Sandy Draper: A lot of questions have been asked and answered, but maybe just a follow-up on the comments about the platform support costs in the same geography, given the strength of the pipeline, the outlook for ’24 and beyond, is it fair to assume that we’re not going to necessarily see those — this wasn’t sort of onetime, 1 quarter, and we’re going to fall off. It seems like we’re sort of stepping up to a new level just because the visibility for long-term growth is there. Just want to make sure I’m thinking about that right.
Tim Bensley: Yes. So I’d answer it a couple of ways. On platform support costs specifically, we had the opportunity, particularly after — on top of the strong performance we had on both the M&A side and the direct contracting side. sort of ramp-up platform support cost in advance of 2023 and sort of kind of get a jump start up to that 2023 run rate. So our fourth quarter platforms forecast is more in line with what we would expect our ’23 run rate to be. And that’s — as we go into 23-unit increases is heavily in platform support cost is heavily influenced by the fact that we’re bringing on a lot of new markets that a lot of the members. So that makes sense. But still getting a significant reduction in platform support cost as a percentage of revenue.
So still getting leverage out of it. On the implementation costs, the that continues on a per member basis to stay in a very good range and say that $400 to $600 range. And when we spend $400 to $600 to bring a new member on we’re getting phenomenally quick payback on that and getting like we consider the lifetime value of the medical margin and network contribution that we’re going to be generating off of that membership and considering the really good retention that we have with membership. We’re going to go to get a lifetime value to customer acquisition costs. ratio of something like 10, 12 to 1. So really, really positive. The fact that we had a big pickup in implementation costs this year is really primarily a factor of having twice as many members that we were implementing.
I mean we implemented over 100,000 new members in 2022 that went live now at the beginning of 2023. The year before class is like 57,000. So that increase in membership obviously, at a still a really good cost per member, just generating a bigger number. We’re — I mean, we will make that investment all day long, right? Getting those members on the platform early today as many as we can with all that embedded margin just puts us in better shape to be able to hit both our membership and our medical margin and EBITDA projections for the future.
Operator: And our final question comes from Stephen Baxter of Wells Fargo.
Stephen Baxter: I was hoping you could talk in a little greater detail about your ability to manage margins and margin progression in a more challenging rate environment inclusive of that risk model headwind, not to harp on it too much, but the risk model change alone that you size is larger than the average annual EBITDA margin expansion that’s implied to reach your long-term guidance target. So I’m just trying to understand why this would it be a bigger setback for you in 2024 absent some kind of mitigation in the final rule.
