OSH - Earnings call transcript Q2 2020

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Operator

Good morning and welcome to the Oak Street Health, Inc. Fiscal Second Quarter 2020 Earnings Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. Mike and Executive Officer. Geoff are Chief Tim call Officer; Financial Price, today's Pykosz, Officer; Chief Cook, Hosting Chief Operating Oak Investor webcast are release, Street’s Street other The materials related website. link, available section Relations and the of Oak on press are risks, XX, and These uncertainties views and made reflects are and of this at assumptions. expectations time as subject management’s September statements XXXX and to various related contains to is future, forward-looking events. past call This statements statements, not that and statements anticipate, target, In plan, and address could, often fiscal this expressions. business contain as performance project, will conditions, future such estimate, forward-looking similar or believe, often and should, context, would, potential, predict, may, financial expected continue, or expect, words intend, contemplate,

uncertain. and see X, to could filed dated the XX, those with on Please where Securities materially differ IPO prospectus Forward-looking statements. ended and company's the XXXX, Street's refer factors -- that that by Commission statements nature degrees XX-Q of address Oak from August these their quarterly will June matters quarter report and its Form cause results XXXX to for different discussion Exchange you are actual the filed to a

future growth, the financial market well target of substantial customers and and limitations related are company's Street, to the existing the achieve those new that retain are by uncertainties Oak cause superior innovations non-GAAP for, number results This profitability, of the estimate measures. portion of measures. to of the financial its increased company's in the company's prepared of management revenue, market, competitors the these customers statements a market, competition in of and expectation and GAAP. in for with ability of company's the its the company's opportunity could There size These maintain non-GAAP substitute than addition ability limited to measures or a For target use increase as differ customers. a company's of to, as effects non-GAAP and to financial includes and company's a of the call materially accordance expressed the to, number forward-looking particular its or its measures to in not as actual number performance include: ability on financial company's reliance to the existing

other that, example, of Mike measures reconciliation these titled calculate companies Refer Pykosz, the comparable may to directly I'll For Oak appendix measures Mike? over it the similarly financial differently. turn to Street. a measures. CEO non-GAAP With most non-GAAP GAAP to for financial of

Mike Pykosz

first And today's is you, joining quarter everyone thank our company second discuss on you that call, Thank a operator. public, us order results. to our call in as to

somewhat our today’s are are a us result Chief of you Many today's me participating Financial and in call call Oak Chief for Geoff adults, Street's approach, Officer. and with Co-Founder recently Joining transforming care Cook, Officer; joining completed on IPO. our Tim of Price, older Operating familiar our as

with both payer. Street and at the lead patient Ineffective outcomes poor to dynamics. to Oak for founded can financial healthcare improvements incentivizing adults story, incentivizes delivering Older all through primary providers the For you of fast for to to focused system those on new a of of one has that instead network growing care in traditional represent fits burdened are on health burden as models outcomes. having conditions drive We system. size volume array This fee-for-service cost not a see chronic in by are the highest to engagement XXXX to We level and model. effectively, providers this believe primary complex adults our reimbursement diverse Oak care address exceptional of the in healthcare care population U.S. Street are centers, serve on patients Medicare. model primary clinical these structured care

measurably provide should with our it healthcare is platform, proactive innovative our to in all technology-enabled health engagement. model and better from to focus, rebuild to is and combining ground We’ve mission purpose-built the and vision up, outcomes personalized Our built communities. be approach our patient

of a XX model Street's moderate their eligible see concerns. to translate of At more per urban patient market size the to meaningful size million average as the X their traditional which income of strong an and half currently into within and as primary estimate engage of singular of Approximately primary in their year focus of in-person these struggle two-thirds our believe have adults, There's at our responsibility We where even factors the with XX spend visits to in form population relationship, centers, whom areas. care. patients, and platform. that us through has to and patient in them helped we food we home-based XX risk address XX% on older us our continue base our addressable to than contractual which a two large to the and approximately the more and can in We them which ill or market a our Our million one to tinier visit living more patient's opportunity believe as relationships of Oak operate financial lives for care low we and cared our assume comprised access panel the And have the chronically approximately XX% the substantial target billion over generate to payers spend $XXX of fraction we them care We for Therefore, opportunity. amount Medicare with patients opportunity. care XX,XXX each eligible, of seniors room so of for primary and represent telehealth our dual to frequently, We social annual for up of we lack are and chronic per more the we enrolled we patients overall markets of more which time with listen expanding take market is outcomes. suburban isolation within allows well patients. as care. value-based and for such beneficiaries with order with provider through or the in housing, setting. Medicare limit fee of time market allows second These Medicare quarter, conditions, approximately of service lives with X% in Advantage plan, times at time grow. clinical end providers

is the our to a spectrum. across provides Oak value stakeholders Additionally, to success key that healthcare Street's model

with Our prospectus average compared XX% provider XX Net of and the quality our patients Net Street's reduced where is patient described receive Score in to hospitalization X. Promoter IPO Score over higher significantly improved care, significantly experience Promoter Oak of by a as

problem across Street are doctors, burnout recommend is model them care sustainable saying feel our for with focus not payer Our model help great massive they partners enter a providers resources healthy. multiple enables that as patients volume our care provide care for they when let quality XX% them is medicine care. work, work. overwhelmingly offer Oak We them to they’ll a well. to need place of as primary to do to of a providers At for keeping support they we on dimensions patients but metrics, and best as the We the norm their primary key and visit do bonuses our over do, their what time pay on a

our membership created of Americans X have months outcomes and the contract. and months medical partners team strong drive patients, enough And grow face believe our effect due providers healthcare Oak per profit results our COVID-XX. the and plans patients outreached I they payer win, burns for of wins. can't model the metrics, on of all difficult patients we the who entire X organization drive growing to historical circumstances work all to and done business. have system over thank of call usually in at for performance of take keep of Oakies the last unimaginable in a Street our in patient depth because patients’ challenges Improving to for because the higher resiliency responsibility Health, capabilities rapid number and our greatest of as model. is we COVID-XX for quality our steps the to agility lock of the of the safe to I of health helps payer as of our that commitment of we costs, strength, last revenue. speak face all and Oakies. we pandemic. When highlight Because and this Oak transformation our the our took The Our help response margins. the in want believe well the I team we COVID-XX full our the strength economic superiority Street We number team our

COVID-XX, a shelf-stable and risks New We number suspected symptoms We hospital our our or We consoles meals for to monitor health QX. the actively who predominantly of to educate fleet food. potential our patient patients exhibit navigate taking of the of visits deliver XXX to goal team to pantries of we vans, infections mitigate barriers able the our England COVID-XX managing Medicine environment. of the deliveries wellness the of of During the following month. keep challenges X,XXX tens to and and which QX publication until patients within thousands created changes: XX% to be from to of to in our like in which care patients published in-person typically and COVID to and risks the the them redeployed out from to in face in our Journal with remove made Care to meals our pandemic. telehealth, was on provide necessary the XX%, model pandemic. to in program, of a by while secure the work quickly the And patients access over to steps on patients We and safely of food centers, save help social XXXX, hospital unless over made checks due those transitioned were face the for get increasing green we We transportation patient of our completed all catalyst

revenue on of patients’ recurring We volumes. visit monthly in not continue invest comes payments to our Oak because from based care are and XX% Street's

there be revenue stay many their to XXXX, discuss them healthy our practices to with to traditional avoid for Oak compared the the flexibility as due to Tim of they revenue first acute While our provides Street's will months recurring continue to revenue need we negative XX% preventable support fee-for-service X provide to minute. and and a patients impact significant financial volume, in had events. grew us our lower

and QX, and of During team new delaying opening ensure including communities, stopping the we steps members centers. our temporarily also the safety to of outreach took events

call the turn on growth opening serve new we centers our Cook, patients of Tim restarted since over existing provide perspective, more our of quarter color recap number markets. Tim? our on detailed the with XXXX. who I'll will marketing the a our have now in and increase a the of efforts some to both from additional expectations CFO, to financial community We you remainder the front and for of and

Tim Cook

XXXX morning, on growth, preliminary the Thank within were of good expand we record you, our COVID-XX were platform Mike, included estimates we in ways. prospectus despite our our everyone. the pleased important pandemic. two financial IPO and To the and results, which with revenue in challenges set second We quarter provided level

markets. of First, growth in and and our strive existing new existing network we across seek centers; to both centers drive patient to second, our expand we

XXXX of we increase a million. In operated the XX% QX XXXX, an the while XX% our year-over-year grew terms COVID-XX. patients quarter we grew in At of by new temporarily as to at-risk end quarter, XX%. membership, centers in revenue patient QX year-over-year, compared from second growth base XX to to to served the openings of XX of centers, in deferred increase total second due $XXX.X flat drive center but The total patients

million. Our in adjustment excess $X.X our from of revenue estimates benefited risk QX of payments

shareholders. model, As this visibility are contracting financial over payers. of our model our model Oak partners revenues for total Street, fixed and as per strong for We month per a patient reminder, due our to XX% drives believe our upon our recurring receiving is based payer value-based from payments

$XXX.X claims revenue on our outpacing to medical compared million, XXXX, XXXX growth representing QX QX for expense pace. of Our of XX% its growth

claims of However, service. expense with QX to $XX.X XXXX dates related medical of million quarter period our or XXXX represented second XX% or claims prior development

end At to our of will line on unpaid with liability the the Excluding detail claims. rate our costs These estimates to revenue each that prior period, that would have in have sheet we for respect for in future development. we make our more receive claims balance medical been these want growth in I on period. the with growth already dates estimates costs, incremental and the for provide claims medical occurred. reside period

with book is is aim XXX% can we certainty, impossible expenses our efforts potential we these prior some that at air point with occurrence. to accurately is of at in the a it this And as the period be any such these the margin some case development, may not as again, the despite there that it favorable. future, That Given estimate in to extent to was mitigate the case instance.

primary Regarding this specific were there drivers. two instance,

planned two-thirds First, in with a these late June, plans, were to issues unable our which of part amounts of related deprioritization COVID-XX. date we to data challenges to until few were approximately the health due amidst remedy

all The costs typical medical runout both have health resolved claims the to greater has than our We since remaining whether intensity integrity It had work. will unclear payment these was estimated. materialize plan's which if revised claims cost COVID-XX speed impacted we and the initially persist. estimates. providers with one-third to challenges processing, claims due submit respect those data of they and with will and is

of For costs we sake and persist. will the conservatism, assume are real these

as period carryforward in of of effect line Our did to utilization the partners, the these prior sheet book with our significant due QX not lower costs. remainder expenses QX in financials our adjustments as balance access restrictions, for our are stemming which facilities health and medical unlike our Even COVID-XX plan reflects limited our healthcare of healthcare from savings many during period. to we guidance claims these expectations. year still the excluding the Fundamentally, well

early distinguish While some that lower medical we results indications repeatable claims seen few utilization and there a key our are patient of in base factors with QX, experience. have different

are our generally First, patients quite sick.

that system Therefore, patients to have As patient our care Mike population likely access local chronic while multiple base was restrictions. of of despite illnesses. the healthcare segment said, over limited a able to XX% was was our during access QX, the

avoidance has those commercial a health of to base many health patient plans. for prevalence or elective of plans. our Second, QX was lower electric procedures of lower driver The a compared particularly procedures, deferral key utilization

positive claims to our quarters the be it continuing COVID-XX. will monitor claims, to related before we assess are to are impact, We or accurately performance our and but several negative able medical indicators expense medical believe key for

the XX% due Our total and of a we benefit average centers centers as activity cost COVID-XX. community temporarily to patients, versus depreciation million year-over-year the excluding for patient growth volumes due to prior some we was suspended second lower our was year XX% due care, increase in that expense stock-based of particular, million in as increased resumed, and driven XX% increase second professional general Mike capitated medical I expense performance. in was mentioned. our year-over-year. which since discuss Patient find financial legal three will compensation and million. by to increase the claims have growth fees headcount, XX% contribution, less $XX.X an our primarily quarter, metrics higher year-over-year evaluating non-GAAP useful was revenue, and million as the growth the decrease $XX.X expense marketing the offset amortization, as in operated of to previously well transition an quarter, Corporate, representing financial we to These now of during $XX to our in by expense, activities number administrative quarter, define The we of the support Sales as grew of in $XX.X second as and telehealth. business. we

per amortization, increase and care, patients of our patient, are of claims Oak $XX.X million, the to part excluding revenue the contribution, contribution which we hour medical platform. total patient depreciation less as cost was an improve year-over-year. expect XX% the We Platform of of define expense and Street longer sum

XXXX, of to dollars compensation, adding calculate both economics a we the compared improving to patient EBITDA quarter negatively contribution QX period stock-based which that platform increases, compared a aforementioned prior therefore, expand but other XXXX, our to patient our in by margins million net loss were the our $XX depreciation the EBITDA, and per second income contribution to XXXX, of our given of As impacted and Adjusted would we million generate adjusted and expect patient the on loss in platform and and by and we contribution, all was XXXX. the Note first second of expenses. expenses base by Cash million $XX.X in months second leverage $XXX.X net debt. excluding quarter XXXX. of in loss, activities of million $XX quarter in center $XX.X used center's operating the million. X We operating totaled growth $XX.X cash with million finished and amortization in the

Through as COVID-XX. expenditures and capital $X proceeds. We August, openings approximately result outstanding months net IPO center $XX million associated used Our as interest of deferred repay $XXX prepayment in XXXX net totaled new the X million of in and borrowings we our in fees. to million raised first these proceeds approximately of a we

use we proceeds remaining the for now I'd XXXX. our of for of novo about see expansion, Given massive network. opportunity our to the continued the de the of we outlook towards balance expect talk growth the majority

quarter $XXX third loss forecasting and to For anticipate and XX XX million, of between $XX having million XXXX, $XXX and are revenue standalone by and EBITDA we XXth between adjusted between of an XX,XXX to million. September of at-risk patients. XX,XXX $XX the centers total million We

XXXX, revenue of total $XXX and of million. and between million and are For $XXX forecasting loss we between $XXX an million calendar $XXX the adjusted year million EBITDA

Walmart. XX We over guidance our XX,XXX midpoint December associated XX XX,XXX openings expect to recently-announced include with clinics center between smaller growth standalone XX% not full do with by The the note represents centers projected to year XXst, and of pilot that our revenue and I'd patients. opened have collaboration at-risk XXXX. our

the average in million company, quarter call conference the to as dynamics issued purposes, occur giving of $XX options of first highlight would million public scale. contemplate This shares being I'd like a diluted the weighted fourth as as we our part effect we that two IPO. modeling For XXX approximately

centers, pressure our since profitability this First, as of centers near-term time their as operate our open a period in ramps. we new profitability can loss for a

statement, centers our incremental EBITDA hold, we outlook as towards forecast. profitability, our expect equal, of our result Over we the economics to as in corporate greater at general our centers time, deliver underlying end adjusted and all else higher unit these in at would lower our to the a these we'd center arrive As base of grows end expect growth patient new future. the take

model would large piece addressable very today, in define continues to we emphasize that inception. center invest and business. to a very market, closing, and we, compelling produce continue marketing have small our of for some our medium I economics and capture and In patient generated of the that the we a sales a Second, targets like degree will long-term I'd to our since to

I are earlier, noted in in as forecasting approximately First, we growth XX% XXXX. revenue

the over for growth is expectation medium term. XX% of Our average to near revenue approximately

the XX the third, like as Second, we for platform centers the believe now XX call to several reach capacity. to over Geoff? approximately XX% can contribution centers Chief I'd Jeff new we to our our years. Officer. reach they turn mature annually margin Price, expect next open Operating over And to

Geoff Price

and we we we like IPO our and expanding compared some to the Winston-Salem, It Today, this since have new year. Ohio our exciting give XX busy. all In communities Dayton, XX across our including Street for both our Worth, I'd navigated date. model Oak the earlier Carolina. on been August on operating new Xth, weeks we existing after has IPO. Since our to Tim. Dallas-Fort team X on have alone, XX last North are bring challenges to into to centers markets, new Health IPO opened Thanks, development kept updates centers

care better preferences We delivery in-person have to care transitioned our our most back align and to with needs. also patients' of

alluded with Tim Xst. our Additionally, September we collaboration earlier, team as Walmart, finalized to on which the announced

small today, In Our our we XX represents collaboration of the opening this a Texas. the on is of initially sites three part in focused business. standalone have locations Walmart in centers open context

foot that and more into rural We is our typical types Walmart growth traffic complement we setting are And we target. that believe patients hub about extending excited Walmart provides a focused convenient of our outreach for a platform model. will suburban the where

at-risk patient to as These Our plan and the continue our do Advantage centers. is in to Oak patient engagement of these happen are Walmart. in Health operate economics any to will same centers grow same the be in at model centers these that Street we retain simply Street base. a Oak Medicare our Health sites

JV outside concluding will partnership We now be our this you group not Medicare. an to progress work. only on look pass on updating we forward of will for all This types, is all with have I Chicago. patient a seeing We of similar remarks. independent to it back Mike to

Mike Pykosz

it will communities said, are that be. for is are are to of want Thanks, excited on we often mission in And system. Geoff. to should the the execute team underserved can, what the health disparities the concludes a need time that conclude That by prepared continue how rebuilding are remarks. excited and our far note making our also are just accomplish. we we against to impact saying to when I existing we patients surface by spotlight, At healthcare to journey. our our continue proud we That we too of of healthcare scratching and are

Operator? will your questions. take We now

Operator

JPMorgan, with Taylor open. line is Gary Instructions] [Operator your

Gary Taylor

around any a your to might that portion your the a in the capability or crisis, stay that initiatives a any when be telehealth. down, at around want bit own lot thoughts model? percent things your back patients. visits then ask there during quickly incremental moved to this protocols little you Have to to that's visits I'm found is I just nonrecurring, sort of the in-person of were of cost normal out just model I of in of about with your guys your of or touch clinical now? develop you some clinical recurring shut call pretty recurring what changing all? to just be wondering, are And something COVID sort quarter to tool know

Mike Pykosz

about a Gary. bit. Thanks, that talk Happy to Yes.

that a So question. of few to pieces take

the in XX% today, telehealth. remainder being back in-person care visits at So with of our spring compares to XX-plus growth over That the telehealth. percent are

a So care we've telehealth is for think in take we part shifted largely that patient most suited the forward. our going be that of of model back to care will We in-person. believe We most do instances. base in-person

they However, telehealth appropriate. is where situations and are preference patient both clinical

quarter, costs from of material costs were specifically. the we telehealth in out the platform and the worth terms In use calling not not probably

We have made piloting will that. move us to some two. next allow currently proprietary over that telehealth investments the We're or to quarter platform our

So we're -- we think that, that excited experience will integrate we're the well for and patients. with even more the overall that, seamless Oak Street our platform effectively, make can that

So more but here, I it's think forward. go part we of a come lot to do think our

Operator

Robert your line is Jones open. Sachs, with Goldman

Robert Jones

to dynamic I the to half questions that in-person markets. back guidance? relates to what's half for guidance, in thinking just first the Gary's but full then and trend versus back maybe the thinking for Thanks one, tele? as relatedly, it Tim, as the far between to year follow-on as public you assumed about welcome just guess question, And utilization how cost the are about the

Mike Pykosz

Yes. Thanks, Bob.

So versus we doing it with the what modality, our to obviously telehealth, in it providers still same different providing means service. guidance, it via to pertains in-person. have doing largely, it is telehealth, a as respect It's the

significant cost. as so mentioned, a to Geoff impact wasn't And there our

care much year, delivered. we much telehealth isn't whether or -- remainder as of So there really there of change the XX% the about regardless be we total was of wouldn't the think XX%

that, to benefit. benefit more expanding XXXX, and see benefit. be our Over the to patients, telehealth can extent I for say we or capacity that leverage more either the expect guidance a doesn't meaning meaningfully I'd there longer-term any and assume But any wouldn't deploy might

repeat can question? sorry, your just And second you Bob,

Robert Jones

just underlyingly trend as back utilization, the as No, guidance in in the far cost half? assumed related just medical to what's

Mike Pykosz

Yes, Yes. thanks.

development So not as expenses negative periods have to the as point did of booked our now future $XX that those we've -- now time. though in QX. million we to were got any -- we we And had balance sheet we clearly, I we against appropriately feel development we're reserved mentioned, related where expect the

significant back comments the as discussed business assumed during and be less don't had today, of folks made the the respect for we year, what there same And to have we I manage our and So half COVID until in the be. to we'd of the have better COVID effects QX more think data usual, the business of our a some from was roadshow as perspective, or decrease will as where understand in a we therefore, will increase the period significant for MLR with to experience a MLRs. later usual with I like

So here we've the what very rolls feel as monitor continue now, on as we're where sit seen but right today, I here. reserved to about the good data, year relative think in we we'll we to that

Operator

is Weiland with Sean open. line Piper Sandler, your

Sean Wieland

lower touch you allow Just when out this haven't? to been level, the a what want you to that I do why cost? think your model in outcomes, at you of able people think to drive have do other figure just a better high the And on, you some of you've lot healthcare aspects are of

Mike Pykosz

Appreciate Sean. the question. Thanks,

our comprehensive things same of the level think achieve that of big focus it's one the and think to I the difficult just and model. nature the what it makes model, Street differentiates others and I for results, the Oak

caring and we're example, inefficient model more for focus be adults would a Medicare. allows the for we very older our for but well population. run us only really population. the And homogenous unnecessary on healthy population, for works to On clinically And aspect, model commercial that fine-tune for the

one can all from technology, optimized cetera, clinical ratios, training, et population. against So be protocols, staffing

breadth And big that offerings. is extent of think focus enabler point the the second success. really our of I that think enables our I So a is then and our success

is two really it And the things on based there's doing data platform same or insights hospitalizations time our are for People technology a know, about patient from And do the in bullet, proverbial over silver every get so, the needs. the analyzing reduction to that Canopy one makes clinical their and a But side, data to ask, that your doing on leveraging no way impact we great you behavioral of as every amount for that think other call primary and do home-based the then XX/X really right? allows what primary huge care can longer biggest will gathering visits, I care our that we host it with And on us and reduced job that half. what support, programs. patients, of need you admissions? health, to a patients transportation, combine center bed

get have a very a the greater applying you in technology and the of a is the consistent you very And much whole those you're than And coordinated manner so interface. situation some all parts. because where manner parts

Sean Wieland

That's then helpful. prior to specifically, what Advantage? that to And And going so does patient enabler? focus what pertains statement more Medicare be and percent And the translate be the will around to percent Walmart how are as your at Medicare? it here mix,

Mike Pykosz

Yes. similar will we're really going what the we big catchments sites piece the Oak Walmarts the in to look choose. we mix are in to testing that That's where is The look initial be a Health traditionally would that very are located, like. catchments that Street

centers that is Walmart. generally we about The of socioeconomic background -- what patients are certainly because the they're serve. we that serve. that of everyone shops in the shopping kind Walmart We don't know at will there be -- many mix know typically think we a the just thing So we a don't Medicare I and at that

that. are model focused on will model similar pilot sees for collaboration, then on out we be need will partnered a patients. to And final focus types and care so on really a the say good focus quite running outside thinking we patients do. so patients, to a else, in and can we of that The run that this standpoint, that we from a I able the Medicare prove model we've again, which, as important and just with Chicago that Street that we But the -- because on Street is, will delivering thing to be is, us Oak this for we really I'd Medicare is all Oak why practice everyone experience that's to about think,

Sean Wieland

Okay. one quick one If more squeeze I could just in.

What is do is due you you said claims third the expense, mean of the third-party out? is claims out. by claims what run the medical On to -- run a due --

Mike Pykosz

Sean. Sure,

in As made XXXX occurred estimated number XXXX would we've XXXX that future at -- the in claims receive we between in would last X on of dates dollars -- now. end XXXX claims year. just is thus or end related I'll of for number claims the for we million we the might claims experience we our far of in we that for look to at XXXX at the to of focus have estimates the service received that of We XXXX, XXXX. receive and today that Essentially, estimate excess of that

out a the that so say closed we from out, claims just thought to when runout receive claims I perspective relative that number estimated sort the received claims And I when dollar of the mean the of the of year. we'd run or we've we

Operator

Baird, Matthew line your Gillmor with is open.

Matthew Gillmor

I wanted about efforts. ask the to marketing

And COVID mentioned, also, had You to programs. outreach the early any you of know? if sense that in really have will effectiveness? a like do the approaches for environment these pre-COVID? obviously, same Can us give too Or resumption versus the of, it community a new have looks is you flavor what of some

Mike Pykosz

Yes. if you year to I go time, multichannel at mean, back a approach. this ago operated marketing still a we

central et we direct channel, generally have call cetera. we TV, -- so as what response And such digitals, marketing

marketing was centers fast We community for year in out not have of in our driven obvious also a center. A to the today, the by our adults events amount today, big that and we're forward community-based events older doing field Obviously, ago of events channels. with reasons. fair

X kind can with adults care our team community figure And deploy part of in benefit older liaison the really out months, over of so last that community, Oak still do be model. we a way we’ve marketing from can Street's how who still the course of the

So we to get care educate people primary Oak about that Street the care. importance primary of why great place is a Health and

is field And so and ways could past, who deployed really their Street. against events, educate working instead them what did a redeployed in lot force But groups done we've constituents help we in which working mostly, through about with Oak understand to and them working community. to with them benefit set is with the what our of the find in of alternative

have an to them directly brunch of cetera. going him make a to order or his is on to So with a in we're hosting faith-based right, pastor with Sunday, introduce after instead organizations announcement et really the send after work et senior services tangible to us working services, cetera, example seniors

same we So results get and the the benefit. same

little get Just different to Street Oak familiar mechanism a with what people educated and does.

on it's And very we around put early have think What primary to factors to have risk of so second around changed. similar. to that's during spotlight really the we a still final seen, Obviously, is -- access I And lot direct relatively chronic have shut What offices COVID put response central I COVID. digital cetera, that as a COVID think and the early obviously, spotlight TV, to think around, so a can I seen there's on has that down care, because doctors’ happen illnesses result. things what really et part has quarter. as a

Street called what it think out further Health do. I has really Oak further we of differentiated and the importance

from a certainly Street interest by field central channels. huge seeing be generated adults our whether by Oak the older So communities I channels amount that of that's generated in think about or learning interest Health, interest our we're

the over to think I those ramp fully early optimistic achieve back I are. course year front, report results of as strong back but acquisition we're we're think normal the the what going of new patient to results, we on to kind it's too I think the

Matthew Gillmor

ask assess about that make mix that bigger take the be And understanding expand what know talked some time not, the of How position to just to the before let in curious of said the me a of really you'd a I about small one enough. terms Fair a the it. of follow-up much decision it do looks will and obviously Walmart piece unit on partnership. think it kind you you've you in whether to factors or Got operation. like? long economics frame

Mike Pykosz

Yes.

quick data. think to years relatively assess frame. longitudinal need time don't we in wait I to think I the

do very the on run consistency generates our our locations, confident can feel we results of given clinical confident we all that we're our think that. I of and metrics our of clinical can geographies all we model across platform effectively. And

the need to feel think So see wait don't clinical I results. to years we or months the

again, patients. becomes how around alluded same Oak engage over it location is the really, experience? them to I engage are hypothesis to about a to, strong, anyways, going of adults, very them experience a provide think, people, And experience of as we're So Walmart every the Street. as it's Geoff they're educate to times question, growing to well able is shop. that, we Are our week, a Walmart rest a And is and shopper doing as we're good faster the if we then which lot able to phenomenal

So we're about it. excited

how I we'll think quickly, working can and here. this understand it's see we relatively

Operator

with line is Daniels your Ryan William open. Blair,

Ryan Daniels

Mike, any and details comments or the I you might get hoping to was on any there contracting more have XXXX? thoughts you for opportunity regarding direct have

Mike Pykosz

Yes. about the Thanks, the program. appreciate contracting I question. We're Ryan. excited direct

And for a traditional are patients. those of it's traditional risk our on their Oak care that us obviously, that's groups For to Street number essentially really differentiate like allow CMMI take we model. program it, a less have Medicare familiar to pilot patients, with new Medicare from Health is exciting why

same our And the money. that So in care but we invest high-quality can the dollars from as fee-for-service, you do, paying you care. economics we're the when model see providing work prospectus, them don't really this our the in

because savings we're generating we're not that. lot capturing patients cost we our of from of So just care a model, actually believe those

us So it's for I a those really of some savings. opportunity capture to think big

And Xst, enrollment begins set April patients period to so enrolling of kind where is actively Xst. October their people the the start program in the begin can program

from couple now. a weeks So of

CMMI normal if I'll economics. of course the for we around don't about final Street. that digest pages. all And figure the just through implications really, had operations. plan kind of begin know release to of their piece the visits, is have read it's at yesterday enrolling to Oak X about evening, that the not PDFs, I in a a Our information of for patients honest, and is puzzle that lot some it come and of time they some out of a be chance

I think about So do excited But not but now, don't at that. making It's know it. program in excited program, the we're quantitative projections new I so point. this enough we to think certainly any about again, we're a

Ryan Daniels

sorry, follow-up, Okay. -- That's just on tuned. then Walmart We'll I'm stay I the guess, And relationship. the helpful. Walgreens tactically another

your between large think centers has I partnerships the and your is also one deviation current probably a operation. Walmart pharmacy

actually warm going Is that that to speak going things will a just So handoff medication Are their be integrate? can like too? to of you bring pharmacists to for you in-house, how it adherence? to kind

Mike Pykosz

point, is our believe if don't This and standpoint, pharmacy side plans about this at I really Walmart we have We, any tactically. the Brian. agree Thanks, not primary care from on would services. operationally

place that focused what on, that's And and that's so the really we well. we're do

on focused great just really we're so And primary care. delivering .

Operator

Stanley, Morgan is your open. with line Goldwasser Ricky

Ricky Goldwasser

up payer whether A thinking specific catch like the expansion, delays, for kind expanding new you question market think with look that? it's talk to you here you criteria about the as given how you're the a on the that just do cadence population? markets, relationship that you’re And or you're detail about going can of little when the market maybe also some expansion, on to of bit COVID-related

Mike Pykosz

Ricky. Thanks,

I the centers here a expectations, as month so month. out, of of up number a little in level far over just As centers XX wouldn't opened a I expect on ongoing. centers, we know XX

want think But I to I open delay a make ongoing. QX don't expectations. setting the many So sure expect XX is appropriately so did we're month some reasons of we we of the one did openings. I

measured year, doing were centers. comfortable see a So right you'll of as that. that opening monthly think sites And felt more I soon we had of as we open the the rest some

the overall pace next again kind measured end think, Tim center a year. throughout the openings provided out step-up we'll at I number for And a on the I spreading guidance then the of see, again, year. of think

quickly. so, one we thing think up learn of month a last think operationally, I is that the or can centers I over we lot open very that did

So our I XX of pandemic still We proud everyone was incredibly locations. as opened teams. new a knows up There's ongoing.

a time, X fill able glitches. provider hiring all We to team day were We to on fill from no standpoint. every roll on every Centers opened big were circumstances. hard able role. So

appreciate So that huge shout of really recruiting their teams, happen. works expansion out to make team, to all and all our our hard them,

to up lot I open that us So for of a a have ability the good think is validation that centers. we

as continue we feel step we up the of piece That's ability have if see so And we to can I kind that prudent. to progress, think results, it's we one.

On the do second select around question markets. we how

the actually we're to. is going I just it's think And that number pieces. probably in Piece the itself more market then is two important about neighborhood market. in I think one the probably

but And And really model huge so number that probably markets for of growth the older and Street's of for adults. so overall a care can opportunity a trajectory, I positive we Oak we need need help really Street less a Oak positive type health there's think on provide. felt huge

kind the feel in, years, in and cities, What's really neighborhood picking good we see across about right huge demographics think in that factors really see refined over geographies markets makeup success we predictive and there's of have and And where, at algorithms similar I a different of the Oak also serve Street and make all not to the across overall of our cities, do market. we how because important, And actually neighborhood have within and is success assess though, demographically. community of kind the score is a similar when most of similar fully we're I we large those XX difference the geographies. level our had talk model. predicted the we kind can attractive for the a host we look that we approach, for neighborhood really, so completely of that's decisions So a picked set very that today. in could or we're markets of

think build figure can from Oak all as Street to and to data, market, go of out, we'll benefit other at centers we really the really Health those portfolio will we'll try where we look so okay, that can is and the and neighborhoods And cover progresses, capacity. how as be the up, neighborhoods. fill over And market on successful. in to good to then more put over the more the get of And center depending we'll -- market those kind starts we'll years infill over centers good coverage is

of we're to next years, be I think at So long obviously, very there's new of couple in a to of list I but expand we opportunity markets. won't there's able markets a about. them the very next look huge excited And over all year, think just

the big about a very I our really we to opportunity feel big locations centers very to think in can existing to we put up impact ability make grow good in where And markets. centers successful. be

Ricky Goldwasser

was And -- this the so this week. entered you opportunity similar do very -- the across equity see else conference opportunities Healthcare expand here Global should do How that then how question One my stakeholder, striking that into? thing into you second about partnership with is partnerships appetite is Walmart. you different for where to But that? think

Mike Pykosz

we We lot market see our centers, of ability, to continue to in to massive. de continue the historically at confidence excited whether think And how earlier those Well, compared have recent have site great Again, economics of looking more put it's novo . our our for a improved and to centers. how looking de our is both performed novo whether the results foremost, vintages performed, we up model. about how really that's first it's are from and vintages at vintages.

ways to willing are And Walmart outside opportunity adults. the to we I pilot because to find such a to growth things because decade. do to obviously, ways there's that huge to continue grow so are the core find outside core that we next huge us And we we try said, Because our and even the is think to the serve there's than partnership, is bar also core accelerate already working anything that to and kind more and to for have continue the things over of a so well more older want core. continue

I like alluded and expand of we markets generally we far the Geoff as the that's mean, all population like bar that that are basis. frankly, Walmart kind as pilot as the partnership focus And that, you've regular more on, I'm because of generally a so amazing. intercity as to, as all nothing to the obviously, use feel geography fact rural the slightly that sure than cleared Walmart as staff core the there's can Walmart seen suburban percentage well on the breadth a and we

opportunity we a because ways that looking partnership accelerate it's And a model for our about So definitely that bar. huge a the our really way. think to focus meaningful grow strength always novo in and bar. de other on leverage other there's our We'll partnership But core opportunities I it to obviously remain continue are model. the high will such really, and to cleared be excited and

Operator

Instructions]. Steve is with SVB Leerink, line [Operator open. Tanal your

Steve Tanal

to you're with Mike, others been to efforts the a of few, the the community that I and mentioned that a respect on getting pleasantly. through of sort hear and outreach follow-up one, have benefit guess have I IPO. such. on that organizations mostly was asked. Congrats you but sort little surprised the same I results same the to

really So growth of ask limiting in and total I was an to you pretty to is tried how about efforts outreach you, that's same? going patients have think it's those on having the much in Or that you impact just guys much think any if COVID way?

Mike Pykosz

improve. we continue pride Steve, at of take in to thing Street a to that Oak is and innovate one continue lot

model investments We static. some and community outreach executive the ended model the for would I think function strategic same certainly alternative I would account of is in static. we training without on COVID, outreach around COVID. really building have our teams don't our made And that So up making have not side an of universe an think that certainly more been

would universe, we those don't there to COVID, wasn't investments. alternative what have the so And is performed, make if see have right, I to how outreach continue

was yes, we're going metrics early our what our of which how too center. last year, key is up start rebuilding community. again, day tell or to per the whether over year-over-year pipeline, of perform it's model And because, to you events, outside we And exactly per really the we're again, in center so the it's in center community-based months, back our patients ramping on part missing couple type last getting a

pipeline fill to a scheduled way through. people of all get kind and little and takes time the for up it the So

So optimistic. I'm

in the our field. think team is I phenomenal

that a normalcy, how put vaccine the hopefully in, marketing, mean the they've am our can more I the you'll a plays happens be out. also optimistic into model world that as -- while digital direct that add designing see and such term, the to we a get of also see we keeping year, I I expanded, if as think that ton community, [indiscernible] that work all -- medium we'll as we've in COVID successful some back world. TV, account-based can returns fields. sometime things next in But response deals of a

maybe would are parts new back, of we think also like bring parts summary did to tried a showing feel that we and be, and our model I -- innovated of we've model good we results. things but are those excited lose So the

drive results forward. continue bringing we successful in even so and in years. And the can to patients more be future successful environment, this hopefully, And really on

Steve Tanal

number that great That's Alright. tell understanding get to specifics? maybe or move I on cap it. comments guess ultimately question this once you I of global just well more And of trying the percent underway. around Got the follow-up ultimately and is here to on fee-for-service then guess for bit little hear. there. some to a governs direct could of I'm my last us contract what program what is really into patients an your could

I have And on applied for under professional your to right, of if that, number or the could you that you today. maybe model program context move as you around in could patients that governs the so cap the global just guess, us what some maybe And global color fee-for-service give it's structured capitation. minds,

Mike Pykosz

of of So apply patients model. our global is we the model care obviously, And the for keeping healthy out did hospitals. focus

in to work. So economics being savings our important kind of from able . the in reduction the to hospitalization share is make

On of there's is two passive. going the attribution understanding membership membership side, that our do One ways from to kind they're attribution.

of for care their we'll them look determine Program, way where of an member providers. the assigned is, little box that's claims at ACO and algorithm Shared getting is predominance works. to with so past and black the bit Savings the a the Medicare example, That And

The doing active other way is Oak they're which relevant more Street, is it, attribution. for

with program. beneficiary submitted be So them a this program. my whether [indiscernible] are And or paper will is form, an align portal the just they provider. there's to patients yes, allowed are to if in aligned the those I'd to essentially, online this CMS, like to

think managed what operational our care very this Health Oak is that we well because And to so we on plays side. into the do to at strength similar Street have

Medicare if new So us care we a contact the a patient doctor patient primary Health. Advantage change their -- today, Medical to the has Advantage Oak joins how patient need plan plan who where the Streeth

So where in very we're will a go way, this Medicare, same traditional that going patients to approach were process. the through similar on

consult the There's it, There's I they can Medicare, any patient patients into visits, [indiscernible] for why say of align. same. changes our benefit doctor work we a to business there's the want mean any And come access the no course really patient their so with when is how no I network. yes they ordinary And them but for understand, no those wouldn't reason we'll center they time. to

done that there's is downside not this I it. We've standpoint, never really new. any patients don't for it But from before. think So do to

sign then number I again, And or hard them. not. this good We're no a tell around will done the exclusions there's before. exclusions hopeful because one's who that quantify Medicare So can't program attritional really it's visit of that a are that, come what to impact percentage of portion it's the ever is, of for piece last agree it of in up to today on you patients

align Advantage patient, on X call my then Medicare, this if dropped been attritional the right, example, for following a it, for, the on on understanding calendar program out month they of year. So until has Medicare year, can't our

other is which of the extent program, the different programs. to meet these I eligible, do a they you exclusions MSSP again of more with change addressable dual and align there's with can't they're patients, out aligned a see have that couple an number SEC impact, think already of patients. There's Medicare they're mid-year kind -- some the an alignment outpatient with If troughing So Medicare ACOs year. of and that demonstration around who a it's can that within you or attritional Advantage, other ACO CMMI

that. we every like our two we closely fits go can not every patients we very X, processes a process, a bulk it's sign other if it's to process obviously, in didn't to And be will good the do But so and to day about will program single So day, we eligible and be sure be run the October thing, it's already of been it's we on one and think up, say going X. the be accepted a beginning feel enrollment we'll new. just have I make this, it

Operator

Health time. now it would like questions this further to at closing remarks. turn back no over team for I are Street to the There Oak

Mike Pykosz

prepared Great. you. appreciate kind remarks. end from Thank the questions Well, all And just everyone. with I the I'll of how ended

really on be been to can view, difference opportunity to believe patients we our invest accomplish. for we could journey, I our transform milepost broader getting huge have. in time are in Oak more health be really we're they this can just also and a excited journey. need care we Geoff a team, who much in opportunity an and but to not started a And But a other what care, experience it. to It's the such make our and invest patient's excited Tim, exciting for And for broader just Street. and there's Oakies, really it's about Our in speak

be this for a you, of we're doing for excited thank So and time. long period guys, the time, to

Operator

you participation. your for This today's call. We concludes thank

You may disconnect. now

Oak Street Health (OSH) 17 Sep 202020 Q2 Earnings call transcript