Thomas Freeman: Yes, that’s — so the 55 is actually the incremental. So to your point, there’s — the current 2022 new member MBR embedded in our overall ’22 results, and really, we’re measuring the expected new member MBR in ’23 versus the new member MBR in ’22. And it’s really an incremental 55 sort of year-over-year in terms of the consolidated headwind. And so as we reflect on kind of where the growth is that we’ve seen so far and our expectations for the year, I would say, based on the distribution of members by market, by product, by provider group, the corresponding new member revenue PMPMs across those different variables and our expected MLR for each of those different again, groups, markets and products, we are expecting our new member MBR to be slightly higher this year than ’22.
But again, that being said, I think what is most important to us is not necessarily where the new members come in at year 1, where they typically don’t really produce much contribution margin anyway. What we’re more focused on is our ability to manage those new members and improve those MBRs over time. And I think that we still feel really strongly and kind of confident about today.
Kevin Fischbeck: Okay. So it’s not the number of numbers, it’s where the numbers are that’s causing that year-over-year delta?
Thomas Freeman: That’s right. It’s a bit of a mix when you consider geography, product and provider.
Operator: This question comes from the line of Lisa Gill of JPMorgan.
Cal Sternick: This is Cal Sternick on for Lisa. A couple of clarifications — is your reach. I guess on the — have you given what the margin profile of the business is over the long term? Apologies if I missed that. And then in terms of the membership growth, I know you said it’s not going to preclude you from hitting your 20%-plus MA target. But how should we think about the growth trajectory of that business going forward? I know there’s a much different SG&A load associated with ACO reach, but are there any material incremental investments you need to make to grow that membership?
Thomas Freeman: Cal, so this is Thomas here. In terms of the EBITDA comment, I think our belief today is that the ACO reach book of business is probably in the low to mid-single digits in terms of the EBITDA margin opportunity. And I think we’ll continue to learn as we continue to grow that in recognizing that it is a new program, and our experience so far has been limited to a pretty small population in a pretty concentrated geography. So I think as we continue to expand that, like we are in ’23, adding new providers in California, Florida, Arizona and Nevada, I think we’ll start to get more of a broader set of experience that we can draw on that will inform our view of the longer-term margin opportunity. But I’d say that’s kind of our current thinking today.
And in terms of the incremental investments required to grow this business, the reason that it’s not too significant from an SG&A investment standpoint is because the providers we’re partnering with are already providers that we are working with on our MA books of business. So we haven’t had to create a massive or significant new business development infrastructure because these are providers and partners that we’re already talking to kind of day-to-day, week-to-week as a part of our MA operations. And then from a — sort of shared services and from a fixed cost standpoint, the only real incremental resources we’re deploying are in the medical expense line as we bring on more nurses, case managers, et cetera, to deploy a lot of our Care Anywhere programs for this population.
