Astrana Health, Inc. (ASTH) Earnings Call Transcript & Summary

Good afternoon, everyone, and thank you for joining us. My name is Ethan Taylor, and I am an associate in JPMorgan's Healthcare Group. Before we begin, I want to call your attention to the blue button on your screen, and this is where you can submit questions to be answered during the Q&A portion, which will occur in the final 20 minutes of the event. With that bit of housekeeping out of the way, I'd like to introduce you to today's presenter, Brandon Sim, CEO of ApolloMed. We are all excited to learn more about the ApolloMed story, and I'll turn it over to you, Brandon, to take it away. Thank you.

Thank you, Ethan. I appreciate that, and thank you all so much for joining me here today. I really appreciate your time. While I am disappointed that we didn't get to all meet in person, this time, I'm still very excited because this will be my first time and our first time presenting at the JPMorgan Healthcare Conference as a company throughout our 25-year history. So I'm excited to be here, regardless of the format, and I'm very glad to have the opportunity to chat with all of you today. Like Ethan mentioned, my name is Brandon Sim, and I'm the co-CEO of Apollo Medical Holdings. Throughout the conversation today, I'll make reference to slide numbers throughout so you can follow along. And in the interest of time, I may skip over at some slides. But the slides will be available on our website. That being said, I'll jump right into it, on Slide 5, which is our company overview, if you will join me there. So Apollo Medical Holdings is a physician-founded health care company focused on transforming and improving health care for all patient populations, via the enablement of providers, through our technology-powered integrated health care delivery model. What's really unique about us is that our end-to-end platform makes it seamless for all health care providers from a primary care doctor, to a specialist, to a hospital, from an independent practice, to a staff model clinic to really engage in and succeed at value-based care with a particular focus on enabling independent doctors and practices. This emphasis on enabling all types of doctors really means that our platform has the flexibility to deliver care in a way that is tailored to each local community. And most importantly, our model works across all patient populations, from Medicare Advantage, to managed Medicaid, to commercial, to ACA exchange and even to Medicare fee-for-service patients in our Accountable Care Organization for ACO. Over our 25-year history, we've consistently demonstrated differentiated and improved clinical outcomes for our patients across a very diverse set of geographies, demographics and reimbursement models. And I'm incredibly excited to show you throughout this presentation that over the last 2.5 years, we've taken the clinical and operational lessons learned from a history of patient-centered care delivery and created a custom-built proprietary technology and operational platform that will enable us to continue partnering with physicians in providing high-quality care in local communities nationwide. We currently manage over 1.2 million lives through a network of 14 IPAs, or independent practice associations, with over 7,000 contracted physicians and contracts with over 20 payer partners, representing around 150 risk contracts. If you'll join me on Slide 6, we'll see what I was talking about before. While some groups are focused on just one line of business, like, say, Medicare Advantage, our platform holistically serves a diverse set of patient populations across those population segments I mentioned before. We take a lot of pride in serving all patients through our platform, and we think that our proven and profitable platform is now poised to take off nationwide. So join me on Slide 10 -- sorry, skipping ahead a little bit here. On Slide 10, you'll see that our focus on all patients makes us uniquely positioned to capture a significant part of a massive and growing $2 trillion TAM across managed Medicare, commercial, and Medicaid. Now flipping back a little bit, sorry for the mixup here. Flipping back a little bit to Slide 9. You'll see that the challenges facing physicians and patients in our current health care system are pretty well known. Despite spending far more per capita on health care than other comparable countries, we still lag unfortunately far behind in quality of care and patient satisfaction with the status quo. And while value-based care has been cited more times than I can count as a cure-all to our growing health care problem, a recent AMA survey, I believe, showed that around 88% of physicians recognize the need to adopt a value-based care model, but almost as many physicians surveyed, at 88% indicated that they would need additional resources or that aspects of participating in value-based care models would be quite burdensome. And if you flip with me to Slide 11, can we really blame providers or feeling that way? I mean this is a jungle up here on the slide. We believe that the unsustainable cost trends and deteriorating physician and patient experiences in our current health care system are merely symptoms of a more fundamental problem, and that fundamental problem is a lack of proper value-based care infrastructure from both a technology and an operating perspective in order to flexibly address the needs of physicians and as you can see, the very complex value-based care world. If you flip with me to Slide 13, you'll see how our platform here at ApolloMed is solving that problem. We've created a model and technology platform that truly enables providers to participate in and succeed in value-based care. In partnering with our over -- with our 14 provider groups, we're taking on over 150 value-based contracts across a diverse set of 20 payers across multiple population segments. And our platform, which I'll describe in the following slides, seamlessly handles the functions listed here and more so that our providers can focus on what they do best, which is quarterbacking the patient's care. So join me on Slide 14. I'll dive a little bit deeper here on the following slide into our proprietary tech platform, what it actually does and how it powers our scalable and flexible care delivery model. We built this platform as a custom solution, with a modern and flexible infrastructure so that our providers and care teams can use a single interface across all ApolloMed patient populations, across all payers, and across all reimbursement models. Let's take a quick journey through how that platform works. So flip with me to Slide 15. On the upper left, you'll see the highlight on this slide, and that describes a patient's office visit, for example. When a patient visits a provider in their office, the provider or the practice staff are able to perform both payer-related and clinical-related tasks with our point-of-care application. For example, they're able to check a patient's eligibility and benefits, request referrals or prior authorizations, to make claims and check on the claim status and see population health analytics about their patients, all in one place, regardless of the patient's insurance company, plan, benefits or reimbursement model. We also ingest data from a variety of EHRs and don't force our partner providers to use any one particular EHR provider. We feel that this is really key because of the diversity in our providers that we enable. We've got tech forward providers, less tech forward providers, urban and suburban doctors, solo doctors, group practices and all combinations there that you can think of. And so for us, it was really important to build that platform to be as flexible as possible to truly meet the needs of providers where they currently are in a holistic fashion. Moving to Slide 16. You'll see that the highlight has moved to the ApolloMed, what we call Payer Tools section. The point-of-care application that I described in the previous slide will make API calls to a variety of back-end services that we've created, much of which is automated as you'll see on the slide. This not only provides the provider and patient with better experiences, but also increases our operating leverage for ApolloMed as we scale across different geographies and populations. In fact, given the wide variety of patient populations, payers and risk contracts that we support and serve for our various heterogenous provider partners, this flexibility and automation is absolutely critical, or else we wouldn't even be able to function as we do today. When a provider in a managed care system, for example, submits a prior authorization request, it will be automatically approved and the provider instantly notified on the spot as the point of care in the application around half the time, which means that the patient does not have to wait for an approval. They don't have to wait a couple of days for mail to come in and say that they can go to a specialist, they can have seamless access to care right then and there. And for example, when a provider submits a claim for reimbursement to us, it's auto-adjudicated at a 90% clip, which means that our providers are paid more quickly and more accurately. For us, we've currently auto approved over 1 million prior authorization requests to date and over 9 million claims, representing a savings of around $16 million of operating costs at market labor rates. If you'll move with me to Slide 17, you'll see that the highlight has now moved to the ApolloMed engine. This slide illustrates that our engine ingests data from dozens and dozens of sources, runs a variety of algorithms powered by machine learning, and creates actionable reports, dashboards and analytics, which are fed then back into the applications used by our doctors at the point of care and by our care teams outside of the practice. Any machine learning practitioner will tell you that the key to creating effective machine learning models is to have a lot of data. You need data to train more accurate models and even more of it to constantly improve those models over time. Because we have a large, diverse and growing 1.2 million members in our patient population, managed over 25 years, I believe we're uniquely positioned not only because of the engineering talent we have in-house creating these models, but also in the quantity and the richness of the data used to inform and improve those models. If you'll move with me to Slide 18, the highlight has now moved to the bottom, to care management. And on Slide 18, you'll see that our care teams, employed by ApolloMed, use the Insight Surface buyer analytics engine and other workflow management tools in order to do a variety of things for our patients, to create care plans, to ensure smooth transition of care, for example, to help manage chronic diseases for our patients and to close gaps in preventive care. This is the glue, so to speak, that ensures that a patient in our ecosystem is receiving seamless 360 complete care as they navigate through their health care journey. Moving to Slide 19. This -- if we start on the left side of the slide, well, here, you'll see that our platform and our strong provider network of over 7,000 providers really drives a virtuous cycle, which helps our providers first succeed in value-based care arrangements on the left, which drives our growth, as you'll see on the top, which improves our model and technology on the right side and thus our clinical outcomes. And therefore, we can put more success or provide more success for our providers in those value-based care arrangements, completing that circle. On Slide 20, if you follow me there, you'll see that this is a model that benefits all the stakeholders in the system, providers, patients, payers and communities alike. I won't go into all of the numbers in the slide here, but the flywheel created by our model really means that we've got phenomenal physician retention rates over 95% in a 7,000 physician population, great adoption of our tech platform, great patient satisfaction and clinical outcomes relative to benchmark, and long term, very positive relationships with 20 payer partners. In particular, I'll note that our payer relationships are very well diversified, with less than 16% of total revenue coming from any one payer. And they're long term, with relationships dating back, on average, around 15 years with our key payers. The numbers on this slide are just some of the proof points around how the platform we've created truly benefit all the parties involved and why they might want to be part of the ApolloMed platform. Now skipping ahead to Slide 22. What you'll see here on this slide and the next couple of slides are numbers that I'm personally very proud of because they truly demonstrate the real impact of our model on patient outcomes and on patient engagements. Being the first engineer at ApolloMed, I'm, of course, a little biased in saying that I love our technology platform. I love our machine learning model. I'm a geek about our scalable microservices-driven infrastructure. But at the end of the day, what really drives me and my teammates at ApolloMed each and every day is our focus on enabling providers to truly make a difference for their patients. Here on the slide, on Slide 22 still, you'll see that across the diverse set of 4 provider groups that recently joined ApolloMed, we are consistently able to drive improvement in patient engagement through our platform by enabling our care team to proactively engage patients in the medium that's most effective for them. On Slide 23, you'll see that we're able to parlay that increased patient engagement into demonstrable improvement in usage patterns across diverse Medicare and Medicaid populations alike. The 2 groups shown here are recently acquired provider groups actually by ApolloMed in non-core geographies. And you'll see on the slide deck that despite a very diverse patient population set, our platform has already begun to impact patient behavior there in a positive direction, in a consistent fashion. Moving ahead next to Slide 24. In order to our demonstrated ability to ramp new geographies, populations and provider groups onto our platform, our model also demonstrates exceptional results at scale. Here, we're zooming out a little and looking at our Medicare Advantage members and consolidated private -- and consolidated provider groups as a holistic group. We're seeing significantly decreased hospital admits, emergency room visits and average length of stay, while simultaneously keeping readmission rates low at 12%. And more critically, I'd like to point out that our MA population has consistently been within the 0.9 to 1.05 RAF score band, or risk adjustment factor score over the past 4 years compared to an average risk adjustment factor score of 1.0. This is really a function of our ethos here at ApolloMed. We're not placing a heavy emphasis on risk coding. We're not placing a heavy emphasis on decreasing MLR, or trying to increase our revenue by coding for this and that and playing the coding game. Instead, our true mission is to decrease medical costs, true medical costs, while providing high-quality care for our patients. Most importantly, all this data that I'm talking about truly shows the value of our platform, that we're able to consistently influence clinical and financial outcomes for our patients across a very diverse set of patient populations without owning the physician's practice. And that's a key point that I really want to emphasize here. Our goal is for the providers and physicians on our platform to feel like they're putting on an iron-made suit when they join our platform. We want to enhance our providers' capabilities and make them feel like the superheroes that they are, rather than having them feel like they're working at a fastfood chain or something that attempts to standardize and commoditize what they do in a one-size-fits-all model. It's really the antithesis of what we try to do here with our platform at ApolloMed. Now flipping over to Slide 25. We'll move over to fee-for-service population in our ACO. As I mentioned throughout the presentation so far, our model really works across population types, across payer types, across reimbursement models, and Medicare fee-for-service is no different. In our ACO, we've decreased emergency room spend by 47% over 2 years, while keeping readmit rates 29% lower than the national average. These are the kinds of clinical outcomes that drive our success in CMS innovation programs through our Next Gen ACO. Moving to Slide 26. Our Next Gen ACO is consistently, as you'll see here on the left side of the slide here, consistently among the top in the country in terms of gross savings. In 2020, which is the most recent publicly available data, our ACO actually had the highest gross savings amount in the country compared to all analogous ACOs. And in the middle of this slide, you'll see that we have consistently outperformed the median analogous ACO throughout the 4 years, and now 5, that we participated in that program. These innovation models are really an exciting opportunity for us since CMS has recently said that they would like all Medicare fee-for-service beneficiaries in an ACO by 2030. In addition, on the right side of the slide here, you'll see that the global GPDC direct contracting program represents a sizable opportunity for us to excel as well, especially given our past performance with Medicare fee-for-service patients. That's a great segue here into Slide 28, where I will be talking a little bit about some of the growth levers ahead of us. So far, just to recap quickly, we've built a proven successful model that drives differentiated clinical and financial outcomes and provides us operating leverage due to our scalable tech platform. Given the changes we've made in the last couple of years in terms of building out our technology infrastructure, creating a repeatable and scalable playbook and assembling a world-class management and operational team, I truly believe that we're at an exciting -- in a very exciting inflection point in our company's history. We are poised to grow rapidly into an addressable market across all population segments, as I mentioned earlier, and there's tremendous white space ahead of us as we continue to enable physicians in their local communities throughout the country. On Slide 29, you'll see a subset of the levers we have that we've been using to create value in existing markets. That's a great segue again into Slide 30, where we've outlaid some of the growth levers that we anticipate both organically and organic -- and inorganically en route to clear visibility into 30% to 45% yearly top line growth for years to come given the great white space ahead. First, on the left side of the slide, we're talking about organic growth in existing markets, primarily in California. The previous slide has a couple of the ways that we might go about doing that. We think there's still tremendous opportunity left still in California with what we believe to be over $20 billion of directly serviceable market size in our legacy counties and close to $100 billion of directly servable market overall in the state of California. So we're really just stretching the surface here, even in California. But that's not where we're going to stop. We're going to scale our model to new geographies using many of the same levers and playbooks that we've developed in our existing ones. From the data above, we've already shown that we can influence engagement, behavior and outcomes as we move into new geographies. Now our flexible platform will give us an edge, we believe, in attracting providers of all kinds as we continue to grow into local communities nationwide. In the San Francisco Bay area alone, for example, where I'm giving this presentation from, we've seen 28% year-over-year growth in our Medicare Advantage membership already there. In addition, we have a very robust partnership pipeline, both with strategics and payers. A recent example that I mentioned in our Q3 earnings call has already yielded over 10,000 patients -- or members with that payer partnership. And finally, we still believe that we have a differentiated and significant near-term acquisition pipeline. We're looking at groups that are not necessarily participating in banker-led processes, not necessarily private equity owned or venture-backed, but rather looking at inbound interest from provider groups that we know intimately and that we believe we have a strong inroads into having them join the ApolloMed family. Skipping ahead now to Slide 34. We'll talk a little bit about financials and kind of our demonstrated historical performance here. As you'll see on the slide, we've demonstrated strong membership, revenue and adjusted EBITDA growth over the last couple of years, with increasing revenues and margins due to our strong clinical outcomes powered by our proprietary platform. We're differentiated, we believe, given that profitability profile as well as the fact that we've been able to grow margins throughout COVID and even as we made heavy investments into our technology platform and grew into new geographies and into new populations. This is due to the differentiated unit economics that we'll describe on Slide 35. As you'll see here, we're able to obtain at-scale capitated rates due to our scale and relationship with payers. That's the, first, #1 blue bar there. Next, from the medical cost side of things, our platform, as described earlier, enables providers and our care teams to truly drive down medical costs instead of playing a risk adjustment game. And finally, our technology-enabled back-end tools greatly reduce operating costs and enhance our operating leverage as we grow. All of this adds up to expected long-term EBITDA margins of 15% to 20% even as we plan to scale revenue greatly. If you move ahead with me to Slide 36, I want to note that due to various regulations, our latest guidance has a midpoint GAAP revenue of $755 million, which we announced in our Q3 -- or are connected to our Q3 earnings results of 2021. However, if we measure the true amount of medical spend that we're actually managing, we believe that it's over -- actually over $1.5 billion, due to the parts of the revenue that we're allowed to consolidate or not allowed to consolidate. Therefore, we think that our reported GAAP revenues of approximately $755 million estimated for the year of 2021 underestimate the true scale at which we're operating. And we think there's a great opportunity to grow GAAP revenue meaningfully as we continue to take on more risk across our member population. I want to conclude today by emphasizing 5 key things for you all today. And if there's a couple of things that you'll leave this conversation with, I hope it's these 5. One, there is an extremely large addressable market opportunity ahead of us, and we think we're in a unique position to capture it due to our focus on enabling independent physicians and because of our platform's ability to serve Medicare Advantage, Medicaid, commercial, ACA and Medicare fee-for-service members alike. Second, we've created a proprietary technology platform that is deeply integrated with our operating model and has consistently demonstrated strong results and is consistently being improved as we continue to gather more data from our patient population. Number three. Our model and technology have led to a proven track record of improving clinical and financial outcomes across a diverse set of populations, geographies and reimbursement models. And at scale, we have best-in-class clinical and financial outcomes. Number four. The strength of this platform will allow us to scale and execute our model across geographies and across patient populations with an expected 30% to 45% yearly top line growth for years to come and 15% to 20% EBITDA margin at scale. And finally, we're led by a management team with wide-ranging clinical, engineering and operational backgrounds, but we're all united in our mission to transform the way that health care is delivered, by creating purpose-built, value-based care infrastructure from the ground up and truly enabling physicians to quarterback patient care. I'm so excited and grateful to have been able to share the ApolloMed story with you today. Thank you, everyone, for your time. And with that, I'll hand it back over to Ethan for our Q&A session. Thank you again.

Great. Thank you, Brandon, for the terrific presentation. So now we will turn to the Q&A portion of the event. Our first question is, how is ApolloMed able to be profitable while other similar companies are struggling to?

Thanks, Ethan, for that question. I think that's a question we actually get pretty often, given the differentiated profitability profile and margins that we spoke about. And I think at a simple -- at a high level, the answer really does lie in the unit economic slide that we described earlier. We're able to get, at scale, great capitation rates for our downstream providers. We're able to use our long-standing relationships with payers and our experience in taking on risk in order to get the best deal for our providers downstream a fair rate for them. And then the real kind of decreases in costs are due to 2 buckets. One, decrease -- truly decreasing medical costs by using our platform that I described in the slides today, enabling our care teams that are employed by ApolloMed, NPEs, RNs, LVNs, social workers and more to all ensure that a patient never leaves ApolloMed health care ecosystem and is being taken care of every step of the way. And three, to lower operating costs by using the automation that we've created over the last couple of years in our technology platform. Like I mentioned earlier, around $16 million in at-market labor costs. We calculated the hourly rate of a claim examiner, for example, or a utilization management coordinator expected workload, and the 1 million prior ops that we've automated and the 9 million claims that we've automated are significant. And so we think we have a lot of operating leverage as we grow into new regions and take on further risk delegations in order to be profitable. So all of that, like I said, really leads to a very strong profitability profile, over 20% adjusted EBITDA margins, even as we grow revenue significantly. And we will plan to continue to do so.

Great. Thank you for that. How is ApolloMed able to manage a diverse patient population, including commercial, Medicaid and Medicare and do so profitably?

Right. Right. That's something that, again, like I mentioned, we're really, really proud of here. And we think it's a key differentiating factor for us. We are not going to force a doctor who joins the ApolloMed platform, for example, to take care of one segment of the population with one tool, take care of another segment of the population with another tool and then take care of only, I don't know, Medicare Advantage members or only Medicaid members through our tool because that's really just very annoying for a provider to do. If we go back to some of the original slides, the one I described as a jungle, you'll see really just the entanglement of relationships and data and reporting that a provider has to deal with if they have to really try to stitch together all these things by themselves. And so we're really proud that our platform supports all of those population segments that you mentioned in your question, Ethan. And the way that we're able to do that is because we have a very flexible technology platform on the back end that allows for different things to be shown to the providers, different analytics, different preventive measures, for example, to be calculated, different insights to be surfaced for each of these population segments. And we've had a long-standing kind of track record and history, over 25 years, which we feel is differentiated in taking care of population types of all kinds. A lot of people, I think, shy away from, for example, Medicaid because the reimbursement rates are a little lower, the diversity of challenges is perhaps greater, but we're, like I said, very proud to be able to take care of all of them through our very flexible technology and operating model. And we look forward to continue doing that. Going forward, there's not going to be necessarily any particular emphasis on any one population segment. We really aim to enter a new geography, have providers join our platform and enable them to provide quality care to all of their populations.

Sure thing. And then just a follow-on, on that. Are there any particular lines of business that have experienced the most growth or ones that you foresee having strong growth in the future?

Yes. That's an interesting question as well. I think, overall, there have been a lot of market sizing studies done on this. And obviously, Medicare Advantage has seen very strong growth, high single-digit percent growth overall. Commercial Medicaid may be slightly lower than that. So certainly, we see a lot of opportunity in Medicare Advantage. But that being said, we're still such a small percentage of the overall MA, managed Medicaid, commercial, ACA markets that, regardless of the growth rate of the overall market itself, we still think that we have incredible white space ahead in terms of our ability to grow at that 30% to 45% clip. And so maybe the simple answer would be in MA or in Medicare fee-for-service, but in reality, we think we have growth levers across all the population segments.

Great. Can you speak to the strength of your physician relationships?

Yes, yes, absolutely. So for the most part, our doctors are not -- actually almost all of our doctors are not employed in nature, right? They're affiliate model doctors, which means that they don't work for us. They don't get a W9 from ApolloMed, and they're free to, essentially for the most part, do what they please. They all run their independent practices. We don't have -- we don't slap an ApolloMed logo on any of our clinics for any of our partner physicians. And I don't think you'll find an ApolloMed logo anywhere in the world probably on a physician practice. But we think that the relationships that we have with our physicians, despite them not being an employer-employee relationship, are actually as strong as, if not stronger, than an employer-employee relationship. I say that is for a couple of reasons. One, our doctors choose to use our technology platform despite us not incentivizing them necessarily to do so or paying them to do so. As you'll see in one of the slides above, on our kind of all parties benefit slide, we have great adoption rate of the technology within a very short period of time of new acquisitions, for example. I believe the number was over 80%. In addition, we see doctors getting paid more because of that flywheel that I talked about, because we have more profits, because we are able to drive savings, because we're able to lower the administrative costs associated with participating in value-based care, there are more dollars left over to more generously compensate our providers and give them not only a very stable and very high relative to the market baseline capitation rate, but also a lot of upside if they participate in our value-based programs and hit various incentives that we've created. And so they kind of have a high floor as well as the potential for a high ceiling, which they really like, especially for the self-selecting independent doctors who joined the ApolloMed network. And finally, the proof is kind of in the numbers. Now we have high provider retention rates despite not employing them, even in a challenging kind of labor force environment. And we look forward to continuing that as the flywheel continues to grow stronger and stronger.

Great. Can you speak to your recent performance versus your previously communicated guidance?

All right. Excuse me. Yes. Yes. I mean we, unfortunately, haven't released any update to guidance connected with this conference. I would say that given that we're now 12 days into the new year here, we still feel confident about the guidance provided at the quarter 3 2021 earnings call. And kind of shortly, we expect to be giving not only an update on '21 guidance or perhaps that will just come out in a couple of weeks here, but also providing new guidance for what we expect in the year of '22 as well. And I'm very excited to talk about those numbers when we publicly make those available.

Got it. How has COVID impacted the ApolloMed business? And how do you expect it to impact the business going forward?

That's a great question and something that's obviously top of mind for not only myself, my team, but investors alike. It's been a challenging time for us over the -- for everyone over the last couple of years. We think that the strong model that we have has allowed us to weather the storm and actually excel during the last couple of years, as you'll note in the financials section of this deck. But we've -- it's not to say that it hasn't been a challenge, despite having to navigate through COVID, despite having to navigate through trying to grow rapidly into new geographies and making huge investments into our technology platform, we've still been able to grow margins, as you saw, in our slide deck above. That being said, we continue to see slightly decreased utilization relative to 2019 due to the Omicron variant, which has now overtaken Delta, as we all know. Luckily, fortunately, for everyone, we're definitely seeing lower mortality rates and complex outcomes for the Omicron -- for patients infected with Omicron virus relative to Delta and previous strains. And so we have hoped that this will be less of an impact for the health care ecosystem than prior strains were. In terms of kind of financial outcomes, there is -- it has affected us in many different ways, right? There are some tailwinds associated with decreased utilizations, and there are other kind of headwinds associated with increased, let's say, testing rates and kind of us having to pay for those. And so all combined together, we think that we're still very confident in our '21 projections. We think the '22 projections will be even better in terms of revenue growth and in terms of bottom line. And we think we're weathering the storm very well, given our strong operating platform and technology platform.

Great. And next question, are you able to provide any detail on the RAF score by line of business, in particular, Medicare Advantage patients?

Yes. Yes. So in the slide deck above, I mentioned that across all of our at-risk capitated MA patients, the RAF scores hovered between 0.9 and really 1.05 over the last 4 years. We're not releasing kind of the year-by-year RAF scores, partially because the year-by-year RAF scores aren't even reported until many months after the year end and partially because we don't -- we just don't feel it's that informative, but they are all within that range and kind of around the average riskiness of a Medicare patient, which is defined to be 1.0 every year. For other lines of business, Medicaid, commercial, we don't disclose the risk adjustment scores. There isn't really the concept of RAF score, although they're analogous measures used to measure the risk finance or yield essentially of a Medicare -- Medicaid, sorry, for commercial patients. We haven't traditionally released those, but if we do, we would let you know. But certainly, we have a lot of Medicare Advantage patients, and they're all of around average riskiness with the size of our population, 1.2 million members, I would say that they skew approximately average. It would be pretty difficult for us to -- and we would not want to and we wouldn't and have not selected for any healthier part of the population across 1.2 million members served.

Great. Could you please explain your rationale for new market expansion?

Absolutely. So when we think about markets, we are -- the model itself actually works, we believe, across essentially any market. It's a very flexible one. It works with independent trust providers. It works with solo docs. It works with group practices. It works with staff model clinics. We think we can expand into any region essentially. And so for us, it's really a matter of finding markets where we think we have -- prioritizing them essentially. So we're looking at markets that are maybe denser, larger, that are more similar to Los Angeles, San Francisco, New York, dense urban regions where we've historically had a lot of success. And we think that the serviceable addressable market in those and adjacent geographies is large enough certainly for us to be growing at the clip that we projected for many years to come without even going into some of the smaller markets. That being said, there's also what I talked about earlier as a bit of a self-selection process when we're recruiting doctors, right? It's -- normally skews towards providers who are a little more entrepreneurial in nature or more independent who want to have both the stable floor and the high upside in terms of their earning potential. And we think that our platform is uniquely positioned to help them achieve just that. That may not be the flavor of model that appeals to every single physician, but we think that there's a large number of those types of physicians in the kind of dense urban geographic regions that we talked about. And so for us, to answer your question more simply, it's really a prioritization process. We think California and New York are very large to start, and that's what's shown on our map here. But so we have plans to expand into adjacent geographic regions to those 2 states as well.

Great. And you already touched on this a bit, but what strategies, tactics or tools does the company utilize to ensure successful expansion?

Yes. Yes, absolutely. So there are really -- it's not just any one kind of magic bullet to ensure that we can move into a new market, be able to understand the local community intimately, to be able to deliver culturally sensitive care necessary and kind of appropriate care for that particular demographic of the population. There are really a variety of things that we do, right? We are hiring people on the ground in a high-touch kind of model as I described earlier with our ApolloMed care teams. We are making sure that the technology platform is being rolled out expeditiously to new geographies, and we've shown in the past that we are able to do so and the doctors are open to us doing so because we're not intrusive, right, because we don't force them to change their EHR. Because we don't force them to adopt our exact brand of value-based care. We try to meet the doctors exactly where they are and help them kind of enhance their abilities, right? They lift a finger and they can move a whole mountain, to use a cliche, right? So I think we want -- certainly, we want them to get on to our technology platform and adopt kind of some of those boosters in performance. And then finally, we're going to be intimately working with the doctors. At our heart, like I mentioned, we're physician-founded, we're still physician led. Each of our IPAs, for example, and physician partner groups, are led by a committee of physicians that we're intimately involved with, talking to every single day, every single week, having joined operational meetings regularly. And so we're really keeping tabs very closely and working together with our physician partners in order to ensure that integrations and further growth is done in a responsible and kind of profitable manner for everyone involved. And at the end of the day, the providers are still getting upside from these arrangements. And so we're very much aligned in terms of what we want for ApolloMed, for providers and for our patients. And so that alignment really helps ensure or protect against some of the potential downside risk and expand into new geographies.

Great. Thank you. Well, looks like we're approaching the end of our session. So thank you again, Brandon, so much for taking the time. And thank you for the audience for attending here. I'll turn it over to you if you have any closing remarks before we conclude.

Sure. No, nothing much more for me. Sure you're all tired of my voice by now. I just wanted to thank Ethan, you and JPMorgan and the audience today for learning more about ApolloMed. I look forward to connecting with all of you hopefully in person some time soon. Take care.