Alignment Healthcare, Inc. (ALHC) Earnings Call Transcript & Summary

Okay. Good afternoon, and welcome, everyone, to the Alignment Health session. I'm Bob Jones. I'm joined by my colleague, Kevin Hartman. And together, we cover health care services here at Goldman Sachs. Really excited to have both John Kao, CEO and Founder of Alignment with us as well as Thomas Freeman, CFO. So welcome to you both. I appreciate you both being here.

Hey, Bob, thanks for having us.

Definitely. Well, the format, obviously trying to keep it as conversational as possible. And to the extent that anybody on the webcast does have questions, please feel free to submit them to me, and time permitted, I'll try to squeeze those in as well.

John, I thought maybe just to start things off, I think there's a wide range of investors out there. So I'm very familiar with the story, some may be less familiar with the story, just given the recency of the IPO. I was hoping maybe you could start off just giving us a few key points on how you really think Alignment differentiate or is differentiated from the other MA providers out there in the marketplace?

Sure. Happy to do that. Alignment Healthcare is a Medicare Advantage platform is the way we'd like to think about it. And I'd like to refer to ourselves as a pay buyer. We have all the capabilities of a payer, but we really have a care delivery model and a culture of that of a provider. And one of the things that I think that distinguishes us is we zero in on knowing who the high-risk patients are in our population, and we care for them at home virtually, that's given us a lot of confidence to bend the cost curve. And it gives us consistency to do that with provider partners in each of the markets and the communities that we serve. And that's allowed us to have best-in-class benefits, really good star ratings, getting paid 4.5 stars, great NPS scores. And doing all that good stuff for our members has resulted really strong financial performance over $1 billion. Last year, I think we're in the low 80 MLRs profitable. And I think what our CAGR was revenue historically is 40%, membership was over 30%. And so it was just this whole concept of doing well by doing good.

Yes. No, makes a ton of sense. And I think that's a helpful way of putting Alignment in perspective relative to the market. One question that we're asking folks all across the health care continuum and hopefully won't have to ask this question too much longer. But as you think about the utilization picture, both from a COVID and a non-COVID perspective, could you give us your latest observations, your latest view of kind of where we are as far as normal utilization kind of getting back -- within your membership, obviously, normal utilization kind of getting back to pre-pandemic levels? And then where are we with those things that are still related to COVID consumption?

Yes, I can take that one, Bob. So we really saw a spike in the fourth quarter of 2020 that persisted into the very beginning of the first quarter of 2021 related to COVID utilization. And as much as that was obviously not a great time, and we did a lot to really try to engage and educate our members as to how to protect themselves, we are very happy to see how that has come down significantly over the back half of the first quarter. And so in terms of where we ended the first quarter, we were kind of back at our normalized rate. And there's still a little bit of offset where some of the emergent volumes a little bit lighter than normal, which has been offset by some of those in hospitalizations. But generally speaking, we were kind of back towards -- within the reasonable margin of our -- what we would consider to be our baseline. And so as we thought about our guidance for the year and kind of our outlook for the rest of 2021, we would anticipate to see some continued volatility. And obviously, we're keeping an eye on the fourth quarter, which typically, just in terms of average seasonality tends to be a bit higher of an MBR quarter for us. But generally speaking, we feel pretty good, and we feel like we are kind of past a lot of the toughest days, and we're happy to say that we are kind of continuing to kind of track in line with some of our expectations. And again, some of the baselines we've seen in the past.

No, that's really good to hear. Another topic that's kind of timely just given, as we said here in early June, was MA bids. Obviously, they were due very recently earlier this month. Definitely don't envy the actuaries this go around just given how uneven utilization has been and the expectation of where it could go, obviously, probably runs a wider range than what is typical. Yes. Any sense you can give us as far as if there was a different approach to bids this year, especially as we think about the potential for cost to come back in a bigger way for next year relative to a normal year?

Yes, I can take that one, Bob. Yes. We literally just, as you probably know, just submitted the bids just last night. And so we took a very specific market-by-market approach. We're looking at all the competitive dynamics whether it's providers, hospitals, what our competitors did last year. We're looking at the big guys, the little guys. And with respect to trends, we think from a risk adjustment basis, 2022 is probably going to start getting normalized a bit. The other thing to keep in mind is even though we had some upticks in COVID for the first couple of months of this year, virtually had no flu like we've had in the past. And so we'll see some of that, I think, go back to norms in November, December, maybe January, February. So we're kind of thinking about all that. And we don't think there's going to be a big kind of pent-up demand on delayed utilization. And we're not thinking about that. We haven't seen that. I do think the plans out there are going to be competitive just on some tailwinds, I think, that they're going to be experiencing. And so we're going to react accordingly.

No, makes sense. Maybe just one quick follow-up on this just because it's been very topical this week, and we've gotten the question from a number of investors. I'm sure you have as well. Big news in the Alzheimer community, obviously, a community population that plays very much into your membership base, I'd imagine. I know it got approved this week. But any initial thoughts on just how you're thinking about potentially covering Biogen's Amab, if that's, in fact, what ends up happening. I've asked this question mechanically, like is there a way to bake that into bids for next year now that it's approved? Or is that just one of those things where you kind of have to move accordingly, given the fact that the timing was probably fortunate in some ways, but unfortunate as far as the underwriting cycle goes?

Yes. So that obviously did take place after the bids were finalized. So we don't have any explicit assumption in the bid as it relates to the drug. But the way we'll approach it is sort of both from a medical side where we have our Chief Medical Officer and his team thinking through sort of how we might approach this. We have our pharmacy experts in-house that are helping us kind of think through it as we use to kind of make sure we all come around the right way to approach this. And ultimately, obviously, the FDA step is sort of step 1 CMS now most likely go through its own review and approval process. And so we'll be following that, obviously, very closely. And there are a few different scenarios that could play out. Some may result and are sort of taking on that cost sooner rather than later. Others may actually obviously result in a delay where it could take a year or 2 before we see any of that exposure in terms of our income statement. So we're watching it closely. At the end of the day, I think what we want to do is make sure that as the efficacy of the drug continues to kind of bear fruit and people will kind of continue in the community to seek access to it, we're doing our best to make sure people get access to it and kind of follow the guidelines that hopefully CMS will help standardize across the country.

Yes. And I'd just add one last comment. And it's just historically CMS if approved through the clinical trials, they've taken a couple of years to embed the incremental costs into their benchmarks that they're going to be issuing on an annual basis. And they've done that historically. So yes, even though there's going to be a potential for an increase, it's going to be reflected also in the benchmarks.

Got it. Okay.

John, Thomas, thanks for the detail so far. So I guess maybe just asking on risk adjustment, obviously, another hot topic, recently. I know on your last call, you were talking about some uncertainty related to the midyear risk adjustment true-up. I don't know if you have additional clarity at this point. But if you do, it would be great to hear how that might be coming in relative to what your expectations. And if not, when you'd expect to get more detail on where that might be coming in?

Yes. So as a reminder, we kind of think about our population in a number of ways. But as relates to this topic, I think the most probably important way is whether the member is returning, which we would define as a member that was with us in the prior or other members new to us, which means they joined in January up through the year-to-date period. And so for our returning members, we actually obviously have our own access to the data that we're submitting to CMS, and we're able to quantify and understand sort of how that should flow to the system and ultimately impact the revenue PMPM for those members. So I think we have some pretty good visibility at this point as to where we think the revenue PMPM should land on those members for the full year. Whereas with that new cohort of members, the members who have enrolled this calendar year, those are the members where the revenue PMPM and the risk adjustment scores for them are going to be based on the activities from the prior year, either the health plan that they may have been with and then they joined us or potentially just in the traditional Medicare system. So for that subset of members, that's really where the midyear sweep becomes very relevant, and we'll give more visibility as to as to how they'll look over the back half of the year. And what we've shared thus far is we have seen just lower on average new member scores kind of by market than we've seen in the past. And given that the new members do represent roughly 25% to 30% of our overall book of business, as we think about the total 2021 member months, it is obviously a relevant thing we're keeping an eye on. But our guidance is essentially reflective of our current payments year-to-date sort of persisting through the back half of the year. So right now, we're not, I would say, anticipating sort of a significant change, and we feel comfortable that the guidance we put forth is kind of reflected what we've seen thus far. And hopefully, over the next 30 days or so, we'll get more visibility and be able to provide a more formal update on the second quarter earnings call.

Got it. No, I think that makes a lot of sense. The natural follow-up, obviously, to this question is just how is your risk coding efforts progressing so far this year. And so similar type of question. Obviously, it seems like utilization more broadly has been coming back to normal levels. Any sense of whether or not you think you'll be back to kind of like your normal coding efforts as we look into next year? And are you anticipating that the headwind that you guys are experiencing this year should more or less be gone by next year? Just any context you have on how that's going would be definitely helpful.

Absolutely, Kevin, yes. I mean the answer is absolutely. There's a lot of lessons learned from 2020 with respect to risk adjustment engagement of providers. I think the deployment of virtual solutions. Even though it's still video, we're obviously hoping for a more broad definition of improving telephonic, in terms of capturing the underlying documentation for risk adjustment. But yes, I mean, we're doing it. We're engaging all of our provider partners. And I think you're going to see a much more normalized 2022 just in terms of the amount of information that's garnered. And just to remind everybody, if you can get the information and close these risk adjustment gaps by the end of the second quarter, you get visibility from a revenue perspective in January payments. And so there's been really an acceleration of that in the first half of the year. So I expect it to be back to normal levels.

Got it. That's also a great context. Moving on just a little separate topic, just on the competitive landscape. So obviously, that's been a relatively competitive market, I think, over time. And so from your point of view, what has made you most successful there? And I think separately, when we were pulling some of the data from CMS, it does seem like that market has consolidated a little bit. Some of the larger payers have a little bit more share than they maybe did 5 years ago. And so any context you can give on what -- how market share has kind of shifted over time? And if you think that like that consolidation poses any risk to the kind of growth algorithm that you guys have been seeing over the recent years.

Yes. California is a very, very competitive market. I mean these are, in many respects, a lot of the principles of value-based care, were born here, right? So it's a tough, tough market with really strong competitors, all the big guys have positions here. And yet, we're still growing at 30% year-to-year. And I don't see, I don't see the any kind of exposure for this reason. And we said in the road show that I expected more provider contracts and strategic relationships within the existing geographic footprint. And that's kind of what's happening. And the stronger we get, the faster we're growing, a lot of the folks that we historically have not been able to contract with, so we're kind of small, are now wanting to talk to us, both on the provider side as well as the hospital IDN side. And I expect that trend to continue. The other thing I would say is there's been a handful of call the smaller MA plans that have kind of come gone over the last 3, 4 years. And I'd say they come in. They've kind of gotten very aggressive on pricing and benefits, and now they're no longer around. They just -- because it was unsustainable, there wasn't infrastructure to really make it all -- or capital to make it all makes sense. And so I think you see some of those folks on the lower end falling on the way . The other thing I would say is you've got some people coming in now that are going very aggressive on, call it, Part B rebates, but really on the back of some of the providers that they globally [ capped ]. I don't think that's sustainable either, right? So you're going to have these ebbs and flows. We've seen it all in this marketplace, and I think we're still very well positioned for kind of long-term consistent growth, which is by blocking and tackling and executing.

That makes sense.

Maybe, John, to think about some of the growth markets outside of Southern California, clearly, Nevada and North Carolina, it does seem like it takes time, as you mentioned, like some smaller plants come and go. As you get into new geographies like these 2 specifically, what's the road map? Kind of what has to play out in order to replicate what you've been able to accomplish in Southern California?

Great question. And the answer is kind of simple, which is we have to ensure that we are high-quality and low cost, right? We said on the roadshow. We talked about that in terms of the virtuous cycle. And all of it really starts with making sure that we have like-minded provider partners. That's not to say we need those partners to take risk with us. We need like-minded partners. If they want to contract what's on a fee-for-service spaces, and that's great. And they want to contract with us on a [ share-based basis ]. That's great. But they want a global cap contract. That's great. We just want to be a like mind and take our model and help them so that we can engage on ensuring value drivers that are core to being successful, making sure that the STARS gaps get properly closed. So we got to give them the right information at the right time to help them close all the HEDIS and CAPS and [ HAS ] and Part D gaps that make up starts. That's really important. That takes a lot of time, actionable data. We got to have very compliant MRA efforts. And part of that is just education, again, giving them the information to accurately close MRA gaps. And then we got to work with all the providers to make sure that they understand the Care Anywhere programs so that in the collective, we can bend that cost curve down consistently. And so the whole program AVA, Care Anywhere and the productization of delivering to consumers the best-in-class products is what ultimately is moving market share. That concept is what's allowing us to get in with a lot of these providers as we are thinking about 2022 and 2023 new markets. And so at the end of the day, providers, whether they be medical groups and/or integrated delivery systems, they're looking for market share gain. And so they can get comfortable that you can consistently ensure that quality at the low cost reliably and have direct-to-consumer coverage and benefits, oftentimes, like we did with our partners in Northern California Sutter, health a co-branded basis, that's going to start moving the market share. That's what's given us, I think, the tailwinds with a lot of the conversations we've had both in contiguous markets in our existing states as well as entering new states.

I mean this is, I think all conceptually, John, that all makes a ton of sense. And obviously, you guys have the proof points to back it up. And I think for me and other investors we've talked to along the way around the IPO, there seems to be a bit of a chicken or the egg though when it comes to new markets, right, like providers want all the things that you just mentioned, but they also want like a membership base. And membership-based wants, obviously, all the things that you just mentioned, but they also want a really good network. So how do you finally strike that balance if you want to use Nevada as an example? Like is it really kind of getting in and getting buy-in from a Sutter-like partner in that market? Or is it somehow you have to kind of get out and do The Street marketing?

It's both end, Bob. I mean there's, the entire health care system is local, right? Health care, as you know, is local. And so what works in what particular market may not work in another. So the key word, I would say, is adaptability. And so the system and the model of care was designed to be adaptable. And your logic is very sound. It's just we face that in every single market that we've entered. And we were very specific in saying let's have a very diverse geographic footprint within California. And what happens in the Santa Clara market is different than the Stanislaw market, which is different than in San Diego, et cetera. They're all different. And each one of them, we started with 0, nothing. And in the same 5-year window, we're right for every single one. We're right around 10,000 members, some more, some less, et cetera. And consistent in a way where we've engaged these providers move market share to them and have really partnered in an aligned way with these folks, and they're just all over the map. And Sutter's one example. San Diego is another example. There was no co-branded partner with several wonderful medical groups that we partnered with. We got 8,000 members in 2 years. In Northern Cal, we got 12,000 in 2 years. So it's -- there's no easy silver bullet. On the other hand, I'm like not going to tell you we're going to put 50 dots on the map and end up with 200 members per dot. I mean it just doesn't make any sense. We're going to be very thoughtful about which markets we're going to get into and prioritize deployment of capital to make sure we have the best outcome. And in each market, we've got to make sure that the quality is there. The engagement levels there. And I got to tell you, that is not the gating item. People want to work with us. And I think it's a function of some of our competitors, It's interesting, a lot of the medical groups are knocking on our door because the dynamics have changed with the relationships with some of these other partners. So I'm pretty optimistic about that. And to your point, and we said this on the road show and the IPO, the issue is at affordability. And that is can you guys make this thing work outside of California? Our response is absolutely. I think we can do this anywhere. But whatever we tell you you're not going to believe us until we do it. And so once we do it, then I think is then we're going to have this conversation about just how big this actually could be.

We believe you, John. So if I just think about some of the comments you just made, maybe it could be helpful to think about are there specific characteristics that would make a particular new geography more or less attractive? I mean like you pointed out, it's competitive everywhere, right? I don't think you're going to all of a sudden find some huge geography where the rest of the MA carriers just somehow overlooked. So are there specific criteria as you evaluate where to go next and not that you're going to give a specific number. But as you think about an annual basis, whether it's '22 or '23, like is there a eternal projection without saying what it is of where you're going to go? Or is it more organic than that as far as where you go next?

No, it's actually quite surgical. It's the kind of the analytics involved would include not only what you would expect, the demographics of each particular marketplace but kind of the quality of the delivery system, the star ratings of the delivery systems, the -- obviously, the reimbursement, the eligibles. But equally important, more, I would say, consumer-specific data, whether it be ethnicity or income levels. And even, frankly, acuity levels are all the kinds of information we're factoring into our target market algorithms. And the other thing I'd say is not to forget that we're actually looking for high levels of Medicare Advantage penetration because there's a lot of seniors in a particular market. And a lot of the big guys have done the work of helping us get adoption of having these [distributors] service members join MA plans, we think we've got a better mousetrap, just from a pure benefits perspective we're #1 or #2 in every single county we're operating in, and it's done so reliably. And so we just think that the marketplace, they're looking at it and they're like -- they're very smart value-oriented senior shoppers, right? They're going to move over a $5 co-pay difference, let on a 5% benefit advantage, right? So we go in with -- in a target market with high degrees of MA market penetration, we'll take market share. That's what we're doing.

That's helpful.

Yes. So I guess switching gears a little bit. Obviously, a big part of the model is your Alignment with the providers. And so value-based arrangements is certainly I know part of the model as well. I mean can you guys give us any sense of how many of your members right now are in some sort of value-based arrangement. And within that population, how we should be thinking about the breakdown of global cap versus maybe something that's a little bit less comprehensive today? And over time, where do you hope that you could see that going?

Yes. Yes. So the vast majority of our members are in some form of value-based arrangement, which we started a spectrum of contracts we like to think about. But I would say the easiest way to generalize it is sort of any member where we're managing the majority of the institutional risk, and that's inpatient utilization, home health, ER, outpatient hospital surgery, SNF, home health, et cetera. And so we had about 2/3 of our members today that are in that type of relationship. And the underlying provider relationship could be fee-for-service, it can be a primary care capitation in certain cases, even a specialist or professional capitation. But at the end of the day, that's where we're really taking the entirety of our clinical model and really trying to develop those higher risk, more chronic complex seniors in our care teams to try to improve outcomes. And so that's a key part of that virtuous cycle that John has described in the past, where we really want to pursue growth in those types of contracting relationships because we're able to use some of our strengths of our toolkit we built out to help provide hopefully better care and better outcomes, we're able to create aligned relationships with provider community to share that back with them. So virtually, all of those contracts have some type of either gain share or profit share or institutional risk pool dependent upon the contract and the provider relationship. On the other side of the coin, we would have bucket we would just refer to as our global capitation contracts where we're passing off the majority of the risk to a third party, either provider or IPA. And we think there are certain benefits to those types of contracts and that oftentimes, those entities have high-quality results themselves that can be great at HEDIS and other aspects of the senior experience. But we have to be very cognizant of the overall portfolio of contracts, again, given that in order for us to have a differentiated product, we have to create a differentiated cost structure. And that gets back to how we, again, work with our clinical model to create the improved MBR relative to competitors. So we think both are really important. And I think we kind of -- as John said earlier, adaptability and flexibility are key. We want to take all comers of contracting arrangements. But we also are thoughtful in terms of trying to make sure we do have a balance between the 2, given the merits of both.

I think that makes a lot of sense. And you kind of touched on the next question a little bit, but I'd be curious what you guys see as your key differentiators in partnering with these providers versus other insurers. That's something we hear your a lot from insurers is that part of what makes them different is their relationship with the provider. And I think on our side of the fence, sometimes it's hard to tell what the difference from one to another is. And so it would be great, whether it's between risk stratification, care management or clinical programs, what you guys see as like the key differentiators in the ways that you partner versus some of the other health plans out there?

Yes. No, Kevin, I can take that one. I'd say the proof is in pudding. I mean it's just the outcomes and the financial results we've been able to produce, really, I just don't think we could have done it without our provider partners. And so everything you mentioned in terms of risk stratification, integration of our care model with the PCPs. And all of it, though, I think the heart of it, if think about this is it's really actionable data, more realtime actionable data that we combine with what we are very good at, which is MA. We've got so many decades of experience on this. So the subject matter expertise is really strong. The combination of the two is that we have helped these IPAs help us together create a more aligned ecosystem for the benefit of the consumer. At the end of the day, that's what it is. And so part of that context is you got to look back at how we started, back 6, 7 years ago when we started this thing, we were 10,000 members, 3 stars. We had small IPA networks that didn't have the capital with systems. So how do you get out of that hole in Southern California? And the answer was we really engage these providers gave them actionable data, help them close gaps related to value drivers, helping close gaps on STARS and MRA and utilization and work with their PCPs on one-on-one-on-one. And through that process, it's paid off. And so now we've developed the AVA platform so they get this information much more real time. And so it's actionable data, realtime actionable data, which I know everybody says they have that, But I don't think people would have the -- I can say they have the outcomes that we have.

That's helpful.

Yes. In the handful of minutes we have left, 2 more topics I was hoping we could touch on. One, clearly, a lot of cash on the balance sheet post the IPO. I wanted to get a little bit of a sense of where your capital allocation priorities lie. I think we touched on some of it through this conversation but just wanted to hear you kind of outline it formally. And then as it relates to M&A, is there really anything that's obvious -- again, without getting too specific, is there anything obvious like in areas or capabilities or geographies that you feel like you would benefit from actually just going out and purchasing as opposed to continuing to build out?

Tom, do you want to take the capital allocation question first?

Yes, yes, sure. I can jump in. So I think they kind of come in the form of a couple of buckets, but I'd say growth, obviously, is top of mind. And within growth, there's a number of ways we think about it, but obviously, continuing to invest both in new markets and new products will continue to be a key part of our strategy. But even in our existing geographies, one of the things we're talking about is really putting more dollars towards the brand. And a lot of our past sales and marketing efforts, as John mentioned, very grassroots oriented local partnerships and ensure we've done mail drops and digital base. But we've never quite established, I think, are invested in the brand that we think there's a huge opportunity for in the future. So there's a number of kind of things around that general bucket of growth that are important to us. And of course, as we enter new states, we'll have risk-based capital needs and things of that nature. And then I think the other kind of big area for us outside of some of the M&A opportunities that I think John will speak to we're very focused on how we create further just sort of automation and efficiencies in order to scale the business as we continue to grow and expand. And while we think we have a really a sustainable competitive advantage from a gross margin standpoint, we also recognize that from a G&A standpoint, we're going to have to continue to get scale economies over time relative to where our much larger and more established competitors are. And so that's really a key focus of ours, how we take a lot of the secret sauce we built out, continue to automate workflows where we can and ensure that we're making the investments today that will allow us to be successful in terms of operating at the growth rates we want to continue to hit in the future.

Yes. Totally I can't add anything more to that. It's, Exactly well said. With respect to the M&A opportunities, the answer is absolutely be, Bob. But one of the things that -- philosophically from our point of view is we wanted to make sure the chassis from which we would add the different assets onto was solid. And I'm very comfortable with where we are on that. What are the advantages of having to build every single function really from the asset that we did buy 6 years ago. I mean, literally, we have our DNA in every functional area. And so we've had to know exactly the molecular workflow processes, data ingestion required, everything about this business. And so we're looking at health plan assets. We're looking at select provider assets. And certainly, with respect to the provider assets, we're looking in target markets that would be not competitive with our existing provider partners. We're very sensitive to that. We're not afraid of having multi-payer assets. We just need to make sure that we have at least 1 direct -- at least 1 direct-to-consumer product that we can issue through the health plan. I think that's really important. But yes, I think the chassis is ready. And frankly, any health plan asset out there, I think we would have to kind of retrofit anyways, certain degrees, some more than others. But we have a very specific way of doing things that I think has proven out to get these results that we've gotten. And we're very comfortable with that.

That makes a ton of sense. I know I only have a couple of minutes left. You just started touching on the second and last topic that I wanted to get to, which was about expanding outside of MA. It seems like there are some markets or end markets, I should say, where it's a bit of a natural extension. There's -- we see the combination of MA and exchange business exists within a lot of smaller players. Some obviously larger players do MA, commercial. It's not that far fresh to go downstream in government and do Medicaid. So as you think about building a presence in a geography and having the network and having a really robust offering, what does the road map look like of potentially getting into some of these other end markets?

Yes. No. The first thing I'd say is any and all flavors of MA, you should expect us to be in. So whether it be HMO, PPO chronic SNPs, special needs plans, dual-eligible special needs plans, C-SNPs and D-SNPs retiree, I think are all subsegments of MA that we're going to be aggressive there. So that's kind of -- and I think there's a lot of runway just in that. Second, I think the emphasis, I think, is going to be very much on the dual eligible. And so getting more kind of into the Medicaid piece and in certain markets, if we need to get into the under 65 Medicaid business, we're prepared to do that. But I think there's just huge opportunities there across multiple states that we've identified that I think you can see us being aggressive in. With respect to commercial, I think the chassis can work in commercial. But I think there's so much runway for us in just Medicare. If there -- if the deal get some kind of policy support, I think that's a growth opportunity for us because I think the platform would do well for those fee-for-service members according ACOs out there. With respect to exchange business, I'd say the unit economics that you might be able to garner in the exchange business may not translate into MA just because we got to pay 100% of Medicare, you pay 100% Medicare from a hospital perspective. And so I think one of the things we've learned is to just stay focused, not deviate, not get too kind of crazy, wild on strategy, just execute, execute and stay focused. I think the senior TAM is just so big that -- but down the road, maybe. I will say this, Bob. I think you can see us leverage different business models from the platform, meaning we've obviously taken the choice of right now, have the direct-to-consumer plan focused kind of strategy. But I do think the EMSO in terms of working with providers, I think there's a huge opportunity there. And I think you can see some initiatives there from us. And I think further down the road, we're getting a lot of requests from people wanting parts and pieces of the platform, whether it be from a software services perspective. Right now, we're really just working with the providers and really giving them access to a lot of these tools as part of the overall relationship. But to the extent that evolves down the road as a business model, we can talk about that later.

Now that all makes a ton of sense, we're up actually over time. But so I wanted to stop there. I want to thank both John and Thomas for your time today. Really enjoyed the session. I hope everybody else did as well. It's been a pleasure working with you guys and definitely look forward to following the Alignment story going forward. Everybody, I hope you enjoy the rest of the conference. Thanks so much.

Thanks, Bob. Thanks, Kevin.

Thanks, guys. Appreciate it.

Thanks.