I'm Todd Freeman. I run Investor Relations here at Claritev. Really appreciate everyone making it here for the Investor Day today. We're gonna do a couple things here at the beginning, just kinda quick logistics, the usual, disclaimers and safe harbor, and then we'll get rolling with the agenda. Of course, for everyone on the webcast, thank you for joining us. We're going to run through a pretty full agenda here today, that will go till about 5:00 P.M. We will save questions till the end 'cause we've got some time at the very end for all of our executive leadership and the speakers to come back on stage to talk and answer some questions.
If you can hold the questions till then, that would be great. First, of course, today we're gonna make some forward-looking statements. That are of course always subject to risks and uncertainties, and so we direct you to our SEC filings, our 10-K, our earnings release for any disclaimers, as well as talking about non-GAAP items. You can also find the reconciliations to those measures in our filings. Please take a moment to look at those if you need to. A couple things real quick about today. First of all, thank you to the NYSE. Thank you all for coming here. It's a great location. Really appreciate everyone showing up.
I've been here for about five months now, and I'll say that when I joined the company, I think I saw a lot of the same things that existed that a lot of the other leadership team has said. They just saw this company that was really serving the healthcare ecosystem in a way that had a much larger opportunity to make an impact on how healthcare is experienced in this country. You know, I was really impressed by the team when I came here. But one of the things that I've noticed here, and we've talked about the business itself, is that well, as you talk to investors, I think there's not this wonderful understanding about how our products, our solutions actually impact the entire healthcare life cycle.
Everything from when someone is looking for insurance all the way through to paying it. Today, what we're gonna do is spend some time walking you through that life cycle, walking you through our products and how we actually address all parts of that life cycle, and then ultimately, we'll close with a discussion about, you know, AI and our financials. I'd like to kick off first with a video that kinda talks about that life cycle, and we'll kinda set the stage for the day. If we can roll that video, please.
Healthcare is meant to be straightforward. A patient chooses a health plan, schedules an appointment, sees a doctor, and receives care. Behind the scenes, a claim moves from provider to payer. It's reviewed, validated, processed, and payment is issued. The bill reflects what was expected. Predictable, aligned, trusted. That's how the system is supposed to work. When transparency is missing, friction begins to build. Choosing coverage feels uncertain. Benefits aren't fully understood. Costs aren't predictable. After care is delivered, the claim moves through multiple checkpoints, reviews, adjustments, negotiations. What should be clear becomes confusing, what should be efficient becomes delayed, and what should be predictable becomes uncertain. That friction doesn't stay isolated. It moves across the system. Providers manage rework and administrative burden. Health plans absorb complexity and cost variability. Employers struggle to plan and control rising spend, and patients lose confidence in the system meant to serve them.
Small inefficiencies compound across millions of transactions across every phase of the healthcare life cycle. Now imagine that same journey with visibility and transparency at every step. Coverage is understood before care is delivered. Costs are clear before decisions are made. Claims are processed with shared objective insight. Payments align with expectations. Providers spend more time on care. Health plans operate with greater accuracy. Employers design benefits with confidence, and patients experience clarity instead of confusion. Better information leads to better decisions across the entire healthcare life cycle. Transparency is the key to eliminating complexity. It strengthens trust, reduces friction, improves performance, and makes healthcare more affordable for everyone. The future of healthcare depends on rethinking the life cycle from end to end.
That's what we're gonna talk about today. We're gonna walk you through that life cycle and bring you through the agenda that walks you through the different solutions we sell, our customer base, and ultimately how that feeds our business model. We've got a pretty full agenda. We're gonna keep things moving along pretty quickly here. We'll kick it off with Travis, our CEO, to talk about our vision and how we execute against that vision. We're gonna walk through step by step from the left side, from the employers looking for insurance for their employees to the provider world. Eventually, a claim gets created, and talk about our core solutions, and then ultimately talk about the payment cycle.
We'll then wrap with a discussion about AI, and then Doug will wrap it up at the very end, to talk about how that all feeds our business model. We got a great set of speakers. We got a number of people here from Claritev, both across the executive team and going a little deeper as well. I'm most excited here that we've got a bunch of customers and partners here as well. I thought it'd be a good chance to give you the opportunity to hear from some of our customers and hear how they think about Claritev and the market in general. To start, I'm gonna bring up our President and CEO, Travis Dalton, to get it started.
Thank you. Appreciate it. Welcome, everybody. Thanks for being here. That video seemed pretty simple, right? Has anyone had a healthcare experience that actually worked like that? Yeah, healthcare is pretty misaligned. We operate across that continuum. We're gonna talk about that today. Yeah, I actually think that there's a moment coming where things do start to be more simple. You got, you know, a situation where you have technology and AI. Data and interoperability have been a thing over the last decade, and I think there's a moment where, you know, providers and payers start to align, and you'll hear from them today. We have one provider client. We have a payer here.
At the end of the day, I think they want the same thing. Providers want quality, cost, and a right price, and payers wanna manage risk and a fair reimbursement. Those two things can live together. We actually believe that. Anyway, good afternoon. I'm Travis. Thanks for being here. Todd, thank you for setting this up and all you've done. We appreciate you. I told Todd after our investor call, I was like, "If this doesn't go well, say goodbye to Todd." All right. He is totally redeeming himself, today so far. So far. This is a big day for us and, you know, obviously, I started two years ago here and have been kinda gearing up for this, looking forward to it for some time, so we're happy to be here.
Getting to the content, but people from time to time ask me, "How are you doing?" I'm doing freaking great. I'm doing great. I mean, we've got great clients, we've got a team that you're gonna meet today, which is one of the exciting things for me is you get to see the team, and we've got purpose. If you put those three things together and you execute long enough, good things happen. For me, I get up super motivated every day to work with a great team on stuff that matters, and that's kind of why I came here. We've got a fulsome agenda, as Todd mentioned. I'm gonna jump right in, and we'll push forward. Our, you know, our purpose is simple. The words are simple.
It's not always easy to achieve, but we will be laser focused on transparency, affordability, and access. Add access because of our network, which I think is unique to us in many ways. Really this idea of reducing friction, I think is part of what we do today, but it's a big part of the future of how we see the company evolving over time, and you'll hear about that today as well. We'll make decisions, and we will allocate capital against the clarity of our purpose, which should be simple. The reason you have purpose and you have clarity is because every day there's the micro decisions get made every day across our 3,000 people. If they know what they're deciding against mentally, they make a good one.
That's why we spent time on clarity as the first part of the company's formation when I got here, clarity, alignment, and focus. Our purpose is going to be simple. You know, to quote the great movie Office Space, "What would you say you do around here?" This is what we do around here, right? We serve an incredible set of clients, over 700 payers, 100,000 employer and plan sponsors, 1.4 million providers, over 60 hospitals directly now in patient care settings, and 60 million plan members. Our solutions are focused around our network. Many are familiar. We think that's a unique asset to us, and you're gonna hear more about that today, from Jerry. Really focused on access and cost. Our network, we're investing in our network.
It's more malleable. We think we can curate networks. I'm gonna talk a little more about that in a minute. Claims intelligence, fair reimbursement, bringing an insight to what is an otherwise pretty opaque situation in healthcare, particularly out-of-network. We're known for that. We're gonna continue to do that. We're investing heavily in surprise bill. You'll hear about how we're using AI today inside of our surprise billing solution, our NSA solutions. Payment revenue integrity. I was really glad to see the demo set up over here and a lot of folks around it. That is a massive area of growth, I think, looking at fraud, waste, abuse, and inefficiency. I'm not even imputing motive. It's just a lot of inefficiency in the coding world and how that works. Finally, data and analytics.
Bringing pricing transparency, prediction models, managing risk, this idea of looking at high cost claimants and how do you handle that. Our friends from Kinetiq Health are here today to talk about how employers are managing cost using this kind of data. That's a lot of what we do. The other thing I'll say, and for me, it's all growth. It's all growth. I'm not gonna sit here and say, "Oh, the network's gonna do it." It's all freaking growth. It's why we came here. It's not just one area we expect to grow. We expect to grow every single area of our business across all these segments as we go forward, and I'll talk about how we intend to do that. That's what we do. You'll hear a whole lot more about that from the team.
Look, our journey. I've you know I said this, those of you that heard on the call, you know, we set out with a Vision 2030 journey and that idea. Not vision 20 minutes, not vision this quarter, not vision tomorrow. I know that's important. Short-term results matter. Intermediate plans matter. A long-term view, you gotta think big to grow big. We're thinking like that, and we're thinking bigger. We're executing against this. We came and said, "Look, we're gonna lay a foundation for the company." I'll talk about what we did there. We branded last year the turn, which was kind of a bold thing to do at the time. I said the words before I was sure it was gonna happen, speak it into existence.
I felt like we had good plan, enough execution, enough smart people to figure it out, and we're figuring it out. Returning to growth, more quickly than I had expected, frankly. We're calling this year the way up, so it's a growth year for us, and the way forward is really around innovation and technology and expanding our client base. So this is our journey. You know, the team, my team knows, you know, I use it all the time. Say-do ratio has to be one to one. If you say it, you gotta do it. We're committed to keeping our promises. I think it's important to make sure all of you know that as people that are interested in the company, you have a financial interest.
Some of you have, you know, maybe put some of your personal credibility on the line for us. That's not lost on us. Trust me when I tell you this. I feel a debt of gratitude for that, but I also feel responsibility, right? We will keep our promises. In 2024, we started the company, not started, but I joined. We set out to create clarity, alignment, focus. We had 30 KPIs that we use inside the company. That is my report card to the board. All of our associates know that. We restructured our debt. I see familiar, friendly faces in the room. I'm sure that was a blast for all of us. I think we finished that, what, Doug, on like the 24th?
Yes.
January to December 31st, something like that, we got it done. That was a big deal for us. There were a lot of things we could have done, but for me, joining, that was a big moment. Going to the board and saying, "Look, here's what I wanna do. I wanna run this company for growth over a period of time." I don't wanna take other alternatives that might have been easier at the time, but we thought it was the best thing to do was keep our promises and commitments to our debt holders, who I think we owed commitments to. We restructured our debt to go forward to make sure that we were doing that. Launched our plan, 2030, we'll talk about it, and then we refreshed the leadership team. That was an important year for us.
In 25, we rebranded the company, not to put new paint on there, but we earned the right to rebrand because we were executing against a technology refresh. We launched new markets. Last year, we reported out $67 million in new bookings. That's new ACV bookings for us, which was a great year. We moved to Oracle Cloud. At the time, that also was part of our strategy, was not just new market expansion, but was positioning for a tech forward future. That's important, particularly in an AI world, right? That investment we made in 2024 is starting to pay off for us as we look at our present and future. We renewed our top 10 clients. This is not a melting ice cube cone. It is not. Been asked that for a long time.
We are going to grow the company, and we're gonna talk about that today. I'm gonna give you clear examples. We returned to revenue growth, right? I think we achieved 6.7% year-over-year growth in Q4. Is that right, Doug? Keep me honest.
Close, yeah.
Close enough. Close enough for the CEO. He'll clean it up later. We returned to growth. That was a good sign. As we go forward. 2026, what we've branded as the way up. We're forecasting single-digit growth. This is, you know, I can announce today, which is an exciting announcement for us. We actually in the last two weeks have signed one of the top five largest health systems in the U.S. to a multi-year managed services agreement. We will be providing tier two support for the EMR and their clinical systems, in addition to opportunities to sell through all of our products and services across the entirety of that health system. This is well over 500 points of care. Well over.
I'm not gonna say the name yet, but I'm gonna announce that we're firmly in that business. That puts us significantly ahead. You'll hear from one of our great clients today who was our pioneer client at Carlinville. We're now moving upstream into much larger venues, which was our plan all along in making it real. Keeping a promise. I said that the day I got here, we're gonna do that, and we did it. I also can announce that we were selected. I mentioned we had some government news to announce. In the government vertical, we were just selected with our partners from GDIT to be the network for the World Trade Center. We're gonna create a national network for first responders as part of this opportunity that was awarded with our partner from GDIT.
This is a huge win for us. This is something, again, horizontal products, vertical markets. We would not have bid that in the past, but we bid it because we started looking across new vertical markets with existing products. It turns out our network is highly expansive, and we're able to curate it in a meaningful way, which was very attractive as you look at the way that the movements have been demographically for first responders over a long period of time. We can create that network. That's another big win for us early this year that's come. We expect growth in new logos. Then, you know, I have our chief growth officer here. I'm not resetting our guide today. No, I'm not doing that. Todd, make sure you heard that, Todd.
What I am saying is we've challenged our team to do $100 million in sales. I'm expecting the team to do $100 million in sales. That's what we're gonna quota them against. That's what they're gonna get paid against. That is our goal for our team, is to deliver that. I think of all that, I look at it, and I think we're delivering our promises, and we know how to sell around here. It's the world I came out of. I did it for 20 years, and it's starting to show up, which is a good indicator for our future, as, you know, going forward. We listen, we solve problems, and we sell. All right. This says vision, but vision, you know, vision has really become strategy, has become reality because we're executing against it.
When I step back, three things jump out. One, we're laser focused on our clients, which we've said. Two, we're gonna be technology-driven, investing in technology, not just Oracle, but other technologies. You'll hear from our chief digital officer. We're gonna be product-led. We're making more stuff. We're making more products. You'll see our roadmap today. Again, there was no roadmap when I came. I asked for it on my second day here, and it did not exist. We have one now. When you have roadmaps, you can tell clients what's coming, they can budget for it, plan for it, and you can sell more stuff. The idea of creating product-driven roadmaps, listening to your clients, yields better results over time across multiple verticals. That's how the company's going to grow.
Really, I would tell you, we're doing it from the bottom up. There were a lot of choices that could have been made, but ultimately, the choice that we made at the senior leader and board level was, we're gonna build the company for growth over a long period of time. We're investing in our technology infrastructure via Oracle Cloud, but also development tools. We're investing in our data platform, so the ability to structure data and use that data in a meaningful way against AI tools and capabilities embedded in workflow. More clearly defining our products, and as I mentioned, we're launching managed services business this year. We think that gives us a massive opportunity for client acquisition to pull through all of our products that we think have benefits, and there's a big need for that in the market.
We're gonna be aggressively pursuing that. As we've said before, we've talked about horizontal products and vertical markets. I've highlighted a few today, but you know, I would just tell you it's working. We had 30 new logos last year. As you look at that, we had four international clients that we signed, 16 payer and TPA clients, six providers, one government agency, two employers and two supplemental. These are net new clients. We're 10%-12% less reliant on our top ten than we were 18 months ago. That's significant for us. That allows us to diversify the business. It allows us to withstand, you know, some things beyond our control. It allows us to grow in a more robust way, and it positions the company for success over a long period of time.
We're more robust and healthier, by far, than we were in 2024. That's a good thing for us. I've mentioned some of the specifics, I won't necessarily cover them again, other than to say we think that some of those things I've announced are really a good indication for us as we go forward that our strategy is working. We'll continue to focus on that in a material way. Okay. Kinda one more slide, and then I want you to hear from some clients. We're very confident that we're well-positioned for the future. Very confident. Confidence is one thing. Proving it in reality are another. I think that there are gonna be three things that are gonna matter. All these things you see on this screen are true.
We have a network at scale. Not too many people can compete with that. We have the largest PPO in the country. We also can curate it now with products and advancements we've made, which you'll hear about today. We do have high provider acceptance, so we have low abrasion in our services across our portfolio. We're very good at regulatory and responding quickly to regulatory change. We have depth of client relationships. We also have proprietary data. We have thousands and thousands of embedded business rules inside of individual solutions for clients. When you think about an AI future, which I'm sure we'll talk about more, which Fernando, who's our chief AI officer, will come up in a little bit, data rights, workflow, and trust are gonna be the three things that I think separate winners from losers.
Data rights are negotiated with clients, and in healthcare, because it's PHI and PII, data rights become the moat because the data is to be used for client-specific use. That's how we use it individually. That's different than trending how you acquire toothpaste. It's different. In healthcare for years and years, you see the data becomes the advantage, and the ability to use it because you have the relationship and the data rights agreement on how you would use that is important in healthcare. We're embedded in the workflow. As I mentioned, we have proprietary rules. We have IP that's not easily recreated by anyone, including our clients. We have high value because we have workflow embeddedness, and then ultimately, we have trust. There's a belief that we'll be responsible because we've been responsible with our clients over many decades.
As you look at those three factors, you know, our view, and I think it's gonna play out in the market, and I think it's starting to in some ways already, is that platforms as point solutions will be winners in an AI future, that data rights are gonna be the moat, and that AI will accelerate product development. As we think about that, we view the winning formula as platform plus proprietary data plus embedded AI equals winning. That's us. That's largely us in the area that we serve. We're not just fearful of the AI revolution. We're actually here for it. We have a team that's using it today. We've been using it. We have real examples. We're driving real value and real automation inside of the business.
We think it bodes well for us both on the top-line growth, but also in terms of operating leverage over time as we advance the company. Why Claritev? We think we have a competitive advantage, and we have to go prove that out. I do believe it's starting to show up in sales, back.log growth, and forward-looking metrics, and we'll talk more about that today. Okay, that was the wind up. I think I'm more or less on time, but what's most important, I think, is that y'all hear from, not just from us, but you hear from some of our clients, and what I wanted to do was bring up one of our clients. I'm gonna welcome Mike Feeney to come up. Been in the employee benefits space for 20 some.
Five.
25 years.
There you are.
All right. Founded Tres Health .
Yeah.
2021.
Yes.
I have a high respect for the founder story, which is great. Also tech forward, very much so. I would say focus on underserved communities in some ways.
Yeah.
W hich is on purpose for us, considering our relationship with National Rural Health and some of the work we're doing. Thanks, Mike.
Yeah.
Welcome.
Thank you.
You can sit down. We'll sit down here.
All right.
Do a Johnny Carson style or whatever it is, dating myself. Thanks for being here. Why don't you just tell the group a little bit about yourself?
Yeah, no, appreciate it. Thank you for being here.
Yeah.
I mean, thanks for having me here.
Yeah.
Tres Health is a bunch of things, and I'll start off By saying who we serve. We serve a lot of variable hour employees, underinsured, small to medium sized businesses, all in the level funded, self-funded arena. We are a payer in our core, so we're a TPA, a third-party administrator. We're also an MGU. What that means is we're a managing general underwriter. We control and manage the risk associated with all of our plans. What ties that all together for us is proprietary technology.
In order to deliver a good product quickly to a variable hour employee, maybe it's a driver, maybe it's a restaurant worker, whoever that might be, and have them understand their benefits quickly and be able to access it is very important to us, which is why partnering with someone like Claritev is very important to us. They have the same vision to serve those communities and with a tech forward approach.
Yeah, you kinda hit on it, but you know, I mentioned our focus on affordability, transparency, access, cost. How are y'all using some of our solutions, and how are you thinking about that?
I took some notes 'cause you brought up things that I forgot we were using with Claritev. Mainly our big piece that we started with Claritev was networks. He mentioned the vast network they have. One of the interesting things for Tres was we were able to tap into their API to utilize their network search. I think we might have been the first ones to do it.
Yeah.
I'm not sure if anybody else is. Basically it allowed that small group, that small employer, that variable hour employee to go on our app and quickly search a provider, find a provider, get quality of care scores, you know, cost transparency, all those things we're able to incorporate using an API through Claritev. Claims intelligence, we use BenInsights, claims analytics, very important for us as an MGU, managing small group health plans that are self-funded, very volatile. Very important for us to know what the risk associated with those plans will be. Reference-based pricing, which I think is a very fast-growing market, specifically in the smaller groups.
Mm.
Reference-based pricing as well as the repricing. You mentioned NSA, the No Surprises Act. And I'll steal one of your lines, we like to go vertical. When we have a good partner.
Mm.
We try to use as much services as possible, and especially if they're tech forward friendly, which obviously Claritev is. You know, all those services we provide are necessary in our marketplace. We move very quick. We add a lot of really small groups very every month, and they have to be able to move very quickly as far as getting benefits, getting ID cards, finding providers, understanding when a claim is being paid, understanding what a EOB is, all of those things. With our connectivity through Cloud, we're able to access that.
Yeah. I think you guys are using Vistara.
Yep.
You're using BenInsights, which is great to see the use. The more use we get, the more we listen, the more use cases we find. We think that data analytics product actually is very important for us going forward. The other thing you mentioned was APIs. I didn't talk about it, but that was another reason that we set out on a technology vision was because we actually thought we could produce APIs off of that and become a platform versus simply a point solution, right? This idea of being a platform really hinges in some ways off your ability to serve up APIs and other data. It's also another competitive moat, and frankly, it attacks our competition because not all of them are doing the same thing, and some of what they offer are just commodities, in my mind.
We think that that has multiple parts to the strategy is using those APIs. I'm glad to hear you're using them.
Yes.
That you remember you're using them too.
Yes.
That's good. Look, you know, I talked about some challenges. I didn't spend a lot of time on the macro health dynamics, but maybe you're living it every day. You're seeing it. Yeah, how do you feel about some of the challenges you're facing? What are some of the bigger ones, and what do you need to be successful?
Yeah. As a payer, specifically in the market we serve, technology is the only way I believe that you can successfully move forward in that marketplace, and scale. AI on the top of the list. You know, the ability to. If you know the landscape of healthcare, insurance companies, TPAs, it's a variable degree of technology. A very. Right? There's
Yeah.
Some are good, some aren't. That's no knock on anyone else. Claritev, I think, has been the best and is still getting better. That's crucial for a member to know their benefits, to be able to access their benefits, to be able to understand why claims are being paid, why claims are being denied, how to find a provider. All of those things, specifically in the world we live in with rising costs of healthcare, and especially in the space I'm in, which is small group healthcare, technology is the best way to educate and to inform and specifically again as being an MGU with managing risk, very important that we know what's going on within our groups and within our population.
Yeah. How are you? Just kind of one other question for you, and I'll let you add anything you want after that. How are you thinking about AI? Are you getting approached by, like, lots of point solutions? We didn't really.
Yeah.
R ehearse this, but.
Yeah.
Is it, are you seeing just the bombardment of that, or is it kinda hard to figure out what the landscape really looks like?
Yeah. It's become more and more when we go to these events like ASIA or.
Yeah.
That's, there's just a lot of people walking around trying to position their AI tools. For us, where we see it, what we've done so far versus where we're going, for now, we've done doing a little bit of customer service, so provider calls. Provider calls typically go into the TPA. They sit in queue, and there's a call center waiting to answer or respond. A lot of those questions can be answered very quickly, rather online.
Mm-hmm.
Or just some data, insight from the AI tool. We're starting to incorporate that. We also have an AI widget internally that helps us know our book of business from a membership level and claims perspective.
Mm-hmm.
Where we wanna go is we wanna be able to have analytics that will help us to understand the risk. It'll help make decisions. It'll help at renewals. It'll help have members understand how their benefits are being used or what prescriptions to get. There's a whole way to expand into the AI market, and being in front of it in insurance is going to be, you know, foremost.
Yeah, absolutely. I mean, we see opportunities in our call center.
Yeah.
See opportunities in financial negotiations, IDR. I mean, those are all areas that are, I think, really well set up to use AI to get better insights.
Yep.
Our team will talk about that a little bit more. I have a huge respect. I mean, we had quite a few clients that wanted to participate with us today. We actually asked Tres to come up because of the entrepreneurial journey. I have a lot of respect for that.
Thank you.
You guys are thinking because you're new to the market, there's a level of creativity, right? It's highly beneficial to us to work with creative partners that'll challenge our tech-forward posture. That's why I really was happy for Mike to come.
Appreciate it.
Which I appreciate you being here. Is there anything else you wanna add? If not, we'll move on to the next phase.
I would just say I've you know as a founder we've gone to you know we've spoken to a lot of companies similar to Claritev. To us there's no one else that has been more forward-thinking as far as what we're trying to do from a technology perspective. I think it's really important because as most of you know the space has always been behind and I think we're collectively moving it forward.
Mm-hmm.
In a space that's usually underserved, or don't understand its benefits as much as they should.
Mm-hmm. Yeah.
Now that we're able to deliver it through these tools, I think it's important.
Okay. Yeah, appreciate it, Mike. Mike, you bootstrapped it.
Yeah, I did.
I don't know if you're looking for investors, but there's a whole bunch sitting right here.
Yeah.
Mike is here if you wanna talk to Mike.
I left my card with everyone, so.
Yeah. All right. Well, hey, I appreciate it.
Appreciate it.
Thank you so much for coming in.
Yeah. Thanks.
Glad you made it.
Thank you. Appreciate it.
Thanks, Mike. Appreciate it. Thank you.
Thanks, everyone.
Thank you. Okay. All right. Just to reorient it back to the video, you talked about claims life cycle. Wanna start with payer TPA that's thinking about technology in a unique way. We'll hear about employer next, and then we'll have provider come up as well. I'm trying to orient you back to where we started, which is that life cycle of a claim, and think about where we fit inside of that continuum over and over. With that, I'm gonna call Sean up, Sean Crandall, who's our GM, SVP of Claims Intelligence. I always tell people, "If you want someone who knows some stuff, Sean knows some stuff, man." He was probably the number one resource for me when I joined the company in terms of educating me on a lot of things.
I encourage you to find him on a break or otherwise 'cause he's wildly knowledgeable in the area and all around great guy. Thanks, Sean.
Thank you.
Appreciate it.
Appreciate it.
You're up.
Hello, everybody. How are you? Good? All right. Again, Travis, thank you. I'm Sean Crandall. I head up our Claims Intelligence Solutions. You know, we heard a couple themes in the last presentation, really around some things I want you to think about, like complexity of care, and you heard risk, okay? These employers and payers are really trying to manage risk, and how do they do that, okay? Again, the traditional model is you have a broker consultant that's working with a payer, okay, and an employer. What tools can they use? Again, the HR team, you'll hear from some HR representation right after this, is that HR team has limited resources, okay? What tools, what technologies can they use to look at cost, risk? What are they offering their benefit plans?
I will walk through kind of one of our staple solutions within our data and analytics solution line, which has been insights, okay? I'll walk through our partnership with Kinetiq, and then we'll really talk about realizing the value of an insight. 'Cause I can tell you about an insight, but I need somebody to take action on it that actually translates into value, okay? With that being said, let's take a look and dive a little bit further into what type of issues employers are facing today. When we're really looking at it, there's a number of different things that employers are faced with very limited resources internally. Imagine trying to consolidate different data sources, which is healthcare spend, Rx spend, admin fees, et cetera, all onto a consolidated platform. That's a very difficult thing to do.
A lot of times, our HR people are having to work with their brokers and consultants kind of retrospectively to say, "Costs have already happened. They are gonna be happening," okay? How do you get ahead of that and manage a little bit more proactively? I'll touch on that in a bit.
One of the other things that they're dealing with is, as Travis and Mike talked about earlier, point solutions. What point solutions are the right ones for the people that I have, okay? How does that fit within my actual benefit plan design? Really looking at a solution that starts with an employer making a decision about their benefits, okay? The last is the complexity of the ecosystem as an employer, and you're gonna hear from the employer lens of this as well. Am I being a fiduciary, okay? Am I making the right decisions for my employees? Do I have the right vendors in play? Again, going back to risk and cost, 6.5% annual increase year-over-year is a tough pill to swallow, okay?
That's tough for not only the CFO, but it's a tough thing for employees as well. How do we provide solutions that basically bend that cost curve, okay? The first fundamental thing we really have to get and we work with employers on is the difference between being reactive versus proactive. Instead of six weeks before renewal, let's put a bunch of reports together, and let's see if we can cobble together something that decreases our renewal rate, okay? This cycle, with BenInsights that we'll talk about, it has to be a continual ecosystem where it's engaging really around the 5% of the population that account for a vast majority of the spend. How do I engage those people before things happen to make a material impact? You'll hear real examples of that, okay?
Again, the other things that when you're proactive, you can really match cost to quality. How do I proactively engage to make sure Sean goes to the facility that fits what's the risk profile is within Sean? We'll talk about that momentarily. Again, being proactive translates to actual value, okay? If I can get ahead of something, that 6.5% goes a lot lower, okay? Highlights, just I love the view of the way that we look at this. This is truly a partnership between the talent team, our finance team, to really analyze employer data across the organization, again, to really reduce the spend. How do I gauge, how do I make a better benefit package for my employees to use through a consolidated platform, okay?
A few key things as well is we will continually try to get this so somebody's not just accessing another system in another. We wanna seamlessly integrate this into the employer experience through various HCM platforms as well. Last but not least, the advisory aspect of it. Like, our platform, BenInsights, it generates insights and engagement tools, okay, that somebody can take action on. When they do, that shows back up on the platform. It's that continual evolution of the actual platform that makes it so value-added, okay? With that being said, I'd like to bring Sarah Michaels up here from Kinetiq Health. Sarah is a practicing nurse as well as the Chief Clinical Officer of Kinetiq Health.
Sarah is a partner of ours, and when I talked about actually getting value and realizing value, our partners are the ones that are helping us do that for our employers. Sarah, can you kinda give a brief overview of Kinetiq Health, what you do, and really how we've interacted with BenInsights and the tools that we have?
Yeah. What an honor it is to be here presenting as a partner today. We ourselves have been clients of Claritev for the past 10 years. Really, the company was created as a result of BenInsights and the insights we were able to gather. Kinetiq Health exists to enable benefits, employer benefit strategy. We want to help enhance benefits, and we do that because we use the data analytics tools, and we pair that with a clinical lens to transform healthcare risk management as it exists today. Think of us as a team of clinical consultants. We're nurses, pharmacists, dieticians, registered licensed clinical social workers. The list goes on, but we are versed in the benefits space using our clinical insights to actually figure out how do you manage risk at the individual member level.
We do that by using the data insights to identify who's going to be an ongoing risk to the plan, as well as who's at risk to being a large cost claimant. RAND did a really good study, and that's actually where Kinetiq grew from. RAND found that for every $1 employer groups were investing in wellness programs, they only got $0.50 back on that dollar. For every dollar they invested in health programs, they saw a $3.80 return on that investment. What does that mean? It means that for too long, we used the two words interchangeably. Health and wellness are actually two completely different concepts. Wellness is lifestyle management. Who has a condition today, or who. Lifestyle management is, how can I prevent something down the line?
Tobacco cessation is probably the most well-known in the employer health space. We used to incentivize tobacco cessation programs, but the problem is that requires a workforce to stay consistent for 20-plus years in order to see your ROI on that dollar, whereas health is who has a condition today. Think about cancer. Think about a high-cost medication. If you actually pair yourself alongside that member and you actively manage those claims, the concept's quite simple. You improve lives, and as a result, you decrease the cost of healthcare as a whole. That's why we've really created this partnership, which is use the data to create those actionable insights to actually change the trajectory of a claim.
Sarah, let's talk a little bit about how would we, your model, and what is the missing link that you wanna get across to employers as you're talking with them compared to the traditional models that are out there today?
I tell groups we don't have a data problem. In fact, you guys know that data is everywhere, especially in the world we live in today. What I love is now we have a tool that combines all of it to create those easy insights. We're looking at medical claims, pharmacy claims, clinic data, even any sort of payroll data that we have that we can get into one singular platform to create those easy insights for us. What you had just shared a little bit ago, I wanna extremely highlight. 5% of members are making up greater than 50% of healthcare risk. I'll go one step further, and I say it's usually only a handful of individuals who are making up 50% or greater of overall claims spent. Think about a self-funded employer and what that means for a group.
We're talking five people might be truly driving all of their claims costs. I had a group last week where it was one individual who was spending over 75% of the total plan spend. When we looked at the data, for a while, we said it's not a data problem, it's a decision-making problem. What are we doing? Are we just taking reports and being reactive to those reports? Are we saying, "Hey, where can I actually intervene to change that trajectory of the claim?" Kinetiq Health really does just that. We want to work not just with the tool, but directly with the plan members, 'cause the best claim is the claim that we can actually avoid. We wanna be in front of that. We wanna work also with those carriers to be able to say, what prior authorization exist today?
What case notes do you guys have to say what the trajectory of this member's care looks like? We can't just rely on the patient alone to change the trajectory of their claim. We have to actually work directly also with those providers to say, "Hey, if we realize there's a discrepancy, what can we do about the discrepancy to start decreasing cost of care?
One of the things that's great about this as well is, again, BenInsights is also available through the Oracle Fusion HCM ecosystem, really getting that direct feed of data to employers so that the future view of it's hard for employers to access data. Okay? Getting that consolidated view on the same platform that their HCM system is, it brings together, you know, the latency of data and puts it right in the hands of the employers. So Sarah, can you walk through a couple case examples, maybe let's start on the medical side.
Mm-hmm.
To really take insight and form it into action and real-time value for that employer.
Sure. This is actually one of my favorite examples because if you read on the screen, this was a group that was only 75 employee lives. We're not talking large scale. We don't need to go to Fortune 500 companies. We can go all the way down to these small groups and really make a huge impact on their claims. This was a group that was running exceptionally high, but when you looked at the claims data within the platform, we saw that there were only five individuals that were driving nearly $1 million of the total plan spend. As a result, what does the insurance carrier wanna do? They wanted to layer or add excess risk to those in the amount of nearly $1 million.
Now, the power of using the data analytics platform, it's given me a complete clinical picture of what's going on within those individual members. We can pull up all five people, and we can look down to a band-aid level. We can see exactly when the diagnosis had occurred by looking at when the scans were done. We can look at how many rounds of treatment have already been done, and we can use our clinical insight to actually judge what the future spend is going to be based on the clinical insight we're able to gain. When we did just that, we also worked directly with the carriers. We found that for the majority of these individuals, they were actually already in remission. We found that for others, they simply needed a maintenance medication.
What the power of all that data allows us to do is negotiate directly for that employer group. We were able to remove all of that excess risk, replacing it with only a $250,000 aggregate and specific deductible. For that 75-life group, they were able to save over $700,000. That is a very real example of how you can leverage the data. You're managing it on a monthly basis, but more importantly, you're bringing power to your employer groups when it comes time to go into your renewal, by presenting all of the facts.
Great example of actual fixed costs, but there's so many other applications that this could be used for, really identifying low quality of care with high complexity of care, low quality. There's so many different, like, use cases for the data, and when you pair data with clinicians that take action, it delivers meaningful savings. This is not just on the medical side. Do you have any other examples, like really on the pharma side?
Yeah.
That we could also talk through?
Pharmacy, you guys know these costs are rising every single year. Oftentimes trend is expected to exceed double digits now on the pharmacy increase alone. That is because not just pharmacy spend, it's actually those hidden medical drugs that are being infused on the medical side. That's why groups will often come to me and be like, "We don't have a drug problem." You actually do, 'cause if your pharmacy costs are low, chances are your highest costs are actually hidden on the medical side. That's why it's so important to have a tool that you can actually go into the data to figure out what are those medical J-code drugs that are running on your medical side. This was a perfect example of the work we do on that monthly basis. The key is a monthly basis.
As the tool is getting loaded from the carriers, you want to be analyzing it every single month, so we identify it the first month it hits rather than waiting until the full 12 months of the plan year have hit. This is obviously gonna help reduce overall risk. Well, for this specific client, they had a dependent on a very rare medication for a rare form of dwarfism. This medication was being infused at $55,000 per week. It was going to be ongoing for the entire life of this dependent, so as long as this member was on the plan, this claim was gonna be on the plan. We were able to use the insights that you probably saw demoed here today to figure out the acquisition cost of that drug was actually $11,000. That markup was coming from the provider directly.
This seems like a crazy scenario, but the reality is we see 400%-500% markups every single day. This is real. It's why AI's need to be in the data to figure out, again, how can we intervene at that specific individual level. When we did just that, we were able to go back. We did not wanna take the member off this medication, and in fact, we didn't even wanna change the place of service. This child had been going to their provider for several years. We needed to work, knowing this data, directly with the carrier, get a phone call directly with the provider to say, "Hey, we know the acquisition cost is close to $11,000.
How can we negotiate this to keep the member getting the same care from your facility?" They actually met us at the $11,000 acquisition level, charged a simple markup for the actual administration of the medication, so they still made money at the facility level. We were able to save this group $44,000 per week, which equated to over $2 million of planned savings every single year. That is the power of using the tool, taking the analytics, and actually doing something with it.
Thank you, Sarah. I just wanna recap. We have the BenInsights platform very, it just drives insights to our end users, and now having partnerships available for our employers to solve some of the issues that we talked about really drives sustainable value. Again, that, like, the annual increases that employers are faced with, if we can take that and really reduce the cost of care. I'm gonna bring up Doug Garis and Carol Nutter now, and to really give another example of a real-life use case of BenInsights.
Absolutely.
Thank you, Sarah.
Thanks.
Thank you. I'll start. I'll take it first. Okay, perfect. Hey, everyone. How you doing? All right, I think we've joked around before and say, you know, we have to eat our own dog food, and our case study is really talking about how we used our BenInsights tool on ourselves, which we think is an incredible platform and something that we're excited to talk about relative to our experience. Not gonna beat this to death, but it's no surprise that healthcare costs are out of control for employers. What people realize through the evolution of plan design and health insurance acquisition, the employer is the one that is responsible for most of the care with respect to employees signing up for healthcare. For a CFO, healthcare costs are my second-largest P&L item, only behind what I pay my W-2 wages.
If I think about it, my per-employee per-year expense in most companies is anywhere from maybe $6,000-$12,000. No, no exception here at Claritev. You look at this envelope of increasing price. I'm left with a very tough, and dare I say, abrasive conversation with Carol.
I would say it's abrasive.
It's fantastic now, but I think traditionally, what we're trying to convey with our BenInsights platform is the conversation we think should be different. As we go into a planning year, and as we go through our benefit design process, on the windshield is once in more than a decade healthcare inflation, and that is not easing up anytime soon. There's two perspectives here. There's you know, the mean, grumpy CFO who says, "I got rising costs. I need to manage my P&L. I need to manage margin." And then also on top of looking for cost avoidance, I'm also managing my fiduciary responsibilities, right? We're a public company. We have a whole lot of things that we have to make sure that our plan design appropriately captures thinking about ERISA.
At the end of the day, we have one ultimate end goal, and this is where I'm gonna turn it over to Carol and speak about our experience with BenInsights.
Yeah.
'Cause we do have one shared goal.
We do.
I promise you.
We do, and I will say that I have been in this space for 25 years, and this is the first time I've actually ever shared a stage with my CFO because of this shared goal that healthcare and health investment is huge. It's a huge part of my job, and it's a huge part of Doug's job. When we really started looking at our platform and leveraging our own platform, we said, "Wait a minute." We both have the same shared goal, which is, how do we maximize the benefit for our employees but also maximize the benefit for our company as well from the economics? Doug, yes, he's the dollars and cents person, and I really look at it from the workforce.
How am I attracting, how am I retaining, how am I engaging a workforce through healthcare, right? You have to be competitive. You have to differentiate yourself in the marketplace. Healthcare and what you're offering your employees, we call them associates, is meaningful. After I've been doing this for about 25 years or so, over that period of time, I started looking at my healthcare investments, what I call a true value, so that's T-R-U-E. First, talent. Is my health plan, are they, is it really attracting and retaining talent? Return on investment. Is there meaningful value that I'm getting from those dollars that I'm spending? Understanding. Is there an actual understanding of how our employees can leverage their benefits? Engagement. Are our employees seeing value?
Is this where they are meeting their needs on the home front, how they're looking at their costs? Before BenInsights, that was really a kind of hope dream that I had, saying, "Okay, this is what I'm hoping to get out of it," but I often didn't, right? I looked at it once a year in a really compressed timeframe. I'm getting all of this data at once, and at the same time, I'm having to make decisions about how I'm gonna spend in the upcoming year. It's not a really great dynamic. Like many employers, we're facing rising costs, right? Every year, you just kinda get it, set it, and forget it. "Okay, it's gonna go up. I know it's gonna go up." Okay, well, what do you do about it?
We could either just absorb the cost from a company perspective, which many do. Many companies also share that cost with employees, which is a hard message, right? Having done this for over 25 years, going to the employees that I support and saying, "Yet again, costs are going up." There were years saying, "Costs are going up, and the benefits are going down." That is a tough message. When you've got a lot of internal chat boards and things like that, it was also hard to kind of get the feedback that I was getting. When we started using BenInsights, what we did is we took three years of claims data, and we said, "Okay, what can we learn from this? What can we learn from our own data?
How are our own employees using the benefits that we're providing?" We got a ton of transparency that really was transformational. On the next slide, we'll go over what our achievements were. For the first time, and again, over 25 years, I know exactly where those cost drivers are, what's really impacting, who it's impacting, why is it impacting, and so I've got the transparency piece. Most importantly, I now have the clarity piece. It's like, "Okay, what do I do about it? How can I be really targeted and really focused to make smarter decisions about these healthcare dollars that we're spending?" When I really started looking at the tool and taking a step back saying, "I've got clinical data that Sarah did a great job talking to us about, financial and workforce.
I've got the trifecta of all this information that now in a predictive, targeted way, Doug and I can partner and say, "All right, what do we do? How do we best leverage these dollars, again, for our associates, our employees, and also from a financial perspective of the company?" All right, what did we hear? Doug, do you wanna start?
Yeah, I mean, first and foremost.
Drum roll, please. This is a big number.
In dollars and cents, we saved over $1,200 per employee on our health plan in 2025 without sacrificing benefits in a year where most on a like-for-like basis most employers actually passed pretty significant inflation on to their associates.
That's right. We're gonna start out, this is a big number, and we do want this to be up here because this is absolutely what we've experienced over the last three years, and not many employers can say that. What we're able to pass on to our associates, I think is even the larger accomplishment. There's really three main impacts that we saw. First was financial, right? We've got the $4 million in total benefits spent. We also did not pass any sort of employee contribution increases on to our associates. I can tell you saying that to a crowd of 3,000 people is a lot easier than saying, "Hey, benefits are going down, costs are going up, and that's just the way it is, right?
It's happening in every, you know, everywhere else." You can read any kind of news article about it, but that's not the communication, that's not the engagement that I'm having with associates at Claritev. The first was the financial impact. The second was around utilization of care, so utilization of our benefits. The third was a stronger connection with what are the values of our workforce, what our workforce was valuing in terms of what they were looking for in benefits. As we looked at the data and we became very, very specific and focused on what we're finding, and as we applied different strategies and mitigation approaches, we lowered our ER visits by 12%. We adjusted our primary care physician and specialist co-pays. We amended deductibles and out-of-pocket maximums.
We added two more pharmacy deductibles, and we also negotiated more favorable carrier contracts and increased our stop-loss retention. That was really, really big. I did not have the information, frankly, the confidence before BenInsights to go back to our carrier and saying, "Hey, that's not good enough." It started this negotiation, me being a much more proactive, offensive stance than a defensive stance that, as I said, I had been in really in 25 years prior to. This is how the utilization of care, how we really made improvements. The last piece was around our workforce and having a stronger connection to what the values of our workforce. I mentioned that we've got clinical data, we've got financial data and workforce, and so that's where the Oracle Fusion comes in.
We have this platform connected in with my employee landscape data. All of that is employee census information I'm able to see real time. I don't just use BenInsights once a year. I use it at an ongoing basis to hold myself accountable, what's working, what's not, where do I need to make a change? The other interesting part is most companies do annual employee surveys. Maybe you do it a couple of times a year. We do. One of the questions is, What would you like to see more of? We get lots of feedback, but one of the areas we get feedback is from a benefits. "Hey, I'd like to see more in X. I'd like to see more in Y.
This is what's meaningful for me." Before BenInsights, those were just words on a page, and I would do my best, but again, I was limited. Mirroring that with the clinical information of how people are actually consuming benefits, I was able to truly see clearly what we needed to be able to offer to our employees to have that stronger connection engagement. We added more support for MSK. We added more support for women's health. Our company is made up of 63% women. We added more support for mental health. We saw a big increase with individuals that still had their children on plans, and we're seeing a big spike in needs for mental health.
We also have a stronger partnership with Carrum and a variety of other solutions that they're able to offer our associates, and that's directly coming from not only what we saw people how they're consuming our healthcare, but what they were saying in various surveys. All of that led to a much stronger, improved employee experience. We have very, very high survey results from Great Place to Work, and in part because we listen. We're taking all the various data inputs that we have, and we're looking to make more informed, more targeted decisions on what we think is best for our associates. Again, because it's such a great number, we wanna we're gonna end on, again, the $4 million in savings. Linking back to the employee or to the healthcare life cycle, so it doesn't stop with plan design.
Employees become patients, and I'd like to bring Jigar Patel, who is our Chief Medical and Product Officer, who's gonna share with you how we support providers through our process and also the delivery of care. Jigar?
There you go.
Sure.
Good afternoon.
Good job. Nice to do two.
Welcome. Thank you for coming. My name is Jigar Patel. I am a physician. I have the unusual distinction of having two very disparate titles, Chief Medical Officer and Chief Product Officer.
Why did I come to Claritev? It's been about 11 months, and I came for two main reasons. One, I get to blend my history of medical science and product experience in working in technology for the last 18 years. That's pretty unique. To listen to the vision before I came was we want to shift left. We want to think about providers as a part of the continuum, and enhance our services in that space, and then be a technology-enabled, product-focused company. It was a golden opportunity for me to use a lot of different things I have in my background, and have an impact at Claritev and in healthcare in general.
I have for the last 18 years focused on scaling and how do I think about improving more lives than I would as a pathologist. You know, the lab I ran was part of before I joined Cerner at the time, we ran about 5 million tests a year, and that probably covered about 100,000 people. When you talk about then moving to a Cerner and then an Oracle, you're talking about your scope getting even larger. Now, you think about claims that cover the United States, and the scope is even larger. It's very gratifying to me to think about our products affecting healthcare at a different level and a different scale than I've seen before. In review, we've talked about plan design with Mike and Tres Health. How do you help someone pick a plan?
The enrollment and the understanding of the benefits with Carol, Doug, Sarah, and Sean. Now I'm gonna focus on that provider lens. What do we think about how do we provide care, and how do you provide the economics for that care? My entire career, I've always heard no margin, no mission. Providers also have to make a margin so they can provide care for persons. That's very important. It's the core of a lot of why people become nurses and physicians and therapists of all kind. With that, the challenges in healthcare are many. This is not a surprise. It's been the headline for a long time, was exacerbated by COVID, of course.
Professional shortages, excuse me, labor and operating costs are continuing to go up, and there are professional shortages across the board. Go from primary care to nursing to therapists. You name the field from a medical profession perspective, and there is a shortage. Talk about the volume of data. I would contend, the healthcare data is perhaps the most complicated set of data, that's available out there, from a clinical perspective, not even thinking about claims and the payments and the other things that we've talked about also. That's why people go to school for many years to understand those things and aggregate that data over time. It's vast and rich, and the opportunity to marry that to the economic side is there are plenty of opportunities there, and we wanna go in that direction.
The complexity of the administrative burden of healthcare is also wildly above and beyond one of the most regulated industries out there. In my career, for the first time in my career in the last two years, more physicians are employed by hospitals than not. When I came out of training, you were expected to go join a big group, hang a shingle, and become a small business. That is less and less true because, in part, for the complexity. Physicians are looking to take a paycheck home now. They don't wanna run a small business. They wanna take care of people. Getting rid of the complexity from a contracting and how do I get paid and keep my business open has become less and less important to those providers.
The big headline for the last 10 years has been also consolidation of healthcare providers. We're seeing a lot of them move together. You're also seeing new entrants in the fields, the Amazons, the Optums, and they're taking on providers to provide services and also think about how do they capture a market that is ripe for the things they feel they have expertise in as well. Behind all of that is the complexity of healthcare itself, medically, technologically, pharmaceutically. Those are all increasing at rates that are very different than when I was in training. Not a day goes by when somebody says, "Hey, have you heard of this drug?" Or, "What does this procedure mean?" They're all brand new over time.
Part of what you learn in medicine is you have to continue to learn because it is ever-evolving, and the technology is pushing us there. That technology also and the ability to take care of people in a lower acuity place has made the people that do get admitted to hospitals very high acuity. That is very different than it has been in the past. There used to be an era where if you had a baby and you went into the hospital, you'd be there five, seven days, and that was fine. That's not it anymore, right? For those of you that have had a kid or, you know you're in and out, right? That's the goal. It's the utilization of that very expensive space that people are trying to maximize.
All of these things are influencing provider market, and those are cost pressures that they have to consider. How do we help or how can we help them understand their space better? Over here we were showing one of our transparency tools. We're showing the sister to the one I'm talking about here. Basically, we have taken the 5 billion public records that were required to be published by payers and providers and taken that 500 billion records and created a solution that provides transparency into negotiated rates across the United States. Why? You can say anybody can do that. When you look at the data itself, it is quite complex, and also there is a lot of variability in its completeness.
We've used our knowledge as a company in healthcare economics to make sense of those 500 billion records. When you do that, you can actually start to understand in any given region, for any number of payers and any number of providers, what does healthcare cost for any given thing. That might be, I'm gonna have an elective total knee arthroplasty. I'm gonna have my knee replaced. We can tell you down to the MSA and even to the zip code, what does that cost in those providers in that area? What is the contracted rate for that service? That's really important. The goal for that legislation was to have all the people in the world know what it exactly costs to take care of and do anything that they would pay for from a healthcare perspective.
The nature of the data being as large as and as complex as it is, that hasn't happened without a translation like a use of CompleteVue. We clean that data, we give you confidence scores on how good that data is. There are gaps in the data from a locality perspective. Some people are more prone to provide accurate data than less, so we have to do that. The trick from a product perspective is to make it actionable or make it informative in a way where everyone can understand what that is. That is to give you a simulator like you see on the screen here.
If we adjust our rates in our facility to be comparable to our peers in the area, what's our revenue opportunity if we go into that negotiation with a better understanding of where we stand from a market perspective? Sometimes you're gonna win and you're below, and there's opportunity for those rates to go up in comparison to your peers. Sometimes you're gonna lose. Sometimes your rates are higher, and that actually is probably you just won't mention that one. You'll just keep taking that one. How do you give people that right information so they feel more confident? We're gonna have a couple of our partners from Carlinville Area Hospital come, and they're gonna tell you about what did they have to do in the past to do this.
My favorite story listening to Brian, and I'm gonna spoil it now, we'll have him expound on it, is he has been guilty of picking up the phone, calling down the street and asking, "What would I want to have this procedure done, what would you charge me?" That is an unusual world when a CEO, CFO, someone in a hospital has to understand their where they stand in the market. They have to go secret shop their competitors. With all of that, we can start to then give intelligence into an opportunity for better reimbursement potentially, for the services and appropriate reimbursement. With that, CompleteVue analytics gives you an understanding of where you stand in the market from a where am I negotiated in the payers that are there?
How do I compare to Medicare? All those sorts of things. It also gives you insight into where is my market leakage, and could I have a service line opportunity to keep healthcare local for me? If you're thinking about rural America in particular, every day there's a decision whether or not we bring that service here, or we have to ship it 50 miles down the road to a major medical center. Is there opportunity to understand that and have a strategic investment in those areas? It could be as simple as colonoscopy services. If you bring those in region, you keep people closer to home, and you provide something that's valuable service, that can be beneficial to the provider organization, but then also to the patients.
We talked about simulation, understanding where you're standing if you increase a little bit here, a little bit there, decrease a little bit here, what does that look like from a next negotiation with a next payer? The complexity of these contracts is. They are very complex. You can go in with a better understanding of where you stand, and have the data there to say, "I don't think this one is fair. This one is fair," et cetera. That financial viability. When you have the understanding of where can I potentially have a better stance on a market, I can actually get to better information about where I stand with getting paid for those services and getting paid appropriately. Travis mentioned the top five health system that we've signed in America that we'll be announcing hopefully shortly.
We had to justify and think about why this is important, and why this is good for Claritev. We're gonna be doing technology management services. Many of us have a history in that space supporting electronic health records. Well, that's getting close to the data. I talked about the complexity of that data and then how do you use that data in concert with claims data. That can be new and powerful. This gives us an opportunity to work with providers with large data sets and see how we can marry those two things that are often not pushed together. We will do the implementation, applications, and management of those things from a technology perspective, but work with them on new ideas around what is that data good for from an economics and care perspective.
We've heard from a number of folks on BenInsights. In healthcare in particular, one of the largest concerns for any CEO running a hospital is the health of their workforce, and that is a hard environment to be in. It's stressful environment to be in. BenInsights has an immediate lift to them as well as employers. We want to make sure that those professionals that are out there stay healthy, well, and come to work and take care of people, and so they have to be well themselves. We talk extensively about CompleteVue and price transparency and how you gain insights and how do you push those things to provide understanding of where you are in the market, leakage, service line opportunities, grow your business kind of conversations. Then finally, coding accuracy.
We have long experience as a company in providing accurate coding, and it can be applied evenly on any side of the fence. Coding is coding. There are objective rules, and you can understand if you get a better code, you can get a better clean claim. If you get more clean claims, that's less people touching those and actually bringing down your cost, your administrative burden in your organization. Then venturing in with some partnerships over the years here into clinical documentation improvement. Nothing happens like in most things unless you've written it down and it's very clear, and you will prevent other people coming back and say, "Hey, I need you to prove this thing," or, "What's the substantiation for this thing?" If your documentation is better as well. With that, I have the pleasure of bringing up Mr.
Brian Burnside and Jay Hodges . Brian is the CEO of our Carlinville Area Hospital in Illinois, and Jay is the chief financial officer there as well. If you gentlemen wanna come over this direction or wherever you wanna. They're gonna talk about their story, Carlinville Area Hospital, and how they've worked with Claritev to go from having less information to having more information now. Over to you, Brian.
Great. Thank you, Dr. Patel. Just to clarify, it was always my wife who called a competitor to find out about the MRI. I'm pleased to introduce Jay Hodges . Jay is our long-term CFO and really excited to have him with us today, and we'll have a lot of conversation about what Claritev has meant to our organization. Let me start just by saying something really simple. Our hospital is in the middle of a cornfield, okay? Before you throw a lot of shade on that, though, let me tell you why that's important. Because we are also a sophisticated healthcare organization that's looking toward the future of the rural transformation in healthcare.
I was really pleased to hear Travis describe us as a pioneer organization in terms of partnering with Claritev because we believe that what we've accomplished with Claritev's guidance in our organization is certainly scalable, and certainly you can see that with their most recent announcement of the top five health systems in the country. We're really excited about what's happening in central Illinois. We're halfway between St. Louis and Springfield. If you know much about Illinois, you know that that is not a growing suburb of Houston, okay? I mean, it's a modest area that has about a population of about 40,000 people. There's our hospital.
The story of our hospital over the last five years that I've been the CEO there, I've been a hospital CEO for 20 years overall. But for the last five years, I've served at Carlinville Area Hospital. My board, my chief of staff, Dr. Lawson, other members of our medical staff, and our employees, believe it or not, believe that there is a rural transformation in healthcare that's coming. There's a portion of the One Big Beautiful Bill Act that has the Rural Health Transformation Program in it. We're being told to transform. We're being told in rural America to take a claim of our position in the care continuum, and that's what we've been doing in Carlinville.
You can see that, we set out over the last number of years to say: How can we create a model for a rural healthcare system of the future? How can we take a small independent hospital and say, "Boy, this organization is having some successes in terms of culture, in terms of service to the community, in terms of value added to employers," and say, "Boy, that might not be a bad approach for other rural hospitals across the country"? My favorite word is momentum. What we needed to do was create some momentum as an organization. We were pretty stagnant and stable for a period of time. Organizationally, we generated some momentum. We put primary care at the center of our strategy. Ultimately, that's something that rural healthcare does really, really well is primary care.
We augmented our primary care with nearly every specialist support physician that a rural community would need at any time during the course of the month. We have general surgery, GI, orthopedics, allergy, ENT, pulmonary, behavioral health, podiatry, wound care, cardiology, urology, a vascular surgeon, ER and hospitalist team, neurology, rheumatology, ophthalmology, nephrology, oncology, gynecology, and pain management all serving our small rural community. You know, they're not there every single day, but that fractional use of physician services is certainly what our community needs. That has allowed us to say, "You know what? We can create a comprehensive rural health system for our community." We've set out to do that. We heard earlier the talk about the importance of employee culture.
Carlinville Area Hospital has a top 5% culture in the hospital industry according to Press Ganey. Not only do we have a fair amount of just great fun with our teammates, we also really invested in their benefit structure, which became a strong competitive advantage for our organization in retaining nurses and techs. In fact, our hospital turnover is 12% compared to an industry average of 20%. You see why I'm kind of sharing with you the rural resurgence, the rural transformation is an important issue for this country. While many rural hospitals are struggling, and it is a challenge, there's opportunity there as well. This is what has happened over the last 15 years. This is from our audited financial statements. Again, we're not a huge organization.
I'm standing on Wall Street. We're not a huge organization. Over the period of 2010 to 2020, you could see modest growth in net patient services revenue, you know, $15 million-$25 million. Over the last five years, since I've been there, and Jay and I have been working together, and we've been working with Claritev, our net patient services revenue has grown from $25 million to today we're operating a $57 million net patient services budget. Net patient services revenue is not what we're charging. That's not what we're charging our payers. It's what we're getting paid.
It is receipts for actual services rendered to our community. We've been able, through data supplied by Claritev, to help better align our services with the services that our community needed, and we've been able to work towards pricing those services at appropriate levels for our market. Ultimately, you know, here we are, an independent rural hospital, not in a growing suburb of Houston, that has been able to provide greater services to our community by using the data that's available to us. Long story short, I met Travis when we were at a National Rural Health Association conference in Kansas City. Claritev is a sponsor of the National Rural Health Association.
As I heard Travis talk about his vision and talk about the importance of data, I mean, I just got so excited in the room because I'm a data guy, right? I represent, I believe, the future of healthcare leadership. I thought, "Man, what do I not have as a small independent rural hospital? I don't have the resources to do this type of big data dive. Let me see if I can find a partner who knows something about data science." Boy, what Jay and I learned during the first little bit of that time was really that that was just a wonderful decision.
The amount of information that we received about services in our market that we were capable of providing, but needed to do a little bit of development on was quite astonishing. The number of cases that we learned that we weren't on par with other competitors in our area in terms of our charging, that was also some findings that had real dollar opportunities for us. Claritev helped us to identify $50 million in market leakage that we weren't touching at that period of time, and also identify some other opportunities for us within again our reimbursement rates.
My message to you all today is from the perspective of an admittedly rural hospital in the middle of a cornfield. There are hospitals like us out there that are thinking about what the future of rural healthcare can look like, and the idea isn't that it's all just doom and gloom. If you use the data, I like to call the data our superpower. If you use the data, if you lean into the data, and you have a better understanding of what your market is doing, you don't have to guess as a rural hospital CEO, and that can help you make better use of the resources that you have in providing care to your local community. We've been thrilled with using both the CompleteVue package.
We're getting some information out of the BenInsights package to some degree, and it has really been foundational in our work to evolve our organization. Just happy to share that story with you and wanted to give you that perspective. We believe that as a pioneer in the Claritev provider space, we think that this type of thing is scalable, and you can see that with the larger contract that they just closed. Thank you for your time.
Thank you. Thank you, Brian. We got a couple questions here that we're gonna pose to Jay and Brian because getting to why this is valuable to them is really important. What first stood out about the approach that Claritev takes compared to traditional solutions? I'm sure, you know, as the CEO, as the CFO, you have somebody in your office every week trying to pitch something.
Sure.
That will help you run your organization better. What was different in this instance?
You know, as I mentioned, you know, we met at the National Rural Health Association, and it was the absolute use of true big data. You know, it was the first time that I had really seen an organization present to me about the use of, you know, the big claims data and processing it that way. A lot of different demographic studies and assumptions that other consultants would have made in the past, but this was all based on true claims data that was occurring within my community and within my region. I would argue that that's been one big piece of it. The second big piece of it, once we began working with Claritev, was, I mean, the depth of the professionalism, right?
I mean, again, I mentioned that we're a smaller hospital. We're sophisticated, but we just don't have the same resources that an organization like Claritev does. To be able to pair our level of sophistication with their level of professionalism and data science, I think has been a winning approach.
Yeah, I often will talk about organizations I visit that don't have huge analytics departments, and I
Right.
I'm pretty sure Carlinville Area Hospital.
It's very hard.
Doesn't have that. Jay, how did the new insights change the way your teams made decisions? I mean, Sarah talked about decision-making with the data is the key here. How was it transformed at Carlinville Area Hospital after working with Claritev?
Well, let's go back to the data, right?
Mm-hmm.
As a small rural hospital CFO, we were begging for this kinda data for years.
Mm.
You know, you would never have it that, you know, you'd wanna go to your payer and say, "we think you're underpaying us." You had nothing to go on, right? Now we have hard, actionable data that we could now go back to the, to Blue Cross or Cigna, Aetna, whoever.
Mm-hmm.
Using the CompleteVue data, right. We can show that, hey, you are underpaying us for these service lines, these procedures, these diagnoses. We actually have something concrete to go for. Also kinda separately on a, you know, we can use the data to look at denials.
Mm-hmm.
Right? We knew for years the payers have been denying us for whatever reasons, right? Now we can see why, how much, and what we can do about it. We take the data. We can do something about it.
Right. Yeah, it's fascinating to me, you know, growing up as a provider, I never had any of this data, and as I worked to join Claritev, it was fascinating to me to see the variability in that data.
If I could just.
Yeah, please. Go ahead.
I think that the way we're viewing this too is, you know, we're not viewing this as a negotiation leverage type of thing. I think we're saying this is a great level setting for both sides of the equation, right? You know, payers want to, you know, pay what needs to be done to provide services to a community. We want to be able to do the same type of thing, and I think that just the idea of having a level set is a great place for.
Yeah.
For both sides to be in.
That's a great point. Thank you for that. Looking ahead, either of you can answer, both of you, what excites you most about the data-driven healthcare, and then the role that AI will play in it? Because, it's everywhere, and it's gonna get to rural America too.
Sure.
Go ahead.
Well, you know, I think we'll both kinda tag team this, but, you know, I believe that again, the data allows you to really match the services that you're providing or the services your community needs with the services that you're and able to provide. If you need to develop some of your nurses to have higher skills, if you need to do something along those lines, recruit a particular type of physician, doing that with the data is crucial. I think that's probably my first thought is the data takes all the guesswork out of rural healthcare leadership.
Yeah. From the AI perspective, you know, we're certainly moving more and more closer to being early adopters. You know, we haven't been on the bleeding edge for sure, but we certainly see the role that it plays, especially in revenue cycle management.
Mm-hmm.
Again, pre-ops, denials.
Yeah.
Coding, et cetera. We've already begun autonomous coding projects.
Mm-hmm.
Et cetera. We're really excited about the AI side.
Yeah.
Side of it.
All right. Yeah, I think I tell folks all the time that AI's gonna help us get above water a little bit, and then we can start to do new things from a care perspective. I want to thank all of you for listening to us. I'm gonna bring Todd Freeman. Thank you, Brian. Thank you, Jay, for joining us.
Thank you.
Telling the Carlinville story.
Thank you.
I'm gonna give it back to Todd, who's gonna take us into the break here.
Sure. I think my first Investor Day was 1992, and this is the first time I can ever say we're ahead of schedule. We're gonna be a little different than we've got on the schedule here. We'll take a break to about 3:00 P.M. There was such good traffic before at the demos. We're gonna get the demo stations turned on again, and we'll come back at 3:00 P.M. here to keep the day going. You know, so far today, we've covered that first half of that life cycle that we showed you, kinda from looking for insurance to looking for care. When we come back from the break, we're gonna go to the core of our business, the heart.
A claim gets created after care happens, and there's that point of what happens when a claim is created and what do we do for that all the way through to the payment. We'll take a break now, and we'll be back in 30 minutes.
What we do at Claritev, rather than describe from an operations perspective the details of our solutions, I thought I'd describe them in terms of the benefit they provide to clients and why we think they are differentiated on a value basis that is enduring. I run the operations organization for Claritev. We've got about 1,800 associates that deliver the services and solutions to all of our clients. We maintain a very tight alignment with our Chief Growth Officer, Tiffani Misensik who is here today, listening to our clients to not only modernize the solutions that we have but bring new things to market as well as we seek to expand not only into new logos, but offer our current clients more things.
As part of being the operations officer, along with the four general managers that run each of the portfolios at our organization, we're responsible for delivering services with that meet our quality standards, that meet timeliness of our clients, that are top of class in terms of unit cost and top of class in terms of benefit to our clients, and therefore revenue and revenue growth to Claritev. We also wanna minimize the error rate in the operations, everything that we do. You know, 1% error means, you know, all things being equal, got about 18 people working on not their highest and best use. You get it wrong by 10%, it's 180 people. We look at that, right?
A lot of engineers, a lot of people with industrial systems engineering degrees in the organization, a lot of healthcare executives or people with backgrounds in healthcare in the organization that, you know, the principles you're taught in school are, you know, kind of basic principles then higher order principles. There's a tendency among people with engineering training to optimize things that should no longer exist, right? We look at the way that we do things, the way we deliver each of our services, make sure that our processes, our procedures, our methodologies, and our technology are the best that they can be, and then optimize them for lowest unit cost and highest benefit to the client, and therefore highest revenue to Claritev. Go to the next chart.
Right, we've got some statistics here, kind of put all of that in perspective, right? I'm gonna talk about four things and kinda run through these six statistics on our business. I'm gonna talk about our core lines of service and kinda give an example of why each one of them is value differentiated in the marketplace to our clients and why they help us win and grow.
I'm gonna talk about our solutions and innovation pipeline that is aligned with our current set of solutions and products, to keep them modern, to keep them competitive, keep the maximum benefit for our existing clients and new ones, and talk about a number of new innovative solutions that we're gonna bring to the market this year that are aligned not only with our annual operating plan and budgeted for, but also with our long-term vision, which we called Vision 2030, now Vision 2031. Finally, talk to you about our latest innovation in our network business, which is our oldest business, called Novera. Starting at the top left, right? We talk about 750+ payers that we've got deep and long-lasting relationships with.
The reason that matters is there's a lot of complexity to contracting with payers and the providers, and we do both, right? What that has done is give us the insight to shape the datasets that we use, the algorithms that we use to make each operating part of our business the most effective and efficient that they can be. That is not something that you flip a switch or use AI to replicate. That is, you know, our 40-plus year, 45-year history of being in this business and optimizing and learning and adapting along the way. 30 million claims processed each month.
Point of that stat on this chart is to show you that we operate a business that is at scale and will continue to scale for the growth that we foresee in our vision now 2031, without increasing the operating cost of that growth linearly. $25 billion of savings identified, right? We send back a claim that's been repriced, recoded, or applied against our network. It's a recommended price that ultimately is either accepted on its face or it isn't.
We look at that, we look at how we, for each of our different services and solutions, we look at what's the maximum number of claims that came in the front door of the shop, are we maximizing the percentage of claims that we can actually do something with, and are we suggesting a market clearing or fair market price that has a high acceptance rate? That's two reasons, to limit patient abrasion and to limit the manual after work or aftermath that happens if it's not accepted. For Data iSight, you know, we've improved materially the percentage of claims that we're able to actually operate on. Our acceptance rate, you know, varies by month depending upon the mix of the claims and the mix of the providers that are originating those claims.
Somewhere between 96% and north of 98% acceptance rate on first pass. That means we've optimized that to a point where there's. Right? We look at every single service and solution we offer in just that same light. Processed about $180 billion worth of bill charges and related to those savings, right? That means we save the average patient about $900 on the bill versus bill charges, so we're delivering benefit to our clients, and we look at maximizing that value every single day. Can we find a higher or lower, a higher discount or lower clearing price for each of these claims, depending upon type of service, which provider, where in the country? Bottom left, the 1.4 million providers that we've got on our PHCS network.
It's a number we talk about a lot, but I wanna put it in context on the next chart. We talk about what the value of that really is, and I'll go back to the example that Travis used in his opening remarks, talk about the World Trade Center program. Finally, 86 million code combinations, right? This kinda goes to our payment and revenue integrity business, where we've got a number of prepay, post-pay, and revenue integrity solutions that are designed on different code and combinations of code to look for fraud, look for waste, look for abuse.
I'll give an example of where we've differentiated ourselves with a major national client of ours based upon the quality of the data that we use to create the algorithms that we use, and the efficiency and the savings that we get for our clients. Right. On the network, you know, Travis mentioned the World Trade Center program. It is a government program that was procured out of the Centers for Medicare and Medicaid Services, specifically the CDC. It started as a network right here in New York City and the surrounding area for people with very specific respiratory and other ailments, as you can imagine, a result of the 9/11 attack. Those people have migrated around the country, so it's now a nationwide program.
Well, that was differentiator number one for us, 'cause we've got the 1.4 million that we talk about a lot. A key part of the evaluation criteria, the government always has a very rigid process and RFP proposal, negotiations, and ultimately an award. I'll talk about that award in a second. What we did in the, as a part of that, sometimes the government will not only exchange documents with you, RFP proposal, questions, answers, but give you a chance to come before them and do an oral presentation on your solution, which we did in this case. I will tell you, I've been through a number of those in my career, probably done 50, 80, 100 government contracts over my career. This one, went as smoothly as any, if not the smootest of all of them.
What we did was show the mapping of our existing network to the people and their particular ailments across the country, and where we had gaps. We showed them the contracting process and methodology that we use to fill those gaps to meet the adequacy requirement of the network. We can do it faster and faster and faster than I think anybody else, and we distinguish ourselves on that basis. Also on our price. We delivered a value price. To unseat an incumbent in a government contract generally is a pretty heavy lift. The incumbent protested the award and the procedure for that is you write a brief, essentially like a mini court case, but it's adjudicated by the Government Accountability Office.
What they do is look at the way the agency structured the RFP. Was the scope clear? Were the evaluation criteria clear? Were they applied fairly or equally to all the bidders? I would say out of maybe 40 or 50 protests that I've lived through in my past lives, generally their remedial action is, "Hey, CDC, go back and or government agency, go back and look at this. Looks like your requirement wasn't clear, evaluation criteria wasn't clear, or you didn't apply the evaluation criteria fairly or equally." In this case, the GAO denied the claim. It's essentially summary judgment. You're done. It was because we had distinguished our network, our solution, our approach to managing the network, and our price by such an amount, they absolutely denied the case.
That goes to the value of the network. On claims intelligence, that business, you know, Data iSight, reference-based pricing, it also includes our No Surprises Act solution, all of which report to Sean Crandall, who you'll hear from again here in a minute. Just based upon the most recent public use file data that published by CMS, our success rate is seven percentage points better than some of the competitors you might think of when you think of Claritev for NSA work and all domains across all providers. All people who are providing NSA services include a lot of the national companies. Why is that? Well, if you buy NSA services from us in a kind of what we call our complete solution, we have.
We try to price that claim against our network, again, leveraging those 1.4 million providers, and the claims get cleared there. We've got prepayment negotiations that we, again, we've got algorithms we curated by data that we've accumulated over the years. Try to settle those claims before they go to post-pay. Then we've got a post-pay negotiation solution, similar data set algorithm, to settle the claim quickly. Now that there's been about 3+ years of published data by CMS about the success rates at the IDR phase, which is the last phase, which is like a mini arbitration, essentially what it is. There are 15 companies that do that, and overall, the providers prevail about eight times out of 10.
Well, they all know that now, and so what we find is a greater percentage of NSA claims are being pushed to the IDR phase, which is more people intensive. What we've done there is, and you'll hear about this from, I think, Michael later on, we use AI and other automation to write better briefs for the IDR to substantiate the market clearing price that we think is a fair price for that, informed by past practice, right? The fact that we've been in this business so long, we're able to arrive at a market clearing price that distinguishes our service by seven percentage points up against everyone else. That's value differentiation for NSA. It also allows us to scale that business without scaling the cost of providing it linearly.
Finally, in our payment and revenue integrity portfolio, you're gonna hear from Brad Ross, who's the General Manager for that part of our business. A number of things that I would point out, one of our large clients has their own in-house capability, and we said, "We'd really like, we think we can add value to that part of your company, save you money." We got data from them that had already been through their algorithms, and we found $hundreds of millions of incremental savings from either fraudulent coding, up-coding, miscoding, so fraud, waste, abuse, and then combinations of codes, the use of override codes, again, developed over years and years and years of being in the business, and that's a highly automated capability we call ACE, the Automated Code Editor.
For complicated claims, you know, complex medical procedures, we've got a small team of clinicians and physicians to look at those claims. We enable them with the same kind of technology to make them more productive, so they can handle more claims and be more productive and keep our cost of doing and servicing those lower. Finally, in payment revenue integrity, I'll tell you've all seen in the news all the fraud, waste, and abuse that's going on in Medicaid in particular, but also Medicare. It's rampant across commercial healthcare as well, in the news nearly every single day.
Our team, using ACE, detected a targeted attack on one of our payers, where they were essentially ordering a very expensive DNA test that had nothing to do with the ultimate reason for care, and they got so brazen, they kinda tested the waters. It was targeted at this one payer in one city, and then they shared. It was clear they were sharing the patient list, and so the claims started coming in from multiple cities, and we detected that. Saved our client millions of dollars on fraudulent claims. I would tell you across all of these three core areas of our business, we have intellectual property, past performance, and AI-enabled capabilities that give us a lasting competitive differentiation in the marketplace. Product roadmap, right? This isn't just a patriotic-looking blue, white, and red chart.
It really is a set of priorities that, my general managers and myself, along with Dr. Patel and Tiffany Mesenchek and Michael Kim and his AI team, have decided these are the priorities that deliver maximum value to our current clients. Those are the ones you see, the 30-plus in red. And then 18 new things that we're gonna bring that either complement or fill another gap in the marketplace. You can kinda see we've organized them by portfolio. And this is or supported in our annual operating plan and aligned with our long-term vision to maximize probability of growth that's characterized there. You'll hear some. I won't get into too many details, but I'll just say, every one of these things, our team is really good at delivering on time, on scope, and on budget.
Each one of these things has been mapped into our annual operating plan across the four organizations that I mentioned to make sure that we not only achieve what we think those, the value of those products will be do so on time and maintain our competitive advantage versus everyone else in the marketplace. Finally, PHCS Novera, right? Having a nationwide network is great, but depending upon who you are, whether you're a local TPA, a regional TPA, a national payer, anything, any of those three or anything in between, you may not care as much about a national network. You may care more about a regional one or a local one, statewide one, and then use out-of-network, which we can also cover with our claims intelligence business for everything else.
What this does is it looks, again, based upon proprietary data that we have, we looked at the top 50 metropolitan statistical areas and identified areas of practice and areas of focus, so geographic focus and practice focus, to optimize for each of our segments, right? We go to market by segment. Again, that led and aligned with Tiffany's team and growth, and we've identified millions of incremental lives. It will not be a cannibalization of the clients that are already using our network service, but offer growth that has dramatically accelerated the five-year outlook for our network business. This is enabled by another AI tool that we use to build and tailor those networks quickly.
Used to take weeks, if not months, depending upon the complexity, both in terms of practice area specialties and geography, down to minutes. Right? This is an innovation that we're bringing to the market this year, and we've already launched three markets, and we'll continue to launch in a prioritized fashion, again, aligned with selling to TPAs, selling to brokers, selling to other payers, consumers of our network services. That's my last chart. I'm gonna turn it over to Sean, again, who runs our claims intelligence business, to talk about some exciting innovations that are happening inside of his portfolio. Sean.
Thank you, sir. Thank you.
There we go.
All right. Hello again. Great to be here again. Again, I run our claims intelligence solution line. It includes everything from our reference-based pricing to Surprise Bill Services, our Vistara product, et cetera. Wanna talk to you today about just the word repricing. You heard earlier in the discussions, you know, Brian Burnside from Carlinville, repricing is a lever to create affordability, okay? You heard Brian say, "I have a charge amount, and I have something that actually gets repriced and finally paid." Our solution line is a lot of our reference-based pricing solutions, but it also can be looked at from a network standpoint. If you look at our core area, our core area is, again, out-of-network care, okay?
If we look at repricing functions from out-of-network care, we really are in all aspects of the member's journey, okay? Out-of-network really comes in two different forms. The first form is where the member had no choice, okay? You also will hear surprise bill services. This is a regulation, No Surprises Act, that governs how bills are handled when there is an issue with an ER doc or if there's a participating provider that is rendering or a participating hospital with a non-par physician at a par hospital. These are all things that covers. Claritev Solutions and our repricing efforts have functionality when the member had no choice. Really, the second form is what I'll call discretionary care, where I, as a member, chose to get services out-of-network.
We've really built our solution set, and whether it's the actual network itself or our negotiators that are calling on behalf of that payer and member to really reduce the cost of care. Then we also have our Data iSight or reference-based pricing solutions as well. You've heard earlier, you know, we operate off of an annual operating plan where we are investing in our core areas, and we're also enhancing those areas as well. What else can we bring to this situation and this process to add additional value within the ecosystem? Okay? Our journey has really taken us. If you take a step back and we look at what really happens behind the scenes, is we get a claim from a payer, okay?
That payer sends us a claim, it's out-of-network, so it's usually, on average, the rate has stayed consistent really the last since about 2021 at about 7% of paid dollars, okay? When we get that claim, again, going back to the employer portion I talked to you about, decisions on how out-of-network care are rendered are chosen by the employer and the broker together. I, as a retailer, will choose a certain way I can handle out-of-network care. If I'm a bank, I will choose this way. It's really governed at that employer level on how out-of-network care is handled, okay? Again, we get that claim, and we have interactions, and we see over 100,000 different group IDs.
If everybody goes home after this and pulls out their ID card, that group ID, we see over 100,000 plan sponsor IDs a year, okay? Those are all decisions that are being made on that employer level, okay? Once we get that and somebody's actually using a solution base that has reference base, what actually happens, okay? We have configurations and we saw earlier all the different rules that are involved with how a claim could flow through the system. Claritev has been around for 45 years. We have been in the forefront leading different reference-based solutions. I can tell you 20 years ago, it was charge-based methodologies like our Viant product, okay. We've seen Medicare, you know, trends going to people pricing against Medicare.
Again, we've also created other products that look at what people are actually paying in the market or what is a cost, and then add margin to that and use that as the vehicle for delivery. We're also evolving. You know, being on the forefront, we wanna innovate as well to reach additional market, additional clients, etcetera. We've created a pilot product already, really around transparency data. Now, I know a lot of you, there is a lot of activity over on the PlanOptix area. How can we use 400 billion records as a blueprint for a pricing product? That employer, if they selected, "Hey, I wanna use price transparency data," which is that No Surprises Act, that's what the legislation was intended on, is to get that data out there. I've been doing this a while.
I never thought we would see a complete blueprint of every managed care agreement. I never did. Now, the thing with it is the perception of the market, okay? There's a view of the payer and there's a view of the hospital, okay? Of what the actual rates are. The great thing about what you heard from the demonstrations is our right and the investment that we've made in that data itself. I'm gonna tell you right now, when it comes out of the payer or it comes out of the hospital, there's a lot of interpretation, okay. You'll hear Fernando, and you'll hear the team. We have a right to win in this space, okay. We have strong infrastructure technology led by Michael Kim, as well as 45 years of experience in pricing this kinda data.
I was having a sidebar conversation. I think of a deal that was done between a payer and a provider that was done 20 years ago, okay. You have to fit that in CMS's format today. That's a tough thing to do. Things have changed over the last 20 years. Having that context and that understanding of contracts and taking that and applying it to the existing infrastructure that we have in place is our right to win, okay. With that being said, it's an exciting future for our area. We're innovating and continually investing in our core, and Brad Ross is gonna take us through some of the investments that we're making in the PI space.
Awesome. Thanks, Sean. Hey, good afternoon. Brad Ross, General Manager of the Payment and Revenue Integrity product vertical. I've been here for about a cup of coffee, but I have been in payment and revenue integrity for a very long time. What I'll tell you is the way that Claritev approaches our solutions here, it's generating a new energy that I haven't seen anywhere else. A lot of that is driven by our core solutions that Sean talked about, the network that Jerry talked about and others. Combining that, we're not just focused on generating additional savings. We're focused on reducing abrasion and partnering with our clients and those networks. It really is different.
I really believe we have the opportunity to do something transformational and disrupt, you know, what the traditional payment and revenue integrity vendors are doing. In payment and revenue integrity, we've provided care to a member. The claim has been submitted, which is very complex. As the claim starts to go through the lifecycle, that billing process has two injection points. It's pre and post-payment. In the pre-payment space, we are looking to identify savings before the claim is paid. Post-payment, after payment, going through more complex claims where real-time was not a potential. But when those two work in concert, we reduce the opportunity for improper payments for our payers, as well as providing fair and accurate payment to those providers.
Not all these issues that we identify are fraud. They are usually simple mistakes. As they continue to go left unchecked, you know, that increases the burden, the administrative waste in the system. In our prepayment phase, you'll see there, we have three solutions. One that we'll be launching in the near term. Our Automated Code Editor or ACE solution really works in concert with our technology and algorithms and applying an expert review component to find additional savings that your traditional technology-focused primary editors do not find today. That's the combination of both those aspects of bringing technology industry experts together to really deliver that value. Our itemized bill review, which focuses on inpatient or outpatient claims that are paid percent of a charge.
We identify savings for our clients on 98% of the claims that we review. We're selecting claims that have the most higher likelihood for an opportunity for an overpayment to really deliver value for those clients. As we look beyond, we'll be launching, as I said, DRG. Continue to expand our solution set here as the industry moves left up into the payment stream. We want to be further upstream, delivering a comprehensive solution set 'cause our clients demand it, right? They're looking for more opportunities to reduce waste, abuse in the system. We'll talk a little bit more about what is DRG or diagnostic-related grouping here in a minute.
In the post-payment space, these activate after a claim has been paid. One of the, you know, we have our coordination of benefits and our subrogation business that really will work to identify other payers or third parties that are liable for payment. Our advanced technology identifies and weeds out low opportunity claims or cases so that teams can focus on the most high probability opportunities to remove waste in the system. We'll have our data mining solution. It's a very comprehensive solution, based on many years of experience, which really dials in on adjudication issues, contract compliance issues.
We're not just, you know, going and taking back those dollars from the providers and working with our payers, but we're also trying to prevent leakage working closely with our payers and providers to fix maybe an adjudication issue, whatever it may be. As Jerry alluded to earlier, when you stack all these up together, you know, we're continually finding dollars, whether it's behind the internal processes of the payers that they have in place, due to the complexity of the payment life cycle or other vendors that they may have operating in their payment and revenue integrity stack. For the year last year, so these solutions combined generated almost $2 billion in medical cost savings identified for our clients.
As we look to the future, we're gonna be looking at expanding our solution set to, like I said, DRG and diagnosis-related grouping. You may ask, what is DRG? DRG is a payment methodology for inpatient claims. It uses patient demographics, diagnoses, procedures to come up with a payment methodology that is simplified. Unfortunately, that does not mean that coding and billing practices are simplified. These claims are just as subject to improper payments, mistakes, adjudication issues and whatnot, so they require an expert review. What will happen is we'll receive the claim, as we do today. It'll run through our analytics. We will then select the claim and flag it for review.
This review is a little bit different 'cause we'll be requesting the medical record directly from the provider. Once that medical record is received, it'll actually go across our clinical team, which is made up of physicians, coders, nurses, that will go and compare the medical record to the actual claim. Findings are sent to the payer, where there is potential overpayments, as well as education to the provider, right? At the end of the day, you know, our mission is to provide transparency and fair payment. We provide additional information to the provider that can inform them of the decisions that were made and why their coding and billing practices, you know, were changed. This will be the foundation for expanding our ACE platform.
You know, ACE has operated at scale, so we're gonna continue to expand that as a complex claim platform in the prepay space, and we'll continue to look to add new solutions to it in the years to come, as the healthcare landscape evolves. Just kinda building on that. Why now? I think you've heard, you know, across the board, we've talked about our network. If we run payment integrity on our network, and I think it's clear to call out that the savings we've generated is not just on out-of-network claims, it's both on out-of-network and in-network, as well as our network. If it's not good for our network, we don't wanna run it.
We will not run it on your network for our clients, and I think that really speaks volumes to the relationships and trust we've built, along with the foundation of the technology and scale that we run at. We will be launching this shortly. Can't wait. It's a really exciting opportunity, not only for our clients, but also the team at the end of the day. I'd like to, you know, we've talked about. Sorry about that.
We've talked about selecting the right plan, finding the right provider, and then after the claim is submitted, what happens, but there's still one more aspect of the life cycle that is a challenge for the healthcare life cycle, and that is making sure that payments are made fairly and timely, and I'd like to introduce our Chief Strategy Officer, Will Mintz.
All right. Thank you, Brad. Hello, everyone. I'm Will, the Chief Strategy Officer at Claritev, and I'm joined today by Tom Dean, the CEO of ECHO Health. As you've heard through the day, Claritev has solutions for every point in the healthcare life cycle as we've defined it. The final point being payments. Given our deep client relationships with over 700 payers, 45+ years of experience in claims, 1.4 million provider network, and now, as you've recently heard, moving solidly into provider services, we truly have an end-to-end solution or end-to-end offering for our clients. For payments, this final point in the life cycle, we've chosen to go to market through our partner, ECHO.
Tom today is going to walk you through a little bit about who ECHO is, talk about how ECHO solutions add value to our clients, talk about the differentiation of ECHO and their solutions in the marketplace. With that, Tom.
Okay. Today's portion of the presentation will be made in the spirit of March Madness by the point guard and the power forward. Just a little bit about ECHO and again, what we do, our core solution that we offer is, we help healthcare payers pay healthcare providers. We have a lot of other solutions, but that's our core solution. We're a 30-year-old company, privately held.
You know, some of our claims to fame, we service over 450 payers today. We distribute $220 billion worth of payments. That figure is, when I say we distribute, what I mean is that when a payer is going to pay a provider, the first thing we do is go get money from the payer, and we're involved in those dollars are tracked and cleared on accounts that we control. That's much different than some of our competitors, which if they put ink on a piece of paper called a check, and they happen to mail it, they count those as billions of dollars of payments that they make. That's not ECHO. ECHO is actually involved in every dollar it clears against an account that we control.
We have the two things that probably are most distinguished ECHO are in the left-hand corner and the right-hand corner, upper corner of this slide. The first one is that we have over, for every one of our payers, we have over 90% digital adoption of payments. That leads the industry, and there's many reasons for that. One is that we have more digital payment, you know, modalities or types than anybody else. For instance, we distribute to over 60,000 providers. We have a network that distributes digital checks. We also hook into lockboxes digitally rather than printing and mailing the payment to the lockbox are two things that are unique about ECHO. In the upper right-hand corner, it's very important that you properly incent new providers. That might be some sort of joint venture that creates another provider.
Anytime there's a new provider entity, what we have to do is figure out how would they prefer to receive a digital payment. We have through a series of methodologies, we have 83% of the time within the first year of seeing a provider, we can create a digital payment to that provider. If you look at what's important to the industry and what I decided to do is just give you an example of a case study. This is a primarily Medicaid payer that also has other lines of business, and this particular payer has about 2 million members that they serve. They have a number of challenges that they that are important to them.
When we came to this payer, they said, "First of all, we've had a plateau in our acceptance of digital payments." It's about 75%, a little bit less. We also have three major adjudication systems, but we have a common staff that services members out of those three systems. We have a challenge because we want to answer questions that our members might have, and/or that providers in our network might have, and we can't do that today because each system has its own process for getting that information. And then finally they had. In the healthcare space, if a payer pays a provider over $600, they have to send a 1099 to that provider and the government.
When the IRS doesn't have a sense of humor if you don't get the provider's name and address and everything else correct, and they fine people for that. It does take quite a staff, and particularly in this you know, payer's case, because they had multiple adjudication systems, they had to try to figure out across the three adjudication systems, as an example, did our payments exceed $600? What we did was we were able to implement our. We are the only vendor in the marketplace that also does comprehensive 1099 processing. So that was just another thing that provider needed.
Again, if you look at the next slide, we were north of 90% in all the categories of digital adoption after implementing this particular payer, which was the main goal that they had. There's differences in terms of electronic remittances versus payments and all that kind of stuff, but not to get too technical, we achieved north of 90% in all those categories. One of the reasons we were able to do that is that in the provider world, many times one provider has multiple business offices that they do business office. Imagine, I'm a hospital, but I have several clinics also in my health network, right? You may have a different business office for your clinical payments than your hospital payments. That's just an example.
Emergency department might use a billing company even though the rest of the hospital processes their payments in-house. We have over 1.6 million different provider locations, billing locations, and we know what the profile, that is, what they will accept in terms of digital payments for every one of those. We also are able to, because of our platform, we have an omnibus accounting platform, which just means that we have a way, regardless of the type of payment that we make, regardless of where that payment came from, what adjudication system a payer paid from, we're able to have a unified view across that whole spectrum, and someone will be able to say, "You funded the payment, you sent the payment. This is the dispensation of any payment regardless of the payment modality." Again, makes us unique.
Because we took care of all their 1099 processing, they don't have any issues with that any longer. Why the Claritev relationship is important to ECHO. ECHO has a direct sales force, but most of our customers are obtained and serviced in some way through partnerships. We have very few partners, and those partners have to be significant and bring something to the picture. The best way I could, you know, I could sort of demonstrate that on a slide is to say you've heard many, you know, people talk about all the great things that Claritev does in the claims reimbursement cycle.
I won't go through those again, but suffice it to say, at the end of the process, the payer adjudicates a claim and then has to actually move the money associated with that, right? It means it goes out of the payer's account and winds up in the provider's account somehow, and that's where ECHO takes over. What we feel is if we've got a partnership with Claritev, we have best of breed when it comes to the claims reimbursement cycle up to and through the adjudication process, combined with best of breed when it comes to actually not only paying the provider, but helping the provider bill and collect from their patient.
We cover the complete spectrum, and we think there's incredible opportunity for us to share information, to further automate processes and all that kind of stuff. In addition to the fact that we thought that this was a very comprehensive in nature relationship, we also partner with Claritev because we believe that they've made the same kind of investment and commitment to technology that we have. The opportunity to collaborate and further work on new solutions for the marketplace is very important to us.
Yes. I'll just add that the partnership selection process was pretty robust for ECHO, going through a full build, buy, borrow partner. We took a viewpoint of how do we future-proof this end of the business. As we've been talking about competitive moats, being the infrastructure, ECHO is in delivering the payment to the provider and being that we have such deep client relationships at Claritev, that foundation really helps us truly future-proof all the different types of future-focused payment modalities, all kind of starting with this partnership here with ECHO to give us that closed-loop end-to-end process. With that, just to kind of recap a little bit about what you've heard today.
Claritev is bringing transparency across the life cycle for healthcare. You heard earlier that leveraging our BenInsights product, providing the transparency to employers to plan sponsors to beneficiaries as they select, design, and optimize their benefits. Moving forward into adjacent spaces in healthcare, such as our provider businesses, to really leverage our transparency tooling to help with service line optimization and planning. Finally, or not finally, our core business, where we, as you heard Jerry, we're making substantial investments in our core around our claims processing and our claims optimization business. Then as Tom and I just discussed, completing that end-to-end loop across the healthcare life cycle with what we feel is a very differentiated and very sticky payments offering.
I'm gonna invite Michael Kim, our Chief Digital Officer, and Fernando Schwartz, our Chief AI Officer, up here to talk to you a little bit more in depth about the AI or how we're using AI and how we're leveraging it throughout our entire offering. With that.
Thank you very much. You know a company like ours is serious about technology when they allow a nerd like me up on the stage. I'm accompanied today by Michael, our Chief Digital Officer. My name is Fernando Schwartz. I'm Claritev's Chief AI Officer, and I'll tell you a little about myself, my background. Before joining Claritev, a long time ago, I was in academia. I'm a former math professor turned into industry. After leaving academia, I went into online advertisement for some time, and then into healthcare. I worked in a few startups in healthcare, and more recently, I was the Global Head of Data Science at Merck in the commercial division.
After that, prior to joining Claritev a year ago, I was leading AI at ADP, the HR and benefits company. We're here today to tell you about what are we up to with AI at Claritev. I know that it's my favorite topic and probably, you know, a really hot topic for the space as well. I'd like to start first to tell you a little bit about the vision. Where are we going with AI here? The vision is clear. The vision is to position us as a global leader in technology innovation. We're gonna achieve that by becoming what's called AI native. This is a clear vision that we have.
When we think about that vision, we're thinking about three areas where we want to explore and use this technology. On the one-hand side, we wanna talk about transformative products. That is to say, think about applying AI into the products that we have to make them stickier, more powerful, ultimately generate revenues to the organization. That's one pillar that we're looking at. We're also thinking about how do we use this technology to optimize our operations. So you have to think about, like, generating internal efficiencies, and there's quite a bit of room there for us to become more efficient using AI. Last but not least, I would say that becoming AI native means that we have the ability to become really innovative, and try new things quickly.
As you all have seen, this technology really allows for that. A little bit of bragging rights for the organization. I would say, first, late last year, KPMG and Oracle had a hackathon around agentic AI, which was, you know, attended by companies like DocuSign and other, like, tech firms. We won this hackathon with the team that we have in place. We currently have over 50 AI models in production, and we're gonna be releasing a couple dozen more this year. Last but not least, a really important topic for us has to do with responsible AI. In that space, we were co-signatories and co-authors of a responsible AI framework that was put out there by one of the leading national AI coalitions in healthcare. We're taking responsible AI quite seriously internally.
We've formed some cross-functional teams with legal and other partners internally to really make sure that we're doing this in a responsible way. How do we realize this vision of becoming AI native and really at the forefront of technology? We're thinking about. I'll give you some sense around three areas where we're working on. First, you gotta have the right infrastructure to be able to do AI at scale like we are intending to do. For that, we foster a deep partnership with Oracle. We are using their services and their high-performance cloud infrastructure to be able to build scalable systems that are gonna help us operate where we wanna go. At the same time, we've partnered with OpenAI to power our, you know, generative AI offerings and our agentic workflows.
We also have a partnership with Anthropic in the Middle East region. Last is our focus on what we're calling CORE, which is our Claritev Operational Reasoning Engine. This is something that I'm particularly quite fond of. Maybe I'm gonna quote my nerdness there. If you think about it, in healthcare, there's little to no room for error. Generally speaking, in regulated environments, you wanna use technology, and you want to avoid mistakes. When you think of gen AI, you know that gen AI in itself is a technology that is prone, I mean, more or less, to committing some errors. How do you combat that? That's the technology that we're building about reasoning.
It's called automated reasoning, and this technology allows you to provide with the checks and balances to the generative piece that's out there. We believe that this is gonna be a huge differentiator for our technology out there. I will go into a couple examples of how we are applying AI today, just to give you a sense of where we're at, and then I'll pass it on to Michael to wrap up this section. First, I want to talk about a tool that we have, a product that we have out there that is called ProPricer. This tool has been around for a year plus. What ProPricer does is that it maximizes savings with the minimum number of appeals for our clients when they're looking at out-of-network claims.
You can imagine that, you know, that gives flexibility to our clients, and really eliminates the complexity of the decision-making process in semi-real time when you're processing claims, again, to maximize savings and minimize the number of appeals. For someone with a math background, that sounds pretty mathy. All right. Then I'll also give you, like, a small sense of what our Surprise Bill Services does and how do we use AI there. Many of you, or I'm sure all of you are familiar with the No Surprises Act, which was put out there by the government somewhat recently. The No Surprises Act allows for some form of negotiation, litigation, if you like, of the sort between payers and providers. It established a framework by which claims can be arbitrated.
Having the behavioral analysis at hand, which we have built into this product, really allows us to really model the willingness of payer or providers coming into those negotiations to try to avoid excessive charges and whatnot. There's a behavioral piece to that, and we also have now a generative piece which is tied to what we call deep research, which allows us to basically enhance the defensible and well-informed arguments that are needed to provide these negotiations, to empower these negotiations. We feel really good about this tool. Actually, the data puts us at seven percentage points more effective than anything else out there in the market with this tool that we have.
Now, granted, it's still pretty challenging environment, but we are seven percentage points higher than anybody else out there with this tool. With that said, I'll pass it on to Michael to continue the conversation. Thanks.
Thanks so much, Fernando. As Fernando indicated, my name is Michael Kim, and I'm the Chief Digital Officer, and have been for the past 11 years at the company. I'm one of the legacy guys that are still around. I'm here because I've seen an amazing transformation over the past two years under Travis' leadership. As one of the analysts wrote, "It's not your grandfather's Claritev." It's been amazing to see the evolution, and I think you saw it today in some of the presentations. That's not what we were two years ago. I'm here 'cause I believe in the mission of the company.
I'm here because I believe we have the right team, and I'm here because I believe we're gonna deliver our strategy, Vision 2030, and that by so doing, we are having a material positive impact on the healthcare industry. I'm super excited to play a real small role in making that happen. That's why I'm still here and excited about being part of Claritev. The two questions that I'm gonna focus on over the... Todd gave me the go-ahead. I can run a little bit long because these were the same questions that I got asked over the break, and actually before we got started. These are the two common questions that are asked. The first question is, "Is AI overhyped?" Right?
That's quickly followed paradoxically by the question, "Will AI or an AI company displace or make obsolete Claritev?" Those are the two questions, and I got those same questions actually before we started. I just have two slides. I'm gonna run a little bit long. Originally, I had five minutes, but I wanna address those two questions. All right? To answer the first question, I wanna anchor it based on the roadmap slide that you saw that Jerry presented earlier. When you think about the hype around AI, there are really two parts of that. There's the AI scientists and the work that they're doing, and that's the examples that Fernando gave. The AI models, whether it's machine learning predictive, whether it's generative AI or agentic AI, that's what AI scientists are working on.
The other part is the software engineering part. Right? Can you use AI to accelerate the software engineering? Right? We've embraced both of those elements. This roadmap here is a really ambitious, aggressive set of product capabilities that we wanna build out over the course of the next year. Now, add on top of that the digital modernization effort that's going on. Add on top of that, and Travis threw out a big number, $100 million ACV target, right? That translates into more clients being signed, which translates into a lot more technology work 'cause we have to implement those clients, right? Add on top of that, we still have a set of. We have to make the donuts every day. There's a core set of systems that we wanna continue to enhance, maintain.
That's a ton of work when you look at those four buckets. Fortunately, from a couple of years ago, on the software engineering side, we started embracing AI. Right? We have OpenAI, GitHub Copilot. We're testing Anthropic, Claude. We've been actively embracing AI to accelerate our software development process. All right? We're seeing a 20% or 30% productivity lift from adopting that. That's one of the reasons we feel good about our ability to deliver this product roadmap. The reason, and those that have the huge hype around AI saying, "Why is it not 90% or 100%?" Why aren't the coding agents? The reason is Travis had it in his first slide, one of his earlier slides. It's because the hundreds of thousands of custom rules and code that are reflected into our system.
Like, if you use prompt engineering and say, "Hey, build me this code," that's a generic code. Unfortunately or fortunately for us, our clients say, "That's great, but there's 20 exceptions to that," right? "I want it to do this instead of that. I want it to do this instead." That requires a lot of interaction with our clients and customization, which is a moat for us. That's why the lift in productivity is not 90%, but it's humans in the loop that actually take the generic model and then need to customize it based on all of these exceptions that are created. Right? On the software engineering side, we feel really good that AI is having a substantial impact on software engineering.
The second part, which is what the AI scientists are doing, we feel, and Fernando covered a couple of cases where it is really transforming the value that we're delivering to our clients and the way the products work. When I take a step back and say, "Is AI overhyped?" Say, yeah, there's probably a little bit of hyperbole. When I think about at Claritev, do I think AI is gonna be transformational? The answer is an absolute resounding yes, both from what the AI scientists are doing in terms of how that changes our products, how that changes our business operations processes to make it more efficient and more effective. It changes product development efforts, and it also changes the way we are engineering our software. I absolutely believe that AI is transformational from Claritev's perspective.
One additional note I will say about AI is Fernando talked about being an AI native company, right? The way we think about AI is not a bunch of PhDs and geeks like Fernando in a corner developing elegant AI models. We think about it as integrated into everything that we do, right? We think about it as part of our strategy. We think about it in our products. We think about it in software engineering. This page here, and I've highlighted all of the AI deliverables as a part of our product roadmap. It's integrated into everything that we do. That's what we mean by being an AI native company. It's not a bunch of academics in the corner. It's embedded into everything that we do. All right?
The second part is if it is transformational, why couldn't an AI or an AI company replace what you're doing, displace you or make you obsolete? The answer to that question, I think, is we don't believe that that's a threat to us. We believe that's an opportunity for us. All right? We think it's an opportunity for us because. The examples that we selected were good examples of why we think it's an opportunity and not a threat. Like, think about an AI company or a new entrant trying to replicate ProPricer or what we do with Surprise Bill Services, and the massive hill that they would have to take to accomplish that, right?
For ProPricer, it looks at all of our products, our network product, negotiation product, reference-based pricing, and we optimize the workflow on what we think is gonna have the deepest savings at the lowest appeal rate, right? A new entrant doesn't have a network. Like, we have a network of 1.4 million providers under contract. Like, an AI company can't replicate that, right? That's a critical part of the value that we're delivering, right? When you have a network, there's no appeals. All right? That's a massive moat. Another part of that is we have deep trusted relationships with our clients, and they're willing to send us their claims. I can tell you, having worked with a lot of our clients, it's really hard to sign a contract and get them to send you their PHI, right, and do business with you.
The 700 payer relationships we have, they're sending us the claims today. That embedded workflow is a massive moat that we have today, right? We have deep trusted relationships, both with payers and we have providers under contract. We're embedded in their workflow. We have data, and so Travis talked about the data that we have, that we use, that they've sent, and we have 45 years of that. We have 200 billion claims. We have 500 billion records that we import every month around price transparency. There's a massive amount of data that we have. Some of it's proprietary, some of it's public, but we've integrated all of that, and that gives us an awful lot of insights and intellectual property that we have. All right? That's a massive moat.
When I think about the opportunity versus threat, like we love AI companies, big and small. Big ones would be the front. They're called Frontier Labs. Fernando has been educating me. That would be OpenAI, right? That would be all of the large LLM providers. That would be Google Gemini. That would be Anthropic Claude. That would be xAI, Elon Musk's xAI having Grok. That would be Meta's Llama. Those are large language models. Those would be the big companies. There's startup companies, right? We love all of them. Like, we use all the LLM tools. They're happy to partner with us, and we've met with the executive teams of some of those companies.
We're happy to plug and work with startups that wanna plug themselves into our chassis and our workflow, right? If they have a point solution that delivers value for our clients, and we don't have that, we're happy to partner with them, right? When we think about AI and will they replace, the first comment I said is 20%-30% productivity gain. They can't completely replace us. Maybe 10 years from now they could, but I don't think over the course of the next five years that's anywhere within the realm of possibility, right? The proof point was all of these companies are approaching us to partner with us to plug themselves into our workflow and our client relationships. We feel really, really good about our competitive advantage, right?
First and foremost, as I said, to kinda wrap up, is AI transformational? Absolutely. We think it's driving transformation in our products. We feel like it's driving transformation in how efficient and effective our processes are, reflected in both Jerry and Travis said seven percentage points more effective than anyone else in the, in the IDR place, and driving our innovation and product development efforts and our software development processes as well. We 100% think it's transformational. The second part is like AI companies, like we feel great about. That's an opportunity for us, not a threat. We're incredibly paranoid, and so we continue to monitor the situation closely to see what's happening.
Today, with the current state of healthcare and the complexity that it has and all the customization that's required and the experience that we have, we think it's a massive opportunity and a moat for us, not a threat today. With that said, I'll be happy to take any additional questions on AI strategy at the end of the day in the Q&A. I want to bring up our closer, our CFO, Doug Garis. He's gonna share how everything you heard today kinda comes together to create durable, profitable business and financial value. He's gonna wrap up for the day. Thank you.
Great. Thank you, Michael. All right. The closer. The good news is we saved the math for last. I think a lot of you are excited to hear our update on the business and how we're thinking about the future. I have a lot of content, and I will note that we are still ahead of the schedule, which is fantastic. I also do wanna say again, big thank you to Todd and the team. I think this has been an incredible day so far. We're humbled to be on the floor of the NYSE and to be with you all. I know a lot of folks had some challenges getting here, including some of our partners, and so we're eternally grateful for that. So I'm gonna cover a few things today.
First, our guiding principles, why we felt like now is the time to accelerate investment plan for growth. I'm gonna talk about the drivers of our business at a macro level. I'm gonna spend a minute or two talking about ACV and bookings. It's a new metric we introduced this year. We spent a lot of time today talking about that. I'm gonna talk about our Vision 2030 operating leverage, why we're doing the tech modernization, why we think the time's now, why the investment has a great economic return. I'm gonna briefly hit 2026 guidance just because we are coming out of our guide over the last few weeks. Then finally, I'm gonna drum roll end on our Vision 2030 model, which includes a midpoint of 2028 with actual figures and then our exit rate for Vision 2030.
Okay, we're gonna continue to kill folks with the journey because the journey is as important as the mission. When I look at 2025, to me as a CFO, the three most important ingredients of the turn were the completion of the debt refinancing to reset our capital structure to provide us a few additional years of runway and an attractive cost to capital, the ability for us and the commencement of our tech modernization with a successful completion of the lift and shift to OCI, and then finally stabilizing our core business so that our investors and folks have belief that we can turn this company into a long-term growth engine. When we think about 2026, there's been a lot of sports analogies today. We are playing offense.
When we look at the deep roadmap, the elevated level of investment, each one of these is informed by a client, informed by a product roadmap, interrogated by a leadership team, supported by strong financials and business cases, and then armed with a sales organization that can actually prove that they can sell things. The pronouncement from Travis this morning about a $100 million internal aspiration is strong double-digit growth on strong double-digit growth. Finally, with respect to going on offense, it's in go-to-market, product, technology, and innovation. We think we will continue to be the market leader in certain categories, and we're gonna continue to double down and invest in those categories. All right. When I think about our guiding principles, let's start with our addressable market.
Previously, if you look at the first bubble, our core addressable market is a very large market, right? It is a $16 billion market within a multi-trillion dollar industry, because only a fraction of the time does a claim go out-of-network. We've made our business out of building a curated network with robust reference-based pricing and analytics, and enforced by payment and revenue integrity solutions to catch boo-boos on claims as they go through the adjudication and payment life cycle. When you look at the next three bubbles, over the last year and change, we've more than doubled our addressable market from $16 billion to over $35 billion. When you look at the next bubble in payer and provider analytics, we acquired a company in 2023 that was formerly known as BST that has now become data analytics.
You've heard from multiple customers and partners today how they're using our products to deliver economic value to them. When you look at that market, just that market alone is equally as big as our core market. From prior lives, that market is growing mid- to high-single-digit %, and even in some aspects, double-digit %. That is where we have our data assets, and we strongly feel that we have the right to play and win in those markets. Finally, when you look at alternative employment networks, we acquired a business a few years ago, formerly known as HST, now rebranded as Vistara, which is a reference-based plan, reference-based pricing health plan in a box that brokers TPAs and folks who are looking downmarket to provide value in care for smaller employee populations.
Finally, in our international business, we launched our international business in May of last year. That business is now generating revenue. We expect the revenue to increase. We've signed four clients, and we have a international team now based in Dubai that is dozens of folks and growing. Moving on to our addressable markets, the pie has grown, and our investment to surround the pie is what is informed by our capital allocation. Simply put, we're here to diversify our business, and we can only do that by accelerating growth and becoming less reliant on a few large customers to underwrite our capital structure. If we do that over time, we de-lever and de-risk the business. Priorities one, two, three, four, five are investing in our Vision 2030 plan.
That is our tech modernization, the alignment of general managers with bag sellers and segment leaders, and a shared service and set of tools and processes to make sure that we have the highest probability of running a strong growth, internationally focused company. We're gonna continue to focus on debt paydown. There's no mistake. We are in a highly leveraged situation, but we did put a renewed focus on M&A within the envelope of our capital structure, and we completed a small tuck-in acquisition of a company, OPCG, that was a catalyst for us to land a top five provider system, which we announced this morning. Okay. Now let's go to the drivers and the macro. There's three basic macro drivers that affect our percentage of savings or our PSAV business, which is about 85% of our revenue.
First one is out-of-network volume, and I have details on each one of these that I'll walk through. Out-of-network volume has been stable at approximately 7% of all healthcare claims over the last five years. We expect that trend to continue, and that's what we've modeled in our Vision 2030 plan. Second is claims mix. We've talked about this consistently over the last year, and we have some evidence to support that care is moving outside of the four walls of the acute care hospital, moving into rural, moving into higher acuity specialty areas. We think that is a tailwind for our business. Regulatory and policy changes impact client budgets and how they're spending money.
If you look at our response to some of the significant legislation changes that have happened over the last few years, there was some hysteria that out-of-network would go away. When you look at a product like NSA, when NSA was passed in 2022, NSA and surprise bill is now our third largest product category within our largest segment claims intelligence. Okay. Now clicking into out-of-network, there's a couple of key important points. We sampled narrative data going from 2020 to 2024. What happened in that five-year periods? There was a global pandemic, there was a major regulatory change with NSA, and there was a recovery from a hyperinflationary environment as a result, of the pandemic.
If you look at the out-of-network claims from a sample, from a pretty large sample, close to 500 billion claims over a multi-year period, you can see the non-network provider line was stable between 7%-7.7%. We think this market is mature. We think this market is here to stay. Moving on to specialty products, something that again we've messaged is care is moving outside of the four walls of the hospital and into outpatient settings. When we look at our top ten specialty practice areas, that makes up over 80% of our identified savings, and importantly, it makes over 90% of our claims volume. Finally, payer networks are mature, right? That's. Don't let the data speak for itself, but out-of-network exposure and payer organizations do their best to limit in narrow networks.
There's a few reasons beyond the 7% that a claim might go out of network. We look at provider behavior, we look at certain specialty areas, and then just proverbial access and care gaps that happen in things like rural settings, which we talked about a little before. All of that underwrites what we believe to be a stable and consistent market over the last five years and through our model period over the coming five years. All right. Moving into our savings and savings by specialty. So the top two pie charts represent the 80% of identified savings. This is provider and facilities outpatient with the key categories. The bottom left is inpatient, which is 20% of our savings and about 10% of our claims.
Then the graph on the bottom right shows the highest acuity special areas, in which you can see if you stack weight the exit price to 100 from Q4 of 2024 and look at the next year, some of our highest volume categories between surgery, behavioral health, emergency, medicine, and pathology have anywhere from 5%-15% core inflation in the charges. That is critically important to understand because the movement of care to where our savings perform the best has base inflation layered on top of it. Some of these categories which have increased as a percentage of our total claims are increasing at a high market rate. This graph on the bottom right shows healthcare inflation.
Now thinking about the build-up on how the increase in inflation and charges and the increase of specialty categories that we perform well hooks to our revenue or percentage of PSAV revenue, which is most of our revenue. First, our claims volume on an absolute basis from Q4 of 2024- Q4 of 2025 was down 11%. That absolute claim volume decline was largely precipitated by one client, but if I strip that client out, the client that insourced some volume, claims would have been modestly down still, okay. Start off that with the kinda baseline. If I now approach the inflation from charges that I covered on the bottom right of the last slide, charges per claim went up 11% from Q4- Q4. Turns out our products work pretty well, and we had favorable mix.
We're able to identify additional value based on a base level of inflation in those specialty categories that drove our increase in identified savings and the mix improvement. We spent a whole lot of time today talking about things like ProPricer, like Autoflow, like NSA improvements. We spend a little bit of time and effort making our products work better. We have hundreds of thousands of rules and when you look at our revenue per claim on an absolute dollar basis from Q4 of 2024- Q4 of 2025, our revenue per claim was up $10 per claim, north of 66 against a comp of 56. Again, when we look at the future, these trends are important to capture and grab on to, but this is a walk of what happened in our business and our core business over the last 12 months. Okay.
Final point on regulatory and policy. We're in a highly regulated industry, and we have had a flurry of recent activity, right? I would say the most significant activity between One Big Beautiful Bill Act, the ACA subsidy, Rural Health Transformation Program in the last 15 years. Transparency is no longer optional, especially among state and federal agencies who are clamoring for savings because their budgets are constrained. When you think about our strategy being on the focus on affordability and transparency, it has a center of gravity with our customers as well as a center of gravity with policymakers. We believe strongly in affordability and transparency, and we're prepared for any subsequent and future regulatory changes, but that is the reality of being in a highly regulated business. Okay. Moving on to ACV and bookings.
I'm gonna brag for a minute, and our Chief Growth Officer, Tiffany Mesenchek, is in here, but humongous dittos to the team for building a sales organization and creating a double-digit path growth to bookings. Let's just look at the numbers. Our go-to-market success in 2025 was not an accident. We made purposeful investments to align segment leadership with bag sellers, client success, and the result of that was a $67.3 million bookings year, that, keep in mind, takes 2- 4 quarters to turn into revenue, with a $23 million booking quarter in Q4. On the year, we closed 650 opportunities with 30 net new logos. On top of that, we closed 108 deals over 100,000 of ACV, and that rate of larger deals closed was up 30% against 2024.
Our average deal size was up 50%, and importantly, our average deal cycle improved by 30%. We started giving indications of building a sales funnel. Our sales funnel throughout the course of the year from Q1 to Q4 exit, we created an additional 150% funnel off the base. We now enjoy a multi nine-figure funnel with an invested-in sales organization that can help us deliver our aspirational target that we covered this morning. The final point I would make here is the pie chart, 70%, so the upsell cross-sell on the organic growth, over 70% of our $67 million of bookings came from our current install base. It was selling new things to our current customers. You heard Tres Health has bought virtually everything from us, all the way to organic growth within our core account base.
Importantly, 30% of our bookings came from net new clients. We like the diversification here. When you see the proof points of a horizontal product, vertical market strategy aligned with segment leadership and general managers to deliver, to me, this is probably the most important slide to say our strategy is working. All right, on to operating leverage. We teased this at our investor roundtable last year. We got some questions from investors: Why are you investing so much money? Why aren't you delivering free cash flow faster? What does the lift and shift to Oracle and rewriting all of your applications mean? Two-thirds of our time and effort on our transformation is devoted to the tech modernization.
The big milestone was the lift and shift ahead of schedule to OCI, which enables us to take advantage of all of the future tools and technology that Oracle is gonna develop. If you think about it, cloud-native modern platform, unified data architecture set up to scale globally and enable us to capture all of the innovation that's gonna happen in the incoming years with the extension of AI. We expect to be largely complete with our tech monetization in calendar 2028, and I'll cover that in the financials in a few seconds. On top of that, we expect an approximately 30%-35% economic return from the incremental investment that we're making.
This is important because if you think about why we would invest a dollar of capital and what would the expected return, our internal expectations are if a project doesn't deliver or an investment doesn't deliver roughly our unlevered free cash flow return, I would rather pay down debt than invest in the project. We have a pretty large investment that unlocks growth, unlocks new markets, and has a pretty good and pretty attractive financial return. The other areas I would just highlight on business realignment and business process optimization as a large public company and as investors, you should just expect us to do these things. Aligning a general manager organization to segment leaders and our go-to-market function is just what big companies do.
We're gonna operate like a big company, and we're gonna focus on building the internal tools, systems and processes to address the future. Those two elements are part of our transformation as well. Now when I think about clicking down into our technology transformation, I mentioned that we did the lift and shift, which we completed on OCI. We do have some one-time CapEx that shifts to OpEx and then bakes into our run rate this year. I thought it helpful to provide kind of three flavors of ice cream for you today. First is our pre-transformation level of investment and what we are spending our time and effort from a software capitalization perspective.
We historically have said, and I looked at even our last investor day that we did in 2023, we said we spent roughly half the time running our business capital and half the time on growth. Well, over the last few years, our revenues declined. We took a circumspect look at what we spent our time and effort with respect to growth capital to reposition. If you look at the capital intensity, it was about 11%-14% of revenue. Mid-transformation, we do expect a slightly elevated capital as a % of total revenue. If you look importantly, a whole lot less time on run capital. That is the benefit of scale with the lift and shift to Oracle, right? We're not running data centers anymore.
Michael and his team don't have to buy hardware or software or manage the overhead of data center assets. Importantly, if you look at the rest of the pie chart, 70% of the time on transform and grow. Post-transformation, we expect the transformation to be complete in approximately 2028. Post-transformation is where we really get scale and capital efficiency. We're still gonna spend a little bit of time thinking about transformation, as we should, but we think we're gonna nestle into about a third or so of our time on run cost and most of our time on a refined list of growth objectives. The most important thing to realize, it's on a much more capital efficient footing.
If you look at the 10%-12% CapEx as a percentage of revenue, that is probably in line, maybe slightly less than pre-transformation, but it's working on the right things with a roadmap against either product innovation or something that a client has indicated us that they want us to deliver. We talked about these at length, but a few of the digital transformation examples in action. You make an investment decision as a company. What are you looking for? Well, I'm either looking to take revenue up, cost down, or improve client satisfaction or retention. If we look at the investments to deliver revenue growth, we talked about BenInsights today. We also talked about the data platform.
Right now, we have a marketplace with several APIs that partners can hook into our data infrastructure where data is accessible and available. That is fundamentally a different revenue model than a PSA-based payer services company. As a technology platform, we're gonna continue to invest in those areas because there is revenue potential there. Especially with BenInsights, we heard a lot today about new customer acquisition and the go-to-market through Oracle. For a cost reduction, think about the lift and shift to OCI and the capital efficiency you get from getting out of running a data center. Then I think about our NSA products, right? We had mentioned that Autoflow, which is the middle top box, and the improvements we made afford us the opportunity to enjoy a 7% competitive advantage against our nearest competitor on a much higher volume set.
Turning insights into action, the NSA Insights on the bottom right is the first cloud-native data API that gives real-time self-service to our customers, which makes us a whole lot. The better execution makes us a whole lot stickier with our customers, improves client retention, eventually we believe, improves better revenue. Okay, I'm gonna hit on 2026 guidance really quick. We had just covered this, but the baseline three points here, revenue growth, EBITDA growth, return to positive free cash flow with an elevated investment profile. When I look at the revenue walk, we ended 2025 at $965 of revenue. It was approximately a 4% growth year-over-year. We did commercially sign a one-time commercial agreement with a large P&C customer, so I would step down my revenue base by 2%.
My gross revenue retention is an indication of how much of our core business and our total business we retain before any sales activity happens. What we're saying is in any given year, and this year what we've modeled, is 93-95 cents on every current customer dollar before you apply market factors, before you apply ACV from incremental bookings, we're counting on delivering. It's a combination of expectations around modest volume and kind of all the other net churn and attrition, 'cause we are in a competitive environment. We expect to retain 93-95 cents on every dollar. That is an incredibly sticky business. We then applied 4%-5% market factors. We are counting on improved mix. We talked about the increases from the elevated acuity levels, and we talked about healthcare inflation playing out.
We have a baseline assumption of market factors and mix, helping us 4%-5%. If you're walking left to right, we expect our base business, our total business to be approximately flat before we add new things that we've sold. On a raw dollar basis, our guide is 2%-4% growth. If you exclude the one-time revenue from the property and casualty business not repeating, it's a mid-single-digit growth business which aligns well to the bookings that we delivered that will eventually convert to revenue. Okay, now moving on to our revenue mix summary. We wanted to provide a couple of points of view on what is composed within our revenue. The graph on the left shows our revenue type as a % of total revenue.
We indexed to 2022 'cause it was the last time we were greater than $1 billion of revenue, and again, the guide range implies us returning in that range this year. As you can see, when I look at PSAV revenue as a percentage of total revenue in 2022, it was over 90% of our revenue, and we exited 2025 with PSAV revenue being approximately 84% of revenue. Couple of important points there. Our PSAV business is a great business. It is a high-margin business, and we expect it to be a big part of our business going forward through our Vision 2030 plan.
However, when we talk about de-risking our business and diversifying the business, we're looking at other ways to deliver durable revenue growth, and we've announced several in the last several earnings calls, several large enterprise deals that behave like recurring revenue businesses. We're gonna continue to look for ways to diversify our revenue stream, but this is an important point that diversification will mean PSAV remains still a good part of our revenue, but I would expect this trend to continue to decline over time. The graph on the right, Travis had mentioned it, but when you look at our client density as a percentage of our total revenue, one of the fears is what happens if one customer does X or Y?
The point of building a diversified business is you have a lot of customers who do business with you, require a lot more customers. When you look over that same period, we're about 10% less reliant on our top 10 customers. In 2022, our top 10 customers were nearly 80% of our revenue. We exited 2025, and our top 10 customers were under 68% of our revenue. Again, thinking about diversification, thinking about horizontal products to vertical markets, activating new logos, the plan is to continue to chip away at both of these so that we can build a more diversified and scaled business over time. All right, moving on to the 2030 model.
Now, taking a look at our business from the foundational year to the turn, we've done a whole lot of work, and we've invested a whole lot of time and effort over the last two years to get our business fit for growth. When we look at 2026 on the surface, doesn't look like a really exciting year, right? "Hey, you guys grew 4% last year. That's great. You're calling a 2%-4% number at kind of flat to down margins." What I would say is 2026 for us is an execution year. We're purposefully investing between $20 million-$25 million in our go-to-market functions to deliver strong double-digit bookings growth. And what we're doing is building a company that has a durable and growing foundation that eventually scales against our investment period through Vision 2030. Now, onto growth and profitability.
If you take the midpoint of the guide and apply that to 2028, we expect 2028 to be at least $1.1 billion of revenue on at least $675 million of EBITDA, which implies a business that grows 4%-6% at low 60s EBITDA margin. Why is that important? We have a steady core where we renewed our large customers. We're booking new revenue, which over time, when you look at the ACV to bookings lag to revenue, takes about 2-4 quarters. We think we start to really get momentum into 2027 and through 2028, but still on a more steady growth plane. At the midpoint, still pretty pleased with a mid-single-digit growth with good EBITDA contribution. Now, taking that forward to Vision 2030, we expect growth to accelerate.
I think the key point is the financial aspiration we laid out last March when we had our investor summit, was we had the aspiration to become a rule of 70 company, which is actually pretty rare. What a rule of 70 company means is that when you add revenue growth plus EBITDA margin, it sum totals 70. If you look at the midpoint of our guide and the exit rate for 2030, that's exactly what this implies. What it also implies is a business that delivers at least $1.3 billion of revenue on at least $800 million of EBITDA.
I would also note that we expect our technology modernization to largely be complete in 2028, and the impact and efficiencies that we get from operating leverage start to really take hold from 2028, 2029 and 2030. All right, now moving on to free cash flow. We talked about returning to positive free cash flow this year, and the midpoint of our 2028 guide is at least $75 million of levered free cash flow at less than 7x leverage. Again, 2028 will have a small piece of investment as we complete our tech modernization, but you're starting to see what looks like a business that generates excess free cash flow.
When I look at our 2028 milestone, and I look at our free cash flow yield, it's about a 6%-7% free cash flow yield as a percentage of revenue. From 2028 to 2030, however, once tech modernization is done, once the compounding effect of our ACV and new bookings turns into revenue, and once the capital efficiency of the business from our tech modernization completes, we look at a business that is about 5x levered, that generates approximately $225 or more of levered free cash flow. When I look at the free cash flow yield on this business from 2028 to 2030, improves approximately 3x to the mid-teens. Okay. I'll leave you with this before I hand it back to Travis.
We get asked often about what's our target operating model, so we thought it helpful to provide to our investors and analyst community. When I look at our gross margin, so taking our revenue minus our cost of goods sold, we expect to run a gross margin in the mid- to high 70s%, which is at the top end of a common technology company. Technology companies run gross margins historically anywhere from 60%-85%. We're expecting to run gross margin in the mid- to high 70s%. When I look at R&D, we will have a small component of R&D that's non-capitalized.
When I look at sales and marketing and G&A, so SG&A, we expect that to be about 11%-13% of our revenue, with a higher index towards sales and marketing as we get more scale leverage in G&A, as a result of some of the investments. Again, when we look at the kinda midpoint and the implied guide, it is an EBITDA margin business that supports a 7%-9% growth business that gets us to the sum total of a rule of 70 company. With that, I'm gonna hand it over to Travis, and I think we have plenty of time for Q&A, and I'm sure you guys have questions.
Okay. Thanks, Doug. Appreciate it. CFOs don't usually get a round of applause. Enjoy that. Soak that in, Doug. Couple things, and then we will take some questions, my favorite part of the day. One is I gotta commend you all. Your ability to focus is immense. I've been standing here watching. I gotta say focus group perked up quite a bit. Todd keeps his job. Where's Todd? We successfully got through. Thank you, Todd, for that. We appreciate it. We were all rooting for you. You've done no, really, it's been a really good day. This is a lot of information. I'll just take two minutes and sum it up.
Some key takeaways beyond obviously the financial picture that Doug showed, hopefully we're starting to give you more detail, more information, decode the business so you can model it. That's our goal. We're gonna laser focus on our clients. You got to meet some great people. You haven't had a chance to see this full management team, so you got that today. And as I say, you know, for me as a CEO, purpose actually matters a lot because I need people to get motivated every day to do the things that you just described there. It's not easy. We have purpose. Because we have purpose, we show up with enthusiasm. We are executing. We're on a journey. We talked about that earlier. We're focused on it, and we're generating results.
The results are starting to come, no doubt about it, and we work across the lifecycle. I know we sometimes talk about things in snippets because we have short amounts of time to discuss them. Today was useful because we're able to see where we interact across the entirety of the lifecycle, from payer to RCM, all the way to provider. That's important. We're growing. Pipeline growth. You've seen material growth in our pipeline, our sales pipeline. Our bookings are coming. They're starting to come, and we're growing. Revenue is starting to come from that. We're getting, I think, more, dare I say, elegant in our ability to predict revenue conversion. We're gonna keep working on that. We know it's super important to all of you in the room.
We'll be investing for growth, but we're also investing for operating leverage. We expect those two things to come together in a meaningful way for us over the course of this journey in the near future, not in the way distant future. There's enough proof points and reality there that's showing up. We wake up every day kinda angry 'cause we think we're wildly undervalued.
We don't think we're getting the credit for what we've done since I've been here anyway, and so we're gonna continue to try to prove ourselves every day, to continue to earn your trust, as you think about the many things you could do in terms of your investment thesis and the way you're evaluating our company. You know, I'll really quickly, this is I think my first few months here, I actually put this up and said, "This is what we're gonna become," and very early in the journey, and we're demonstrating success on every single one of these. We've upgraded the management team materially. We've added hundreds of new clients when you look at our recent closures and our new markets. Our goal was durable, sustainable growth, not simply going back to the same well consistently day after day.
We want to create a durable, sustainable business that has a variety of customers and clients that we can withstand ups and downs based on market dynamics and still grow and deliver our results. We're diversifying the business. We like our position with products. We like our position with AI, and we've got rigor and discipline in the business, from the work that Jerry's done, where we think we can get more value while we reduce operating costs over time. You really put all that together, the piece that we have to unlock the full potential of the shareholder value is around the capital structure. We know that, and as Doug said, tell the team, "Look, you can assume there's one way out, and it's through.
One way out, and it's through, and through is organic growth." We're gonna grow the business. Our assumption is we're gonna delever the business over time, and we're gonna do it with precision, with smart investments, and keeping our promises to those of you that invest in the company. I close it there, and say, I think we have time for a few questions, but we're very happy with the progression that we're making against what we want to become. We know that, you know, it's starting to show up in results, and it's starting to show up with people in the room because when I first started here, all I did was go to leverage finance conferences. Like, "Are we gonna talk to investors?" Like, no one cares about you.
That was literally what I was told over and over. Well, a few people care about us, so you're in the room. We're making progress because we're becoming relevant, and we're gonna continue to do that and focus on that. Thank you for your time. We'll just open for questions. I know that I told the team. This is not gonna be one of those conferences where everyone's, like, wanting to go home. There are gonna be questions. All right, we'll just jump in. Todd, do you wanna? Yep.
Hopefully, there we go. When you have a question, just make sure you grab a mic. Jen's going on that side of the room.
Good.
Thanks, Jen. I'm gonna cheat, I'm gonna ask two.
Sure.
Just some maybe clarification. You guys spent a good amount of time on BenInsights and CompleteVue. Could you just remind us the revenue models for those segments, and then, you know, any sense of revenue contribution would be helpful in terms of putting those in order. Then second question would be. What would you need to see that would change your capital deployment focus on the organic opportunities? I am not naive. I got the stress on that. Are there certain areas, certain things that could happen where you would emphasize debt pay down or even strategic M&A on the other side?
Yeah. Is this on? I'll just use this. Is this on?
Sure.
Okay. Maybe let me start with that. Start with the second question first, and then maybe I'll kick it over to Jerry and team to talk about BenInsights. You know, taking a look at an investment like our tech modernization was obviously a big investment. It's a multi-year investment. When we look at the strategic opportunities that provides, it starts with if you're gonna invest in dollars, you're gonna provide an attractive return.
We think a 30%-35% economic return, which is a barometer for unlevered free cash flow, is where we would draw the watermark to say, "Now, does it make sense to accelerate debt pay down?" I think with our tech modernization, there's both an offense and a defensive component, which is why it was fundamental for us to start with the investment with Oracle and our tech modernization this year, right? It's to unlock all the future revenue potential, and we provided a base case. We expect to grow the business, and I think the tech modernization was fundamental. As we look at the future, the expectation when we start delivering excess free cash flow is to use significant proceeds to delever the company.
When you look at us arriving as an approximately five times levered company by 2030 and generating a couple hundred million of free cash flow a year, the expectation is a good use of those proceeds are to help accelerate delevering. When you think about it, that to us is a prudent use of capital in the medium to long term. The big investment and the focus on the tech modernization, we think was both an offensive and defensive measure. We simply needed to do the investment and we're really happy about the prospects of it. On BenInsights, the data and analytics business is reported within Claims Intelligence from our segment reporting. We don't give out specific details. That's something we might share in the future. The business is still relatively small.
In terms of the revenue, maybe you just speak about kind of clients and their revenue model.
Go.
Thanks, Doug. Yeah, so what is now BenInsights, you know, is one of the capabilities we purchased by way of BST in 2023. We spent a good bit of our investment time modernizing that and getting it to a maturity level where we've sold it to a number of clients, right? It really begins, you know, with plan design, right? It pairs well with
All of the other products and solutions that we offer from, you know, ACE, coding the claims correctly, you can apply our network to it. In terms of a standalone, BenInsights, revenue model for I think that was the essence of your question, ultimately, we will sell it as a service inside of human capital management systems, so it becomes kind of the TurboTax for healthcare plan design, broadly available to large and small businesses across the country. Also a tool that enables TPAs and other, payers to provide that service that's better than what's out there in the marketplace today.
For, you know, more than a couple of handfuls of clients where we've gone in and done an assessment on a payer's book of business, generally we find depending upon how good they are and how long they've been at it, we find between 5% and 20% incremental benefit to the employer, right? We've licensed that as a software as a service, along with a PSAV component for upside, you know, given the variability that can happen during any plan year.
Okay.
Hi. Stan Berenshteyn, Wells Fargo. Right here. I guess two questions. First, maybe follow up on BenInsights. It seems like it's a pretty crowded field. There's a lot of services in that area. I guess, how do you stand out? How do you displace existing vendors that are already in the space?
Yeah, maybe I'll take the first shot at that. When you look at the delivery mechanism, managing your plan spend is not a technical problem, it's a behavior problem. If you look at the distribution of how analytics are sold today, that distribution is carried through brokers and consultants. The big aha that we had as we started unpacking what was the BST and BenInsights was the delivery mechanism through human capital is where all of the other employee information is. Re-platforming BenInsights to be able to be sold as an enterprise piece of technology, to Carol's point earlier, allows a benefits professional to assess her or his employee population on a daily basis.
We think that is a buying behavior that we're aspiring to change with partners like Oracle, but primarily, it's been a distribution problem on how benefits and savings programs have been sold through brokers and consultants.
Yeah, I think, I'll just comment. I mean, I'm not sure there's a lot of that I would call highly truly competitive for a lot of what we can actually do. I do think there's a lot of commodities out there that offer data. So here's some transparency data. Here's some information, basically taking the MRF files and other publicly available means and putting them together in something. The real value is in the insights, which is what Sarah talked about with Kinetiq earlier. The way Kinetiq uses it and actually takes that insight and turns it into meaningful cost takeout relative to, say, drugs for the single patient example, which was $2.4 million. So I actually think there's a service wrapper for this that distinguishes the business, which is how we'll get more sell-through.
Which is why I was very enthusiastic about signing a large health system, because the next thing we're gonna do is pull through our products like BenInsights with consulting attached. That has been the single most vexing problem since I've got here in my mind, is getting full value for that business when everyone you talk to immediately sees the value, and they're like, "Everyone should just buy that." We had the discussion on break with someone, right? It's hard to get it through the channel of healthcare. The channel of healthcare is broker, TPA, consultant, and other, which is inside of a fixed PEPM, and they're not moving off that PEPM. You need to either be inside of that and displace someone, or you gotta find a path, a different path.
Which is why I like vertical markets, because we have multiple paths. We're gonna try a direct-to-employer path through HCM. We're gonna try a TPA-based path. We're gonna try a broker-based path, and we're gonna try a direct-to-provider path along a managed service offering. I think we have to attack the problem from multiple angles to get full value from the analytics business versus just a pure productized thing that you just fire into a market. I think that's gonna be a differentiator for us.
Okay, maybe just a quick follow-up on AI. You obviously have a lot of focus there. A lot of the last mile delivery of the services that you do, it seems like negotiation requires an actual headcount. Do you see AI potentially displacing or maybe driving efficiencies on that area where you can maybe leverage AI there?
Yeah.
Thanks.
Maybe Michael and pass it to Jerry.
Yeah, the answer to that question is absolutely yes. A lot of the work that we have is, as we're modernizing, we're actually building agentic AI, generative AI, to automate a lot of the manual tasks that require human decision-making. Yeah, that there's a definite plan, and that is part of what we're planning on doing. Do you wanna
I just wanted to add on the side that that project that won the hackathon was the last mile for BenInsights. We won that hackathon with KPMG and Oracle.
Yeah. Right.
One example of that, Stan, was, and Jerry talked a little bit about this, the surprise bill services, IDR, very manually intensive. Something that took three weeks to put together is an hour now. Generating IDR briefs, which is the argument that's used, part of it is predictive modeling on what's effective. Part of it is generative AI, where a human being doesn't actually have to spend days writing a brief, that it's done by it. Absolutely. It's little things, but it's a much broader context that we have.
Yeah. I think you asked about our negotiators, right? Financial negotiation, our negotiators in that part of our business and clinical. You know, we do a lot of hiring in those areas, but if you look at kind of the average productivity in terms of revenue generation, the benefit they get for clients, there's a pretty wide distribution as you come up the learning curve, as you get to form relationships with the providers and the other constituents, the counterparties. We've used the tools to not only improve the capacity of each person to process more claims and cases per day, but to get a higher benefit per claim. Getting people up that learning curve faster, we get a lot of benefit, fewer headcount, better results for our clients, and better revenue for Claritev.
We have about five minutes left, so if we all just ask, we're gonna kinda keep it going rapid fire here for our team as well.
Great. Thanks. This is Jason Cassorla of Guggenheim. Just a quick clarification to start. The new top five health system, is that part of the $80 million-$100 million of ACV or separate or incremental? And then, maybe just a question on CompleteVue. You've discussed this a bit earlier on the price transparency that's helped pricing disconnects, but an interesting point you flagged is the volume discovery side of the equation, like leveraging CompleteVue for reducing leakage or using data to underwrite new service lines. Could you maybe just talk about how CompleteVue can help bring down the total cost of care for an individual despite perhaps rising prices as you have that discussion? Thanks.
The answer to the first question is yes. And we'll probably give some more details on the next earnings call since it just officially signed. But the answer to the first question is yes. Who do we want to take the CompleteVue question? Maybe Sean?
Yeah. To answer your question around like lowering the cost of care, I wanna refer back to Brian and what Brian was talking about. Brian is in a rural market, okay? His price points are lower, okay, than somebody actually going into an urban market. By him opening up new additional lines, he's capturing that volume at a lower price point. It's beneficial for both payers and providers. Brian's raising his net revenue, keeping things local, as well as he's helping the overall cost structure as well. Does that help?
Okay.
Thanks.
I'm gonna go.
Jess Tassan with Piper Sandler. Thank you guys for the day. It's been super helpful. I wanted to just come back to the top five health system win. Can you just describe what is the managed services offering? How is it billed? What segment does it sit in? And then I guess just how does the margin profile of that managed services offering compare to your existing business? And should we kind of expect CompleteVue to ramp through, you know, managed services linchpin or foothold type deals in the future? Thanks.
Yeah. Maybe I'll answer the latter part of that first. We'll give those details on the Q1 earnings call, and we'll walk through the segmentation and the model. The managed service business is not gonna be like Data iSight or a PSAV business. We think about the total package of selling through managed services with other offerings to arrive at an attractive margin business in total. We would expect the business to probably be half as profitable as our core business. This is our first client, so for us, the learning is incredible as anything. I think when you look at the story surrounding with other technology and solutions, we would expect that relationship to grow.
When you look at the total client, we would expect the margin to be north of what the managed services agreement would explicitly denote.
Look, there's a massive, I would say, need for capability insights for health systems and hospitals that have EMRs and other systems that can't maximize the use clinically, let alone, you know, procedurally with other pricing tools. Since the day I got here, I've been fielding calls about stepping into that, and we've been actually fending it off, wanting to make sure that it was on strategy, on brand for us. We could get to the attractive margin profile that we wanted, and we had other products that we could pull through, massive client acquisition, if you're able to sell it over and over and over and over. What we don't intend to be is a managed services company.
What we do intend is to acquire clients and pull through our products associated. Example would be, we will not be providing a level one help desk and doing password resets. Not gonna be doing that. What we will do is look at complex clinical workflows, helping them understand how to maximize the use of the technology they have. Oh, by the way, let me just go out in every region you have, which is every state for this particular client. I'm happy to go do a pricing study for you. I'm happy to go do a competitive analysis for you. I'm happy to show you BenInsights and how that works and where we think we could find value for the drugs that you're using and the prices that you're paying for those.
I view it as a material opportunity in the provider segment in order to use the totality of our tools, but also some of the expertise that, one, we have here because we've hired folks who know how to do this, but two, we also acquired. That's why we did that tuck-in, frankly, because it was an ability to get this client in, an adjacency and use some of our existing products. That's how we're thinking about it.
We have time for one last one here from Daniel.
Thanks, guys, and thanks for all the detail. Daniel Grosslight with Citi. I guess I wanna focus a little bit on the 2026 guide or the building blocks to the 2026 guide and then bridge that to the longer term projections. I really wanna focus on the gross retention being down 5%-6%. If we back out the large client attrition from last year, Doug, I think you mentioned it was kind of flattish from a volume perspective. Why are we seeing kinda this decline in the gross revenue retention, if in fact we are seeing that? Then as we bridge to 2028 and 2030 and beyond, can you help us think through those building blocks, gross revenue retention, mix shift, ACV, and inorganic growth as we get to that high single digit growth rate?
Sure. What we attempted to do was simplify the components of our revenue, and the reality is, you know, before you apply any net incremental bookings, so before sales activity, we try to walk the components of kind of a base volume environment that was slightly down last year, and walk that against how we've modeled for kind of the base business, including all churn and attrition, which like I said, a low- to mid-90s% retention is actually a fairly good thing. But, you know, we do have clients that attrit, right? Small clients. We operate, you know, down segment, our Vistara business, for instance, you're rebidding a lot of small deals and resigning a lot of small deals.
I would think about it in terms of we're planning low single-digit volume decline that is being offset by continued favorable price and mix. Again, I think I would refer back to the specialty categories. We would expect that to continue. Then really when you layer in the revenue conversion from the new bookings in ACV, we think the second half of the year is especially where our stronger bookings at the end of last year start to compound our revenue. When you look at the exit rate of this business, it's comfortably at the top end of the guide.
Then thinking about the components of gross and net revenue retention going forward, we would look, you know, we didn't provide explicit details through 2028 and 2030, but the trend is, and if, especially if you think about another strong double-digit bookings growth year, as we continue to grow our bookings, and we set, you know, Travis set a target for $100 million, but if you just take kind of a strong double-digit growth number and compound that over time, the next two to three years, we stabilize the core business. We have a compounding growth business. That's how we go from kind of a mid-single digit growth midpoint to a high single digit growth exit from 2028- 2030.
We wouldn't expect when you look at kind of gross and net revenue retention, we've taken a modest and moderate view of base volumes with basically price and healthcare inflation and mix offsetting those, and then the growth rate from the new bookings to really start to compound 2028, 2029 and 2030.
Yeah, I'll just add one thing to that. I mean, we're trying to give you the best visibility we can to model something that we don't fully control. We don't control what happens on the other side of the employer group, where they go. I mean, they switch between all the time, so we don't have total control over whether they use Cigna, Elevance, United, et cetera. There's always movement on the other side of that that isn't even always a reflection of our capability or service. It's just simply groups move between payers. There's some natural movement there that creates some level of attrition for us on the client base. My experience, that's extremely high number. I mean, we thought we were doing incredibly well at like 88% in prior lives.
We'll take this all day, but we have to sell. Like I'm not solely a salesperson, but I like to sell. We need to sell our way into growth against that number now that we're able to peg it to a percentage based on, you know, our historical averages, if that makes sense. Yeah.
We're at time. I wanna say thank you to everybody. To give us four hours of your day, five hours is a great commitment. We really do appreciate it. Thanks to everyone on the webcast for listening in. I'm gonna turn it back to Travis here for some just final remarks, just to say goodbye in a moment. Appreciate you all coming. We look forward to your follow-ups and talking to you soon. Travis?
Yeah, I don't have anything to add other than send us your questions, send us your feedback, what do we do well, we not do well. We'll listen, and we appreciate it. Thanks for your time.
Great. Thank you.