Meaning a lot of the branded, you all consider A to your health systems are running out of space. There’s so much demand because the brand is so strong. And so, what’s interesting is a lot of them are approaching us with their solution if not to just take global cap, that’s not what they want to do. Rather what they want to do is actually leverage AVA to anywhere and lower senior admissions into their hospitals, and in turn replaced those admissions with commercial admissions which are correctly just better funding. So, I think somatically that’s going to be a trend you start seeing, and as a growth opportunity there. And I think one of the things that they’ve commented to us is some of the larger national folks, the long-term viability working with somebody’s folks really challenging for them.
And so, I would see that trend continuing across the board, kind of geography agnostic. I think it’s a consistent theme that I’m seeing everywhere. I know that answer to your question, John.
John Ransom: Yes. Not what I was expecting. That’s interesting. So, just to tack one more on ACO REACH, is that ever going to be any kind of material profit driver, do you think the government has made that program attractive enough — down or it is just going to be one of this little — one of this Medicare programs where the government saves money but nobody makes any money participating?
John Kao: Well, it’s hard to underwrite it. I mean we’ve been consistent with that also. We think it’s probably a pretty good program for physicians, kind of has on onboarding and on-ramp to value-based care, but it’s hard to underwrite when they reset the benchmark every year. It’s just like — I don’t want to say it, it’s kind of race to the bottom, which is why we have not deployed capital like some of the others. I seen that before. So, I do think it’s important to have it as a part of our portfolio simply because we want to help doctors, and so a lot of the doctors that we have good relationships with do have a component of either an MSSP, or ACO REACH, or just kind of some form of issue program and DCU program. And from a workflow point of view, we don’t want it to be different than the MA book, so we’re helping them just provide better care and better economics. But for us, I’m not sure it’s something that we would underwrite.
John Ransom: Thank you, sir. That’s it from me.
John Kao: You got it. Thanks.
Operator: Thank you. So, we have one more question in the queue. That question comes from Scott Fidel from Stephens. Please go ahead.
Scott Fidel: Thanks. And I guess since John started round two, well, I’ll tack on there. And actually, wanted to get your view on one industry level, just dynamic that’s where California has been a bit more of the tip of the spear recently, just in terms of the union dynamics where we saw Kaiser agree to that new contract and then the minimum wage bill that was approved for healthcare workers. And definitely interested in how you’re factoring that into your thinking on upcoming unit costs and negotiations with assistants out in California. Not really, I guess, as much for ’24 but even taking more for ’25 and ’26.
Thomas Freeman: Hey, Scott, Thomas here. I guess there’s two parts to how we might think about that. So, the first is, in terms of its direct impact on our clinical workforce. The impact is generally negligible, just given the level of nurses and doctors that we employ across the state. So, not something that we view as a major driver of our ’25 and beyond outlook, I think in terms of your point on how that may eventually flow through to our conversations with hospitals. We typically are contracting with hospitals on a percentage of Medicare basis, typically it’s 100% of Medicare. And so, the way it will work for us in general is, as those hospitals are getting pressure, we often see that, that leads to greater levels of Medicare rate increases, which flows through to our contract to your point, but it also flows through to our revenue benchmarks. So, I think in general, our contracting approach is pretty well insulated from some of those dynamics overtime.
Scott Fidel: Okay. Thank you.
Operator: Thank you. That concludes our Q&A session and today’s conference call. Thank you all for attending. You may all disconnect at this time.
