunities for growth in the future, you've got a ton of upsell opportunities, you know, with the combination of R1 and solutions that they had. Even within the existing Cloudmed portfolio, the penetration is somewhere around two solutions. Out of- ... call it eight or nine- Okay ... solutions that, that we have. The white space, even in our existing customer base to cross-sell and, and upsell and increase the penetration there, is enormous. Those are annual contracts for the modular solutions? Typically, they're three-year. Three, okay. In many cases, they, you know, auto-renew or they're evergreen contracts, with very. Price and escalators? Typically, we don't have-- I mean, it's- Yeah ... it's pretty steady- Okay ... consistent pricing across the contract period, but we have very high retention rates. Yeah. Well, it makes sense since you're, you're, you're getting cash flow. I guess, let's talk about balance sheet capital allocation. You know, give an idea to investors of where you sit on your balance sheet. You, you did take on debt to acquire Cloudmed. Talk to us about the cash on the balance sheet, how it's gonna be deployed, and how we think about capital allocation broadly. Sure. We did increase debt with the Cloudmed acquisition last year. Right now, we're between 2.5 and three times leverage. We started out right at three times, coming out at the close of the acquisition, and we expect that that will continue to come down, you know, as we continue to move through the year, and expect to be in that 2.5 times leverage range by the end of the year. From a capital allocation and priority perspective, our number one priority is investing in the growth of the business. Mm. We, last year, had incredible growth on the commercial front. We won a historical amount of new business, $13 billion of NPR that we won last year, and we're currently deploying and onboarding about eight of that right now. The other $5 billion is the second phase of Sutter. Yeah ... that we expect will be into 20, early 2024- Mm-hmm ... when we begin to onboard that. We're phasing that as we expected, and as we've talked about on that on prior calls. Yep ... just from an operational stability perspective. That is, by and large, our top priority, is making sure that we're investing in the growth opportunities of this business. The second is integration of the Cloudmed business. There's an incredible amount of synergies to extract and realize with the combination of the business, so we expect that we'll realize about $30 million of synergies this year. We originally guided to $15 million-$30 million of synergies, cost synergies this year, and we've recently updated that to say we'll be on the high end of that range. There's going to be costs to achieve those synergies and integration costs as we think about consolidating the technology platform so that we can get and maximize and extract the value of combining all of the data that we have. There will be some significant cost and cash that we'll use related to the integration, and the technology transformation of that combination. Paying down debt. Yeah. As we talked about, we wanna continue to see the leverage, decrease. As far as M&A goes, you know, we're gonna be opportunistic. If there are opportunities for tuck-ins or bolt-ons, we'll look at them, but that's certainly not our top priority. Coming out of the Cloudmed acquisition, there is a lot of execution. Yeah. to go do, and, we're gonna focus on that first. With default there on the bolt-on side, would it be around modular, more, adding more modular solutions to upsell? It could be. It could be adding new capabilities on the modular side. It could be enhancing opportunities for technology, where we can, you know, buy technology, if you will, that helps us on the end-to-end side and further our automation efforts. Mm-hmm. I think it would be, you know, kind of one of those two areas. My last question before I open up to the floor, I'd be remiss if I didn't ask you about how you're deploying AI at R1 RCM. This is one area that I get really excited about, because in the first, you're coming over from Cloudmed, which does have a lot of technology and use of technology with all the data at hand. This is one area that there's an incredible amount of opportunity as we move forward to extract value. It's something that R1 has actually, you know, it's a, a journey that they've been on. In 2018, the R1 business launched what was termed as a Digital Transformation Office, or DTO, office, and at the time, really started looking at where are there opportunities to automate manual task. Very, you know, services-focused business, a lot of manual task. Every customer has different processes, so there are a lot of, you know, manual operations that have to take place. Over the course of the last five years, R1's actually automated about $160 million of those tasks that were identified as opportunities to automate. It's certainly a journey that we've been on for quite some period of time, but given that technology is changing so quickly, you know, the use of generative AI and other uses of technology, it's ever-changing. We're deploying and looking at where are there opportunities for use cases internally, where we have large numbers of people doing things manually, that we could deploy more sophisticated technology into some of those areas, and the team is already exploring opportunities there. Kind of early stages of what, you know, the future means, but we're already well into the opportunities to just do automation and then, you know, combining it with Cloudmed data, combining it with. Right ... technologies that are available, really, there's a ton of opportunity, and that's one of the things I get most excited about. Yeah ... is the opportunity that there is in this business to, to really change healthcare. Great, any questions from the audience? Yes. As you come in, kind of, the management team here, is there, you know, glaring issues that you think you can really improve on in the core RCM business that has been kind of, yeah, when you're taking over your new role? I wouldn't say glaring issues. The R1 team, prior to the Cloudmed acquisition, is had been very successful in growing the business, and you could see that by the number of customers they've brought on over the last couple of years. Even, at the time of the Cloudmed acquisition last year, the sizable commercial wins that the business was having. With that growth comes challenges and comes opportunities for improvements, and so one of the things that we've been very focused on, with the existing management team and the new management team, all coming together in 2023, is being very focused on execution. On the commercial front, you know, we've won an incredible amount of new business, but we have to execute on deploying and onboarding that and making sure that we're getting customer satisfaction and stability for our customers through that process. There's a lot of operational execution required there. On the integration front, integrating a business and extracting the value from the integration, both on the cross-sell front and on the realization of cost synergies, a ton of value to extract, but again, a lot of execution required. On the technology front, we just talked a little bit about opportunities, but we've got to bring that data together. You know, there's three things that are required for technology to really work, and it's having consistent data, and data, and especially in healthcare, is not always clean and consistent, and so trying to bring that data in one platform and make sure that the platform is scalable and we can drive growth as we move forward. We've got to make sure it's high quality and accurate data, and then privacy is obviously incredibly important in, in healthcare and the business that we're in. As we think about execution required and doing all of those things, none of those are easy. There's a lot of opportunity, but there's a lot of balls in the air, and we've got to execute and keep them all moving forward. Sorry if I missed this, do you sell a suite of every module in one package right now, or do you sell them all separately? No, we certainly do bundled solutions. Great. We can do that, and in many cases, we will do that. When customers come to us for a very specific use case of, "I have this particular pain point," in many cases, we end up, you know, deploying a couple of different solutions. Over the last five years, on the Cloudmed side, pre-acquisition, Cloudmed had done a lot of bolt-on acquisitions- Yeah ... to increase the capabilities and the different solution sets. Those solutions are fairly new and part of why the penetration across the Cloudmed base, on average, is still very low, because we've acquired some of those capabilities over the last, couple of years, so that it creates a ton of runway for us as we move forward on opportunities to continue to penetrate. Is it a different sales force that goes out with the upsell than versus the original? No. We have two sales forces. One is more on the modular side, and one is more on the end-to-end, kind of the operating partner side. What's the most I know on the, I believe, correct me if I'm wrong, on the legacy R1, the most popular module was the PAS, Physician Advisory Services. Is that still true? On the, on the legacy R1 side? Yeah. Yes. My question is, what's the most popular module on the Cloudmed side? I would say over the last couple of years, we've seen a lot of growth in our DRG solution. You know, I would say over the last probably 18 months, given all of the challenges that providers are under, we've seen an incredible amount of growth in our denials in AR. Ah, yeah. There's just this huge backlog of denials. Systems can't keep up. As coming out of the pandemic, as the payers start to, you know. ... kind of return. Yeah ... historical levels of denials, and hospitals don't have staffing, there's this backlog, and ultimately, that's real cash that's sitting on the sidelines that they have the right to, but they need help. We've seen a lot of growth in our denials business. That makes sense, and we could spend probably another 30 minutes on that part of the equation. Well, thank you so much, everyone, for joining, and thank you, Jennifer, for participating. Great! My pleasure. Thank you.