1Life Healthcare, Inc.

Good day and welcome to the One Medical's first quarter 2022 earnings results call. After the speaker's remarks, there will be a question and answer session. Please be advised that today's call may be recorded. I would like to turn the call over to Ken Goff. You may begin.

Thank you, Operator. Hello, everyone, and welcome to One Medical's first quarter 2022 earnings call. I'm Ken Goff, head of investor relations, and I'm joined today by Amir Dan Rubin, chair and CEO of One Medical, and Bjorn Thaler, chief financial officer of One Medical. A complete disclosure of our results can be found in our press release issued earlier today, as well as in our related Form 8K, all of which are available on our website at investor.onemedical.com. As a reminder, today's call is being recorded, and a replay will be available on our website. As part of today's commentary, we will make forward-looking statements. These statements are based on management's current views, expectations, and assumptions, and are subject to multiple risks and uncertainties. Actual results may differ materially, and we disclaim any obligation to update any forward-looking statements or outlook. Please refer to the risk factors on our most recent annual report as updated from time to time by our other reports and filings with the SEC, including our quarterly reports. We believe that the COVID-19 pandemic continues to create particular complexity when it comes to providing a forward-looking view of the business, and we are providing our guidance on a good faith basis per recent SEC recommendations. we would like to specifically caution investors that our future performance will be harder to predict for the foreseeable future. Our forward-looking statements are based on assumptions that we believe to be reasonable as of today's date, May the 4th, 2022. Information contained in today's statement should not be relied upon as representing our estimates as of any subsequent date. Of note, It is one medical's policy to neither reiterate nor adjust the financial guidance provided on today's call unless it is also done through a public disclosure such as a press release or through the filing of a Form 8-K. Today we will discuss certain non-GAAP metrics that we believe aid in the understanding of our financial results. A historical reconciliation to comparable GAAP metrics can be found in today's earnings release. During the call, we may offer incremental metrics to provide greater insights into the dynamic of our business. These details may be one time in nature, and we may or may not provide updates in the future. Finally, I'll remind you that we closed the acquisition of IORA on September 1st of last year, meaning that their results are not included in any comparisons made to the first quarter of 2021. And with that, I'll turn the call over to Amir. Thank you, Ken.

And thank you everyone for joining us. In the first quarter of 2022, One Medical continued to perform, innovate, and grow with its innovative primary care model built for purpose to delight members with better health, better care, lower costs within a better team environment. In terms of financial performance, Q1 revenue of $254.1 million exceeded the high end of our guidance range by more than $4 million. For senior health at-risk care, the medical claims expense ratio decreased by 10 percentage points compared to the fourth quarter of 2021. Non-GAAP profitability measures also outperformed, with care margin and adjusted EBITDA both coming in above the high end of the respective guidance ranges. And looking ahead, we continue to be extremely excited about our ability to transform healthcare at scale across all stages of life for multiple key stakeholders, including for members, employers, providers, and health networks. In terms of members, our total member count grew to 767,000 in the quarter, up 28% compared to the first quarter of 2021. This membership count included 728,000 consumer and enterprise members, up 22% year-over-year and in the high end of our guidance range. It also included 39,000 at-risk members. which was above the top end of our guidance range, up more than 80% compared to IORA's pre-acquisition at-risk member count from Q1 2021, driven by growth from direct contracting, a program that began in Q2 of last year, as well as Medicare Advantage. With our human-centered and technology-powered model, we continue to delight our members. For example, we continue developing our machine learning model, enabling us to even more seamlessly respond to member inquiries and shared test results with even faster response times. With our senior health at-risk care, we continued to see significant improvements in our medical claims expense ratios, reaching 84% in the quarter, down a full 10 percentage points sequentially. As you may recall from last quarter, we showed continued improvements in medical claims expense ratios across all our cohorts of at-risk patients on a year-over-year basis. We also continued innovating our member experience and care management approach for our most vulnerable seniors through our One Medical at Home program, building upon IORA's previous efforts. Through One Medical at Home, we bring together in-home care teams, in-office providers, and virtual team members connected through our technology to deliver better outcomes to complex patients. We leverage our analytic and machine learning models to identify vulnerable members who could be well served by this intensive model and who on average have nine chronic conditions. One Medical at Home has allowed us to provide better care while further reducing avoidable costs and complications. For example, compared to a matched historical cohort, patients in the program with the highest risk profile had a statistically significant reduction in costs over six months, averaging 26% less spend than non-enrollees with a similar baseline spend and risk. In addition to delighting our members, we continue delivering outstanding value to existing and new employer accounts, including from national multi-market clients. As our geographic footprint grows, we continue to see an increase in interest from larger multi-market employers, a positive validation of our national strategy. We are also seeing employers further recognize how our primary care hybrid in-person and virtual-based model can deliver differentiated clinical outcomes and value-based care results. addressing backlogs of deferred care to prevent avoidable morbidity and costs down the road. For example, with a large employer, we recently further rolled out programs to address chronic disease conditions, many of which may be exacerbated by people deferring care during the pandemic. One such program is One Medical Healthy Heart, which focuses on metabolic and cardiovascular risk and includes a risk assessment by a primary care provider followed by a series of virtual and in-person interactions with a health coach and exercise guide. In rolling out Healthy Heart with an employer, 80% of the participants saw a reduction in low-density lipoprotein, or LDL, also known as the bad cholesterol, with 60% of participants experiencing a greater than 20% LDL reduction. Now, LDL cholesterol is bad because high levels can add to risk of heart attack and stroke. Another program we recently rolled out with an employer called One Medical Healthy Mind, is an expansion of our mindset behavioral health solution set and focuses on mental well-being and resilience. Healthy Mind combines primary care visits with cognitive testing, wellness coaching, and when needed, support by a therapist. Through One Medical Healthy Mind, participants at this employer saw an average 52% increase in health confidence scores, a standardized score that measures confidence in capability and motivation to look after one's health. Through Healthy Mind and Mindset more broadly, employers are seeing how one medical can promote employee self-efficacy and engagement, which are important steps to improve physical and mental well-being. Given these dramatic improvement levels, we are now scaling the Healthy Heart and Healthy Mind programs to additional employers. Accordingly, we're demonstrating with these programs just as we've demonstrated with our Impact Program for Diabetes and Chronic Conditions and our other Mindset Behavioral Health Solutions that our differentiated modernized hybrid model of longitudinal primary care can deliver outsized impacts for better health and better value. In addition to delighting members and employers, we are also transforming healthcare delivery for One Medical providers and staff. We continue to advance our technology team and processes to reduce administrative burdens faced by our providers, allowing them to spend more time focused on patient care, whether working virtually or in person, in more markets across the country. As we mentioned last quarter, One Medical was recently ranked by Forbes and Statista as one of America's best mid-sized importers. Furthermore, our strong mission-driven culture has enabled us to hire more primary care providers in Q1 than in any other quarter ever reported in the history of One Medical. Turning to our health network partners, We continued advancing our partnerships to further own the complexity of coordinating care across a continuum of settings on behalf of members and payers and to further deliver value-based integrated care experiences. As mentioned on last quarter's call, we recently entered into a partnership with Hartford HealthCare in Connecticut, which will bring us into our 29th in-person market. Additionally, we continue to field further interest from existing and potential new health network partners. to partner with us on commercial and senior health opportunities. We also continue to expand our partnerships with more health plans for senior health at-risk care. We now have senior health payer relationships in place with nine different Medicare Advantage plans with an average of more than four plans per market. We have also grown our potential for more at-risk lives through direct contracting, all of which together gives us more avenues for member growth and retention in the future. Additionally, we believe we are delivering outstanding results for members and health plans, with one of our health plans just notifying us last week that we are a top performer with an equivalent Medicare STARS quality rating of 4.8 out of 5 STARS. And speaking of at-risk care, we have been highly effective and ahead of our expectations in integrating IOR's care management capabilities, analytical models, technology providers, and team into our combined organizations. Accordingly, we believe we are positioning ourselves to uniquely serve every stage of life across the nation under multiple reimbursement models with high-quality virtual and in-person value-based care. In summary, we are off to a strong start for the year, making impacts for our key stakeholders through our human-centered and technology-powered model. We outperformed our expectations in the quarter, reflecting strong execution against our strategic operating plans. We believe we have never been better positioned to serve more people in more markets across every stage of life with better health, better care, better value in a better team environment. Now, let me turn it to One Medical CFO, Bjorn Thaler.