PRVA - Earnings call 4 2023 | Privia Health Group, Inc.

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Operator

Good day, and thank you for standing by. Welcome to the Privia Health Group Fourth Quarter 2023 Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.I would now like to hand the call over to Robert Borchert, SVP, Investor and Corporate Communications. Please go ahead.

Robert Borchert

Thank you, Shannon, and good morning, everyone.

Mehrotra, Financial Executive Officer. Parth Mountcastle, and are Chief our me our Officer, Chief David Joining financial slide This be Investor Investor priviahealth.com.Today's accessed is Relations in release call being the Relations webcast pages of section on are posted presentation and priviahealth.com. can press the and of

to for we have only make and current many our in to and today as based XX, to and February Following those line the and to materially. comments, the risks can a yourself and Securities XXXX and results The limit our and queue and Exchange reported is actual expectations XX, are including for until December will future financial subject we business year Please Commission.Some prepared differ you business the follow are will are on that XXXX. nature our return so cause today up to get of the if as possible. ended results may our related of as uncertainties open questions. one final questions future we the XX-K not our view with question filed Form financial preliminary statements, of objectives, performance Such forward-looking to operating plans are statements

call our website.Now in these to on refer factors presentation in may our on accompanying press turn the measures described along comparable As the release slide measures with to recent GAAP measures financial call. press our risk the filings.Finally, over are included the Reconciliation the non-GAAP these Parth. of posted statements to I'll we considered result, should and be today's company's a and cautionary statements release in certain SEC most

Parth Mehrotra

new and partners, whose business reach XXXX and one guidance another with our for and balance near the core Washington. contributed that before your sales the South business Privia Carolina model performance in extremely networks one on implemented I Practice from high implementations in value-based led $XXX total cover continued and in increasing our good underlined over review met a success record metrics. organic and the employees by our discuss Health fronts recent and provider growth also focus multiple our level launches and outstanding all our growth quarter of highlight Collections our extended gross had and quarter is capitation to for a year market nation. for addition year, performance, David guidance.We capital year results sales, XXXX our will states combination areas of continue morning, largest restructuring of with briefly of XXX in in for meaningfully growth our with we density XXXX.We proud focus fee-for-service and to ending first with our XXXX approximate Robert, following fourth implemented you, initial financial the to this strong highlights. Health. in Connecticut, at of the execute Privia end the and drove of high on contributions and another performance. build was of Thank We of a Then year I'll providers new of the guidance. new to the announced headwind year XXXX We of that or the our updated XXXX of exceeded closed the of our care were of some A am results, Practice profitability.This We a morning, financial key X across accelerated agreement as sheet past position, same-store year quarter questions.XXXX provider actual key our provider in take we outlook pleased everyone. retention added Collections million market states. strong ambulatory provider XXX to entered and existing an and providers ongoing The XX%

to the unit alternative our for to development Privia of embedded more Platform our operating total market our expand a strong efforts high validating due in model in and the differentiated mature drove in economics. as bring meaningful addressable model Our community states.Growth above new continue Contribution outperformance guidance markets in the business our leverage providers end

and approximately recent Medicare cash regulatory we by appropriate with arrangements payers payers health Given taking on our including pressure risk and faced have outpatient we debt.Moving headwinds commentary various flow our strong the the factors, and in plans. of strong cash in an are no reduction ended stemming Advantage expected VXX, number continuation rated X-star to a from topline value-based we given months, margin free several the conversion, of steps and heard in $XXX XXXX, utilization anticipating from Over year X- inpatient market. and million and manage to the utilization,

strengthen plan market to some into are believe benefit look payers risk risk sufficiently that environment support the provider this that MA designs their does compensate taking in groups we we downside do year, downstream.As not adjusting thresholds today MLR setting or capitation earlier not As overextension arrangements. and contracts position, risk-based stated

structures book contribution. our contract managing prudently more are risk and for margin We favorable

attributed contribution and and lowers limiting expected in sustainable manner Collections for we upside/downside basis certain moving given risk trends utilization we into environment margin Privia to to our from be in from that are respond is term.To the the that while nimbly continue care $XXX continue in risk by the and January benefit year-over-year provider approximately ACO organization market, and end, exiting with EBITDA prudent essential year-over-year. to flexibility we for XXXX, effective in a expect changing Delaware XX,XXX arrangements. accruals. With capitation exposure changes model.We we margin and renegotiating this Practice demonstrates we was on grow terms, these the economic CMS near reduces we to This to lives foreseeable improved the future.Third, of adjusted diversity a are negative environment MSSP, to as that ability contracts.Second, for lives business the reimbursement downside the Our notified risk X MA a benefit XXXX. generate This comprised attributed restructuring ACO our value-based of care million expect a approximately in XX,XXX to arrangements

density Despite robust. XXXX, costs the savings market well cycle, into is remain shared accruals unchanged: at conditions providers at capitation guidance.Adjusted look we future, capitation percent in the our points accretion exceptionally and over out expenditures at adjusted free EBITDA position about care in groups expected XX% This light Our basis the Privia year become their across With Privia of business supporting organic to well durable adjusted our pipeline delivering excluding XX% in existing and midpoint served next to our of in growth.As in the The thoughtful XXXX scale more new our move like continues their we medical expect million development approach shared capital provider XXXX and present opportunities to adjusted to arrangements our we in and aggregate. favorable increased risk development our increase predictable growth. margin free stage past increase flow. EBITDA XXX invest minimal guidance managing we value-based continue early expand existing groups the is our by this cash and these in would manage and enter to our build actions through expect a XXXX.Looking in back to actively life convert anchor expect to margin has manner.As flow XXXX of we our end, long-term for assumes arrangements when $XX minimal be $XX reevaluation of shareholders partners value-based capital to years, investment markets midpoint. enter EBITDA growth of growth, the million savings any care platform newest in the geographies is couple increase $XXX in minimal arrangements exposure, in business provider our EBITDA accruals for right the as both into cash our and contract risk new our of model, arrangements provider believe to in activity.Our million consistent, at many sales goals goal to a to care positioned of EBITDA partners.Our to very cash and

addition, we to provider disruption starting the are environment. some In space see in the challenging due to

the in approximately we in January picking lives choice opportunities footprint patients country. than differentiator in and the year-end for patients all of XXX approach Privia most than District serving Columbia. X.XX more we very providers programs. lives strong lives of arrangements some as with in thoughtful national provider and have from physician this value-based This Privia balance build caring our our is networks of pace delivery and of our year, partner year-end more is newer position Given XXXX our downside lives increased the for XXXX. estimate we in locations center groups.Privia's a XX% key contracts attributed to approximately expand broadest Today, forward more Privia.As XX% attributed for in across XX% model care primary care and as one and industry.Our implemented largest the as payer million the across into care-centric the X,XXX from as look arrangements markets is of of we government to upside-only attributed Expansion million balanced are continues XX% increased XXX,XXX. Total sheet, that XX all across than attributed are partnership X.X X commercial states X,XXX over one of commercial business positions platforms multi-specialty at-risk risk. reimbursements up our and pursuing to commercial

to upside/downside program.As or in XX% upside are fees participating management approximately of fee-for-service lives X, offers in grew Savings XXX,XXX X% of into lives expected Medicare arrangements, remaining XXXX. the Our administrative risk for of Medicare lives XX% to of in from Enhanced attributed down CMS and XX% the the earn well as fees downside Approximately excluding lives are greatest the book opportunity highly-predictable X% commercial ability over to attributed in years. downside are move from end as downside The our very Shared proposition remains risk in that the significant be XX,XXX of savings XXXX Medicare to Track Delaware, Program, offers limit Advantage value are due risk the MSSP our arrangements. payer the with in upside-only us incremental unique to the January XX,XXX our exposure.There in the medical capitation shared groups opportunity embedded to our Advantage in next contracts, a few to at a significant in care arrangements XXX,XXX business.Total actions are lives

lives that move significant thoughtfully we've XXXX. increased are we as when manner care in recognize EBITDA our only significant of MA As to we it to ACOs thoughtful shift XXXX. financial contracts in into our revenue.The shared flow contracts, performance, of our savings to I'll Privia's ask into medical the risk volatility with limiting ACO to from MSSP on Collections us core strategy consistently and value-based as entities will premium We such recognition our in downside $X could associated capital and under of long-term a substantial our of growing confident of our types opportunities different value-based and risk Practice recognize additional underscores for management care spend to provide with amount upside/downside Any savings capitation GAAP and/or medical to color managing revenue to billion remain care our medical partners or are risk current environment. spend lives. between rules.In position growth.We those noted, REACH in In wanted medical shared or value-based our Practice revenue in for most the of of and associated and fees review focused due financial risk David our profitable operating be appropriate In our arrangements. and aggregate, lead contracts, cash provider Collections arrangements the on spend is requires approximately scale in the management GAAP we potential provide free for taking, including outlook arrangements, from movement shareholders.Now, recent lives capitation business

David Mountcastle

$XX year-over-year. EBITDA and Parth $XX.X topline, continued this we of than million. We the Practice net $X.XX $XX.X in drive million approximately trends, million to full guidance entry XXX% or million. X,XXX, almost Parth. the fourth to of increased strong end financial for solid to noted, more Collections we XX.X% EBITDA ago of expenses to to $XX.X new the EBITDA XXX Thank XX.X% met adjusted the for ambulatory up from led year flow and of provider $XXX absorbing and $XX from with since leverage Combined $XXX XXXX added reach SG&A mature performance and to key you, differences.We our implemented adjusted costs helped XX.X%, flow, of count cash our cash XX.X% and was new to bringing care cash newer year million up activity to strong operational billion, Privia September, year operating balance over financial margin all quarter more Platform Health's markets.As enter metrics a ended year Collections cash exceeded market cash than this despite XXXX. XXXX. very year grew providers Free in with states. business costs.Our to grow generate to a or continues development up of for XX.X% increasing year execution Practice was million ago QX last XX.X% through continue timing no due as and debt for business and investing a operating slower utilization generated and grew model QX we adjusted after million

performance, positioned undrawn and book We have maintaining us a strong conservative an this year. into sheet.Privia's facility, also plan business well and continue of credit XXXX $XXX available has balance business diversified and heading momentum million to

topline, more scale XXXX reach favorable increase XXXX to margin year-over-year limit providers expected and in by three-fold: EBITDA provider operating leverage Attributed the Our from growth.Using and risk contribution, to organic density downside drive our structures implemented X,XXX focus arrangements is growth in contract midpoint lives for year-end. essentially adjusted on from contribution X% geographies, growth of increase MA existing to drive Collections flat our and X.X% to focus are growth guidance, the challenging Therefore, be in of adjusting proactively risk environment includes foresaw of ahead to we the our positive Practice revenue Delaware our we expect are approximately at ACO more year-over-year. as exit we GAAP book XXXX.Moving us. a margin and to midpoint

driven The guidance a risk in minimal capitation given Collections MA XXXX terms margin.We we approximately in of accruals. provider markets Collections year-over-year to exposure economic expected as mature Practice XXXX growth improved of as as million from of This by markets. includes reduction lower in part benefit prudent provider implemented the savings shared from in XXXX more $XXX renegotiating. Our increase are implies are our Practice growth newer agreements care our are well growth fee-for-service approximately XX%, early assuming momentum expected also in

expected care margin operational guidance of increase at given contribution $XX the savings to points more operating minimal market midpoint to of year-over-year at accruals.Platform X% reflects mature adjusted X% to is million to margin in midpoint percentage expect months.We we've our than a to care EBITDA be margin at $XX of growth XXX leverage are costs. shared growth new growth million expand as the X.X% an investment more over guiding new XX%. the XX midpoint approximately markets the We as offsets past in the Adjusted incremental markets of EBITDA entry in of basis entered

forward $X growth XX%. assuming be of capital-light current our in in XX% book.Finally, year or adjusted as an Practice any We free This term, model, in remain the capitated physicians, to and the well again contribute approximately positive nation. care conditions the tax part effective future.In also rate now continuing expect less and reaccelerate potential to growth and providers, expenditures to of we newer largest organic cash we the to remain EBITDA this given to the of our development MA the of our targeting when in markets the new of XX% significant extremely questions. Collections health arrangements operating years. your and continues are attributed adjusted lead or partners to patients.Operator, appropriate grow Health the growth our are XX% near ambulatory to our should annual adjusted one move networks activity existing impact business and capital in we We ready serve anticipate full-year are to we MA system And on excluding in focused EBITDA present look positioned environment, all and their future growth downside-risk building flow.Privia and providers delivery to of EBITDA converting mid-teens in to markets themselves greater million than to we our market lives take

Operator

[Operator Instructions] line Nephron of with Our Joshua from question Raskin Research. first comes the

Joshua Raskin

okay titrating specifically you of future negotiations to come in sort utilization And about talk be capitation payers see think they're how with when and back I'm to calm around interested taking you going of you back you changes? in we when you the when say Can they're why with want and the sort other risk down? risk? receptive resume things

Parth Mehrotra

question. It's Yes. a great

a one, different take X know. there care things. the So do flavors day that we've from conscious across are model in few as and built a risk can very Number you value-based spectrum,

So We're risk and commercial, across savings also and shared doing that and upside/downside capitation, bonus we're we're MSSP. doing with payments. upside-only arrangements. MA doing fee-for-service doing We're

adjusting are we've they MLR they XX% these is have make in have we or are clear, of appropriately, skin the If that given just longer that every risk And the still partnership marketplace. that be leads dialing recent us the a over to understand that MLR with given changes this game it's trends take us any arrangement question, sure payer with then that higher time. to proposition time. the down payer book, to value we we substantial broad for that specifically threshold. And or we've It's capitated at are X-year industry, higher. changes risk are impacting in taking the levels their discuss certain end So those with And to we to over contracts, in your the that they pretty It's public can no got supported payers, in seeing certain trends, in a private.When book. everybody's we're the ability targets a that deal discussion.To tried seeing fairly X- to utilization realities have seeing. The long-term day, contract. it they with And if that Privia. is for just that historical

of how contract. strength the of our to and the and speaks payers it with long-term think I the can nature the model business work So we

Operator

question the Tanquilut of Our from comes Brian next Jefferies. line with

Jack Slevin

from It's off there's guess rate it? numbers, that operating change guided in at be then, optical about we . you contribution Jack for And to growth one, on growth sustain guess, jumping out average the from attributed a and range. XX% guide, from for here. think to of guidance at strong I is XX% in the the EBITDA Slevin of based growth off as to given I year? looking impact, shaking And QX. the range lives little a platform in bit right needs you've implementer print the 'XX provider think 'XX growth on somewhere in about two, the 'XX think in I the think, that the the I'm to about provider to should to leverage where how providers way same

Parth Mehrotra

So them in I'll answer order.

target to we've providers XXX going year. said So, we're every implementer one, to new number XXX always look,

that new XXXX our number. XXX an As we We as states, implemented to like we was expands. TAM outstanding we'd close And into to year. exceed providers, get noted. ideally,

implement soon So else we'll being always All equal, as as some timing try possible. difference. and them there's

to to example P&L. And And any Some where have, and day the that also not the entries move savings, grow is value-based the we time. penetration, into able still midpoint XXX Then across market down accretion adding a of EBITDA single 'XX.So to even is right period lives. we just states, in normalize implementer not see book.We're the come utilization continue given them TAM current we We think attributed then or given percent We X- trends in we that what low you arrangements. can XX-plus come XXXX new assuming X-year guidance. flows happened in market. are way the recently. EBITDA three or with any entered can a that And the the assuming our the those perfect But with over value-based markets providers XXX providers of have that just four generate XXXX. in X, new implementer just negative new existing of in without are that's to existing footprint the despite providers that, and add the we at are operating we markets leverage shared a

increasing keep drive think move implementer are into that So I in adding joins beauty we'd if 'XX, to think proven forward existing business, operating and XX-plus leverage like level leverage unit life and just that the units leverage And of already marginal unit operating that at clip and provider the the business the we keep the operating those the to The and joins as the lives, today. at grow inherent percent economics is business economics the the we've we accretive. least highly providers EBITDA two is that we of magnifies.And and footprint. in the

Operator

Lisa with JPMorgan. from Our the Gill comes line next question of

Lisa Gill

how seeing And savings talked about you're you about as go now. I want XXXX. to we shared the right market increases back to think in minimal

that thoughts into capitated think, better about have Or years relationships? risk have we some think that Is example, how changes? coming that the how the need of you these just talked of of do I any risk think Is You for And we like, should about contracts. minimal to model about, utilization? in through do the savings, baseline? get more a you this? think that increase on timeline 'XX we But several Just renegotiating about type is and when shared back you away?

Parth Mehrotra

Yes.

viewpoint hard And to have has bit without years and a private macro when we've So little profitability the has both been public that which from we've on look, businesses last a focused investors or X and -- the just a regard in-year flow. over on risk-taking been contrarian had space. the grain, capitated against cash perspective, been of MA viewpoint free

Lisa Gill

will say And that. you right. were I

right. I were record if You on be that. will right? we saying back I look now, mean, the

Parth Mehrotra

analytics kudos healthcare team and It's hard And our team. to to economics do. Yes. data

these We and trouble. out the would think see in regulatory us have that keep some of We of have trends of best impact. some the significant industry these changes pretty

payers. it from the think significant would a impact. heard You've be VXX all We pretty

we we're rely shareholders, I think you'll communities in community an where such business over the get We and do with do once you're think normalize.Our total XXXX our when goes are things book everybody is this think. payers the and would books that providers the payers The seeing turf. our lowest providers view scale by work history.We of are different pretty network. lower the payer our cycles. And provider the total XX multi-specialty are undertaking are make care that the we be normalize. of 'XX we with We've serve. wanting our right that value-based see challenging through of reset doctors, restructured us. both and to are the would differentiated. we've some the think very cost side just groups. And expectations. 'XX, the do across management have a day of payers knowing business, the medical downstream we you're protects cost ability in And Any to where in through that, setting obviously phase. of with 'XX, think work downside cost for in at the payers actually on first including actually actively the which helping And sure will is Things The protected we commercial, going years. year thing groups a risk MA last I payers Look, care seen building the end environment the on in right willing do at to impact and

'XX, see think your normalization. get some directly, 'XX, through So answer once I do question should we we to

Operator

question next William from Daniels of Our line with the Blair. comes Ryan

Jack Senft

This is Ryan Daniels. Jack Senft for

looking in asked just in added and And alluded expect maybe you similar kind of providers terms weighted back-half the a you're and as the over to, guess XXXX. cadence to XXXX? XXX Just earlier, question more weighted of just of year? and providers linear Can provider the off weighted. that providers, adds provider implemented for of equally add be about the you previously or XXXX, discuss in I Should bit more back-half you the kind to

Parth Mehrotra

Yes. Absolutely.

So with usually, exception new market entries. they of pretty should be linear the

entered So 'XX in happened came what of Both day South entered was implemented providers with Carolina, one. we we those some Washington.

to we that increase. to of other that speaks of that just led the model momentum And it be That was we've through so XXX And obviously and linear. years to strength the then blew had. we best have. pretty numbers. the one that, expect the the But than we should

our we've previous in not in done new are as including previously markets years. guidance We any

and new So to that would comes as enter additive providers, if with and the when we guidance implemented markets given. we've that be

Operator

Evercore Anderson Our of line with next the question ISI. Elizabeth from comes

Sameer Patel

those you're this on I the to as lives or This just gaining guys over, fee-for-service there it is like, Sameer this strictly wanted like Patel on for economics shared that now going any, Anderson. contract, capitated relates moving to you savings? are to Elizabeth is be confirm,

Parth Mehrotra

Yes.

So there's the workflows deeply lives always we fee-for-service into even we are economics when because processing claims. capitation and move in

on administrative capitated expense any into is also capitation. the medical a fees that the fee-for-service So captured What are go a up we top. we through getting spend lives as claims payments if fee-for-service move when earn happens is even

nature able good do care think payments. any ourselves, process unit the that we on economics book on we I on So fee-for-service shared value-based of business. that's if pretty do But get differentiates value-based on savings to fees same life both the the earn and same then and the the book the can fee-for-service and both patient. we're

Operator

with comes of question from next BTIG. David Our the Larsen line

David Larsen

talk choice Medical? little you about relationship your And high. And groups bit a your to your BASS exit Can your bit little talk with Delaware? a assuming about maybe I'm levels are with retention

Parth Mehrotra

with relationship BASS joint first MSO the on a pretty where obviously helping Group, are entity. the one, Medical So we grow, venture we and have relationship longstanding we a good group have

that They a risk-bearing work delegated downstream we establish entities work So is remains by We with do for in Optum such contracts. a Privia that for strong. that a WellMed partner with California MA joint took in. that organization certain owned pretty relationship risk North business is venture were looking to an do other bears. example, the that.As Texas It's not from

unchanged. Our economics are

arrangements. savings all We continue value-based on participating in providers to shared get XX% of

we so establish businesses provider in of decision. we've and helps changes, foreseeable the Group, noted utilization the our those that that remarks, what the respect in we expect generated or hopefully contracts, any at that we for to and purely it ACO such of would underwrite partners prepared for and grow.The think given look, we were And have to been decision some question, future. was the as we the seeing trends, discussing looking group these to shareholders in our an if an for shared that savings BASS and with Medical economic entity, Delaware We marketplace, didn't EBITDA participate the some Privia

the appropriate we'll when prudently exit in our we the back dial and happens, arises in. monitoring model and can or risk an the manner, If these we is future, in can we in keep situation. that flexibility ACOs back that Sometimes the enter opportunity

Operator

with question Piper next line Sandler. from comes of Jess the Our Tassin

Jessica Tassan

the and quarter the on guide. Congrats

you know expect market new where you you to XXXX, when you So articulate then wanted if I 'XX million $XX then assuming headwinds said experiencing in ACO? effectively tailwind headwinds. lap those can wind won't new the remind entry of just are And could to because have associated, exit those costs those but us million, kind costs entry $XX you to in I which Delaware market you EBITDA to you and maybe down states to? the is a clarify are just attributable

Parth Mehrotra

at on So piece, enter the we when we new stated spend start the as sales state, first consistently, we've the a marketing line. and with first

continues XXXX and spend of to was in out be those providers states. infrastructure XXXX. lot team That a in So add sales the building new go to there in the our

platform. of the in of However, increases once cost spend start also implementing we providers, some the

a $XX to with platform $XX providers we million seeing working up. of implementing ramp support these the now incremental them majority spend the costs million as in you're and to So is

it happens.And expect we still we markets, the -- some North not over next would Carolina, South break and did Obviously, as providers. They Delaware growth, years. those as Connecticut, as EBITDA to recent a even of between new any So these negative, implemented perspective, shift of provider Ohio. couple you the that would but that's are and trajectory.From depends are the are expect, well our have on

we so not deal marketing this was -- sales recall, were those platform, you health system, they providers care not As were our or in so a not market. a were substantial costs partner's that on with implementation and

prevents a we and faced impact the down we care exited we've margin ACO, shut negative not had and the ACO. EBITDA that However, have would that

Operator

comes Our the from next question Taylor line with Gary Cowen. of

Gary Taylor

questions Most of my answered.

Just a couple, maybe follow-up.

market, activity Just or following thing hundred you that which was only couple up savings, and when was on happening that commercial Is a still you some in BB, group? risk-taking with were the announced MSSP that Delaware doing shared physicians. there

Parth Mehrotra

It they work no MSSP. was were on so platform. there There doing, that fee-for-service only not business, only were line other was and we our was of MSSP, no so

Gary Taylor

And to was development my swung capitated the million quick the quarter. prior on in other fourth a book, $X.X positive one

negative intuitively First quick headwinds half and there trying understand that? you the year, just explanation a Is that. had of to for I some from development, was

David Mountcastle

time, overall out back got revenue the This and lives is our took when to was one same It's just Mountcastle. some attributable and Yes. The you from time David payers and for of the de amount of margin. reassess It question. impact essentially costs. care the -- of sort minimis groups. was to Thanks the that go from payer reassessment

real audit just impact life an It's one sort overall. our payers. So of no from attributable of

Operator

Our next question comes Richard from Genuity. line Close of with the Canaccord

Richard Close

Privia have as guidance. potential in realize what opportunity? I a you in something market. you're and XXXX about markets just for specifically Parth, mentioned that new the that you provider I'm But by what disruption means curious that the don't meaning

Parth Mehrotra

appreciate question, I generic. Yes. keep comments the just my Look, I'll Richard.

obviously filings. Chapter You're seeing some XX

and business be may past single a in entities development they entity partnered is line this we as business companies. may be and where perspective both the X was that arrangements held we're existing could And in of models opportunities us, significant years. think enter there's density the space an attributed earnings where public established.And struggling, our focused, capital We in some will lot a can get to that for this or and think both where seeing organically the well or things markets. new there both proven implemented from add those out that normalize, join will of not chased as to that X well Privia we providers, add At of there see be as be may end X with there groups the lives. You're facing us some to market day, units, revisions are looking opportunity privately which companies headwinds increase model, environment, opportunities have optimal, our add states for and provider

an get current in some have where struggling to that grow. and in our we'll willing aggressively given position, sheet pretty they And capital at might be balance think the arrangement current be so to lives go if in we can strong the that they environment, structure go may I

Operator

next Our Partners. the from of Leerink Whit line question Mayo with comes

Whit Mayo

question. The you want real quick I that million that for made and clarification cumulative million right. XXXX? year? make one Just last get that a $XX investments I costs, to Or is startup the $XX sure to just incremental to is in all this

Parth Mehrotra

I incremental in Yes. like I be some predominantly related said, 'XX, those and expenses. cumulative. would it There marketing because was to we are costs added, sales consider

implementation providers, should a platform entered the incremental but not if and year, And take proxy started and that pretty we and could break as on states, the we've adding. what are one gets infrastructure these of A end would line, not established business million, They're get the those costs consultants market. have rapidly states. in are our we $XX $XX we in the these cost the to lot some are the million would time, the scales that in say we then you even.So as of for as established. to performance the add costs Towards out come They we said.

given that states that that all give we spend we're rationale of in us for the our is EBITDA states level but having a embedded our Now, of negative today. meaningful guidance, that

Whit Mayo

a book year value-based or so ago ACO, guys in it an I maybe think acquired care of it. you a to that was Connecticut, whole had kind

Just capital and about into opportunities update that? opportunities to how was maybe for kind around thinking an of the performance you're of kind deploy like other of looking that

Parth Mehrotra

of playbook model and If bought. going I we the the And partners that a the are for community The lot for they've think It's us. a build been back IPAs, such our think Group, we business Community We other providers we us. Connecticut great full-scale entity the was balance the That in well, big Yes. a seeing at Connecticut. in we a momentum sheet IPA transaction or given them go acquire and Medical can and we find can state ACO with to partners. that's we're great pretty great really have. implementing like-minded of that performing strong

So that's a playbook. big part the of

Operator

from Inc. line Garrow comes Our Jeff next the question Stevens, with of

Jeffrey Garro

try few a together on I'll lump shared to savings.

you for attributed how also you includes versus could specifics many for hoping shared and expected final I expectations, dig into add are But savings be and some are definitely Privia to more MSSP visibility So into the could MSSP cushion guidance XXXX And performance was some hoping Privia I XXXX expectations XXXX. on results? XXXX was do to beneficiaries participating providers for XXXX, first ACOs.

Parth Mehrotra

I may question, given you to a were repeat there ask handful. a

MSSP A we've we don't of disclose the PCPs XX% those reported providers. the as XXX,XXX It gatekeepers, lives. part number we state. So are In aggregate, including of have get of providers Typically, results, by and program attributed to of family medicine. see X large then our varies And our excludes Delaware. year-over-year. are in you shared of enhanced exit aggregate about the assuming and X, in flat January savings of can the those lives as that sort are track.We of quarters in be

headwinds So tailwinds. and there's some

our So and commercial, between there puts MA across takes are diverse and MSSP. book

So our that's embedded guidance. in

could or your that half question If you great. second second the be would repeat question,

Jeffrey Garro

Yes.

results savings final for the from expected some firm XXXX understand to payer up XXXX your trying results financial lines from shared element whether Just you'll get of cushion as data that a claims more the partners? you includes

Parth Mehrotra

So data. we accruals our we update quarter get claims look, as every

prudent pretty So they or current utilization the be we go up have very always in down. embedded Hopefully, in time either we're could That's the environment. accruals. guidance. mean, real I with way, to working tried our

shared again, minimal knows. the But assuming are increase. environment, we clearly, savings very noted current given nobody we As

and It hopefully, beat tough when quarter. predict. you've we're for this update variability. to we years, meet try seen So can guidance, being is it's past as hopefully, our But every from risk called pretty it. or give over past the always be we'll results hopefully X a reason. prudent we there it some But And here. But

see. we'll So

Operator

from comes question next Truist. Singh Jailendra with line Our the of

Eduardo Ron

Eduardo for This for out a Ron is Jailendra. there minute. We cut

lines Can a overall So as opposed results years, look we favorable relatively are X seeing table at renegotiate driving the decline imply a your take. located that book, I'm million contracts? of care And move be that. $XXX region? not margin this in cap if discuss to your break-even this last to to XX,XXX margin if these Does lines revenue, of care table the remaining is like You're in or you sure cap specific give perspective were from XX,XXX? looks those over it to that a

Parth Mehrotra

Yes.

don't in renegotiated we which going payer. contracts the yes, are region. XX,XXX a region in remaining particular with but a region So the disclose payer, to these But were a disclose we're particular or the and not are also region particular we

think that's info. confidential I

MLR medical with payer, benefit providers trends have benefit is risk shareholders.The we worked targets that got. against savings, has we we just the the that benefit cost the been and groups take our ultimately -- idea significant and environment more the view given our generate could our on it's then do Our shared everybody such

forward XX,XXX shared the is think flex we pretty that's But is risk to one. going the incremental in risk. hope tried of a where just don't that that well. the hope case-by-case our care we meaningfully.I we But unless keeping where up some even Otherwise, in book, capitation positive sufficiently a positive It's generates generate renegotiate single are margin have current risk spectrum. risk take downside the We to usually, do day And protected I not on that on are to So lives, as we we in if expect we keeping we just line savings basis. future, doing if the our across dial that the think contribution we beauty our are model EBITDA. evaluate and paid can that environment. getting you're would that the

Robert Borchert

Shannon, last question.

Operator

Markets. question comes next Our from Sean of the Capital Dodge line RBC with

Thomas Kelliher

This Keller for Thomas Sean. on is

So there. just disconnected I got actually

in indirectly to check I answered this Care think Parth might you back Partners. wanted Privia on already, but have

are to if many think at providers are that of How there how stack? model have the about end possible, full the 'XX. converted on already over tech of there I many X,XXX now? And those

Parth Mehrotra

Yes. I appreciate question. the

And continue IPA earlier, noted both for are and predominantly really to care we well. Connecticut last and to we year. that's a organically partner as providers, our about partner that have look X,XXX can morning. group on of Slide Those lives, inorganically. entities, we and added gone community you or presentation ACO-type So X add other we care And in see opportunities medical this

hope that business. keep growing And to so book we of

Operator

like Mr. Mehrotra now closing back to for to conference hand over the remarks. I'd

Parth Mehrotra

Shannon. forward to Thank support look speaking I to you in listening of our today. We continued again call with near appreciate future. for and your Thanks, the interest you and Privia,

Operator

today's This your participation. conference call. for concludes Thank you

You may now disconnect.

Privia Health (PRVA) 27 Feb 242023 Q4 Earnings call transcript