Thank you, everyone, for joining us for our next presentation. Looking forward to a great presentation with Travis Dalton. Travis, President and CEO of MultiPlan, just joined the team a couple of months in, so we're excited to have him. Thank you for coming. Jim Head, President and Chief Financial Officer. Before I kick it off, Shawna, I think she was gonna read a quick disclaimer. Oh, didn't see you there. Sorry. Okay.
Good afternoon. So just a quick reminder, as we have up on the screen, you know, our remarks and responses today may include forward-looking statements as outlined on the screen, and actual results may differ materially from those forward-looking statements. A summary of all of the risks can be found in our SEC filings and our most recent 10-K. Any such forward-looking statements are based on our information as of today. With that, I'll just hand it back over to you.
Thank you. Thanks, Shawna. And again, thanks to the team for joining us at the conference, team. Travis, I figured a good place to start, a couple of months in, I know we've touched on this, we had conversations about this, but maybe for the audience, we could just touch on, you know, your observations a couple of months in. What, you obviously. You know, on your call, you laid out, new man, new team, new members of the team, new COO, new leaders in the sales side. So a handful of those things, and then kind of what your vision is for the company now. Like I said, you've laid out some initiatives.
Yep.
Some guidelines. Maybe you could just walk us through those.
Yeah.
Guidelines and what you've kind of, w hat your observations on the first couple months here?
Yeah. Okay. Well, first of all, thanks for having us. We appreciate it.
Yeah.
Yeah, it's been an interesting two months. I'm not gonna, not gonna lie about that. You know, I, m y prior experience, kind of just briefly, you know, why I came to MultiPlan and what I was doing before. So I was at Cerner Corporation and was part of a, you know, really good growth story over a multi-year, you know, over a 20-year period, working in healthcare for over 22 years, and then spent several years at Oracle running all of Oracle Health. So I was responsible for all the global assets, in 32 countries, about $6 billion of top line, et cetera. So growth, public company stuff, healthcare-
Mm-hmm.
You know, serving in that way. Yeah, I kind of looked at MultiPlan. I'm like: Okay. Interestingly, when I was called about the opportunity, I'd never heard of the company. So that was, t he first interesting observation was like, eh. And then I started to look, get a little demographics or little optics on the organization. I was like: Well, let me at least take a look at this. You know, some fundamental things need to be there for to be interested in something. You know, great clients, great team with core values, and, you know, kind of a mission, a mission that matters. Dug a little deeper, and, like, the products work really well. They deliver a lot of value. I'm hearing that from our clients as I talk to them.
Got market segments that I think we could capitalize on today that aren't fully served by us, or we could be more competitive if we focus. So we're gonna focus on certain market segments in a different way. And then we have some untapped assets, I think, on the data and decision science side that we can focus on. So when I map those two things together, I'm like: This is a pretty interesting opportunity to drive growth. And my assessment was that, on a personal level, I had something to bring that could be of value to the company. We'll see about that. I hope so.
Mm-hmm.
But that's kind of the, you know, the way I looked at it. As I look at the business, you know, it'll be, you know, folks may get tired of hearing my, how I talk about it, but I'm gonna talk about the same way over and over.
Mm-hmm.
You know, clarity, alignment, focus is how you run a business. Clarity of the purpose, so everyone on our team knows what we're here to do, which is to reduce costs and take costs out of healthcare. That's what we're here to do. Alignment of the organization, so we've added some talent. We brought in a COO and some additional sales talent, and we're aligning the organization with what I think was a really strong management team, which Jim's here representing, along with a couple new points of view, and then focus on operational metrics. So we've developed, you know, five key areas that we're gonna focus on-
Mm-hmm.
Which is focus on our core, grow in our adjacent markets, which is be very aggressive in, in selling into those areas, operational excellence with data, innovation in our people. And if you do those five things well, and if you have both forward indicators and current indicators in the moment, I think you can run a successful business. And so the basis for the company forward will really be around that. And then furthermore, and then I'll pause, so maybe Jim can get a word in here today. But you know, I think being fit for growth is really important. And what I, when I, when I say that, I mean, we're gonna have, we're gonna run the business with data and information and good sales processes and product life cycle.
Mm-hmm.
MultiPlan was not, hadn't been a product company over its past. I come from product environments.
Mm-hmm.
And so to me, part of the job is: Can we take market insights? Can we assess those insights, size those markets, and then make more stuff with more velocity that we can drive into a captive client base while we search for additional growth in new segments and otherwise as we go forward? So I think we're on a journey to a maturation journey in that way.
Yeah
That will yield different results for us on a long-term basis as we serve our core clients, as we sell more aggressively, and then ultimately, I think we break into new market segments-
Mm-hmm
That I haven't been shy talking about, which is provider health and other parts of the continuum.
Yeah, to that end, can you walk us through, you had talked about the, I think it was 30 performance initiatives-
Mm-hmm.
On the call. Can you kind of wrap the, you know, our, you know, for us, what really is the core, what's gets the central message in those initiatives, and what your expectations are internally for your, you know, your new platform?
Yeah. Yeah, as I mentioned, there's kind of five. So, as a strategic and operating plan, we're gonna focus on five pillars, which I just mentioned.
Yeah. Mm-hmm.
Inside of that, you'd have a set of metrics in each one, and then throughout the whole organization, everyone would line up to that. So you get organizational momentum.
Mm-hmm.
You know, depending on the vertical, it's different metrics, but it's things like, what does our sales pipeline look like, and how do we assess that pipeline on a weighted average?
Mm-hmm.
Do we have sufficiency? Do we have volume? And do we have growth? SVG. So measuring that in a very specific way, and astutely, will allow us to apply our resources in a different way. What is our code quality? How much code are we generating and putting down? What are our error rates in that code? Efficiency metrics, like that. So it's things that. It's not just the output, which is your results on a 90-day cycle, it's actually the things that you're doing inside the business that give you belief that you're actually on a forward trajectory over time or are forward-looking indicators.
Mm-hmm.
We have some other with our people. Are they getting trained? Are they progressing in their careers? Those kind of things. So if it's a great place to work, we can attract talent. I think we can, we can ultimately be more effective in the market as well. But all of those things in addition to, you know, what you would call standard metrics that, that many of you track every day as it relates to our business.
In terms of innovation and the existing kind of, we'll call it, I guess, the new product platform, you know, the acquisition of BST last year, you know, PlanOptix you talked about on the call, I think HST is one.
Yeah.
Can you kind of frame, you know, that opportunity and how would we think about that opportunity going forward?
Yeah. I, you know, the way I've classified it, as I mentioned earlier, what we're thinking inside the company is the, the fundamentals of running the business, which I, which I just noted, and getting-
Mm-hmm
Fit, the fitness for that, but then the horizons for growth. So what are those horizons? We've kind of characterized three horizons. So one is, serving the core market today, which is our large accounts and our current customers, with more product, faster, okay? Make goods, make more better stuff, to put it plainly. That's important. Secondarily, is using products we have today and horizontally moving them into other market segments: brokers, consultants, TPAs. Building off of our HST platform to sell more aggressively against our competition in those areas, but also into white space and opportunities that we have. So that is what I would say is horizon one. We can do that today. Horizon two would be, do that better and faster with more focus as your organic growth capabilities develop-
Mm.
And then look at new market segments. Everyone knows I came from a provider world. I think we could serve provider health systems. I think PlanOptix is an interesting tool. I think it has transparency capabilities. I think that our data and decision science business can bring analytics and risk models to health systems that are well beyond the market that we serve today.
Mm.
I think that's a huge opportunity. We have a market research group together today that we're working with, that's helping us develop use cases that we could sell over time, and that's a multi-year journey. Then ultimately, you know, we start to really hit on all those all those elements, and we see if there's something there related to our data platform.
Mm-hmm.
We're working on some platform assets and otherwise, as we go forward, that, you know, if you look at, you know, you look three years out, two years out. I hate to use this word, but I said it in the last meeting, but people need to give a you-know-what about MultiPlan.
Yeah.
And what makes you give a you-know-what about MultiPlan? Well, it's tech forward. We're using data in interesting ways. We serve the continuum in a more broad way than we do today. We're not just this, you know, best-kept secret in healthcare that serves a specific niche-
Yeah
In healthcare.
Mm-hmm.
We actually bring value across that continuum. I firmly believe that we can take that journey, and that's why I came, was to try to take that ride.
Yep.
I got to get everyone in here and others to believe in that-
Yeah
'Cause they've only known us as one thing in the past.
Mm-hmm.
We're more than one thing today, but we haven't told our story very well. So we'll invest in core HST, BST with data assets, and new market entry. Those are the things you'll see us investing in.
I know you, you've been out to see your, your kind of your top 10 clients.
Mm-hmm.
I mean, what has been their feedback? What have they communicated to you about either, you know, core or opportunistically?
You know, it's been, I mean, I had to joke with the team. I've been going to see these folks, and I'm like: Did y'all how much have you teed these conversations up? Because they've been very positive on the value that we bring. I mean, I'm very much emboldened by that. I mean, the discussions have always been, "man, we love your team, we love your people, we love the way you guys operate, and the, you know, the integrity with which you do business. We love that, and the solutions you have today add value. Do more of that.
Mm-hmm.
So bring us more value, bring us more capability." So, the discussion it's been very positive. I think we're priced competitively in the market now. I think we're in a good place. I think our activity going forward, you'll see that as we look at contracts that are upcoming. But it's been, you know, generally very, very positive, the conversations-
Yeah
Honestly.
You talked, you hit some metrics that you had discussed, I think, on the first quarter call, you know, four new logos, and I think-
Yeah
You talked about sales opportunities and so forth.
Yeah.
70+ . Can you just elaborate on those kind of, you know, kind of initial opportunities and what you've gained?
Yeah, I think we'll. Again, those new logo opportunities were primarily in our HST business.
Mm-hmm.
What I didn't say was we also took three from competitors.
Mm-hmm.
I'll call that + 7.
Mm.
That's something that hadn't happened for us in a long time. So what I've, you know, as I look at that, it's we're not gonna let someone have our lunch money-
Mm-hmm
Going forward. We're gonna compete much harder in those markets. So new logos, we're gonna keep track of new sell, new sales. We're gonna look at that year over year, and we're gonna really, aggressively look at what we think our white space is versus where our resources are allocated.
Mm-hmm.
In my view, the data is suggesting that our resources aren't all fully allocated where our best opportunities exist. And I think that, you know, that's an opportunity for us, frankly-
Mm-hmm
As it relates to capital allocation, but also the allocation of time, energy, and money, and people inside the business today.
Yeah.
They're all the ones I've talked about.
Yeah
You know, NSA, we view as a positive for us, ultimately. HST, I mentioned, payment integrity, in-network capabilities, those are all big opportunities for us-
Yeah
If we can execute.
A- a-
Yeah
Specifically to NSA, how do you frame that opportunity? We hear, you know, there's so much noise out there, if you will, right now in NSA and-
Yeah
Be it the provider, payer, community, I mean, how do you, where do you see that opportunity?
I see, I see us as, w ell, I see it in a couple of ways. One is, I don't see it going away.
Mm-hmm.
So, I see volume continuing to potentially grow there.
Mm-hmm.
I think we're a small percentage of the total market today, like many others, so there's market share potential to take there. And we're focused on using AI and other automation inside of that solution to where, I think we could get better at it. So, you know, fewer errors, higher throughput.
Mm-hmm.
As you work through that, and you work through your backlog of cases, ultimately, your solution on a, you know, value basis gets better. And so with more market share to go, more automation to be done, I view that really as an opportunity for us to positively impact the business. And we're, it's very close to what we do on the other side of our network.
Yeah.
We very much support the aims of the administration, interestingly.
Yeah.
You might not pick that up in some of our coverage. We eliminate balance bills. We actually do that.
Yeah.
That's what we've done for decades, so we're gonna keep doing that.
Mm-hmm
Actually.
And what, you know, in light of, you know, kind of the capital structure, where the equity trade and so forth, and so on, the message, I mean, how do you regain confidence? How do you get shareholder confidence back? How do you-
Yeah, we-
Holder bondholders. This is transitioning over to Jim now, but-
Yeah.
You know, what-
Yeah, in one week's time-
What's your vision for re-?
Everything gapped out and
Yeah
And then swirls of liability management are out there and things like that. There's no silver bullet on this, Larry. I think the, I think a couple of things. Number one, we need to execute. We have been unequivocal on our need to continue to chip away at the debt stack and grow the business. That hasn't changed. So we're not seeing a. We're not gonna change our strategy in lieu of things, you know, widening out. I recognize a lot of investors are not happy about it, but on the other hand, there's no panacea.
Mm-hmm.
We are gonna stick to kind of our mission or our North Star of trying to get to a regular way refinance with the lowest cost of capital without damaging our ratings along the way.
Mm-hmm.
Okay? That seems trite, but it, it actually is kind of the way we're organizing ourselves. Now, having said that, we've been opportunistic about managing our capital. We, you know, if you've seen, we've been buying bonds. We bought the HoldC o converts over the last couple of quarters. Last year, we went pretty deep with our cash balance to buy the unsecureds. Everything looks juicy right now. I wish we had more cash lying around, but that doesn't mean we have to change our strategy. So we do have to get our cost of capital back to where it was, and that's through proving it out, and it's also not, I'm kind of grinding through some of the perception issues that exist.
So back to Travis's point, we do need to get some simpler and more consistent messaging around our value in the system, which is, having looked at all the data and understanding it, we really do provide a valuable service that's widely accepted 98% of the time and does good things for consumers and employers, but also is valuable to the providers because they need to eliminate friction. And so that story's got to continue to come out. There's a lot of, obviously, swirl around court cases, things like that. You're starting to see a little bit more of a balanced act, balanced set of data out there. The RAND Report came out earlier this week talking about hospital prices, et cetera. Very consistent with the data that we've seen in our system.
So it's gonna take a little bit of time, but we're not gonna change our strategy dramatically, other than grinding it out a little bit more aggressively on the stakeholders that matter to us, including, you know, government.
Mm-hmm. And since you kind of touched on it, and recognizing that the scope of what you can say is maybe very, very limited-
Mm-hmm
But you're, you know, in regards to some of the, you know, noise as I think you put it, in regards to lawsuit and the allegations of, you know, that Times article and-
Right
Of the not-for-profit, and then recently, I think it was Community Health, or certainly publicly came out-
Yep
You know, filed suit. How do you prepare? How do you think about that? I know. Understanding that you're limited in scope as to what you can, you can say, but is there much you can say on that?
Yeah, I think-
Right
Well, we were aware that there was gonna be some copycats or pile on, on the antitrust stuff. That was expected, if you will. Interesting, I would just note that there's been an interesting development in that that antitrust theory last week in Nevada, I think Las Vegas court. They had a similar suit in a different market that was some the motion to dismiss with prejudice went through. It was dismissed with prejudice. Cendyn was a case, C-E-N-D-Y-N. And it had a lot of parallels to our case. So in some ways, this is going to play out. We like the facts that we have. We've been around forever, and we think we provide a lot of value to hundreds of thousands of plan sponsors and millions of consumers.
Mm-hmm.
So, our, you know, our services are bought and sold that way. So, I think that's gonna play out, and we like, we like where we stand.
Okay. To that end, I know we had touched on it earlier, lunch, but, you know, the retirement general counsel, I mean-
Yeah
Thoughts, maybe that's back over to Travis and-
Yeah.
In terms of-
Absolutely. So, yeah, Jeff had, you know, he had informed me long before some of the recent activities, that he wanted to have a planned transition to retirement, essentially. So this was not a, "hey, let me shake up the, let me blow, drop a grenade on the management team. Jeff's got to go." It wasn't even related to any of the current activity. It was a planned activity.
Mm-hmm.
The timing is what it is. That said, you know, my view on it was, he's earned the right to be supported personally, and I didn't ask him to hang on for another six months because he wants to go and do things with his family, so I support him in that. So really, in my view, it's, look, I'm a positive person. You will see that as you get to know me. I view it as an opportunity to bring someone in who's got-
Mm
A fresh perspective and who has deep qualifications in the areas that are of real interest to us right now, and that's what we intend to do.
Okay.
But there's nothing to read into that, other than when Jeff's retired, he's gonna, he likes to go to the zoo, so he'll go to the zoos and hang out. He's a zoo enthusiast, actually, believe it or not, so that's it.
Okay, thank you for that.
Yeah, sure.
Can you talk about the cyber incident, its impact, in the, I think you, you had framed around $5 million-$6 million of the impact in the quarter-
Yeah, it's
Tail into 2Q a little bit and-
Right. So just as a reminder, the clearinghouse outage affects our business because the kind of the industry-wide claims flows were slowed down. There was this little call, a blockage in the pipes upstream. And we started seeing it because our claims flow lags, as you, as many of you know, from the date of service. We say 6-8 weeks, but it's not a very tight distribution. It's kind of spread from 2 weeks to even much longer, 2-12 weeks, and then some. So we're seeing it snake through the system.
Yeah.
Okay? On our call, we talked about February being affected. Most of that $5-$6 that we talked about was in February. Or I'm sorry. Sorry, March, 'cause February was when the incident happened. And then we talked on the call about April seeing effects, too, 'cause it's plowing right through. So we're gonna see some effects. Now, the question is how fast does it catch up? It's not whether it catches up. Those claims need to be repriced. And we've got no indications that it's anything otherwise, a timing issue from our clients. And we know employers want their claims repriced. So the real question is how long is it gonna persist-
Yeah
In Q2? By the end of Q2, we should probably have a fair amount of visibility. It stands to reason that it should have worked through by then.
Mm-hmm.
But it's just a little bit of lack of visibility right now in terms of what the effect is. And it's, we really did see it hit, you know, mid-March, pretty quickly after the, you know, the clearinghouse shutdown.
Yeah. Mm-hmm. Yeah, it will put a little more incremental pressure, obviously, on the back-
It did
Back end of the year.
Yep.
Does that cause some of the opportunities that you've talked about, Travis, does some of that start to accrue in the second half of the year to help?
Yeah, and we've stated that we'll capture some of the flows that were held up.
Mm-hmm.
But also in the second half, we were expecting some, you know, additional contracts. It's kind of across our core business, HST-
Yeah
BST, et cetera. And maybe the right way to think about it is, we hadn't seen anything coming out of the game plan for this year that was saying, "wait a second, you know, something's-
Right
Completely amiss on the demand side." Think about utilization. Feels pretty good. You know, out there, you see some of the hospitals reporting-
Mm
Solid demand. The physician side has been a little bit more muted 'cause that's about half our business is facilities, half is-
Yeah
Professional fee, you know, professional physician-type stuff. But the demand side feels okay. The inflation side is pretty, you know. I'm not gonna say robust, but we just kind of see the groundswell of medical inflation coming through in terms of not necessarily affecting our business, but contract, you know, in-network contract renewals are picking up, and as a result, Chargemasters are growing. That's their list price, if you will. So a lot of our business is around the list, the list price versus a cleared price for out-of-network claims. So that feels pretty good, and so the, you know, as we stand here today, that's our-- that's kind of our point of view, and acknowledge that it puts a little pressure on the back end.
Back end. I mean, the impact from the cyber incident, do you, one, do you recover that in the second half of the year, per se?
I think so. I mean, how long will it persist? And there is a tale of smaller providers that are still struggling with this and getting-
Yeah
Their claims into the system. A hospital, you know, one of the big hospital systems, generally, it didn't affect them.
Mm-hmm.
Because pretty quickly they could, they have multiple clearinghouse feeds.
Mm.
And so what they had to do is just divert claims into new clearinghouses and get that done. So the big systems, which are mostly in-network anyway, you know, managed to do it pretty quickly after the cyber incident. A lot of the smaller providers struggled with it because they oftentimes had an exclusive feed.
Mm.
And to switch, you'd have to get in the queue. It's almost like getting your cable provision. It's like, "sorry, we can't get to you just yet. You're, you know-
Yeah.
We're backlogged.
Mm-hmm.
I think by the end of Q2, we should have a fair amount of visibility, but it could persist on a very small margin past that.
Okay. I don't know if there's, w e have a couple minutes left. If there's any questions, the audience certainly happy to field any, if there are any. If not, I would, you had mentioned it earlier, I might as well follow up on it, your perspective on liability management.
Oh, yeah, it goes back to that, the earlier comments I made, which is, I know it feels the volatility in our securities prices feels challenging to many of you investors who are mark to market. But on the other hand, we'll go back to those first principles, which is we really wanna lower our cost to capital, have long only participate in a regular way refinance and not, you know, put ourselves in any downgrade situation. So anything we do on that front, sure, we think about it, and we get lots of ideas from people, but it's got a pretty high bar to-
Mm
Make sure that we're not doing something that feels, you know, short term, like, wow, that feels like we're taking some action, but long term screws up the, you know, the broader refinancing.
Mm.
So, you know, we're never say never, but it's, we're gonna be very circumspect about crossing that Rubicon.
Right. Okay.
We have the benefit of time, Larry.
Yeah.
That's one of the things that-
Yeah.
It's not an unlimited time, but somebody said, you know, "it's three years to the refinance. What were you doing three years ago?" Well, I was quasi-retired. I hadn't even joined MultiPlan.
Right.
It feels like dog years or something.
Don't tell Travis.
Yeah.
But, deployment of capital, I think we have-
Yeah
A minute left, less than any questions. Deployment of capital, does, you know, continue to buy back?
Yeah, I would, I would actually say you saw a little bit of buyback in the share buyback-
Yeah
In the first quarter. We've used up, as a
Yeah
Father of two sons, like you, you've used up your allowance for the year.
Right.
You know, we just saw some opportunity when the stock came below a dollar, we used it, and that's kind of, w e never wanted to do much more than that.
Mm-hmm.
The primary focus going forward is going to be debt retirement and, you know, investing in the business, as we said, but nothing's changed on that front. Anything after that is debt retirement.
Right. Including, you know, like the convertible preferred and the
Yeah, and...
Across both of them or?
I think there'll be a healthy tension, to be honest with you.
Okay.
And the tension over the last year-
Yeah
In retrospect, was what's available?
Yeah.
What's the right price?
Mm.
It's interesting because, you know, the unsecureds had gone up over 80. We had been buying in the low 70s, and so we-
Yeah
We said, "wait a second, that doesn't feel so great." So, but all of a sudden, some convertibles, you know-
Yeah
Finally started loosening up, and we were able to buy some. I think, you know, with the prices being, feeling dislocated right now, I think we'll be opportunistic, but the, you know, it's kinda like there's relative value, but one's the first maturity, right?
Yeah.
Converts are the first maturity. So we kind of, we're just gonna have a balance between what makes the most sense-
Right
But both of them look pretty attractive right now.
Okay.
Unfortunately, for you investors, they're attractive to us.
Just lastly, as deployment of capital, just one last question, maybe back to Travis. Is there, I mean, is there capacity, I mean, for potentially tuck-in acquisitions, or, you know, something of that, or if you see something that may fit within the portfolio, is there capacity to absorb, you know, smaller acquisition?
Yeah, I think, so my view on it is, we'll probably look at that as a multi-year strategy.
Mm-hmm.
Right now, to me, it's a core case of business fundamentals-
Yeah. Yeah
And credibility generation. So we're gonna develop credible. We're gonna hit milestones.
Mm.
We're gonna be credible. We're gonna turn the nose cone up-
Mm
Continue to be disciplined in our debt pay down, manage our liabilities, as noted, and we'll look at that opportunistically when we're in the right place to do it.
Yeah.
We'll probably look in places that serve the full continuum, not just tuck-ins, to do the same thing we've kinda always done, actually.
Okay.
But that definitely will be part of our strategy on a multi-year basis, but not in the short term.
Okay, great.
Yep.
Thank you. Thank you, Travis.
Yeah.
Thank you, Jim.
You bet.
Thanks to the-
Appreciate it
MultiPlan team as all. So I think, yeah, I think we're, we're past our time here, so.
Thanks, Larry.
All right. Thank you.