Second point is higher starting points. We’ve got year 1 markets that typically come in, they’re breakeven. They’re certainly dilutive on a med margin level. Our ability with a longer implementation cycle on this acquisition, which we’re really excited about, can help that starting point. And then the third thing is really just the cohort migration across time. And so I think we feel like we can manage it. We’re obviously in the comment period. We participated with APG and BMA and the health care transformation task force on this. I think there are others that are much more dramatically impacted than we would be and we are supportive of phasing in something of this magnitude and type of change. But for us, it’s manageable. And I guess the last point I’d make is what I talked about in my remarks, which is I think there’s just a macro trend in terms of the push towards value from fee-for-service.
There’s always been the factors of the challenge for physicians, the demographic surge in terms of seniors and payers demanding, looking for more to value. I think what just happened with this notice is going to accelerate that. If you think about payers and Medicare Advantage, the vast majority nationally of their membership in MA sits on a fee-for-service chassis. They are going to want to move that because of that variability that I talked about. And who is the solution for that from a payer side, I think it’s agilon. Who is the solution for that from the physician side, I think it’s agilon health. And so I think from a volume perspective, we’re going to win on it we’ll see where this settles out. We’ll know in a month. But I think the headline is it’s manageable.
Matthew Gillmor: And just one clarification. Steve mentioned new markets being dilutive on a medical margin basis. I think you probably meant EBITDA.
Steve Sell: I’m sorry.
Matthew Gillmor: It’s okay, but just to clarify. Operator, we can move to the next question, please.
Operator: And our next question comes from Jay Andresen from Truist Securities.
Unidentified Analyst: Actually, my question is related to what the clarification, Matt, you just gave. So on this Clearly, class of ’22 performed well compared to your medical margin PMPM target of $30 to $60. How should we think about year 1 medical margin guidance in terms of class of ’23 does the unique nature of this year’s class impact your view, how you think about year 1 medical margin this year?
Tim Bensley: This is Tim. I’ll take that. I don’t think so. I think we’re still — looking at the class of ’23, we still say that, that range of $30 to $60 is going to be the starting point. We’ve got — within — within the class, it’s a very large class in 2023. We’ve got some on both sides of that. But that range is still very appropriate for the class of 2023 for this year.
Unidentified Analyst: If we can ask one more quick here on the — any update you can provide on your discussions with health systems? Are you actively exploring those partnerships for class of ’24? Or do you believe that there is a wait-and-see approach on how Main Health plays out?
