David Saxon: Okay. Great. That’s super helpful. Brice may be sticking with you. I think in your prepared remarks just running through the growth drivers you noted reduced account churn. So, I guess on the competitive front historically why have accounts kind of rolled off the Zio platform? And then what have you guys changed recently to reduce that account churn? Thanks so much.
Brice Bobzien: Sure. Of course this has been one of our areas of focus over the last few years and it’s deeper penetration of existing accounts but also reduced account churn. And what we’ve done is we’ve put what we call a KAM role or a key account manager role in these large accounts that are effectively on site and servicing these accounts on a regular cadence. It’s not just the folks out there sort of a hunter-gatherer model. It’s not just the hunter out there but it’s instead the gatherer making sure that they’re servicing those accounts providing feedback, helping train new folks within the clinician offices, et cetera. And we’re seeing with those activities actually really nice results with less folks coming off. And frankly, operationally, I think we’ve been a lot better in the last couple of years as well.
When you think about the throughput from our clinical ops organization as well as the timeliness of getting the product into the field. So, there’s been several different factors but it’s been a focus of our organization and it’s a testament to what our commercial team is doing without their actively selling in existing accounts going deeper but also making sure they’re serviced the way they should be.
David Saxon: Great. Thanks so much and congrats on the quarter.
Operator: Thank you. Our next question comes from Nathan Treybeck from Wells Fargo. Your line is now open, please go ahead.
Nathan Treybeck: Hi thanks. Congrats on the quarter. I want to just to clarify can you continue to market Zio AT while you file both 510(k)s? And then will it continue to be marketed as an MCT device? And in the interim while you kind of work on these 510(k) filings do you expect any impact to Zio AT volumes? Thanks.
Quentin Blackford: Yes. So, yes, we absolutely can continue to market Zio AT as an MCT device and we’ve reached alignment with the FDA on that aspect. With the one aspect and we’ve talked about this there’s some enhanced labeling that we’re going to make available and that’s actually part of the 510(k) submission that we’ll make here before the end of the year. But it’s something that we’ve already aligned with the FDA on. So, yes, to your question can or is Zio AT continue to be marketed as an MCT device? That answer is, yes. And yes based upon everything that we’ve had discussions around with the FDA, there is every intent that Zio AT will continue to be in the market as we submit these catch-up 510(k)s and the 510(k) with the new enhanced design feature of alerting the patient through the light on the device and ZioSuite, updates with respect to the trigger limit.
So we don’t expect any disruption in the AT business at all. There is the potential that we could even get on file with Zio MCT while the FDA is reviewing AT. This is something that is more of an internal prioritization and our focus on continuing to build out the MCT capability while we continue to address the concerns of the FDA around AT, and make sure we do that in a satisfactory way. So, nothing’s going to hold us back from continuing to progress on MCT while AT stays in the market and it’s why we continue to be excited about the potential of that. But our focus is AT first, and we want to get that resolved with the FDA and then we’ll move on.
Nathan Treybeck: Okay. Thanks for that. And so you spent a good amount of time talking about the mSToPS health economic data. I guess at this point how are you thinking about the silent AFib opportunity you know getting into USPSTF guidelines? And when could this potentially become a more meaningful driver for your business?
Quentin Blackford: Yes. I think we continue to be very excited about what potential is out there to proactively be monitoring and screening, if you will the asymptomatic population. We see the data of mSToPS. We’re seeing the data come back in a real world setting with many of these large national primary care networks who are applying some of those criteria. So, we understand the value of it. Getting the USPSTF to move is a significant hurdle and something that I think would really open up some of the doors to enable better screening on a wider basis. But it’s not something that we’re going to sit back and wait for. We’re going to continue to approach the commercial payers in particular around the value proposition of mSToPS.
And we know that these at-risk entities, I mean when you look at the value in terms of the incremental cost-effectiveness ratios that most folks will pay attention to, any time you see the ability to impact and many times you’ll see $500,00 to $200,000 of incremental cost-effectiveness ratios be something that these payers deem to be of high value, when you come in under that so even less costly which we’re at now in the mSToPS publish date around $36,000 it conveys that there is meaningful value to proactively look for these opportunities to identify arrhythmias dangerous arrhythmias and care for them. So I think, it’s just a matter of time. I can’t tell you exactly, how much time that is or how quickly it goes. We’re going to continue to work with the commercial payers.
We’re going to continue to work to influence USPSTF, but I can’t tell you exactly, how quickly it goes. I do think it’s a terrific opportunity probably 12 million to 13 million patient opportunity in our estimates if we just do the math on that Medicare Advantage population and the likelihood of who has arrhythmia that they’re unaware of.
Nathan Treybeck: Thank you.
Operator: Thank you. Our next question comes from Richard Newitter of Truist. Your line is now open. Please go ahead.
Q – Unidentified Analyst: Hi, guys. You have Sam [ph] on for Rich. I’ll just ask the first one on margins and just as we think directionally into 2024 a lot of moving parts in 4Q. How should we think about that just directionally versus maybe the first half or is the 4Q number really where we should be thinking about the jumping off point for margins in the next year?
Quentin Blackford: Yes. So just to clarify, are we talking gross margin or are you talking adjusted EBITDA margin?
Q – Unidentified Analyst: Sorry, gross margin.
Quentin Blackford: Okay. Yes, so there are some moving pieces in here and we’ve been sort of alluding to the fact that we were going to have a bit of temporary pressure in Q3 for the last several quarters, and we saw that experience this quarter. It was a bit bigger, but I think in our mind the navigation to Zio Monitor, which ultimately comes at a better gross margin profile over time this is actually a good thing. Now it’s again, it’s a bit more costly in the short run but I think ultimately, over time it allows us to scale much quicker than what we would have probably been able to. We will incur these accelerated utilization costs, if you will through the remainder of 2024 and that’s when ultimately you know Zio XT will be sun-setted and then ultimately those costs will go away.
