So, I think while our approach has been more prudent than many other players, I think there’s been a lot of focus on taking more risk in the recent years than managing risk. We think managing risk should be as important, if not more important than taking risk, especially as you go through some of these utilization trends that the payers have been commenting on. We as provider entities taking risk are downstream from that. And I think, again, you’ll continue to see us being very thoughtful. Over time, over the long run, you should see very – pretty significant opportunity for us to increase the earnings power of this business as we take more risk in that particular segment and drive future EBITDA and free cash flow growth.
Operator: Thank you. Our next question comes from Ryan Daniels from William Blair.
Ryan Daniels: Yes, good morning. Thanks for taking the question. Parth, one for you. You’ve talked a little bit about outpatient utilization. Obviously, the managed care companies are seeing a lot of pent-up demand and sustained outpatient surgery volume. You’re in a pretty unique position here, both with your surgery partnership and kind of your multi-specialty purview, and maybe help with that. So, I’m curious what you’re seeing specifically there, and if you can move into more risk-based contracts or episodes of care on the outpatient surgery to help deal with that and drive your growth and value proposition. Thanks.
Parth Mehrotra: Yes, thanks for the question, Ryan. We would agree with your assessment. I think we are in a very unique position, and that’s a great differentiator for us. We have 50 plus specialties on the platform. We are not very heavy on surgical specialties, but we have partnerships that are, and in the markets where we have hospital partners, obviously that’s a bit more heavy. But overall, we think the Commercial book is going to continue to be a pretty important part of our business. 50% of the population is commercially insured. I think there’s a big focus by the payers to move a lot of the surgical procedures in an outpatient setting from an inpatient setting. I think that bodes well for our business and the value a multi-specialty group like network can provide the payer partners, and we are having a lot of discussions in adding to our specialist network and moving a lot of those volumes to the outpatient setting.
So, again, it’s a long-term strategy, but it adds a big tailwind to our business. And again, that diversification helps us continuing to grow both topline and EBITDA. As I mentioned earlier in one of the questions, if you look at the last four years, it’s just played out where despite the ups and downs through the COVID years, we’ve continued to grow topline and bottom line with that kind of mix. And so, we feel pretty excited about our strategy, and it validates our approach in building big multi-specialty groups. 80% of the costs are downstream from the PCP, and it allows us to manage those costs and different arrangements as they come about over time.
Operator: Thank you. Our next question comes from Adam Ron of Bank of America.
Adam Ron: Hey, thanks for the question. Going back to the Washington market entry, just trying to get a sense for how dilutive it would really be to enter, just because if you already have 50 providers, that could be like $30 million in revenue, and if you take 10% of that, that’s like $3 million of incremental revenue to you. And you talk about like low single digit startup costs in new markets. So, just wondering, like, why wouldn’t that just be break even next year? And just trying to understand what scale you kind of need in a market to overcome the dilutive investments. Thanks.
Parth Mehrotra: Yes, thanks, Adam. So, your assessment is correct. If we get a head start, like we are doing here with 50 plus providers, as you’ve seen, we’ve entered the market and we’ve increased our guidance ranges on the bottom line metrics to the mid to high end. So, we are absorbing some of those costs within the year, despite addition of one new market that we hadn’t previously announced. However, I think the TAM is pretty big. So, while we’ll get a little bit of a head start here, these markets breakeven as we are looking to build very big medical groups 200, 250 or 300 providers over the next few years. There’s pretty significant sales, marketing, implementation costs that go in. we’ve commented on the $2 million to $3 million spend per new State. And that spend will happen in Washington as well. Getting a head start with 50 providers helped, but most of these markets take a couple of years just to hit breakeven.
Operator: Thank you. And our last question comes from Sean Dodge of RBC Capital Markets.
Thomas Kelliher: Hey, good morning, this is Thomas Kelliher on for Sean. Thanks for taking the question. I guess I’ll just go with a higher level one here. How does virtual care fit in your current provider playbook or strategy? Is this like an effective tool to improve overall economics, at least maybe on the value-based care side, or is it just more of a capability that certain patients kind of expect at this point? Thanks.
