Tabula Rasa HealthCare, Inc.
Q2 2018 Earnings Call Transcript

Published: 11 Aug 2018

[Operator:]

Good day, ladies and gentlemen, and welcome to the Q2 2018 Tabula Rasa HealthCare Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to introduce your host for today’s call, Mr. Kevin Dill, Corporate Counsel and Chief Compliance Officer.

[Kevin Dill:]

Thank you, and good afternoon. I'm Kevin Dill, Corporate Counsel and Chief Compliance Officer for Tabula Rasa HealthCare. The company intends to avail itself of the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Certain statements made during this call will be forward-looking statements within the meaning of that law. These forward-looking statements are subject to risks, uncertainties and other factors that could cause Tabula Rasa HealthCare's actual results to differ materially from those expressed or implied by the forward-looking statements. These risks and uncertainties include the developing nature of the market for technology-enabled healthcare products and services and potential changes to laws and regulations that may impact our clients. For additional information on the risks facing Tabula Rasa HealthCare, please refer to our filings with the SEC, including the Risk Factors section of our most recent annual report on Form 10-K. A recording of this call is accessible through a link on the Investor Relations page of our website, and it will be available for 90 days. I'll turn the call over to Dr. Calvin Knowlton, CEO, Chairman and Founder of Tabula Rasa HealthCare

[Calvin Knowlton:]

Thank you, Kevin. Good evening, and thank you for joining us for our second quarter 2018 earnings call. With me today are Dr. Orsula Knowlton, Co-Founder and Chief Marketing and New Business Development Officer, who will provide an update on our business efforts and Mr. Brian Adams, our Chief Financial Officer, who will provide our financial update on the second quarter as well as our current outlook for the third quarter and full year 2018. This was another strong quarter for Tabula Rasa, as we exceeded our guidance ranges across the board. Our revenue of $48.6 million increased 55% from $29.4 million in the second quarter of 2017 and adjusted EBITDA for the quarter came in at $7.3 million, a 114% increase over last year. I’m incredibly pleased that on the call today, I'm able to share with you the results we received recently from CMS for year one that is 2017 of our enhanced MTM pilot. We were pleasantly surprised as was CMS with the results we received. While the Part D prescription coverage started in 2006, it was in 2010 that CMS enacted and attended medication therapy management or MTM. The goal of MTM was to mandate a service that would reduce Part A and B expenditures, since medications in the senior population often lead to unintentional adverse effects that necessitate more spending for physicians and hospitals. By 2015, CMS decided that medication therapy management was ready for an innovation overhaul to understand if there could be an improvement in cost reduction on part A and B expenditures. At that time, CMS produced an RFI for a revised model of MTM called enhanced MTM or EMTM. In our EMTM program, we focus upon medication safety using our novel medication risk mitigation platform. Most of the other pilots, as we understand it, focus upon tactics related to medication adherence. CMS’ goal with EMTM was to demonstrate that one or more of the EMTM Part D pilots reduced Part A and B expenditures over the five years by 2%. The Center for Medicare and Medicaid Innovation, CMMI, which is spearheading the efforts for CMS, expressed its belief that not one of the 6 Part D EMTM pilots would achieve that saving target in year one. However, I'm pleased to say that Tabula Rasa’s EMTM Part D novel interventions decreased Part A and B spending by 2.08% in the first year 2017, which translated to a $37.1 million savings for our 240,000 EMTM Blue Cross Blue Shield members. We cannot be more thrilled by the efforts of all of our teammates here at Tabula Rasa. We're excited about the potential ahead of us and we'll keep you posted on our progress in year two, as we engage with community pharmacists, as part of our medication safety community pharmacy network, EMTM 2018 strategy. One of the things that is more interesting to me is that this serves as tangible proof that our medication risk mitigation, personalized pharmacotherapy platform can reduce ER visits, hospitalizations and related medical expenses in closed delivery systems like PACE as well as now in open systems like Part D. We’ve produced a number of promising outcomes over the past year and we have identified a plethora of future opportunities for our MTM or medication risk mitigation metrics to touch a wide array of patients in numerous settings. To ensure that we are able to capitalize on these opportunities, we launched Tabula Rasa 2.0. This is a next step in our evolution in which we scale the business to support our growth for the next few years. We are making investments in our analytics platform and in integrations with third parties. These investments will ensure the highest level of integration and the ability to present our information to point of care to empower clinicians to be able to take action quickly and simply. We've accomplished a lot since our IPO almost two years ago, including expanding our leadership position in the PACE market, making significant traction in the managed care and Part D markets, broadening our solution offerings with a number of successful acquisitions, and taking serious steps toward national and international propagation of our medication risk mitigation personalized pharmacotherapy software. I cannot be more proud of our team’s accomplishments and I look forward to keeping you updated on our progress in the second half of 2018 and beyond. Medication safety continues to be a growing topic of input, not only in the United States, but internationally as well and Tabula Rasa is perfectly positioned to make meaningful contributions to and capitalize from these efforts. With that, I'll turn the call over to Orsula to provide an update related to our new business efforts. Orsula?

[Orsula Knowlton:]

Thanks, Cal. Today, I will highlight our initiative to bring our medication safety platform outside the US, how we plan to enhance our EMTM outcomes by launching our direct-to-consumer initiative and an update regarding our work with programs for all inclusive care for the elderly. As you may know, last week, we announced that we inked a letter of intent with the National Pharmacy Association of Portugal or ANF. The organization represents the interests of over 2800 affiliated pharmacies in Portugal, about 95% of the Portuguese market as well as pharmacies and hospitals in other European countries. We have been working closely with the leadership of ANF and have found that there is both a cultural and philosophical fit between our two organization in the areas of patient’s medication safety and in empowering pharmacists to personalized medication management to enhance outcomes. The ANF’s goal is to make the pharmacists the most sought after health care professional for medication information and optimization. It is well known that avoidable adverse drug events caused by dangerous drug interactions and the imprecise use of prescriptions present challenges worldwide. In Europe, there are approximately 8.6 million hospital admissions caused by ADEs every year with ADEs accounting for 2.5% to 10.6% of hospital admissions. Our medication risk mitigation tools and proprietary technology identify patient’s risks for multi-drug interactions before they occur, enabling a more personalized approach to what is available today for prescribing medications and reducing trial and error prescribing. Pharmacists, through the use of our MedWise Advisor platform can support physicians and patients by helping to implement care plans that reduce medication risk. This may include the option to apply pharmacogenomics, which is of great interest to the ANF. Winning quick reading pharmacogenomics data, one moves from personalized medication regimens to precision by also understanding whether an individual has the genes to metabolize medications that they're taking. In fact, we found in a study of over 300 PACE participants, 78% of patients were on at least one medication that they could not fully metabolize. We have kicked off our collaboration and are working towards the launch of our initial phase. As mentioned in our press release, future phases of this partnership also include the deployment of TRAC’s my MedWise, our consumer facing smartphone app that empowers patients with easy to understand medication alerts and enables access to certified pharmacists. We are delighted to begin this growth opportunity outside the US with this group of healthcare leaders and international pharmacy. To expand on the idea of offering our my MedWise consumer facing smartphone app, TRAC is launching its first version in the enhanced MTM program, while also conducting consumer based research regarding My MedWise. We expect to launch My MedWise in the fourth quarter of this year. Switching over to an update on PACE, we continue to evolve to meet the demands of our PACE partners and to attract new PACE organizations. When we entered PACE in 2011, we viewed it as an ideal setting for our medication risk mitigation platform due to the fully financial at risk provider model and our ability to reduce medication [indiscernible] that can lead to hospitalizations, especially in the elderly who are taking multiple medications. Over the past seven years, we have grown to become the market leader within PACE. We believe our market share is approximately 30% in terms of PACE facilities and today, we work with several of the top ten providers. As we have continued this growth trajectory in PACE, we have expanded our service line to meet our partner's needs. In addition to medication safety and risk adjustment, we have added plan management services through the recent acquisition of Peak PACE Solutions. We have also hired experienced people to assist, startup PACE organization. Recently, we received the designation by the National PACE Association of technical assistance center for PACE organizations in the startup phase. Our goal for this year’s National PACE Conference in October is to launch an offering that includes all of these services for ease of efficiency and to enhance our ability to deliver results for our PACE clients. We know that of our combined PACE service offering, only 20% are using all of our PACE service lines. Cross-selling has been our strategy and continues to produce solid leads and new clients. PACE continues to evolve with the National PACE Association’s new PACE 2.0 initiative. The association is a vocal proponent of PACE providers’ ability to improve the quality of its members’ lives at a more efficient cost. The PACE 2.0 initiative is an effort to accelerate the growth in the number of people served by PACE. They have laid out a plan to exponentially grow PACE with the goal of 200,000 PACE participants by 2028 from approximately 50,000 today. Their plan stated four main priorities. First, expanding current PACE organizations’ operations and service areas in the 32 states that offer PACE. Second, launching new PACE organizations in the other 18 states that do not have PACE providers. Third, serving more currently eligible individuals. And lastly, raising awareness of newly eligible individual PACE members. We think this is a great opportunity, not only for us, but for our senior population. From a PACE new business perspective, we successfully implemented two existing PACE organizations during the second and the start of this quarter in North Carolina and Arkansas. We're pleased to announce the signing of a new start up PACE organization in Florida, which plans to begin operations in mid to late 2019. Our backlog for third quarter includes three client expansion locations. We also have signed contracts with startup PACE organizations in California, Michigan, Colorado and Arkansas. We have visibility into our current PACE clients, adding expansion PACE centers in 2019. So far, there are two plans for the first half of 2019 and three for the second half. I want to comment on our work with CenterLight. As mentioned, the organization saw a change in management, including both the CEO and CMO turnover this year, along with a number of audits in multiple locations. The organization continues to be focused upon these matters. CenterLight still remains an opportunity in our pipeline. We stay in close contact with them and anticipate getting reengaged as the new management team becomes more familiar with our value based services and positive outcomes. Finally, to wrap up, our optimized opioid solution has been launched and we're actively cross selling this product into our MTM division. It is too soon to tell how successful this will be, however, we are optimistic. Also, we have implemented the pilot phase of our collaboration with the National Concierge Medicine Company this fall. Lastly, we have begun the implementation of integrating our medication risk mitigation platform and clinical pharmacy support with the National EH, a company that is a leader in the physician's office practice setting. Now, I would like to turn it over to Brian Adams, our CFO for an update regarding the financial progress of our company.

[Brian Adams:]

Thanks, Orsula. To Echo Cal and Orsula sentiment, this was a strong second quarter, driven by solid performance across the entire business. Tabula Rasa generated $48.6 million in total revenue in the second quarter, representing an increase of 65%. Product revenue of $27.4 million represented 56% of total revenue and a year-over-year increase of 18%. Service revenue of $21.2 million represented 44% of total revenue and a 244% increase over the same period last year. Drilling down a bit deeper, SinfoníaRx contributed $12.7 million in total service revenue for the quarter. Gross margins of 33% compared to 29% in the second quarter of 2017, consistent with our past messaging, we continue to target 35% to 40% gross margin over the next three to five years. Product gross margins of 27% increased 400 basis points, as a result of two new clients starting in the quarter. Slight fluctuations, both positive and negative, can occur in a given quarter, due to the onboarding of new clients. I expect the product gross margin to settle back in with recent historical trends in the low to mid-20s next quarter. Service gross margin of 42% compared to 49% a year ago. This year-over-year decrease is the result of the inclusion of the SinfoníaRx and Peak businesses, which carry lower margins than our historical service offerings. In addition, our EMTM program has a higher cost structure in year two. We believe that there are opportunities to generate some efficiencies and improve margins in the program, but at this point, the cost structure is designed to continue driving the outcomes that Cal mentioned previously. Operating expenses, excluding the change in fair value of acquisition related contingent consideration in the second quarter, represented 32% of total revenue, down from 34% of total revenue in the prior year period. We anticipate operating expenses, as a percentage of revenue, to continue to trend lower in the longer term, but in the near term, this number will be impacted by investment in our Tabula Rasa 2.0 initiative as well as incremental audit and SOX compliance fees related to our expected classification as a large accelerated filer year end. We expect to start to incur some of these fees next quarter. Adjusted EBITDA of $7.3 million in the second quarter compares to $3.4 million a year ago. Our adjusted EBITDA margin of 15% in the quarter increased from 12% a year ago as the result of growth in new and existing clients in both the PACE market and health plan market as well as an increase in higher margin service offerings as a percentage of the overall business. Our GAAP net loss of 29 million compared to a net loss of $1.7 million in the second quarter of 2017. This net loss was significantly impacted by a charge of $34.9 million due to the change in fair value of acquisition-related contingent consideration for the SinfoníaRx acquisition. The charge recognized in the second quarter of 2018 increased the amount of contingent consideration we expect to pay in connection with the acquisition. As of June 30, 2018, the SinfoníaRx contingent consideration liability was $80.2 million with the potential for up to an additional $4.8 million, if the maximum contingent amount is earned, which would flow through as a charge to GAAP net income or loss. As a result, second quarter net loss per diluted share attributable to common shareholders was $1.53 compared to a loss of $0.10 a year ago. The per share calculations are based on 19 million and 16.5 million diluted shares outstanding respectively. Adjusted net income per diluted share for the second quarter of 2018 was $0.20 compared to $0.08 in the second quarter of 2017. Turning to the balance sheet, as of June 30, 2018, we had a cash balance of $7.3 million. We had $8 million drawn on our $40 million line of credit and currently have $1.6 million in equipment leases. To close out my remarks today, I’ll review our current financial outlook for the next quarter and for the full year. For the third quarter of 2018, we anticipate revenue to be in the range of $52 million to $53 million. Adjusted EBITDA to be in the range of $8.5 million to $9.5 million. Net income to be in the range of $1.8 million to $2.8 million. And I’ll remind you that this amount does not include any forecasted adjustment for acquisition related contingent consideration. For the full year 2018, we are updating our previously stated outlook. We now anticipate total revenue to be in the range of $190 million to $200 million. Of that total revenue, we expect product revenue of $115 million and service revenue of $80 million at the midpoint of the range. We now expect adjusted EBITDA to be in the range of $28 million to $30 million to account for the additional investments related to our Tabula Rasa 2.0 initiatives and costs related to becoming a large accelerated filer. The midpoint of our guidance range would equate to approximately 15% adjusted EBITDA margin for the full year and 160 basis point increase over last year. We now expect the net loss in the range of $41.8 million to $43.8 million. I'm very pleased with our strong second quarter results, our new business wins, continued expansion within the PACE market as well as our exploring opportunities outside the US. We've come a long way in the past couple of years since our IPO and I look forward to updating you on further developments as we continue to embark on Tabula Rasa 2.0.

[Calvin Knowlton:]

Thank you, Kevin, Orsula and Brian. In closing. I want to thank all of our customers, our partners and our Tabula Rasa team members. I look forward to continuing to update you throughout the year on our progress. With that, let's open the call to questions. Operator?

[Operator:]

[Operator Instructions] Our first question will come from Matthew Gillmor with Robert Baird.

[Matthew Gillmor:]

Congrats to the team on the EMTM results. I was hoping to start there. Can you provide some more details with respect to why you think you’ve outperformed some of the peers? And then as a quick follow up to that, when do you think you can start marketing some of the results, especially to the MA plans? And I guess the context around that, if I did the math correctly, it looks like you're saving about $13 per member per month. And I think the cost was something like $2 to $3. So just wanted to understand when you could get that into the marketplace?

[Calvin Knowlton:]

This is Cal. Thanks for the question. We believe, in fact, there was an article that came out at Health Affairs just recently that showed that increasing adherence doesn't actually spill over into decreasing hospitalizations and we believe that patient safety, that we're doing the prospective medication safety if you will and the retrospective medication safety initiatives. With the metrics, it has a profound impact on [Technical Difficulty] hospitalizations. We will have more color on that as we go on as we now increase our analytics department to be able to harvest those precise endpoints for us, but that's what our current belief is. Orsula, would you want to talk about the second part?

[Orsula Knowlton:]

Sure. We certainly can begin speaking about it by the way. We were allowed to do that as of August the 1 and we believe that we'll be able to accelerate our growth as a result of that.

[Brian Adams:]

This is Brian. Just to clarify, you do have the numbers right though. It is about close to a 4 to 1 ROI for the, not necessarily this plan, because they don't have the medical utilization, but overall savings for the government.

[Matthew Gillmor:]

And then on the ANF relationship, I was hoping you could provide a little bit of background on that organization. It sounds like a trade association from our perspective, but at least in our investigations, you might give us a little bit more than that in terms of their ability to push down technology into their clients. So just wanted to understand the organization? And then if you could provide some detail with respect to what you're doing with the initial pilot and when that could be a broader relationship.

[Calvin Knowlton:]

I’ll take the first Matt. It’s Cal. ANF is in fact [Technical Difficulty] in the country in Portugal. However, they have [Technical Difficulty]. They have a software company that has won employees for example. They have a total of 10,000 employees. They actually own hospitals in Portugal and some other countries. They have -- their software is in those hospitals. Their software is in 95% of the pharmacies in Portugal. It's also in pharmacies in other adjacent countries. So it's a very interesting association, the likes of which we've never seen before. And there -- and they have a very -- their culture works with us very well as Orsula said, but they have a profound vision on what they're going to do.

[Brian Adams:]

Maybe just to put a couple of numbers on that. The number of hospitals in both that are currently using the software platform of one of the companies that they want to control take, it is about two hospitals and there's 16,000 pharmacies currently using those platforms. So, it really opens up a pretty big market for us over there.

[Orsula Knowlton:]

And with regard to your question on the phase 1, our goal is really to work out the workflow and then moving to the actual integration of the technology. So we would envision phase 1 to be 2 to 3 hospitals over a period of 12 months and then to move into more of the phase 2 and understanding other things like price and our sales process.

[Operator:]

Our next question comes from Ryan Daniels with William Blair.

[Ryan Daniels:]

Again, I wanted to follow-up on EMTM. Is that such a good data point, big opportunity? I'm curious if you actually received data on the other plans? I know you indicated plus 2% savings. Do you know what the other plans actually achieved and how far ahead of them you were with your program?

[Calvin Knowlton:]

We don't know exactly. This is Cal. We don't know exactly. We’ve talked to one of the other plans who has indicated to us that they didn't have any movement in either direction on the 2%, but we would hope that CMS will be or CMMI will be sharing that information with all -- with the rest of us. We’re very curious about that too. But, we do know though that CMS indicated to us that they were surprised with our result. So I think that we just inferred some other things from that.

[Ryan Daniels:]

Is there any way they could actually push other vendors to adopt a similar strategy as yours going forward to achieve the savings such that it would really kind of create a pull through demand for your services rather than you trying to market it and push it?

[Calvin Knowlton:]

Yes. That's actually part of the construct of this that they said if one of the six programs shows some positive outcomes, then they're going to propagate it and mandate it. So I don't believe personally that they're going to do much right now. I think that, it's like one blood pressure doesn't tell if you're hypertensive or not. So you've got to have a couple of years, a couple of little trend, in other words. So I think we just have to wait and be patient about that, but we are very optimistic that at least from what we have right now and what else we're doing in the EMTM this year that some good is going to come out of this.

[Ryan Daniels:]

And then one more follow up just on PACE 2.0. I wanted to make sure I got that correctly, because I haven’t heard the data points. Did you indicate that the goal is to move that from 50,000 lives roughly participating to 200,000 lives over the next decade? Did I get that right?

[Orsula Knowlton:]

That's right.

[Ryan Daniels:]

And do you have a belief on which of the kind of drivers that online would be the biggest? Is it kind of moving into novel states or better marketing or anything in particular that you think will be beneficial to the program and concomitantly your business?

[Orsula Knowlton:]

The actual goal of that number is pretty realistic. It’s called the PACE organizations right now, net of 13 participants per month, they would meet that goal. So, I think it's a matter of the organization using tools that they have funded by various companies to really train the existing PACE organizations to have a growth philosophy and to move forward with that. They have a couple of pilots right now in the country, trying to reengineer the workflows to incorporate and support that growth.

[Operator:]

Our next question comes from Sean Wieland with Piper Jaffray.

[Sean Wieland:]

And let me also echo my congrats on the EMTM pilot results. So my question on that is what's the next thing you do with that piece of information, in terms of either expanding your pipeline, in terms of maybe convincing managed care or other members and other elements of your pipeline to move and to embrace your solution. What's -- kind of what's the next thing that you do with that.

[Calvin Knowlton:]

We actually are formulating a plan on that. We had an information session with our board yesterday about that about how we can go and propagate this. So, we don't really have the plan congealed yet, but we aren’t going to sit on it.

[Orsula Knowlton:]

And Sean, I think it really relates to sales people who are part of our – our PACE 2.0 is to add salespeople with those data. We certainly have a lot to talk about and share.

[Sean Wieland:]

All right. That gets me to my other question is the Tabula Rasa 2.0. Can you kind of quantify the kinds of investments and the timing related to that and specifically, I wanted to ask about sales.

[Brian Adams:]

Yes. So this is Brian. The two primary elements to the investment related to Tabula Rasa 2.0 are going to be analytics and software development and then following that is really sales and some other infrastructure type moves in order to really capture the market, but we're really seeing kind of an immediate step up in costs related to these ad staff that are going to happen really right now and move into the next year. So it's not going to be a temporary up and down, but there are some incremental costs that we're incurring right now and I'm estimating that it will probably be about 1.5 million incremental dollars in the second half of the year.

[Sean Wieland:]

Not for quarter, that's for the total second half of the year?

[Brian Adams:]

That’s correct.

[Sean Wieland:]

And one more if I could sneak it in, any traction or what did you see on any of the Medicare Part D plans that were formulating their opioid plans for CMS.

[Orsula Knowlton:]

Thanks for the question, Sean. We are still in the early stages of that. We do have some risk stratification modeling going on right now. So, we'll have more information for you over time.

[Operator:]

Our next question comes from Mohan Naidu with Oppenheimer.

[Mohan Naidu:]

Let me echo my congratulations as well. On EMTM, how sustainable is that and is that replicable across like multiple plans at a different set of population. Can you talk a little bit into what you're thinking about your ability to replicate that?

[Brian Adams:]

This is Brian. I think the idea that this is very replicable is real and the fact that we're focusing solely on these high risk members and that can be done in any population. So, it's not an overall strategy where we're looking at the entire population, but highlighting just these very high risk members. That varies depending on the population that we're dealing with, but we do feel like, the types of -- the ROI that we've driven within this plan, we could certainly replicate and do over again.

[Calvin Knowlton:]

This is Cal. I think that's right, Brian. And I believe that we showed first in PACE, which is a closed system that we could reduce hospitalizations in double digits, fairly commonly up to 40% and higher in some PACE organizations. Here was an open system. It wasn't a closed system. And for us to be able to move the needle in single digits in a system that's not as frail as PACE is, not as high risk members, not as old was very -- it will bode well for us to go to all the other types of Part D plans that has the same type of population and try and capture them.

[Mohan Naidu:]

Brian, one more question for you. Did you talk earlier about the revenue model that you were expecting from the European opportunity? I missed that.

[Brian Adams:]

No. So we haven’t talked about that yet. That's actually part of our [Technical Difficulty] with the ANF partner. We're really exploring what is the right revenue model and really the willingness to pay from the customers. So, more to come on that, but that's part of this first phase.

[Operator:]

Our next question comes from Jamie Stockton with Wells Fargo.

[Jamie Stockton:]

Maybe just one quick follow up on what Sean was asking about I think. The KHRC 2.0 effort, in layman's terms, is this basically you guys trying to automate a lot of the interpretation that maybe today is done by pharmacists on your staff, of what the MedWise platform is generating, so that you can embed the technology more easily into unlike trying health record or some other platform that's closer to the point of care.

[Calvin Knowlton:]

This is Cal. You hit the nail on the head that we’ve increased our analytics, our engineers immensely to do that.

[Operator:]

[Operator Instructions] Our next question comes from Stephanie Demko with Citi.

[Stephanie Demko:]

And one more out of me, another congratulations. Just thinking about the expansion into Europe and the clinician facing space, it feels like we're seeing an accelerated timeline on your recent initiatives, as we talked about at the beginning of the year. What has changed since you’ve first put these out to drive the acceleration? And one follow-up to that, how are you balancing these growth opportunities, given there are so many different ones.

[Calvin Knowlton:]

This is Cal. I’ll give some details. I think that one of the main thins is that the interest level from the executives at ANF has increased dramatically. [Technical Difficulty] And they see this as a tremendous opportunity. So I think that's what's really catalyzed it from our perspective. The other question was about --

[Brian Adams:]

Yeah. I'd be happy to take that one, Cal. Hi, Stephanie. This is Brian. In terms of the balance, we're really looking at this opportunity to help us build the platform, pilot it [Technical Difficulty] so that know we can use in the US and use this in a lot of places, but this is, at least, it'll probably be through this with the ANF team. I think that we're still being very focused on the health plans and at risk provide right now in terms of near term growth opportunities, but this gives us longer term platform for growth going forward.

[Stephanie Demko:]

And then just one follow-up. I know you talked about kind of increasing investments for the opportunity. Is there any potential to pivot some of your existing headcount to kind of spread things out from your growing PACE program into maybe the European and clinician facing space?

[Brian Adams:]

Right now, our current headcount [Technical Difficulty] incremental folks that are going to be dedicated to this opportunity.

[Calvin Knowlton:]

And I think also, it's going to -- that's one of the reasons that, I think to Jamie’s question, so this is one of the reasons that we're really focused on making a lot of our software much more efficient.

[Operator:]

Ladies and gentlemen, this concludes our question-and-answer portion of today's call. It also concludes today’s conference. You may all disconnect and have a wonderful day.