Good morning, everyone. Welcome to the 43rd JP Morgan Healthcare Conference. My name is Fanc hen Zhu. I'm an associate in the group. It is my pleasure today to introduce Astrana Health to present. With us today, we have Brandon Sim, CEO, and Chan Basho, CFO. Today's presentation will be in the format of 20 minutes of presentation plus 20 minutes of Q&A. So with that, I will yield the stage to Brandon.
All right. Thank you so much, Fanchen , and thanks to JP Morgan for hosting us here today. I'm excited to be here, especially because it is a sunny week here in San Francisco, unlike other years. So very happy again to be here, and thank you all for your time today as I talk about Astrana Health and what we're doing to better health care for communities across the country. Just to start off, Astrana Health is really here with a mission to empower physicians and health care providers so that they can provide the best possible care to their patients and to their communities across the country. And I'm here for a very personal mission. I believe I'm an Astrana member myself. All of my family members are Astrana Health members.
And I personally believe that now more than ever, it's our responsibility, our moral imperative, to build a system that actually works. It's clear to me and to the country, I believe, from recent tragic events, that the system is just not working for everyone. Of course, before I start, standard disclaimers around disclosures. But as I was mentioning, the status quo for health care today is broken. I don't think I need to repeat any of the statistics around the per capita cost for health care in the U.S. versus other countries, around the prevalence of chronic conditions in our country versus other countries, or the shortage of primary care and specialists in our country. And part of that issue is that the health care system is deeply uncoordinated with the system of incumbents and a system of disjointed incentives that are not meshed or coordinated with each other.
On the right side, you see a sample geographic map of one of the areas that we serve. It shows providers, primary care doctors, specialists, hospitals who, without an Astrana system in play, would be completely disjointed in terms of the way they deliver care in a fee-for-service model that incentivizes usage and utilization over actually bending the cost curve. What we are doing here at Astrana is transforming that network into one that is accessible, that's high quality, that's coordinated, and that is high value. At the end of the day, there are many different ways in which we're doing that across multiple payers, across multiple lines of business. But the core message is that we are transforming the status quo disjointed system into one that is a high quality and coordinated network of care delivery.
On the left side, you'll see some of the ways that we're doing that. We have a care partners business in which we're bearing risk on behalf of managed care organizations in order to be responsible both financially and clinically for the outcomes that we produce for our patient populations. We have a care delivery arm in which we operate. We own and operate around 70 clinical locations in primary care, multi-specialty, and ancillary services to better our mission to deliver better health care and more accessible health care to the communities that we serve. And we have a technology-enabled services business in our care enablement segment that provides the infrastructure, technology, and the glue that allows all of that to happen in a coordinated fashion and in an efficient fashion from a profitability standpoint.
You can see from the last slide and moving on to this slide that we have transformed regions in which we serve patients in this exact way. On the right side, you see some of our example footprint. This is real data around where our primary care doctors are in an asset light model. Our contracted doctors in the green. Our blue care delivery sites in which we own and operate those sites to supplement the supply of health care to meet demand in the regions that we serve. How they really provide density around hospital and acute care sites so that we can control and truly bend the cost curve in a way that's meaningful. I want to really emphasize that that is the mission of the company, to truly bend the cost curve. It's not about arbitraging a contract to get a better rate.
It's not about aggregating providers so that we can negotiate jointly to get a better rate. There are elements of that, sure, and we'll do that when necessary, but at the end of the day, the point is that fundamentally, the country needs more affordable health care at a higher quality, and that is why we are building coordinated networks so that that can happen, and how is it that we're doing that, so I would posit that the current system actually holds risk and financial reward for taking care of populations at fundamentally the wrong place. I would posit that on the left side here, you'll see the status quo where each managed care organization is contracted downstream in a many-to-many relationship with outpatient providers, with hospitals, with ancillary facilities.
And there's a complex web of reimbursement that makes it very complicated for anyone to truly hold holistic responsibility for the longitudinal care of a patient. What we are doing is we are transforming fundamentally what that reimbursement model looks like, plugging into the incumbent system, but changing it once we have received all of the premium dollars from the plans so that we can serve as almost a pseudo-single payer downstream to our provider networks, not only in primary care, specialty, but also in hospitals. So on the right side, you'll see that we are contracted with over 25 different payers, all the large publicly traded MCOs, local plans, nonprofits, Blues, et cetera.
We're entering into arrangements, risk-bearing arrangements, in which we are taking some percentage of the premium dollar, often that number looks like 85% of the premium dollar, in order to be responsible ultimately for not only the financial, but also the clinical outcomes for the patient. We are then free downstream to create our own networks, to credential our own networks, to perform prior authorization for those networks, to pay claims for those networks, truly to act as that pseudo-single payer for our downstream network so that all of our incentives are aligned. We are that single payer, but we plug in and build the infrastructure for that single payer model, which doesn't exist in the United States, to plug into the existing system of MCOs.
Ultimately, what that leads to is a better model for the key constituents of the health care system, for patients, for payers, and most importantly, for our physicians and our providers. For patients, we are truly able to invest in the patient long-term, longitudinally across their life, across their life circumstance, because we are bearing risk across all lines of business, across all payers. As an example, we are taking risk in Medicaid, in Medicare Advantage, in Medicare Fee-for-Service, in commercial. We're partnered with over 25 different payers.
Regardless of your life circumstance, which plan you choose in open enrollment, whether you lose your job, you weren't in Medicaid before, you're in commercial before, you have to go on Medicaid to go to the exchange to find a plan, you are still able to access the exact same care team, the exact same primary care doctor, the exact same specialist team, the same hospitals, because those care delivery teams are accessed through Astrana's single payer model. What that allows us to do is really invest long-term in the patient's health. We are able to reap long-term value, LTV, from a given customer, a given patient, far more than a managed care organization can, because we have certainty, or more certainty rather, that the patient will remain in our risk-bearing ecosystem, in our portfolio of risk, longer than any given payer can.
So for example, if you were a large MCO in Medicare Advantage, if you had a dollar to spend and you knew that it would save you $10 in the future of medical costs, you may not be incentivized to spend that incremental dollar on the patient's health in a preventive fashion today, because you don't know where that patient will be from a financial perspective in 10 years. They may be with your competitor in 10 years, and so you spent a dollar to help save your competitor $10 on their medical loss ratio line.
For us, regardless of which plan a member chooses in any given year, regardless of whether they lose their job, get a new job, switch insurance because of that, decide to go to the exchange, we are still the ultimate risk bearer, as you can see on the right side, in our Care Partners business for that member. And so we can actually justify the ROIs there for us to truly deliver preventive care, to truly invest in patients' health today, to save dollars in the future for the health care system, because we are going to have the opportunity to reap part of that reward financially. So for members, what it allows is for us to truly invest in their health. It allows for us to have continuity of their care teams, both primary care level, specialties, and hospital systems.
And it leads to a better overall care experience for the member. For providers, it means that we have more market share and mind share for the physicians. For a physician that is partnered with an MA-only entity or a commercial-only entity or a payer, they will have 10, 15 different organizations telling them what to do, and they're all slightly different in terms of what they do. They will have to all tab between 10 to 15 different payers, provider websites, provider portals, eligibility, claim submission engines, because they are contracted with so many different payers. When they work with us, because we are a pseudo-single payer model, they only have to work with Astrana. They are only sending claims to Astrana. They're only taking clinical feedback from Astrana.
The systems are set up in a way where that is really easy and reduces the administrative burden that they have. It helps the front office, too. Instead of having to key in 10 different websites to check if a member is eligible for United or Molina or Centene, they're looking at one place. Are they eligible? Is my patient eligible with Astrana? And so this single payer model really streamlines the process for physicians and allows us to have a greater penetration rate into a physician's panel, where any other payer might have 5%, 10% of the panel originally. Because we're aggregating demand from the MCOs, we often represent 30%, 40%, 50% or more of the physician's panel, not only from a revenue perspective, a number of members' perspective, and all of that translates into mind share perspective.
And finally, I truly believe, and payers are telling me, it's a no-brainer for payers. You can hear in the earnings calls and investor days of large MCOs, part of the margin recovery story for MCOs is the further penetration of value-based care in their books. For payers, we are helping them reduce their volatility in their book, helping them continue to grow in a margin-constrained and regulatorily margin-constrained business model in a way that reduces utilization headwinds for them and allows them to continue attracting members to their networks because of the high quality that we're delivering once they reinsure, quote unquote, some of those dollars to us. And so we really think that this pseudo-single payer delegated financial model works for all of the constituents in the system. And it's because, as I mentioned earlier, of our ability to engage members longitudinally across their lives.
So you can see here. I won't go over all the statistics, but it's a highly diverse and broad-based set of patients that we have, over 1.2 million today, going to 1.7 million in the near future post-planned acquisition, where across all age groups, across ethnicity, across race and gender, across payer type, we have a highly diversified book of business that truly represents the communities that we serve. It's not that we have a goal, that Chan and I have a goal saying we need 50% of our revenue coming from Medicare, we need 37% of our revenue coming from Medicaid. That just happens to be what our communities look like. And we serve our communities holistically. And these are the numbers that drop out naturally. And we think that's a model that works. And it's a model that has made care more accessible and better for patients.
Everyone cites these measures in terms of 45% fewer hospital admissions than benchmark, lower average lengths of stay. But we think that our model truly actually results in financial outcomes as well, which is important given we're in an investor conference. As you can see, over the last five years, we've grown at a 29% CAGR on the top line, 26% CAGR on the bottom line, up to the midpoint of guidance for the year. And we think that the model truly allows us to truly bend the cost curve while delivering financial results, strong financial results for our shareholders. I'll talk a little bit now about how exactly we do that. So the execution playbook, frankly, is quite simple. The unit economics of the business are quite simple.
At the end of the day, what we're doing is we're taking as revenue a percentage of premium from our managed care organization partners. The COGS, the cost of goods sold against that revenue, is the claims dollars, the cost of care for our patients. What remains has to be operated, and so we have a G&A line item against that, and whatever falls out is gross margin or EBITDA margin, and so the levers we have to pull are we're either increasing the amount of revenue that we have, either by growing the number of members or growing the per member revenue, those are the first two levers here, and/or we are decreasing the medical cost it takes to take care of those members, which is the third line item here.
Or we are using our technology platform to drive operating leverage to decrease the G&A line as a percentage of revenue, which is the fourth item here. And if we're doing all of those things well, the results will naturally fall out. It's a very simple waterfall of unit economics that we have here. So I'm going to take you guys through a little bit about how we are doing and performing and executing over the last five years and on a go-forward basis on some of these levers. First of all, on the growth side, we have both a strong organic and inorganic growth story. On the inorganic side, we've been acquisitive in the past, both in terms of smaller acquisitions in the tens of millions of dollars range, as well as some of the larger acquisitions in the hundreds of millions of dollars of TEV.
We've also grown organically at a strong clip by setting up new risk-bearing networks or adding providers to our existing risk-bearing networks in the regions that we serve. What we think highly conservatively is that if we can continue to execute on the playbook that we've laid out here, we are guiding towards at least $350 million of Adjusted EBITDA in the full year of 2027. Not a run rate number for the full year of 2027. Again, a highly conservative number. This number only assumes low teens% EBITDA growth in our core business. It assumes a baseline number of $81 million for a recent acquisition that we did, growing at high single digits% EBITDA. It includes, I believe, $12 million of synergies. Again, all of those numbers we think highly conservative for reasons I'll go over later.
In our core markets in California, ever since our inception in the 1990s, we've continued to grow at a steady organic clip throughout California, not just in Southern California and Los Angeles, down into Orange County and San Diego with the recently announced acquisition, but also up into the Central Valley here in San Francisco. There are a couple of clinics within walking distance of this hotel, and we continue to improve and increase the influence that we have on communities across the state of California, and we've not stopped there. Once we've built out our care models that we believe to be scalable and sustainable, once we've built out some of the technology-enabled services that I'll go over later that allow us to have operating leverage even outside of California, we've started to grow there, too.
In Nevada, for example, in Las Vegas, we've grown in our top five network there. In Texas, Arizona, Georgia, and Hawaii, we're slowly but steadily increasing our presence with the goal of being a top three to top five density network in each of the regions that we serve. Typically, we're targeting MSAs that have at least around a million people so that we can make the investments necessary to build the density, both from an affiliate standpoint in terms of an asset light model and supplementing that with care delivery sites that we own and operate so that we can provide that coordinated, accessible, high-quality, and high-value network to our patients in those communities. There's been some, I think, reserve about the recent deal that we announced in terms of acquiring or intending to acquire the assets of Prospect Health for $745 million.
I want to get that out of the way and really emphasize the amount of confidence and the excitement that we have about that transaction. We have done transactions like this before. Certainly not at that scale in terms of the dollars and the TEV that we're contemplating for this transaction. But just last year, many of you may remember that in our Q3 earnings in 2023, we announced a similar-sized deal in terms of our acquisition of Community Family Care. Community Family Care was a medical group in Los Angeles that had actually wanted to sell to us more than four years ago.
We took them on first as a client for our tech-enabled services business and drastically improved both their revenue and EBITDA after they became a client to the point where we decided to acquire them and fold them into our actual core business in Q3 of last year, and since then, we've continued to grow revenue. We've continued to grow bottom line at that business, and at the time that they sold to us, they only had 12 full-time employees because they had outsourced so much of the services and the care model and the care team work to our business that it made it very seamless for that integration to happen.
And proof points like that, and there are many other stories like this, are the reason why we believe we are uniquely suited to take not only a good deal in Prospect Health, we think, but also integrate it in a seamless fashion. To dive a little bit more into the details, Prospect is anticipated to generate around $1.2 billion of revenue in 2024, around $81 million of Adjusted EBITDA, highly conservative. And we paid around $745 million for that business with a $45 million indemnity escrow. That's just over nine times LTM EBITDA unsynergized. And we think there are tremendous opportunities for synergy given the technology that they have and some of the platform that we've built in terms of automation in a lot of the operating line items, which I'll get into later.
Combined, pro forma, this footprint will span all of Southern California or all of California, really, all of the Southwest and Arizona, Texas, Nevada, and parts of the Southeast as well in the Northeast. Pro forma, it will have around 1.7 million members with a very similar operating model as ours in terms of being a delegated risk and a delegated administrative platform focused on Southern California. Oh, going back. Sorry. One more point. We spent a lot of time due diligence on this asset. We understand that Prospect's parent company has declared Chapter 11 bankruptcy. If you read some of the purchase agreement that we filed, it's public information when we first announced the deal back in Q3 of 2024. This was a contemplated and anticipated outcome.
That's part of why we believe they had to do the deal in the first place and why we stepped in as the natural buyer for the asset at a price that we really felt was attractive. The regulatory environment in California is quite challenging. It's very difficult for financial sponsors, private equity to actually acquire an asset like this. There is probably one or two other large-scaled players, much larger than us, that would probably have antitrust issues if they were to acquire something like this. And so we felt this was a very unique opportunity to build such scale and density in Southern California that we have the opportunity to be a lasting entity with enormous moat in that region. And part of Prospect has been with our company for a long time.
One of our chief accounting officers, for example, who reports to Chan, my CFO, was the former chief accounting officer of Prospect. Their senior vice president of operations works for us as our senior vice president of operations. Their senior vice president of integrations is our senior vice president of integrations. They all moved over within the last two years. And they helped us diligence the asset to a point where we really feel very confident that the profitability and revenue numbers that we're showing here on the screen are actually real, if not even conservative in nature. So that's kind of all of the growth levers that we talked about, both membership growth due to organic growth in new states, but also inorganic growth due to recent acquisitions.
The next lever that we really have to pull after growth in terms of number of members is the number of, or is the amount of revenue per member. And so one of the ways that we do that is by taking on a greater percentage of the premium dollar from our MCO partners. Taking on a greater percentage of premium dollar comes, of course, with more risk. No risk, no reward, right? And so part of what we're doing is changing our contracts when favorable to us, when it makes sense to take on a greater level of risk, not just outpatient-focused risk, but both outpatient and inpatient risk for the patients that we serve. Ultimately, it makes sense given the larger vision that we have, which is that all of the risk should lie in a pseudo-single-payer provider-focused entity, which is what we are.
It just matters that we are doing it in a prudent way to ensure consolidated entity up until the right profitability. And so we'll see over time. We've slowly moved into full risk when appropriate for membership bases that we believe we can underwrite that full risk. And we've been able to implement the care model for long enough that that volatility is less once we go into the full risk environment. We've previously guided that around two-thirds of our revenue will come from full risk arrangements by the beginning of this year, two weeks ago. And we are well on track to meet or even exceed that two-thirds number when we announce our full year earnings in February. And all of this is powered really by a purpose-built, completely in-house and from scratch, from nothing, technology platform that we built. My background is actually in technology.
I have an undergrad and master's degree in computer science and AI from Harvard, and we built this tool. I was the first software engineer actually at the company, and over time, over the last five years, we've built out a data science team, analytics team, and technology team, numbering close to 100 people. And these are not typical. I don't mean this in any offensive way, but these are not typical healthcare health system engineers that we're talking about. We're talking about folks who have worked at big tech companies, who are at cutting-edge startups, who are helping us make sense of the terabytes of data that we have about each and every patient of the 1.2 million patients that we serve, soon to be 1.7, and make sense of it.
Try to do things like identify opportunities for our providers directly in the workflow and in the EHR that they use. Do things like create proprietary care management systems that automate the risk stratification of our population and automate what the next best action or next best set of actions will be for those patients from a clinical standpoint, guided, of course, by our chief medical officer and our medical directors, looking for fraud, waste, and abuse in our population health metrics. I used to be a trader at Citadel, and so I take some of that knowledge and background with me as we are essentially managing a book of risk. We're taking on fixed dollars. We're paying out floating dollars. It kind of looks like a swap. It kind of looks like a financial instrument.
Of course, the nice thing about this is not only do we have the opportunity to price that financial instrument that we're taking on, the risk that we're taking on, we actually have the second bite of the apple to actually impact what that financial risk looks like through our actions, through our preventive care, through our care coordination, through our downstream provider contracts. And so, for example, we have very detailed and sophisticated AI that allows us to detect if there are anomalies in the network that might trigger, back in my Citadel days, the risk team to give me a call, for example. If our leverage in a certain area is too high, so to speak, back then, that translates to, for example, are there anomalies in the billing patterns of a particular specialty in one of our regions?
Can that be identified proactively, sent to our teams, and dealt with so that we have the visibility we need and the ability to truly bend the cost curve, like I mentioned earlier? And there was an example of this very recently. I mean, there are tons of examples each and every day Chan and I are dealing with that gets brought up by this system. But I'll highlight one quick example. There was a set of dermatologists in our group, for example, who had purchased laser machines, and they were doing phototherapy on every single patient that came through the door. Our typical spend in this given geography on dermatology was around $2 million a year. In just one month, this set of dermatologists had billed $2 million in two months, one or two months.
And so our system automatically flagged that dermatology, and especially this particular CPT code that was being billed for, was far higher than average in this particular region for these particular NPIs. We went to go determine with our medical directors if that spend was appropriate or inappropriate. If it's appropriate, then it is what it is. Maybe we need to go negotiate a rate increase. But in this particular case, we determined that it was inappropriate. It was not medically indicated. There was no scientific proof that it actually helped the indications that they were being treated for. And so we actually had a conversation with these dermatologists, fixed the problem, and proactively determined or stemmed the bleeding that existed from issues like this.
And part of, and I'll go into this in future slides, part of what allows us to do this is the unique delegated single-payer model that we have, but I'll talk about that in just a bit. And finally, the technology platform really allows us to drive operating leverage. Because we are a single payer, we are responsible for paying claims, responsible for performing prior auth. Of our claims, 90% are automatically processed by the computer. The human doesn't touch a single one of those. By contrast, for example, the acquisition that we just announced, Prospect, processes 100% of their claims manually with human intervention. And so again, huge opportunities for us to drive operating leverage in the businesses that we acquire, just like we did with CFC last year and just like we're going to do again with Prospect this year.
Two-thirds of our prior auth, actually 70% now of our prior auths are automatically approved. What that means is that not only is a nurse not wasting their time on low-value work, like saying someone who broke their arm should get an X-ray, and actually doing high-value work, it also means that patients who go to their primary care doc and need a prior auth can get that prior auth same day at the appointment itself. They don't even need to go home sometimes. They can go straight to the specialist's office and get the care that they need, hopefully thereby stemming future utilization. So this is a key point that I want to, and I'll leave some time for Q&A here, but this is a key point I want to get into before I wrap up here.
And that's that in addition to the delegated financial risk we're taking, we're also taking delegated administrative responsibility. And what I mean by that is that in addition to folks giving us risk on a financial basis, but withholding the operational payer-related items such as paying claims, prior auth, etc., that a payer might typically do, we are being delegated both the financial and the operational items to Astrana. And I alluded to some of this earlier, but what that means is that payer providers are submitting all of their claims to us because we're the single payer. We are approving and denying claims. We're approving and denying prior auths. By the way, I'm proud. I looked this up yesterday. I'm proud to say that our denial rate is around 2%, far lower than many others in the space.
A vast majority of those denials are actually administrative in nature. Someone miswrote, mistyped their address, mistyped their NPI, forgot to fill out a field, that kind of thing. The financial performance we're driving is not because we're denying a bunch of stuff. It's because we're able to create the single-payer environment that truly bends the cost curve. Our RAF score, for example, just over one, 1.02, I believe. It's not an arbitrage game that we're playing here. It's a system set up over decades that allows us to bend the cost curve and do better and do right by the Americans that we serve. Going back to this administrative delegation slide, we are actually paying claims and performing prior auth, which gives us great visibility into future claims expense. In fact, I looked it up last night.
Two-thirds of the claims dollars that we pay out have a prior auth approval attached to them, and so that means that we have good visibility. Almost over two-thirds of the dollars that we're paying, we know are going to be paid out three, six months in advance because we've approved that care to be delivered. This is in stark contrast, I believe, with other entities who are taking financial risk but are not taking the operational responsibilities associated with that risk. For those entities, they are being told in arrears, sometimes a quarter, sometimes a year, sometimes 18 months in arrears that the utilization in their book has been higher or lower, but mostly higher than the benchmark that they've agreed to.
And that is leading to significant negative prior period adjustments for a lot of these peers that we just don't see, we just don't have because we are able to see almost into the future, so to speak, in terms of the utilization that we anticipate because of our ability to take on administrative delegation. So in the interest of time, I'll wrap up by saying that, as I showed earlier, the execution of these four simple pillars that we've executed on for 30 years plus has really driven profitable growth on both top and bottom line. We continue to grow at a 25%-30% rate in the top line, not only now, but into the future. We continue to grow EBITDA in a high 20% CAGR.
We're happy to reiterate that in Q4, we are continuing to see trends moderate and be within our expectations, allowing us to therefore reiterate guidance for the year. At the end of the day, like I said at the very beginning of this call, we are building a solution for what we believe to be a real problem for the status quo of U.S. healthcare. We're building a platform that is not just in California, not just in Texas, not just in Nevada, but can be portable to communities across the United States, across all payer types, and across all lines of business. Post the Prospect acquisition, we will have a meaningful scale, 1.7 million members, 13 states, 20,000 providers that we're serving, physicians and providers that we're serving, over $3 billion of revenue and over $250 million of pro forma EBITDA.
We believe this is just the start. The need for value-based care is not going away. We already see part of our thesis for acquiring Prospect was that we believed we are nearing a trough if we are already there in terms of Medicare Advantage rates. We've been saying that to folks for the last year. Because it is a natural mathematical formula, the rate for a given year is dependent on the prior utilization in future years. It just depends on when that sliding window is. We're starting to see that thesis play out. Last Friday, many of you may have seen that the MA base rate notice was a lot higher than people expected.
It wasn't higher than we expected because we knew from the claims data, as long as the window was the appropriate time frame, that the base rate almost had to be higher. And so this is the thesis that the bet that we're making, that we're going to lean into value-based care at a time that others are fearful. We're going to lean into doing things that actually fix the healthcare system instead of just playing an arbitrage game when others are fearful. And we believe with our execution and our platform, we will be rewarded for that, not only now, but especially in 2026 and 2027 as rates improve. So with that, I'll open it up for question and answers sessions. Thank you again for being here. I appreciate it.
Thank you, Brandon. We actually have a couple of questions from online. The first one is, what are the pros and cons for providers to join Astrana network?
Yeah. Thank you for the question, Brandon, and to whoever asked online. So the question was, what are the pros and cons for a provider that joins an Astrana network? I think there are a lot of pros. First and foremost, a provider is able to, when we contract with a provider, I'll do primary care first, we are going into the practice and changing, making it easier for them to do the work that they want to do on behalf of their patients.
So what that means is, depending on the maturity of that provider in terms of value-based care, that can mean something as little as giving them the technology and integrating it with their data and EHR, or it can mean something as wholesale as doing that, but also helping them with billing, helping them with their front office, helping them with their call center, helping them with their provider presence online, helping them with aggregating patients and giving them more contracts. It really is kind of a pick your choose your own adventure menu depending on how sophisticated that provider is. But we have those capabilities because we believe that it's not just our financial contracts that lock a provider in, but also the added, the value-add set of services in terms of provider enablement that we're offering. So it's a one-stop shop to get a cheap EHR.
It's a one-stop shop to get cheap billing. It's a one-stop shop to have a centralized front office at a time that LA County just raised minimum wage to over $20 an hour. These are all challenges that independent providers face that are making it harder and harder by the day for independent doctors to practice and hang up their own shingle in the way that they want to.
And so when they work with us, they're getting not only the financial benefits of the contracts that we've negotiated, the 25+ payers that we're contracted with across all lines of business and the rates that we have, but also the technology and the practice, the transformation of the practice, and the support of a care team over 400 nurses that we employ today, nurses or clinical staff and care managers that we employ today, who are going to support their patient base in a way that takes some of the burden off of the provider. In terms of cons, I think probably the only con I can think of, and Chan, you let me know, is if to build a differentiated network, we often require, we would like for a provider to be exclusive to us. We would like for a provider to see patients through Astrana's network.
You can think of the analogy not to make light of the great work that physicians are doing, but the analogy would be if a driver were to only be locked into Uber and couldn't kind of shop Uber and Lyft. I think some of the cons would be if anyone prefers to have choice that stays with them, they could see this as a limiting factor. Again, we're providing so much additional value and better rates that providers are often very excited to do that and wouldn't shop anyway, even if they could.
Yeah, makes sense, and the second question is, how do you manage the risk of medical cost overrun and how do you negotiate fee rate with MCOs?
Sure. So I think the question is, how do we manage medical costs over time?
Overrun? Over, overrun. And kind of how are we negotiating with MCOs? I'll take the first part of the question, Chan, if you want to take the second, but I kind of got into it, but the care model overall is trying to meet providers where they are so that they can better take care of patients in a longitudinal fashion and creating the economic proposition around that so that that can actually happen in a way that's sustainable. So on the first part, we have both an offering where providers can remain independent and own their own practice, partner with us, get some of that practice transformation I talked about earlier, have the support of the care team that I mentioned earlier, and continue to practice medicine in the way that they want to, but with all the extra support that they wouldn't have as an independent practitioner.
Or for a lot of providers who want to be employed, we have a model for that too. Our care delivery business allows providers to be employed by us where we drop them into what we like to call an Iron Man suit where they get everything kind of taken care of and amplifies each and every action that they have. So we're really trying to meet providers where they are so they can better serve the patient and take care of patients long-term. But the other part of it is that we have that long-term view on bending the cost curve.
As I mentioned earlier in my example, we have every incentive because we are across multiple payers and across multiple lines of business to truly invest in the patient's health now because we believe that the future ROI on that investment now is going to pay off years into the future. That's something that fundamentally, from an economic perspective, other entities can't justify because the members are churning between plans each and every year. And so I think we sit in a unique position because of the business model and the reimbursement model that we've set up that allow us to make the investments in a financially prudent fashion, and we believe our financial outcomes show that. Do you want to talk a little bit about MCO negotiation?
Yeah, sure. On the MCO front, and the reason we're so excited about the Prospect acquisition is as we are able to provide a holistic high-quality network throughout the state of California, it changes how we can approach payers, and it allows us to be a better partner with payers. We are one that works in a very partnership-oriented manner with the MCOs. We have relationships with all of them, and we continue to work with them to fill their needs. And in return, through our high-quality network, through our expanding geographic scale, we are then able to negotiate higher percentage rates because we are filling their needs that they have.
One point I want to make there, mentioned, is that one of the key words in Chan's answer is that loyalty and long-term relationship with our payers. Our loyalty and relationship with our payer partners sometimes stretches decades, and it's not a relationship in which we are terminating our contracts the first sign of issues or headwinds that we see. I used to use the example, I don't want to make light of the situation now, but imagine if you have insurance for your car or for your home, and right as the crash is about to happen, right as the fires are coming, your insurance company cancels on you.
Now, the next time you're looking for insurance, are you going back to that same insurance company who you thought was going to be a loyal bearer of your risk, who took your premium dollars when things were good, but terminated you when things were bad? Or would you rather be with an insurance company that stays with you even when times are tough, even when headwinds are apparent, and tries to solve the problem with you, kicks out their fire hose and fights the fire with you? That's what we are. We have not terminated any of our forward contracts. In fact, as you can see, we've increased the amount of forward contracts that we've had, even in a high utilization environment, while our peers are terminating their contracts and bragging about it on this very stage.
How do you think that makes the payer partner feel when the person that they're delegating risk to runs away at the first sign of trouble? We're not running away. We're leaning in. Our superior care model is allowing us to deliver financial outcomes even as we're leading in a difficult period. And when things get better, which we're seeing the first signs of in the 2026 Prelim Notice, we're going to be in the best position to succeed compared to our peers.
Thank you. And probably one last question. You also mentioned the full risk conversion in the presentation. And the question is, when you convert patients from partial risk to full risk, while there is a revenue pickup for that patient, is there a corresponding EBITDA pickup as well? If so, why?
Right. There is a slide I believe I took out just for the sake of this presentation in the time limit, but if you look at some of their past presentations, there is a unit economics waterfall of what our unit economics look like in a partial risk scenario versus in a full risk scenario. But the simple answer is really, of course, on the revenue side, there's a pickup given the higher percentage of premium almost by definition that we're taking. On the bottom line side of things, there is also a pickup over time because we are better able to coordinate care for the patient across both outpatient and inpatient settings.
So year one or year zero, right when we sign the contract, there's often a contract pickup just because of the decreased administrative burden that the plan has that they can now give us in terms of premium. Before, they had to keep the claims responsibility for the hospital, claims network contracting responsibility for the hospital. They're now giving that to us. So it's cheaper for the plan to operate in this full risk environment, which means they can pass some of those savings on us. So that's kind of the day zero answer.
Over time, because we're aligned in terms of our ability to coordinate outpatient and inpatient care better, and because we're financially rewarded for doing so, we're able to drive further decreases in unnecessary hospitalizations, unnecessary emergency room usage through our care model, which will allow us to actually financially be levered to that driving that patient outcome because we're now taking risk on it. In the partial risk world, if we were to drive those outcomes, we actually wouldn't partake in the financial upside because we're not at risk for that part of the dollar. But in a full risk environment, we would be at risk for that dollar. And so that's the answer for kind of why there's going to be some pickup on day zero, moving over into even a larger pickup over time on the profitability line.
Thank you, Brandon and Chan. Thank you all for joining today.
All right. Thank you, everyone. Have a great rest of the week.