Seth Blackley: Yes, look, I think Jailendra, what I would say is that, as I mentioned in the prepared remarks, just a lot of pressure on the payer community right now, which is driving good demand in the product. And I continue to think that our ability to more effectively manage these categories, whether it’s under Performance Suite or Tech Services, that is a platform opportunity that I think we accrue over time. We continue to take market share and grow for that reason. In terms of the negotiations to your very specific question, I don’t think a lot has changed there. We have always had a number of different protections. It’s always part of the conversation. It’s always part of the negotiation to get those aligned in terms of how it’s set up.
One of the things that’s also true is that, we can do it different ways. We have relationships where baked in and trends are much higher in our fee, meaning our annual inflator on the fee is pretty significant because we’re taking fewer protections and the opposite can also be true. There’s not been a huge change there. To the earlier question, obviously, we have to take in the most recent data and pick the right market-based trend to use in that negotiation, but that’s a fact that’s not that hard to get our hands around, and get aligned on. That’s sort of the dynamic in the marketplace. Again, there’s some puts and takes on these kinds of moments. I think as we’ve been saying for a while, we think it’s a net positive, the pressure that exists in the market in terms of the demand side.
Operator: The next question is from Sean Dodge with RBC Capital Markets.
Sean Dodge: Yes, thanks. Just on the Performance Suite indicator, I guess, can you give us any more detail on why you think it stepped-up in March? Was it concentrated was this concentrated in any particular geography or payer or population? Was it — you said volume, so it sounds like it was more tied to prevalent than it was cost, but correct me if I’m wrong there?
Seth Blackley: Yes, you’re not wrong, Sean. We see in that authorization data, the majority of the increases driven by what we see as changes in the population, so things like disease prevalence. I’d say, they’re not localized to a particular geography or line of business. There are pockets here, pockets there, and something obviously that we’re watching closely as we go through this quarter.
Operator: The next question is from Daniel Grosslight with Citi.
Daniel Grosslight: Hi. Thanks for taking the question. Last quarter you mentioned that, you would expect to see around 10 percentage points of margin improvement of 2023 Performance Suite launches in ’24, similar to what you saw from 2022 to 2023. Given some of these utilization pressures, are you still comfortable with the assumption around margin improvement of 2023 Performance Suite launches? And as you look at utilization and some of these pressures, is there any difference between newer launches versus more mature launches or more mature Performance Suite arrangements?
Seth Blackley: Yes. Both good questions. Let me take the second one first. There is not. This isn’t a specific to a new population or more recent growth. It really is in pockets of both older clients and newer populations. To your first question, are we still confident in that 10% execution and the margin maturation for the performance suite, as we’re exiting this year? The answer is, definitively yes. We feel very good based on what we’re seeing in terms of the interventions that we’re doing, the value that we’re creating, the incremental quality that we’re delivering to those members. It is true that, we may need to adjust the capitation rate or two as we sometimes do. But on the — our ability to create value by lowering the cost of care, we feel very good about that.
Operator: The next question is from Jack Wallace with Guggenheim.
Jack Wallace: Just wanted to you get an idea for the, it sounds like the end market’s building quite a bit of demand and you’re thinking about the performance suite. If you’re able to pull in more new customers for the performance suite and transfer or transition some of your tech and services customers to Performance Suite, is there a potential that enough of that demand would put an impact on your end EBITDA target and set differently? Would any of the upfront costs and actuarial assumptions for the incremental performance suite lives potentially be a drag in a good scenario for the medium and long term? Thank you.
John Johnson : Yes, Jack, so good question. I don’t think so for this year we continue to first of all have a nice pipeline across performance suite and the tech and services side. It’s pretty balanced if I looked at what’s in there. And so, I don’t see a skew 0.1. And then I’d say the second point would be just that I don’t think at this stage in the year, there’s from a timing perspective, likelihood that would happen. And even as we look into next year, if you’ve asked the question differently, I think it’s the same response, which is we continue to have a pretty balanced pipeline. We like it that way. We’ve sort of always liked the balance between the two segments for the reasons that we’ve been talking about that’s continues to be what it looks like.
Jack Wallace : Excellent. Thank you. And then, how should we be thinking about the economics from the aerology deal? It sounds like it’s a pretty interesting partnership. Should we think about that as some potential upside for this year? Is that really more of a ‘25 story?
Seth Blackley : Yes, Jack, so we are very excited about Careology too. The team has — our team has done a great job. Their team, it’s exciting partnership. I think that it’s not going to have an effect on this year. We’ll probably go live with our first health plan partner late this year, if I had to guess. So it’s down the road a little bit. And we’re going to really be targeting our performance suite relationships first, and at some point it may become a tech and services product as well, but it’s really about embedding it into our performance suite relationships, somewhere to what we do with our end of life product.
Operator: The next question is from Stephanie Davis with SVB Leerink.
Stephanie Davis : I’m actually with [Indiscernible] Parkley. Glad to be in my new home, but thank you for taking my question. You provided a really helpful bridge on profitability. I was hoping to split hairs a little bit more and ask which of these, like the new wind mix would be more of an impact to gross margins, and which of these we should think of as a headwind to gross profit dollars?
