Oak Street Health, Inc.

Hello and welcome to today's Oak Street Health third quarter 2022 earnings conference call. My name is Elliot and I'll be coordinating your calls today. 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. I would now like to hand over to our host, Sarah Cluck, head of investor relations. The floor is yours. Please go ahead.

Good morning and thank you for joining us today. With me are Mike Peikos, Chief Executive Officer, and Tim Cook, Chief Financial Officer. Please be advised that today's conference call is being recorded and that the Oak Street Health press release, webcast link, and the other related materials are available on the investor relations section of Oak Street Health's website. Today's statements are made as of November 8th, reflect management's view and expectation at this time, and are subject to various risks, uncertainties, and assumptions. In addition to historical information, certain statements made during today's call are forward-looking statements. Please refer to our 2021 Annual Report on Form 10-K and other periodic reports filed with the Securities and Exchange Commission, where you will see a discussion of certain risks, uncertainties, and other important factors that could cause the company's actual results to differ materially from these statements. Certain statements made during this call include non-GAAP financial measures. These non-GAAP financial measures are in addition to and not as a substitute or superior to measures of financial performance prepared in accordance with GAAP. Please refer to the appendix of our earnings release for reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measures. With that, I'll turn the call over to our CEO, Mike Bikos. Mike?

Thank you, Sarah, and thank you to everyone for joining us this morning. Joining me in today's call in addition to Sarah is Tim Cook, our Chief Financial Officer. I continue to be impressed by the impact our team is making on our patients in the communities we serve every day. Their hard work and dedication leads to outstanding results from our care model, driving the performance of the organization. For Q3, our performance led to results above the top end of our guidance range for revenue, centers, at-risk patients, and adjusted EBITDA. The two main drivers of both our impact and the financial results our centers generate are the number of at-risk patients we serve and the effectiveness of our care model in improving outcomes and lowering hospitalizations, leading to lower third-party medical costs. For Q3 and year-to-date 2022, we've achieved strong results on both of these drivers, leading to center-level performance in line with the cohort expectations we shared coming into the year. Our patient experience and the resulting patient engagement enable both drivers of our model. Our patient acquisition approach is predicated on educating older adults on the superior patient experience we provide at Oak Street, with lighters such as longer visits, additional services such as insurance navigation, and easy access generally only found in concierge provider groups. We communicate our differentiated patient experience through our community average model, as well as our central marketing channel. We launched our first meaningful television brand advertising campaign in Q3. The theme of the advertisements was a differentiated level of patient experience we provide compared to traditional doctor's offices. We plan to continue and expand upon this campaign in 2023 and beyond. On the care model side, our differentiated patient experience leads to much higher patient engagement, which enables our care model. Oak Street cares for a patient population that historically had less access to and engagement with the healthcare system. Even in the face of these headwinds, Oak Street drives strong patient engagement. For example, using annual wellness visits as a proxy for the level of engagement for our patients, we complete over three times the percentage of annual wellness visits on our patients compared to Medicare overall. Patients engaged in our model have significantly lower hospitalization rates and better patient health outcomes. Oak Street's patient experience allows us to drive significantly higher engagement than the average provider, leading to increased impact. As we've shared in the past, we can offer a superior patient experience because of our consistent de novo approach to rebuilding healthcare. As we continue to scale, we will continue to invest in our technology, data infrastructure, and culture, allowing us to further differentiate our experience. We believe this will continue to drive results on patient acquisition and patient engagement, while further differentiating Oak Street from existing primary caregivers.