Hello, everybody, and welcome to the agilon health Fourth Quarter 2022 earnings call. My name is Sam, and I'll be coordinating your call today. [Operator Instructions] I will now hand you over to your host, Matthew Gillmor, Vice President of Investor Relations, to begin. Please go ahead.

Thank you, operator. Good afternoon, and welcome to the call. With me is our CEO, Steve Sell and our CFO, Tim Bensley. Following prepared remarks from Steve and Tim, we will conduct a Q&A session. Before we begin, I'd like to remind you that our remarks and responses to questions may include forward-looking statements. Actual results may differ materially from those stated or implied by forward-looking statements due to risks and uncertainties with our business. These risks and uncertainties are discussed in our SEC filings. Please note that we assume no obligation to update any forward-looking statements. Additionally, certain financial measures we will discuss on this call are non-GAAP financial measures. We believe that providing these measures helps investors gain a better and more complete understanding of our financial results and is consistent with how management views our financial results. A reconciliation of these non-GAAP financial measures to the most comparable GAAP measure is available in the earnings press release and Form 8-K filed with the SEC. And with that, I'll turn the call over to Steve.

Thanks, Matt. Good evening, and thank you for joining us. 2022 was a very strong year for agilon and our physician partners, and we have entered 2023 with incredible momentum. We have made significant progress against our vision to transform health care in 100-plus communities by empowering primary care doctors to accelerate the transition to a value-based care system. The research analysis we published in mid-January highlights the success of our model, specifically in patients with diabetes. As many of you know, diabetes affects about 30% of the Medicare population and if not properly managed, can have significant long-term health consequences for seniors. Our analysis found that diabetic patients cared for by agilon Physician Partners when compared to Medicare Advantage and Medicare fee-for-service benchmarks saw a 2x greater improvement in A1c control, a 19% lower total cost of care and a meaningful improvement in health equity access and quality. Consistent results like these are simply not possible in the legacy fee-for-service model, which is prevalent in the vast majority of communities in this country. With our early success in managing diabetics, we see a multi-decade opportunity for agilon and our partners in addressing significant variability in the way complex patients are managed, ultimately driving better outcomes at lower cost. To that end, we are making meaningful strides in addressing the access, cost and quality variability that defines the fee-for-service system. Our distinctive platform is rapidly unlocking for more primary care doctors, a care delivery and payment model that allows them to operate an outcome versus transaction-driven business model. This new primary care model delivers consistently better outcomes across our network and creates an infrastructure for additional doctors and communities to make the transition to a value-based model. What is good for our physician partners and their patients is ultimately good…

Thanks, Steve, and good evening, everyone. I'll review highlights for our financial statements and provide some additional details on our guidance for 2023. Starting with our membership. Medicare Advantage membership increased 45% to approximately 270,000 at the high end of our guidance range. Direct contracting membership increased 72% to approximately 89,000. Total members live on the agilon platform, including both Medicare Advantage and direct contracting increased to 359,000. Our MA membership growth was driven by the 6 new partner geographies that went live in January 2022 and 13% growth within our existing geographies. Revenues increased 49% on a year-over-year basis to $690 million during the fourth quarter. For the full year, revenues increased 48% to $2.7 billion. Revenue growth was driven primarily by MA membership gains from our new and existing geographies. On a per member per month basis or PMPM revenue increased approximately 2% for the quarter and for full year, which primarily reflects benchmark updates and market and member mix. Medical margin increased 93% year-over-year to $61 million in the fourth quarter. For the full year, medical margin increased 67% to $305 million. Even with the dilution from our strong membership growth and a higher proportion of members in our year 1 markets, medical margin increased as a percentage of revenue and on a PMPM basis. For the full year 2022, medical margins were 11.2% of revenue compared to 9.9% last year. and medical margin PMPM increased 15% to $96 versus $83 last year. Medical margins benefited from stronger performance in our year 1 markets and significant gains in our year 2 plus partner markets. As Steve mentioned, in our 10 year 2-plus partner markets medical margin PMPM increased by 33% to $124 in 2022, up from $93 in 2021. Network contribution, which reflects agilon on share of…

[Operator Instructions] Our first question comes from Lisa Gill of JPMorgan.

You got through a lot of detail here. wanted to hone in on the revenue number for next year. Is that substantially here. I know you gave a few of the metrics at our conference just a little over a month ago. But Steve, if I think about the revenue being higher, can you maybe just talk about the components to that. One, is it risk scores? Are the acuity levels higher? Two, I know that we had a nice rate, MA rates were better for 2023. How do I think about the revenue and then how that translates to medical margin?

So 23 unit revenue has a nice step-up. I'll let Tim kind of dimensionalize that for you, Lisa.

Yes. In fact, of course, the first pickup in revenues because we have this very large increase in membership coming in. Then when you look at, I think, revenue, at least on a PMPM basis, that's going up around which, of course, is a big number. But the benchmark increase itself is your kind of blended across our markets and members is in that 4% to approaching 5% range to begin with. And then on top of that, I mean, we would expect especially in our kind of year 1 and year 2 sort of younger markets that we would get some continued wrap improvement as well, and that kind of tops you out to that sort of 6% or so range on a revenue PMPM basis. So that in combination with a very strong membership growth gets us to that overall revenue number.

And Lisa, one thing I would add to Tim's comment is, if you think about what we do, we love going to these markets and being first. They're 100% fee for service, and we want to move them to value I think we found that there are markets out there with higher health care spend and therefore, higher starting points on rates as part of our mix that are really attractive for us, and we've been able to demonstrate success within them. And when you realize how large this class is with those year 1 markets that have a higher baseline plus the factors that Tim talked about, that accounts for that higher composite revenue number you referenced.

Our next question is from Justin Lake of Wolfe Research.

So I wanted to ask 2 quickies. One, on the ACO reach membership not basically flat year-over-year. What are you seeing in terms of physician groups? I know not every physician group is in there. So are you seeing some entering some exit? Are you seeing changes in the underlying membership. Just trying to understand that. And then Steve, you gave some positive commentary on rates and probably the bigger question that I get from people is on this new risk model. Would love to hear your comments on how you lived through this back in California. The last time they put through a big change in the risk score model. So I would love to hear your thoughts on kind of maybe how that -- how you've seen that change of limited and how you think it might affect agilon.

Sure. Thanks, Justin. Two fulsome questions. So real quickly on ACO reach, same partners in '23 that we have in '22, and that's sort of the year-over-year relatively flat. As we shared early in January, we did have some partners that could have gone in '23. We pushed to '24 because we're very focused on having a strong implementation and a good starting point. And so we see opportunity in '24 and beyond for additional ACO reach membership. We continue to see it as a very strategic program. I think we're really pleased with our results from a cost and quality perspective. The value that we get both in direct contracting and Medicare Advantage of having that concentration within the practice and with the community is really very strong. So we're bullish on direct contracting and now with 2 years of visibility and experience and better transparency and almost a full runout on 2022. You can see in our results that there was some upside within that, which is encouraging for us as we go forward, although we are being cautious. Yes , anything to add?

Yes. Before we move on to the advanced rate notice question, I'd just say that obviously, we're pretty pleased with the overall performance so far after contracting now transition to ACO reach. I mean the name of the game is drive costs out, be cost benchmark and have high quality, and we're basically doing both those or continue to beat the cost benchmarks and we've got 100% quality score, and that really helped drive that a little bit higher performance than we expect than we had previously expected for DC in 2022. We did mention that for 2023, we're being -- trying to be very prudent. We've got both the combination of the step down and the global -- or the step-up, I guess, in the global discount and just trying to be a little bit prudent we're saying that we would expect it ACO reach in 2023 will probably contribute a little bit less than that in the $5 million to $10 million range.

And then, Justin, on your second question about the 24% rate notice and the recalibration of the risk adjustment model within the context of that We, like everyone has -- we've done our preliminary work. We've gone through this on a market-by-market basis, look at the HCCs and kind of the proposed changes. And I think the headline for you is we feel like it's very manageable for us. The composite is probably in line with that 3% impact that's been called out nationally. And if you think about what we do in the markets we go to and the populations we serve, that really makes sense. We are going to markets that are 100% fee-for-service. They're really early in their life cycle. 44% of our membership is in year 1 or year 2 markets. We are working on taking out variability on cost and quality, but also on risk adjustment. And so when we look at some of our prevalence numbers relative to -- or when we look at regional prevalence numbers relative to our capture, we can be below those. So I think there's opportunity and therefore, the impact of this is not nearly as great as you might find it a clinic model that's very concentrated with more complex patients such as duals. I think we are -- when I talked about how confident I am in '24 and beyond as well as '23, it's really about the levers that we're exercising today, and we continue to exercise that are going to give us a nice lift in '24. We're getting members on the platform earlier. Think about what I said, we are going to double our membership in MA from what we just reported to you today for the close of '22 and what we're seeing…

And just one clarification. Steve mentioned new markets being dilutive on a medical margin basis. I think you probably meant EBITDA.

I'm sorry.

It's okay, but just to clarify. Operator, we can move to the next question, please.

And our next question comes from Jay Andresen from Truist Securities.

Actually, my question is related to what the clarification, Matt, you just gave. So on this Clearly, class of '22 performed well compared to your medical margin PMPM target of $30 to $60. How should we think about year 1 medical margin guidance in terms of class of '23 does the unique nature of this year's class impact your view, how you think about year 1 medical margin this year?

This is Tim. I'll take that. I don't think so. I think we're still -- looking at the class of '23, we still say that, that range of $30 to $60 is going to be the starting point. We've got -- within -- within the class, it's a very large class in 2023. We've got some on both sides of that. But that range is still very appropriate for the class of 2023 for this year.

If we can ask one more quick here on the -- any update you can provide on your discussions with health systems? Are you actively exploring those partnerships for class of '24? Or do you believe that there is a wait-and-see approach on how Main Health plays out?

Yes. I can update you on that. I mean I think it's a great question. As I shared in our remarks, part of the class '24 includes health systems or the physicians affiliated with them. both employed and independent physicians that are affiliated. And so we will -- we're going to expand a lot more at our Investor Day on our class of '24 and give you that. But I think we see this as a tremendous growth area for us. I think that health systems are seeing many of the challenges from this fee-for-service world, reimbursement changes, labor costs, that our physician partners are seeing. And they've got a tremendous opportunity with their primary care physicians in a senior population to move to value. So we're going to see that again with the class of '24 and we'll be able to give you much more detail at that media at the end of the month.

Operator, why don't we move on. If we could just keep it to one question just so we can get to the full queue.

And our next question comes from Kevin Fischbeck from Bank of America.

Great. I just wanted to get a little more color on this implementation time frame that you guys talked about with mphrX. Are you thinking about this is more about being more prepared when you go live because of faster implementation? Or does this potentially accelerate your ability to bring someone on faster where you would have had to wait 12 months implementation I can do it with only 10 months of advanced warning?

Well, I think we're going to continue to take as many months as we can on an implementation period. The example I'll give you, Kevin, is in our 2022 pilot, we utilize this in a market that took us 4 months doing it the old way. And using the technology of the nerve technology, we were able to do it in 4 weeks. It's 75% faster in that example. Each month is worth a lot in terms of our ability to get patients scheduled, get them in for visits get clinical programs set up earlier, the ability to stratify that population. And so what I would say, when I said it buys us time is it gives us more time to get into the really the heart of that implementation which is getting that patient in getting that assessment and getting them the resources that they need around that. And so that is the most immediate and powerful impact. This will improve our clinical quality over time should help us on the medical expense because we're getting there. The quality of our data through this was improved to versus the way we were doing it. Some of that variability came out. So I think it's a combination of those things, Kevin, that leave us pretty excited about the acquisition.

I think it's really important strategically as we have continued to diversify the kind of partners that we go out now and partner with, including some of these very large kind of PO type organizations that have multiple EMRs within their system. This really just gives us more capability to be able to service a large number -- a larger number of types and diverse types of partners. So this is -- it's going to be really impactful with that kind of partnership as well.

Operator, why don't we move to the next one.

Our next question comes from Sean Dodge from RBC.

Yes. The class of 2024, 130,000 members, Steve, you made the point that's much larger than you had initially contemplated. Should we think about 2024 being fully based now? Or do you expect there will be more to be added there? I guess I would point you start to kind of shift over to building out 2025.

Sean, we'll give you a lot more context at our Investor Day at the end of the month. I think I said it's going to be at least that, right? The class of new partners, new markets is that's coming on the composite when you think about what we're doing and same geography could get you to that $130 million, but it could be larger than that. And it could be a combination of there are additional partners that we have letters of intent with that we could put into that class of '24 where we could push them as we did last year, out a year. So in this case, they would go out to the class '25. There also is -- that's an estimate on those 6 partners I talked about, but there is some additional membership potentially within that. We try to be really kind of smart about the way we do this. But with some of the technologies, some of the faster implementation period, maybe some of that gets into 2024. So we'll update you at the end of the month at our Investor Day on it. But I think we're pretty positive on the class and what the opportunity could be for it.

Our next question comes from George Hill from Deutsche Bank.

Yes. Steven, I think you probably just answered this question because it got a little bit of a long preamble. But if I look at what you guys have signed already for the class of '24, it looks like FCP in Pennsylvania, if the national averages apply will contribute 30,000 to 35,000. And again, with Lexington clinic, that looks like you could be as many as 60,000 MA lives. You said end market growth could probably be over [30]. I guess my question is, a follow-up on [indiscernible], when do you cut the class of '24 off? And kind of what size is too big for you to ramp '24 and then kind of push people into '25?

Well, so George, thanks for the question. Well, first, let me say, FPC and Lexington are the 2 partners out of the class of '24 they put releases out. We'll do those on the others, and we'll talk to you fulsomely at our Investor Day at the end of the month. They both are great partners and they're emblematic of how strong this class is, FPC is the largest independent primary care group in Central Pennsylvania. We've talked about this phenomenon of groups in an existing state or region in which -- we talked to them previously. And for whatever reason, it wasn't right. And we came back then a few years later and when they wanted to make the move to value agilon was the partner for them. That's the case of FPC. And I mean, they're an outstanding group. We're really excited to have them. And then Lexington Clinic is really a phenomenal largest multi-specialty oldest multi-specialty group in Central Kentucky. And so we're excited to bring them on as well. And they were a group that we've got a longer implementation period as we talked about. And we push them from the mutually, we agreed to have them go into the class of '24 instead of the class of '23. So we'll talk about it at the end of the month. We are approaching the period in which in another month or so, it's probably going to push folks into that next class of '25, so you can have that long runway and get that great starting point that I talked about.

Okay. We'll hold up for the Analyst Day.

Our next question comes from Ryan Daniels from William Blair.

Congrats on the announcement. Tim, a lot of data but I want to hone in, again on your comments on medical margins. They were interesting looking at the year 2 cohort. So I'm curious if you could give us any color on how that contrasts to what that year 2 cohort may have looked like a year or 2 ago? And then second, do you think that's due to more rapid and better implementation, so starting at a higher point or is it more to do with kind of the operational speed to value as you move into the second year of those performance metrics?

Yes. No, that's a great question. I think our we'll update you, again, Steve was just talking about it in about a month on the cohort data, you'll get even a better look at this. But even if you refer back to a year ago, I think you can -- the information we put out on cohort data at last year's Investor Day, you can see that. Yes, I mean, our year 2 plus market performance has been consistent across cohorts as we move -- as we move through time. So we're not necessarily seeing a faster pickup. We're just seeing that same kind of progression, I guess, in each cohort as they move forward. I don't think, at least right now, in the last couple of years, it hasn't been really a higher starting point. I think we've been consistently in that $30 to $60 range. More important, when we start somebody in the $30, $60 range, the more important thing is that we're quickly moving those folks up on that maturation curve and medical margin kind of as we walked you through in the cohort analysis last year as they move into year from year 1 to year 2 and year 3. And they're quickly getting the numbers up into the mid-100s and we even showed you markets by year 3 are getting up and already pushing between $150 and $200 medical margin PMPM. So I don't think it's necessarily a higher starting point. I think it is our ability to quickly ramp those markets up in year 2 and year 3. And basically, that ramp-up is coming because as they mature in the market, we're just getting tremendous physician variability out of the system. We're getting tremendous compliance with our -- and execution of our clinical programs that are driving quality and quality up and cost out.

Our next question comes from Brian Tanquilut from Jefferies.

Tim, just a quick question on the EBITDA to cash flow conversion. So obviously, a strong outlook in EBITDA growth. But how should we be thinking about cash flows this year and into next year as well?

Yes. So one of the things that happens is our cash flow typically is going to lag our EBITDA. And the reason for that is a couple of things. One is just the timing of how we settle up our risk pools with the payers means that we're getting the cash for our EBITDA performance kind of well behind the time here that we're reporting the EBITDA. And the second thing is we are actually investing in these larger and larger markets. And so that year or I'm sorry, that year 0 implementing market expense is actually going up as well. And obviously, we don't get any revenue or any cash for that until the following year. So typically, we're seeing we're seeing cash flow kind of lag EBITDA. So for instance, in 2023, a significant portion of our cash flow improvement year-over-year, we would expect to see a significant pickup in cat year-over-year will come from 2022. And certainly in 2022, the fact that we had significantly more EBITDA gain than we did cash flow is driven by the -- by those same factors.

Our next question comes from David Larsen of BTIG.

Can you talk about any conversations you might be having with your base around the RADV rule or the final rate notice? It seems to me like physician practices will need basically all of the assistance they can get in terms of like coding and implementing restricted and effective narrow networks. Is that driving up demand for your platform or not? Just some thoughts there would be helpful.

Yes. David, really appreciate the conversation question. And I'll just say this weekend, we're going to be with 200 physicians in Florida. And the regulatory environment and how it is increasing the acceleration of value and how together we can take advantage of that and even perform better is really kind of at the heart of that discussion. So I think from a opportunity for us, we're saying that we can just perform better on value. We will work with them very closely to make sure that we have high accuracy from a coding perspective. We've done a very good job to date. We'll continue to do that. And so we're constantly looking at how we can make improvements. We'll walk them through that this weekend. They want to make sure that we're all doing things the right ways. If you think about the power of -- what I'm talking about $550 million of medical margin in 2023, roughly half of that goes back to be invested in these practices. And so it's a tremendous catalyst for them, tremendous catalyst for their communities, but we just want to make sure that we're doing things in a really smart way. So it's a key part of that. And then obviously, what that impact is from that advanced notice. We're talking to them because it's different by market. but it's not the final notice. And we'll find out in a month what that looks like. So we'll make preliminary plans around that and then adjust as we see what that final looks like.

Our next question comes from Jamie Perse from Goldman Sachs.

Just wanted to follow up on the platform cost I think you said those were higher than expected due to infrastructure to scale over 2023 and beyond. Can you elaborate on what these investments are a little bit more? And should we think about them as accelerating growth, accelerating profitability or just necessary investments to support what's already in place?

Yes. And first of all, I think we're really pleased with our ability to get leverage out of platform support costs. I mean I think we talked about, again, platform support costs as a percentage of revenue overall for 2022 was down by more than another 100 basis points, and we continue to see -- expect to see that improvement year-over-year as we move forward. I mean, I think getting that leverage against platform support cost is obviously a big part of how our model works. Specifically in Q4, we did have the opportunity to step up platforms forecast. And you kind of see it when you look across the quarters and the higher absolute level of spend in Q4 versus the first 3 quarters. And that was really to support this very large class of 2023 coming in. So we're able to do things like kind of proactively increase our technology infrastructure and data storage, for instance. So we were able to do these kinds of things that would essentially put us in a position to get that huge class of 2023 on board and really put us in a position to scale our business over time. So I don't think it's indicative of anything going forward other than we'll continue to get great leverage out of platform support costs, but I think we're in a good position to do that. Now of course, in Q4, one of the reasons we're able to do that is we did have a little bit higher direct contracting EBITDA flow through that offset that increase.

And Jamie, if I can just add to that. I think just the macro is we are investing heavily in our business in a variety of ways. I think we are the solution out there. I think we have a lead. We are trying to invest in a period of dislocation and frankly, advance that lead. And so meaningful step-up in terms of the platform support costs, a lot around technology, the amount of data that we are taking in and providing to our partners on a daily basis to help do the things that we talked about for better cost and quality has escalated dramatically when you have a much larger class, getting in front of that is a key part of it. The geo entry costs that Tim talked about. Now that's just a function of the double the class size, but that's a substantial investment. And then this acquisition that we talked about. So in a variety of ways, we are trying to do things that are going to put our partners in a position to really extend their lead in their communities and attract other doctors and other patients.

Our next question comes from Whit Mayo of Bravo Securities.

Tim, I was just wondering if you guys are making any changes in your patient attribution initiatives or process. It's just anything new with the systems to ensure that you're matching with the plans given the materiality of the membership growth in front of you? And maybe do you find that the plans are getting better with this as well. They obviously have some huge incentives to match alongside you.

So Whit, it's Steve. I can chime in on this one. We are spending a lot of time with our plans right now. We are on the phone with the Humana National team on Monday we collectively have a goal to really accelerate that period. So there's not as much retroactivity. And so both of us are saying, what do we need to do earlier. When you have a mix shift, like you talked about between plans. Obviously, there's more work around that. And so it's what I would say, it's a lot of logic, it's a lot of process. It's a lot of data. that's going on to make that work happens. There's still going to be some retroactivity through this first quarter, given the magnitude of some of those shifts. But it's just kind of table stakes in this business. And we've got a great relationship with the plans, and we're working on it.

Yes. No, I think that's fair. I don't think we're doing anything new, but I would say that, that continues to be a strength of our model and one of the strengths that we bring to our partnerships, both with the payers and with our provider groups. Our ability to have a really good attribution logic and process for -- obviously, it's easy to do for HMO membership, but to be able to do that for the significant mix of PPO membership that we have is something that actually essentially makes our model work. So I wouldn't say we're necessarily doing anything new, but our ability to sort of leverage that core expertise that we have really makes it a lot easier for us to expand both with the national payers and with all these new regional payers that we're bringing on.

Our next question comes from Sandy Draper from Guggenheim.

A lot of questions have been asked and answered, but maybe just a follow-up on the comments about the platform support costs in the same geography, given the strength of the pipeline, the outlook for '24 and beyond, is it fair to assume that we're not going to necessarily see those -- this wasn't sort of onetime, 1 quarter, and we're going to fall off. It seems like we're sort of stepping up to a new level just because the visibility for long-term growth is there. Just want to make sure I'm thinking about that right.

Yes. So I'd answer it a couple of ways. On platform support costs specifically, we had the opportunity, particularly after -- on top of the strong performance we had on both the M&A side and the direct contracting side. sort of ramp-up platform support cost in advance of 2023 and sort of kind of get a jump start up to that 2023 run rate. So our fourth quarter platforms forecast is more in line with what we would expect our '23 run rate to be. And that's -- as we go into 23-unit increases is heavily in platform support cost is heavily influenced by the fact that we're bringing on a lot of new markets that a lot of the members. So that makes sense. But still getting a significant reduction in platform support cost as a percentage of revenue. So still getting leverage out of it. On the implementation costs, the that continues on a per member basis to stay in a very good range and say that $400 to $600 range. And when we spend $400 to $600 to bring a new member on we're getting phenomenally quick payback on that and getting like we consider the lifetime value of the medical margin and network contribution that we're going to be generating off of that membership and considering the really good retention that we have with membership. We're going to go to get a lifetime value to customer acquisition costs. ratio of something like 10, 12 to 1. So really, really positive. The fact that we had a big pickup in implementation costs this year is really primarily a factor of having twice as many members that we were implementing. I mean we implemented over 100,000 new members in 2022 that went live now at the beginning of 2023. The year before class is like 57,000. So that increase in membership obviously, at a still a really good cost per member, just generating a bigger number. We're -- I mean, we will make that investment all day long, right? Getting those members on the platform early today as many as we can with all that embedded margin just puts us in better shape to be able to hit both our membership and our medical margin and EBITDA projections for the future.

And our final question comes from Stephen Baxter of Wells Fargo.

I was hoping you could talk in a little greater detail about your ability to manage margins and margin progression in a more challenging rate environment inclusive of that risk model headwind, not to harp on it too much, but the risk model change alone that you size is larger than the average annual EBITDA margin expansion that's implied to reach your long-term guidance target. So I'm just trying to understand why this would it be a bigger setback for you in 2024 absent some kind of mitigation in the final rule.

So Stephen I think my headline to you was that it's manageable. It's in that 3% range. And the reason is those levers I talked about. So getting more members on the platform earlier, the fact that we are doubling our MA membership from '22 to '24, that's far greater than we would have told you a year ago. And then the year-over-year maturation that's driven by earlier rollout of clinical programs, better quality, the diabetes research that I cited at the beginning where we're 20% better than Medicare Advantage on a national basis in terms of total cost of care, go down the list of sort of complex patients, and we're getting much better on that. And so -- and I'm not even counting anything that might happen on the benefit side. There's a lot of dialogue that we have going with plans on that, that could be -- there could be adjustments on benefits. And we have that discussion every year last couple of years has been about increasing benefits this year. And depending upon the market, it could be about, hey, are there places where we tune and reduce some of those benefits. But it's a pretty normal cycle. And so I think -- and then the starting point that we talked about, if you think about the year 1 markets being dilutive potentially at that adjusted EBITDA level, each incremental dollar we're able to drive there by having a better implementation period really helps a lot.

And there are no further questions. I would like to hand the call back to the management team for any closing remarks.

We're obviously excited about our performance in '22 and what's ahead in '23 and '24. And we look forward to seeing all of you at the end of the month at our Investor Day here in New York. I think it's going to be a great discussion. So see you then.

This concludes today's call. Thank you, everyone, for joining. You may now disconnect.