Ken Burdick: Sure. Lisa, I’ll take the first part of that and let Danish speak to the revenue per clinician. Our payer strategy really is going to continue the work that we started in 2023, which is I was very surprised to see the number of payer contracts we had. It was well in excess of 400. We reduced that by about 30% last year. We will do an additional reduction this year, probably not quite as large. But I think what’s most important is sharing the underlying rationale of why we’re doing it. So when we think about our payer contracts, first and foremost, we found that we had many, many where there was such little volume. It just didn’t make sense administratively to maintain the work, to reload the rates, to do the credentialing, et cetera.
So that’s important. Beyond volume, we look at the administrative terms that we have with the payer and look to try to make them simple and straightforward and not overly complex and onerous. We also look at whether or not we have delegated credentialing because we have found there’s a dramatic reduction in the time it takes to onboard a clinician when they grant us delegation. And then the last two things are we certainly look at the reimbursement that we’re paid and their desire and willingness to partner with us with strategic initiatives such as value-based care and integrated care between physical and mental health.
David Bourdon: Lisa, this is Dave. I’ll take your — the kind of the TRPV growth question. So in the fourth quarter, as you noted, we had a material step-up in our rates or the revenue we were collecting per clinician. The primary drivers of a TRPV improvement in the fourth quarter were driven by the higher — increase in the higher margin, higher revenue services. We’ve talked about like neuro-psych testing and services like that. In addition, we did get some nice increases in payer rates in the fourth quarter. I’d have you think about that as largely we were getting increases for 2024, just a few months earlier. So that’s what drove the increase in the total rate per visit in the fourth quarter. You mentioned the holding of claims, that was more of a cash phenomenon.
So that impacted our cash. We were still booking to appropriate levels of revenue. So that didn’t impact our TRPV. It was really more an impact on DSO. And as you noted, we did release those claims, and you saw DSO come down significantly in the fourth quarter as we expected.
Lisa Gill: And if I can just squeeze in a quick follow-up. Just you talked about full-time employees and the capacity opportunity there. Can you talk about how many of your clinicians are full time today and what the ultimate goal would be?
Danish Qureshi: Yes, this is Danish. So our long-term goal is to always make sure that we’re creating an environment where clinicians feel like they can dedicate their full caseload in time to LifeStance, and we continue to enhance our benefits, create incentives and rewards for clinicians to do that. However, we do have both clinicians that are providing what you consider a full time on the higher end of hours, and we have ones that are more part time. And our value proposition though different to each continues to resonate for both. The point in our prepared remarks was that we continue to focus our energies around incentivizing and rewarding clinicians to really build their careers here and have this be their primary or only source of income.
Lisa Gill: Okay, thanks for the comments.
Operator: We’ll go next to Ryan Daniels at William Blair.
Jack Senft: Yes. Hey guys, this is Jack Senft on for Ryan Daniels. Congrats on the quarter. Just for a clarification, for 2024, I know you aren’t expecting to open more than 20 clinics. I guess just what is your expectation for consolidating clinics this year? Are you completely past that hurdle now? Or is this kind of an ongoing situation?
Danish Qureshi: Yes, this is Danish. So I can talk about that. So again, as we mentioned in the prepared remarks, we consolidated 82 centers in 2023. At this point, kind of a broad scale consolidation like that, we would consider complete and behind us. On a go-forward basis as leases come up for renewal every year, we will continue to evaluate each and renew or close as it makes sense, but it will not be a large-scale effort like what we saw in 2023. We will drive further optimization primarily through monitoring the pace of our de novos and placing those in markets where in-person demand continues to increase beyond the footprint we have in any of those markets as well as building further clinician density within the existing 575 centers that we have today.
I would note that in-person continues to be a very important part of our overall hybrid strategy and is a significant differentiator for us versus others that are out there, and we continue to believe firmly in the hybrid model and that we have done the large lift in optimizing our footprint in 2023.
Jack Senft: Okay, perfect. Thanks. As a quick follow-up to Lisa’s question, in the prepared remarks, you did mention the shifting your focus towards clinician capacity,; that you want to reward and incentivize clinicians offering full-time hours. Can you just dive a bit deeper on this a little bit more. Are clinicians coming from private practices or competitors desiring these type of benefits more? Or is there anything you’ve learned with incoming hires that you can kind of talk about with these incentives?
Danish Qureshi: Sure. Yes. This is Danish. I can cover that. So yes, as we look at where we attract clinicians, it tends to fall into three areas. One is clinicians that are looking for improved lifestyle and are moving away from typically inpatient physicians or hospital-based positions with heavy case-loads, and they are looking to have benefits as part of that transition because that’s typically what they’re receiving in the other environment. The other area you see is new grads coming out of training that are looking for — to start their careers and — or looking for someone that can provide overall employment inclusive of benefits as they begin to start operating as a practicing clinician. And then the third is clinicians that are coming either out of solo practice or other small group practices that are typically 1099 in nature and do not offer benefits.
And so particularly for that group, though, across all three, it resonates, but particularly for that group of clinicians, being able to incentivize and reward them through benefits like health care, 401(k) match, et cetera, is something that is unique that we offer and continues to be a differentiator for our value proposition.
Operator: We’ll take our next question from Kevin Caliendo at UBS.
