Steve Sell: So I mean, I’ll just back up, Adam to what I said, which is, we are really trying to tune our payer economic and risk sharing arrangements in this environment. Utilization is up and we’re managing that. We should probably be receiving a larger percentage of premium. That’s part of the dialogue that we have with them, given the consistency of performance from a quality perspective that we’re delivering for them and for their patients. So that’s kind of a big part. The things outside of our control, how do we look at that? Do we corridor it? Do we cap it? Do we carve it? I mean – getting into sort of future scenarios about what gets changed and how that flows through? I don’t have a perfect crystal ball on that, but I do think this idea is, we are delivering an incredibly valuable service for them and we are trying to look at a sustainable model for them and for us that works around that.
So that’s sort of a general answer to your question, but a lot of dialogue with them as they think about their ‘25 bids, as they think about ‘25 markets and how our partnerships fit within that.
Adam Ron: Yeah, I appreciate that. And then just two really quick follow-ups. So G&A, I think like platform support costs are based on the current guidance of like 3% of revenue and last year’s performance, I think they’re growing in like the mid-teens. Is that a reasonable way to think about ‘25 as well, just on a dollar basis for platform support costs? And then finally, I think the adjusted EBITDA in ‘23 was around negative $90 million. Is that how we should think of operating cash flow losses in ‘24 as well, since we’re talking about a one-year lag? Thanks.
Tim Bensley: Yeah, I think on the first one, a little early for us to be guiding to platform support costs for 2025, but we would expect that we’re going to definitely continue to get leverage out of our platform support costs and continue to drive platform support cost growth will be obviously well below what our revenue cost growth or what our revenue growth is. So specifically a little early to say, but yeah, we’ll continue to get leverage for sure. On the cash flow numbers, what we talked about for 2024 is that our expectation is that we’ll burn somewhere between $135 – $125 and $150 million of cash use in 2024. If we hit our guidance for 2024 that we put out there. The way our cash flow works is, there’s kind of a delayed impact of the medical margin and EBITDA that we’re generating in 2023 has a big impact on our 2024 cash flow.
2024’s guided performance will have a big impact on 2025. If we can deliver our 2024 guidance, which, of course, we expect to, our 2025 use of cash would go from down to about $25 million or $30 million. And then that would put us on a good trajectory to be positive cash flow in 2026 and beyond.
Steve Sell: And, Adam, what I would say is, just we’re seeing tremendous leverage on the efficiency side from the investments we’re making in technology and the – centralization, standardization of activities that we’re doing, like chart reviews that previously got done within the local markets. And so I think just the scale that we’ve got, there’s a tremendous opportunity, not just in things like discussions with payers, but also from an efficiency perspective, for us to drive further – further around that. So I think as we continue to grow, there’s going to be far greater leverage from that perspective.
Tim Bensley: And we get very good leverage against our operating costs in our existing markets. I mean, most of the incremental costs that we add year-over-year to our platform support costs is because we’re adding markets as our existing market base becomes a bigger and bigger part of our overall membership. We just get really good leverage out of cost in those markets.
Steve Sell: It’s another benefit of growing in your existing footprint.
Adam Ron: Agreed. Thanks so much.
Operator: Thank you. We have no current questions on the line. So I would like to hand it back to the agilon management team for any final remarks.
Steve Sell: Well, thank you. Obviously, we’re living in a very dynamic environment. I think our ‘23 results and ‘24 guide we’ve shared with you are clearly impacted by those. But we feel like our targeted action plan is on track and our business model is working. And I think when you look at our cohort data, even in a difficult environment, it shows the value we’re providing to physicians and sort of what the long-term opportunity is within the business. So we look forward to talking with you all soon. Thanks for joining us.
Operator: Thank you for joining the agilon health fourth quarter 2023 earnings conference call. You may now disconnect your lines and please enjoy the rest of your day.
