Brooks O’Neil: And I’ll just ask one more, and I appreciate all of your thoughtful answers here. But Brandon, I know you have much deeper expertise than I do in information technology, and I know it’s a key part of your underlying platform. You mentioned, I think, in the prepared remarks, AI, and obviously, a topic on every investor’s mind right now. But I value your perspective on how you think AI can impact your company in the provision of value-based care through your providers to your members.
Brandon Sim: Yes, of course. As a bit of a nerd myself, that’s something that’s close to my heart. I do think, however, that the core of our platform is not necessarily driven by some of the very exciting new developments in AI because there’s so much low-hanging fruit available for us to solve and coordinate better care for our patients even without all of that. I have no doubt that in the years and decades to come, that absolutely will be on the forefront of incorporating those new technologies’ involvements into our technology platform. But even now, the ability to pull all of a fragmented data ecosystem together to engage members effectively, to build risk ratification algorithms and to suggest care planning and clinical programs for our members, especially those who are higher risk, these are the bread-and-butter tools that we’ve developed in-house to enable superior care coordination and outcomes for our patients.
So I do want to temper — we probably won’t have any ChatGPT in our platform any time soon, but I do believe that the developments are exciting, and we’ll continue to stay abreast of all of them, of course.
Operator: Our next question is from Ryan Daniels with William Blair.
Jack Senft: This is Jack Senft on for Ryan Daniel. Also reiterate, congrats on the really strong year. First off, I know you guys don’t give guidance on specific line items. But when we look at the risk pool settlements and incentives revenue line, how should we think about this going forward with the sunsetting of NGACO? Fourth quarter, you guys were at about $15.5 million. Is this kind of a run rate you would expect for 2023? Or if not, can you give us any indication on how to kind of think about this moving forward?
Brandon Sim: Jack, thanks for calling in. I’ll be letting our CFO, Chan, answer this one.
Chan Basho: So with the sunsetting of the NGACO, you’ll no longer be seeing that Q3 bolus in terms of the settlement of prior year risk pools. And instead, what you will be seeing is us accounting for the ACO reach program quarterly within our financials.
Jack Senft: And then another quick question, too. How should we think about margins going forward, especially given in your prepared remarks, you said a return to normal utilization? And also just kind of given the redeterminations, the sunsetting of the NGACO and then also recontracting with payers given the RKK, so just kind of curious what your thoughts are on margin expansion going forward and if you have any long-term targets in this area.
Chan Basho: Yes. I think on the
Brandon Sim: Oh, sorry, Chan, go ahead.
Chan Basho: Oh, no. Go ahead, Brandon.
Brandon Sim: No. I’m just going to start off with a couple of quick remarks. We have guided towards a long-term EBITDA margin of 10% to 20%, both from our care delivery and value-based enablement platform side of the business. We still plan to be in that range at the midpoint of guidance for 2023, which is $1.4 billion of revenue and $140 million of adjusted EBITDA. And this includes some of the costs that will go into continue to develop the platform outside of California and bring differential growth in those regions. Chan, could you add to that comment?
Chan Basho: You said exactly what I was going to say. So yes, relative to 2022, we don’t expect medical costs to continue to increase. And as we said, we do feel we’re at a post-COVID kind of run rate.
