Option Care Health, Inc. (OPCH) Earnings Call Transcript & Summary

Ladies and gentlemen, the program is about to begin. At this time, it is my pleasure to turn the program over to your host, Joanna Gajuk. Please go ahead.

Thank you, and hello, everyone. Thanks so much for joining us today for our Home Care Conference. And now it's my pleasure to host this next session with Option Care, the largest home infusion provider in the U.S. And today with us, we have John Rademacher, who's the President and CEO; and also Mike Shapiro, the CFO. [Operator Instructions] I will turn it to John and Mike first for any opening remarks before we go into Q&A.

Great. Thank you, Joanna, and thank you all for participating this morning. Before we begin, we may be making some forward-looking statements in our conversation today. I encourage you to review our safe harbor disclosures on our Investor section of our website for risks and uncertainties that we outlined there. Q4 has been a very busy time. I think coming out of what we reported in the third quarter. We continue to make really strong progress as an organization. Although we're not in a position to provide details on the impact of the Stelara headwinds at this point. I will tell you that we continue to be in very constructive conversations with the team at Janssen. We continue to work with them around how to leverage our platform and our capabilities and the unique position that we hold to serve not only their patients that they have today or that require their therapies, but thinking about additional ways that we can work together and provide broad access to patients that require their medicines. And so it's been a very strong partnership. We expect that to continue to move forward. we will disclose when we can, the outcomes of those negotiations. We expect that, that will be finished by the end of the year as we head into 2025. But I really want to characterize the strength of the relationship that we have there and the partnership that we have enjoyed as both parties continue to work -- think of ways to work together. The team has also been working tirelessly to recover from the successive hurricanes that we had in Hurricane Helene as well as Hurricane Milton that were at the end of the third quarter and into the fourth quarter. I'm pleased to report that the team is -- has really recovered internally around some of the impacts that we felt in the dislocation of our patients and really to be able to support our patient cohorts and our referral sources. There continues to be constrain in supply of IV bags, but I'm pleased to report that the situation continues to improve on a week-over-week basis. We continue to work closely with the supply teams and alternate as well as Baxter manufacturers around obtaining supply. We think that there is a significant opportunity for us as we move forward, being able to be a partner of choice for hospital systems that are looking for support of the discharge of their patients, especially given some of the market dynamics in the shifts that have happened in some of the competitive dynamics. So the team continues to increase its level of confidence in being able to take on more patients we're cautious to make certain that we have a clear line of sight of that supply line and the access to the IV bags that are required for many of those therapies but that situation continues to improve, and we expect that to continue to see that improvement into the first quarter of 2025 as we move ahead. The last thing I'll call out is just that we continue to make really great progress in expanding our suite of infusion suites. That network continues to grow. We have over 600 shares that we've talked about. And we also have a really dynamic model in which we utilize it for not only expanding access for our patients in the traditional sense of utilizing those infusion suites as part of the pharmacy delivery mechanism but also our expanding use of the advanced practitioner model or nurse practitioners to provide additional care that wraps around those patients and the ability to expand the portfolio of products that we can provide through that solution. And with that, we continue to utilize that platform to develop unique and -- programs that support the Alzheimer's therapies. Early stages is encouraging. There's still a lot more work to do there. But having this ability to utilize the advanced practitioner model and think differently around how we will approach and be able to be a partner in the market for some of these unique products. We are encouraged by the early signs that we're seeing there. We're continuing to invest in the development of that. The last thing is, as we reported in the third quarter, the balance sheet has never been stronger. We continue to make really great progress in the strengthening of that, of the investments that we've made into our people, our process and technology, our facilities continues to have a very stable foundation in which we're building from. And we believe that the position that we hold in the marketplace allows us to partner deeply with those key stakeholders, whether it's the payers that are looking for a site of care initiatives those prescribers and those hospitals, health systems and physicians that are looking for a partner to support their patients and that ability for us to continue to maximize our local presence with a national reach, we think positions us well to continue to support additional patients as we move forward. So with that, Joanna, I'll turn it back to you for questions.

Yes, you covered a lot of ground, But I guess like you mentioned, the first topic really is the Stelara. So too bad, you don't have any update for a prior conference, but it sounds like maybe in short order, there's going to be something more to talk about there. But it was interesting because you said you are looking for additional ways you kind of work with Janssen. So maybe you can maybe expand on that part a little bit more. Is there -- are there some other products you're referring to kind of just Stelara specifically?

Yes. So our relationship with Janssen is multidimensional, as you would expect. They have a broad portfolio of products, everything from REMICADE through Stelara. You see a lot of advertisements for products like TREMFYA that are being introduced in the marketplace as well as a pipeline of additional products that are in development and seeking FDA approval. Across that entire spectrum, our relationship exists and the ability for us to utilize the clinical platform that we have, the national reach of our capability set and continue to build on what was and continues to be a great partnership and being able to support unique patient cohorts, we think we'll continue to provide opportunities as we move ahead. So the conversations are across all of those dimensions. Certainly, we're dealing with some of the uniqueness and the specific aspects of the Stelara product and some of the information that they provided to us, which caused us to disclose things in our earnings call in October of kind of a shift in a reset in some of the product profit profile moving forward. But they're working through kind of the implications of the IRA on Stelara, but they also are continuing to invest in other areas of therapeutic advancements and other products. It really would fit well within our capability set and our ability to support the patients that are seeking those medicines. So we'll continue to work with them around all of those dimensions and expect that we're going to continue to have a very productive relationship as we move forward.

So how do you plan to communicate. So it sounds like you might have, I guess, something to say maybe after December. So should we expect to hear from you in between now and your earnings? Or we have to wait for your earnings release to kind of hear what's the status on that?

Yes. I mean what we said, Joanna, is that our ordinary course schedule would be to provide guidance on our February call, at which time we'll be reporting our final Q4 numbers. I think one thing that you know is John and I and the leadership team strive to be as transparent as possible and as responsive as possible. Obviously, as John said, the top priority is getting to a resolution with Janssen. So we have better clarity around Stelara. Obviously, on the third quarter call when, we announced it, we introduced a level of obscurity around '25. But given the magnitude of what the potential impact was, we wanted to be as responsive and transparent. So assuming that by the end of the year, we get some clarity with Janssen around the economic outlook going forward, to the extent we're in a position to update you all in the investor community ahead of the February call, we'll absolutely take advantage of that. No promises, but obviously, we're will be as responsive as possible. I think the broader way we think about it is, look, once we have more certainty and clarity around the Janssen impact for Stelara, if we just communicate that the obvious next question is, so how do I think about '25 in the context of the Stelara impact, so I think the way we're thinking about it is how quickly can we be in a position to provide at least preliminary thoughts on '25 and reckon in providing additional insight for folks on how to think about the impact of Stelara and other levers in the business.

Okay. Got that. So I guess we just have to wait and see how it's going to be done. But I guess, to that end, when it comes to what this particular manufacturer is trying to do, the actions by them, does this change your view in general when you're thinking about maybe some additional changes in the future when it comes to biosimilars, would that kind of impact how are you thinking about the business going forward based on the experience you're having now with Janssen.

Yes. I really want to characterize the relationship that we have with Janssen and the situation with Stelara as being unique within our overall portfolio. Normally the normal course that you see in these types of events when there is a biosimilar is, the brand innovator normally has the advantage in the sense of they don't give up much in a discount out of that block because they have an innovative product that's being introduced into the marketplace. And normally, the normal course is that as the biosimilars enter into the marketplace, it allows providers such as ourselves to start to negotiate better economics because they are competing products. That is the normal course. That is what you normally see. The uniqueness with Stelara was because of the patient cohort that we were serving. Janssen allowed some additional support into the channel to allow us to build programs that really wrapped around those patients that required health care professional oversight that weren't able to do self administration of the drug. And so that is what's kind of created that unique situation. And then on top of that, the backdrop of the Inflation Reduction Act and the negotiated pricing of a 66% reduction, which was announced in August. So as an organization, as we look at the rest of the portfolio, we fully expect that we're going to see biosimilars be introduced for some of the branded products. We expect that they're going to move down those additional paths of administration, whether it's subcutaneous or other forms as just part of the evolution of the way the products move. But I think it's going to be more in alignment with what we've seen historically than what we have seen with the Stelara situation. Given that, that was so unique in the way that we developed it, and it was so unique in the amount of having a branded manufacturer provide the level of support. It just created a little bit of a unique situation that we are working through with them at this point in time. As we move forward, the foundation of the business remains. We offer high-quality care at an appropriate cost in a setting in which patients want to receive that care. We have a clinical competencies. When you look at the organization and how we can work with complex patients and with manufacturers and payers in order to support them through that process. We think the platform has never been stronger in order to support those therapies in those patients. And also when you look at the total addressable market and all of the products that we have as well as how the market is formed around it, there's opportunities for us not only to take share in our ability to drive reach and frequency across the therapeutic categories that we're already serving today, but also to think about that make share of being that partner for new products that are being introduced that have the characteristics and that have the requirement of this higher touch health care professional oversight and the capabilities that we have all the way from what we can do with market access and the breadth of our payer relationships, although, way through the practice of pharmacy, nursing, our nutrition support and our physician insights.

And I guess, since you mentioned it, because this was one of the, I guess, offsets that you had outlined on the third quarter call in terms of just the new products coming to the market. So can you expand a little bit more in terms of the pipeline that you see there and kind of the time line and things that we should be paying attention when it comes to trying to see what's the next, I guess, potential drug out there that could be beneficial here.

Yes. I would start again with the existing portfolio that we have still has runway of growth as we look at it from that perspective. And the investments that we've made in being very local where it makes sense, but using scale as a competitive advantage remains intact, and we'll continue to look for ways to operate and execute around that. And when you look at the therapeutic categories that we serve and the product portfolio even that we have today, there's still a substantial opportunity for growth there. We continue to be thoughtful around our approach to products in the neurology space. Certainly, Alzheimer's, Leqembi and Kisunla are 2 innovative products that are entering the marketplace. We believe that over time, it will transition away from academic medical centers more towards the community settings through that process. We -- the investments that we've made into our infusion suite capability, we think helps position us well in order to do that. And as I said in some of my opening remarks, the addition of the nurse practitioner model allows an expanded clinical capabilities that we can wrap around those patients that have a specific unique need. We also believe that there's opportunities as the marketplace continues to evolve in areas like oncology to capitalize and leverage the infrastructure that we have, both from the practice of pharmacy but also the infusion suite capabilities that we're building out. And then there are significant number of rare and orphan and smaller patient cohort products that we're in dialogue with manufacturers today. Again, much as we saw with the relationship that we have developed with Krystal and their product by VYJUVEK. These are smaller patient cohorts that have unique needs that require a platform like Option Care Health in order to provide channel access and market access to their patients and to provide the product into that patient population. We're looking for every opportunity to leverage that uniqueness of our platform, both in the clinical capabilities that we possess, the ability for us to utilize the technology that we've invested in to drive consistent, high-quality care as well as the platform of our over 90 pharmacies that allows us to not only use scale at centers of excellence but also the local dispensing where necessary and being very responsive to the local market. We think it positions us well to be that partner of choice for pharma manufacturers as they're thinking about how are they going to bring products into the marketplace and who are their partners that can allow that high-quality, consistent tariff.

And you mentioned oncology, right, today and on the third quarter call, so you said you can utilize the existing infrastructure. So can you talk a little bit about the potential size of that? Because we just heard from someone else talking about that they think it's a very limited number of patients. But I guess any other obstacles growing into oncology in more meaningful way? Because obviously, this is a fastest -- the fastest I think, pharmacy, I guess, subsegment when it comes to growth. So just very curious what needs to be done in order for you participate in big way in this.

Yes, Joanna, it is a competitive space today, and many of those patients are being served within the oncology clinics or hospital outpatient departments, et cetera. But we also saw some characteristics in the neurology space and the gastro space for some of the different products as they move through their life cycle, starting to move to these alternate sites, and we are well positioned to make certain that we're able to capture that. When you look at products that really are in the PD-1 type of categories, the KEYTRUDAs, Opdivos, Yervoy, they have a lot of the same characteristics of our chronic inflammatory disease products, right? These patients -- many of them are out doing activities of daily living. They're ambulatory on that aspect, that ability to swing by and utilize one of our infusion suites and where they're conveniently located and easily scheduled is something that makes sense. When you have patients that are immunocompromised, medically fragile, ambulatory constraint, our ability to reach into the home and to be able to provide services from that standpoint with the high clinical touch that we can through our nursing network again, we think that creates an opportunity as things move forward. We don't expect this to be uncontested. We expect that there's going to be that tension in the marketplace. But we also think when economics start to shift and the ability for -- payers can start to influence what site-of-care initiatives and other aspects around helping to help their members by high-quality care at an appropriate cost in a setting which they want to receive it. We think that we're well positioned in order to do that and in our inactive conversations with payers today who are looking at site of care initiatives to help to manage the medical loss ratio or bend the overall cost trend where they're looking at where their spends are and how they can offer an alternative to their members that kind of achieve those goals of high-quality care at an appropriate cost.

So since you mentioned that, are you seeing this already as in like with obviously, Medicare Advantage payers having a lot of pressure points around the rates, but also utilization and star ratings and a lot of different things happening there. So are you seeing kind of more interest because you mentioned these payers looking to, I guess, influence more so the side of care and kind of shifting to the lower cost setting. So are you already seeing it? Or is it sort of part of discussion, say, for like the next year or the year after?

Yes. So we have -- we are in those discussions today, Joanna. So those conversations are in process. And as we look and move forward, I think those are ones that there will continue to be a heightened level of interest, especially with medical loss ratios being under pressure as well as when you look at the star ratings and the satisfaction scores that are required for participation really in all of the health care ecosystem, not just in the Medicare Advantage. We take great pride in the patient satisfaction scores that we're able to generate. We take great pride in the Net Promoter Scores that our teams really deliver upon. And those are part of those conversations that we're having at the payer level of not only helping them with this total cost of care and thinking about what -- how to help them manage that loss ratio that they're dealing with, but also the overall member experience, and the access to high-quality care with our teams that drives that higher satisfaction and really helps to drive those better clinical outcomes.

And I guess coming back to the point about different drug categories and what's happening. So you mentioned Alzheimer's before a little bit. But I guess the other one is subcutaneous formulation. So you also kind of alluded to this idea of you can utilize your suites or your advance practitioner model. So is that also one of the, I guess, categories in terms of how you can respond to the market dynamics where you have more of the subcutaneous formulations entering the market? And so how will you envision that trend impact your business?

Yes. So there's a couple of different dimensions that happened with that. One is, today, we can dispense through the practice of pharmacy, and we do dispense today subcutaneous formulations. Many of those, though, they are self-administered. Again, the focus of our organization is where there's a health care professional that is required for oversight. So some of the subcutaneous formulations are going to continue to require a health care professional to provide the oversight to do that in that injection to make certain that the response of the patient is safe and effective through that standpoint. And so we'll continue to capitalize on the infrastructure that we have, not only in the traditional home infusion space, but also in the infusion suite. We've called out before that with that broadening infusion suite capability, we have the opportunity to expand the portfolio of products that we can provide because of the efficiency that the infusion suite provides and the opportunities that we can to either use both a traditional pharmacy model or that advanced practitioner model in order to support patients from that standpoint. So we think there are ways for us to participate in that. And we also realize that if you're a manufacturer of a product, the easiest thing is to create a little white pill that you take with water. And ultimately, that is where the advancements we expect things to move forward. There are molecules, as you know, that just don't fit that profile that require either an infusion or an injection in order for it to be at its best formulation and it's most effective in its process. And we think that but the robust of the pipeline that we have, the depth of the relationships that we've created, the ability for our team to be working upstream on new product innovation that's coming down the pipeline that requires a platform like Option Care Health. We think that, that's part of the overall process that exists as products kind of move through their different levels of their life cycle. But also there are these alternate forms of administration that happened. We expect that we'll utilize capacity and continue to look for opportunities for growth based on the additional products that are coming in or our ability to take broader share of the existing marketplace.

And I guess, just to close the loop on these sub -- subcutaneous formulations and such, is there a way to think about the margin differential because obviously, there's been a lot of focus on gross margins for the company, so just to frame it, infusion -- traditional infusion versus subcutaneous is how to think about gross margins for these 2 different, I guess, service lines.

Yes. And we don't disclose kind of the margin at a product level or even at an administration level. As you would expect, when there isn't nursing involved or when there is a more simplified administration for things like nursing as well as the clinical per diems look different within that perspective. So -- but the cost of serving those patients is lower, as you would expect as well through that process. So we don't really break that out for obvious competitive reasons around how that works. But as we're looking at the breadth of the broader portfolio and we look at the way that we're spreading the assets of the pharmacy infrastructure, we capitalize on every opportunity that we have to deliver value to not only the referral sources and the patient, but also to make certain that we're extracting fair value for our shareholders.

And another dynamic in the industry has been the -- some of the large players exiting some of the acute therapies, right? So current but also United in the past exited some of the acute therapies. So what do you think are the drivers for these organizations, if you are willing to comment on that? And also, I guess, in the context, why are you willing to still do acute therapies? And I guess you alluded to this, that this could be a market share opportunity for you to gain some more market share. So essentially, how much there is up for grabs from these exits?

Yes. I can't necessarily speak to other's strategic imperatives and why they do what they do. I can't speak from Option Care Health standpoint. And Mike has called this all multiple times. We really like the acute therapies. They are profitable when you look at the gross profit, but then even the drop through, it is a meaningful part of our organization, and we think a meaningful part of the value proposition that we're bringing into the marketplace. Our ability to invest over the years into our pharmacy infrastructure, our technology stack, our clinical capabilities and being very local where that is necessary is one in which we believe we are well positioned to capitalize on these shifts in the marketplace. There is nothing more important than the help to safely transition a patient out of the hospital into their home and to continue with recuperating from an acute event in which they're operating. The value that we bring not only through a hospital and health system that maybe having patients that are under DRG and that they've got to manage that patient in a very efficient and effective way in that bundled payment environment or we were in conversations with payers who are trying to manage bed days because of the cost in the hospital day versus what that cost is in the home, there are real savings that are generated and there's really value -- a significant amount of value that's released in that. So our belief is that -- and we've talked a lot about the breadth of our portfolio and having both acute and chronic therapies, we think creates a competitive advantage for us as we move forward. I think it does at the referral source level of being that consistent, reliable, high-quality partner to help with that transition of care. But I also think that it helps us in the way that we have conversations with the payers around being in network and as well as the reimbursement that we're able to receive for that given the value that we're bringing across the breadth of the product portfolio and that ability to use both the acute and chronic capabilities that we have to serve more of their members and help them reduce the total cost of care. So look, if you kind of take the constraints of the IV bags and put that aside, as I said in kind of my opening comments, we're seeing improvement there, and it's getting better week over week as more capacity comes online as importation has some positive impact as plants that were impacted begin to recover. But there is still some constraint that we're feeling there but we think that this creates a real opportunity for us to leverage the investments that we've made into our people, our process, our technology, our facilities. We think we are well positioned. It's a competitive marketplace but we know that with the investments that we've made as well as with the reach and frequency that our team possesses, we should be well positioned to be that partner of choice for those referral sources as they're seeking quality partners to be able to transition their patients on to service with.

So maybe just to wrap up the -- all these different topics we just touched on, right. There's a lot of new products, right, there's the acute therapy market opportunity, but then there's on the flip side the uncertainty around Stelara. So kind of just to summarize the discussions around the different fundamental trends, does -- do those things change your view in terms of how this organization should be growing longer term?

Yes. I don't think it does, Joanna I think the interesting thing, as you look back in the 5 years since we merged into BioScrip, it -- these are not new trends. Throughout that period, again, we delivered more than 12% annual top line growth. That's in a period where we exited a number of therapies like Radicava and Makena. We saw REMICADE migrate to a biosimilar competitive environment in which -- over which a couple of years, REMICADE lost more than 80% of its reference place. And Cubicin the last branded major intravenous antibiotic went generic and lost more than 90%. And so the dynamics of the portfolio of therapies that we oversee is constantly shifting. And it's something that our team is very well positioned to continue to execute around. And as we said on our Q3 call, look, we're going to have to quantify and articulate the impact from the Stelara margin reset. But our confidence in the growth algorithm of this enterprise remains firmly intact and that over the medium term, we see this as a high single-digit top line enterprise, incorporating all of the dynamics that we touched upon, including biosimilar or subcutaneous entrants and other therapies being introduced. And given the investments that John alluded to, we have a high degree of confidence of our ability to leverage this unique national platform that frankly is more expansive in and capable than any other in the industry to translate that top line growth into low double-digit earnings growth. I think the other important component of this enterprise is the cash flow generation capabilities through 3 quarters we generated $287 million of cash flow from ops. That's in light of the changed health disruption from earlier this year. We're on track to exceed $300 million of cash flow from ops, that's our guidance. And through 3 quarters, we've actively deployed $160 million towards share repurchase out of that $287 million that we generated. So I think our confidence in this platform going forward remains firmly intact.

Great. And I guess on that point, on the free cash flow, obviously alluded very, very good traction there this year. So can you talk about the capital allocation strategy, right. At some point in the past, you alluded to you would be willing to lever ops to even 3, 4x sort of right asset that would allow you to delever over time. So would you be interested in assets outside of home infusion, getting some questions, any updated thoughts on home health? Because obviously, there is the debate or there's the pending deal that has not yet closed. So is there something that you would consider still or when you think about the capital allocation?

Yes. Maybe I'll start with the cash and the cap structure, and I'll let John share his thoughts on kind of the scope of where we're focused. Look, first and foremost, we're really proud of the cash flow generation of this enterprise. We always preach internally revenue and EBITDA, I don't pay light bills, cash in the bank does. And so we're relentless and focused on our revenue cycle and converting profitability to cash inflow. Again, we have a very solid track record of being able to generate cash and deleverage relatively quickly. Given the strength and resilience of this capital structure, we have said in our stated capital policy is that we're very comfortable operating up to 3x net levered. We would be willing to exceed that with a very clear line of sight and commitment to deleverage below 3x. Again, when we merged into BioScrip, we started over 6x and look at the progress we've made over the last 5 years. How we deploy that capital to create value for our stakeholders is a critical priority of this leadership team, and we really see 2 facets of how to deploy capital. First and foremost, as I mentioned, we are active in repurchasing shares this year alone through 3 quarters. We have deployed $160 million and just a recent history, we only started repurchasing shares with our first authorization back in the first quarter of 2023. And since that point, we've deployed $410 million through the third quarter. We also believe that deploying capital through M&A can be highly complementary to this platform. We've deployed over $200 million over the last 5 years to admittedly smaller bolt-on and complementary assets that have increase the resilience of this platform. And we really focus on 2 questions on that front. One, what is the strategic value of the asset relative to the national platform that we've created? And then secondly and equally as important is, what are the economic cash-on-cash returns to ensure that any dollar we deploy through M&A is accretive on an adjusted EPS basis.

And as we continue to take a look at what opportunities are in the marketplace, as we've said in previous conversations, our focus is really more on the, let's call it, more traditional infusion capability set. As Mike said, we look at both strategic and economic. It has to bring value across those dimensions as we're looking at it. we believe that we're well positioned, but there are some unique situations where either at a certain geography or a certain clinical capabilities. There's opportunities for us to deploy capital to strengthen our position in those marketplaces or in those categories. So we're going to continue to be very thoughtful and very disciplined in the way that we're approaching that. To the specific question around home health and others, I don't believe that that's in the scope of things that we're going to be looking at in the near term as we're looking for opportunities. We think that there's enough within kind of a narrower aspect of where we're looking to really drive that forward. But I do want to at least have that ability to -- we expanded our nursing network through deployment of capital. I mean, when you think back on the investments that we made there, that has been a significant advantage for us in making certain that we secured nursing and what we did in the acquisitions of specialty pharmacy nursing network and infusion -- Infinity Infusion Nursing as well as Revitalize. All of these kind of created a really unique platform that allows us to continue to grow and to continue to serve more. We'll continue to look for those type of opportunities as well. So I don't want to just narrow it to only the pharmacy operation. But really, when you think around the home infusion, alternate site infusion therapy and administration and all of the capabilities set clinically that are required around that are areas that we're going to continue to look for opportunities where we can find strategic and economic value drivers in order for us to advance and to drive value for our shareholders.

All right. So I guess, should we look for tuck-ins or there's, I guess, appetite for larger assets as well?

I think you would expect that we're looking for things more of a complementary nature of things in the $5 million to $15 million of EBITDA range. I think nothing that we're actively looking at right now, really goes beyond the cash and leverage capacity. So that helps you ring-fence the size of opportunities we're actively engaged around.

And I know we're running out of time, but there's another, I guess, a bigger topic that's, I guess, impacting this industry situation, Stelara the IRA or the changes to price. But I guess there are some other changes in the -- under the IRA around the Part D benefit redesign. So kind of what are your expectations? How meaningful could this be? Because obviously, the Medicare Advantage is a big player for you. The Medicare fee-for-service is not. But I guess how do you think about those changes under IRA impacting your business?

Yes. In some ways, it's positive. When you think of things like the -- what had traditionally been the patient obligation narrowing down, as it went from kind of uncapped 3,500 to 2,000. And all of that kind of creates more stability, especially in the patient pay aspect of that as you look at how much of a deductible is kind of within the format there. I continue to look at -- we will continue to work in Washington to try to find the expansion of access for Medicare beneficiaries. We think that the work that's being done, the bipartisan support that we have in order to expand access to home infusion. We think is really important for Medicare beneficiaries on the fee-for-service side. And we think when you look at the total cost of care and anyone that is thinking about high-quality care at an appropriate cost in a setting in which patients want to receive it, we think we are well positioned in all of those conversations to bring real value to the different stakeholders that are in that space. So in the near term, Joanna, we think that, again, some positive aspects in some of the narrowing of the patient obligation in some of the format changes there. We will continue to work closely with the MA plans as they're looking at medical loss ratio and how to manage that effectively. And we're going to continue to be working in Washington to try to find a way to expand coverage for Medicare fee-for-service beneficiaries who today lack that access and in many instances, are participating in much higher cost environment, which is really costing the U.S. taxpayers money.

And I guess the very last question I ask every presenter doing our conference is, in one word, how would you describe the outlook for your industry?

I would say attractive. I really -- hopefully, you hear from Mike and I, the foundation of this business remains really strong. The investments that we have made into our people, our process, our technology, our facilities continues to pay dividends on that in that ability to be local, but use national scale as a competitive advantage. And we really think that as the marketplace continues to evolve and as innovative products continue to receive approval and access is required for organizations that offer high-quality care at an appropriate cost. We think we are extremely well positioned to capitalize on the opportunities that exist in the marketplace.

And this is the end of the time we have for the session. So Mike, John, thank you so much. And the audience, thank you so much for participating. But please don't go too far because the next session, actually, Allen Lutz will be hosting with Owens & Minor. And then we have a couple more today and then more tomorrow. So hopefully, you guys stick around, and thanks so much for joining.

Yes. Thanks, Joanna.