Medicare Advantage Risk Strategy
Q: How will MA payment cuts affect your risk arrangements?
A: We've proactively adjusted our Medicare Advantage contracts over the past 18 months to mitigate the impact of payment cuts. We're willing to take on more risk as long as we're appropriately compensated, ensuring a positive adjusted EBITDA growth over 20% and free cash flow impact for both our providers and shareholders. We're well-positioned to increase our risk book, but it's crucial that payers share in the risk and economics.

Contract Restructuring and Earnings
Q: How did you restructure MA contracts to maintain profitability?
A: We restructured contracts to preserve earnings for both our doctors and us by adjusting benchmark expenses, medical loss ratio targets, and sharing risk with payers. This approach has allowed us to aim for over 20% EBITDA growth at the midpoint of our guidance, which is notable in the current environment.

Future Risk-Taking Approach
Q: Can you quickly shift lives back into capitated contracts?
A: Adjusting to capitated contracts is typically an annual process starting January 1, with discussions in Q3 and Q4. We prefer not to assume 100% risk; instead, we favor arrangements where the payer, we, and physicians all share risk and rewards. This ensures rational outcomes and that we're compensated when taking on more risk.

Business Development Opportunities
Q: How does market disruption affect your growth strategy?
A: Disruptions in the provider enablement space present opportunities for us. With over $400 million in cash and no debt expected by year-end, we're in an enviable position to be opportunistic in growing the business. We aim to enter 1 or 2 new markets annually, focusing on integrated medical groups, risk entities, and service platforms.

Confidence in Guidance and Growth
Q: How confident are you in achieving your 2024 guidance?
A: We feel very good about our business momentum and operating execution. Our fee-for-service side remains predictable with seasonal trends, and solid early performance positions us well for the year. We've met or exceeded guidance for the past 12 quarters and expect to maintain that cadence.

Pipeline with Health Systems
Q: Are you seeing more opportunities with health systems under pressure?
A: Yes, we're having good dialogues across small practices, larger groups, and big health systems. Disruptions often lead organizations to redefine strategic objectives, and our proven track record makes us a partner of choice. These are strategic, long-term relationships that take time to develop.

Strong Cash Position and M&A
Q: How will your cash position influence growth strategies?
A: With expected cash over $400 million by year-end and no debt, we plan to be opportunistic in growing the business. We're well-positioned to take advantage of disruptions in the marketplace and potential M&A opportunities.

Utilization Trends and Guidance
Q: How are current utilization trends affecting your outlook?
A: Utilization trends are as expected and have been factored into our guidance. We've anticipated industry-wide trends and reflected them in our accruals and results. We feel good about how we've anticipated these trends.

Timing of Cash Flows
Q: Why was free cash flow impacted this quarter?
A: Q1 is typically our lowest cash flow quarter due to timing differences. We received cash from value-based care agreements in late Q4 and paid out amounts to physician partners in January. Also, we paid annual employee cash bonuses in March. We expect to have over $400 million in cash by year-end, excluding any M&A activity.

Attributed Lives Growth Dynamics
Q: What's driving the growth in attributed lives?
A: Attributed lives grew 10%, influenced by entering Connecticut last year, which added about 185,000 lives, and exiting Delaware, which reduced about 12,000 lives. The rest of the growth is organic from same-store increases and new practices. We're focusing on building primary care-centric networks to increase attributed lives.