Operator: We have our next question, it comes from Daniel Grosslight from Citigroup. Daniel, your line is open.
Daniel Grosslight: I wanted to go back to the question around utilization and try to square a couple of comments that you made. So December was the strongest quarter from a utilization standpoint that you’ve seen since May 2022. Your guidance isn’t really assuming any meaningful uptick in utilization. Why shouldn’t we expect the utilization recovery in 2023 if December was so strong?
Dale White: Daniel, it’s a great question. And I’d love to be able to tell you exactly — pinpoint exactly when utilization will come back. But as we said, December is a — December was the strongest month for us since May of 2022, and really October was the lowest point, right? So that was the nadir. You always have to remember that we have that claim lag of about 4 to 8 weeks built into our volume. Going forward in 2023, we’ve really been conservative, right? We took — we anticipated that our run rate would be flattish and that there’s only a very modest uptick in recovery.
Daniel Grosslight: Got it.
Jim Head: Daniel, I think what you’re hearing from this is — this is the utilization environment, you can look at some leading indicators and feel a little bit better about it. But we’re a little — as you know, from last year, we’re idiosyncratic, and we’re just not ready to call a massive turn and get ahead of ourselves on the utilization front. So I think as Dale mentioned, we’re being conservative. I think we’ve got maybe 2% over the course of year increase off a relatively kind of low base rate. So we’re not even getting close to where we were in Q1 or Q2 of last year at all. We’re kind of — I think you’re kind of saying a somber utilization environment until we see different data points.
Daniel Grosslight: And I appreciate more of the color that you’ve disclosed in your presentation around PEPM and percent of savings rates and revenue. But I just wanted to dig in a little deeper into some of the dynamics there. You’ve seen a nice increase in savings, potential savings from the PEPM model recently, but revenue yields from that savings is compressing a little bit. Just curious if you can describe what’s going on there in a little more detail, savings rate — saving growing in PEPM and revenue declining.
Jim Head: Yes. So this is the good news, bad news of HST. The good news is it’s a really sticky business that is on a per employee per month basis. And if they do better and generate more savings with their special brand of reference-based pricing that they employ, the savings will go up. And this is one of the reasons why we broke it out because we’re compensated on a much stickier basis on a per member per month, and that’s what you’re seeing in the PEPM is HST generating more savings for their clients. And that makes us stickier and it makes us more valuable.
Operator: Our next question comes from Rishi Parekh from JPMorgan Chase. Rishi, your line is now open.
Rishi Parekh: I have two questions. One, on the utilization. Are there any specific specialties that might be driving that utilization pressure that you saw either in Q4 and then what you expect to see in 2023? And then my second question, as it relates to the contracts, did the second renewal go into effect on Jan 1? Meaning is that 8% impact that you’re expecting for this year, is that an annualized impact? And then with that, I think you also said that you expect to resign a third major customer. Is that contract also that contract expectation also included in that 8%?
