Richard Close: Okay, that’s helpful. And maybe a follow-up on that. I’m just curious, you’re talking about a strong pipeline, and obviously, you have existing customers that you have a long-standing relationship with. I’m curious if you ever look at pieces of business and just say, hey, we don’t want to necessarily do that in terms of – just gauging in terms of what kind of line of sight do you have before you, sign another performance suite contract.
John Johnson: Yes, we absolutely have said that before is the answer. When we’re underwriting a deal like this, we’ll review two to three years’ worth of claims, and you’re looking at that data for sort of what’s the size of the risk pool, what’s the volatility of the risk pool. Is there a of – are there manageable levers that we know we can pull here, or are there not? And sometimes, there are not, and that’s a great customer for tech and services.
Operator: The next question comes from David Larsen of BTIG. Please go ahead.
David Larsen: Hi. Congratulations on the good quarter. Some of the health plans, we’re talking about a few different things, obviously, higher MA utilization. Everybody’s been talking about GLP-1s, diabetes, obesity management. And then also, importantly for 2024, the plans are talking about pricing. Have they fully accounted for the higher utilization levels in their pricing? Sometimes, they have. Sometimes, they haven’t. Any thoughts or color on how that possible margin pressure that some health plans might see in 1/1/24 may either benefit you because they need your services more or how you basically get your fair share of the premium? Thanks very much.
Seth Blackley: Yes, David, look, I think what you’re highlighting, whether it’s GLP-1 or pricing or the aging question that we talked about before, the general press toward slightly higher MLRs and I think the pressure that our customers are feeling, it is generally a positive thing for us, right? And I think risk adjustment, I’d put into that category, too, David. There’s a set of factors that have created a little bit of pressure, and the need to actually manage the thing that is driving a lot of the costs, which is utilization in general, and all these other factors is helpful to us. We have, as John mentioned earlier, ways to manage our reasonably narrow risk, and we have some contractual protections on that. Also, I think just the way we manage our risk is a little bit different and clinically manage it.
So, I think part of the results we’re seeing this year through this commentary by the plans but also the business development pipeline that I talked about earlier, it is partially related to the question you’re asking, and it is a net positive for us. And we can talk about the puts and takes on that if we want to, but in general, it’s a net positive, and I think it’s going to continue for a while, which should be a positive for a while.
John Johnson: Now, I’d just add one piece of detail to that, which is the way that we price our performance suite is with dollars per member per month, not as a percentage of premium. And so, as plans are contemplating their benefit design, their pricing, that does not directly flow down to us.
David Larsen: Okay. And then I just wanted to confirm that what I heard was there’s no unusual increase in oncology or cardiology or GLP-1-related costs. Your costs are coming in sort of in line with your own expectations. Is that correct?
John Johnson: That is correct.
Operator: The next question comes from Sean Dodge of RBC Capital Markets. Please go ahead.
Sean Dodge: Yes. Thanks. John, I think you just kind of hit on it, but I wanted to ask kind of the inverse of what I think Dave was asking, which is – so on the redetermination, some of the NCOs are talking about upcoming Medicaid rate updates and those, in some cases, building in prospective consideration for acuity changes in those populations. And so, if you’ve got a performance suite counterpart that gets a higher rate from the state when or where they’re actually seeing acuity changes, do some of that flow through to Evolent?
