MultiPlan team, and we have the whole team up here on stage. We have Jim Head, CFO. We have the brand new CEO. Nice to meet you. Like I said, you may remember him from Cerner. We were a little nostalgia walk, and we also have Dale, Executive Chairman now.
Thank you.
No longer the CEO. So I do want to say that we also, before we get started, Shawna has a quick disclaimer to go through on the investor relations side. Shawna, take it away.
All right. Thank you. So just a quick reminder that our remarks and responses are mainly as outlined on the screen. Actual results may differ materially from those stated or implied due to a number of risks. And a summary of these risks is shown on the screen, and a more complete description can be found in our annual report on Form 10-K and other documents we file with the SEC. Any such forward-looking statements are as of today. And with that, I will just turn it back over to you.
Perfect. Thank you. Travis, you got 10 days into the job?
Right.
Seasoned veteran.
Yeah.
Tell me about the path that led you here. I think a lot of folks may remember you from Cerner.
Yeah.
What made you look at MultiPlan and say, "This is the next seat?
Yeah. So, first of all, thank you for the welcome. I'm official because I'm a note taker, and I have MultiPlan on my note card.
Oh, look at that.
Yeah, I was 21 years with Cerner, and so it was part of a pretty good run there. When I started, we were about $500 million. We sold the company for somewhere around $5.4 billion. So it was part of that growth run. At the end of that, before we sold to Oracle, I was running about 80% of the company. So I had sales, technology, delivery, and some other elements of the company. And then the last 2 years have been running Oracle Health, which was doing integration work into Oracle. So, you know, growth, scale, public company experience, productization of things in healthcare markets, those were all areas that I had been focused on, and I thought that they had some relevance as it relates to the...
What I believe, and I'm trying to get everyone else to believe, as are we, a MultiPlan story can be.
Convince me, convince them.
That's right. So, you know, why MultiPlan quickly is, you know, I looked at it, and I said there's three ingredients here that I think are core to why you'd go anywhere. Great clients, good team, and a mission. And so those three things exist before you even look at any of the financial, the financial elements or the actual business case. And so I just felt like, hey, we have those three things. We've got products coming to market that I think we can drive into our core market. We got adjacent and the white space, which I think we can continue to drive products, and we have new segments that I believe we can open.
And so from my view, I thought the things that I was, you know, had learned and developed actually had good relevance here as we seek to verticalize and, and data enable the business.
You've steered very large ships before that are going through transition.
Yep.
This echoes that.
Yeah. Yeah. I mean, my, it's been a, it's been a soul-searching process for me, you know. You, you, you, you go to Oracle, and you find yourself inside of a, a big thing, and what is it you want to do with your life? But to your point, for me, ultimately, it came down to building something and, providing, making an impact. And to me, this reminds me a lot of kind of where Cerner was at a point in our journey. And I think that this is the right size of an organization where you have-- you've got enough capital to do some things, but it's not so big that you can't prove it in the strategy that you want to execute.
So there's a little flexibility there, but there's also you put some wood behind the arrow on the things that matter most, and I think that was really part of the decision criteria as well.
Because at Cerner you saw, you saw a large organization, but then you were bought by Oracle. I'm sure you saw what scale, right?
Yeah, I did see that. And also, I'll say moving on, also got the good opportunity to see how to really take horizontal products and put them into vertical market segments. And we made a real effort to grow by doing that, and I, I really think that we can do that in both adjacencies but also in new segments here.
Now, usually when there's a new CEO, there's a lot of questions about continuity, but we've got Dale literally over your shoulder.
Literally.
What do you do in Miami, Dale?
I hear you. First of all, I'm doing the fun stuff, right? The torch has been passed 10 days ago.
Yeah. Now, you just do welcome drinks after this. That's great.
The torch has been officially passed, and I've assumed the role of executive chair, and I, I'm Travis's wingman, and I get to do the fun stuff and, and, you know, focus on customers, deepen our customer penetration, provide that stability in those larger customer relationships. That's the good stuff.
Now, the bad stuff. You've got to go deal with the roadmap from the investor day.
Exactly.
Is that the same roadmap?
Yeah, I'd say it is right now, for sure. So short term, you know, our execution this year really needs to be, I think, as part of the investor day. But I, again, I do really believe that we can take what we're doing with data and decision sciences, and particularly the BST acquisition in optics, and we can take that platform, and we can use it, in provider health markets. And I think that's a real opportunity, and you can build analytics off of that, which opens up new growth that hadn't probably previously been contemplated. And so that's gonna be something that we look at that market analysis very carefully, and a strategy that we're gonna consider for sure.
This isn't your first time doing an expansion, especially into an adjacent space.
Mm-hmm.
What learnings have you had so far that you want to apply to this one as you go into a new end market, which can sometimes be, as you know?
Yeah
a battle?
Yeah, I think a couple of things. We, you know, one is spend a little more time on understanding the market potential before you go there. I think a question that doesn't get asked enough in new market potential is: What would you pay for this? And so, you know, we're actually canvassing particularly in the provider segment potential buyers and what would their appetite be for buying behavior. And that should inform what we ultimately do.
So what will they pay for it?
Don't know yet, and I wouldn't probably say just yet either. But we ultimately will put market size on it, SAM, all that good stuff, and we'll size the market. We'll go look at it, we'll put a go for it, if we believe it's there.
How are you going to be able to leverage your relationships in that industry? Is there a way to get a few anchor folks in order to help create this product?
Yeah, for sure. For sure. I was 22 years in the North American, you know, healthcare market, so, I got a few friends left. But I'd say, you know, some good, a few good ones. So, we've made a few calls, and we'll make a few more, but I think we got a lot of benefit to drive more revenue, but also service line optimization off analytics, which is, I think, a real value proposition for, for healthcare systems in the U.S.
Jim, I feel like you've been, you've been too quiet. I've got to ask you about guidance. You're sitting here, I'm asking them.
Sure.
Back half weight of ramp.
Sequential growth expected.
Help us get comfortable with that. You know, that is a dog whistle for investors right now. Like, oh, no!
Well, you know, we've I would say 2023 was an example of that, where we saw sequential growth throughout the year. Our first quarter is usually the softest, and our fourth quarter is usually the strongest. So, you can put your whistles, so, whistles down, so to speak. But, in fairness, we've got growth engines that are beginning to come across throughout the year. In our guidance, we talk about the core, which is, in large part, you see, you have a pretty good sense of where things are because your customers and all the plan sponsors they serve are kind of set for the year, and what you're waiting for is volumes to happen.
And so we've got a little bit of utilization increase and a little bit of inflation, so that'll pick up throughout the year, expected. But in the end, we've got new products that are coming across in Payment Integrity, our HST employer direct platform, and BST, which are building throughout the year. So there is an aspect of build throughout the year, but it's not a giant go get, if you're wondering. And so, to us, it feels a little bit similar to 2023 in that build.
Well, maybe let's touch on that. What sort of visibility do you have into that number? Like, how much is the go get? How much of it is just volume, something like that needs to happen?
Yeah, in our core business, the out-of-network repricing, which is admittedly a very large piece of our puzzle, we have a pretty good amount of visibility at the beginning of the year. The variables are really kind of volumes, which have been, you know, in 2022, and we saw some volatility. 2023, we saw some stability and actually increasing. You know, investors see some of the signals from the hospitals and things like that. So it feels like the environment's pretty stable going into 2024. And then we've got a little bit of inflation, so that it's not go get, but it's just kind of naturally built into the system. In our HST business, we feel pretty good about the growth prospects there, and a lot of it is business that's been signed up for 1-1.
They go to an employer, sign up the plan for the year, 1/1's a big date, and then we continue selling even more throughout the year. So we start off with a fair amount of visibility on that. Payment Integrity is pretty similar in that sense as well. And BST is going to build throughout the year in our estimation, and so the go get is pretty modest in terms of our overall growth aspirations. And we, you know, we put out a relatively narrow range, but I think it's we feel good that it's balanced and down the field.
Why did you choose a much narrower range than normal?
I think we're trying to... Listen, the variability in our business is starting to narrow down. We wanted to show growth at the bottom end of the range and make investors feel comfortable that we're moving in the right direction. So I don't know if there's, you know, a level of precision that's narrow or wide is gonna necessarily end it, but we just felt that was a good expression of how we feel about our year.
Now, it all makes perfect sense if you have typical volume and things like that.
Yep.
There's this company, Change Healthcare.
Yeah.
They've had some issues that have maybe impacted you.
Right.
Talk to me about this.
Okay. Well, Dale, you want to just talk maybe about the macro? I'll talk about the,
Look, the I think everyone is aware of the incident that Change Healthcare had. I think it got on the 21st of February. They provided regular updates as to the work effort they have underway to address the issue. The last update on March the 7th said that they would be targeting the week of March the 18th to bring their claims platform back online, right? And remember, you know, Change Healthcare sits between payers and providers, and claims flow back and forth, right, information flows back and forth. So there's been a disruption to the claims submission process. From our perspective, we, you know, directly, we have very little... We took all the actions we needed to take as soon as it happened, to protect our data and our systems, right? So that was priority one.
We have very little direct exposure with Change. There's a little bit of, you know, with one of their many companies, we have a connection point to the, you know, in the relationship, but it's immaterial to our revenues. And so from that perspective, you know, but they're a big player. They're a big player in the clearinghouse space, and they're an important player in the exchange of information between payers and providers.
Right. I think as it pertains to what we're seeing, I'll just make a couple points. Number one, we are beginning to see an impact on the flows that are coming into our system. We lag a little bit, as you're all aware. But number two, it's primarily a timing issue, okay? The claims need to be repriced. Again, we're not a network company that reprices claims in the core of our business. Those claims need to be repriced, but they're not going away. They're not being, you know, they're not just being submitted, and the plan sponsors want them to be repriced, okay? So they're not disappearing. Number three, it will probably impact the tail end of Q1 and maybe go into Q2.
But it's too early to figure out what the magnitude of that is, okay? Last week, we said it was too early to tell. We're kind of, I would say, updating a little bit, but this is going to work its way through the system, okay? So it's a little bit like a timing issue, a ripple through our volumes, and it should be done by the end of Q2. So when you look at the longer view, I don't think it changes anything. I think we're going to have some geography issues between Q1 and Q2.
Beyond just volume geography issue, I have to imagine that comes on at a very, very high incremental margin.
Yes. Well, you know, it... We have a fixed cost to our platform, right? In a lot of ways, we have the people and the technology, and so you're absolutely right. On the margin, there's not a lot of variable cost to change when you're just processing claims through the platform. So it would be high-margin business for us .
When you think about the product roadmap, given this whole Change incident, does it change the direction that you'd want to go in, or does it change the prioritization of your product roadmap?
That's a good no. I think we're very confident with the growth plan we set in place. If you reset the clock, right, if you reset the clock and look back, we formed our growth plan in 2022. We executed on it in 2023. We're advancing it this year. What's important around that is, you know, last year's initiatives will be growth drivers this year. So three, in particular, you have Balance Bill Protection, which we launched last year, right, in the summer. And we, as we said on the call, we expect about $6 million in revenue, incremental revenue this year. We launched Balance Bill Protection in, or I'm sorry, Pro Pricer, which is our AI machine learning, sort of dynamic process at the front end to generate the most savings on claims.
We launched that in the fall. It's doing better than we expected. We said $6 million when we reported Q3, we expected that. Now it's running about $8 million-$10 million this year. We refreshed our IBR program, and we signed a handful of customers in the fall, Q3 and Q4, and that alone will be driving $5 million of revenue. But that's... We're not standing still, right? There's a lot of work effort now. So those growth drivers are contributing, you know, those initiatives are contributing to our growth in 2024. Now, the work we're doing in 2024 will be the growth drivers for 2025.
So there's a lot of work taking place this year around deep, you know, deepening the value of our core initiatives, implementing next generation of our core products, like Pro Pricer 2.0, like micro networks, things like that. We're expanding our employer and the solution on the HST platform, so we're snapping more products and services on our HST platform, which, you know, Stephanie, is our direct-to-employer channel. So all of those things, all that work taking place this year, will be foundational to our growth in 2025.
I'm hearing a lot of different folks that go on the stage say that the whole Change Healthcare incident is also making it more important to have these, like, duplicative data exchange sets.
Yes.
Would you ever want to go in more of a clearinghouse direction or partner in that direction?
Yeah. Maybe I'll take this, and I'm going to synthesize what Travis and Dale had just said. When we talked about our Investor Day, you know, last year, we talked about the value of our platform and what the adjacencies could be off of it, and the benefit of having our new Data and Decision Science service line, which is that horizontal set of products that we could take to different markets, Medicare, Medicaid, stop-loss, provider, okay? And we felt like we had a fair amount of runway in terms of new product introductions, et cetera. So what we have is bandwidth constraint, and so we have to be pretty choosy about where we want to spend our incremental development dollars, where we want to spend our incremental calories.
And so I think what you're hearing from us is, I think there's an opportunity for maybe someone else-
Mm.
In that realm, because these providers need more than one, you know, more than one access point. They probably, you know, some of the bigger providers have multiple choices, but in the end, we're trying to stay focused on what's going to drive the most value for us and where we have the most distinctive advantage.
Hopefully.
Well, yeah, but, like, we feel like there's a good runway of stuff that we can do really well with our existing customer base.
Well, maybe let's go to that. Talk to me about the key drivers for your 2024.
Uh-
You have a lot of different growth opportunities, right?
Yep.
You have a lot of new products that we may not be as familiar with.
Right.
Talk me through them. What are you excited about?
I think where we've shown a lot of excitement, first of all, in the core, we feel like there's still plenty to do. We've got penetration to, you know, to new clients. We are, I'm very excited personally about the revamp called Pro Pricer for our next generation out-of-network repricing solution. That's gonna both optimize our savings, but it's also gonna take costs out of our system over time, 'cause it's a more flexible switch, okay? So we've got some opportunities, and we're making investments right now. They're not massive moonshots, but they're very attractive investments that we can do to refresh the, you know, the core of the business.
And then we talk about it in our guidance for the year, but as you walk across some of these other areas of growth, I mean, revenue integrity, we've been making some investments. We're starting to see, you know, returns from IBR and advanced code editing and things like that, where we feel like our customers are really desirous of those types of solutions. HST has legs. HST is our direct-to-employer. We go to kind of the smaller end of the employer base, 1,000, 2,000 employees, and we have a reference-based pricing solution that we're wrapping more solutions around, including balance bill protection. That is one of the, you know, a really interesting driver. We can make that a pretty big business over time. And then Benefits Science. Travis talked about it.
Benefits Science is our horizontal capability, and we are finding that there's just tons of products and solutions that we can develop internally and efficiently to go out to go-to-market. And so, you know, Travis is here for the very reason that he's bringing some of those skill sets and commercializing product lifecycle management, et cetera, to the table. And that's stuff that we are gonna marry with our intellectual capital in the business, you know, the scope of platform assets, to make some exciting bets. And so that's... We feel good about where we're going. It just takes time. It doesn't happen overnight.
I'd add to that. I'd say our partnership with ECHO Health.
Right.
Right? We entered into a partnership with ECHO Health last summer to put in the payments business, right? 'Cause we decided not to buy it, build it. We wanted to partner with it. It was a speed to market question for us. We're in the market, and we've already sold two customers. The interest is strong, the demand is there, and our pipeline is good. So we're take that and bundle it into the products we have. We're super excited.
Well, talk to me about pipeline then. I'd, I'd love to hear, what are the big parts of your suite now, of products, that's really getting traction with customers? What's the biggest sticking point? Where could we see that go?
I think I'd echo what Jim said, right? I mean, it's you focus on our core, right? So it's deepening the value of, of what we do in our core, right? Because that's, that's our life install right there. We focus on the core. And so it's making sure that, that we're doing everything we can to, to, to deepen the value, to bring more value to our customers. So look at Pro Pricer. Look at Balance Bill Protection on HST platform. A Balance Bill Protection wasn't a, it wasn't part of the HST platform this year, last year. It is now. And so we're widening, we're deepening and widening the scope of products that we're bringing to our customers. We're now, we, we refreshed our payment integrity with IBR. We're, we've partnered with Echo. It's all of those things that, you know, what are we super excited about?
Balance Bill Protection, right? Pro Pricer, next generation.
We can't name all the products. We can't name all of the products.
Those two.
But say what you're most excited about.
Those two. Those two are the key. Those two, Balance Bill Protection, Pro Pricer, next generation, out-of-network cost management.
Well, I guess with that in mind, a lot of that came through M&A, right? Where are you in your cash priorities?
Right.
Could there be more of that? Could we be on stage next year with Dale talking about two new products?
Well, I think, so let's, let's talk about what we've been very consistent on. We're, we're gonna invest in the business. You're seeing that. Obviously, capital expenditures are putting, taking some of our operating leverage that we, that we gained because we have, you know, revenue growth, and re-investing it back in the business. But with, with what we've built over time, we have some, we have, we have some runway in some of these areas that we don't need to make acquisitions to create growth. I think that horizontal platform that we bought with BST is a product and solution engine. So in a lot of ways, it's, it is more about executing on the assets we have. We, a couple of years ago, we were kind of a one-product company, and now we've, we've actually opened the aperture quite a bit to new areas.
We've got to execute on that first. We've told folks that acquisitions will be on the sidelines for the time being, but that's not too long. But in the end, we've got to focus on our debt retirement. So I think we can actually, with what we've built and what we've bought, I think we can have a pretty good runway organically for the near term.
So if I had to characterize your arc over the past few years, you came out, and you were kind of a very deep one-product company.
Yeah.
Like, the deepest, but-
Yeah.
No problem. Then you expanded a lot of your products over the past year and a half, 2 years. How do you see the next few years? Is it making sure it all sticks?
Yeah. I mean, yeah, I view it as there's enough on the cover here to actually thread the needle and run through what I see here, and that was attractive to me coming in. And so I looked at it, and I'm like, "Wow, we have enough products now to annoy people by listing them all." Right? I probably wasn't as true three years ago, but now we do, so that's a good thing. So we have a set of products that, again, we, if we run better, sell better, work harder, more urgency, I think we can squeeze water out of rocks right there. Then you start to look at, okay, what becomes behind that? I'm serving the core. I'm moving into the employer market more aggressively. Then you come back with a new market segment.
Then you come back and say, "Okay, I have an interesting data science asset that I think I could treat as a platform and potentially monetize." Maybe. We'll see, but I view the arc as a 3-year arc of serve the core, new market, data. That's how I look at it.
No stranger to scaling. All right, well, that's all the time we have. Thank you guys so much for joining.
Thank you.
Thank you.
I look forward to seeing the scale.