Oscar Health, Inc.

Good evening. My name is Rob and I will be your conference operator today. At this time, I would like to welcome everyone to Oscar Health's fourth quarter and full year 2024 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, again, press star one. Thank you. I will now turn the conference over to Chris Potichar, Vice President of Treasury and Investor Relations.

Good evening, everyone. Thank you for joining us for our fourth quarter and full year 2024 earnings call. Mark Berlini, Oscar's Chief Executive Officer, and Scott Blackley, Oscar's Chief Financial Officer, will host this evening's call. This call can also be accessed through our Investor Relations website at ir.highoscar.com. Full details of our results and additional management commentary are available in our earnings release, which can be found on our investor relations website at ir.highoscar.com. Any remarks that Oscar makes about the future constitute forward-looking statements within the meaning of safe harbor provisions under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by those forward-looking statements as a result of various important factors, including those discussed in our quarterly report on Form 10-Q for the period ended September 30, 2024, filed with the Securities and Exchange Commission, and other filings with the SEC, including our annual report on Form 10-K for the period ended December 31, 2024, to be filed with the SEC. Such forward-looking statements are based on current expectations as of today. OSCAR anticipates that subsequent events and developments may cause estimates to change. While the company may elect to update these forward-looking statements at some point in the future, we specifically disclaim any obligation to do so. The call will also refer to certain non-GAAP measures. A reconciliation of these measures to the most directly comparable GAAP measures can be found in the fourth quarter and full year 2024 earnings press release available on the company's investor relations website at ir.highoscar.com. We have not provided a quantitative reconciliation of estimated full year 2025 adjusted EBITDA as described on this call to Gap Net Income because OSCAR is unable without making unreasonable efforts to calculate certain reconciling items with confidence. With that, I would like to turn the call over to our CEO, Mark Berlini.

Good evening. Thank you, Chris, and thank you all for joining us. This afternoon, OSCAR reported the strongest year of financial performance in our history. Our results were driven by record high membership, bottom line profitability, and continued product innovation. Oscar reached two significant milestones in 2024. First, we reported total company adjusted EBITDA profitability growing to $199 million, a $245 million year-over-year improvement. Second, we achieved net income profitability. Net income was $25 million, a $296 million increase over the prior year. Our improved bottom line was driven by strong performance in all parts of our business. We grew total revenue by 57% year over year to $9.2 billion. Our medical loss ratio was stable year over year, increasing 10 basis points to 81.7%. We also drove greater efficiency in our business as our SG&A ratio improved more than 500 basis points year over year to 19.1% through operating leverage and disciplined expense management. Our 2024 performance reflects the strength of our strategic plan and our ability to deliver long-term profitable growth. Overall, 2024 was an exceptional year for Oscar. Our results reflect our growing maturity as a company, and we are committed to delivering at least 20% revenue CAGR and a 5% operating margin by 2027. Scott will review our fourth quarter and full year results in a few moments. First, I will cover key business highlights. Oscar is one of the largest ACA carriers following the 2025 open enrollment period. The individual market grew 13% year over year to a record 24 million lives. Our growth outpaced the market by close to three times at 37%. We are now privileged to serve 1.8 million members as of February 1st, 2025. Our competitively priced products, technology, and superior member experience drove strong growth and retention across the OSCAR's 18-state footprint. Our disciplined pricing strategy gives us another year of above-market growth, which we expect will drive significant year-over-year increase in operating margin with continued administrative cost efficiencies and improved MLR performance. Our above-market growth demonstrates OSCAR's growing prominence across our service areas, We drove market share gains with strong positions in key Oscar states, including Florida, Tennessee, and Texas. We also performed well in new geographies, including North Carolina. The strength of our IFP brand network and expansive products portfolio also led to new ICRA growth across our footprint. We grew our ICRA membership with gains in Atlanta, Columbus, Kansas City, Miami, and New Jersey markets. Oscar's high value products continue to resonate in the market. We are attracting new members and creating a loyal membership base with plans built for individual needs. We had strong enrollment in our new Tech First HMO and multi-condition plan. Our condition-focused plans addressing diabetes, asthma, and COPD had high retention. Our Spanish First solutions attracted more Hispanic and Latino members, engaging them with culturally relevant providers, health resources, and care teams. Our leading NPS is proof that OSCQR is meeting rising consumer expectations. Consumers have more control over their healthcare with OSCAR. Our plans are meeting consumer demand for choice, transparency, and affordability, a value proposition that drove new employee initiations and open enrollment. We introduced new services with ICRA platforms, including convenient shop, buy, and enroll solutions and personal care guides to welcome employees to OSCAR. We will build on this momentum in 2025 and introduce more solutions for employers and employees. Oscar is positioned to take share from traditional group plans and engaged employers that do not offer insurance today. Oscar's powerful technology platform continues to unlock long-term value across all areas of the business. AI remains central to our strategy, and we are realizing its potential faster than others in the market. We are personalizing clinical care. Our team is integrating large language models into more of our capabilities. including tools that keep follow-up care on track after ER visits. Initial results show the tool lowered readmission rates by close to 10% for a major health system client. We continue to reduce provider administrative tasks. More than 50% of onboarding and post-care instructions today are AI-powered in Oscar Urgent Care. Our actions are reducing provider paperwork, improving speed to care. We are also deploying applications at greater speeds. significantly reducing implementation time. All of this is possible because of our industry-leading platform, which continues to fuel major strides in operational efficiency, member engagement, and affordability. In summary, 2024 was another remarkable year for the company. We generated record revenue, drove all-time high membership, and achieved both adjusted EBITDA and net income profitability for the first time in OSCR's history. These milestones are a solid foundation for strong profitable growth in 2025. We have a proven playbook to mature our existing markets and enter new ones with the technology to efficiently scale a profitable business. As I have said before, Oscar is committed to having the strongest leadership team in the individual market. Today we are welcoming healthcare veteran Janet Liang to our team to help drive our next phase of growth. Janet joins as president of Oscar Insurance and will be responsible for all insurance functions. She comes to Oscar from Kaiser Permanente, where she served as Group President and Chief Operating Officer of Care Delivery. Janet has strong operational expertise and a track record of growing markets. Oscar is stronger than ever. Our growth and the individual market's growth demonstrate its durability and the power of reorienting healthcare around the consumer. The market is giving consumers the ability to choose plans that fit their needs. which is driving competition, lower costs, and the lowest uninsured rate in our country's history. Direct-to-consumer markets simply work better. The individual market will continue to unlock new growth and replace traditional insurance models, and Oscar is leading the way. I am incredibly proud of the Oscar team and their leadership in achieving our best year yet. We look forward to delivering strong results for our members and partners in 2025. I will now turn the call over to Scott. Scott.

Thank you, Mark. And good evening, everyone. 2024 was a strong year for Oscar. We delivered the best financial performance in the company's history, including above market growth and adjusted EBITDA and net income profitability. We are well positioned to achieve our long-term targets of at least 20% top line compound annual revenue growth and a 5% operating margin by 2027. I'll touch on a few fourth quarter highlights before shifting to our full year performance. Total revenue increased 67% year over year to approximately 2.4 billion in the fourth quarter. The fourth quarter medical loss ratio increased by 170 basis points year over year. And the fourth quarter adjusted EBITDA loss was approximately 113 million, essentially flat year over year. Turning to the full year. Total revenue increased 57% year-over-year to $9.2 billion, driven primarily by membership growth during the 2024 open enrollment, strong retention, and special enrollment period member additions. The full-year medical loss ratio was 81.7%, a slight 10 basis point year-over-year increase. Overall utilization for the year was modestly favorable compared to our pricing expectations, and we had continued favorable prior period development. Strong SEP membership growth during the year was a headwind for the full year MLR, and we increased our risk transfer payable in the fourth quarter based on the most recent interim risk adjustment report. Our risk transfer as a percentage of premiums for 2024 was largely consistent year over year at approximately 14.5%. Switching to administrative costs, The 2024 SG&A expense ratio significantly improved by 520 basis points year-over-year to 19.1%, driven by higher fixed cost leverage and variable cost efficiencies. In 2024, we delivered on our commitment for adjusted EBITDA profitability. For the full year, adjusted EBITDA was $199 million, representing a substantial $245 million year-over-year improvement. We also reported net income profitability of $25 million. Shifting to the balance sheet, our capital position remains very strong. We ended the year with $4 billion of cash and investments, including $190 million of cash and investments at the parent. As of December 31st, 2024, our insurance subsidiaries had approximately $1.2 billion of capital and surplus including $774 million of excess capital driven by strong operating performance. Given the excess capital in our insurance subsidiaries, we expect funding of our 2025 growth capital requirements to have minimal impact on parent cash. With respect to quota share reinsurance, we expect our seeding percentage to be largely consistent year over year at approximately 50% in 2025. Before I turn to the 2025 outlook, I want to highlight that starting with our first quarter 2025 results, we'll be shifting the focus of our conversations to earnings from operations rather than adjusted EBITDA. While we will continue to provide both metrics, we believe earnings from operations is the best metric to show our progress towards our goal of a 5% operating margin by 2027. Turning now to 2025 full year guidance. We expect to execute on our strategic plan and deliver above market growth and meaningful margin expansion this year. We expect total revenues to be in the range of $11.2 billion to $11.3 billion, driven by solid retention and another year of above market growth during open enrollment. We remain committed to our disciplined pricing strategy, balancing growth and profitability. we expect our medical loss ratio to be in the range of 80.7 to 81.7%, representing a 50 basis point year-over-year improvement at the midpoint. Our outlook reflects lower year-over-year SEP member additions as Medicaid redeterminations are largely complete. On MLR seasonality, we expect the first quarter to be the lowest and the fourth quarter to be the highest as members meet their deductibles. For 2025, we expect risk adjustment as a percentage of premiums to be largely consistent year-over-year based on our updated membership mix. We expect our SG&A expense ratio to be in the range of 17.6 to 18.1%, representing an approximate 125 basis points year-over-year improvement at the midpoint. As a reminder, this ratio includes stock-based compensation expense, which in 2024 was approximately 110 million. With respect to seasonality, we expect our SG&A expense ratio to modestly increase each quarter as the year progresses. We expect earnings from operations to be in the range of 225 million to 275 million, representing a significant $193 million improvement year over year at the midpoint. We would expect adjusted EBITDA to be roughly $140 million higher than earnings from operations. Additionally, we expect positive net income in 2025. In closing, 2024 was a successful year for Oscar. We delivered strong growth, adjusted EBITDA, and net income profitability, And we've turned the page to the next chapter in the company's trajectory, one of continuing to meet consumers' needs with differentiated and innovative product offerings and meaningfully improve financial performance. And with that, I will turn the call over to the operator for the Q&A portion of our call.

Thank you. We will now begin the question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your questions, simply press star one again. We ask that you please limit yourself to one question and one follow up. Your first question comes from the line of Stephen Baxter from Wells Fargo. Your line is open.

Hi, thanks. There's a lot of focus in the market currently about payment integrity in the individual health exchanges and potential changes from certain re-verification programs being back in place for this year that may have been relaxed in prior periods. Mark Broughton- Can you give us a you know more of a detailed discussion around what you're seeing when it comes to things like effectuation rates and then what you're assuming in terms of. Mark Broughton- You know enrollment declines throughout the year is potentially maybe there could be an above average lapse in payment rates any kind of detailed discussion around the assumptions you're making on this issue would be greatly helpful, thank you.

Mark Broughton- For the smart. Mark Broughton- i'll start with defining effectuated membership, which is new enrollment which. obviously is past muster with the government in getting people into the plan and then renewals that's the gross number if we were to report that number as it sits today for us it will be 1.98 million members we have decided to start tracking actual numbers we can members we can put premiums on and numbers on and so today the number we shared with you 1.8 million is our knowledge of 1.8 million people who have paid their premiums and therefore are in the plan. And that is the number against which we put together guidance for revenue. So we believe there's about a 9.1% impact of effectuation against actually what will show up paid by the end of the first quarter. Scott?

Yeah. Steve, I think that, you know, what we tried to do in providing the information of, you know, we would think that effectuation rates year over year should be about, you know, the same, which is exactly what we've seen. But we also know how many of the new members have paid already. And so 1.8 million members have started making payments for us. And we think that is the most relevant number to look at. And that's why we provided that. You know, with respect to what's going on overall with payment integrity issues, I'd just make a few comments. Number one, you know, the issues of verifying social security numbers, verifying, you know, that you've got all the right data, as Mark talked about, that's already happened in open enrollment. The broker of record, you know, restrictions, those things have already happened through open enrollment. So we believe most of those types of issues are behind us. And with respect to the questions around file to reconcile, you know, that topic I think is actually quite complicated. And so just to simplify things, you know, the way that file to reconcile is working, CMS and the IRS worked on what portion of members in the ACA have not filed for 22 and 23. They sent a notice to those members in November that highlighted, hey, you need to complete your file to reconcile process. And it instructed people to go onto the CMS website and click a box that said, I have completed my file to reconcile process. If they didn't do that, they would have lost their subsidy in open enrollment. And so as of January 1st, they would be getting a full premium unsubsidized And they would not be, you know, included in our February 1st paid account should they have not paid the full premium amount. Now, you know, that we understand that CMS and the IRS will go back and verify in April that for those who clicked the box that said I did file the reconcile that that in fact happened. Again, this is members, you know, these are people that were in the ACA in 22 and 23. That's the basis of what they're making the adjustment for. we've incorporated our estimate of what that file to reconcile process may do. And so we have built that into our full year revenue guidance that we gave the street. So again, 1.8 million members is the number of members that are paying OSCAR as of February 1st. We built in all of the risks that we see from this file to reconcile process, as well as the other CMS payment integrity thing, we have put that into our guidance. And we think that growing, roughly 23% on revenue year over year is a remarkable delivery against our plans. And we are super excited about what 25 is going to bring for us in terms of our ability to grow margin and deliver terrific results for our shareholders.

And just for a comparison year over year, last year, our difference between effectuated and paying customers was 4.1%. Because we looked at the file and we had some rate changes in markets, where we had zero premium members that actually started to have to pay, we assumed those people would not ultimately renew, and so we took that up to 9.1%.

Yeah, and that's an actual, those are the actual numbers between effectuation and payment rates. Those are the differences that Mark indicated.

Okay, thanks. I'll jump back in the queue.

Sure. Next question comes from the line of Josh Ruskin from Nefron Research. Your line is open.

Hi, thanks. That was a super helpful answer to the last one. I'll start with the, I guess, two questions here. Just the MLR, you know, came in above the high end of guidance despite the lower revenues. So, you know, I heard the higher risk transfer payable, maybe you could quantify that, but were there any other one-timers or any drivers of the MLR increase? And then just this move to

um income pro or you know adjusted or earnings from operations is there any material change to interest expense coming in the next year or two i'm just curious if that seems to be the biggest difference between ebitda and the new metric just i'll start with one point um that i think is really important to understand our utilization came in as expected actually slightly better so what you're seeing in the change of the mlr is not worsening utilization It's the relative risk of our book versus others and the impact of risk adjustment settlements at the end of the year.

Scott? Yeah. So, you know, I think that on the MLR, I'll start there. So, for MLR, as Mark just talked about, what we have seen is utilization actually came in slightly favorable to what we would have anticipated. we saw risk or development proceeding as we would have anticipated based on the claims that we've had. And when we got the fourth quarter risk report from our friends at Wakely, we observed that in several markets, there had been an increase in the risk scores of the market versus what we were expecting. So we took that information and updated our accruals for that. So that is really what drove the pressure in MLR. It also, as a result, when you increase your risk transfer, it also drove a shortfall in revenue. So it was the same thing driving both those effects. I would also point out that we had favorable prior period development in the fourth quarter, which offsets some of the pressure from the risk adjustment true up. And, you know, those same drivers had an effect on the full year MLR, but to a lesser degree.

Gotcha. And then just the interest expense?

Oh, and then on interest, I think that interest is the biggest delta between adjusted EBITDA and earnings from operations is going to be stock compensation and depreciation amortization. And we would anticipate that, as I said in my talking points, It's about $140 million difference between earnings from operations and adjusted EBITDA in terms of our 2025 guidance. So those are the biggest drivers. But by the way, on interest expense, I would expect that to be consistent year over year because we don't have any new indebtedness.

OK. All right, thanks.

Your next question comes from a line of Michael Haw from Baird. Your line is open.

Thank you. Yeah, so I think 2025 guidance, there might be some confusion amongst investors about the new EBIT guide versus what that implied on EBITDA. And Scott, I think you just answered it, but just want to very clearly clarify and clear up any confusion. If we take your 225, 275 starting EBIT guide, back out DNA, back out stock-based comp, the implied EBITDA guide would be around 400 million, right? So that's basically roughly in line with STREET.

Yep, so the top end of our guidance for earnings from operations is $275 million. Add $140 million to that should get you to around $415 million, which would be the top end of adjusted EBITDA.

Got it. Thank you. And then just to clarify, so 1.8 million people have paid their premium. So from now through April when the final FPR recheck happens, is it fair to say the low scenario is now already built in And from now through April, you can only do potential upside on membership via FTR recheck. Is that right?

That's exactly right, Michael. That's what we're trying to do is to de-risk. You've seen us do this both in our investor days to try to make this simple for you guys. So we took out the risk of effectuation being higher than ultimately the membership that we would realize. So we're starting with paid members. There's a potential that we could see some of the people that haven't paid you know, as of this date, actually make a payment and become, you know, finally effectuated out into the first quarter. But at this point, you know, we've built the risk in. And so there's more upside to our plan than downside.

And again, that's largely in the renewal book and largely around people. We thought that we're going to go away from zero dollar plans to having to pay out of pocket.

Got it. And if I could squeeze in one more, the Oscar 25 earnings bridge, what makes it so attractive in our opinion? All the additional SEP lives in 24, retaining those members, capturing a full year risk adjustment revenue could be 10% MLR improvement. And if my math is right, just a very large part of the bridge into 25. So with that said, wondering how is your retention rate on those SEP lives? And are there any notable dynamics, whether it's member makeshift or anything else that might prevent you in any way from seeing that that powerful MLR tailwind play out?

Look, I think that as we talked about in our talking points, we had solid retention. You know, a year ago, the retention was incredibly high. We were expecting that. We expected a little bit softer retention. We saw that, but we still saw terrific retention, and we saw retention in the SEP cohort. So, you know, all of the dynamics of, you know, building momentum, James Rattling Leafs, and building that scp membership in 24 is playing out with the growth that we're seeing in 2025. James Rattling Leafs, We also have you know high confidence that that those Members from last year, who came in through scp will also have a ml are in 2025 that looks like you know the rest of always so all of that is built into our guidance, and you know again. Utilization in 24 Barats was really good. It was favorable to our expectations. So, you know, we think that we've got a lot of momentum going to 25 in terms of the performance of our MLR.

And the risk scores will mature on that SEP population, which we did not get full advantage of in 2024. So we'll see that happen. The demographics are largely the same, 52% male, 48% female, largely 71% in silver plans. I think the issue that we saw in ICHRA was actually people choosing more gold and bronze plans. As we saw the ICHRA commercial come in, small sample, but still an interesting dynamic and a different way of purchasing.

Great. Thank you very much.

Again, if you'd like to ask a question, press star one on your telephone keypad. Your next question comes from a line of Jonathan Young from UBS. Your line is open.

I plan to take a question, I guess, just in relation to the 1.8 million lives. Are you assuming any attrition throughout the year as people get jobs or perhaps just stop paying throughout the year? Or are you assuming a full static 1.8 million lives? And then just on GNA, does the does that step down from the 1.9 to 1.8? Does that you obviously have a good GNA ratio for this year, but does that change kind of your how the trajectory of it might look moving forward? Thanks.

So, you know, I think that on the SG&A, you know, we see continued opportunity for SG&A improvement. You know, that's going to be, you know, we've seen that in our guidance. I would just say that in 2025 we are making some investments to continue to accelerate, you know, our opportunities for growth. and efficiency so that's already baked into the guidance so you know the fact that we're improving our sgna performance while you know continuing to invest in our future i think is um you know is a strong example of how we think you know long term for the company um and then you know the with respect to um the operator a point on the operating leverage it's based on the 1.8

Yes.

So, you know, if the fluctuation comes down from 1.98 to 1.8, we still have a height at 1.8.

Yeah. And basically, on your churn question, we anticipate that membership will be roughly flat throughout the year. We would anticipate, you know, we believe that we'll see lapse that's at or around, you know, what we've experienced historically. potentially with some, you know, some a little bit of pressure from what I talked about in terms of the April final CMS process, we built that into our expectations. And then we expected some of the factors that drove growth in this market in terms of, you know, new people coming in, whether it's through the gig economy, or through, you know, other sources of growth that have been the bedrock of what's been driving the ACA over the last couple of years that we expect those to continue. So again, flat membership throughout the year.

And on the AI front, we did not project AI enhancements in our three year projections that we shared with you in June. But last year we put in 11 new use cases. And this coming year, we're going to we have ten more in the pipeline for just the first quarter. So we continue to find ways to use these tools to help us drive the SGA down. And that's why quite frankly, our numbers ahead of where we thought we were going to be when we put together the three-year projections.

Great. Thanks.

Your next question comes from a line of Jessica to sign from Piper Sandler. Your line is open.

Hi guys. Thank you for taking the question. My first one's a quick one. Can you just quantify the total prior period development in 2024 and then specifically in the fourth quarter? Yeah.

So prior period development for the full year was $126 million, and it was $62 million in the fourth quarter.

Awesome. Thank you. And then can you maybe discuss Oscar's pricing strategy and kind of specifically the extent to which your silver plans are priced above the benchmark and how that pricing kind of ensures that Oscars only really enrolling, you know, active and intentional premium paying members? Thanks.

Yeah, well, I would say that, first off, we always take an approach to pricing, which is we want to have discipline pricing strategy that balances our desire to both grow the book and to create margin for us. So that's kind of thing one. When we think about the different pricing for each of the metal tiers, we do that primarily with the view of we want all of our book to perform in a way that creates margin for the business. So that's probably the most important lens. So we build up, what do we think the trend is going to be? And then, you know, we create margin by basically having affordability initiatives that allow us to experience an MLR that is below the, or experience an increase in medical costs that is below the trend. So that's kind of what we do there. With respect to, you know, zero dollar and the comments you made around is there more, you know, risk of fraud, we are, James Rattling Leafs, You know, engage with cms in trying to do everything we can to make sure that we only have valid members and cms is actually the one who does all of the income verification. James Rattling Leafs, What we do is we police the brokers that we do business with. James Rattling Leafs, We you know we're actively looking at to try to find any kind of irregularities or or things that we see brokers doing that cause us to. James Rattling Leafs, You know question if there's something going on that we should be talking to see a mess about we report those brokers to. James Pfeiffer- cms they are the ones that do those investigations, but we don't have any interest in having you know any kind of Members that are there without being there on purpose, and you know we do everything we can to support cms is payment integrity efforts.

James Pfeiffer- What we have found in a number of our zero premium plans are large number of Members that don't use care all that significantly and that's largely as an insurance policy. for them in case there's an accident or someone gets ill, they don't lose the house. So it's a very different purchasing decision. They're buying a plan at zero premium that gives them some coverage for catastrophic events.

That's really helpful. Thank you.

And your final question comes from a line of Adam Ron from Bank of America. Your line is open.

Hey, I've just got a question about SG&A. It seems like, you know, last quarter you got it to 19.4 and then you printed 19.1 for the year. So in the quarter, that implies pretty significant outperformance. So I'm curious what's driving that, if that's related to AI or, you know, for example, if you've like slowed your hiring or something you could point to that, that would be helpful.

Yep. Yep. Look, I think that SG&A is just a bright spot in terms of John MacDonald, You know number one the the in the quarter, you know I think that we saw just continued strong performance of our. John MacDonald, initiatives of making sure that we try variable efficiencies and that we achieve our fixed cost leverage, so you know all of the improvement, there is sustainable and I you know we'll we'll move into 2025. John MacDonald, You know, overall sgna I think that you know mark previously described seeing some. John MacDonald, watermelons on the floor, I think we have been very successful at harvesting those watermelons and a lot of what you see in sgna is is really from the blocking and tackling and then we're starting to see the front end of. John MacDonald, You know a lot of the Ai initiatives that we've been running and talking about in terms of the our ability to. you know, be a more efficient company. And I think there's more opportunity for us to drive that into the future. And we've just started to see the, you know, the first round of the effects of that on our cost structure.

I could squeeze one more in. I thought it was interesting that the new hires coming from Kaiser, given Mark is typically kind of bearish on capitation. So curious if Janet has a different view on that or change of strategy on value-based care, but appreciate all the questions.

So Kaiser is not capitated. Kaiser practices a different form of medicine, and they organize in a way to practice better medicine. So, you know, I would say that she brings to us some skills that we, as we evaluate value-based contracts and whether or not they work effectively, she brings some really strong skills. And she did an amazing job in turning around Hawaii when that program got in trouble, and she's anxious to join us. So we're very pleased to have her.

Appreciate it.

And that concludes today's conference call. Thank you for your participation. You may now disconnect.