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. Thank you.

Thank you. Thanks, everyone, for joining us. Again, welcome to the -- to our Fifth Annual Home Care Conference. And now it's my pleasure to have this session with Option Care, I think, the largest -- one of the largest home infusion providers in the U.S. And today with us, we have Meenal Sethna, who's the CFO. And also in the room with her is Stephen Shulstein and also Nicole Maggio. So thanks so much for joining us. Thanks, everyone, for tuning in. So the team agreed to jump into -- right into Q&A. And I guess a note to the audience, you have an option there on your screen where you can post your questions. So I'm more than happy to also incorporate your questions into my list.

But with that, obviously, there's a lot of interest on the topic of Stelara. But before we talk about that, maybe can we start with your high-level views of the company's outlook when it comes to, say, next 2, 5, 10 years?

Sure. Thanks, Joanna. Thank you for having us at your conference today, and good morning, everyone. It's great to be here at this virtual conference. So maybe I could just do a little bit of a step back, talk a little bit briefly about the company and then what we see as our growth drivers looking forward. As Joanna mentioned, we are Option Care Health, really the largest stand-alone independent home infusion services provider, over $5.5 billion. We have a coverage map in terms of 170 sites across the United States and can cover about 96% of the United States in what we do. And really, our focus, our mission is really thinking about how we transform health care through innovation at a reasonable cost as we think about all the dynamics going on in the health care industry and most importantly, really thinking about how we can continue to support a number of patients and really their loved ones with everything we do. Really -- the road map that we have really thinks about how do we provide high-quality care at an appropriate cost in a setting in which patients want to receive it. And so we're -- when we think about our patients and our broad patient group, we continue to service patients at home as we think about home infusion care. But we also have, as I mentioned, a footprint of about 170 different sites where we're able to service many of those same patients at a setting away from their home, and we find a lot of patients that's something that they're looking for to be able to take their disease or medical state outside of their home. We have -- really, we sit in the middle of a very broad ecosystem ranging from payers providers, right, doctors and really who the patients are working with patients, of course, and pharma companies. So we really have to have relationships across the board with all of these groups, which we do, which really helps drive our success and impacts our reach. As we look ahead to the next 2, 5, 10 years, as Joanna talked about it, really, a lot of it comes down to the state of the health care industry as we -- there's been a lot of discussion across the United States where we want choice, we want availability, we want speed. We want to be able to make decisions when we need to make those decisions as patients as consumers. And so we believe that our model really works with payers and with providers to be able to provide all that to be able to provide choice and the decisions that need to be made. But again, at a more appropriate -- at an appropriate cost in a setting in which patients want to receive that. There's been a lot of discussion in the marketplace about payers, medical loss ratios, general profitability. And as payers and providers are looking for alternate ways to think about the cost structure of the industry, I think we are a big part of that solution, right? We are -- we just don't have the same overhead structure that you find in different medical settings. And so that cost structure we have, we think, is really going to help drive our growth in that we are able to support patients that have long-term chronic diseases, and we tend to talk about that as the chronic space. But even much more so, and this has been a great growth area for the past 3 or 4 years for us, patients that have more acute illnesses, more short-term illnesses, say, in the 4- to 12-week time frame where they need immediate care as they're leaving a hospital. And we're able to provide with the scale that we have, able to provide the therapies that they need in their home location, in a location where they need it when we get phone calls on our relationships, that's really going to drive above-market growth when we think about the chronic side of the house, acute side of the house as well as additional growth vectors, which I'm sure Joanna is going to ask me about, and I can talk about those more.

Is there kind of a framework in terms of the growth algorithm we should be thinking about when it comes to revenue, EBITDA, EPS?

Sure. Sure. We talked about -- as we think about the medium term and we look ahead, we've talked about our algorithm being revenue growing in the high single digits, getting leverage from our EBITDA growth in a low double-digit EBITDA growth and then earnings per share as we think about capital allocation, really earnings per share growing a bit better than EBITDA. So that's a framework that we're looking at. We've got a number of dynamics that we're working through right now that we're running a little bit lower than that framework now, and that's why we talk about in the medium term, that's really what we're looking at for our financial outlook.

And when it comes to this high single-digit revenue growth, how much of that is market share gains versus just the underlying market growth?

Yes. No, great question. So right now, the underlying market from the data that we've seen over time, when we think about the acute side of our business, the market is growing low single digits. The chronic side of the business, the market is growing in the low double digits. And so there's a market element of growth that contributes to growth that contributes to our goal of the high single-digit growth. But then on top of that, we think about how do we pick up additional share. And as an example, within the acute side of the business, we've seen a number of different competitors, big and small, that have exited the business over the past few years. I think it's definitely a more complex operation to support in that you're getting new patient groups anywhere from every 4 to 12 weeks. You need to be able to provide same-day service in terms of the therapies that the patients need, in terms of the nursing and the staffing that we need. And so with our agility and our scale, we've been able to do that. We've been able to pick up more share as an example. And that's been one of the many factors that has been continuing to drive our growth rate above market. So it's both, I guess, if I were to summarize, it's a market growth that's happening. It's share that we've gained but it's also the fact that when we think about the settings, more and more treatments are starting to occur outside of the hospital in general, and that's also where we want to make sure we're picking up more than our fair share on that as well.

And then just thinking about the end market growth and such, right, especially in the chronic. So the acute therapies right, not the market -- the end market are growing fast, but it's really chronic, right? So most of it is really the drug pipeline, right, the new infusion drugs coming. So can you talk about that in terms of kind of your expectations in terms of what you are looking out in terms of the next couple of years in terms of the big therapy categories that may be coming your way and kind of frame it in the context of, say, the next 5, 10 years versus how things have been -- what the pipeline was, say, the last 5 years?

Sure. I can take that one?

Sure.

Because I've seen the pipeline and come through our portfolio over the past 5 years or so. And we continue to be very excited about the drugs, which are in the FDA pipeline as well as new indications for therapies that are already within our portfolio. I know that there's been a lot of questions on subcutaneous administration. And just because something is subcutaneous doesn't mean it's not part of our portfolio. Again, a couple of things we need to consider as far as whether or not there's health care professional oversight required for those. And the combination of infused and injectable drugs that are coming through the pipeline, we're still very excited about. We did call out a number of LDD wins that we have for this year and continue to look at those as a complement to our existing portfolio of therapies. We continue to see, to Meenal's point, growth within our existing categories, so chronic inflammatory immunoglobulins and the other chronic disease states that we treat. And in addition to capturing that additional share, I'd say to Meenal's earlier point, we're also finding the opportunity to make share as we find ways to shift the administration outside of those hospital settings, whether it be through site of care initiatives or just through the overall market shifting towards that way. I think we're in a really good place heading into 2026 and beyond. And I would say I'm as excited about it today as I was 5 years ago.

Yes. And maybe one other thing I'll add, as I think about the past several quarters, we've announced partnerships with Gilead, with UroGen, with Quince. These are just some of them as new therapies are released. And so that's also a big part of our model is really continuing to build on the pharma partnerships we have. We of course, have a number of partnerships on many of the drugs that have been in our portfolio for a while. But then if there are new breakthrough drugs coming through, that's an element of our success as well.

And to that point, right, on your third quarter call, you said you expect to grow revenue, EBITDA and EPS next year despite Stelara, you talk about that. But when you think about the core, to say, put the Stelara dynamic outside, is there anything next year that we should consider? Or should we just think about the kind of the core business growing in that framework into next year?

Yes. So as we look ahead to 2026, one of the things -- well, one of the many things we talked about in the third quarter earnings call was we do expect to grow in 2026. We expect to grow revenue. We expect to grow our earnings and our earnings per share, our EBITDA and our earnings per share. This may not quite be a growth algorithm year in terms for 2026 but we do expect to deliver solid growth next year. I think some of the things that both Nicole and I have talked about, whether it's continuing to capture additional share in pockets, right, where I think there's still continued opportunities on the acute side of the business where while maybe there's -- we've seen big names drop out, but there are also small names that keep dropping out. And I think also with our now reputation and presence, that's also helped us. I think the relationships that we've built and the success that we've had in growing our acute side of the business is also helping us in our relationships on the chronic side. So where we're working with other payers and with hospitals around growing our business on the chronic side because of the -- again, because of the scale that we have, that's also been a big part of our help. And then we just -- we're continuing as new drugs are being launched, what can we do on some of those pharma partnerships and continuing to grow those. I think that's a third piece of growth. And then lastly, we've been talking about the past several quarters about our advanced practitioner model. And I think while that's -- while we're continuing to work through expanding that model, really, that takes our existing footprint that we have with 170 sites and thinking about how do we get additional -- additional patients really coming through our sites and what the advanced practitioner model does is by having a nurse practitioner in some of these sites, it allows a different patient group coming in more of a Medicare fee-for-service group of patients coming in as a physician office visit. And again, it allows us to leverage capacity we've already built for another group of patients.

And maybe getting closer to talking about Stelara. But in terms of just in general, right, the other dynamic that's pretty common, right, in this industry is switching to generics or biosimilars. Can you talk about just like a typical conversion, what tends to happen when it comes to revenue and EBITDA? And also to that end, how quickly you see these things play out, right, through P&L? Obviously, there's revenue piece but then the gross margin percentage, how quickly can you see improvement post like a biosimilar launch or generic launch?

Sure. I'll answer that question just more -- no pun intended generically but more generally versus -- because I think the Stelara dynamics are different than what we see in a typical model. Typically, when a branded drug is launched, as you can imagine, right, we have great pharma partnerships, and we want to be a partner with those pharma companies. Many times, we are a preferred partner there. And it's good for the pharma company. They spent a lot of time and as you can imagine a lot of money. And so the profitability tends to stay much more with the pharma company, and it's really us getting in early with that particular drug. So we've always talked about profit margins somewhere in the 5% to 30% range depending on where a drug is in the life cycle. The profit margins tend to be on the lower side when it comes to the branded drug. Over time, right, as there are maybe biosimilars that are announced or generics that are announced over the years, right, the branded drug is going to start declining in price and/or this is where we may then have discussions on discounts, maybe a more favorable discount that we get with that particular pharma company so that we'll continue to partner with pharma company on that particular drug in the patients. But at the same time, got biosimilars, generics that are introduced, while the dollars, the revenue dollars may drop off, the profitability tends to be in terms of margin percent tends to be better. So that's where you get to the higher end of that 5% to 30% range. And typically, what you find is you'll find a slope over time, over years. And so that gives us time to think about how we can continue to service the customers, how we can do that economically, how we can do it at scale, how we can do it efficiently. So that gives us the opportunity to build the profitability as we think about the tail of generics and biosimilars. Nicole, is there anything else you would add to that?

No, I think that describes how we see a typical biosimilar event, although that glide path on the revenue is different for every event because you won't necessarily see the reference price decline upon the first biosimilar entrant, but on the second or the third, you do start to see it come down a little bit. And just we'll add that typically, the biosimilars will come in at a lower price point than the branded drug from a reimbursement perspective but much closer to where they are currently being reimbursed, so as to maximize the dollar but still remain competitive from a payer perspective.

And now moving on to the Stelara situation, which, like you said, very unique, right? Because here, there's some actions being taken by this maker ahead of the biosimilar competition really coming to the market wait and it sounds like this was partially because of also the dynamics around the government reimbursement, right, for these drugs under the IRA, Inflation Reduction Act. So -- but then moving forward from earlier in the year now, Stelara biosimilars were launched, you're seeing some impact there. So kind of can you walk us through the initial kind of uptake there? Is it really the biosimilar dynamic? Is it really the new patients coming to the market? Or is it the existing Stelara patients being converted?

Sure. Maybe just a little backdrop if there are folks on this conference that maybe don't have all the story. Compared to the last question that Joanna asked us, the relationship that we have with Janssen on Stelara was a little bit different, and it was really around a unique patient cohort where normally, as we talked about Stelara, a branded drug that I'm sure everyone has seen all the right commercials on that. But -- and it's normally a self-injectable drug. What was different is this was a relationship we had with Janssen where they have a group of patients where they said really needed medical oversight either because of dexterity issues or cognitive issues. And so that there was a structure that was put in place where we could serve these patients but the economics for us were a little bit more like a generic. So even though it was a branded drug, it was profitability was better because of the service we were providing. The patient cohort group, as you would imagine, as we built up that patient cohort group and found others that needed that help that ended up being some strong economics for us. Fast forward to where we were in '24 and '25 as Stelara was one of the drugs that was put on the IRA, Janssen started coming back with us -- coming back to us in 2024 and adjusted the pricing down or basically lowered our discount, also anticipating the biosimilars would be coming into the market in '25, which is what we've seen. So that was some of the discussion that we had almost a year ago with many of you was really trying to understand what that -- what the profitability impact would be going into '25. We managed through that. Again, great relationship with Janssen, and we managed the profitability. Fast forward to where we are now in mid-'25 going into 2026. And we started to see biosimilars coming out. The biosimilar pricing is coming in really more like what we expect the Stelara market pricing to look like in 2026 because of the IRA. So really for us, what we've been doing now over the past several months is, to your question, it's -- you've got patients that are on Stelara today. They will either continue to stay on Stelara in some cases. They will move to a biosimilar, and it's not just one biosimilar, but there's 5 or 6 biosimilars out there now. They could move to the next-generation drugs, which would be Tremfya, also a Janssen product or Skyrizi. And so now it becomes a discussion with the patient, with their provider and with the payers themselves because as we start into the January, February time frame, payers are going through which drugs we're going to reimburse for and how much and we're having those discussions, which drugs are they going to cover for patients. So pharma companies are involved with that. And then also really putting the patient in the middle of this equation, if the therapy is worked well or there's a switch that makes sense for the patient, they'll look at that, and there's also that consideration. So I think the dynamics differ quite a bit this year than last year because it's not just about Stelara and the price of Stelara but now it's what therapy makes best for the patient, how are payers going to work with providers and patients when they think about coverage and then what does that mean for reimbursement. So it's a much more complex equation this year. We have great -- again, great partnerships with pharma, and we're working through all that. And so as we go into '26, we'll have more color for you as all this starts to unfold more.

So like you said, there are discussions with payers decisions in terms of formularies and such and any initial indications where this is headed and also how the new -- like you said, the next-gen therapy being placed against the Stelara and biosimilars?

Yes. I would say there are -- the short answer is it's all in progress now. I think the big date starts to be January 1, right? Because January 1 is when you'll see payers start releasing their formularies more and then doctors will start needing to have discussions with their patients based on that but also based on the treatments that they're getting today. And also Stelara is it's not a daily or weekly treatment. It happens a little less frequently. So these discussions are taking place now. I expect these discussions to take place in January. So I would expect you're going to see transition over the course of the first quarter.

Okay. So you're saying that we might not really be able -- or you might not be able to tell what's happening even January, so you need more kind of time to see how everything kind of positioned.

Yes. It's a good question. We will start to -- I mean, we're starting to get some indications. But again, it's really going to be January 1 before we see -- because there's multiple variables, right? It's the patient, it's the provider, it's the payer. So really looking to see how that transition goes. I think we'll see some direction in January but I really do think this is going to go well into February also.

And I guess to that end, right, you alluded to the idea of how you were able to manage through the headwind this year, right, with the Janssen changing the discounts and such. And the latest commentary was, right? So just to clarify the $70million headwind to EBITDA, right, for this year, and that includes actually now the biosimilar headwind, right? So when we think about that number, because it sounds like there were some launches earlier in the year, but you really started to see in Q3. So how should we think? Is it the biosimilar headwind you kind of have Q3 and then Q4 is sort of like a ramp-up from Q3 when it comes to that. So just trying to understand like what's included in your $70 million headwind now?

Yes. I would think about -- so what Joanna is referencing is we have been guiding over the course of 2025 that our gross profit headwind as it related to Stelara originally as it related to Stelara and the pricing dynamics, that headwind was about $60 million to $70 million. That's what we said at the beginning of January. And at this point, we've said, assume it's closer to $70 million, and it really covers not just the Stelara pricing dynamics, but also the impact from whether a patient is taking out Stelara or a biosimilar. So that's all wrapped up into that $70 million impact. Our guidance really didn't materially change. If anything, we raised our guidance on sales, and we raised our guidance on earnings. So we've been able to navigate through that $70 million in 2025.

And this $70 million headwind, right, like you said, it started small in Q1, right? And then it actually grew through the year because you were kind of calling out different numbers through the year. So I guess the market seems to be still a little bit confusing on what it means for next year. I know you don't have a guidance, right, yet, but should we expect year-over-year growth in first quarter of '26 to be smaller than the full year, whatever the number is, right, just because of this kind of ramp-up in that headwind.

Yes. So again, to what Joanna is talking about, in the first quarter of 2025, we were able to -- with some really good discussions with Janssen, we were able to leverage our balance sheet, right, strong balance sheet, good cash flow, and we were able to purchase some inventory in advance, which mitigated some of the discount and the pricing reductions that we saw in the rest of 2025. At this point, right, it's no longer just about Stelara and the specific price to Stelara but it's the entire basket of therapies that we could be providing, whether it's one of the many biosimilars or Tremfya or Skyrizi. So all those discussions are going on around what the economics could look like for us with them in 2026. And part of it is they all have an incentive to work with us because there's a patient cohort group that we're working with. And there's a number of different options potentially that patients could have. So we're talking to all of these -- the providers here in terms of the pharma partnerships and those who are providing the drug.

And I'll just add that at the beginning of the year, we gave a range because there are a number of variables that get into that equation. The fact that Q1 was a smaller impact to Meenal's point, wasn't necessarily that things have gotten worse beyond our expectations. That was part of our calculus when we put out that $60 million to $70 million, knowing what we had on our balance sheet and the way we're able to leverage that to minimize the impact in Q1.

And I know you're not in a position to give guidance today for next year '26, right? But like you said, a couple of things you still kind of have to see. Can you walk us through the different items and the different pieces you really need to know to have greater visibility into, I guess, revenues and profits? And I guess, talk about the Stelara and it sounds like other pieces of that maybe patient cohort, so to speak. But is there anything else, I guess, we should be thinking about when it comes to next year?

Yes. So I can try to summarize this again. As it relates specifically to Stelara and the related therapies for 2026, right? We know we're starting to see what and we're in discussions right now on the pricing with Stelara as well as biosimilar manufacturers as well as other pharma companies on some of these other therapies. So don't think of it as just one drug that we need to negotiate. Now it's probably up to 10 that we're actually in discussions on. So I'd say that's one. Secondly, because there are now -- it's not just one drug, it's now 10, you now have a number of payers that are going to be having discussions and sorting out what their formulary is in 2026 and what they're going to cover. And then third, it's also a discussion that providers or doctors are going to be having with their patients on who might have been on Stelara before, does it make sense to change? And if so, what and who's their payer and different things. So that's where the variables come in, a lot of which is really not in our control on what payers are doing in terms of their formulary and in terms of -- we can talk with a doctor perhaps, it's really the doctor and the patients that are making that decision. We don't get involved in that decision.

Right. And the other dynamic here, right, because the Stelara biosimilar dynamic is one but the IRA specifically right and the price I guess production for Medicare for that therapy. And how quickly does it flow through to other payers, right? Because the idea is like, Medicare is paying less, like why would Medicare Advantage have to pay the higher price. So is this sort of one-to-one like Gen 1, the MA plans also have a different sort of reimbursement to reflect that?

Yes. I would expect all these discussions, right, the formularies are going on now. I mean all great questions because it's more than one drug now. It's multiple options that they have. So I'm sure they're all assessing what makes sense as part of our formulary.

Okay. So that's the sort of TBD in terms of the coverage and what they're going to cover and how much it is the...

Yes. Right.

Right. And I guess switching maybe gears a little bit because I guess Nicole mentioned the subcutaneous formulations, right? A lot of discussions there. And there are 2 key therapies, right, that you guys do Entyvio and Ocrevus, right? They either already have or they will have subcutaneous formulations very soon. So kind of how we should think about those dynamics impacting the business specifically?

Yes. So maybe I'll take a step back as I talk about subcutaneous in general because we get this question often. I mean, clearly, the hope of every pharma company and even for a lot of patients is, boy, can I take my medication with a pill with a little bit of water every day, right, as opposed to the complexity that -- in terms of drugs and how they're administered. We see that in a number of cases, right, there are some subcutaneous therapies that are out there. That's always been the case. And so this is nothing new at this point. What I would say is there's probably a few dynamics to consider. One is if a patient is on a particular therapy and that therapy is working well for them, providers as well as patients are not always excited to convert off of that. So I think that's one because it's really in the end, what does that therapy do for the patient? If they do make a decision to convert, then you get to the point of not every patient can actually self-administer like we were talking about the Stelara example but we have a number of examples where there needs to be either sometimes medical oversight where we would play a role in that. In other cases where the drug needs to be compounded, and so we would play a role in something like that. So there's an opportunity for us there. And also then you have the payer aspect of things that many times some sort of subcutaneous or even an oral formulary might be more expensive. And so a payer is not necessarily always willing to reimburse for that. So I think a broader answer to say that drugs moving to a subcutaneous administration is not new for us, and that's something that we work through. And behind us, there's always a new pipeline of drugs but I would call it as just the life cycle of therapies that we continue to work through and to deal with. Anything you think I've missed?

No. Again, those are therapies that have been part of our portfolio today and will continue to be part of the dynamic nature of our portfolio but I think you covered it. Thank you.

And anything specific on Entyvio, Stelara and Ocrevus in terms of like how it's been sort of impacted by these new formulations?

Yes. I mean keep in mind, whether it's Entyvio or we were even talking about the Stelara example, most patients on Stelara are on a self-injectable pen today, right? So people might say, well, I don't really understand them why has this been such a complex equation for you. Well, it was a small patient cohort group that for various reasons, right, either dexterity issues, cognitive issues, other issues, they were unable to administer themselves. And so they needed medical oversight to do that, and that's where they came in. And so one of the questions we get is, well, if patients are converting from one therapy to another, if they weren't able to self-administer under that therapy and they go to a new therapy, they probably will still need some sort of oversight and administration for self-administration. So that -- again, that's a place where we can service patients and really work with them as well.

And nothing that we've called out on either of those 2 drugs specifically.

Yes. I don't think they're atypical or unusual from anything else in our portfolio.

And I guess Different drug category here, the IVIg. Can we talk about the competitive dynamics there? Because obviously, there's the Vyvgart, which is prefilled. This is also self-administrated drug. So do you envision this being disruptive for your business?

Yes. I would put it in the same category as just the conversation we just had where -- so first of all, we actually have a relationship with Vyvgart already. So that's one of the many relationships that we have. I think IVIg falls into a similar category where you have patients that are on these therapies for years when it comes to IVIg. And so if they have a doctor, if that therapy is working, given the longevity of the therapy, it's not so simple to say we're just going to switch because it could have different effects on the patients. So I think that's one set of dynamics going on. On top of that, the therapy to self-administration is more expensive, at least it has been running right now. And so you've got now payers once again that are entering the equation and what are they going to cover when it comes to that. So again, similar to what I was talking about before, there are a lot of dynamics before assuming just because something is released doesn't mean patients will migrate to it. And even if a patient does migrate to it, there ends up many times being a role for us in assisting patients that cannot self-administer on their own or is there work that we need to do around compounding the drug?

And I guess to just wrap up that topic around the infusion versus subcutaneous. So I guess, subcutaneous doesn't mean that you're not involved, right? So if you were involved, if you do actually service that patient for subcutaneous formulation. So outside of Stelara, that was very unique but how should we think about the gross margin? Is there a delta, but -- or is it pretty much comparable? It's just because you still deliver the services, so you still make a margin on that component on top of the drug. So is it kind of like thinking about the subcutaneous formulation, if you involve, that means like you're still making a very comparable margin on that business?

Yes. I think the short answer is it depends. It depends on the level of service we're providing. If it's that we're still having to go and assist the patient with a self-administered drug, then it's a nursing visit, right? And that's something that we would negotiate as part of that as opposed to is it just a compounding of the drug. So it depends on the level of service or the different services we're providing for something like that.

All right. So I guess it depends. But I guess we mentioned that, too, in terms of just the dynamic around the health plans. And like you said, it's all about like what are you going to cover because some of these new drugs are expensive. But I guess stepping away from like the specifics the subcutaneous or subcutaneous. But just in general, the other dynamic, when these plans are looking for just essentially manage their costs, and we're hearing a lot of these plans calling out specialty drug spending as being one of the areas where it is driving their cost trend. So is it -- on the flip side, is it sort of a tailwind to you guys? Because like you said, you want to be the solution, right? You want to be the lower cost setting solution for these payers. So are you seeing a lot of interest or more of these sort of side of care management initiatives from the plans that kind of benefit your business?

Yes. And we continue to have very productive relationships with our payer counterparts, even those with captive capabilities. We've seen some of the additional services that we've been able to provide on the acute side really puts us in a good position to be able to negotiate across the payer contract. Again, the -- our services, to your point, make us part of that solution to reducing the total cost of care, and that remains a focus for the payers as well as for us for being able to partner with them. We did call out the site of care management programs on the Q3 call. We are seeing some good traction with those as well as our bed management program. So we continue to see progress as we move forward and hopefully see more care shift to the home and alternate side. Meenal, anything you'd add on that, Meenal ?

Yes. I would just add to this, the partnership that we have with payers is important, right? And really, they have medical loss ratio issues and they're really looking for ways to reduce their costs. So ultimately, we're on the right side of health care, right? We're an important partner to them because we can continue to provide the services for our patients, their patients in a setting that is lower cost. And that's really back to your original question, when we think about the long term and we think 5 to 10 years out, this is the direction where medicine is going, right? It's can I get my care elsewhere for payers at a lower cost but at the same level of support that I needed. And I think that's what continues to be a strong tailwind for us as we look out 10 years.

And I guess just talking about health plans, the other kind of topic out there, right, is the potential for PBM reforms because a lot of these plans also own PBMs. So kind of how are you thinking about that? If there were some of these -- the most recent discussed elements, I guess, of reforms, if they were to happen, would there be any impact to you guys?

Our -- the impact of the PBM reform on our business isn't very significant. I know that we called out some rebates that we have in our financial statements that have generated a number of questions. Those are truly volume-based rebates that are negotiated with the manufacturers and not tied to rebates coming back through PBM. So we don't participate in that part of the channel.

Right. I think we're right out of time. So I guess we have to stop here. But obviously, yes, there's a couple of other topics we want to cover. So hopefully, if there's another chance we can continue the discussion. Thank you so much to the Option Care team, and thanks, everyone, for joining. And please stick around because I guess there's another session we're going to continue on the home infusion topic right after. So thanks, everyone.

Thank you, Joanna.

Thanks for having us. Bye-bye.