eHealth, Inc. (NASDAQ:EHTH) Q4 2022 Earnings Call Transcript

eHealth, Inc. (NASDAQ:EHTH) Q4 2022 Earnings Call Transcript February 28, 2023

Operator: Good afternoon, everyone, and welcome to the eHealth, Inc. Conference Call to discuss the company’s Fourth Quarter and Fiscal Year 2022 Financial Results. At this time, all participants have been placed in a listen-only mode. The floor will be open to your questions following the presentation. It is my pleasure to turn the floor over to Eli Newbrun-Mintz, Senior Investor Relations Manager. Please go ahead.

Eli Newbrun-Mintz: Good morning, and thank you all for joining us today. On the call this morning, Fran Soistman, eHealth’s Chief Executive Officer and John Stelben, Chief Financial Officer will discuss our fourth quarter and fiscal year 2022 financial results and our financial outlook for 2023. Following these prepared remarks, we will open the line for a Q&A session with industry analysts. As a reminder, this call is being recorded and webcast from the Investor Relations section of our website. A replay of the call will be available on our website later today. Today’s press release, our historical financial news releases and our filings with the SEC are also available on our Investor Relations website. We will be making forward-looking statements on this call about certain matters that are based upon management’s current beliefs and expectations relating to future events, impacting the company and our future financial or operating performance.

Forward-looking statements on this call represent eHealth’s views as of today, and actual results could differ materially. We undertake no obligation to publicly address or update any forward-looking statements in future filings or communications regarding our business or results. The forward-looking statements, we will be making during this call are subject to a number of uncertainties and risks, including, but not limited to, those described in today’s press release, our Annual Report on Form 10-K and our other filings with the SEC. We will also be discussing certain non-GAAP financial measures on this call. Management’s definitions of these non-GAAP measures and reconciliations to the most directly comparable GAAP financial measures are included in today’s press release.

With that, I’ll turn the call over to Fran Soistman.

Fran Soistman: Thank you, Eli, and good morning to everyone joining us today, as we report our fiscal year and fourth quarter 2020 financial results. On this call, I will, one, review our annual enrollment period performance, which exceeded our expectations and reflected the early progress of our transformation plan; two, update our strategic and operational priorities for 2023 and finally, share our outlook for this year. I’d like to begin by sharing our view of the Medicare market and eHealth’s critically important role. The Medicare Advantage Program offers strong value propositions to seniors through superior health outcomes compared to traditional Medicare and a wide selection of quality and robust plans at affordable premiums.

Today, seniors have a large choice of provider networks, coverage options and supplemental benefits, such as over-the-counter medications, dental, vision and hearing, as well as membership through the plans offered by multiple health insurance carriers. Further, many carriers provide beneficiaries with access to programs to address social determinants of health, including transportation and food assistance as examples. For certain segments of the senior demographic, a combination of traditional Medicare with Med Sup can also be an attractive choice of health coverage, complemented with ancillary services, such as dental, vision and hearing. With all the robust options, however, comes complexity. We view our role in this industry as a trusted and transparent adviser to seniors as they make the critical decision of assessing their options and choosing a health care plan that best fits their needs and preferences.

We are well positioned to deliver on this mission, based on our broad network of leading carriers, unbiased plan recommendation tools and our unique omnichannel consumer platform. Our omnichannel platform allows customers to seamlessly shift between telephonic, self-serve online and online-assisted interactions with eHealth, while researching and enrolling into plan. Simply put, we aim to meet consumers on their terms, guiding them through their health insurance and related options, when, where and how they prefer. Our strategic and operational decisions are informed by the company-wide goal of being the gold standard in quality and distribution at scale of Medicare, individual, small group and ancillary products. As I shared on our last earnings call, this mission has been operationalized through our customer pledge outlining our commitment to beneficiaries, consumers and caregivers and the experience they can expect when they work with eHealth.

We also remain committed to maintaining close and collaborative relationships with our carrier partners and supporting their customer experience goals. Following the AEP’s completion, we have received positive preliminary feedback from several of our largest carrier partners with respect to our enrollment quality, including a meaningful reduction in Medicare Complaint Tracking Module, or CTM scores and an improvement in persistency compared to a year ago. As a reminder, CTMs reflect beneficiary complaints filed directly with CMS. Since implementing a host of enrollment quality-related initiatives in the third quarter of 2021, eHealth has observed a 50% decrease in its CTM rates from 2021 to the most recent AEP based on preliminary data available to date.

We also continue to receive positive anecdotal feedback from carriers, including from one of our largest carrier partners who share that our enrollment quality metrics are in line with their own internal sales channel. We are steadily moving towards our goal of becoming the gold standard in enrollment quality within our sector, while also achieving and exceeding our financial targets. Last month, we released our preliminary fourth quarter and fiscal year 2022 results, which came in above annual guidance ranges that we provided earlier in the year. Today, we will share more detail about our fourth quarter financial and operating performance and the key drivers behind our effective AEP execution. Shortly, after I joined eHealth as CEO in November of 2021, we mapped out a business transformation plan that included several strategic initiatives, including overhauling our marketing and sales processes to lower the cost of acquisition, improve the quality of leads and improve our sales advisers selling techniques, all with the ultimate goal of improving conversion rates.

Further, we were focused on evolving the customer journey to create a memorable shop, educate, advise and enroll experience. From a financial standpoint, returning to sustainable profitable growth and positive cash flow generation became our North Star. In early 2022, we initiated a company-wide cost reduction plan and purposefully slowed down our enrollment growth, choosing to forget on enrollment volume that did not support our target margins. During this last AEP, we pursued targeted demand generation campaigns and deemphasize certain channels such as DIRECTV, while driving strong performance within our affiliate and strategic partner channels, as well as through dedicated carrier arrangements. Driven by changes to our marketing program implemented in 2022, we were able to generate higher quality leads during this AEP compared to a year ago and converted them at much improved rates within our call centers.

Higher conversion rates were also driven by meaningful process improvements in our telesales organization. For our license and service agents for benefit advisers, ahead of the AEP, we redesigned our adviser hiring and training program, introduce new adviser-facing technology tools and launched a local market operating model where our benefit advisers specialized by region, which better aligns our sales model with the local community-based nature of healthcare delivery and the health insurance industry. To better bridge our online and telesales experiences. Last year, we introduced co-browsing and chat capabilities. The online chat tool, in particular, had a pronounced positive impact during the AEP on conversion rates for the online visitors to used it.

It also positively impacted approval rate and initial retention for these enrollments based on data we have to date. In addition to creating a positive user experience, chat also effectively leverages time and capacity of our benefit advisers as one person can manage multiple chats simultaneously. As a testament to the success of these initiatives, our fourth quarter telephonic conversion rates increased approximately 25% compared to Q4 of 2021. This represents a meaningful operating lever given the significant call volume we received in Q4. Adjusted EBITDA margins on our fourth quarter Medicare enrollments were more than doubled as Medicare Advantage lifetime values remained stable while total variable acquisition cost per approved MA-equivalent member declined by 18% compared to a year ago.

Through a combination of strategic and operational initiatives, along with cost transformation measures, we increased fourth quarter adjusted EBITDA by 76% year-over-year, partially driven by our intentionally reduced enrollment volumes and revenue compared to a year ago. Fourth quarter revenue of $196.3 million represented a decrease of 19% year-over-year and drove adjusted EBITDA of $49.5 million, up from $28.2 million in Q4 of ’21. Fourth quarter GAAP net income was $20.7 million. It’s important to note that over the past several months, we have observed trends suggesting that our industry peers are taking similar actions in terms of prioritizing sustainable profitability versus growth at all costs. In fact, we believe that the Medicare distribution market has reached an inflection point with brokers refocusing their effort and resources on enrollment margins and member retention.

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In addition to bringing a more rational approach to demand generation, which benefits all players in the industry, we see this trend as having a positive effect on consumers as brokers place increased emphasis on the overall customer enrollment experience, including plan fit and a long-term member retention. During the fourth quarter, we managed our liquidity much more effectively than we initially forecasted. More specifically, total cash outflow for fiscal year 2022, excluding the impact of our $70 million term loan and associated costs and net securities activities was $44 million, favorable to our guidance range of $110 million to $90 million of outflow. We ended the year with sufficient liquidity to support our business needs and objectives in 2023.

Business transformations are driven by people, and in the period of time following our last earnings call, we rounded out the senior leadership team with three new additions. John Stelben joined eHealth as Chief Financial Officer in November of 2022. John has significant financial leadership experience in healthcare, most recently at CVS Health, Aetna, where he had multiple roles, including CFO, Government Services division, covering Medicare, Medicaid, federal employees program and public exchange businesses. John has already made its impact felt driving the development of our 2023 financial plan. This year, we announced that Ketan Babaria joined eHealth, as our Chief Digital Officer. Ketan’s extensive track record building strategic digital road maps at customer-focused companies make him the ideal person to further our technology leadership in the sector.

Third and finally, Lara Sasken returned to eHealth at the beginning of February, as Senior Vice President of Communications. Lara returns with a wealth of knowledge and experience to once again lead eHealth’s communication initiatives and activities. With these three hires, I’ve completed the new senior leadership team that’s executing on our transformation plan, strategic initiatives and pursuing the exciting opportunities we see ahead of us. We are pleased with the significant operational achievements made over the course of last year, culminating in a successful annual enrollment period. However, we are just getting started, and see even greater upside to the efficiency of our marketing and sales organizations. In 2022, we intentionally reduced enrollment volumes and total revenue, as we implemented necessary organizational and operational changes ultimately with the goal of returning to sustainable profitable growth.

We expect to achieve this through disciplined volume growth, further improvement in our enrollment margins, strict fixed cost controls and developing revenue streams outside of our core MA broker business. At the midpoint, our 2023 annual guidance reflects 6% revenue growth, while achieving significant year-over-year improvement in adjusted EBITDA. John will elaborate further in his remarks that will follow mine. Moving now to our 2023 operational priorities. These objectives are meant to build on the success of our transformational initiatives implemented last year and reflect our commitment to continued improvement across all areas of operations. The four objectives are as follows. First, we continue to build on last year’s progress with an eHealth’s omnichannel marketing and lead generation engine.

Second, to improve conversion rates across our entire enrollment platform regardless of how the customer chooses to interact with eHealth. Third, to introduce the next phase of our customer retention strategy. And finally, to further diversify eHealth’s revenue streams. I’ll now provide further detail on each of these objectives. First, we will continue building out our unified omnichannel marketing engine. Last year, we significantly improved our lead quality and lowered our acquisition costs by narrowing down our marketing channels and campaigns to pursue only the highest ROI initiatives. This year, we see an opportunity to start diversifying our channel mix through a disciplined test-based approach, out of the strong leadership of our CMO, Michelle Barbeau, our reengineered marketing initiatives will be increasingly driven by audience segmentation and targeting, leveraging differentiated messages that highlights what’s unique about eHealth and extending touch points with non-converting website visitors as well as our existing customers.

We will also be aligning our marketing engine more closely with the new structure of our telesales organization by emphasizing local market and product-specific campaigns. Ultimately, the goal is to further customer engagement and establish a strong distinct brand that effectively communicates our differentiated value proposition as a fully transparent adviser to customers in a complex health insurance industry. Second, we will continue to prioritize improving consumer experience and conversion rates across our entire platform regardless of how the customer first interacted with eHealth or how the final enrollment is made. As I mentioned earlier in the call, last year’s introduction of the new omnichannel features, including co-browsing and chat capabilities had a positive impact on our ability to close sales.

This year, we will be further refining our digital funnel to make the user experience even more frictionless and intuitive. Another goal of these optimizations is to enhance the accuracy of the information we collect in order to provide the best advisory service and plan recommendations. On the telesales side, we are expanding the percentage of benefit advisers who will specialize into the geography and/or product, which has demonstrated a positive impact on the depth of their expertise and effectiveness in serving our customers. On the technology side, work is already underway to add a new feature that further enhances the enrollment experience through multiple touch points in our omnichannel customer journey. The fundamental success of eHealth’s sales operation depends on our investment in people and we’ll continue to foster the scale and career growth of our strong base of benefit advisers.

Our third priority is to introduce the next phase of our customer retention strategy with the intention of reaching aggressive two-year goals that we have set for ourselves internally. Our retention program starts before the enrollment through marketing and branding built to create long-lasting impressions. One of the keys to our branding strategy is to create a lasting awareness of who eHealth is and what we do with the ultimate goal of long-term customer loyalty. The retention effort continues during the enrollment process by providing an excellent customer experience and optimal plan matching through enhanced recommendation analytics tools and carries on post enrollment through continued engagement using a data-driven approach, targeting the optimal times to engage our existing customers.

The success of these initiatives will be measured by our ability to keep our beneficiaries in the eHealth advisory ecosystem even as they switch plans or carriers based on changes to the personal needs or plan design. In aggregate, this new retention strategy will bring a more thoughtful approach to building a year-round personalized relationship with our beneficiaries, focusing on high impact rather than higher volume customer communications. The fourth and final operational priority is to further diversify eHealth’s revenue stream. While we continue to hold the utmost conviction in the MA opportunity, we believe supplementing broker of record Medicare Advantage sales with other revenue streams will help us improve our LTV to CAC ratios, while playing an important role on our path to reaching sustainable profitability and improved liquidity.

This includes our plan to expand dedicated carrier arrangements, BPO business opportunities to account for a larger share of total enrollments. These arrangements play to our core strengths and are becoming a valuable supplement to our core M&A business as they carry no direct marketing costs and can offer attractive unit economics. In fact, earlier this month, we learned we have the winning proposal for a new carrier dedicated arrangement with one of our major carrier partners in support of this strategy. We also plan to place an increased emphasis on our individual, family and small business or IFP segment, which has been consistently profitable over the last several years. We believe that the growing adoption of the individual coverage, health reimbursement arrangement or ICRA and the potential impact for Medicaid redetermination will drive increased interest and demand for major medical IFP plans and create incremental opportunities for eHealth in this market.

This year, we also plan to market targeted investments for growth in our Medicare supplement and ancillary product business. Additionally, we will be leaning into the member engagement services that both deepen our relationship with beneficiaries and offer valuable revenue opportunities in the lower volume quarters of the year. Recapping 2022, it was a pivotal year in progressing towards our goal of sustainable, profitable growth while strengthening our standing as a gold standard in health insurance and ancillary product distribution and scale and demonstrating eHealth’s value proposition to our carrier partners. We expect to continue to build on this momentum in 2023 with a number of impactful operational initiatives underway. The guidance we published earlier this morning as part of our earnings release is indicative of the progress we continue to make as an organization and puts eHealth on a path towards achieving profitable growth in 2024.

Further, we are currently in the process of planning our first Investor Day since 2019, to be held in-person in New York in May of this year, where we intend to discuss our longer-term strategic and financial goals. Finally, I would like to take a moment to acknowledge eHealth’s senior leadership team, our management and all the employees of the company for their important work that supported the strong results that we reported today. It is inspiring to see the commitment and the dedication of our teams across the organization, united and their goal with helping beneficiaries find the best possible health care coverage. I believe this team will continue to excel in 2023 and I look forward to sharing our progress throughout the coming year. I’ll now pass baton to our Chief Financial Officer, John Stelben.

John?

John Stelben: Thank you, Fran. I’m excited to join eHealth at this vital time in the company’s evolution. Our 2022 financial results reflect the impact of a transformational plan that touched every area of the organization, drove strong execution during the annual enrollment period and allowed us to enter this year on a significantly reduced cost run rate and in a solid liquidity position. In the fourth quarter, we achieved significant improvements in critical financial and operating metrics compared to Q4 a year ago. We turned to profitability on a GAAP net income basis and reported a meaningful expansion of adjusted EBITDA margins year-over-year, despite an intentional reduction in enrollment volume and total revenue. This was accomplished in part by driving higher quality leads to our omnichannel consumer platform and converting those leads at higher rates compared to a year ago.

In preparation for this AEP, we made a decision to reduce our total marketing spend and our licensed benefit advisor headcount compared to a year ago, while we implemented a more disciplined ROI-driven approach to demand generation and focused on increasing benefit adviser productivity. The emphasis on best performing marketing channels and higher telesales conversion led to a significant increase in per unit gross margin in our Medicare business compared to last year. We defined per unit gross margin as a spread between lifetime value, or LTV, and total variable acquisition costs per enrollment. Fourth quarter Medicare Advantage LTVs grew 2% year-over-year, while combined fourth quarter marketing and telesales caused current approved Medicare member declined 18%.

The resulting Q4 per unit gross margin for Medicare Advantage plan was 29%, above our expectations and meaningful improvement compared to 12% in the fourth quarter of last year. I see further upside to this important metric, as we continue to execute on the transformation plan, which is reflected in our 2023 annual guidance. Moving to our topline results. Fourth quarter 2022 revenue was $196.3 million, down 19% on a year-over-year basis. This revenue decline represents an intentional decision to progress the company towards profitable growth, which temporarily decreased but more efficient marketing spend. Fourth core Medicare Advantage approved members were approximately $131,000 or a decrease of 26% compared to Q4 of 2021. Total Medicare approved applications for fiscal year 2022 of 161,500 were down 33% year-over-year.

Fourth quarter Medicare segment revenue was $180.4 million, down 22% year-over-year. At the same time, Medicare segment profit of $53.2 million was up sharply by 56% compared to Q4 2021. Our ability to generate significantly higher profitability on lower sales and marketing investment represents an important operating level. As we plan to resume enrollment growth in next AEP, we expect to do so on this improved operational and cost foundation, driving additional increases in Medicare segment and overall profitability. In Q4, 29% of Medicare vantage applications were submitted to our online unassisted channel, and 34% were online assisted. We view our omnichannel platform as an important differentiator and plan to continue making targeted investments in further enhancing customer experience on our platform and driving higher conversions.

Fourth quarter MA LTV of 1,033 grew 2% year-over-year representing an increase in average commission rates as well as stabilizing retention. Fourth quarter tail revenue in our Medicare business was a positive $6.7 million reflecting favorable persistency trend on some of our historical cohorts. Our estimated Medicare Advantage paying membership at the end of the year was approximately 646,000 lines, up 2% from 2021 year-end. Our total estimated Medicare membership, including Med Stock and prescription drug plan policies was 976,000 lives also up 2% on a year-over-year basis. Fourth quarter Medicare non-commission revenue comprised primarily of carrier advertising revenue was $25 million down 2% from Q4 of 2021. Moving on to our individual family and small business or IFP segment, which also includes our ancillary products.

Fourth quarter segment revenue was $15.9 million, an increase of 23% year-over-year, driven primarily by an increase in tail revenue. We continue observing favorable retention trends on our major medical IFP products with Q4 LTVs up 16% for non-subsidized plans and up 6% for qualified plans. At the same time, IFP enrollment volumes decreased year-over-year. The adoption of the ACO product is scaling slower than we originally expected and we correspondingly adjusted down our fourth quarter marketing budget in the IFP segment. Segment profit was $9.2 million compared to $7.2 million a year ago. Full year revenue of $405.4 million was down 25% compared to fiscal 2021. Underneath that, Medicare revenue was $361.7 million was down 23% and IFP and SMB revenue of $43.7 million was down 35%.

Moving now to cost and profitability. In April 22, we launched a cost reduction program with a goal to accelerate our return to profitable growth and reach positive cash flow generation through targeted cuts to both our variable and fixed costs. The program generated $114 million and net operating cost savings compared to 2021, which exceeded our internal goals. The most pronounced impact of cost reductions was seen in Q4, our highest operating expense quarter. Importantly, we entered 2023 in this new cost foundation, reflecting significant year-over-year reduction in first quarter costs compared to Q1 of 2022. Our total fourth quarter non-GAAP operating expense, which excludes stock-based compensation, restructuring charges, amortization of intangibles and impairment charges was $152.3 million, a reduction of $68.6 million or 31% compared to Q4 of 2021.

Fourth quarter GAAP net income was $20.7 million compared to a net loss of $32.2 million in Q4 a year ago. Fourth quarter adjusted EBITDA was $49.5 million, an increase of 76% from $28.2 million in Q4 2021. Full year 2022 GAAP net loss was $88.7 million, with adjusted EBITDA of negative $41.7 million. Our cash flow for fiscal year 2022 significantly outperformed our guidance, driven primarily by more effective deployment of marketing and call center budgets and forecasted better-than-expected cash collections on some of our membership cohorts and outperformance of the goals set under our cost reduction program. Total cash outflow, excluding the impact of our term loan and net securities activities was $44 million compared to an outflow of $110 million to $90 million contemplated by our guidance.

We ended the year in a strong liquidity position with $144.4 million in cash, cash equivalents and marketable securities. This compares to $123.2 million at the end of 2021. Our balance sheet also reflects $242.8 million and short-term commission receivables expected to be collected over the next 12 months and $641.6 million in long-term commission receivables. eHealth positive net sale revenue for 2022 points to the quality and continued stability of our commissions receivable balance. In fact, our net sale revenue across all products has been positive each year since we adopted ASC 606 in 2018. Moving on now to our financial guidance for 2023. We are forecasting total revenue to be in the range of $420 million to $440 million. We expect GAAP net loss to be in the range of $55 million to $35 million.

We expect adjusted EBITDA to be in the range of negative $15 million to positive $5 million. Operating cash flow is expected to be in the range of negative $30 million to negative $15 million. At the midpoint of our guidance, we expect to grow revenue by approximately 6% compared to a year ago, with similar underlying growth in Medicare loans. We also expect to deliver meaningful improvement in profitability, driven by continued rightsizing of our demand generation and benefit advisor-related spend, improvements to our marketing efficiency and telesales conversions, and an associated increase of LTV to CAC margin, and a positive impact from the cost reduction program launched in April 2022. We continue to be laser-focused on defense management and will be implementing targeted cuts on the fixed cost side to layer on top of savings achieved last year.

Our adjusted EBITDA guidance represents a year-over-year improvement of roughly $37 million at the midpoint, including positive adjusted EBITDA at the high end of our guidance range. The annual guidance also reflects our revenue diversification efforts, including stronger contributions from Med Sup, IFP, and ancillary products, carrier dedicated arrangements, and additional supplementary revenue opportunities. At the same time, we expect a decline in carrier advertising revenue compared to 2022. While our 2022 results and guidance for this year demonstrate significant progress in improving our operating and financial performance, including key profitability metrics, eHealth’s long-term goal is to reach a run rate of profitable growth, coupled with positive cash flow generation.

This involves diversifying our revenue streams, improving our unit economics, improving retention, and managing our fixed cost to gain leverage. These efforts, coupled with working capital management, will move us towards that goal. Looking at our operating cash flow guidance for this year, the midpoint of our range implies an outflow of $22.5 million, a slight improvement compared to 2022. This year-over-year improvement is certainly not as pronounced as what we project for GAAP net income and adjusted EBITDA. This was driven by the seasonal timing of our cash collections and our operating decision of decelerating enrollment growth last AEP. Given that the majority of initial commissions associated with AEP sales come in during the first quarter, our Q1 2023 cash collections will reflect the reduced enrollment volumes from its last AEP.

At the same time, the cash benefit of the investment we will be making this year to resume enrollment growth this coming AEP will not be felt until Q1 of 2024. In fact, on a trailing 12-month basis, ending March 31, 2024, we expect to be right around breakeven on an operating cash flow basis. Based on the ending cash balance and our cash flow projections, we believe we have sufficient liquidity to execute on our 2023 operating plans. I would also like to comment on our expectations for Q1. Given that our extensive cost reduction program was not implemented until April of last year, we expect a significant decline in marketing and customer care enrollment expenses in the first quarter of 2023 compared to Q1 of 2022. As a result, we also expect a corresponding decrease in our first quarter enrollment volume resulting revenue.

Q1 revenue is expected to decline in excess of 30% year-over-year. We expect, however, for adjusted EBITDA in the first quarter to be roughly flat compared to Q1 2022. Operator, please open the line for questions.

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Q&A Session

Operator: Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. Your first question comes from George Sutton of Craig-Hallum. Please go ahead.

George Sutton: Thank you. It is nice to be able to say congratulations on the results and outlook. So your co-browsing and chat tools, which were obviously very successful, I’m curious how much you were able to use those this season versus as we look further out into the future? Will that become a more significant part of your offering and therefore, have a bigger impact overall?

Fran Soistman: George, it’s Fran. Thanks for the encouraging words, and we’re just as happy to be able to put a smile on your face and all of our €“ all those who cover us. Your question is a good one. I think, it’s fair to say that, our chat capabilities, was an important contributor to our AEP performance. I can also tell you that, we were making adjustments to that chat capability throughout the AEP. So it’s fair to say, we didn’t enjoy all of its benefits, meaning it didn’t perform as strong as I think it could have through the beginning of AEP, but when we made some course corrections, it really kicked in rather nicely. And that €“ just to be transparent, it was about moving the chat capability further up into the call as opposed to the enrollment, it was done more in the shopping experience.

So it works. It’s scalable and it provides a wonderful experience for beneficiaries and it certainly supports our efforts to increase conversion rates. Co-browsing, a little different in that it’s really about providing a better experience for beneficiaries as well as enhancing our agents’ capabilities through the shop advise, educate and enroll process. It takes €“ but could be viewed as a one-dimensional encounter, meaning verbal to now verbal and sharing of the screen, so the documents can be viewed simultaneously with the conversation, which just makes for a much more productive process and a much more favorable experience for beneficiaries. So I do see us evolving our capabilities this year and adding new capabilities beyond the chat.

George Sutton: That’s great. One other question. When we look at the 6% growth expected for 2023, and I’m not sure what macro numbers you’re looking at. Are you assuming that as a share maintenance? Is that a modest share gain? How are you thinking of your relative performance in 2023?

A €“ Fran Soistman: Sure. I’ll start, and I’ll certainly ask John to supplement my comments. It’s an important growth, meaning that it’s coming from a more diversified set of products and capabilities. It’s — in the past, it’s been nearly entirely reliant on broker record traditional Medicare Advantage business. And it’s spread out much more widely between our MA business, our dedicated carrier business Med Sup and ancillary. So it’s — and those — particularly the dedicated carrier and Med Sup, ancillary have much more favorable cash flow dynamics, which is important, as I know you appreciate to meet our liquidity needs. So let me see if John, would like to add to that.

John Stelben: Yes, George, I would say that the BPO deal that Fran mentioned in his prepared remarks, plus improvement in Medicare sup sales drive a good chunk of the year-over-year growth, but we still have absolute growth in the core MA business.

George Sutton: Okay. Perfect. Thanks, guys.

Operator: Thank you. The next question comes from Daniel Grosslight of Citi Group. Please go ahead.

Q €“ Unidentified Analyst: Hi. This is Louis on for Daniel Grosslight. I just had one quick question. With greater emphasis on retaining agents, what is your approach outside the busy AEP and OEP season? And how should we think about agent costs throughout the year? Thank you.

A €“ Fran Soistman: I missed the very first part of that. I heard the last part in terms of agent compensation. Let me address that, and I’ll ask you to repeat your first part of the question. The agent compensation is market-based. It’s performance-based as well. So clearly, we need to be market competitive in attracting the talent that we need for our telesales capabilities. And that has not been a challenge in the past year, and we’re already underway to begin ramping up for the current year. So — but it all starts with market competitive compensation and the emphasis on performance, which is pretty, I would say, consistent with the industry. And the first part of your question?

Q €“ Unidentified Analyst: The first part of my question is more so what is your project outside of the busy AEP and APC seasons? And how should we think about that?

A €“ Fran Soistman: For the first three quarters of the year. Well, I think the most important point would be in the first quarter were in 2022, we spent a fairly large sum of variable costs for marketing activities to support our agents. We’re being much more prudent this year. And clearly, we want to keep agents productive, but we can do that through the progress we’ve made on the lead quality side, so we don’t have to spend as much. But keeping our agents productive, and we’ve also begun ramping up our Med Sup capabilities. So you can sell that all year around, as you know, and we believe that, that’s going to be a contributor for our revenue goals as well as keeping agents productive and sharp

Q €“ Unidentified Analyst: Thank you.