Ryan Daniels : Congrats on the announcement. Tim, a lot of data but I want to hone in, again on your comments on medical margins. They were interesting looking at the year 2 cohort. So I’m curious if you could give us any color on how that contrasts to what that year 2 cohort may have looked like a year or 2 ago? And then second, do you think that’s due to more rapid and better implementation, so starting at a higher point or is it more to do with kind of the operational speed to value as you move into the second year of those performance metrics?
Tim Bensley: Yes. No, that’s a great question. I think our we’ll update you, again, Steve was just talking about it in about a month on the cohort data, you’ll get even a better look at this. But even if you refer back to a year ago, I think you can — the information we put out on cohort data at last year’s Investor Day, you can see that. Yes, I mean, our year 2 plus market performance has been consistent across cohorts as we move — as we move through time. So we’re not necessarily seeing a faster pickup. We’re just seeing that same kind of progression, I guess, in each cohort as they move forward. I don’t think, at least right now, in the last couple of years, it hasn’t been really a higher starting point. I think we’ve been consistently in that $30 to $60 range.
More important, when we start somebody in the $30, $60 range, the more important thing is that we’re quickly moving those folks up on that maturation curve and medical margin kind of as we walked you through in the cohort analysis last year as they move into year from year 1 to year 2 and year 3. And they’re quickly getting the numbers up into the mid-100s and we even showed you markets by year 3 are getting up and already pushing between $150 and $200 medical margin PMPM. So I don’t think it’s necessarily a higher starting point. I think it is our ability to quickly ramp those markets up in year 2 and year 3. And basically, that ramp-up is coming because as they mature in the market, we’re just getting tremendous physician variability out of the system.
We’re getting tremendous compliance with our — and execution of our clinical programs that are driving quality and quality up and cost out.
Operator: Our next question comes from Brian Tanquilut from Jefferies.
Brian Tanquilut: Tim, just a quick question on the EBITDA to cash flow conversion. So obviously, a strong outlook in EBITDA growth. But how should we be thinking about cash flows this year and into next year as well?
Tim Bensley: Yes. So one of the things that happens is our cash flow typically is going to lag our EBITDA. And the reason for that is a couple of things. One is just the timing of how we settle up our risk pools with the payers means that we’re getting the cash for our EBITDA performance kind of well behind the time here that we’re reporting the EBITDA. And the second thing is we are actually investing in these larger and larger markets. And so that year or I’m sorry, that year 0 implementing market expense is actually going up as well. And obviously, we don’t get any revenue or any cash for that until the following year. So typically, we’re seeing we’re seeing cash flow kind of lag EBITDA. So for instance, in 2023, a significant portion of our cash flow improvement year-over-year, we would expect to see a significant pickup in cat year-over-year will come from 2022.
And certainly in 2022, the fact that we had significantly more EBITDA gain than we did cash flow is driven by the — by those same factors.
Operator: Our next question comes from David Larsen of BTIG.
