Lee Bienstock: Of course. Thanks, David. Great to hear from you. Appreciate the question. So absolutely, as you described, we’re absolutely seeing demand for care gap. This is really being driven by the health plans really investing deeply on improving their quality scores, improving their HEDIS, Stars measures and really making sure that they’re investing in impacting their member and their patient – their member base and their health outcomes. And we see a tremendous opportunity for us to engage these health plans, many of which have millions of members to reach those members that have gaps in care and have accessibility issues. I think our competition primarily are sort of your brick-and-mortar clinics where the health plans traditionally have tried to funnel or try to direct patients into those clinics to be able to close those gaps in care.
Obviously, we take a very different approach. Instead of calling a patient and saying, we need you to come into our clinic for a bone density scan or we need you to come into the office for a diabetic eye exam, we call the patient and say, hey, we’re in your neighborhood. We understand you need a care gap closed, you need a colon cancer screening. We’re in your neighborhood, we’ll come to your home, how does tomorrow sound? How does next week sound? And we feel like we have a really differentiated patient experience that I think is proving successful and very valuable, and patients love it. So that’s really where we see the demand. That’s kind of the competition. And of course, there are other mobile providers out there, but we have a really unique service delivery model that combines our tech platform.
We’re able to efficiently optimize the field clinicians that we have, we provide them with the technology they need and then we marry them up with a – we partner them with an advanced practice provider that’s directing the clinical encounter remotely. So a really unique model and obviously bringing care to patients and meeting them where they are is way more likely to be helpful in improving health outcomes. In terms of the virtual care – in terms of the primary care practice business, PCP business that you mentioned, we really feel there as well that we have a differentiated model. So you can imagine when we go and close gaps in care, when we engage patients in their home and we form that relationship, there’s an opportunity for us to become their primary care provider.
And there’s an opportunity for us to help quarterback their care, to help coordinate their care and impact their care in a much more profound, deeper way. And so we feel like we have opportunity there. And so as we engage patients, close care gaps, there’s going to be an opportunity for us to become their primary care provider because perhaps they don’t have access to one or they haven’t seen one in over a year or they have a hard time getting to their PCP or they have a hard time getting an appointment with the PCP. We have our unique model where we essentially bring the PCP to them. And so as we go and close care gaps, there is going to be sort of that natural funnel where we can then become their PCP as well. And then as we’re helping coordinate care, as we’re closing gaps in care, you can imagine we’ll be successful in impacting Stars ratings, HEDIS quality score metrics, and obviously, that betters the patient, that betters the plans and ultimately helps lower cost for the overall system, and we will participate in that.
So, we are excited about that funnel. We think the value prop is certainly there. The patient experience is certainly there. It’s a really differentiated offering from what’s out there today, and we are excited to scale it and invest in it.
David Larsen: Okay. That’s very helpful. And then just one quick follow-up on the primary care business, like the virtual primary care businesses that I am aware of, are very – like fast-growth businesses. Plus Care within Accolade, I think is their highest growth segment. LifeMD, very high growth, would there be – like what would the revenue model be? Could it be like $100 a month direct-to-consumer? And then I mean I think that would be like $12 million a year in revenue if you assume 10,000 patients. And then – or would you potentially bear risk and collect a percentage of premium, or is that sort of still in development and you will sort of see where the need is in the market?
Lee Bienstock: Yes. So, I think it’s important to know, we really feel like our differentiation is the virtual when it’s effective and then the ability to go in person when it’s needed. And in many cases, it just simply is needed. And I think a lot of healthcare companies are finding that out where they are doing telehealth only, they really are needing that in-home clinical care. So, we really feel like that’s our differentiation, not just on the virtual side, but we are adding to the equation the in-person, and in some cases, we will do virtual, but when it’s needed, we are able to go in person. I think our monetization of this really is exactly as you described. I think initially, we are going to be – we are going to be having a per member or per patient per month essentially fee that gets charged, either to the health plan or a commercial payer.
And then eventually, once we have the data, once we feel comfortable, some of the contracts we are signing do have the ability for us to enter into risk-sharing. Initially upside only and then eventually full risk when we feel comfortable, when we feel like we are indeed impacting patient outcomes and lowering total cost of care. But we are structuring things in a way that it is a step function, not all at once.
David Larsen: Okay. Thanks so much.
Lee Bienstock: Thanks. I appreciate it.
Operator: Next question we have comes from Pito Chickering of Deutsche Bank. Please go ahead.
Kieran Ryan: Hi there. You have got Kieran Ryan on for Pito. Thanks for taking the question. Just wondering, is there any way you can – anything you can say to maybe help us understand what the margin is on your base revenues today or in 2024 just as we think about kind of bridging to that 12.5% for 2025 on the $400 million in revs and $50 million in EBITDA? Thanks.
Norman Rosenberg: Sure. So, on the – it’s Norm. So, on the gross margin side, the transport business, we break out pretty easily. So, that’s about 33% and change, so that’s where we are running. Obviously, the EBITDA margin on that depending on how you allocate the overhead is a different number. But when you look at mobile health, we will start with the gross margin, probably about 35% and change. Actually, if you break out migrant, that number might be a little bit higher. Some of the migrant revenues, especially the programs that are going to be the first ones that go out the door, happen to be lower margin. So, I think the mobile health base margin – base gross margin is in the high 30s. The way we get there though is we talk about having a blended gross margin of, let’s say, 35 points and then SG&A as a percentage of revenue is about 23 points and then you get to your 12 points or you get 22.5 points.
