DocGo Inc. (DCGO) Earnings Call Transcript & Summary

Okay. Good afternoon. We're going to get started with our next panel. I'm Jamie Perse, health care provider analyst at Goldman Sachs. Next, we have DocGo and Lee Bienstock, CEO. Thank you for joining.

Thank you, Jamie. Thank you to Goldman. It's great to be here.

Thank you. Well, maybe we can just start. You've got a couple of different business lines, but maybe you can outline for us like what is the core competency that connects these all and just give us a quick overview of the business, and we'll dive in from there.

Yes. So an overview on DocGo, we're a mobile health care company. We bring care to where it's needed or we'll transport a patient to a location of care that they need or as they're being discharged from the hospital. So we have a very large medical transportation platform, and we have a mobile health care platform that brings care to patients where and when they need it.

I guess just starting from high level and we'll work down from there. But you've gone through a little bit of a rebasing period across a couple of the businesses. How are you thinking about just the positioning of the business overall, redeploying assets and sort of using this period to transition to what's next?

Yes. So as you mentioned, we are going through an evolution of the business. But really, it's continuing to expand what we've always done and what we've been so successful doing. So the company got started as a medical transportation company, and we built probably the best tech platform for EMS nonemergency medical transportation, where essentially a discharging nurse can click a button on the platform and know exactly when the medical transportation, when the ambulance is arriving for that patient that's being discharged to take that patient home. And just like the common tech platforms of today, get an exact ETA. Last year, our tech platform calculated 15 million ETAs for our partners. And so we've continued to expand on that. And as the country was hit with COVID, as New York City was hit with the migrant crisis, we were one of those companies that essentially the public health apparatus turned to because we had so many ENTs, paramedics, ambulances. We were very natural partners to help respond to some of these, frankly, what seem to be once-in-a-lifetime events, a pandemic and a big 200,000-person influx to New York City. And those events like COVID and the migrant crisis took on a lot of the story of the company. And really, what I've focused the company is to really focus in on continuing to expand the medical transportation platform that we have and also all the while continuing to expand the care-in-the-home business. And that's really what the company has been focusing on. Yes, we've done a lot of crisis response, a lot of municipal work, which I know we'll talk about. But all the while, we've been really expanding our capabilities of the medical care we can deliver in patients' homes and really expanding the medical transportation platform. And really, that's the focus of the company. We've been doing that. We're going to celebrate our 10-year anniversary this summer. And over that span, we've helped care for 10 million patients. So we've been doing this at scale. Yes, we responded to a lot of these crises that have happened over the last 5 years, but all the while, we've been building the capabilities to deliver care where it's needed, and that's the big focus of the company.

Okay. Well, you mentioned some of the one-off things that have emerged over the last couple of years. We'll come back to that. I want to start with the core business today. Obviously, the medical transit business, I think that's $225 million in guidance of $325 million -- excuse me, $315 million at the midpoint. So it's the bulk of the business today. You're coming off, I think, your highest medical transports ever in the first quarter. Can you just talk about the growth drivers? I think you're growing mid-teens or thereabouts. What's driving the bulk of the business today?

Yes. So our medical transportation business is focused on large hospital systems. We partner with large hospital systems utilize our tech platform. And at the same time, we also provide them with the ambulances and the crews with which to transport the patients in the system. So that's been a big focus of ours. We work with some of the largest hospital systems in the country. We work with New York City Health and Hospitals, Northwell, HCA. We work with Methodist. And so we work with Jefferson, Main Line, lots of different hospital systems, and we go in and we help manage all the patient flow. They utilize our tech platform and their discharging stations use our platform. It's all embedded and integrated with Epic. So directly from a patient's chart, the discharging nurse can click a button. And so that's how we grow that medical transportation business. So there's an inherent organic growth that happens with the hospital systems we're already working with. Unfortunately, America is getting [Technical Difficulty] more patients that are being moved around. And so that tends to have a tailwind for us. But at the same time, also, we sign new hospital systems that come on to the platform, and that creates a step change function in the growth. So that's how we get. I'd say 2% to 3% of organic growth just on the number of volume that just goes up for the trips, but then we bring on additional hospital systems that get us to a 10% or 15% year-over-year growth rate.

And just thinking about the growth drivers in that way, is there opportunity to deepen relationships within existing health systems? You're in -- I'm making this up, you're in 5 of 10 hospitals within a health system and you can expand to additional hospitals. How does that fit into the growth algorithm?

Yes. So today, we serve hundreds of hospitals across all of our markets. And I should have mentioned in the opening, DocGo, we serve patients in 30 states. We're licensed to provide medical care to our physicians group in 48 states. So we're serving hundreds of hospitals across many states in the U.S. as well as many of the hospital trusts in the U.K., which we can talk about. And so there's an opportunity for us to do more with the hospital systems we're already working with, bring on additional locations that they may have, but there's also an opportunity for us to provide more and more services to those hospital systems. And I think we've only scratched the surface of that. Most of the hospital systems we work with, we're only providing medical transportation. But because we're such an expanded mobile medical care company, some of the hospitals we work with now, we're doing cardiac monitoring and patient monitoring for them. Some of the hospitals we work with, we're doing transitional care management, which we can talk about, as the patient is being discharged, helping to stop and reduce them from being readmitted to the hospital within 30 days. So we have great partnerships with the hospitals we work with. It's primarily medical transportation today, but we think that we could expand it pretty significantly to other services.

And just as we think about the next year or 2, you've guided to 575,000 transits this year. I don't know that I'll call it guidance, but alluded to that you can get to 700,000 next year, that would be like a 20% growth trajectory. Is that underpinned by visibility on new contracts coming online? Or just give us a sense, it sounds like new logos, new customers is a big piece of that. So what's the visibility that's driving that?

Yes. So we have good visibility certainly for this year's number. I think we have good visibility for next year's number. And really, those numbers are based on 3 factors. One is signing new hospital systems onto the platform. So as an example, just this month, we signed a very large hospital system in New York City -- in New York that we're bringing on right now actually as we speak. Over the last 6 months, we've expanded to Chattanooga, Tennessee. We've expanded to the Dallas-Fort Worth area. We think that Texas is going to be a large market for us over this year and next year. So it's really a confluence of multiple variables. One is signing new hospital systems; two is geographic expansion and then also, of course, bringing on additional hospitals for the systems we already work with.

And what are you displacing when you add these new customers? Is there just small regional competitors that you tend to be displacing, maybe there's no solution? Who are you displacing?

Yes. So on the medical transportation side, we are displacing existing providers. We're coming in with our own technology platform, which is displacing whatever technology platform they may be using. Sometimes they're just using Excel file, they're using Teams messages, things of that nature. And then, of course, we bring on our transfer center software that allows them to manage the whole system. And then there's existing providers that we're displacing very often. So in that business, on the health insurance side, which we'll talk about on the business where we provide care in the home, that's just an expanding pie that's a greenfield opportunity for us.

Yes. And can you just give us a sense of the -- sticking with the medical transportation business, a sense of the market. I imagine it's very fragmented. And you've got -- you've invested in the technology platform that's enabling an elevated, more sophisticated process for nurses, more seamless for integration with EHR, et cetera, that they probably can't provide. Is that what's enabling kind of the share gain dynamic that you're seeing?

Exactly. It's a very fragmented industry. And we've invested heavily in that tech platform, and that's what's allowing us to win a lot of this share. And so really, that's been a focal point for us. And it's a very fragmented industry, and we are coming in with scale. We're coming in with a certain level of service, and we can talk about what our model is because it's a very differentiated model from what has existed prior, which I think we should talk about actually. So the old model is really what I call a jump ball model, right? A patient is being discharged from the hospital, the nursing station has a list of ambulance providers that he or she can call. She calls the first one, they're not available. He or she calls the second one and down the list, they go. And we think that just fundamentally creates a bad experience for everybody. It creates a bad experience for the patient. They could be sitting around waiting for transportation, creates a bad experience for the hospital system. They don't know when someone is going to arrive. They don't have sort of this predictability that they need to run their health care facility. And so we came and we said, we're going to upend that. A, we're going to give you a technology where you know exactly when we're arriving. So you know exactly when to get the patient ready. Intake knows exactly when that bed is being freed up for the next patient. And we're going to provide you with a fleet of dedicated ambulances and crews for your facility. You tell us which patients are most critical to be moved. You tell us which patients to prioritize. You know exactly that those ambulances and those crews are going to be there, gives you tremendous predictability. And also gives us predictability because those hospital systems are guaranteeing the rate for those vehicles, those dedicated fleet of vehicles so that we know that they're going to be highly utilized. So this, I think, has revolutionized the space, not only the technology platform, but just the model itself, right? The hospital system gets predictability and they know exactly that those fleet of ambulances are there ready, willing and able to transport those patients in real time. That's a big, big change to the industry. And I think that combined has allowed us to really gain share.

And you mentioned the New York Hospital, the Chattanooga Hospital. I imagine you don't want to speak about specific customers. But as you're going into these conversations and winning RFP, what's the 1 or 2 things that's most resonating pain points for hospitals that allow them to get across the finish line with DocGo?

Yes. So I think the #1 is the patient bed management and flow because to bring on a new hospital bed in this country, just one new hospital bed will cost $3 million. So hospital systems are faced with, do we have to build more capacity, which costs a lot of money and takes a long time? Or can we use the capacity we already have to be more efficient? And we enable them to do that, right? And so like as I was describing, when the discharging nurse clicks that button, a, he or she knows exactly when we're arriving, but then housekeeping gets a notification when to come and make the bed ready for the next patient. And then intake is getting a notification, alerting them that the bed is now ready for the next patient. So the flow of the patient allows their hospital system to be more efficient. And as a result, they utilize the beds and a lot more efficiently and then the capacity as a system increases. That is a very, very profound value proposition for the hospital systems we work with. And that really is the cornerstone of what we provide to them.

And then how does pricing work? Is that all contracted between you and the hospital? Is it Medicare rates? I mean, give us a sense of pricing dynamics? And are you taking price in this market?

Yes. So we go to the hospital system and we say, we're going to provide you with a dedicated ambulance and dedicated crew. And depending on, as an example, we know Friday at 2:00 p.m., you have the most number of discharges. We're going to have 5 ambulance and crews ready for you because we look at all your historical data, and we know exactly how many patients on average, you're going to be -- need to transport. And we say then, let's say, our basic life support or advanced life support ambulance is going to cost you X for the day, cost you X for the day. We're going to bill insurance. Whatever we collect -- let's say, it's -- $1,500 is going to cost the hospital system. If we're able to collect $1,500, then the hospital system doesn't owe us any money. If we collect $1,200, then the hospital system has to make up the shortfall. So they're basically guaranteeing that they have capacity, but at the same time, they're also guaranteeing that they'll help us make sure that those vehicles are highly utilized. And also, we don't take on the reimbursement risk, right? So if they require that we transport patients that are uninsured, underinsured, then ultimately, they're going to help fill the gap that's there between what we're able to collect and really what it costs to procure a great quality service.

And just in that example, how much is the hospital typically funding?

Well, we have hospitals that fund -- almost fund 0. In many cases, we have hospital systems that have payer mixes that allow them to fund 0. At the end of the month, they don't owe us anything. And we have hospital systems -- as an example, we work with a hospital -- I'm not going to call them out by name, but we work with a hospital as an example that 30% of their patients that are being discharged are either uninsured, it's a safety net hospital. So as a result, a big percentage of their patients just don't have insurance, and we get no reimbursement for them. In the old jump ball days, they make phone calls, we need to transport this patient. Nobody is going to transport a patient that they're not getting reimbursed for at all. So that hospital tends to have to make up the shortfall to us. But they know that we're going to be ready, willing and able to transport those patients and free up the next bed for the next patient, and that's worth a lot more than what the shortfall ends up being with us.

Okay. Let's maybe shift gears to the payer-facing side of the business. And here, it seems like you're creating more of a market. I mean these are patients that just aren't addressed by the health care system as it exists today. Can you talk a little bit about the needs from the perspective of the payer, your customer and how your solution fills that need?

Yes. So this is a really rapidly growing part of the company. And essentially, the way it works is we partner with the payers and provider groups, the value-based ecosystem. And they share with us list of patients and they assign us patients that have gaps in care. They maybe have diabetes and they need a retinal scan or A1c check. They have osteoporosis, they need a bone density scan. We provide over 40 different care gap services in the home. And basically, the insurers are providing us with list of patients that they know are chronically ill that are not going to get these care gaps addressed, and they've tried and tried to get them to go to the clinic or to their physician to get these care gaps closed and they haven't been successful doing that. So they give us those patients to meet the patients where they are in their home with success in closing out those care gaps. And you say to yourself, well, why are the insurers doing this? This is the reason why we're just so excited about this business. To me, it's like everybody wins in this scenario, right? You have the patient who, for whatever reason, is not accessing the care they need. Maybe they have mobility issues, maybe they're disabled, maybe they don't have good access to care. So we're going and meeting them where they are. And pretty much in any business, when you meet the customer or the patient where they are, you're going to be successful. So the patient is winning. The insurer is basically funding and paying for the medical costs relating to this patient. So the more gaps in care they have and the longer they go unaddressed, the more expensive that member is going to be for them. So they're highly incentivized for us to go and provide care to that member. And then, of course, if we're successful doing it, our company does well. And the U.S. health care system also does well because the healthier patients are, the less of a cost they are on the system. So we are very excited about this opportunity, and the insurers are really taking us up on this right now. So we started doing this in Q4 of '23. We had one payer assign us a list of 2,000 patients. It was December 3. They're trying to close out the year, get a call. We've been working with this payer, and they're taking a while to sign the contract. They call us on December 3, okay, we want you to make progress by the end of the year, we have a list of 2,000 patients who want you to go to their home to close care gaps. And we have a culture of saying yes. We have a culture of taking on that comes from the emergency medical background that we have on the transportation side. We took that list of 2,000 patients, and we were quite successful in going and meeting at least a portion of that list in their home, even over the holidays and over New Year's and so forth. Since then -- since that list of 2,000 in December of '23, we now have lists of patients that total 900,000 patients with a list of about half a dozen very, very large payers. And they're giving us these list of patients to go engage and close care gaps. And we're very excited about that because, ultimately, that's really -- no we'll talk about this. This is what -- this is the right solution for the right time. This industry right now is under enormous stress, higher utilization, causing them a fortune and now there's going to be potential cuts in funding. So we feel like our solution is tailor-made for this. We are absolutely trying to cut costs in the system, and we're trying to meet patients that are sick to keep them out of the hospital so that it costs the system less money. Ultimately, that's going to be what the health care system in this country ultimately needs.

And I mean, you mentioned the 900,000 list. I think that's up from 700,000 a year ago, high-20s growth, 28%.

That's right.

How would you break this down into a revenue opportunity? I mean, like is there a revenue per member type of goal? And then I guess, as a related point, what does success look like? If you can reach 50,000, is that the 25,000 -- what does good and great look like in terms of addressing that list?

Yes. So right now, we're getting paid essentially a custom rate per visit that we do per patient. And sort of basically fee-for-service style model. We go and close the care gap in the home. We get paid an at-home visit rate. That's where we're starting right now. And we're getting paid per care gap closed. So as an example, we might go to -- on average, we close 2 care gaps every visit we do. So we might go and titrate a patient's meds, take vitals and do a vaccination or we might do a bone density scan, a diabetic retinal scan. We do multiple care gaps when we visit a patient's home. What we're finding is -- so we get paid that per visit rate. What we're finding is, so far, 50% of the patients that we're going and visiting don't have a primary care provider. And by the way, that's not like such a -- it's a high number. But on average, right, I look in this room, 1 in 4 Americans -- 1 in 4 average Americans don't have a primary care provider. So what we're finding is we're going to the home, we're closing gaps in care, and we're finding these patients don't have a primary care provider. So we're now starting to enroll them in our primary care practice so they can become our primary care patients. So we can get that longitudinal recurring revenue. And then over time, we may take some capitation or value-based payments on these members, but we're being very, very cautious, and we're sort of gradually easing into that value base. So right now, we're in a fee-for-service model. Over time, we feel like we'll be in probably the most strategic position to take a value-based arrangement because we're in the patient's home. We're closing gaps in care and we're their quarterback on the primary care side. We think those are crucial ingredients to take risk intelligently. But right now, we're starting in the fee-for-service way. But over time, you can see us go from an at-home visit rate to primary care rate, to capitation, to value-based payments as we go through the progression here.

I'll come back to primary care and the risk side in a minute. But just thinking about the list that you have today, how much runway does that give you in terms of growth opportunity over the next couple of years just in terms of penetrating that? And maybe as part of it, just talk about how you're doing that. I think you've talked in the past about you're constantly trying to figure out how to better reach patients in terms of when to call all these different strategies to better reach them. So how do you execute on that? And how much runway in terms of growth does it...

It's a lot of runway. It takes a lot. So obviously, we can convert a higher percentage of the list we already have. And there's so many great -- that is a competency that the company is building that I think is going to be a tremendous strategic advantage to us. I'm going to give you a few examples. So we get this list of patients. We know God forbid, Jamie has diabetes. He needs a diabetic retinal scan, an A1c check, check his vitals. We get a list. Here's Jamie's name and number. And here's his address. So we started reaching out to these patients. And originally, what happens is the health plan is going to send you a postcard from them. Hey Jamie, we value member, you need some critical screenings. DocGo is going to be reaching out to you to schedule an at-home visit. Originally, I was maniacal with the team. The day that Jamie gets that postcard, make sure you call him. The day after Jamie gets that postcard, make sure you call him. And the team gleefully comes back to me and says, Lee, you were wrong. The best time to call is like 20-some-odd days after he receives that postcard. Why? Because a lot of the population we're dealing with has -- only checks their mailbox once or twice a month, right? We know that there are certain times now to call seniors during the day that's better. We know that we're calling in their native language. We know that text messages works better for certain populations. So we're creating this cadence of communication, and it's just getting better and better, the more and more data we have and the more and more engagement we do, it's feeding the engine, and we're just getting smarter and smarter at this. So first growth is just get more and more patients, but then also convert more and more of those lists, and we're getting smarter and smarter about how we do that and then layering on more and more services. That's how we're going to grow. Right now, we're focused on New York for this business. Right now, we're focused on New York and California. But there's absolutely an opportunity for us to also take the show on the road to other states as we grow this as well. So there's growth with the list we have, grow the list we have. There's growth to penetrate the list we have even further on the conversion rate. We can sign more payers. We can go to new states. So we're just scratching the surface of this opportunity.

And then one thing I'm unclear on, I guess, is the goal here to get them reengaged, and they'll have a primary care doctor on their own and you sort of are out of the picture at that point, you're reengaging for a period of time and then get them back into regular engagement? Or is there a longer longitudinal relationship here that you're trying to develop? I think that's part of the primary care strategy. Help us understand like, I guess, the duration of the relationship you're trying to create?

Well, we feel strongly that if a patient has a primary care doctor that they like and they're going to see for whatever reason, we go to their home to close a gap in care, we're going to close the loop with their physician. If you have -- it was once famously said, if you have a doctor you like, you can keep your doctor, right? If you have a doctor, you can keep your doctor. We believe that. If you have a physician that you like, we want you to continue. But like I said, half of the patients we go and see don't have physicians, they don't have a primary care doctor, and we are ready, willing and able to fill that void. So that's kind of the way we feel. We feel like we are in existence to care for a subset of the patients that are not getting good care today or don't have coverage, don't have good access. That's the void we're filling. By the way, it's a massive void that we're filling. The patients that are well served today, we bless them, we want them to continue to be well served by the establishment that serving them today, and that's kind of the way we think about it.

And then can you talk about the labor model a little bit, particularly as you're thinking about building the primary care side? More -- lots of companies interested in hiring primary care doctors at this point. So like how challenging is that to build?

So we have a very unique model, right? I mean I always like to remind people, this is like -- this is not a new idea. Like everyone's seen the Norman Rockwell paintings, like the doctor used to come to your house. But it's wildly inefficient to have doctors travel from house to house. There's so much drive time, downtime that they're not utilizing. Everybody has this sort of cliche and mean that when you go and see the doctor, the doctor only comes into your room for like 1.5 minutes and they're out, right? So we basically -- we don't do that, but we say we are sending an LPN, a licensed practical nurse, from house to house. We're sending a medical assistant from house to house. They're serving as the hands, eyes and ears in the patient's home, and they're being directed synchronously in real time by a physician, nurse practitioner, physician assistant and an advanced provider centrally, let's say, in HQ, in our headquarters. And so where that LPN going house to house can see 1 patient an hour, our advanced providers in HQ can maybe see 3, 4 patients an hour. And that's how we're leveraging the very scarce resource that you're describing in HQ and scaling the more prevalent clinician base, which is the licensed practical nurse and the medical assistant, and that's how we're sort of arbitraging between the 2. We have a very scarce centralized resource that's been directing in real time the sort of more prevalent clinician that's going from house to house. And that clinician, that's going from house to house, is equipped with what we call a go bag that includes all of the various different diagnostics to be able to listen to the chest to see inside the ear, nose and throat to be able to take different swabs, to take bloods, to do various different diagnostics and send back those readings in real time to the advanced practice provider that's centrally located. And so that's how we've been able to scale this model. I think this is by far going to be the model that's necessary, if you want to be a successful mobile health care company.

And it seems like you have a lot [Technical Difficulty] early in this opportunity, you can add primary care. This gives you a lot of runway. Why not just kind of focus on those pieces? You're already talking about risk. Why is that necessary at this point and not just building some scale and track record, I suppose, in some of these newer categories.

Yes. Well, we're not taking risk. We absolutely are focused on the sort of building scale, fee-for-service today. The reason why I say that is because I know that we are leaving a lot of the value that we're creating on the table. I'll give you an example. The other month, one of our clinicians goes to a patient's home, they have 6 open gaps in care. And we closed 6 gaps in care in that one visit that we got paid that one visit -- home visit rate for. That visit was worth a lot more to the payer and to the system at large than what we were paid for that at-home visit because we closed so many different care gaps. Basically, there was a peer-reviewed study that published that said, just the first preventative care visit is worth about $4,000 to the health care system. We're getting paid 1/10 or less of that. So I just know that our company is creating a tremendous amount of value for the system, particularly with these hard-to-reach patients, particularly with these patients that cost the system so much money. And over time, we're going to look for ways for the company to receive credit for that value we're creating.

Probably got to move on here. I've been running a little long today. So just on the migrant business, really just one question. I mean you've been pretty clear this is winding down. I think the primary question I'd have is just your visibility on the accounts receivables. It's a pretty significant balance. What's your level of confidence in sort of the collectability? Have you taken any reserves against that? Any color there?

Yes. We are very confident in the collectability. In fact, we see progress. Just today, we've received the payment. The payments are coming in. We had $150 million outstanding, went down to $120 million. Now it's sitting at $100 million, and we're making progress. So that balance is being worked down, and that's what's being converted to cash on the balance sheet.

Any updates there relative to the guidance? I mean, you've already done most of the revenue you expect to do this year. There will be a little more in 2Q, I guess, any updates?

Exactly. No, that's well said. Correct.

So on the government piece, this is a big focus coming off the last earnings call. You cut it entirely out of guidance. I guess, is the message there -- you kind of expect revenue, but you have no idea what it's going to be. And so it's out of guidance? Or I just want to make sure I understand what the message is. Do you have revenue in this channel today or you would need some of these programs to launch in order to have any revenue?

Yes. So we will have some revenue from the municipal programs this year. I think the reason -- the decision that I made was really the predictability of how much it's going to be and the timing of that revenue became very difficult to predict. And so we said, let's remove that from the guidance. Any municipal revenue will be in addition to the guidance that we have on the medical transportation and the care in the home businesses that we've been talking about. And part of that is because I just feel like the company's message. It will be easier for the company's message to resonate with investors. When I meet with the team, I talk a lot about we've never done more medical transportation than we're doing right now. We've never done more care in the home than what we're doing right now. The company's balance sheet is incredibly healthy, right? We have over $100 million of cash on the balance sheet, very little to no debt. So that's the message that needs to be resonating, not whether or not this municipal program is going to come on, how long it's going to be, whether it's episodic, whether it's an emergency, whether they're going to pay, those are pieces that's just going to be incremental and reported separately. But the base business, the business that we're growing on the medical transportation side, that's the reason why I gave a lot more specificity around that on the last earnings call.

Okay. Yes, I think that makes sense from a communication standpoint. I want to understand what was embedded in the prior guidance actually just to think about how much potential upside. It could be -- maybe it's this year, maybe it's next year, but I think it was $100 million that you took out of that. How much of that was projects that you had already approved -- that were already approved, that had not launched versus new RFPs that you are hoping to win, but obviously, probability adjusted? Any context on that?

Exactly. So we had a pipeline. So first off, we had contracts that we had signed that were set to launch, and those got delayed with what's going on right now in Washington. We had projects that we had submitted that we were waiting to hear back on. I'm going to give you a couple of examples of that. And then we had projects that were set to scale, that are sort of sitting in the early or earlier stages. So that was the reason why we said, hey, we have to -- we saw companies pulling their guidance completely. And I said to the team that doesn't -- we saw a lot of companies doing that around that time that we had our earnings call and said, no, the predictability of the businesses that we were just talking about is there. It's really the municipal piece. So let's just take that and put it incremental to the guidance. And I'll give you an example. We have over 30 RFPs that are sitting that we submitted over half a year ago that we're just waiting to hear back on. We haven't heard that we won it. We haven't heard that we lost it. We just don't know. It's sitting in limbo. It's sitting in purgatory. And ironically, the week of our last earnings call, we got notified that week that we had won -- it's small, but we had won a municipal vaccination program in Southern California. That we had expected to hear about at the end of last year that originally when we submitted that RFP was set to launch in February. Now obviously, we can't launch something in February when they get back to us in May. Now we are in the process of launching that right now, and it's launching this month. But the predictability of the timing of it just sort of precipitated us saying, let's take it and put it on the side.

Okay. Last minute or so here. On SG&A, you're going through a process of rationalizing that. How do you do that without cutting into future growth opportunities? Just give us a sense of your focus there.

Yes. So SG&A as a percentage of revenue is really what's driving the margin pressure for the business and sort of the adjusted EBITDA loss. So we're focused on cutting the sort of centralized SG&A and being efficient there. But at the same time, we want to preserve some of the capabilities we have for the future growth. So it's a balance. The way I think about it is we're cutting SG&A around that sort of municipal work. I think we continue to run the medical transportation business very efficiently. Like I said, we're now in our 10th year in that business. And then we're investing heavily spending, and we're going to continue to do so in that payer and provider vertical that we talked about because the upside is just so enormous there.

Okay. Well, I think with that, we're out of time. But thank you, Lee, for joining, and thanks, everyone, in the room.

Thank you so much. Appreciate it, Jamie.