Alignment Healthcare presentation. For those of you whom I've not yet met, my name is Ryan Daniels. I am the Healthcare Services and IT Analyst here at Blair, that covers the organization for our firm. So really happy to have a couple members of the team with us. John Kao will do the formal presentation, and then Thomas Freeman will also join him, who's the CFO up in the Burnham Room for the breakout session afterwards for Q&A. Just a couple of quick points. Again, we'll be upstairs for the breakout. I'm required to inform everyone that our disclosures are available at williamblair.com. And then in regards to the introduction here, really happy to have the team with us again, in our Growth Stock Conference.
For those of you less familiar with Alignment, it's really a pretty unique payvider model and asset in the healthcare/payer space, and that it's been built from the ground up to be a really innovative solution to support seniors in Medicare Advantage, to help them get the best care, the highest quality, the most expanded benefits. And that's manifested in really strong cost controls, which you'll see when, I think John goes through some of the metrics or through the Q&A. It's also delivered patients with a great experience, and, I know John takes this to heart and has created a really impressive corporate culture that allows that to manifest and drive growth. So really doing some great things for seniors.
So we're really happy to have the team here to talk about the model and how well they've executed over the last few years. I think you'll find it very impressive. So with that, I'll turn it over to John.
Thanks, Ryan. Can you guys hear me okay? Good. Thank you, Vince. Okay. I'm gonna go through some results, and then really what I wanna spend time on is to answer the question many of you have asked, which is: how are you different than everybody else that's blowing up in the sector? And I'm gonna show you exactly how and why. All right? First of all, results. We're at 165,000 members right now. It's 51% growth year-over-year. Last year, we spent a lot of effort on time, on retention and member experience.
We had a pretty good inkling we were gonna have a very good year of growth, and so we wanted to make sure that we kept the growth through retention and service, and to also make improvements in Stars, which we were able to achieve. As a lot of the investments that we made on member experience, we insourced member experience from a vendor. We had to replace a supplemental vendor, Black Card, we call it the Flex Card, fulfillment vendor. We beefed up our sales operations, we beefed up investments in our broker portals, et cetera, and all of that yielded these kind of results. We feel very good about our utilization in 2024. We've given guidance that on the midpoint, we wanna break even on an EBITDA basis for 2024, and I'm very, very excited about 2025 as well.
We think that we will continue to have tailwinds with respect to Star Ratings. We're gonna have tailwinds with respect to V28, which is the coding, a new risk coding model. We think that a lot of the regulatory changes are gonna play to our favor, things related to the broker compensation. We can talk about that in the breakouts. The Inflation Reduction Act and the Part D implications and changes, those are things we think will play to our favor as well. The other thing to keep in mind is, when they implemented some of the higher standards with respect to Star Ratings, it was a really impressive feat we were able to keep four stars when the entire other sector, in particular, California, dropped below four stars.
And we'll talk more about that as well. And so the model that we've built and you'll hear about today is really the model designed for the future of MA, which interestingly, is really CMS saying to the rest of the industry, "We wanna get back to what we originally intended," which was, if you're an organization that can provide high quality through access and clinical outcomes to the member at an affordable price, you should be in an advantage situation to win. Now, that's what we have built. Okay. So Payvider, Ryan alluded, this is a Payvider model. Structurally, from a business model point of view, this is what we think you need to be able to have to be effective in MA in the future. Health plan capabilities like product design, network construction, sales, and member service support for our members.
These are just basic health plan competencies. Data proximity, real-time data is a big deal, and we'll share with you why we think that's a competitive advantage. The ability to actually manage care. You have to manage care to control the costs, which is what we're gonna spend the bulk of the day on, is such a competitive advantage because through the bid process of CMS, if you are, like I just said, the most affordable player with the highest quality, you're in an advantage position with respect to the bids. I would say that, about 70% of our business is where we're running and managing the risk. We're managing the care. 30%, we'll globally capitate out to other provider organizations that meet our quality standards. But by and large, we like to manage the risk.
We think it's an actual superpower of ours. It's a competency that we think is going to yield the most optimal balance of growth and margin expansion in the long term. And so this notion of virtuous cycle that you're gonna hear us talk about is premised on the simple fact, you do well for you all, for the shareholders, by doing good, by doing good for the senior. You actually take care of every single senior, like your mom or like your dad, in the way you would want that individual be taken care of. That's the cultural dynamic that we've built. This missional aspect is so important, and when we say, you have high quality at low cost, and you do the right thing, what does that mean operationally? Well, it means you get good Star Ratings, right? That's demonstrating that that's important.
You get more revenue from CMS. Low cost means you have to have a clinical model to manage utilization. Those are things that we're demonstrating as well. So if you can maintain the quality and the Star Ratings, and you can manage the cost, and you take care of that senior as the center of your universe, good things happen. And so what this really is, is saying: Identify who are the high-cost people in your organization. They happen to be the most frail. They happen to be the vulnerable. They happen to be the polychronic. Those are the people in our system today, we do not believe get a square deal. The healthcare system in this country, we say, is pretty good. The sick care system is not very good in terms of coordinating care and transitions of care and care advocacy.
That's the area that we want to shine. It just so happens, if you know who these people are, you then take care of them. You take care of them at the home. You take care of them in the environment they want to be in. You don't have to just take care of them in the hospital setting. If you can do that, you have the ability to bend the cost curve. If you can bend the cost curve, by CMS law and the bidding process, you're required to take those savings and reinvest it into greater benefits. You invest in greater benefits, you get growth out of that, right? If you get the growth, the next thing is, gotta keep the members, keep them happy, which is retention. Ergo, the investments that we made last year in member experience, we knew we were gonna grow.
Didn't think we're gonna grow 51%, but we grew. And the most impressive thing is we kept most of the members. Didn't lose them, right? So the philosophy of the business, the culture of the business is clinically centered. It's really important. It's not just an insurance, underwriting, financial engineering model. It's a clinical culture and a clinical model. We just happen to be pretty good at all the financial engineering and product design and sales and regulatory and IT stuff, which is what you would traditionally link to a health plan. This is what it yielded. If you look at this chart, just, you know, the growth was 51%. And when people, the number one question we get is, "Well, you guys grew. Did you buy the market?" No, we didn't buy the market.
Well, how is your MLR not ballooning like all these other guys?" You got the next guy, peer number six, you can probably figure out who that is. 20-some-odd% growth, but their MLR went up six points, right? Like, how? How are you not being subject to what all the other legacy MCOs are going through, right? And that's what I want to start sharing with you. Step one is the platform. All we do is Medicare Advantage, and so just focus on MA. MA is here to stay. It is not going away, despite some of the changes, regulatory changes that CMS is imposing on the sector. Many of you have gone through, like, no cycles. I've gone through maybe 5 cycles, which kinda ages me, but, I mean, these things come in cycles. And right now, you just got a pricing correction.
It's a reimbursement adjustment, is the way to think about it, right? The government, CMS, it's an employer. Employers make pricing adjustments every once in a while. But the fundamentals of growing MA, I think, are gonna increase from 52% market share penetration to probably 65-ish% over the next five or six years. And there's a lot of dynamics causing that, not the least of which is this, the value proposition to these individuals is just greater than fee-for-service. When you add to the fact that there's the potential for increased premiums on standalone Part D in the fee-for-service environment, supplemental fee-for-service, premiums are gonna go up for individuals in a fee-for-service environment. That's gonna push people into Medicare Advantage. Okay, so MA is here to stay. These are the things you have to be good at to be successful in MA.
So number one, you gotta really have care management capabilities, like real care management, not just UM or denials. That doesn't work. That's like a 1980s thing, okay? Gotta have care management. We'll talk most of the day about that. Quality Stars applications. You have to be good and understand Stars. Somebody asked me today in one of our one-on-ones, "Do you kinda have a sense of where your Stars are at for the month?" I go, "I know where our stars at on the hour. Numerators and denominators for every single measure, for every single market. We just have that level of visibility and control on Stars. Risk adjustment, it's gotta be compliant.
V28 is all about the notion that CMS wants to reinstate, is if we pay you plans more revenue, that's okay for higher acuity patients, we wanna make sure you have the care plan for that patient to ensure that person's getting the right, proper care. That's the gap they're trying to address. Core infrastructure and then growth applications with respect to broker and member portals and engagement portals. These are the these pillars that we form, that we call the value drivers. You have to be good at that to be successful in MA for the long term. That, in terms, is the context of which we built our technology architecture that we call AVA. And so getting the data and managing to data is step one, with minimal data latency.
Having the visibility and control starts with this, is getting the actual data that we have internally referred to as the source of truth. Everything is ingested, everything is cleansed, and everything is stored in a way that different functional areas, internally and externally, can access that data. It's the same set of data. There's not this reconciliation process that a lot of the legacy folks go through. I've done that when we were in the legacy environment. Okay? So it starts with the technology, and it's... Technology in and of itself is not going to change healthcare. But having correct, relevant, timely data, putting that into the hands of the right people, creates actions that save people's lives. Okay?
And so once we have the data, first thing we do, if you go back to that virtual cycle, who are the people that are sick? And so we use that information, and we stratify based on our own algorithms, and we identify these kinds of cohorts. So you'll say 74% of the membership account for 5% of the institutional costs. Let me say that again. 74% account for 5% of the institutional cost. 26% account for the other 95%. If you break down that 26%, you can see 12% of the members in the red chronic circle account for 74% of the institutional spend. Two other smaller circles, a healthy utilizer, which is the blue circle, 7% of the membership account for 19%.
It's relevant because sometimes you have people whose markers are healthy, but they get into an accident, or they get a hip or a knee that they have to get done. Once they get that hip or knee done, or once their accident is kind of cured or fixed, they're okay. They're kind of our, you know, they see their PCP a handful of times a year. They're generally healthy, okay? The pre-chronic, that's 7% of the membership that account for 1%, is just the opposite. Those individuals are people we know are sick. They have complex conditions. They just haven't gone into the hospital yet, so they're not in the claims system, right? And so they're on the launching pad.
So it's really important that we identify those people, and we care for them the same way in which we care for the chronic population, okay? And so the whole idea here is, and you see on the right, we call it Care Anywhere, and it's an interdisciplinary group of clinicians comprised of physicians, APCs, MAs, social workers, behavioral health coaches, case managers, care coordinators, virtual care nurses, all of which talk every single day on cases. They do rounds virtually on every one of our high-risk cases, okay? The other thing to note is, you look in the blue bars here. Again, you look at this and you go, "You know, kinda like 90%-ish or 81% of the membership generally is being taken care of by their PCPs." So they, they do a good job. They're generally healthy.
It's this other 19% that we need to really focus our efforts around. And what that creates is a very efficient way, not a lot of brick, incremental bricks and mortar, but an efficient way using technology and using focused clinical teams to care for the population where all the money is. And you just happen to do a really good thing for these people 'cause they need the care coordination. Okay? So this is an example of how we manage an individual member. We have this kind of visibility. We call it a Patient 360 View of our members, and it's hard to see, I think, but I don't know, does this thing point? Is there a little pointer thing? Oh, yeah. So this thing I can't point it.
Okay, so you see the health journey? It's basically a chronology of that individual's experience, and what it says is they went in the ER on November eighteenth. So we know what's going on with that. They were in inpatient for seven days. They had a knee surgery, they had a cancer diagnosis, Care Anywhere enrolled, which is a chronology of that person's journey. And then we also have details on opportunities to make sure that the coding is done compliantly and correctly through these HCC alerts. HEDIS gaps, another star metric, is something that we wanna make sure we understand what these gaps are. So we manage that, we track that on a daily basis. Clinical alerts, lab results for each one of these individuals. And this is just a summary.
I mean, we just have a lot more data on this information that is exposed to all of the clinicians and the nurses on those IDT teams. That's how we manage the individual. And so that gives us a lot of what we refer to as visibility and control for each of our patients. So it's like if you have the data, you apply the data, and you organize the data, and you expose that into actionable things that you can have your clinicians take care of, you have visibility and control. And, and the key to the whole thing is having consistency of the information. And so visibility and control at the patient level, that extends to visibility and control at the market level. And so they say: "Well, how do you, how do you know, or how do you address, 51% growth?
Aren't you gonna just have a lot of hotspots everywhere?" Well, yeah, we have hotspots. We're not immune to pockets of utilization. We just distinguish ourselves that we know who they are real time, and we have a deployment mechanism, which are these interdisciplinary care teams and our Care Anywhere nurses to take action in those hotspots. All right? That's basically what we do. We... This is, you know, this, this whole slide here is, again, data collection and ingestion, single source of truth. Just a big deal. People don't understand that. If you're in an environment as a traditional legacy player, it takes you 30-60 days to reconcile different legacy back-end systems, eligibility systems with the provider database, with your claim system, et cetera.
It has to get cleaned up and reconciled, and then it takes another, what, couple of weeks or 30 days to expose that information to your downstream global cap provider. That's like a 60-day window of flying blind for that, for that poor provider, right? And so the legacy folks, we don't think understand or have this culture of care delivery, which we do think the global cap providers do, but the global cap providers don't have the data real time, and they don't have the ability to construct products that the plans do. And so this model that we're building is a virtually vertically integrated business model, which we think can scale, okay? We have daily KPI tracking and scorecards. A lot of information organized in a way that we can actually do something with it. It's actionable, it's efficient.
Every single day at 8:30 A.M., myself and the senior team and 30 of our best friends go through these KPIs and scorecards every single day to start the day. And we're getting big enough that you can't, you can't just be inefficient when you do that. You have to be really efficient with the correct data, and you're giving very clear direction, and the clinical people are giving their ideas, the market management people are giving their suggestions to solve problems, okay? And then they go and solve it, and we talk about what improvements or progress we made the next day. That's how you run the business: visibility and control. And that stems, again, culturally, with you have to care about taking care of people, and then you gotta have the tools to do it, okay? Here's a case study, one of our Northern California markets.
You know, again, when you grow as much as we did, this is a hotspot. You know, our overall admissions per thousand into an acute setting is about 150. We announced for Q1 about 151 for the quarter, which is world-class. Milliman would suggest a well-managed, care organization, 200 is pretty good, ADK. We're at 151. But we had one, pocket in Northern California that started with 316, just unmanaged. There were new members, and through the efforts of the last quarter, we got it down to, you know, we're getting it down to kind of, 150. And it's not out of magic, it's just a lot of work.
It's, it's engaging the doctors real time, it's educating the doctors, it's incentivizing the doctors, it's allowing the hospitals to open up their access to medical records for our physicians, so we can run and manage the cases. Basic blocking and tackling. Another example here in Southern California, same kind of thing. Our admissions per 1,000 are so good. Our MLR is really well. That gives us the fuel to invest in investments in rebate dollars. It gives us the fuel you have to be high quality, low cost to invest in the bids. And that's what leads to the growth, and you can see the growth. And the growth not only is for AEP for January, but we're having good intra-year growth as well, right? And so it's the ability to drive value to the consumer through better quality outcomes.
It's better quality what we do, I guarantee you that. It's better clinical experience, it's better access, it's safety, and it's good benefits. It's really competitive benefits, okay? That leads to the kind of growth, and I just want to emphasize, I think what has been successful in MA for the last 10 years is gonna be very different in the next 10 years. And I think we have that platform to be successful. I think we're demonstrating that. A very in tune to people... Are, are you, are you guys really for real? Is this, like, too good to be true? No, it's 30 years of scar tissue, is what it is, of knowing what is required to be successful in this marketplace. And so it's disruptive, it's purpose-built for MA. We have made investments that are paying off.
We have not chased the pack. We've been very disciplined in the way we think about running our business for the long term. We have visibility and control. We have a high confidence in our 2024, and an even higher confidence in our 2025 and 2026 performance, in terms of both growth and EBITDA margin expansion. So, I've got two minutes left. That's amazing, I'm on time. Ryan, you wanna take questions or anything, or?
We can take one from the audience.
One from the audience?
Yeah.
Yeah.
What should at scale margins look like?
I think long-term margins, we think in MA is still 5%-6%. Yeah, yeah. I just don't think anything's structurally changed. I think it's just... We're going to do it the right way. Internally, we really like to say, you know, Alignment, it's Medicare Advantage done right. So yeah, I mean, I'm very comfortable with that, by the way, and I think we'll phase into that where that-