eHealth, Inc. (EHTH) Earnings Call Transcript & Summary

All right. Well, I think we'll get started. I know there is 1 minute to go, but we might as well get started. So good morning, and welcome to eHealth's 2023 Analyst and Investor Day. This is our first Analyst Day since 2019, so the entire senior leadership team is very excited to host you. We also extend our welcome to webcast participants. And today's presentation is also being recorded and will be available for audio replay only on our Investor Relations website. Today's presentation -- just to cover a couple of housekeeping items. Today's presentation will contain forward-looking statements that are outlined here and have been posted to our IR website. And today, we'll also be discussing certain non-GAAP financial measures that we're going to reconcile to the most directly comparable GAAP financial measures in the appendix of the presentation, which is also going to be available for your view in the deck. So before I get started, quickly the agenda for today. Our Chief Executive Officer, Francis Soistman, will lay out the vision and future of eHealth. And after that, select set of our senior leaders will outline how we are building and bringing this vision to life. We're going to have a presentation by our Chief Marketing Officer, Michelle Barbeau, speaking about marketing strategy and brand opportunity. We will have our Chief Operating Officer, Roman Rariy, talk about the telesales transformation. And after that, we'll take a quick break and our Chief Digital Officer, Ketan Babaria, will talk about our technology and product differentiation. And after that, our Chief Business Officer, Gregg Ratkovic, will discuss our relationships with carrier partners. And we'll introduce our guest speaker for today senior executive from Aetna, Mr. Armando Luna. And after that, we'll break for lunch. After lunch, our Chief Financial Officer, John Stelben, will discuss 3-year financial outlook and talk about eHealth financial model. And finally, we'll conclude the day by a 30-minute Q&A session. And all of today's speakers will be participating in that Q&A session. And now it's my pleasure to introduce our Chief Executive Officer, Francis Soistman.

Well, good morning, and thank you again for participating at eHealth's Analyst and Investor Day. We are really excited about this day, an opportunity to tell our story more comprehensively and to give you a glimpse of what we think is certainly available to us with effective execution for the future. This is a picture of -- from my home office study and it displays a small sample of sports memorabilia. I'm a sports memorabilia collector. I'm very passionate about it. But it may surprise you why I'm so passionate. It's not just to have the artifact but it's a symbolism of those artifacts. It's great people, great athletes who were major contributors to great teams that achieved great outcomes. And I was a competitive athlete for a good part of my life. And what I learned through that process about the dynamics of bringing good people together and everyone aligned and working towards a common goal and achieving great outcomes, it transfers into your professional life into your business life. It's been, I would say, one of the major contributors in my career is having that foundation of team dynamics from my competitive days. And I've applied that throughout my career, and it has served me and served the organizations that have had the privilege of working with incredibly well. This is what we're building at eHealth. And we've made incredible progress since I arrived 18 months ago. So for those of you who don't know me, a little bit about my background, I've spent 4 decades, primarily on the carrier side. But in those 4 decades, I've done just about everything with exception to delivering clinical services. That's something I aspired -- the irony of that is I had aspired early in my life to be a physician. So working as -- in health care and health insurance, about as close to it as I could get, and no regrets, by the way. I -- it's been an incredibly rewarding career. And I've been associated with organizations where my responsibilities were leading P&Ls of $0.5 billion to as much as $50 billion. I touched it all. I've touched mergers and acquisitions, integrations, divestitures, downsizing, winding down, turnarounds, accelerated growth businesses. So I've seen it all over these 4 decades, which I think has equipped me particularly well to lead eHealth at this point in our journey, where I started, where we are and where we're going, we'll touch all of those experiences, which I'm excited about. I have 3 children, adult children. And one of my goals throughout my life has been to, in some way, contribute to improving our health delivery system, health care delivery system. And I think along the way, I have made contributions. But it still isn't where it needs to be, and I think everyone in the room would agree, there's lots of opportunities to improve it. But at eHealth, I have a unique opportunity to lead a great team and a great organization of highly engaged employees that are motivated to provide a great customer experience and to work with our carrier partners and supporting their objectives, but to do it not just based on volume, but also based on quality and based on a memorable customer experience. This is what we're doing at eHealth. And we're going to be sharing a lot of stories today about that. And then lastly, of course, we are fiduciaries to our company, and we have shareholders. We have shareholders here today. It is constantly on our mind, how do we return value because we know investors have choices where they choose to invest their money. And there are certain expectations in doing so. And we want to deliver on those expectations. This whole team is very aligned to that. So I would say there's 2 questions that I've been asked repeatedly since I joined the organization. Number one was, why did you take this job? And number two, what is the investment thesis for eHealth? And interestingly enough, they're not mutually exclusive. My answer to that. They're very intertwined. I had worked with eHealth as a vendor early in my career, my Coventry days, when we were standing up our individual business. We actually contracted with eHealth and utilize their platform to make it possible and that goes back into the late '90s, early 2000 period. And then when I joined Aetna, we utilized the relationship with eHealth as a part of our distribution solution. So coincidentally, I have interacted with eHealth throughout my career. So I knew a lot about the company. But obviously, there was a lot of things that you don't know about a company to you're actually part of that company. So I did my diligence, met with our -- all of our directors, looked at the Qs, the Ks and had a pretty good idea of what this company was about. But until you're on the ground and you have an opportunity to really dig in, that's when you really get excited about the untapped potential. And I'm going to talk a little bit about that untapped potential. But some of the basic tenets of the investment thesis and there's 5 of them that I've utilized. We are in a growing consumerism environment. And what we're all about is making that possible, making that journey possible, simple, meeting customers on their terms, when, where and how. There's demographic, very favorable demographic headwinds or I should say, tailwinds that provide an abundance of opportunity, I'll be calling some of them out today. Carriers, and I was talking to a few of you before the start of this and one of the common themes was what carriers say in earnings calls. And sometimes they'll make a comment about proprietary and there's an overreaction to those comments. Having been on the carrier side for much of my career, and Armando is here, we worked together for many years, you do want proprietary capabilities. But it's not efficient, economical or possible to support your overall growth objectives with proprietary only. You need outsourced distribution. But you need it with the right terms, right, the right understanding of expectations, the quality, the customer satisfaction. So we play a very meaningful role there, and we will continue to evolve in future in time. So that covers 2 and 3. The fourth, our omnichannel capability, our telesales capability, our online platform, both assisted, unassisted and our strategic partnerships really provides something truly unique in this sector. It does allow people to go on this journey of selecting their health benefits in a way that best suits them. We learn differently as people. So we need different tools to help that process of learning, understanding, processing and ultimately making a decision omnichannel environment allows for. And then lastly, the industry is at an inflection point. I think that started last year. We made some significant transformation changes that are still underway in various stages. We're going to talk about that today. Others followed. The days of growing at the expense of the bottom line are over. The days of focusing purely owned volume and not on the experience are over. And I think that bodes well for everyone, the carrier partners, beneficiaries and consumers and us because we will be able to achieve the bottom line results that investors expect of us, more rational. So going a little deeper, the marketplace continues to grow. This chart best depicts that. What we expect to happen over the next 2 years in terms of those market segments, Medicare Advantage has already achieved that 50% of all Medicare-eligible population. MedSupp continues to grow, and the individual market continues to grow. We have the Medicaid redetermination that just started last month that will go on for 12 to 13 months. That will be a state-by-state environment, decisions or I should say, expectations of what is achievable will vary from state to state. I should also mention the ICHRA, the Individual Coverage Health Reimbursement Arrangement. This has been around for a couple of years, but it's starting to gain traction. And as 3 decades ago, when employers shifted from defined benefit pension plans to define contribution 401(k)s. This is the path that this industry is on in terms of employers switching to the defined contribution. It makes so much sense in so many areas, portability, cost controls, empowering people to select plans that best meet their needs as opposed to selecting one carrier, thinking that, that carrier can meet all of their employees' needs. So we're excited about that. The digital adoption, the chart at the bottom, there is -- as you can see by the last box on the right, the 56 to 64 age cohort are very accustomed to already enrolling online probably through their employer or exchanges or other options. They like that experience. So the digital adoption is only going to increase over the next 5, 6, 7 years. We're going to have a lot of agents with baby boomers aging into Medicare eligibility. This represents a significant opportunity for eHealth because we have an end-to-end solution that is truly industry best. And we continue to make thoughtful, strategic investments in our platform to take it to the next level. So sector at the inflection point. I think the key takeaways here is that number one, the focus had been on volume and not on relationships. We help people make their health choices, their health benefit choices. But we have to have multiple touch points in order to establish a relationship, and that hasn't been happening as an industry. eHealth has already made that pivot. We are working on that right now to add more dimensions to our relationship, not just the sales process, but the service process, how can we help? How can we be there when someone does want to do a market check to see whether or not they're getting the best value? It's an important part, what we do. e-brokers, telesales is an important part of the carrier growth strategy. They can't achieve their objectives without having strong and effective relationships with us. Again, emphasis on the enrollment quality, the customer experience that has greater value today than it had 2 or 3 years ago. And then member acquisition. The cost of lead generation, making those investments in the right places where you can get the right LTV to CAC performance. We are very diligent about that. And you'll be hearing from Michelle and Roman and John, a little bit more about that. And then, of course, regulatory changes. We have the advanced -- the final rate notice came out, Star scores resetting, new rules, all of those things. It's part of what we do. It's part of our environment. We are very accustomed to navigating that. And that's not going to change for the foreseeable future. I think we'll always have those regulatory challenges that come along, but we're equipped to navigate them, and we do it particularly well. I think it's also important to point out that there are small, medium-sized companies in this sector and the capital environment is particularly difficult, as you all know. So I think there will be a shakeout over the next 2, 3 years. This sector is going to look a lot different 2 or 3 years from now than it does today. eHealth will be -- intends to be the recognized leader in every measurement, everything that we do. So opportunities to establish ourselves as leaders in all of these categories. We have to be agile because it is a dynamic market. We have chosen a strategy of offering a broad choice of carriers. We value those carrier relationships. We believe consumer value choice. Health care is local. And with value-based care, continuing to gain more and more traction, particularly in the Medicare Advantage program, knowing what is happening in local markets in terms of delivery system, social determinants of health, this is critical for our benefit advisers to understand, this makes them more effective as they're talking through choices and needs of beneficiaries. So we made a decision last year to stand up 2 local dedicated teams, local meeting focused on local markets, and we're expanding that. And Roman is going to be sharing more details about that when he presents. So the sector is definitely ripe for disruption. So when I joined the company in November of '21, I did what most leaders do. They go through a period of assessing. I accelerated that assessment process because we had some challenges that just needed immediate attention. Part of that was assessing the team. And over the course of 12 months, I reconstituted the leadership team, and that leadership team is with us today. There -- it's a great team in that they bring diverse experiences, capabilities. No one on that team has an ego. We work well together. We work incredibly well together. We meet every day. And in fact, taking a page out of the NFL playbook, each one of us has this. And it reminds us what we're doing every day in terms of what's important. It reminds us about our mission, our vision, our strategic objectives. We're always aligned. We meet every day at noon for a huddle and that's how we stay aligned because it is so dynamic, things are happening very quickly. But there are changes that we implemented last year. I spent time with Gregg's assistant meeting with our top carrier partners. And that's invaluable to listen to what they have to say, what are we doing well? What we could do more of? What we could do less of? How do we advance the relationship. These are critically important relationships. You have to work them every day. It's like any good partnership. You have to work it every day. And we have a team of folks under Gregg's leadership that work those relationships, and I get out there and I meet face to face and I value that time with all of our carrier partners. Kate Sidorovich, and her team and I started working together in the summer of '22, working on a 3-year strategic plan, which we presented to our Board in the fall. And it provides a road map of what the opportunities are, prioritizing those opportunities and a road map to get there. We set the 1-year operational priorities. Most importantly, we embarked on a massive transformation plan. And when I say that, it was based on my takeaway of the assessment, and that is we have a valuable asset here, a very valuable asset, but change is needed. We needed to change our financial discipline. We needed to change our organizational discipline, operational, change the culture of the company and make some strategic corrections. And we did that. And I'm going to be sharing a little bit more about that. But the overarching objective of transformation was not just to change things for the sake of change, but it's a change in thing because there are opportunities emerging, and we needed to be ready for those opportunities. We need to manufacture opportunities and respond to opportunities, all towards the goal of returning the company to profitable growth. On the financial side, and John Stelben is going to go a little deeper on this. We took out over $110 million in costs last year, a combination of fixed and variable. There's still opportunities for efficiencies for fixed cost -- reduction of fixed costs with its space, we are remote first. So we do have space throughout the country, and we've been able to eliminate some of that and more of it will be eliminated over time. Reengineering the telesales organization. Roman will cover this a little deeper, but 1.0 achieved great results. We improved our conversions in last year's AEP by 25%. We drove CTMs down by 50%. That was 1.0. We're now on 2.0. When I arrived at eHealth, it didn't take me long to realize that our telesales and our online organizations were siloed. They weren't coordinating. They weren't aligned. In some cases, they were working across purposes. Well, that doesn't exist anymore. It is one team working together, it's Michelle, and Roman and Kate, always in lockstep, always in lockstep to help lift each of those channels, and what Gregg and his team do on our strategic partnerships. So the alignment and the cooperation, the collaboration occurs daily. This is how we're going to fulfill greater performance. An area that I'm really excited about, Michelle is going to go much deeper on this, this morning, is redesigning our marketing strategy and introducing a branding strategy. But the branding strategy will be integrate it into the marketing. So it's not a stand-alone branding, it is integrated marketing, and Michelle will tell you more about that. But it's focusing on audience segmentation, it's focused on moving away from the generic messaging and really telling the value proposition of eHealth, what we do and why it matters. And you're going to see a video today. You're going to hear from consumers from them what they are excited about when they learn about what eHealth does. It's a compelling video, you don't want to miss it. And then, of course, branding. Branding occurs -- eHealth hasn't historically spent much on branding. We haven't featured our name that changes. That changes. We're very proud of this organization, and we think that telling the story of what we do. eHealth that name will begin to resonate. It's not a hard name to remember. Customer pledge, we got this one done last year. We came out with a pledge of what customers can expect when they work with eHealth, what we're committed to, what the experience will be. This whole leadership team was involved in construction of that and we shared it with our customers, beneficiaries, our carrier partners, the entire organization and even regulators. And I was surprised by the reactions I got from regulators. I mean, they really think it invoked more confidence that we get it, we get it. And then lastly, setting the foundation for diversification. We have many capabilities that were underinvested in over the past few years. The focus was Medicare Advantage almost exclusively. So we have these assets that we see great potential, like IFP, like MedSupp, like the individual market and ancillary services. And then the introduction of broader BPO dedicated carrier arrangements, which essentially is just a variation of what we do as eHealth as an independent impartial organization. We can work in a different dimension with our carrier partners, and Gregg will talk more about that. So throughout the 25 years, eHealth has been transforming the way consumers shop for health insurance. This is a little sort of a simple version of our ecosystem. But the objective is to be a transparent benefit adviser, providing great educational content so that consumers can understand what is available and what differences are and then having the tech tools for those who prefer to go online. We have a culture of compliance. We aren't regulated by CMS, but our carrier partners are and we're a downstream delegated entity, and we have to behave as if we are the regulated organization. Everything we do is with a mindset of we have to abide by what the carriers who will contract with CMS are required to do. So over the course of 25 years, before eHealth, it was a very paper-intensive environment. eHealth over years has been changing that to create these new capabilities. This is where we are today. This is where -- this is what we're working on right now, continuous member touch points, loyalty, retention, improving retention, calling out the brand. very specific new omnichannel tools. Last year, we introduced chat and co-browsing. They provided important lift. They improved the customer experience. We're now evolving that even further. We have appointment scheduling capabilities. We offered that last year. It's a great service. It also provides an opportunity for us to manage our sales operations even more effectively in terms of how we load balance throughout the day. The local market strategy I touched on and then obviously continuing to nurture those carrier relationships. So the competitive thesis when we look at what eHealth does unbiased broad choice relative to carriers feet on the street and tele brokers, we offer something that no one else offers a choice. Our competitors often really focus on 3, 4 or 5 companies. We work with the multinationals. We work with regional players, with niche players, delivery systems. So we offer a broad choice because it matters in the local market. A true omnichannel platform. We're not one dimensional. We have multiple ways to work with us. The other choices are very limited. Our tech difference. Again, we've been evolving this over years and years and years, substantially ahead of everyone else. Brand is the big opportunity. Carriers have great brand recognition. eHealth will be striving to have that same kind of brand recognition, but with the association of what the value proposition is. Carriers, how important are they? They're critically important. They enable us. We have 70% of the senior leadership team has worked in the carrier side, 70%. That's powerful. We know what is expected because we did that when we were with the carrier, when we worked with the carrier. We understand their needs, their expectations and the consequences of failing. So there's no learning curve here. We got it. We did it. And we've carried that in. This team that I've assembled lives it, and that gives us a great advantage in how we work with our carrier partners. We've been doing this as an organization for 25 years. Going back to the pre-ACA days with individual and then over the last 10 years, focusing more on the Medicare side. Expanding our collaborations, critically important. We do that through the BPO, through onboarding, how we can help add value to carriers in addressing needs that they have that we are uniquely qualified to do. So the vision for the future, and each of one of my colleagues that follows will be touching on these throughout the morning and early afternoon. We are striving to be the gold standard in the industry. And that's best measured by consumers, beneficiaries and carrier partners. They will be ultimately determined are we living up to that standard. A distinct consumer brand, again, Michelle is going to cover that pretty extensively. Retention is an enormous opportunity. It's a challenge, but it's an enormous opportunity. And 1 of our 4 objectives is built on increasing member retention. For every 1% improvement in retention where you get a 4% lift in our LTV revenue. It's significant. Targeted investments in tech. I mentioned the chat capabilities, the co-browsing capabilities, our scheduling appointment. We're evolving those now so that we're ready for the AEP to take it to even new levels of success. Revenue diversification plays a major role in our ability to get to profitability sooner rather than later. And then lastly, enhanced capital structure. It's our balance sheet. How do we make it stronger? And John will cover that. We're motivated to achieve profitable growth, strong cash flow performance and returning shareholder value. So I started with great people, great teams, working together to create a great culture, a healthy business culture to achieve great outcomes. That's our story, and that's what you're going to be hearing from my colleagues how they are affecting that in their respective areas. Thank you.

Hi there, it's an awesome setup. Great cultures, great team, great leaders. It's exactly why I joined eHealth, nice to meet all of you. I'm Michelle Barbeau, our Chief Marketing Officer. I'll give you a little bit of an overview of me. I've joined with decades of marketing expertise, coming from very top organizations and success that really, for me, also personally drives from leadership, leading teams and businesses to growth and also a real passion for consumers, understanding their needs and how to solve their problems. At General Mills, I helped build iconic brands like Yoplait, Betty Crocker. I turned a declining $1 billion Pillsbury product portfolio of warm fresh from the oven baked goods back to growth. And while maybe hard to resist that yumminess of Pillsbury, you start to wonder, does the world really need more biscuits. And so 7 years ago, I shifted into health care for more purpose-driven work. As Fran talked about, it's complex, and there are real consumer challenges to solve. I have had a successful career in transformation and turnaround. And quite frankly, I wasn't looking to leave when eHealth reached out almost about a year ago this time. In fact, I had never heard of eHealth, but I'll tell you kind of the 3 reasons that really drove me to want to join maybe the same reasons that I'll join you to want to continue to invest in our growth is that, one, that passion for our purpose and the beneficiaries, which you've heard. Two, is the people getting to work with us really smart team. We all have that same bias for action against our shared goals. And three, that transformation. We really are building something very special here. And so getting to apply my talents, driving profitable volume growth against consumers and needs, it's extremely gratifying and honestly, I'm honored to be part of this. So where did we start? Last year, I joined not long before AEP, and we made great progress against our goals. We started with a very thorough audit of every campaign, every channel and we reduced. As you know, we pulled back spending behind anything that wasn't profitable and wasn't working. In some cases, that meant pulling out of channels like DRTV that under the old strategy, just weren't working at the time. We further optimized and leaned into what was working and that allowed us to significantly improve our COAs. That optimization also drove higher quality leads, which also contributed to enhanced telephonic conversions. Again, really proud of what we achieved in year 1 kind of the start of the marketing -- evolved marketing strategy, but the marketing strategy goes so much more beyond optimizations. It is really about at the heart of it, putting the consumers first. So along those lines, I'm going to ask you to think of yourself as a beneficiary. If you're not yet 65, maybe you think of your parents or grandparents and kind of go through their shoes, because I think that's how you'll understand how this marketing strategy will be so impactful to the business. When we understand our consumers and we solve for their needs, the business grows. That sounds super simple and very [ one-o-one ], but you will see, in fact, I will show you that we are really at the forefront leading this industry in that. Okay. So again, you're a Medicare beneficiary, you need to select your plan for this year. And this is what you experience from the industry. I'm just showing you visuals for the sake of time. But if you were to hear these ads or again, I encourage you like go through these materials with your parents this year, you will see that they all sound and feel very similar. There's usually an authoritative spokesperson. They're telling you to act now, get all the benefits you deserve, you see supers right, times running out, call today. They all feel very generic. And that shows up in the metrics that we all look at every day. Yes, there's been some pullback, more rationalization of spend among brokers, but this is still a really competitive space. You're competing for those eyeballs in that short 10-week period, often in the same channels. And so that shows up right with higher media costs, higher COAs, higher churn because if it all looks and feels the same, there's not really that recognition and brand awareness that is being built. Oh, Fran mentioned this. Sorry, Fran mentioned this. It is true. We think this industry is at an inflection point. And really, it is ripe for disruption. There is a real need to be able to help consumers through this process. And so we spent hours actually talking to consumers to understand what works and what doesn't. And they told us that, that sea of same advertising is not helpful. They feel bombarded. They feel overwhelmed. One gentleman, you'll hear from him in a bit. But he talked about how he looks forward to December 7 every year. That's the last day of AEP. Like it's so sad that, that's a date he knows to look forward to. They've often come from a more narrowed selection, right, from employer plans. And now it's this whole new world to navigate of new plans and rules to understand, and they often feel lost and alone. Another gentleman told us how we had to go to 35 different websites to make a planned selection. Like you can do all of that with us, right? One click. So anyway, it's -- and at the end of the day, like they still don't always feel good that they made that right selection because there's so much detail and information to try to understand. And then it starts all over again the next year because there's new plans and new regulations. So again, it is really clear that consumers need a different solution in this space. And lo and behold, we have the solution. And really, it's what I said. It's our marketing strategy puts consumers first and uniquely positions eHealth to win because we can solve their needs. So let's kind of go through the 5 core components of the overall marketing strategy. I'm going to touch on each one of these a bit more, but we need to build that differentiated brand. We need to separate ourselves from that noise. And for the first time, really tell consumers who we are and embed that differentiated value prop into every touch point to drive immediate conversion. Second is greater audience segmentation and personalization. Medicare is not a one-size-fits-all audience. We need to tailor messaging, media, the experience, and again, that will drive further increased conversion and better economics. We need to expand our channel mix, so we can be where our audiences are and we will do this in a test-driven methodical approach. I'll take you through that. Fran mentioned, I'm going to double down. I won't spend a lot of time here because Roman will, but retention is critically important to us. We are going to be shifting and moving to a data-driven multi-touch omnichannel strategy that is really about building those lasting relationships beyond just that onetime transaction. So yes, it starts with the brand and making that great first impression. But again, it's understanding the drivers of churn and how we can offer a different solution to fill their needs. And probably most important, but again, underlying and guiding all of this. The marketing strategy is the economic return, right, how we will evaluate the profitability of each of our marketing investments. And so that's taking that disciplined approach with more efficient COAs, looking at every campaign, so we're optimizing against our LTV to CAC guidelines, driving that higher retention will drive higher LTVs and then that brand building, which will be in-period ROI initiatives. So let's go through each of these in a bit more detail. So building your brand as an investor, you may wonder, is this some splashy multimillion-dollar campaign just to build awareness over time. As a consumer, you know that, that's not the case, and that is absolutely not how we're looking at this. Brand is the North Star that guides the company. It guides every interaction. So think of a company like Apple, right, that stands and oozes that sleek, simple design that shows up in their product, their packaging, their store, in the customer service and yes, in their marketing. It really distinctly differentiates them from competition and consumers are willing to pay more for that. The same is true with eHealth, right? It will guide everything we do from our hold music, the interaction of that first call or how they visit. It will go into every campaign. So again, this idea, it's not some separate brand-building campaigns sitting on the side, it's embedded to every single touch point to drive immediate conversion. So the other reason why invest in brand is that higher -- companies with stronger brands consistently deliver higher returns and outperform their peers. They also drive significantly higher click-through. We know from our data, higher click-through drives higher conversion. And yet, at eHealth, we have a significant opportunity. 60% of our outreach has been unbranded. So we really just aren't even telling them who we are, and yet the unbranded outreach drives 1.5x higher churn. So we've kind of been the same, right, saying that same messaging hasn't really been branded. And so not super surprising, but we have very low aided awareness. So what is our brand opportunity? Our brand opportunity is to shift from being kind of that great powerful Wizard of Oz, hiding behind the curtain, adding to the sea of same messaging, the consumer frustration to being their helpful guide. So you know Yoda is not the hero of the story, Yoda is the guide that helps Luke fulfill his potential. Similarly, eHealth will be the guide being able to help them navigate through their journey and find the right plan for their needs. So how does eHealth become Yoda? Our brand strategy that North Star -- this is not outward-facing language, by the way. This is just our internal guide, but it's to consumers remarkably parent adviser, that means that we listen to them. We simplify. We help them compare all those options, right? They don't have to go to the 35 different websites, and we empower them to make their decision when, where, how they prefer. We are transparent in everything we do, in a way that is worthy of remark because it is so different than what they are currently experiencing. This has been the core of our offering. We just really have never communicated this. So again, we talked to those same consumers that I was talking about earlier. We shared with them kind of the top line summary of our value prop and our services. And they told us that it is differentiated, compelling and highly motivating. But -- okay. So don't take my word for it. We're going to show you the video because it's just much better to hear it from their words. [Presentation]

Pretty amazing, right? We -- just for the record, we did not pay them. That's a completely independent moderator. This was purely just to start to gain some insights into our brand and the opportunity. But very compelling space that we're going into. So what we are currently working on is taking that brand strategy and turning that into that external consumer representation, right? What will it look like the brand look and feel, the value prop messaging, the logo, et cetera, that will all be updated for AEP. And again, threaded into all new marketing campaigns, our experience and so very excited to be able to share that with you in the coming months. The second pillar of that strategy is growing audience personalization. So I'm going to ask you to go back to recall that you are a Medicare beneficiary. You're bombarded with that sea of sameness. But now you start to see the light at the end of the tunnel with a helpful guide. But remember that not all Medicare audiences are the same. Some of you are new to Medicare. Some of you need to switch because you're paying too much for too little. Some of you are looking for the lowest cost with all-in-one benefits, while some of you are willing to pay more because you live in different states and you need access to doctors anywhere. Some of you have just moved and you've lost coverage. Some of you care deeply about the local piece, as Fran talked about sticking with your local physician and that local hospital network. And some of you are not yet Medicare, you're still younger, maybe self-employed and looking for individual and family coverage. Anyway, you get the point, but the point is that we are going to be personalizing end-to-end experience and really diversifying our business in a whole new way in a way that's very different from our competitors. And so what that means is a few things, right, that tailoring it means that we're developing data-driven audience models so we can accurately identify and reach each of those segments. That means tailoring the messages. So there's the brand that's threaded throughout, but you've had to be distinct messages that meet their needs and motivations. You need to tailor the media, so we can show up where they are. You need to tailor the experience, the online, the telephonic, the shopping and the enrollment experience so that we can pay off and deliver against what we've promised in the marketing. When we do all of that, it shows up, right, in all the metrics that we want with higher conversion rates, satisfaction and retention. And as I said, really increases our opportunity as a business to diversify and extend outside of that AEP, OEP time period. The third pillar of the strategy is expanding our channel mix. And I'll point your attention to the arrow because probably is going in the opposite direction of what you would think and you would be correct. Marketing funnel usually starts up at the top of the funnel. You build awareness in mass reach channels like TV, radio, print. You move consumers into the middle of the funnel for consideration, reaching them in channels like social. And then when they're primed and they're ready to convert on the bottom and you're there in search to be able to do that. The reason that the arrow is going up is because we need to build that full funnel. We have been almost primarily very heavily weighted to bottom funnel channels only. So search, affiliate, direct response. The reason that we need to build out that full channel mix is because that is how marketing generates the greatest return. I have seen that time and time again when you can orchestrate channels across awareness, consideration and conversion. And second, as I've stated, you just -- we simply need to be where our consumers are. So again, I'll walk you through an example. As a consumer, you need to make a high stakes decision. This time, let's say, you need to purchase a car. Do you immediately go online to search and that's how you make your decision? Likely not, right? You've been influenced by TV, print, radio, social. You have brand perceptions, perceptions of different features, and that all influences your decision. So let's go also a step further. Let's say that half of you are in the market looking for a Ford pickup truck, and half of you are looking for a Volkswagen bug. You are likely very different consumers, right? So not only is the channel mix different, but so is the programming, the type of TV shows you watch, your news consumption, that's different. And so similarly, at eHealth, we need to tailor that to each audience, our channels, our media mix and our partners, right? That is how we will drive the most effective results. I'm not building as we go. Sorry. So here also, what I can tell you is that as we expand our channels, we can play into our inherent strengths as an omnichannel fulfillment capability. And Fran talked to this a bit. But in the past, we have had just some of our channels that drive solely into telephonic conversion and some that drive just solely into online. And we are moving away from that. So all of our media channels will be able to drive into that omnichannel experience so that consumers can engage in the way that's best for them. As we start to build this mix, we will test our way into this, starting this AEP. So you'll start to see us in channels like TV, social and the programmatic media. Also, as we build this mix, obviously, it's very important in terms of how will we be measuring success. We'll be continuing to hold ourselves to those very strict LTV to CAC profitability guidelines, which is why we're going to test our way into these. And we are building a new marketing mix model. So we will be moving away from last touch attribution, which means that assigns conversion performance to the last channel that a consumer before they came to reach eHealth. So what that means is it ignores the impact of any other channel that played a role in that decision. And it places inaccurately too much weight on those bottom funnel channels. So we are investing significantly, getting great talent in place in our marketing analytics. And so we are building a new multi-touch marketing mix model. That allows us to measure channel incrementality and know with precision, the role that each of those channels is playing in consumers' decision-making and profitability. And finally, because we are doing this in a test-driven way, we can remain a bit opportunistic and flexible. So we'll be able to lean into the channels as we see stronger performance. So as we move to this consumer-first strategy, I can tell you all of these different components. I have seen as I've done this multiple times, this is what works to drive growth. But very important, right, what will be those measures of success? How will we see that show up? It will mean higher conversion rates, lower COAs, stronger member retention and increasing that brand affinity. That leads to being able to expand our enrollment margins and consistently over time, having that sustainable competitive differentiation. Marketing plays a critical role, as you can see in getting to our positive EBITDA in 2024, and that continued margin expansion beyond. So in summary, I think we made great progress in 2022. We pulled back spend, reducing what was unprofitable, leaning into what was working and we were able to expand our margin to 29%. However, a lot of it was still generic on branded media, really going to that broad audience. So again, just to put a fine point on it, right, as we move into 2023 and beyond, critically important, we maintain that disciplined approach to our spend to maintain profitability, but we start to deliver that differentiated brand and value props giving consumers that light at the end of the tunnel that will drive immediate conversion increase, being able to tailor our audiences, the media, the messaging and the experience to our core consumer and expanding beyond to diversify the business. As I talked about, starting to expand that channel mix to the full funnel reach consumers where they are, but doing it in that really thoughtful, test-driven approach. We are absolutely confident that as we do this, that will lead to that further expansion as we've projected over the next 3 years. So I'll just end with reiterating that I joined eHealth because I see the vision. I am incredibly excited about where we're heading. I think the path is very clear and the transformation will be meaningful. And marketing plays a critical role in this. We determine who to engage, how to engage and how to bring in those high-quality leads that are primed and ready for conversion. And I know that no one loves a high-quality lead that's primed for telephonic conversion more than my colleague, Roman. So I'll let him take it away from here.

And the high-quality leads position great sales organizations to perform on the next level. I'm Roman Rariy. I'm the Chief Operating Officer. I'd like to spend a few minutes today to tell you about the work we've done in 2022 to transform our telesales organization. And then we will discuss in more details work which we're doing now to position us to win now and in the future. I'll start with telling you a couple of things about myself. You picked up on my accent. I was born and raised in Soviet Union. I got here 25 years ago. First part of my life, the first part of my career, I spent as a scientist. I got my bachelor in chemistry from Moscow State. I got my PhD from Moscow State as well in chemistry. I worked at MIT as a -- I did my postdoctoral studies at MIT, our Procter & Gamble, which is a consumer goods company, transition to pharmaceuticals, and did product development for precision therapeutics. Then at some point, I decided that I would like to start a new chapter of my life, and I used working Business School as a launching pad for that. I spent 2 years in Philadelphia doing Wharton MBA full-time health care and finance. And after that, had a variety of roles, a diversity of roles in different industries. So I worked at L.E.K. Consulting, which is a strategy firm, strategy consulting firm. I spent several years in with Kraft Heinz, which is a food company in the United States, China, Australia and New Zealand. And when I returned to the United States, I, prior to eHealth, I worked for a company Lionbridge, which is in the translation and localization services. As you can see, I bring the variety of experiences in different functions and companies. But the reason Fran Soistman brought me into the organization, it's because I bring 30 years of experience of doing 2 things remarkably well. One, I can understand what really matters. I can cut through the information clutter and understand what really matters now. And two, I can adapt and take actions that will help us, help the organization to deliver on what really matters. I'll tell you a quick story, which takes me back about exactly 30 years back. I was a student at Moscow State University, was preparing for the exam, in parallel country was really falling apart. And we had empty shelves. That's true. It was a period of -- in the history of the country where we had empty shelves. And I had a choice to make. Exam is tomorrow, have a choice to make. Either I wait in the student cafeteria for a couple of hours to get a meal or I study. And I was very clear that studying was the most important thing to do at that moment. But I had to support myself somehow, so I had to have some nutrients. So I went to the store and the thing which was available was baby food. I still remember those boxes, the smiley faces, the smiley kids -- child face on the box. And I figured, well, if kids can eat it, baby can eat it, I probably can do that too. I bought a few boxes came back to my dorm, mixed it up. I think I triplexed the dose because I'm a bigger person. It helped me, it carried me through the day. It was the first time I realized that babies have been duped into drink baby food, it does not taste well at all. But still, it helped me. So it carried me through the day. I took the exam, I aced it. That was really the first time probably going back in time. This was the first time that I had to make a choice. I had to really boil down what matters the most to me at that moment and then adapt and find the way to accomplish the mission. So I bring that, so -- and I carried that with me throughout my life. So I bring that to work every day. And I'm going to speak about the telesales transformation 1.0. As Fran mentioned, we're done with 1.0, we're in the middle of 2.0. And I bring that ability to cut through the clutter, understand what really matters and take actions, adapt and take actions to work every day. And this was -- this is something that I applied as we drove as an organization, telesales transformation. But let me start with -- remind you something you've seen -- you may recall Fran talking about, which is -- but like to establish. Our goal is to establish eHealth as a gold standard in health insurance distribution. We believe the industry needs a gold standard, and we believe we can be one. Our other goals build a highly efficient year-round full-time adviser model and drive enhanced member economics through higher conversion and retention. A quick view where we are now. Organization, one of the things we're very proud of is that we work really well together. We have a strong market in sales and sales ops collaboration. These 3 units really work well together and that drives -- it helps us to cut through a lot of information clutter. Just to remind you that we have -- our organizational structure on the telesales side consists of benefit advisers, formerly known as sales agents. We have sales management and we have a dedicated retention team. I'll speak about that later today. And we, at the moment, predominantly full-time internal advisory model. 2023, where are we focusing? We're enhancing our infrastructure. We're increasing diversity of our operating model. We have carrier agnostic model, which is predominant model that we operate in, and we're actively building care dedicated models. We're scaling the activities that worked last year and would like to do more of that, with scale in the local market. With scale, we are building -- we're actively building out member loyalty and retention initiatives. Also, you've heard Michelle speak about audience targeting. So when the different audiences come to us, we have to address them differently. So as Michelle has built an audience targeting -- on the marketing side, on the telesales side, we're training our agents and we are building capabilities to address different audiences differently to allow for continuity of customer experience. And you also heard Fran talking about MedSupp, IFP, SMB, ancillary, all these capabilities are must have our sales organization, and we are building stronger. We're getting stronger there every day. So for the rest of the presentation today, I'd like to talk about 2023. What are we doing there? But before I jump there, I'd like to cover 2 things. One, I'd like to quickly align on carrier agnostic and care-dedicated models. So we're on the same page. And after that, I'll quickly talk about 2022 accomplishment and things we've done that worked really well. And after that, for the rest of the talk, we'll focus on 2023 initiatives, which are really exciting. So let's talk about care models. Where, as I mentioned, we have 2 fulfillment models. And the key for us to have 2 models, is to have to enable operational diversity. Our main model is a care agnostic model and care dedicated is a model which we're actively building. Let's talk about care agnostic model. You see the value chain here. Demand generation through eHealth, lead acquisition efforts. Then leads come in, being assessed. We use the proprietary lead assessment and call routes and algorithm. Leads are matched with the benefit adviser who is best field to help that individual. This is also done through the proprietary algorithm. Then active adviser in sales happens. Our remarkably transparent advisers help individuals to find best plans for their specific circumstance. We're using our proprietary plan [ measure ] algorithm for that as well. And then post-sell enrollment and verification and then ongoing retention. When you look at the care dedicated model, is somewhat similar to that. However, lead generation is done by carriers. So leads generated by carriers come to us. Lead assessment still happens. However, the lead assessment and benefit adviser happens. And then advisory and sales happens using the portfolio of plan provided by that carrier. So this is why it's called carrier dedicated. We're dedicating with limited number of plans available for that agent that for the beneficiary because the lead came from specific carrier. And then post-sale enrollment and verification happens in a similar fashion. So these 2 models are operational today. We started building the -- would build the care dedicated model, enhanced it last year and continuing to enhance this year. Let's talk -- let's spend a couple of minutes on what happened in 2022. This is the all -- these are the key, not all but key activities that we engaged in 2022. There's a lot on this slide. So let me group them a little bit here. So first group of activities. I would classify as doing things we're doing, but doing them much better or the other way of saying is better management. What are the better management things? We enhance management process and reporting. We flatten the sales organization. We achieved an enormous cross-functional alignment, not only between sales and marketing, but between sales and product, sales and carrier team, sales and finance. The other area that I classify as new processes. So you do things better, you use the same process you have, and you just do them much better because you bring operational rigor to that every day. And then on top of that, you build new processes, a new process that will we built last year -- we revamped our hiring processes. One of the remarkable things we've done is we allowed supervisors to hire their own teams. So now our sales supervisors hire their own teams. They interview the agents. They work with later, and they go with them through the training, which creates enormous team morale and comradery which plays dividends later on. We also started Sales Master University, something that vehicle that we use to train agents and supervisors and people go through different stages of the training. They get different belts from white to black. That's extremely comprehensive multiyear educational efforts. And the other area is the long-term valuable projects that we can call it, long-term valuable projects. What are they? We piloted local market project last year. I'll speak about that in a second. And we deployed omnichannel strategy. You've heard Fran talking about this. It wasn't always the case. It wasn't always the case that omnichannel strategy was alive and kicking, it was the case before that each channel will work independently. Well, that's no longer the case. Now our beneficiaries, our customers have a chance to start where they are. You want to start online? No problem. You can continue online. You can complete the application online. You can get help with chat. If you'd like to call us, we'll pick you up exactly where you left off online. We'll complete the application telephonically. If you want to start telephonically and complete the application using online tools, not necessarily online, but online tools, we can do that, too. So this is the start of what we believe will become truly industry standard omnichannel experience. All that combined gave us 25% increase in conversion rate and decrease CTMs by 50%. CTM is a complaint tracking module that's how CMS tracks customer complaints. Now let's switch to 2023. In 2023, we will do more of what worked in 2022, and we'll start new initiatives. Work to work in 2022 is focused on local markets. I have a slide on that later in the presentation. We'll talk about that in details. We'll do more of that. We're scaling this up. We're really putting efforts into member loyalty and retention program. You've heard Fran mentioning this. This is our main -- one of the key focus for the company, you saw Michelle speaking about that. This is not a sales-driven program. I'm presenting it here, but member loyalty retention is a company-wide initiative. People from all functions work on it. It's marketing, it's product, it's sales, you name it. Diversified product sales. I mentioned that you've heard Fran mentioned it, you've heard Michelle saying this. Medicare Advantage is our main product at the moment, but we are making conscious efforts to develop our internal capabilities to offer MedSupp, IFP, SMB and ancillary. These training efforts, cross-company training efforts are happening constantly. And on the sales side, this is focused more about -- focused more on training our sales agents to be able to recognize opportunities and to be able to offer best products for our customers. BPO, business process outsourcing. This is where customer dedicated model, a fulfillment model lives. And this is the area of which we're actively building within the organization. This diversifies our operational capabilities and this diversifies our revenue streams as well, in alignment with the audience targeting. We cannot stress this enough. You've heard Michelle mentioned it, Fran spoke about this. When you reach people, when you reach different audiences and they come to eHealth, we need to be able to service them differently. So that training and development of our agents is an ongoing part of our -- of all our training modules. Let's talk in more details about local market strategy. This is my favorite slide here in this presentation. This presentation has many good slides, but this is my favorite one. I can summarize everything to say here in one sentence, health care is local and insurance distribution should be as well. Let's unpack it a little bit. Well, health care is local. I don't think I need to convince you that, that is true. But let's look into details, local to whom? Well, carriers, carriers know that health care is local. Even though we have -- we offer many plans for national carriers. Every national carrier knows that the plan design in local and star rating from CMS a local too. So carriers don't need to be convinced that the health care is local, they know that. What about our strategic partners? What about hospital system? What about pharmacies? They also know that. They know that the health care is local. This is where they work in the local community in the core and a pharmacy. What about our beneficiaries? What about you? You also know that the health care is local. Your primary care doctor, your specialist, it's a name, it's a person who works in a specific location. Yes, the person is a part of a broader network, maybe national network, but it's extremely local. So health care is as local as it gets and distribution of health care should be local as well. We're a national organization, but we're recognizing the fact that to take the company to the next level, we need to start thinking local because people we serve and people who we work with think local. So it really benefits us and the entire organization and the industry to think local, all right? How does it look? While we started a pilot last year. We took 2 states. We took state of Illinois and state of New York. And we said, let's run the pilot. We spent some time selecting the states. We looked at a number of factors such as population, Medicare eligible population, Medicare penetration, our own strength in those states and many other factors. So we're on a pilot on these 2 states. We dedicated agents and we said, you will be taking calls, you will be servicing beneficiaries from the state of Illinois. And you will be working with the state of New York, which allowed people to really get familiar with the local landscape of carriers, local landscape of providers and enabled us to better service beneficiaries. How do we measure that? Well, we measure it based on conversion. Conversion improved in higher than national average for us. We said, okay, this is great. This is working, let's do more of that. Let's do more of what's working. This year, we expanded these 2 local markets into 6. We call it clusters because you see that some of them are no longer a single state. We added 3 states to Illinois cluster, we added Wisconsin, Indiana and Michigan. To New York, we added Pennsylvania and New Jersey. We formed the Georgia cluster consistent of Carolinas and Georgia, and then 3 clusters, which are state clusters, Florida, Texas and California. So right now, as of today, we operate in 6 local market clusters. And we do see improved performance for local clusters because people -- because agents who work there, they take extreme pride in servicing a specific area, they get to know the area, they get to know the plans, they get to know other things. They check the weather. They check the scores of a sports game. They can talk to people about something that they can -- they relate to which creates enormous bonds on the call. It's a big deal. And we intend -- we fully intend to continue that trend and evaluate additional markets for 2024. Well, I'd like to switch gears and talk about it a little bit. This is my second favorite slide. Again, if you were to take home one line here from retention and member loyalty, all we need to do really is to do 2 things well, find the right plan for the beneficiary in the -- in life circumstance beneficiary isn't right changes. That changes. One, life changes, circumstances change. So the key is to find the right plan and match the right plan with the beneficiary given the circumstance the beneficiary is at. And then engage the beneficiary after sale. Post-sale engagement is a key driver here. We do plan matching really well. As I mentioned, we have a proprietary algorithm that matches beneficiary with the best plan for that person in the present moment. Postal engagement. It's one of those easy to say, difficult to do things. So let's unpack that a little bit. What do we really mean by post-sale engagement? It's a variety of things, which really starts with ability to reach beneficiaries after the sale. Ability to have [indiscernible] with additional offerings with information, with educational materials and so on. So one of the foundational efforts which were taken here when enhancing, we're putting additional effort both human and product efforts into enhancing our ability to capture contacts, phone, e-mail, anything. Next is on-board. We believe that first 30 days after beneficiary signs up for the plan, and the most critical one to get beneficiary -- to start beneficiary interacting with the plan. And this is also an opportunity to identify additional products that beneficiary may benefit from, which are complementary to the initial purchase. So here, in the onboarding phase, which is really first 30 days, we're developing very targeted campaigns for plans and beneficiaries who know based on our experience and based on the algorithm, again, we have a proprietary algorithm that runs and determines high churn or beneficiaries at risk of a high churn. Here, we're developing additional programs, additional outreach programs that will educate beneficiaries about their plans, get them to use the plans earlier, sign up for primary care. I have here social determinants of health, which is becoming more and more important in the Medicare market. PCP match, additional plan utilization services, signing up for PCP appointments. It's a small little thing, but it definitely increases -- we noticed that, that increases the plan utilization and reduces churn. Engage. Once you onboard post -- after first 30 days, then we need to engage. We launched about 3 years ago, about 3 years ago, we launched customer center. We're right now working on enhanced in that customer center and really using it as a platform, which will run our loyalty programs from because we would like to switch from onetime transaction you buy, we help you to purchase a plan and we're done. No. We'll help you to purchase a plan today. We'll help you to start using the plan within first 30 days. We contacted you 60 days into it to ask you how you're doing? Do you need anything else? Is the plan working out for you? And if not, let's talk about it. And then we say, well, there are other products that you can purchase if something is not working, you need additional services, we have that as well because we carry a portfolio of products that we can offer. We plan to launch this at scale in advance of AEP and I'll be updating more on that later. But this is really the core of our initiative here or the core of the retention program this year is to switch from retention to member loyalty. We want loyal members. We want people to know eHealth. The branded initiative that Michelle spoke about is a part of that. It's a part of the process. And then, of course, retain. And as I mentioned just now, our focus here is shifting from planned retention to member attention because people need change, and we see that year-over-year life changes plans change as well. So our goal is to put -- to match beneficiary with the best plan for them. So come back to us, and we will do it for you. And to facilitate that we're also thinking about personalized outreach campaigns prior to AEP. So there's a lot of work here being done. And stay tuned, we'll update you more in advance of AEP. Summarizing. You might be -- you might have a question. You might be sitting with a question. This is all -- these are all great things you're talking about, Roman. This is like great initiative. You guys are clearly doing a lot. How would that land in the KPIs that we look at every day? Year around advisory utilization, which is the cost KPI. Conversion, which is a profitability. LTV retention, that is revenue. I summarized here on the slide, our view of how every initiative that we spoke about today or mentioned briefly, impacts those KPIs. As you can see here, pretty much majority of these KPIs have been impacted by every initiative, some more than others. So we feel really good that initiatives that I mentioned today, which were successful in 2022, and we are building on for 2023 will not only allow us to serve our beneficiaries better, but also will improve our financial position. I'd like to bring us back to where we started. We started saying that our goal is to establish eHealth as a gold standard in health insurance distribution. We're going to do that by doing 2 things remarkably well. We're going to provide superior consumer experience, rooted in best-class advice on board in training and coaching, supported by the proprietary technology tool. I believe things I mentioned today should leave you inspired by the fact that we are doing all that. Also, as Fran mentioned, compliance is a foundation of our work. Everything we do must and will be compliant. So the other piece of the puzzle here is the strict adherence to compliance principles with focus on unique requirements for each step of the sales process and post sales in interactions. We're very serious about this. With that said, I'm not sure how about you, but all the stock makes me hungry for baby food. Let's take a 10-minute break. Back in your seats sharp in 10 minutes, please. Thank you. [Break]

Okay. We're going to start again right now just to keep things running on time, and I'd like to welcome our Chief Digital Officer, Ketan.

Show of hands. How many of you still use point and click cameras? How many guests still use stand-alone GPS devices? Not many of you. The fascinating thing is -- these technologies were invented, adopted and became irrelevant in a relatively very short period of time. Technology is changing so fast the pace is ever increasing. And the consumer preferences are changing with it, too, very quickly. Hi, I am Ketan Babaria. I'm here to tell you about how we at eHealth are leveraging these technologies to improve our customer experiences and their ever-changing needs. Before we do that, I'll give you a quick introduction about myself. I discovered coding very early on that green on a black screen was very attractive to me. I learned coding at a very early age. And over a period of time, I have learned and coded in like 10-plus languages. I obsessively read and still read about our technology. I love, love, love tech, right from the days of C, C++ to ChatGPT now and blockchain somewhere in the middle. I've been following tech most of my life. And I did my undergrad from IIT [indiscernible] as well in design and engineering fields. And after that, I moved to Bay Area. And I have lived entire professional life in the Silicon Valley, and I've seen all the trends over years. And I worked at some of cutting-edge technology companies like PayPal, eBay and start-ups like M1 Finance and Roofstock. And one thing is common throughout all these companies where I worked at is all of them were trying to kind of disrupt or they were trying to really reinvent the fields, their own fields by leveraging technology. And that brings me to eHealth. Why am I here? eHealth is a transformation story. It has an amazing mission, great people. And as Fran mentioned, is going through transformation. And I am a techno optimist. I truly believe that technology is a force for good. It can make this world a much better place. And I'm here to leverage that and make something good at eHealth. eHealth was actually born in Silicon Valley. And it's at the heart of all that we do, and it is one of our key differentiators. It enables us to orchestrate interaction among our 3 primary constituencies, our beneficiaries, our advisers and our carrier partners. And I'll walk through each one of them in detail. We operate on a principle that our beneficiaries, as Michelle mentioned, are not a homogenous group. They have different preferences. They have different tech proficiencies and different needs. So we have built a truly flexible platform, which provides best-in-class experience, which is rationalized to their needs. For example, if folks who come to our site and who are not sure about the kind of plans that they need, we provide very easy-to-use guided shopping flow where they can try to understand their needs and then figure out the plan that they are more interested in. We support thousands of plan and plan comparison is one of very important criteria, as Michelle mentioned, when customers come to our site, they're looking at us as an unbiased party to compare the different plans. So we provide that functionality. And remember, it's not just functionality or let's just compare like hundreds of plan together to help them narrow it down and bring it to a manageable level. For folks who are still not sure, okay, what does this plan mean? Does it support this, that or the other. We provide chat options for them to chat with a live agent, and then I'll show you an example of how delightful that experience could be. One of the things that we take pride in is our deep integration with our partners, and we keep all our plans up to date. We know which plan supports your PCP, the plans which support your pharmacy. And a beneficiary can come and very quickly look at the plan, which actually meets their need based on the kind of PCP or pharmacies that they have. And all of this and more is also available on the telesales side. We are only one out there, which truly supports omnichannel enrollments. And you can start in one and end in another, but we truly support end-to-end across all channels. Let's look at a demo, which shows an example of creating a delightful experience, leveraging technology for our beneficiaries, which we short as a promo video internally, but I'll share it here. [Presentation]

How cool is that? If we just look at the tech behind it, it's amazing like being able to think of latency, thinking about having them see the same screen at the same time, there's a lot of cool tech behind that. But it's all wrapped up in a beautiful interface. And this is just the beginning. We are working a lot of other interesting ideas. As we speak here, we are currently having a hackathon in our offices. There are tons of good ideas coming out of that as well. So we are very excited about that. Let's talk about -- let's switch gears and talk a little bit more about our advisers. So for our advisers, we applied powerful tools that empowers them and enables them to provide a great customer experience. Something that Roman mentioned, each lead that comes in is rated on multiple factors. So we have built this AI model, which takes the lead, and then we look at our agents. And then based on multiple criterias, we make a real-time connection between the 2. So this is very powerful since it allows us to maximize our conversion based on the kind of the lead potential that we have. Second, we keep our -- as I mentioned earlier, we keep our plan up to date, but we provide very powerful tools for our agents, for our advisers to quickly go through it and narrow it down for our customers. And then we provide a very easy to use tools, so we can quickly enter the PCP information and suddenly narrows down the plans. You enter your pharmacy, suddenly brings the number of plans available. So an adviser can very quickly go through thousands of plan and pick fee, which are very relevant to the beneficiary. Finally, this is a cool one, the planned recommendation. So we have built a very interesting and complex recommendation engine which I'm -- which we are very proud of it, which helps you provide your guidance to the adviser. So like I'm interested in this, but I'm not interested in that. But this is top of list, but this is third in my list. So when an adviser is talking to you on the call, we can very quickly change the ranking of various factors. And you can get instant answers to the plans, which are best suited for your top priority, second priority, third priority so that they can provide the plans best suited for you. Let's talk a little bit about our carrier partners. So we already have a pretty close relationship with them. But we are building ever tighter relationships with them by leveraging the technology platform that we currently have. Such integrations enable us, as we mentioned earlier, to get an plan information and keep it all updated, but also provide an up-to-date enrollment information to them. We are also working with our partners to create a dedicated fulfillment BPOs, that's something that Gregg will also be talking a little about. And then we are working on post-sales engagements, like HRA and appointment settings. So we firmly believe that digital will be a key differentiator for our future success. And as Fran mentioned earlier, digital adoption will continue to grow as younger cohorts age into Medicare. We are also noticing a pretty strong uptick in the percentage of total applications coming through online assisted and online unassisted channels. And finally, we are noticing significant jump in customer center account creation. And as Roman talked about it earlier, this is going to be a key pillar for us to increase our engagement with our customers and improve retention. All of this will allow us to have a deeper engagement with our customers and then hope -- our goal is due to this and other efficiencies gain efficiencies that we gain will be able to drive more enrollment for adviser. This is a very important slide. I'll tell you why. Our online funnel has significant opportunities. If you see on your left, even small 50 bps improvement in our online conversion could lead to $42 million in incremental operating income. And that is a big area of focus for us. We already have multiple initiatives working to improve this. We are building personalized experience, as Michelle and Roman both mentioned, that will continue to improve our overall experience on our site and provide personalized experience based on where you come from and what you're looking for. You could be new to Medicare, you could be switcher, but we are looking -- we are working on providing a personalized experience based on what you're coming here for. Mobile is very, very important for us. We are optimizing the overall flow that our customers -- so that they -- our customers can get the best experience when they come through a mobile like mobile or a tablet channel, and you do not have to like stretch it out, move it around to see what the content is, we are optimizing it for mobile. We are analyzing the overall funnel, looking at drop off from page to page for each of our visitors and running multiple AB tests to improve conversion from page to page as customers are coming on to our website. Finally, as you mentioned, we are investing in customer center improvements, which will help drive customer engagement and build long-term loyalty for us. So where do we go from here? As I mentioned, our tech platform is at the heart of all that we do. We have guided by providing the best-in-class experience for our customers. We intend to bring -- build deeper relationship with our carriers. And finally, for our advisers, we're going to build best tools possible for them to be most efficient and provide best experience to our beneficiaries. As Fran mentioned, we are at an inflection point. And we are already far ahead in our tech capabilities. We enjoy a sizable lead compared to others. We are committed to expand that advantage, thoughtfully, prudently and as efficiently as possible. Thank you.

And that sizable lead is a key differentiator in what separates eHealth from a very crowded field. I'm Gregg Ratkovic. I'm your Chief Business Officer with eHealth. I've been with the company now 25 years. What's unique is I spend half my time with the carrier with Pacific here in the United and the other half in the external distribution. I'm a lifelong LA Angels fan and some of you might laugh as I know there's some definite Yankees fans in this room. But in being an Angels' fan, I've always watched the Dodgers from afar. I've watched how they practice. I've watched what they do, but I didn't live in their shoes. What's interesting about my experience is, I played on both teams. I played on the Angels, I played on the Dodgers. And I know how that carrier and the Dodger thinks. My team is a single point of contact in working with the carriers to handle their unique needs and services that they want and desire. And I just noticed I didn't send you my pixelated slide. Carrier relationships are critical, critical to our business. That wasn't always the case before Fran. Carriers were more of a commodity. The carriers are central to everything we do. Having the supply that we have, having the relationships that we have, having the daily conversations that we have, they're critical to our choice model and driving all the way through to our benefit advisers that Roman talked about earlier because they understand and believe what the market and what that carrier -- that customer has to offer. In a moment, I'll bring Armando up here, and he'll reaffirm and drive why eHealth is so critical to the diversification and growth strategy for their business. We truly do see a different customer than the individual carriers. We see somebody is more technologically savvy. We see somebody that's more interested in going online, being able to work with the assistance of an agent, being able to use the incredible tools that Ketan went through that allow the customer to fulfill -- for us to fulfill our customers' mission, which is to make sure we can see them and experience our tools. When, where and how they want to be served. We were a first mover in the space when the carriers need us most, when complaints were going through. And we worked collaboratively with those relationships that we had. And I can look at Armando, he was one of them. We actually sat down and we did the right thing for that consumer. We made sure that we improved our experience. We made sure that we put that customer first. And in all, you've seen the numbers. We improved the CTM scores by 50% to 60%, in many of the cases with our carrier partners. That was really important because it developed trust in that relationship. That trust then allows us to diversify and leverage our platform. We've talked about diversification. Diversification is not only in revenue, and we've talked about how that works on the revenue side with our dedicated enrollment moving away from the 606 accounting, and actually driving dedicated enrollment for our carrier partners, but also product diversification. We can't be a one-trick pony. We can't be relying on just MA. We've got Medicare supplement. We've got a team dedicated to Medicare supplement. We've got ancillary products and services with hospital indemnity that work well with our Medicare Advantage plans. Dental vision and hearing that works well with Medicare supplement. And then we have our under 65 brands that we continue to leverage and influence so they can start with us and end with us all the way through Medicare. We have incredible data and insights. We can utilize that data to help out our partners like Armando, who are developing products and services that are important to their customers and our customers. And we bring that all together in a simplified solution that is a winning combination between our carrier, the individual and, of course, this incredible team that you've heard from. It doesn't end there. Post-enrollment, engagement is critical. We have to continue talking to them. That retention has to live in everything we do. It's okay, if they want to change plans, but they certainly shouldn't leave eHealth. We should always be that brand that matters, and comes back to eHealth over and over again, just to reassess their needs and ensure that they still have the right plan, and they're still on the right products, and if there are other products and services that we can offer to the consumer. All of that comes together, and I'm happy now to bring up Armando Luna. Armando has been with CVS Health as an officer. He's been with the company now over 11 years. He's been in the industry for 35 years. And I can tell you, I think I've worked with him for all 11 years. So I want to welcome Armando, thank him for his partnership and let him tell you a little bit about the importance of our relationship.

Thank you, Gregg. And unless you've got a click for me, you might want to give that up. Remember it's a partnership. You have to share. So before I get going, I wanted to first touch a little bit on the term partnership, right? You heard some of the speakers talk sometimes about vendors, right? Partnership implies that there's some mutual goals that together you're trying to accomplish, right? And I think it's important to have that context because as you're ever waiting, right, the business model for eHealth and its effectiveness, right, you sort of want to understand how the organization operates. I always tell people that organizations are really made up of processes, right? You can see the legal entity, the paper, right, the corporation, the funding and so forth. But at the end of the day, so it's processes. So I'm hoping, [ Simon ] that I will answer your question today about why do we do business, right, as we go through this process. And to do that, I want to start first a little bit more about my company, CVS Health, right? So if we think about CVS Health, what it is that we're trying to do is we're looking to become the leading health solutions destination, leading health solutions destination, right? That's what CVS is all about, right? What that implies is that we need to recognize, right, to be the -- a living organization that you need to be able to attract customers in different ways, right? You all are familiar with our pharmacies, I hope, right? I know Fran went to one of our CVS pharmacies yesterday, right? And then it's important to know that as an organization, right, we're looking at the overall health solutions, right? And to believe you had to be able to recognize that people come to us in different ways. Gregg mentioned a little bit about their customer profile, right? There's customers that come in a different way. There's people that would come directly to our Aetna products, which is what we offer for insurance purposes, because of the brand, others need assistance, right, is trying to find a way of attracting different groups of people. If we were only doing direct-to-consumer in our model, we'll be attracting a more narrow group of folks, right? So when you're trying to understand the customer dynamics, right, you want to make sure that you have options and choices, right? Think about how you guys can hear, right? Some of you live here, you may have your own car. That's your choice your own proprietary, right? Others may have found that picking up another, right, was more convenient. Others may have had a different service, right? Consumers are like that. Depending on their needs, they're looking for different solutions. And we believe that we need to be able to cover different options for consumers to come to us. The second item is we're really looking to deliver a superior health care experience. What that implies from an acquisition perspective is that you want to be able to anticipate whether or not the right product has been offered. When we look at organizations like eHealth, we have to look at, do they have the ability to identify what's going to happen, right, to that consumer? What are their needs? Can they match the different solutions that we offer with the needs of the consumer? We recognize that we're not always the right solutions for every consumer, right? But when an Aetna product is, who wanted to be able to do that match. Now having an experience -- remember, it starts with experience. Let me that -- we want their people to know a little bit more about just the product we're selling. What's going to happen to me, right, once I enroll in the product? What happens on day 1? How do I activate my benefits, right? And what we love with the relationship that we're building, and you heard some of the presentations is when looking at the journey beyond the decision making of making the purchase. Think about the last time, right, you narrowed, right? Yes, it's not good, you have the key and so forth. Now is in your garage, you're going to turn it on, you remember everything that you need to do, right? You know all the gadgets and so forth. Health care is like that. Most people are not familiar with everything they need to do, right, to activate their benefits is understanding how to take advantage of that, that is critical, right? We're in a business of dealing with people, where setting expectations for that experience. We need partners and companies that can do that. It's beyond just that initial sale. Somebody will say, well, selling might be easy, yes, but the sales really happens when you actually solve a problem, right? We talk all about solutions. If you can identify the problem and you can deliver the right solution, you can go a long way. Now in our business, right, we're trying to ensure that the health-related issues are addressed. So we think in terms of health outcomes. What's interesting is that when you look at health, you have to start with your mindset. Some people may be in a wheelchair, but they believe they are healthy. They may not be able to even walk around the block with their grandkids. But they believe they're healthy. So keep that in mind. So we want to make sure that we're able to pursue and help people achieve those goals, right, from a mind perspective. Mental health is critical, right? We also want to be able to look at health from the perspective of the emotions, right? We make decisions based on emotions, right? I know many of you are very quantitative. At the end of the day, there's an element of how you feel whether or not you like a company, right, when you provide that endorsement. There's a combination of qualitative and quantitative. It's very similar to the outcomes that we're looking for. I want to make sure that emotional aspect is taken care. And of course, right, we need to ensure that physically, the body is taking care, right? There's a pain, there's a problem, right, that you have from a health care perspective that needs to be addressed. I'm just sharing this because I want to visualize the complexity of being on this business. It's not just about having a scale of benefits like in the old days, it's really about understanding what those needs are and how do you create those connections, that's where the magic is. So it's more -- a little bit more complex than that. Now in our partnership, right, we look to deliver different solutions, right, to different problems out there. People are looking for our product, right? If you think about it, last time you bought our new life insurance product, right, you buy life insurance to have a degree of protection, you want to be taken care of, right? That's what we have, MedSupp products. A Medicare supplemental product is a way of achieving that. Other people are looking for the care coordination, right? I want to -- I've been with an employer, I got my insurance there. They always tell me what to do. The ability to have access to a way of achieving access to a care coordination, that's where some of the Medicare Advantage plans come in. Those sort of differences, right, become important on how the products get positioned. So that's why you heard some about the technology and the analytics that Roman was describing, right, create the match means that you have to be able to understand where the consumer is coming from. That then allows you to see, okay, what are people looking for, right? Do they want some assistance, right, or accessing the care. There are products like the world's special needs plans, right, that help people. They provide transportation, right? You learn through the interaction that what do mean I don't have transportation to go see the doctor? I may not even have enough means to buy the Russian baby food, right, that we heard earlier, right, we -- the programs that provide help with basics like food, right? Having the match -- imagine that agent, right, creating the connection, imagine the marketing activities are going on, that's what we're visualizing from our end. So I just want you to appreciate the complexity of what we're having to do together, right, to achieve that loyalty to be able to achieve that trusted relationship, right, it requires us to understand the level of detail. It's not a single transaction. Now the other piece that I wanted to highlight, as I mentioned earlier, there's different ways that people go about acquiring their insurance, their access to coverage, as I like to call it, right? Some people know what they want. They want to do their own research. They're very good and working through the Internet, calling different sources and getting information. They come directly to us, right? So we're prepared for that. There's other people that want to be able to compare and contrast. That comparison and contrast requires to have somebody that could provide that advice, do we have the right product? Where do I go, right? Think about the last time you were looking for some new solution, a new product, right, that you're not familiar with. How do you know which product to buy, right? You hear about different brands. I live in Texas and lately, the weather has been changing a lot. So we began to look for, oh, gosh, we -- every time the power goes off, we have these storms and sometimes the temperatures are 120 degrees. We probably need to find something to help us keep up with the power, right? And I began to look at different companies. There were like 30 different companies that I could go for. Some were telling me I can get it for free, if I do something and I put some solar systems and so forth. It was mind-boggling, right? Now I ended up calling somebody that was an expert associated with State Farm sort of like a broker. They guided me through the process and say, oh, this is the size of your house. This is what you need to be looking for, right? This will help you from that perspective. I got the guidance. I don't know what to do. I was overwhelmed. I didn't start it, right, that field. I didn't work in that field. It's the same situation for consumers. Now the other factor that we've seen is these changes, changes when how people go about buying benefits. The pandemic actually accelerated the changes. I remember my in-laws, by the way, just moved to live with us now in the last -- it's going to be 18 months. I'm counting the month because it's a very intense relationship. You have to make a commitment right to do that. And remember going and taking them to restaurants, right? And I have to use my phone to illuminate the menu and to make sure they see it. Now we go and the menus have these QR codes so they pull up their phone and they read the QR code, and I'm like [ boron our ] way by that. I'm like, wow, how much they have changed, right, from they're having difficulty in reading the menu to now putting up their iPhones and reading the QR code. And my father-in-law is 97. And he's -- I mean -- and he's not -- I mean, if you ask him to do something with an Excel file, he doesn't know how to do it. If you ask him to research something on the Internet, he doesn't know how to do it. But he can grab his iPhone, read a QR code and read the menu. It's a significant change that is going on, right? And I wanted to highlight that because as consumers change, we need companies that are able to adapt to those changes, right? Yes, we're doing things internally as for our Aetna products, right, within CVS to adopt that technology. But we also know there's different consumers that are buying in a different way. In fact, I saw this statistic the other day, and we were looking at different purchase behaviors, right? And I was asking what has happened, right? Even before the pandemic and nowadays after the pandemic, what are the buying behaviors. And if people were buying digitally at the rate of 5% to 10%. What we're seeing is, at least within looking for advisers right, to compare and contrast, it's like my situation with trying to maintain the power of my home. Companies specialize on providing digital and phone support, right, are being selected for purchase purposes at a rate that is 150% of what it was 5 years ago. It's a dramatic improvement. Hence, my comment about my father-in-law with his QR code, right? So there's more consumers is fully more comfortable, right, interacting from that perspective. Whereas in contrast, I was looking at the field agents still dominant source, right, an important one, right? They come to your house. They engage with you face-to-face. But from the relative percentage, it's been decreasing, right? People are now beginning to think about, hey, do I want somebody that I don't know to come to my home? Or do I have the convenience here. I have my son in California and I trust on his advice on buying insurance. I'm calling a company like eHealth and I want to have a connection, but we don't have time to have the agent connect with both of us who are -- I mean, Texas is in California, how do we connect to make that decision, right? This technology now that enables that. Being able to -- also be responsive to the needs of consumers is critical, right, having the immediate information. I remember 5 years ago, right, we will have -- and we still do, we have agents that visit people's homes, right? And you look at the trunk of their cars, right, and it's full of booklets and so forth. Imagine how responsive you can -- when you're looking at all those papers versus using the technology. They always tell me, right? Yes sir, we were having dinner and they were telling me when you're in New York, make sure you do things quickly. Finish your synthesis very quickly, right, finish on time, move, right? Well, people want more responsiveness. There's no time, right, to go through our booklet, if you will. So the risk is what we're working, right, with eHealth is one -- and to me, it's very important. I know Gregg talked a little bit about the CTMs. But when they made a commitment to us in terms of the volume, right, the membership, right? We always talk about the panel, right, how much growth the book of business, the membership book of business is going to experience. We put together marketing plans. We put together activities around retention. How are you going to grow it, right? The one thing that they've been predictable, especially in the last -- probably the last 2 to 3 years, right, is that when they commit to a number, they deliver. Why is that important to us? Because remember, we -- as we get more members, we need to make sure we have the clinicians on our staff. We need to have the customer service. We need to have all the infrastructure that people need for their engagement, right? We only deliver on good quality of care if we are properly sourced. So knowing that we have the membership that we had expected, right, becomes critical. Swings up and down where there might be good sometimes, may not be good for service and retention. And the second point that I want to highlight is from a CTM perspective, right, that's a quality common indicator that we all use, right? There's been a significant amount of collaboration, right, in the way that you heard some of the descriptions, right? We go into basics like let's listen to a call together. What led to that confusion, oh, wow, we didn't tell them that doctor that they select is quite busy. And when they were trying to get an appointment, they were going to have to wait 2 weeks. That created a complaint, right? How do we make sure that we look at elements like that, are you changing doctors, the doctor that you're in with, right? That may change how quickly you get an appointment. It's so simple, but it does take time, right, when you're looking at that engagement level. What happens on day 30, right? What's the process, right? You heard comments about the enrollment verification process, they onboard there, right? That becomes important. Everybody wants to know what to expect. If you don't have those processes, right, they're trusting the health to be able to give them the right advice. That trust can only be built if there's confidence that they know what they got into, right? They recommended this product. They put a trust on us, right? So we have to deliver, right, obviously, as a carrier, right? There's an obligation that we have because they put their trust in us to deliver on our service experience. But they help us by ensuring that consumers know what to expect and getting them through that process. So that ability of an organization and a business model that can interact to help us achieve that is what makes a difference, right? CTM don't just change because you have different folks and so forth. In fact, I wanted to close with the term partnership one more time. We achieved that joint goal of growth when we do a few things, right? Number one is the people component, right? Organizations, right, there are ample of people and processes, right? So we've seen how they have invested on developing their people, right? Every person that they have is an ambassador for us, right? If there's a problem, and it's not handled properly, right, Aetna CVS can be blamed by that because they're ambassador. Think about what we do in foreign relations as a country, right? We send our folks, our Vice President and others, right, to speak to other countries. We have eHealth talking to the folks on our behalf, right? So it's important to us that they have the right talent, the development of the people, right? It's not just about making sales, it's about creating those relationships. If they're sustainable and they're getting the trust, right, it's good for us because we're building on each other's brand for us, right, we're building it together. So again, when you analyze a company, I will ask you look at their business model, yes, but also look at the talent and how it's being developed. It's not just at the top, but even the people that are actually interacting with the consumers. Number two, is that experience? How do we make sure that they're setting the right expectations for the buyers, whether they sold a final expense product from us. Dental vision, hearing, our MA, Medical Advantage product, regardless of the product that they offer, right, from us, we want to make sure that we have the right expectations. But we also are learning with them those changes in consumer behaviors. We all are changing. There's a transformation going on in the industry. So we spend a lot of time talking about how are people buying. They're satisfied coming online. There's something different on that digital periods. What are the profiles of those people, right? So we know how to differentiate and anticipate needs, right? That becomes important, right. Instances like the chat, right? Hey, people are, thanks to Amazon, they're teaching them how to do that. They come in and buy the insurance, right? They're using technology like that are people ready. What are the activities? And how it should work, right? Do we have to prepopulate the databases, right, before the consumer interaction that becomes critical. It's going to just getting a vendor to do it for you, right? You have to know what the journey is going to be. If you had the skills to manage and build a journey, you're going to have something successful. Same thing with their solutions, right? They're going to be hearing, and you guys know they do a lot of research on consumer needs, right? People that are aging in, right, switchers. You saw Michelle's slide where they were looking at different stages of when people make enrollment. It's important to us to understand what are they looking for? We may have certain features there are not in our products. We need to know, right, from that process, what's new? What do we need to have? So there's always that collaboration on what features, what products do we need to add, right, to our set of solutions and to platform. Now the last point that I wanted to touch on is the fact that people change over time. right? Then we have sold maybe a supplement product to somebody on our behalf. All of a sudden, the individual, the client that they got finds that they need to move to a different state and they no longer have the support that they have and now they need more active engagement because now they're living in [ Sony, ] Florida, right? And they're by themselves, right? Their families stay back in New Jersey. So all the support system that was there is no longer needed. A transition to MAPD becomes a solution, right? That's a way of extending that customer relationship, but also making sure that you know when it's appropriate to make changes, right? So we pay very careful attention to when do we have a need to trigger a change in the product, right? Going back to my knowledge in cars, right, I remember driving a nice [ Revcoz ] red, when I was young. When I got married, I began to have kids. We have 3 car seats, they didn't fit in the car. I got an SUV. I mean that was like a convenient way, right? So life changes, right? And you need to ensure that you know that. You know where your consumers are to determine the right products. So that ability to not only -- yes, we want to keep people in a single product fine, but there's times that the needs change. So that ability of understanding the portfolio and understanding where those folks are in their needs, basically creates an opportunity, right, to build a loyalty. Now the -- our job as a carrier is to deliver those solutions. There might be times that we don't have what they need, right? I know the carrier will have a better solution, that's fair, right? We are not good at everything, right? We recognize that. But the products that we're good at, we want to be able to be giving a fresh shot, right? So that's why that's important. It's really an element that ensures it might be a greater persistency for John, right? We may have a little bit of disruption in between, but we want to make sure we satisfy the client over time, right? We'll have different solutions, right, that we want to deliver. So just keep that in mind, right? It's not just how long a person stays with a given product, is really how you build the relationship, right, and whether or not the client, right, remains there, and they have that confidence. Because at the end of the day, right, eHealth is starting to build right, a trust, a relationship. We have a different type of customer, right? That's what's important, right? So hopefully, that helps understand right, why -- at least from one carrier's perspective, right, why we do business with them. So with that, thank you, Gregg, for the opportunity of being here. And you have an enjoyable lunch. We did not cook the lunch, so we don't claim responsibility for that, but we hope you enjoy it and you'll have what 45 minutes you've given them. So, all right.

Thank you. I believe so. Thank you, Armando. Thank you so much for the partnership.

Thank you. [Break]

We are going to resume the program in about 5 minutes. So if you can just start making your way back.

Good afternoon. I'm John Stelben. I'm the CFO. I left the ranks of the retired about 6 months ago to join eHealth to work with somebody that I've known, learned from and respected for over 25 years, our CEO, Fran Soistman. Before I joined eHealth, my wife and I were building a retirement home in Florida. We spent time designing it, a couple of years building it through the pandemic. And with all the ups and downs that you might expect through that, we finished the construction. We furnished it, and we moved in about 18 months ago. But it wasn't -- that was just the start. It was just the beginning. It was a house. It wasn't a home. It needs a lot of work, punch-less just 100 details. It takes to get it just exactly perfect. And so I took another year. And as we are finishing that up, I realized I have more to give, I have more to contribute. And I was thinking about what was the right opportunity to do that. I had a couple of things that it had to -- it had to satisfy. One, I wanted to work with people I know and trust. Two, it had to be challenging. I'm not a caretaker by nature. Three, I had to be able to make a difference. And so when Fran called me, it was the proverbial perfect fit. And so here I am. And the analogy I would make is that when Fran joined in late '21, he was building a house. He was designing the future state, building a management team, making sure there was a strong foundation for future profitable growth. And so we're here today to tell you guys about how we're going to turn this company into the gold standard for online health insurance education and enrollment. I'm hit the button, here we go. So in early '22, we started the transformation and implemented a comprehensive cost reduction plan. And that's really a way of saying we decided to start spending the money smarter than we had. And so there are some familiar faces here, one left from back in our Coventry days. And we used to say something about there's only [indiscernible] and that's today. And so really, our plan was around making sure that every penny we spend added value, marketing, people, technology, and that's what we did. And so we took out over $110 million on an annualized basis. I'm sorry that -- okay, here we go. So in '22, we gave guidance in. We exceeded guidance on all those metrics. March, you saw we ended with $203 million in cash, $800 million in commissions receivable. For '23, we're projecting to start growing again. The levers are in place to drive margin expansion, and we're projected to be EBITDA positive in fiscal year '24 and operating cash flow positive for the trailing 12 months ended March of '25. The picture of our revenues. Today, and I emphasize the word today, about 70% of our revenues are Medicare Advantage commissions. But what's important is tomorrow in the future and what we're going to do in this business to diversify our revenues. While Medicare is a great growth trajectory into the future, we want to grow our commercial businesses. We want to grow our products, and we want to grow the cash flow dynamics of those products. And we'll do that through the BPO and additional dedicated carrier services you heard about this morning. And we're leaning into those carrier relationships and our direct-to-consumer experience to really grow our commercial products more. One, I'm particularly excited about really is the ICHRA business that Fran mentioned earlier. I liken that to the transition from defined benefit plans, pension benefit plans to 401(k). It took a little time, but today, everybody is 401(k). So it's not a matter of if, it's just a matter of when. The important thing to take away from this is all built today. We may have underinvested in it in past years. It may have been sidelined because of a primary focus on MA commission growth, but it's there. It's scalable. We do it today, and we're ready to grow it. A little bit about the cash and revenue cycle and I get asked a lot of questions about this, but we account for commission revenue under ASC 606 or lifetime value accounting. What that means is that our work is complete when we have an approved application from a carrier. So in Q4 during the AEP, as we convert those calls or we get those online conversions, we will book our estimate of the lifetime value of that application into revenue. We get a little bit of the cash related to that in the fourth quarter, but most of it comes in Q1. And then as members renew in following years, we get that renewal cash. I think what's important to understand here is that when you look at our financials today, you really need to look at cash flow on a trailing 12-month basis as of March 31 because that best reflects the matching of the revenues in Q4 and the related cash receipts in Q1. I think -- and I'll say this a couple of times today. And our view is that we will be at breakeven cash flow from operations in March '24. An important metric in our business is LTV to CAC. And really what that is, it's revenue over the cost to acquire that revenue. And so you can see the history of the Q4 over the years. You can see that '20 and '21 as the company was moving to really a growth at any cost. You can see how the margins start to suffer, bottomed out in 2020, in 2021. And we brought it back in '22 from the cost reduction program, smarter marketing spend. And the LTV to CAC is important because the simple math is 1.5 is about a 35% gross margin. Our fixed costs today are running in the sort of low 30% range. So you create profit when your gross margin is obviously above your fixed cost. We have a cyclical business, though. 50% to 60% of our commissions in Medicare are booked in the fourth quarter. The next biggest quarter is Q1 and then Q2 and Q3 are the smallest. What's important there is we need to drive the LTV to CAC into the high 1s in Q4 because it's difficult to get the LTV to CAC into the high ones in quarters where you have lower revenue and especially in Q2 and Q3, where you have lower revenue and you're ramping up your telesales for AEP. So the impact of everything that happened in '22 was most visible in Q4. And so you can see that revenue dropped 20%, but earnings improved 76% and cash flow improved by $84 million. And that it's a sense of a disciplined approach. It's evidence that the fixes that were put in place are working. What does that mean for '23? I mean you've seen our guidance, but at the midpoint, it's 6% growth. The midpoint of guidance we're getting near breakeven on EBITDA. And certainly, as I indicated earlier, breakeven operating cash flow at March of '24. It's a clear trend of improvement. So the vision we want to share with you today, where are we going over the next few years. Revenue growth, we believe we can grow 8% to 10% annually. We believe we can get EBITDA margins in the 8% to 10% range by 2025. We believe we will be positive cash flow by March of '25. And how are we doing that? Well, you've heard it all day, it's revenue diversification. It's expense management. It's improving the LTV to CAC ratio. It's really watching the pennies every day and making sure we're doing what's smart. But it's also making sure we're taking care of our carrier partners and taking care of the beneficiaries, who put their trust in us helping them make their decisions. A snapshot of the balance sheet, $202 million in cash, $800 million in commission receivables. We have sufficient liquidity to bridge us to positive cash flow. We will look over time to improve our cost of capital and our capital structure, but with everything we're doing to improve the company, we'll be able to approach the markets when they improve from a position strength. This is my favorite slide, $800 million of commission receivables. It's the most audited in our financial statements from the inputs to our LTV models all the way through the sales process to what we put on our balance sheet. It gets intense scrutiny internally. It's where I spend a lot of my time as well as our external auditors and their valuation specialists. It's real, it is real. Two things I'd point to, to help you get comfort around that statement. One is, since 2018, we have cumulative positive tail. That speaks to the conservatism in our models. And also you can look at our LTVs. They are relatively stable over time. You have not seen RLTV's jumping up and down as you might see elsewhere in the industry. These are great indicators of stability. So the key takeaways here, I think, you've heard all day, significant progress in 2022, getting us to 2023, improved performance and getting to the growth rates I just spoke about. We'll continue to build on the progress, and we have a plan in place to drive sustainable, profitable growth and cash flow generation. I firmly believe that because of a few things. One, the management team that you heard speak today; two, our CEO, who I've known for 25 years and has a grown profitable business wherever he's been' three, the 1,700 eHealth employees, who get up every day, who work hard to make this company better. And they do it because we have a mission. We're in the helping people business at the end of the day. We help people make one of the most critical decisions They can make about their health insurance coverage and their well-being. We take that seriously. And when we help people do that and we find the right plan for them, that's rewarding. It's very rewarding for benefit advisers on the phone. It's rewarding for all of us who are maybe in the back office, who know that we're all doing our part to make this right for people. So being in the people business is a good business for us. And to bring this all around, I started this out with what I was sort of building and how I got out here. And when you think about it, businesses -- a collection of businesses to make up an industry and a collection of home make up a neighborhood. And eHealth is going to build the best home in the neighborhood. Thank you.

Thank you, John. Now everybody's favorite part, the Q&A session. [Operator Instructions].

Jonathan Yong from Credit Suisse. Appreciate all the color today. It was really helpful to -- it was really helpful to get all this color on the business and all the updates that you've done. I guess first on the 8% to 10% revenue growth. I guess what are you assuming in terms of, say, adding your more members coming online that are yours versus the LTV growth? And then how much is coming from the other business lines that you're going to stand up? Because when I think about MA, I usually think mid- to high single-digit growth, and you talked about a 1% improvement in retention leads to 4% LTV bump. I'm just trying to marry all those components when I think about that 8% to 10%.

Thanks for the question. I'm going to have John to start it out, and I'll supplement.

I'll take that pieces. So when we go through our LTV models, we can model out that the 1% improvement in retention will increase LTV values by 4%. That's something that will happen over time. We would observe that, meaning as we look at our renewals each year, as we look at the cash coming in, we can see that retention improved. It's not something that just happens. We see retention this month and LTVs go up. It happens over time. So we think about this revenue growth in several pieces. One, just if you just look at the secular growth rates in MA, we think we can be right in line with that. This year especially, there could be additional shopping given the rate increase from CMS, given the RADV given other things. The LTVs, we think, can improve over time, not just from retention, just but the annual commission rate increase, which I think since 2015 or '16, I think the CAGR on that is in the 4-point range. So you get a natural increase there. But it's also growing the other businesses to the commercial businesses we talked about, our ancillary business. If you think about the BPO business we discussed, I'm certainly that the BPO business alone can be a couple of points of growth. So it's a mixture of many things. And that's the beauty of diversifying the revenue streams in the business. We can grow in multiple ways.

I'd add one more thing. I think John's answer is spot on. There will be mix changes, right? There'll be a share change as going back to my comments about the inflection point. I think those organizations that perform at the best of the game, the top of their game, they're going to capture more share. So while I understand where you're coming from in terms of the mid-single digits, I think that sort of assumes things remain the same, and I think we're going to see opportunities for us to capture more share in the next couple of years -- during the next couple of years.

All right. Great. And then just turning to the other businesses that you plan on developing a little bit more. I guess how much more incremental investment do you think that you need to apply to those businesses? I know that they're currently stood up to some extent right now, but there obviously, I assume, we'll need more resources to really grow them. So how much more do you think you need to plow into those businesses versus MA?

It's really minimal investment. It's what we do as of the infrastructure, the operating model, the platform. It's all in place. It's a matter of leveraging some of this, number one. As we ramp up and we're in a BPO type arrangement. We're -- that's built into the economics in terms of how we enter a contract. So there may be a modest difference in timing, but it's not comparable to what happens in the Broker record business where you're waiting a quarter for the cash to come in. So it's really a minimal investment.

Ben Hendrix from RBC Capital Markets. I wanted to get your idea of where you believe the optimal business mix is or if you have a target right now in terms of BPO carrier dedicated type businesses. Is it just kind of what's coming in and level of interest among carriers? Or is there kind of a defined target right now out there that you're working towards?

Thanks for the question, Ben. I think it's -- since it's so early, right, we have to demonstrate consistently that we are well equipped to manage this business effectively and meet expectations, exceeded expectations. So we're going to have to earn it, and that's what we're all about. So I think that over maybe the 2-, 3-year period, I'd like to see us get somewhere in that 15%, 20% range. But again, we have to earn it. The Board is getting out that we do it. And once we have another year under our belt, we'll intensify our outreach so that we have proof of concept. We're really good at this, and it works. I mean it works with the carriers, right, in terms of meeting their growth objectives perhaps a more focused manner. And they really get 2 bites of the apple, right? Because we continue to work with them as eHealth and an impartial and biased manner, but then become an extension of their organization with a firewall, of course, to help drive even further growth. John?

I was just going to say, for in to, it's good business because it's good margins. The cash flow dynamics are great. And we win this business not because of -- not because we're the cheapest but because we're the best. We're the best at converting the calls and putting membership into the carrier. And so that's important. That's why we win the business.

Yes, in a compliant way. Gregg, is there anything you want to add to that?

No. I think John really hit it well. I mean it's -- everything that we've done from having this choice agency model, all the way through to managing the quality of the business I spoke about earlier, to now manifest ourselves in more of a specific way for the carrier to see different opportunities in a BPO model. And then to what Michelle is talking about in the brand, we can then drive more of that funnel into a carrier that may be gain a volume, but all tools that we've talked about with Ketan, those tools become specific to that carrier. And we have a relationship in 3 different ways, but we have to earn it. We have to build it and we have to extend it. And that's, I think, what's really critical here.

Daniel Grosslight with Citi. Thanks for all the great detail here. The question similar to Ben's on incremental investment, but really focused on the incremental investment needed for some of these marketing initiatives and agent initiatives. What kind of investment do you need to make there? And maybe you need it on the technology side, too. I don't want to leave you out. But, yes, what do you need to do in terms of spend to really bring these new initiatives to the market?

I'm going to -- we'll tackle this one Daniel. Let's start with John with the numbers and then ask Michelle and Roman to supplement.

Okay. Certainly. If you look at sort of our CapEx a year. The biggest piece of it is the internally developed software. And so the numbers fluctuate a little bit, but between the internally developed software and other CapEx, it's in the range of [ $15 million to $20 million ] a year. And I think that as we think about these investments, we go through a process to understand what these are, what we think the impact of the business will be, and we prioritize them. And some of them we don't do because if they don't -- the ROIs are not there, we're not going to do it. It's -- we want to be careful with our cash, but we want to be smart about the future.

I'll speak a bit to the marketing piece of it specifically. In the model, there is some level of growth for marketing investment, but what I would say is very similar to what I said as we talked about expanding our channel mix is that we need to do that in a methodical, test-driven way. So this isn't like an all-in, go crazy and spend, right? You really need to sort of test the market. We need to learn and find our way there. And then as you see those pockets of success, then you can continue to be able to lean in, right? And it's really clear that path to ROI. So I wouldn't say that there's some sort of set specific investment from a marketing standpoint, we really need to do that over time.

I will echo that on the sales side. really the incremental investment you can think of when it comes to initiatives that we talked about earlier today would be development of specific training programs because agents have been trained as a baseline. So we're talking about the development of the specific programs and then implementing them, but that would be not -- because agents are being trained, which is going to train them in different things, let's say, local markets. We're going to be training them on the specifics of the local markets as opposed to national. So the only small incremental investment is the development of the program itself. So I would say that almost negligible.

Finally, on the technology Ketan?

Yes. On the technology point of view, our mantra is doing more with less, it is one; and two, bringing in discipline to overall software development process so that we are not wasting resources. And third is focus and making sure that we are not running in 100 different directions. Making sure we are delivering and building things that matter to business and get it out as quickly as possible.

So I would sum it up this way, Daniel. We think about it as an opportunity to sort of self-fund, the incremental investment by improving our LTV to CAC performance continuing to drive improvement with conversion, right? So it's basically freeing up capital that would otherwise in an inefficient model, have to work harder to generate top and bottom line results. So that's really how we're approaching it, let's go about this. We know we're going to get continued improved improvements, let's repurpose those savings into additional investments.

Yes, that makes sense. If I just look at what happened last AP in 2022, on an MA equivalent basis, CC&E was down around 6% year-over-year. Marketing was down around 28% year-over-year. So I'm wondering as we think about your margin improvement for the next few years, how much juice is left to squeeze over out of that efficiency on a per MA basis? Is everything in kind of mid-single-digit declines. How should we think about that in our models?

Do you want to take it?

Sure. I would say 2 things. I think when it comes to Medicare, I think about -- you've got to think about it in 2 different ways. One is there is room to improve in the LTV to CAC on the telesales. You can see our numbers there. I mean Q4 of '22 was [ 1.4 ]. We can draw a bit higher. But it's not just the marketing spend, it's also the sales mastering and the execution and making sure we're driving better leads to and continually train our agents to convert them. The other piece then, too, is our online unassisted because, as Ketan pointed out, we continue to try to improve that experience, but if we can just improve that conversion rate a little bit, it has a pretty big payoff.

Fran and the team, I think, you did an amazing job today. Let me give you guys a lot of credit. I think that the fact that after the last 6 or 7 weeks and these concerns of a [ death mill ] of an industry, that you would come out and guide ahead of street expectations today for your revenue growth in the next 2 years speaks a lot about your confidence in the business. I have 2 questions, one for Fran and one for John. Fran, obviously, you've been in discussions with your carrier customers in the last few weeks, 6 weeks, 8 weeks about what's been going on post the CMS ruling. What gives you the confidence and, therefore, shareholders the confidence that you think you're going to be a share gainer that your business has improved and will get even better with your relationships with the carriers based on some of these changes, which seems like will go the way where the winners will take a larger percentage of the business. And my second question was to John. Your confidence in the business, I think, was really powered by the comment that your cash will be at least breakeven for the trailing 12 months of '24, which is basically the next 12 months from March of '23 to March '24, you're out there saying you will be cash breakeven and the cash flow positive. We're 3 months into that. Can you give us some color on what gives you the confidence that you're not going to lose any cash over these next 12 months and then proceed to generating positive cash in the future?

Well, let me first thank you for your very kind compliments to this team. We did this for you. We know this already, but we wanted to make sure we tell the story in a way that resonates with our investors and with the analyst community. So thank you for that feedback. My confidence is continues to get stronger and stronger, simply based on where we've been, where we are, and a very clear vision of where we need to go. And this team has demonstrated and we've only been together as a team in a very short period of time because I was adding members of this team throughout last year. And in fact, Ketan is really our newest member, having joined earlier this year. So in that time span, we demonstrated our ability to transform our sales process and generate significant improvement in conversions to improve the quality side by driving down CTMs by 50% and more. We doubled down in our interactions and communications and collaborations with our carrier partners. Perhaps if I brought anything to this organization, it's the relationships that I had when I was on the carrier side after decades of working with many of these. Some of them working in the same place at the same time. Others, you get to know people in the industry and while your competitors, you establish rapport. And just great respect for those who are leading our carrier partner organizations because I've worked with many of them for decades. So we've -- the state of the state of those relationships is very strong and very healthy. We don't take that for grant at all. We know it's all about what have you done for me lately. And that's good, right? I think that keeps us focused. It keeps us sharp, keeps us agile and appreciative because of these relationships. We continue to look for ways to demonstrate greater value beyond what they look for first, that is helping grow their business in a compliant and in a quality fashion, high customer satisfaction, high retention. But there's other things we can do that we touched on today in terms of adding value with helping with onboarding, helping their new members, our customers get their first PCP appointment, helping with the HRA process. So we continue to identify those things that are really adding to our core capabilities. I mean, we have those relationships through the sales process, how do we utilize that to endure ourselves more with our customers as well as help them with their new members. We -- taking out $110 million in cost was a big lift, and we did it. We did it incredibly effectively. We navigated through some of the organizational disruption to come with that and rebuild the confidence of our employees, one of my other key hires, who is not on the panel, but she's in the audience here is our Chief People Officer, Jana Brown. She's my partner. She's our partner in what we're doing to build this culture to success, but it's getting our employees to believe, again, in this company. We've created a brand new mission statement, a new vision. And I can't be accused of plastering on the walls because we're remote first. We just help people internalize it, to remind them why they come to work every day, what is it we're doing here? What is the -- we're always mindful of where we got to get to, how do we get there and how do we get there with the urgency. So there's always when you're in a turnaround situation, and I'd say that we're nearing the end of that turnaround because we can see when we achieve profitable performance. And we have a demonstrated track record to give me confidence and give John confidence, give this whole team confidence, we're going to get there. No one is growing in a different direction. We're all growing together. I've been doing this a long time, and this is one of the best teams I work -- and I've worked with some really great teams in my career, I've really been fortunate. So that's at a high level. John, I'll let you take the second question.

Yes, I would say it's really -- it's not a sexy answer. It's really -- I get up every day and we think about how are we going to do better today? What are we going to do to improve our cash flow, what are we going to do to ensure that we can hit our numbers. And what I'm -- where I'm looking is that in a lot of organizations, the CFO has to sometimes be the guy with the stick and people on the stuff, I don't have to do that here. Everybody is on the same page. In fact, some thoughts at table, Michelle pushes me. And so I get confidence because we had -- got some momentum going in Q1 and just working with people every day, and we're very focused on what matters. And so there's not extraneous BS around the place. It's what are we going to do today to drive forward.

I guess what I was trying to get at more was, what have you learned in the last 8 to 10 weeks that gives you the confidence after speaking to your partners and your business that the enrollment period this year and in the future will be so positive for you after so much noise about what could be in the industry.

Sure. Let me try to be a little more clear with that. I think what you're referring to is when CMS published the new rule. And that ambiguity in the rule, which is quite common, CMS rules and regulations by design oftentimes. But we're accustomed to that, and I was pretty comfortable that we're going to get to a better place, but it's on CMS' time line. They're the regulator, right? So it's very prerogative. And while there hasn't been a broad public statement, we've seen correspondents to clarify that inbound calls are not subject to the 48-hour cooling off period in the statement -- in the scope of appointment. So -- and we were talking with our carrier partners the entire time. They largely were in agreement that the world doesn't apply to end out, but until you get that absolute clarity from CMS, you just have to be very careful. When it came out in the draft 1, we saw what could happen, and we started working on solutions. What do we do well today that we could do better to address this, if indeed, this becomes the rule. We won't have a clear visibility of what carriers' plans are. And so after they've submitted their bids, that goes through a reconciliation process with CMS. Gregg and his team will start meeting with our carrier partners on what their plans are in terms of the specifics in July. And each year, we go through that same process. We were -- we have detailed information in terms of what the plan is and what markets so that we can plan accordingly. I think there's going to be some carriers that will be more mindful of protecting their books of business. And we'll try to manage the risk of volatility with plan designs and disruption to beneficiaries. I don't think everyone is going to be in that same place. I think that there'll be companies that are just -- the stakes are higher or a company that has managed its stars performance incredibly well, doesn't have that kind of disruption risk nearly as great as those who perhaps had a bigger setback with stars. We think that if there is more shopping, we'll be prepared for it. We'll anticipate we're on a market-by-market basis, carrier-by-carrier basis, where there's the greatest friction and make sure we go on offense with our customers to help them navigate. And there's sometimes a foregone conclusion that you have to switch. We don't buy that, right? Oftentimes, what you have is the best value. You just need to hear from an expert and not the pharmacist. So I hope that helps you a little bit.

Being one of the leaders in the space, it's important to hear the confidence speaking of the carriers if things are really going to be pretty as planned. This enrollment period have not really changed dramatically from what it was in previous years.

The carriers have navigated. I mean, many of us on this panel have personal experience navigating some of the challenges that they're facing right now. Carriers are very resourceful. They're very resourceful. And looking for ways to reduce either their administrative costs to improve the utilization management, to drive cost savings or medical care savings that give them a little more room to navigate and as opposed to always having to go to either decreasing benefits or introducing a premium because they know the consequences of that. They're very sophisticated. And the industry has evolved tremendously in the last decade.

I'm trying to unpack your long-term sales growth of 8% to 10%. And I'm trying to put that into context with both long-term Medicare Advantage growth that's kind of growing that 8-ish to 10-ish percent. And so what does that assume? Does that mean that eHealth is going to grow in line with the Medicare Advantage industry. But then I look at kind of the slides today, and I think, well, that would assume no increased share of e-brokers. You had that interesting slide about the younger cohorts in Medicare Advantage prefer online sales. So can you just -- I'm trying to reconcile those kind of forces with your long-term sales growth of 8% to 10%. Does that question makes sense?

Yes. Thanks for the question. I'm going to have John feel the math part of it, but from a strategic perspective, I'll just remind you that the numbers, the ranges that John went through really represent the composite of a business. So it's not indicative of exclusively Medicare. So we see opportunities with IFP with small group with MedSupp and ancillary. So it is a composite. The BPO, again, we have great aspirations in terms of what we can do over the next couple of years there. So it's an all-in range. John, do you want to...

Yes. Fran, you said it perfect actually. And the other thing the number two is, to what we're thinking about the commercial business, and so the beauty of the diversification is it's sort of any one channel, let's say, slows down, we have other channels that we can push to keep going. And I will say we do think -- I don't have a crystal ball, but we think the -- a big opportunity for the future. I think also that underneath the products and getting our LTV to CACs improved in, call it, Q2 and Q3 is our ability to sell other products like MedSupp and to get more new to Medicare sales in the business, and that's going to help push the revenue growth rates.

I have a question about the capital structure. Can you discuss your -- or describe a future capital structure from 2 perspectives. First, can eHealth self-finance growth going forward over the next 3 to 5 years? And then second, can the cash generation improve the capital structure between preferred and debt options and still allow the company to grow? And maybe within that context, can you refresh my memory? And how big the H.I.G. preferred is and when it will be put back to eHealth since it is so far out of the money?

I start with the second part. I think that today, our capital structure is expensive. I mean -- we've got 2 pieces. You've got the H.I.G. preferred we've got the Blue Torch. Our goal is to improve profitability and improve cash flow, and that will give us options. So I can't tell you exactly what we're going to do, but I know that the best way for us to have options on this capital structure is to improve profitability and generate positive cash flow.

Sandy, could you maybe repeat the first part of your question?

Can you help self-finance growth then going forward over the next 3 to 5 years?

Yes. Certainly, our goal is to do that. We do it again, to John's point, start with generating profitability and positive cash flow. But it also goes back to the efficiencies that we are executing on. We already got 1.0 done on sales, we're 2.0 now technology, driving efficiencies, eliminating some, I'll say, fixed costs that are no longer serving a purpose, right? We have the space that -- and abundance of space that we are managing away over time. So that's going to free up funds. And then the marketing, we think that there is pretty significant upside opportunities, as we launch our new marketing strategy with audience segmentation, having strict discipline with our LTV to CAC expectations, how we manage that and initiating new channels that we believe are less crowded that could yield better results. And then the branding, I want to be very clear about this because I've gotten a couple of questions at the break. The branding and the marketing go hand to glove. They're not mutually exclusive. We're approaching this very differently. So Michelle, stated that in her presentation, but I want to reinforce that. It's the branding and the marketing are intertwined. That's a very efficient way to approach it. And then it applies across everything. Everything we're doing in this company will feature the eHealth brand.

On the BPO business, can you explain how the lead flow work? Are those -- is the outsourced for the business that you're doing with the carriers as their in-house, will that -- will you be driving leads to that business as well? Or is it totally -- the lead flow is from the carriers themselves? And then also just in terms of the rev rec, can you just walk through the rev rec and the cash collection in that business. Just to refresh me on that.

So I'll answer the first and going to hand over to John here. So 2 separate parts of the business with our platform. One is, obviously, that choice agency platform where we represent that carrier, driving our leads, using our sales agents to convert and employing or deploying our technology. The dedicated carrier side is the carrier driving the lead through their platform and their cost while we're deploying our agents to drive that higher experience -- that conversion, obviously, a better quality experience. So we do have a path in both areas, but they are separate to just make sure that we keep our choice platform pure compared to the dedicated.

I think how these arrangements work is that there's a fee you're paid for your actual work getting done for your teleforce. And then there's a success fee based on actually converting the leads that you're being sent into sales. And so we'll recognize revenue as on the success fee as we get approvals, and we'll recognize revenue, I believe, on the cost reimbursement as we incur. And so what's nice about these arrangements? Are there good margin arrangements? And if you remember the slide where I showed under the LTV, I get 40% in the first year and then renewals, I'm getting 100% in essence upfront. So the cash flow dynamic is great for us.

It looks like there's no more questions. So we'll pass the floor back to Fran for closing.

Great. Well, I want to first start with thank you for being here today. I thank our investors, thank the analysts who cover eHealth. We appreciate your participation. I started the day sharing my passion for teams and my experience and passion for growing championship teams. So I hope the time we've spent together today. You've seen we have a champion -- championship grade team before you. And in the interest of time, you only saw about half of the leadership team. The other half are sitting over there, and they are critical contributors to the company's success. So we took today to paint a picture of where this team can take eHealth, why we were each here. We all had choices as to what we could do in our careers, but we're here because we believe the common vision. We believe in the investment thesis. We believe in our business case, and we work it every day. So our job now is to earn your confidence, to maintain your confidence because you all have choices. And we want to reward you with our business performance so that you are satisfied shareholders. And those of you who cover us feel confident in what you're reporting is something that this company can deliver on. So thank you all very much.