ModivCare Inc. (MODVQ) Earnings Call Transcript & Summary

Good afternoon, everybody. This is Miles Highsmith with Deutsche Bank. I cover high-yield health care. We're very fortunate today to have ModivCare joining us for a fireside chat. We have Heath Sampson, who is Chief Financial Officer; and Zach Miller, who heads up Corporate Development and Investor Relations. We're going to do a fireside Q&A format. But I thought I'd turn it over to Heath first for just a couple of seconds to give some broader comments. And then we'll go back to Q&A from there.

Yes. Good afternoon, everybody. Thanks for having us here. I was reflecting, I've been here now 7 months. And someone asked me when I first joined, "Why did you come here?" And I spent a lot of time deciding where my next journey in my life was going to take me. And I was looking specifically for a company like this. But even now, even after the last 7 months and specifically after the recent acquisitions we've made, there's really no better company positioned to really bring health care into the home and then also add mobility on top of that, where people need to get to and from the hospital. So I'm excited to be here and excited to share our strategy and even some more detail as the questions come in. So thanks for having us.

Great. Thanks, Heath. And again, we appreciate you taking time out of your schedule to be here and to go through some Q&A with us. So let me maybe just start with a few broader questions. As we think about sort of the puts and takes around COVID, on the personal care side, we're seeing lower utilization in terms of relative to the demand. It's hard to staff up to meet that demand given some of the labor challenges out there. And I think you've even given some numbers in the past, where you've talked about being roughly 18.7 million hours at the run rate, which may be a little bit dated versus kind of your more normalized run rate of 22 million hours. And I can kind of run some math around that to suggest, hey, if things pick back up again and you're able to staff that, maybe that's a, call it, 11 million upside. Not to bless my number, but maybe if you could just talk a little bit generally about that dynamic? And then also on the other side, with NEMT business, we've got some capitated contracts. Maybe if you can kind of talk a little bit about that in terms of the breakup of true capitation, true risk, versus kind of rebate and how those look and when we might -- not just the repayment of the rebates, but when we might expect the EBITDA to shift back to reflect -- assuming we come out of COVID, how long it would take to get back to more of that run rate. Sorry, that was a lot -- that was a mouthful. I can repeat parts of it if you need me to.

Yes. No, no. Thanks for that question. I'll start with the personal care business, which is now significantly bigger than we have CareFinders now. So you hit it. This is a unique business in that normally, you have to worry about the demand side. We have the demand. And your numbers are actually right. The guidance I gave just in general, depending on what market, were down about between 10% to 30% on demand, depending on what market is. So your numbers make sense when you try to average that out. And again, hoping as we come out of COVID, now that we have such a great footprint in the Northeast, we will be even better than that when COVID subsides and then, more importantly, when the labor market gets back in balance. So your numbers are right there. That's a staffing business for us. So labor is the #1 factor for us. And a little more on personal care specifically and why we feel good that when the labor market normalizes, that we'll be in a good spot because density matters. Our strategy is to be of size in specific markets. In the top 3 states that we're in now Pennsylvania, New Jersey and New York, we're the largest or second largest there. So -- and why that matters -- and this is related to the staffing challenge. What's important to our aides is that they have take on pay. So hourly rate is important, but more importantly is they get a full day's work. And because we have the size, scope and scale in those markets now, we feel really good about getting our aides back to work and keeping them working especially as we come out of COVID. So your numbers are very reasonable. On the NEMT side -- and just in general, as COVID subsides, we just talked about personal care will be coming up. It really acts as a natural hedge to our current business, which is NEMT. And we have been seeing the benefits of COVID in that mainly because of our full-risk contracts. And those -- and why is that the case? Because we take the risks. And having lower utilization means lower trips, therefore lower cost, therefore higher margin. We're probably about 70% back from the COVID lows. So we have about 30% to go before we get to what is kind of a normalized return to utilization. So that's why our margins will come down from where they are but a lot higher than where they have been historically. Prior to even me getting here, but I've been reaffirming this, is that we should be in the 7% to 10% EBITDA margin range post COVID. So that's the right way to think about the NEMT business. And why we're able to do that? One, we're the largest. Two, as importantly, we've executed on this technology strategy, which includes modernizing and automating our business. And then just overall good business practices that you have in a call center has allowed us to take $50 million out of the business, and we expect to get more out. And then the other important item that will give some understanding of why we feel good about our 7% to 10% margin range is we bought the National MedTrans portfolio from United, which is around $200 million of annual revenue. That comes in at a really high gross margin in that 50% range. So for all those reasons together, coming out of COVID, we feel really good about the business being in that EBITDA range. And then with that uptick on personal care, we're really looking forward to things getting back. When that is, maybe mid next year. I think all of our -- would be guessing on what's going to happen around that with the Delta and everything. But again, the business is well positioned today and be even more positioned as we come out of COVID.

Great. So you made a comment about the timing. So if COVID ended like today, is it a pretty immediate resumption in normalization? Is your comment about next year more of a comment on when COVID might subside? Or is there any kind of delay between COVID subsiding and you guys getting to a more normalized run rate?

Yes. It is a bit of a delay. I'll talk with the personal care side as well. For us, we got to get people back to the workforce. So if COVID subsides, you still need to work on all the benefits that are out there. I know a lot of those have rolled off in September. But more importantly, you need to get people trained. So it's not just, "Hey, get back to work." So you have to get people back into the training office. So call it a 60- to 90-day delay before you really see the benefit in the personal care side. And it's likely the same on the transportation side because it's providing medical offerings. There is not an immediate turnaround. But it would be pretty quick, probably quicker than that 60- to 90-day, but it will be a little bit of a delay if COVID was to end today. But again, because of where we are and because of the actions we have taken, even if it was quick and immediate, we're in a good spot on both businesses.

Got you. That's very helpful. Just going back to one point you made. You may not have talked about this publicly. So if it's not something you want to share or can't share, that's fine. But you mentioned that you're about 70% back from the COVID lows on the NEMT business. Have you shared how low that was? Like what was the kind of the trough from a volume perspective during COVID versus pre-COVID?

Yes. We haven't shared what the utilization number is ever. And really, it's -- what it was in 2018 and 2019 is very different today based on the mix of what we have as well. So it's a little bit -- it would be hard to compare, which is why I've tried to put in the 70% range, so people have some context of the low point that we were. So I normalize a little bit for our new contracts and new service level, a new mix of products that we have. Basically, we have 30% to go.

Okay. Yes, that's helpful. Maybe we can turn to food just for a minute because it's pretty exciting. And from that standpoint, I think there's still more to go in terms of what you guys need to announce. So we don't have to go into any more specifics than you want to. But maybe broadly, is this kind of a -- is this a national rollout? Does it need to go in markets where you have existing service offerings or not? How do you sort of proceed with that as a state by state if you're building this? And like would you look to all 50 states to try to do as much as you can? Or is it more nuanced than that? Maybe some states are more attractive than others?

Yes. So we don't need to be -- we don't need to launch in any of our other areas where we have transportation or personal care. There's a benefit -- a multiplier benefit that I'll touch on a little bit. But just for -- in general, for food, we're ready to go national. We have a national food partner that enables us to do that. And it is our strategy to do that. I'll start with the end game. We want to get to $500 million in revenue in the next 5 years. And that's very achievable considering the size of the market it is today. It's got $9 billion in revenue opportunity and the penetration rate in the teens. So we really look forward to that growing. We have -- we're ready to go now. A big -- we've been building this organically from the ground up for the last 8-plus months with a partner all the way from the food that we need to create to the technology that we need to implement as well. So we're ready to go. We finished our pilot with our own employees. We are launching with a very large payer in a specific state. And that's probably how we'll go about launching it. We'll pick a state. We'll go to the next state and then go to multiple states. And then we'll do -- we'll have another payer. And we'll do that same rollout. That being said, it won't be -- we won't grow really fast because just by the nature of when we get that state signed up with that specific payer, you have to sell into the facilities, the caregivers and the members. So it will be a gradual growth. The slope to get to that $500 million, the way I think about it, there won't be much in 2021. We'll have meaningful growth in 2022. And then really, that ramp to get us to $500 million for those next remaining 3, 4 years is the right way to think about it. We could go faster. Again, there could be a pull. We have the food capability. There's really no governors to how fast we go. It really is our ability to sell to those individual patients/members and caregivers. But again, our competitive advantage, we know, is strong relative to our competitors. So we look forward to it. It's going to be a great product for us.

And when you say penetrated, kind of mid-teens penetration, does that mean that do you believe there's a greater number of people who could benefit from this, that it's not part of the Medicaid in terms of the benefit package at this point? Or am I missing that?

No. That's right. It's -- more could be receiving it, but they're not yet. And it's Medicaid and Medicare Advantage is the opportunity for us in that. Yes.

And how does that work? Do you have to convince a given state to include it in their benefits package by saying, "Hey, look, here are the economics. If you provide this healthy nutrition, your patients are going to have less in the way of high blood pressure or diabetes or whatever it might be. And then your costs are going to ultimately be much lower. This is why it makes sense," and then they hopefully say yes and move forward? Or is it a different -- am I missing that piece?

No. That's exactly the way to do it. And that's why the acceleration in growth has been so much. The data is clear that providing nutrition keeps people out of the hospital and saves money. So that's why it's such an exponential growth on the food offerings, both on the Medicaid side and the Medicare Advantage side. The reimbursement is very, very reasonable, anywhere from $6.50 to $8 per meal, so very manageable.

Yes. Okay. Great. Yes. That's very helpful. And so I'm getting kind of into the nuances of this. But -- so if you roll it out, like do the states decide on the benefit package like once a year? Or is it -- can they do it like on the fly? Like can you come to them in December and say, "Hey, you guys should do this," and they can implement it as part of the benefits package in January and you can go out? Or does it need to have like another year to cycle through before they can consider something like that?

On the Medicaid side, they can. On the Medicare Advantage, it's a year, typically a year for that offering. But if you're studying the Medicare Advantage market, food is one at the top, food and transportation and personal care. A good proxy for that understanding is UnitedHealthcare a couple of months ago came out what is their Medicare Advantage focus. And they said food, personal care, transportation.

It sounds good. Okay. So -- and I might have done some poor math here. But as you were talking -- if I remember, I think the food market -- addressable market could be $15 billion maybe in 5 years. And if I assume the penetration didn't change and just remain mid-teens, I call it 15%, that would be -- and if you guys had $500 million of revenue, that would imply about a 22% share on that penetrated market. You don't have to answer that. But I guess I was just going through that. Is that direct -- can you say is that directionally kind of a reasonable way to think about what you would have attached here?

Well, your math is correct. The penetration rate is going to be a lot higher, though. So though -- that's a 20% -- we'll be at $500 million be significantly less than that because penetration is going to be higher. So a very reasonable expectation for our share.

Okay. That's great. Thanks for all that. I know people will want to talk about labor. Maybe if you can just talk to us a little bit, especially on the personal care and the NEMT side. What's the current landscape? How can we think about how you can mitigate those pressures as it relates to either fee increases from given states and maybe how different states can be different in those regards? Yes. Maybe just kind of a lay of the land on that front. We talked a little bit about it during the road show. But I think it's probably, if anything, intensified. And just appreciate any thoughts you have there.

Yes. So the personal care business is a labor business, right? We're going to have 27,000 employees. Well, now we have -- close to 27,000 employees with 20,000-plus of those being aides. So it's a staffing business. But we like that business, again, if you are in the right markets and have the right density. But the issue is exactly that, getting them back to work. So the labor market and specifically incentives have not allowed these people to get back to work. However, we're starting to see that change. The big unemployment benefits ended in mid-September. And we are seeing our training classes increase. Just an anecdotal but a specific example, in New York, our training classes 2 weeks ago are 5x larger than they were a few months ago. So we're starting to see people come back to training. Not showing up in our broader numbers yet and actually fulfilling that demand, but we expect that to happen over the next number of months and likely more into 2022. And then on the cost side, I get this question a lot. Within our large markets, if minimum wage goes up, cost goes up. Usually, a corresponding increase in the reimbursement goes up. These states that offer know how important this is to their broader Medicaid or Medicare Advantage program. It saves them money to have people get this type of care in the home. So if they can get more care, it saves more money even if they have to increase the reimbursement by $1 or $2 like they just did in New Jersey, a couple of months ago, they increased it 10% and increased it $2. We'll likely have to give back $1 of that to wages, which is great. New York, our other large market, it's built into that state program. As wages go up, reimbursement goes up. In Connecticut, that happens. In Pennsylvania, not as explicit but history would say and what we'd expect is that happens. So in general, in most states in the states that we are in, if costs go up because of minimum wage going up, we expect a corresponding increase in the reimbursement.

Okay. And you said in New York...

And then moving...

Yes. Sorry. Go ahead.

Yes. New Jersey and New York -- our 3 largest states that account for close to 70% of all of our revenue. New Jersey just went up $2. New York will go up if costs go up. And in Pennsylvania, which is our other large state, we expect that to happen, too, if minimum wage starts to go up. And then I was just giving you the...

And just on the -- yes. Sorry. Go ahead. I didn't mean to cut you off.

Yes. I was just -- I mentioned Connecticut because they also went up. Our rates did go up a few years ago as wages went up.

Okay. And you mentioned New York, kind of how it's tied. How does -- sorry, it's kind of nitpicky, but how does that technically work? Do you show the average increase in your cost and there's like a formula that's tied to how they pay you and it just runs through that way?

No. It's tied to minimum wage, if minimum wage goes up.

I got you. Okay.

Yes.

Okay. So all that -- all the minimum wage increases have flowed through and been adjusted for as it relates to the contracts. Okay.

Yes. It may be a little more complicated than that, but that's generally how it works.

Got you. All right. That's helpful. And then anything like on vaccine mandates? Maybe New York has been a little bit of a case study early on here as it relates to disruption or further disruption in your labor supply?

Yes, it has been. And vaccine mandates are a disruption or a continued delay in the eventual recovery. The extent that where we saw it even 3 weeks ago, I think, is less. For example, we thought that we're -- about 10% to 15% of our workforce, we could potentially lose. But as we're moving through -- and I think a lot of other industries are realizing this. When the rubber meets the road and people potentially won't have a job and won't be able to collect unemployment, they're actually getting it. So what's it ultimately going to be? 5%? Who knows? So though it is a headwind, we're able to manage through it right now because we are where we are right now. But it's manageable right now. We are doing a lot in all our states to -- we're doing lots of testing to ensure that people can also prove. So there's a lot of effort by us to show that we're supporting and being empathetic to these ever-changing mandates that are out there.

Got you. That's helpful. Maybe I'll turn to just M&A. You guys have done some deals that have rounded out your portfolio very well. You mentioned some of the key criteria that certain payers are looking for earlier. Can you talk about like -- I guess sort of a multipronged question. Are there other areas that you still would like to get into and M&A might be the way to do that? Can you just remind us again kind of where your target leverage is, but also where you -- how high you take it for the right opportunity, assuming you could work it back down to that whatever x, 3x or whatever x level over 1 year, 1.5 years? And we've talked a little bit about Matrix before. But any other opportunities like -- will be on the table as part of the raising of funds for something more significant?

Yes. For us, these last 2 acquisitions that we've made over the last number of days, weeks have really helped accelerate our strategy. We were opportunistic in both at the same time that we almost killed some of our people getting it done. It was so much work. But it was the right thing to do strategically for us. So we feel really good about these couple of big acquisitions that we just made. Our strategy is to have the supportive care within social determinants of health. So we really have filled out our portfolio, especially with the acquisition of VRI, which does remote monitoring medication management. We do not anticipate to get into anything clinical. That would be on the other side of the wheel. So we have most of our strategy filled out from an offering perspective. Now we just need to execute and grow that. Obviously, foods begin grow food, further grow and sell remote monitoring and medication management. So that's our strategy. We really hit it. From an M&A perspective, additional M&A would likely be on the personal care side. So we are in -- concentrated in the Northeast and a little bit in Florida. But we'd like to grow nationally where it makes sense for us to grow. So those will likely be where additional acquisitions would be. That being said, we're -- it's important for us to be in the market, aware of where the future is going. And there's potentially other acquisitions that may make sense. For example, last -- a couple of months ago, we bought a piece of technology that allowed us to round out our capability. So we would do something like that. There's nothing large out there from a personal care side really that's in our pipeline. It would be small if we were going to do that, significantly smaller. So we may do that. From a funding perspective, we'd like the leverage -- and we've said this before, we'd like our leverage to be in that 3x range versus where it is today. It is unlikely or we will not take leverage up higher to make an acquisition of -- in that space. The fortunate thing is, I think, we have the capability. If there was a large acquisition that we needed to make, I think we'd be in a position to raise equity to do that. Because of our balance sheet, because of how we are performing, because of the markets we're in, I think we'd be able to raise equity to make an acquisition of that size. And then you did mention the other benefit that we have out there is we have our ownership in Matrix. So when Matrix monetizes, assuming there's no acquisition in the wings, we will likely use that to delever. Again, it's important for us to get down to that 3x standpoint. So -- did I answer all your questions around...

And then just to follow up -- yes. That's right. Absolutely, a bunch of subparts in there. Just on Matrix, to follow up. Is that the type of thing that is more likely done like in connection, like you said, with maybe a large acquisition that can be partially funded with some of those dollars? Or is it really separate than that? It's really more about getting the right valuation, showing the right sort of trajectory on that business to capture the best -- the optimal amount of proceeds that you could for that? And it's really -- the monetization would be done irrespective of like being part of some financing? And as a follow-on to that, are we -- next couple of years maybe a reasonable time frame to think about that? Or any comments there?

Yes. So it's the latter on Matrix. We're a minority owner. Frazier is the majority owner on that. So it is 100% on selling in that -- at the right time. It would just be by luck or coincidence if it happened to correspond. So most likely, it will happen at a time that will enable us to delever. So that's the right way to think about Matrix. And the timing on monetizing that, again, gets to what you just -- what you said. When is the right time to do that? And with Matrix really the last 12 months, they've diversified the business to add really 2 different business lines that are relatively new. So we need those business to take hold. And then this is also my opinion, we need to show the rigid earnings kind of beyond COVID. So those 2 things together, then I think it would be a good time for the monetization to occur and would be in line with Frazier to do that. When it happens, our focus is to do it as fast as possible. But we hope to have it sometime in 2022. But again, no pressure on the exact timing. It's just really what's the right time to do it.

Great. That's helpful. And then just going back to personal care. I think you made the comment that you've done a couple of large ones. There may be less of that available at this point, but you still want to build out. What does it look like? I mean we see that might be even EBITDA multiples on CareFinders and Simplura and some of the stuff that you've done in recent years or recent days. How do we think about like mom-and-pop multiples? Are those -- or smaller regional-type cash? Should those be at a discount to what we saw on CareFinders and some of the more recent -- or what would be the rationale if not?

Yes. No. You're right. CareFinders, we paid for scale, right? Like you do larger, which is why we paid that 10x -- a little bit over 10x. In the smaller guys, and we've seen that in the past, it's in that 5% to 6% range. So that is -- we expect that to be the case. It looks like that's the case going forward but much less than the CareFinder's double-digit multiples.

Got it. Okay. That's helpful. I wondered if we could maybe talk a little bit about technology. Such a big part of your business, and you talked about digitizing certain parts. I think in NEMT going from 50% currently to a low of 90%. Can you maybe -- if you kind of -- I like to be talked to like I'm 6 years old sometimes because I understand what's that a little bit better. Maybe if you could just tell us a little bit, maybe a couple of examples of these types of things? Like I think there's some new driver apps, some new rider apps for NEMT. Just like -- I don't know if there's any way you can sort of just tell us the types of the things that they might do and like how that compares to how it was done before, so we can kind of understand better ahead what the real benefit is here?

Yes. Well, first, just in general, technology is important to all our businesses. So there's not really -- and anything we're going to do that technology is not going to play a big role in everything we do, from personal care to food, of course, to remote monitoring and in transportation that I'll get into a little bit. It's important because that's where you get data and then that's where the member experience increases. So every line of our business technology is of strategy now and definitely a strategy as we move into collecting more data to eventually move into broader value-based care. But specifically, your question is around NEMT. This business, we've been large and the dominant player for many, many, many years. And most of that dominant position has been because of hardworking people that have really paid attention to the member. So the model was very decentralized, very manual, very people intensive. But that's tough to scale. And especially as the Medicaid reimbursement and just overall business cycle challenges of more competitors coming in, that has really stressed this company over the last 5 years. Our Achilles heel relative to our competitors was technology. A lot of the other players that came in, especially the new ones, they led with technology. And we're able to steal share over these last number of years. However, when Dan came in, in late 2019, the decision was to invest heavily in technology to really automate and modernize this business. And that strategy has been key. One, again, we didn't have it, so we would lose some bids based on technology. Two, our manual nature, yes, it's tough to scale and tough to compete. So we've made a lot of investment and made a lot of progress to our end goal of being -- and this is this where most people on the phone would understand, so like your Uber app or your Lyft app, to have that experience. That experience is important to the member. It's also important to eliminating all the manual efforts, whether that's manually routing calls via -- routing rides via a call or manually reconciling eligibility, manually reconciling and paying claims. So digitization, modernization, automation is going to allow us to really take out a lot of our costs just from doing that. And we're -- our overall long journey, we're approaching maybe 50% of that journey. So when we say full automation, it is like your app that you'll get on your phone. So the member will be able to see the car. The driver will be able to see the member. That really helps the experience happen -- the benefit of the experience to ensure that the member gets picked up on time. So those are obvious member experience benefits. But the benefits we get from a cost structure is transformative. We have like 20-plus locations, where we have currently 400 people that route cars. We have 150 people that manually process claims. I could keep -- we have 2,000 call center people. So just by the nature of automating that, you can see how we can eliminate headcount and real estate. So that's the journey we're on. We said we have -- we're around 50% digitized. Our goal is to get to 90% digitized. That's going to enable a lot of the back office stuff. And then we even have more work after that to get to the true kind of Uber-like experience sometime in the months and years past. Yes. So it's -- that strategic decision to automate and modernize really puts us in a great position to continue to win share and, for sure, to protect share and then, as importantly, grow within Medicare Advantage.

Great. That's helpful. Let's see, we've got a few minutes here. I'll ask a couple of just kind of numbers questions. Maybe just if you could comment on -- we talked about rebate dollars that need to go back potentially in the next year or 2. What is the timing on that and the magnitude of it? And just general, assuming we get our leverage back to 3x or whatever your target is, do you then start to look at share repos or small -- more acquisitions? Or the priorities of free cash flow, I assume, could change and be more balanced at that point?

Yes. Yes. So from a capital allocation perspective, executing on our strategy is the most important thing. And a lot of that is taking advantage of where the market is going, care in the home, mobility to bring people to and from their visits. So that's top priority for capital allocation. But since we've made these acquisitions and really leapfrogged our strategy for a couple of years, a big part right now is to grow organically through cross-selling and delever. So that's going to be our top priority. After that, yes -- would there be -- if our stock price was disconnected, yes, we would do some repurchasing. But like -- but that's -- the waterfall is to invest in the business, delever. And then we'd be delevering before we would get over -- before we'd start doing stock repurchases unless the stock fell apart. So that's the strategy from a capital allocation perspective. And then I'll just repeat myself a little bit. In the event that we needed a lot of capital to make a larger acquisition, we'd likely tap the equity markets on that side. And then with your specific balance sheet question, it has to do with cash. Our contracts on our NEMT side, 85% of those are capitated; 15%, fee-for-service. But within those 85%, about half of those are these risk corridor or rebate contracts. The majority of those rebate contracts, based on utilization and cost, would have us settle up with our customers about once every 3 months. However, there's a couple of large state contracts that have much longer term on those. But that total amount that's on our balance sheet, that actually continues to grow and continues to ebb and flow as each month goes by. It's all in current right now. It's all in current liabilities right now. But the right way to think about it is that -- a good chunk of it will be paid in 2022. But some of it will also be paid in 2023 based on how the business is going. So -- and then you couple that with our strong free cash flow, very CapEx light. Even with VRI, our monitoring business that has a little more capital, we'll still be in that $8 million-ish per quarter range from a CapEx perspective. You couple that with our TTM EBITDA that we just talked about. We have a lot of free cash flow that's going to allow us to either make smaller acquisitions or delever even more. So long story short, even though that contract's payable is large right now, close to $300 million, with the timing of it being paid, coupled with everything else that we said, we feel really good about our balance sheet.

I think, Miles, I might just add on to what Heath was mentioning about the cash flow is just even in terms of the -- as we look at financing, continued growth in our business, whether it's reinvesting in the business or looking at some of these acquisition opportunities, is just the idea that when we're making some of these acquisitions, they're very accretive from a cash flow perspective to the point that even if we financed a larger acquisition with equity, it would still be very accretive from an equity standpoint. And so to that point, there is a lot of support in our -- in the equity markets to continue to fund the growth that ModivCare has ahead of it.

Great. Thanks, Zach. Let's see, I'll do one more because we're going to come up on time here. Maybe this is just kind of a bigger-picture question. But there seems to be a real value proposition here for the payer, for Medicaid and the other payers as it relates to the services that you're providing today. I wonder if that can make sense for more people than just Medicaid patients? And like could this be part of a Medicare fee-for-service-type customer? And at some point, I would think conceptually, yes would be the answer and that would be great. It might be a massive opportunity. But maybe like, I guess, a question for -- and then secondly, logistically, it would probably be more complicated. Like you would have to convince them to add that to the benefit. And that might take some time potentially. But any thoughts you have there? And then we can wrap up after that.

Yes. I tell you, to a payer, even in the Medicaid side, bringing this all together, especially with how health care is going, we have quarterly business reviews with our customers. And they are leaning in and calling us and, "When are you guys getting going?" So lots of opportunity there. And then on the Medicare Advantage side, the same. These offerings that we have, food, personal care, remote monitoring and transportation are all on the top of services that Medicare Advantage is providing. It's -- and even more so, that's what people want when they are in their home. So the next evolution beyond what we have in front of us, which is Medicaid and Medicare Advantage, would be to other private insurance. But I think we have to -- I think the right way is to show that you can do it in Medicare Advantage. And then people realize, "Well, should I want that, right?" I just -- I was just talking to a friend of mine. And unfortunately, her mother is sick and she's like, "Why can't we get that type of service that you guys do? And we would pay for it." So I think it's just as we mature and provide these services in a more bundled fashion, I think it's just -- it will be more of a natural pull as the months and years go by. Not a priority for us right now, I think -- but the market will evolve and we'll be in a great position to offer all those.

Great. So I know we're coming up here on the hour. Just want to say, Heath and Zach, to both of you, thanks again very much for taking time out of your schedules to meet with us and others this week. We really appreciate your perspectives and your time and hope you guys have a great day. We'll talk to everybody soon.

Yes. We really appreciate it, and thanks to Deutsche Bank for being great partners with us. And thanks for having us on this conference. We really appreciate it.

Thanks, Miles.