Way too much feedback. We good? I'll stand back here. If anyone has questions about the non-GAAP measures or definitions contained in today's presentation, please see the back of the presentation. With that, I'm gonna introduce Evolent's CEO, Seth Blackley.
All right. Welcome. We are glad you're here. Just to orient you, right across the street is the Evolent worldwide headquarters. You're here in D.C., it's 70 degrees, no humidity. It's a very typical summer D.C. day. If you're not from D.C., this is exactly what it's like all summer, so come see us. We started Evolent 12 years ago, the future really has never been brighter for the company. I think we have a fantastic morning put together, and I wanna dive into the agenda and orient you to the overview for the day. I'm gonna spend about 15 minutes going through briefly what Evolent does and how we create value for our shareholders, for our customers, for our employees, and for our patients.
I'll turn it over to Dan McCarthy, our President, who'll go deep into our focus strategy around value-based specialty care. After that, we're gonna go deep across a number of spotlights around customers, value proposition, and our underlying infrastructure and technology. Thrilled you'll then get to hear from Kali Beyah, who is our Chief People and Brand Officer, about why talent is a differentiator for the company. Of course, we'll finish with John and a deep dive into the numbers. Certainly save time for Q&A at the end as well. Let me just start by orienting you to Evolent, what we do and how we do it, for those of you particularly who may be new to the business. If you think about who our customers are in the bottom right, health plans and risk-bearing providers.
What we do for them is help lower cost and improve quality for patients with complex conditions. Think about cancer, think about cardiology, musculoskeletal and the like. Our users are doctors. These are oncologists, cardiologists, orthopods, and the like. At the top, last but not least, certainly our motivation is the patient. Our mission is about patient, and increasingly we're doing more to engage with the patient. You certainly can see on the right-hand side of the page an overview of the types of organizations we work with. They're gonna be both health plans, but also organizations that are in the kinda risk-bearing provider category. I did wanna take a second just to give a little bit of history on Evolent for those of you who are, again, new to the story.
If you think about 2011, we founded the company. The early days of Evolent, our customer base was actually the provider community. We built a lot of experience working directly with providers. That is in our DNA. One of the big themes you're gonna hear today is about how we influence physicians. Not telling them what to do or not telling them no, but influencing their care. Think of it as a B2B second opinion service in a lot of ways. How do we influence their care to make the care better for the patient and cheaper for the plan? We built a lot of that DNA in the early years of Evolent. In the middle, you know, 2017, 2018, 2019, Evolent really began to focus on value-based specialty care. I'd say we learned 2 things during that time period.
One is that we had a unique ability to influence specialists through the New Century asset, but a lot of the other things that we did in our DNA, we had a real ability to make change happen, change the way healthcare was delivered. Second thing we noticed is that, you know, if you're a payer, you had a lot of options for risk-bearing primary care, right? There were great companies like Oak Street, like Agilon, like Aledade, that began to crop up during that period. I think we saw a huge opening in what I would call value-based specialty care, right? Both because I think there weren't as many options for payers, it's a huge problem, and primary care is necessary but not sufficient, right?
We spent a lot of time, 2018, 2019, 2020, we had new team and many of the people you're gonna meet today in seat for a lot of the opportunities. I'd say more importantly, we've really focused our strategy, our capital, everything we did around value-based specialty care. You know, I'm excited. Today we, in some ways, are unveiling the next chapter of Evolent. One that we've been talking about, you've heard about it, think about it as value-based specialty care. We also have a logo, as you can see here on the bottom right-hand side of the page, that is meant to symbolically identify the next chapter for Evolent. We'll talk about that logo in a second. Interestingly, at the bottom, our mission hasn't changed, won't change. It's gonna remain the same through all of this.
Just a moment on the logo. You saw it probably when you walked in today. This is our new logo. You're gonna see this going forward. The wave is really about a pathway to better health for patients. If you look at the tagline at the bottom, specializing is obviously a reference to our product. Connected care is because our mission is making healthcare less siloed and making it more connected. When you hear from our customers today, when you hear from Dan, when you hear from Dr. Hertler and others, listen for the connection. The connection should be throughout everything we do, and I think it's one of the things that differentiates our product. Again, just a couple numbers here to kick us off, Evolent at a glance. We're roughly $2 billion of revenue. We've been growing quickly.
We're strongly profitable. Strong renewal rates, which to me matters because it means your customers like what you're doing, they wanna do more with you. We have a huge TAM, $150 billion, but I think interestingly, we have a $50 billion cross-sell opportunity, which you've seen that number. 5,000 employees. You're gonna hear from Kali about why those people are special. 300 of them are physicians. 1,100 others are licensed clinicians. You have 1,400 clinicians out of 5,000. It's a heavily clinical organization. When you think about the consistent operating priorities that we've hit over and over again, may have even bored you with each earnings call, every investor interaction, every decision we make goes through the lens of these 3 operating priorities.
Let me just hit those quickly 'cause I think they're core to our investment case. Strong organic growth. It is a very big market with a $50 billion cross-sell. We are less than 5% penetrated, and we have, we think, a differentiated product that is winning. That formula is powerful. Expanding margins. You know, I think here we have a track record, thanks to the team and all the work you've seen us do around executing on margin expansion. We also have a balance between our tech and services portfolio, those that are higher margin products and are more subscription-based with our Performance Suite. It gives us an ability to grow quickly and deliver margins. Finally, capital-efficient business. We have a strong cash flow profile.
We're gonna release some more information today about what that's gonna look like over time, we're clearly very focused on de-leveraging in the short and medium term. Just a moment on the product, just to tee us up, make sure everybody's oriented with the product. You think about what we do, we really focus on four specialties at the top, oncology, cardiology, musculoskeletal, and complex care. We have these three cross-cutting capabilities of advanced care planning and end of life, radiology, and genetic testing. At the bottom, underpinned by our technology and administrative platform. I wanna take just a second to connect the past to the future. If you think about Evolent Care Partners as a term you've heard from us, that was really on the primary care side. That is the dark blue box in the top right.
You'll hear about that as complex care going forward. It really is like another specialty when you think about it, and because of the way we're running the business now in an integrated fashion, you're gonna hear about it more in this fashion versus as a separate Evolent Care Partners. Still a crucial part to our future. At the bottom, if you remember Evolent Health Services, you're gonna hear about that as our administrative and technology platform. Yes, we still have some customers and will have customers that do that kind of work that we've done, but as you'll hear today, increasingly, that platform is really supporting our specialty strategy. This is how you're gonna see our product laid out going forward, and we're really excited about it.
I'd make one note on the ability to successfully integrate M&A, which we've done over the last few years with lower risk. In my opinion, part of that is because we've had the box at the bottom, which was our former EHS business, a lot of glue, a lot of talent, a lot of capability that's allowed us to tie this together. You know, from Dan, you're gonna hear a lot about our differentiation. Why do you win as a company? You know, it is a breadth and depth of this product. It is that we are trusted, and we're independent, and we are willing to guarantee results. That's pretty unique in the marketplace, and Dan and the team will talk a lot about that. Quickly, our growth formula, our growth algorithm. Why do we have so much confidence in the ability to grow over time?
Today, on the left, there are four ways we can grow on the left. We can add unique customers, partners. We have 73 of those to them today. There are obviously several hundred opportunities in the markets. There's a lot of running room there. Unique new logos, if you will. Second, we can add unique members. We have 41 million today. There's a possible opportunity in the U.S. of roughly 300 million that we view as our target opportunity. Running room there. 1.6 products on the PMPM side. There's 6 total products that we have on the PMPM side. We are 1.6 out of 6 penetrated there. That multiplies together to create your unique, excuse me, your product members of 66 million.
When you think about the total number of product members possible, it's about $1.8 billion. It's the $300 million times the 6 products on the PMPM side. We are penetrated $66 million out of $1.8 billion. Obviously, a bit of running room left there. Not to leave them out, but we have 2 case rate products, right? We have about 15,400 cases in Q1. We'll talk about that. That a little bit different than our PMPM products, but not to leave those out. We can also add those. That would be formerly known as IPG, as an example. Fourth and finally, we, on top of all that, we can add Performance Suite. Only about 5% of our product members are in the Performance Suite today.
We obviously added two states with Humana recently that are very significant. That's an example of that kind of addition that can add significantly to our growth. Across all those things, you're gonna hear a lot of confidence today about long-term sustainable growth. Margins, let me just orient you here. John will have a lot more detail later. You know, if you think about the two basic ways that we make money in the business, at the top of the page, the Performance Suite is a more of a risk-based capitation model that has mature margins, 12%-18%. That is about 25% of the company's profitability today. It's about half the revenue, about 25% of the profitability. It's still maturing, as we'll talk about.
On the bottom part of the page, our technology services and case rate products, these are subscription-based. These have mature margins in the, say, 50% range. That's 75% of our profitability today, about half of our revenue, as John will talk about. This should orient you well to the day, but really kind of keep these two categories in mind. Going forward, you're going to see us sunset the brands on the left. You're not going to hear us talk about Vital or IPG or some of the names that you've heard in the past. Going forward, we are Evolent. We are one integrated product, one integrated solution. I think that's really important for our customers, right? They want to buy an integrated product. They're going to show up as an integrated organization.
It's important for marketing, it's important for brand investment, but what it's really important for, in my opinion, is on the right-hand side of the page, where we have gone from a business unit management methodology to an integrated methodology over the last 6 months. Dan and the team will talk a lot more about this, but it's allowed a lot of scale in terms of shared capabilities. If we're gonna invest in machine learning or AI, we're gonna do it once. We're gonna spread it across all of our products. If we're gonna have a team, we're gonna have the best team possible. They're gonna manage all of the functions around that particular area. Software, one team. I think we've already seen a lot of efficiency from this, but interestingly, I'm
It'll help us make more money, but interestingly, I'm a believer that as things become more lean, often they become more nimble. We can move faster, we can actually innovate more quickly, and I think you're gonna hear about that today. Finally, I just wanna take a second on the team. A lot of the feedback in asking you all what you wanted to hear from today, most people said, "Don't want to hear from you, Seth. I want to hear from the team." I didn't take that personally, but you were right to ask 'cause there are a lot of really talented people in this organization. We have a deep and broad bench of talent.
number of the people that are in the senior leadership team, many of whom you are going to hear from today. I want to take one second to just introduce each of the people you will hear from today. Dan McCarthy, our President. Dan has been running our New Century business since 2019. That business has done pretty well. Give you a sense of Dan's leadership there, and he has taken on a much bigger role over the last year. John, everybody knows and has done a fantastic job running finance and a lot of other things in the company. Kali Beyah ran talent for Delta Air Lines and decided she wanted to spend time in healthcare for a whole host of reasons
When you think about scale, and growing this business, you know, the experience at a place like Delta Air Lines brings a different level of understanding to scale. Thrilled that she wanted to join us. She's been here for 8 months, she's been unbelievable, and you're gonna hear some nice things today, about how we use talent as a differentiator. Dr. Andy Hertler, 30 years as a practicing oncologist, ran an oncology group, so has been on the front lines, has been, you know, in a position to actually work with a whole group of oncologists. Certainly been our Chief Medical Officer for, I think, close to 5 years now, and has incredible depth. One of the world's experts on the topics you'll hear from today. Jordan Silvergleid, our Chief Product Officer you'll hear from today.
Jordan and I worked together first, 20 years ago. Jordan has a career in marrying product with outcomes for customers, and through The Advisory Board Company, and now been at Evolent for a long time. Scott Pritchard, clinical background, spent time at McKinsey, has been at Evolent for close to a decade. Really important part of the success we've had, and you'll hear from he and Emily Rafferty. Emily has very, very deep operational expertise, new role in Chief Operating Officer of the company, and I think you'll be impressed with what you hear today. Then Dr. John Tam, our Chief Strategy Officer, has been here since the beginning. You're gonna hear a lot of interesting things from the team. You can see the scores on the right.
This team's been together, we are committed to, you know, playing for the long term, we're gonna continue to, I think, drive a lot of success. You know, in terms of outlook, this is my last slide and I'm gonna pass it to Dan. You know, nothing new at the top. You understand what the outlook is for the year. We're reiterating that. We feel very confident in that. In the middle, also numbers you've seen before, numbers we feel confident in that we're reiterating today, we'll go into detail on. At the bottom, we are introducing a couple new metrics today in terms of what I would think of as the sustainable, consistent long-term numbers that we can put up, kinda after reaching that $300 million profitability level, mid-teens growth plus plus.
Everybody asks, "What does plus plus mean?" That means that 15% is a floor for us. Some years we'll be significantly higher, the Performance Suite dynamic plays into that, and we'll talk about that today. We feel really confident in sustainably growing the EBITDA line after we hit that $300 million, and, you know, certainly we'll grow a lot faster than that on EBITDA the next several years, but in the long term, at 20% plus. Excited about these numbers, feel good about them, and I'm really thrilled you're gonna get to hear from the team. With that, I'm gonna pass it to Dan McCarthy.
Thank you, Seth, and good morning, everyone. I'm excited to discuss the immense opportunity we have in value-based specialty care. We stand here today oriented around a strategy that's truly five years in the making. I remember the strategic offsite we had in early 2018, where we talked about how payers at the time were heavily indexed on their primary care investments, and yet eventually, they would realize that they need deep specialty solutions to drive quality and cost effectiveness. We had conviction that the next wave of value-based care would be focused on specialty, and ever since then, we've moved decisively at every step in that direction.
It started in early 2018 when we acquired New Century Health to get into oncology and cardiology. We built and innovated around that asset in important ways, and eventually, based on voice of customer, added key capabilities in end of life and surgical management, and most recently, MSK, radiology, and genetic testing. There's no greater validation of this strategy than the strong growth we've experienced from our specialty customers in the last 5 years. You can see here the specialty business has grown at a 54% CAGR since 2018 and now represents more than 80% of Evolent. Here we are in 2023, poised to accelerate our market leadership based on the combination of our differentiated products and the strong market demand. We moved with conviction against this strategy because fundamentally, we see a tremendous mission and market opportunity in value-based specialty care.
If you look on the left side of this slide, there's a large TAM for us to go run after, including, importantly, a $50 billion cross-sell opportunity within our specialty customers. On the right side, there is significant dissatisfaction with the status quo. If you think about the affordability crisis in U.S. healthcare, much of it comes from skyrocketing costs in areas like oncology, cardiology, and MSK. In terms of quality, we see wide variation in evidence-based medicine, with 75% of low-value care coming from a specialist. Finally, the experience leaves much to be desired as payers, providers, and members all struggle to navigate a system that's plagued by fear, friction, frustration, and fragmentation. Lots of unmet need in value-based specialty care, which is a direct result from the fact that trying to manage specialty care is extraordinarily difficult.
First, the clinical complexity is almost beyond comprehension. As two examples, there are more than 75,000 genetic tests on the market and more than 6,000 medical devices regulated by the FDA. Payers naturally look for external help, but the existing solutions in the market tend to be broad but thin or deep but fragmented. Number 2, payers typically try to manage specialty care through utilization management. The problem with traditional UM is that it causes a lot of abrasion and friction with providers. Even if it works a little bit in the short term, it's generally not a winning, sustainable strategy for the long term. Number 3, specialists generally are not aligned around quality and cost outcomes, the fee-for-service mentality in specialty care is pervasive.
You can see some stats here on how a substantial portion of the economics of a cancer practice come from things like buy-and-bill rebates and consultant fees. Fourth and finally, the member voice, sadly, is often not included in their care journey, despite ample evidence that's what members want. In the end, shared decision-making ends up being a buzzword that's an exception rather than the norm. As we look to accelerate our market leadership and truly transform specialty care in the United States, we believe it's imperative that we tackle head-on each of the challenges that I just walked through.
To address clinical complexity, we have specialty expertise that is broad, deep, and integrated, powered by our 1,400 clinicians in the organization, complemented by our independent scientific advisory boards, who ultimately work together to create the core intellectual property of the business, which is our value-based pathways and initiatives. To address the friction from traditional UM, we have a decision support tool that is purpose-built for specialists and purpose-built for value-based care, trying to make it as easy as possible for specialists to make high-value treatment choices. To address the fee-for-service mentality in specialty care, we have a comprehensive suite of provider alignment capabilities around things like alternative payment models, quality benchmarks, and peer-to-peer consultations.
Lastly, to address the unfortunate truth that the member voice is often not included in their care, we believe it's important to integrate the member voice through the entire care journey, and therefore put a strong emphasis on things like advanced care planning. This is a visual depiction of what I just walked through. In essence, at the top, this is our set of broad, deep, integrated clinical solutions across specialty care. In number 2, we take that clinical IP and try to get it in front of the provider at the right time in the right way and make it as easy as possible for the provider to make the high-value choice. Number 3, in terms of provider alignment, is removing any and all obstacles and supporting the provider in every way we can to make the high-value choice.
Number four, around member journey, is making sure that that high-value choice importantly includes and reflects the values and goals and preferences of the member. All of this ultimately at the bottom is powered, enabled, and supported by the global technology and infrastructure of Evolent laser-pointed against the specialty care strategy. Here's an illustrative case study from one of our advanced markets that aims to bring to life what we just walked through. Here is a patient who's 81 years old, has congestive heart failure, and unfortunately just found a lump on his neck that turned out to be cancerous. As we think about driving as much clinical value for that patient as we can, it's important to think longitudinally across the entire care journey. What does that mean?
That means upstream in the pretreatment phase, we're gonna engage with and support that patient's PCP in every way we can. That might mean that we are consulting with that PCP and providing data and information that helps them avoid what would otherwise be an unnecessary cardiology referral. It also means that we'll likely provide quality data to the PCP on the oncology network so they know where to make a high-value referral decision. Given the fact that this patient has an underlying heart condition, we wanna make sure that we're engaging that patient early and often around their values, their goals, and their preferences even before they hit the oncologist office.
Once that patient ends up in the office of a high-value oncologist, then we're in the middle treatment phase, and here our comprehensive pathways aim to bring together the various puzzle pieces of the oncology journey to make the best treatment decisions we can for the patient. That means we will likely recommend proactively genetic testing so that we can get this patient on the right checkpoint inhibitor the first time and not the second. Once they're on that right regimen, let's make sure after a few months that we proactively recommend advanced imaging to see if the tumor is growing. If the tumor is growing, the treatment is not working, and we need to find an alternative for that patient. We also need to take into account the cardiotoxicity profile of the regimen, given the underlying heart condition of the patient.
Ultimately, as I talked about before, our decision support tool is going to nudge the oncologist to make the best decisions they can. We're gonna do things like automatic dose rounding. We're gonna highlight the preferred regimens. We're gonna show patient co-pays. We're gonna show black box warnings in terms of toxicity. Provide all of that at the right time and the right way to the oncologist. We're not gonna stop there, though. In terms of number 3 in the middle, we wanna make sure we wrap an alternative payment model around this patient's oncologist so they can focus purely on quality without any concerns about income degradation. Giving an APM is necessary but not sufficient.
We also need to make sure we are giving clear performance data to the oncologists so they understand how they are performing on the quality measures relative to their local, regional, and national peers. When necessary, we're gonna support that local practice. Oncologists and pharmacists at Evolent are going to engage in a true peer-to-peer way with the local practice on scientific literature, on the interaction between the anti-cancer treatment and the cardiac meds the patient's taking, and make sure that we are providing that B2B second opinion service that Seth talked about earlier. Finally, the last row in the middle, it's great that the patient had an early advanced care plan, but we wanna make sure that doesn't live on an island.
With the patient's consent, we're going to make sure that advance care plan is shared with the oncologist so everybody's on the same exact page. Finally, let's fast-forward a couple years, and sadly and unfortunately at that point, the patient is no longer responsive to treatment. At that point, we're in the post-treatment phase. Here, where we are focusing is making sure that we are honoring and enabling the goals, preferences, and values of the member, supporting the patient in all the conversations they need to have with their family, their caregivers, and their providers. Ultimately, the sum total of this case study is higher quality care, it's more cost-effective care, it's a better experience for the PCP who's kept in the loop, as well as the oncologist who's supported.
Most of all, it's better for the patient who has their goals, preferences, and values honored and reflected in the care journey. As we deploy our model, ultimately it results in higher value decision-making by specialists. We are extremely proud of that, and we see that over and over and over again. We see it in oncology as Level 1 Pathways adherence increases over time. You can see this example going from 49% to 90%. We see it in MSK as surgeons tend to make higher value device selection decisions over time when they work with us, and we see it in cardiology as the appropriate use criteria score improves over time. That last example, in particular, I think nicely encapsulates the power of our model, so let me spend one minute on it.
The AUC scoring system was developed by the American College of Cardiology, effectively trying to assess the clinical appropriateness of all procedures, tests, and interventions in cardiology. It's a 9-point scale. 9 is the highest quality score, 1 is the lowest quality score. As you look at this chart with the purple outline, you'll notice 2 lines. There's a light green line at the bottom, which is the initial starting AUC score of what the cardiologist submits. The other line, the dark blue line above it, is the final AUC score once Evolent engages with the cardiologist around high-quality decision making. There's 2 takeaways I would encourage us to have from this chart. Number 1, as shown by number 1, is that the blue line is always above the green line.
We are literally lifting up the quality of cardiac care over the entirety of the data set. Number two, and in my opinion, more importantly, we are teaching, we are training, and we are coaching the cardiologists to make better decisions on their own. You can see the initial starting AUC score improving over time from 6.6 to 7.7. As we think about sustainable long-term value creation in a market over a 10 or 20-year period, we believe voluntary behavior change by physicians is paramount to making that happen. Extremely proud of what this AUC score represents. As we improve decision-making by specialists, ultimately that allows us to deliver on the comprehensive value prop to our customers. That comprehensive value prop always starts with quality. We just talked about Level 1 Pathway scores in oncology.
We just talked about AUC scores in cardiology, but we track a litany of quality measures at Evolent, and extremely proud of that. Here are 2 examples. 79% of our clinical interventions in oncology lead to a less toxic regimen choice. Any of you with loved ones who've had cancer in the past knows how important that is. At the bottom, we had a 15% adherence improvement with guideline-directed medical therapy, effectively using medical therapy instead of something that would be far more invasive and interventional and unnecessary in cardiology. In the middle, a long-sustained track record of delivering outsized savings to our partners across all specialties, so again, a couple examples there.
All the way to the right, again, as we think about long-term sustainable savings and value in a market over a 10 or 20-year period, which is our ambition, we believe the how is just as important as the what. As we're trying to create this value, it's important to us that all stakeholders in specialty care are part of the solution. We are deeply proud of the 84% provider satisfaction rate and the 78 net promoter score for members who've gone through our advanced care planning program. That's a good segue to how we think about growth at Evolent. Our philosophy is that ultimately it comes down to 3 simple elements. First is building the right products that actually solve customer problems.
Number two is once you've built those products, let's make sure we deliver differentiated value to our customers across all those dimensions I just mentioned: quality, cost effectiveness, and experience. Number three, once we've built those products, once we deliver the value, let's make sure we can capture the resulting business opportunities that come by selling based on our results. We emphasize in our go-to-market approach all the win themes that Seth talked about earlier, and we believe over the last five years on the specialty care side, we've developed a core competency in terms of how to solution sell into enterprise payer accounts. Thinking about how to engage the top of the house, how to think about all the different stakeholders up, down, and across that you need to engage to get to yes. Principally, it starts with delivering value to our customers.
Here's 2 recent and powerful examples of earning the right to grow by delivering strong results. I use those words intentionally, earning the right to grow by delivering strong results. On the left side, you see Centene, rewind 4 years ago, we worked with Centene in 1 state with 1 product in 1 line of business, and here we are 4 years later, national footprint, all lines of business, several different products. On the right side, you see Molina, a similar story over a similar timeline. 4 years ago, we started small, a couple of states, just cardiology, tech, and services, and here we have oncology, cardiology, and Performance Suite across several states now.
Ultimately, what we see in these charts in 2023 and beyond for Centene and Molina is a direct reflection of the results and relationships that we created in 2020 and 2021. Earning the right to grow with these accounts by delivering strong results in quality, cost effectiveness, and experience. Even with all of the growth we've had with Molina and Centene over the last 4 years, there is still a ton of runway with both accounts. And more broadly, a ton of runway across our entire customer set. This slide shows the product penetration rate of our top 10 customers as defined by their total health plan membership. You'll note the footnote that this excludes our national health plan customers that are vertically integrated.
When you look at the top 10 customers as we define it right here, only a 14% weighted average product penetration. If you look on a revenue basis, it falls to something like 3%. A ton of runway here to earn the right to grow through delivering value across quality, cost effectiveness, and experience. That tees up what we feel is an exciting growth strategy across both tech and services and Performance Suite. On tech and services, we're gonna run head-on at that last slide we just showed. Another way to think about the data from the last slide is that on average, out of our six products, in terms of how we classify them, our customers only use 1.6. Again, a focused cross-sell plan to take that 1.6 and increase it in the years ahead.
On the new logo tech and services side, we've done a lot of voice of customer work. You can see the quote in the bottom left. We have heard loud and clear from our health plan prospects that they are looking for a more comprehensive, broader solution. We feel as though we have that now, really excited about going to market that way on the new logo side. If you look on the right side of the slide with Performance Suite, first order of business there is integrating and innovating our capabilities to drive even more value in oncology and cardiology, because the more value we drive in oncology and cardiology, the more growth we'll have because we'll be able to deliver more savings to payers and providers. We will be incubating an MSK Performance Suite product this year and next.
In terms of growth from Performance Suite, we see it coming from a number of different areas, one in particular we're excited about is the idea of pursuing market density for the Performance Suite. What I mean by that is we believe our performance and our stickiness both improve when we work with multiple payers in a market. It's also what providers want. If you read the quote at the bottom from a large cancer practice, it's much easier for a conduit to multiple payers as we think about having consistent alternative payment models. I think a nice testament to the power of market density is the fact that our Florida Oncology Performance Suite business has grown at a 30% CAGR since 2019 in terms of membership.
Again, really excited about the opportunity ahead of us to drive growth in both tech and services and Performance Suite. Let me leave you with three takeaways. First, the value-based specialty care opportunity, which we've been after for five years now, is a large and growing market with a $50 billion cross-sell opportunity and strong dissatisfaction with the current alternatives in the market. Number two, we have a differentiated set of products, both broad and deep, and more importantly than that, a clear set of proof points of delivering sustained value to our partners across quality, cost effectiveness, and experience. Number three, a focused cross-sell plan as well as new logo opportunities to drive growth in both tech and services and Performance Suite. You've heard a lot from me over the last 20 minutes.
You probably heard me say voice of customer a few times. It's a core to our DNA at Evolent is making sure to build the products that customers need. We're engaging with them over and over and over again. You heard a lot from me. What we're gonna do over the next 10 minutes is allow you to have voice of our customer. Really excited to share the next video clip, which as I mentioned, is 10 minutes long. It's a compilation of interviews we've done with the following 3 leaders at their health plan. Kim Henrichsen is SVP of Population Health at Centene. Dr. Yvonne Collins is Chief Medical Officer of CountyCare Health Plan. Finally, Pat Geraghty, President and CEO of Florida Blue and GuideWell.
Specialty care ranks pretty high amongst our pain points here at Centene. One of the reasons is because we see a great deal of fragmentation in specialty care. Some of the challenges in managing specialty care for our members go back to the fact that, you know, our goal is to have our members connected with a primary care provider. Oftentimes, however, that primary care provider does not even recognize or see what specialty services that member is accessing. That's where, again, the importance of solutions to help reduce that fragmentation and bring that full picture into play for that patient and that member. While at Centene, we have a lot of specialists across our organization.
We know that partnering with a company who is bringing together specialists, again, in a concentrated way, staying up to date on all of the literature that is coming out on an hourly basis almost these days about best treatments and most, you know, appropriate care pathways would take quite a bit of burden off of our team from having to develop that ourselves.
One of the benefits that we have found in partnering with a company that provides multiple services that are related, if you will, in some way or another, makes it much easier for us as a company to work with one company who is overseeing services for a variety of conditions because it really does help us as we are thinking about our members, helping our members navigate, it really helps stitch together some of those clinical pain points, and having a partner who can evaluate imaging for an example, and how that imaging relates to a cardiology procedure that might need to occur. It is important for Centene to work with an independent company. We chose to work with Evolent as a partner for a couple of reasons.
One, probably a primary reason was we've had great experience working with New Century Health, which is one of the Evolent companies. We like the model that they use in really thinking about the member experience, the provider experience, and how we can navigate from a really a clinical perspective in ensuring those high-quality outcomes at, again, at the lowest appropriate cost. With the acquisition of NIA has been a long-term partner with Centene, and we've had great experience in working with NIA. Again, similar values and mission driven, and our partnership has been a very positive one over the years.
I have had a lot of confidence in the partnership with Evolent and our desire to expand into additional markets and additional programs and services that Evolent offers, from oncology to end of life to cardiology, imaging services, et cetera.
As we look at specialty care, it's a high priority. Primary care physicians may not be as strategically placed to deal with these conditions unless they're part of a bigger group. When we look at oncology and value-based care, when providers know that we are constantly looking at the data, that we're looking not only at quantity of the care they provide, but the quality of that care. That is, are they prescribing antiemetics appropriately? Are they sticking to evidence-based chemotherapy regimens? Are they imaging when necessary and not just because something is going on? When we look at value-based care in oncology, a lot of studies have shown, dependent upon the study that you look at, anywhere from a 25% to a 35% decrease in cost. Evolent works with us in terms of oncology care via New Century Health.
New Century Health is our specialty benefit manager specifically for oncology. What they've done a really good job with is, number one, trying to remove that transactional UM relationship that we very commonly see and making that process more relational. What do I mean by that? They're going into physicians' offices. They're talking to physicians. They're talking to the non-clinical staff that very often are submitting authorizations. They're educating, and they're training. When we look at the provider side, New Century Health has taken all of the data that we know for oncology, and it's been massive over the last year. I think we had 22 new drugs come out just for oncology last year. What they've also done is allow providers to continue with the art of medicine, within the lines of looking at pathways.
As we talk about value-based care, especially for oncology, pathways are gonna be key, and that's what Evolent and New Century has helped us do. They've improved and constantly looked at the data to hone those L1 Pathways. If we continue to be proactive, which Evolent helps us do, then we eliminate that burden that so many providers, I think, associate with utilization management and the PA process, and really hone in on we wanna, again, make sure that the patient, excuse me, is getting the right treatment with the right time and the right setting. I did utilization management before I came to CountyCare. I oversaw our oncology program.
I'll tell you, when an oncologist called, and they would have a conversation with one of our primary care doctors, it was very different than having a conversation with an oncologist. The depth and breadth of knowledge is so different for specialty care that you have to have that specialist who hones in on that specific disease because it makes a difference. The other part of that, and I'm just gonna focus on oncology for a minute, as partners, we've also partnered with Vital Decisions. As an oncologist, palliative care and hospice is crucial to oncology. Palliative care we know begins at the moment of diagnosis.
The other part of that hospice and palliative care is that we know that there are a significant number of members who get chemotherapy in their last week of life, which is probably unnecessary and wasted, not only resources, but drug and funds. Really looking at, "Miss Jones, you have metastatic uterine cancer. I'm never gonna cure your disease. You have significant side effects. Let's talk about options." I think that part of the partnership with CountyCare and Evolent and Vital Decisions has become more impactful. I think members are beginning to understand, yes, we will take care of you. Let's look at congestive heart failure as an example. Congestive heart failure, again, a very costly disease.
We know that, in order to keep those members not only having a quality of life but out of the hospital, it takes a team. Not only does it take the primary care doctor, it takes the cardiologist, it probably takes the physical therapist, it's gonna take the dietitian, it's gonna take the pharmacist, but you're gonna work with a vendor who's working with an array of members that have that disease and are able to focus and hone in specifically on that disease. When you look at vendors who are either covering one specialty versus those covering multiple specialties, I will say the ones that cover multiple specialties, although they may have separate teams, you're having one main entity that you're working with. I would have to oversee one entity. I would work with one account executive.
I would work with 1 overarching medical director. So it's, you're getting a lot of services under that bulk bucket of multiple subspecialties. The partnership with Evolent is successful because of transparency. Number 2, the teamwork. The last one I'll mention, is trust. Those are things that come to mind readily in terms of the CountyCare relationship with Evolent.
Specialty is a very high priority on our list, we've done some significant work across our team to really tackle in various ways care management, medical policy, and work with other trusted relationships. Value-based specialty management is increasingly important. In particular, if you're looking at cancer care, cancer diagnosis takes a horrible toll, even when it's curable or in a treatable stage. We've seen some tremendous bad fallout from suicide after a diagnosis, it's one that's really tragic. There's a great deal of value for a member to have a navigator and a trusted resource to answer their questions and help them move through this very complex area. The first thing I think of is trust. The second thing is trust, the third thing is trust.
It really is about the relationship, the integrity of that relationship, and the ability to feel confident that you're gonna be on the same page with the partner that you have, and that collectively you're on the same page with the member that's being served. That is the most critical thing. I mean, we have relationships that are payer-owned, and some of them can work fine. In general, I think the objectivity of not being associated with a payer and having that trusted relationship is one that we think is sort of an optimal case and one that we value very, very highly. I think it is in the best interest of patients to have somebody who plays a role as the middle person, who pulls all of those answers and resources and services together for our patients.
Some of those things we can do ourselves. Other issues, we're gonna have to pull in the best partners that we can. Really trying to create an environment that's a single point of contact for the member is critical to not having hundreds of touch points that a member would have to navigate on their own. Again, when you're talking about building trust with your member, your customer, your patient, it is about the transparency on information, on cost, on quality, so that they are brought into the equation of really being part of the decision-making process and feeling that they're empowered as they navigate through what are very difficult and complex circumstances.
All of that comes together in this, in the type of ecosystem that we're trying to create with the very best partners and certainly Evolent is one of our most important partners in that equation.
Please welcome to the stage Dr. Scott Pritchard, President, Performance Suite, and Dr. Andrew Hertler, Chief Medical Officer.
Thank you very much. Dr. Hertler and I in this next section are gonna focus on a deeper dive into our cardiology and oncology management solutions. Oncology and cardiology, either separately or often together, and increasingly paired with our end-of-life care offering, represent the bulk of what we call our Performance Suite business, where we're taking capitated risk with our health plan partners. Over the next 15-20 minutes, we're gonna try to bring to life, first of all, our deep specialty specific clinical expertise, and then we're going to, you know, really again bring to life the notion of how we drive to higher value care through, first of all, a next gen decision support system based on proprietary content in our pathways and a platform that is built for purpose for specialists.
We're gonna talk about how we align in an influence-based model with physicians and build trust. Finally, we're gonna talk about a differentiated member journey. I personally find it really validating to hear from our partners, so hope you enjoyed that last section, and we'll carry some of those themes into the presentation here. First of all, why oncology and cardiology? I think the obvious first answer is the sheer cost of those two specialties. Dan talked about specialty in general as a massive driver of growth in cost in this country. Cardiology and oncology alone will soon surpass half a trillion dollars of healthcare spend. Despite this massive investment in treatment, significant questions still remain around the quality and appropriateness of the care delivered.
For a cardiology example, a full third of cardiac stress tests with imaging are likely inappropriate, leading to half a billion dollars in waste. On the cancer side, over the last 25 to 30 years, of the cancer drugs granted accelerated approval by the FDA, only 16% of those actually showed validated clinical benefit in practice. A lot to be desired in terms of what we're getting from that nearly half a trillion dollars of cost. Finally, oncologists and cardiologists operate in a really challenging environment that is highly complex and fraught with misaligned incentives. One example, just what it's like to be a busy specialist trying to keep track and keep up with this relentless pace of innovation and clinical research.
It can take nearly 17 years for evidence-based cardiac guidelines to find a solid foothold in clinical practice. 17 years. That's almost as long as I've been working. Finally, for a cancer practice, and Dan referenced this earlier, nearly 30% of revenue is derived from margin from chemotherapy drugs, perversely incentivizing the use of high-cost options. With an aging population, and Dan touched on this a little bit as well, issues at the intersection of cardiology and oncology are increasingly challenging. Many of the treatments for cancer actually lead to downstream cardiovascular conditions, and nearly 5% to 15% of cancer survivors will develop heart failure downstream of cancer treatment. Finally, cancer patients are at higher risk of heart failure and also at higher risk of death from cardiovascular conditions than their non-cancer counterparts.
We're actively trying to address this in our program. First of all, by integrating data and clinical guidelines across the two specialties to inform our treatment approach. Second is education, going out to our oncologists and sharing with them the importance of adherence to cardiotoxicity guidelines as they're thinking about choosing a regimen. Increasingly, we're really trying to push for treatment options that are non-cardiotoxic in nature, especially for high-risk patients. Let's talk a little bit about our team and our deep clinical expertise. Highlighted on this slide, you see a subset of our oncology and cardiology clinical leadership, including providers, pharmacists, and other health professionals. This leadership team directs and shapes the work then of the 1,400 clinical colleagues across the organization that Dan referenced earlier, many of which who have specialized experience in cancer and heart disease.
Dan referenced our scientific advisory boards. We have specialty-specific scientific advisory boards in radiation oncology, medical oncology, and cardiology that are comprised of practicing specialists from both academic and community settings and have representation across the country. All of this clinical expertise and experience has led to long-standing accreditation of our clinical work by bodies such as URAC and NCQA. I'm gonna tee up a little bit of just a frame for the rest of the presentation that Dr. Hertler will walk us through. Wanna start at the bottom in terms of what are our goals in cardiology and oncology management. Ultimately, we want to ensure that every patient gets the optimal, most evidence-based care for their unique clinical condition.
We wanna do this engaging with providers in a friendly and an influence-based way, where denial of a treatment request is seen as a failure and is a rare occurrence versus the established norm, and you'll see a stat here on the bottom. On average, less than 2% of the treatment requests that we receive result in a denial. In most cases, we're innovating through a peer-to-peer discussion and driving to the right answer through influence and aligned incentives. How do we do this? Again, I'll link back to a frame that Dan introduced. First, our pathways and our platform that are loaded with proprietary content and are easy to use by physicians.
The second is an influence-based model with our specialists, where we're aligning incentives, we're meeting them where they are, we are a trusted advisor and educator, and we're building trust and behavior change over time. Finally, we aspire to a shared decision-making model where member goals are actively reflected in decision treatments as they are made. With that, I'm gonna hand off to Dr. Hertler to bring these concepts to life.
Our pathways are the heart and soul of our clinical program. Cardiology and oncology represent two specialties characterized by dramatic innovation and rapidly escalating costs. No individual provider can keep up on the evolving medical evidence. In fact, it was recently quoted in a paper that for an oncologist to keep up weekly on the new literature being released, they would spend 40 hours a week going over the medical literature, which is obviously impossible for any individual provider. What we attempt to do with our pathways is curate that medical evidence and put it in a form that is easily accessible and usable for decision support by providers. I've got an example on this slide in medical oncology, and if you direct your attention to the center of the slide, an oncologist will have multiple different chemotherapy regimens or treatment plans to use for any individual patient.
In this example, we've got nine labeled A through I. Sometimes there's even more than that, and they're obviously not all equivalent. The first thing we do is look at the quality of the medical evidence. What were the studies that led to the approval of these drugs? Were they randomized clinical trials that actually compared the new therapy to the standard of care, which unfortunately rarely ever occurs? That's the kind of study we look at. What's most important to the patient, first of all, is efficacy. They want to live longer. That's overall survival. When the study is done with that as an endpoint, we give that extra weight.
We know that when a surrogate endpoint on accelerated approval is used, such as progression-free survival, which is how long until the X-ray worsens or response rate, how often does the tumor shrink, less than half the time does that translate into an overall survival advantage. A study that looks at overall survival, extra weight. We look at the second thing that patients want. They want to live better. They want to live longer, and they want to live better, and this is toxicity. Some of these regimens will have more toxicity. They'll put people in the hospital or have permanent long-term side effects. We'll exclude some of the regimens because of this toxicity. Last and only last do we look at cost, and you can see in this example, we lost regimen G because it was significantly more costly than B and E.
That being said, those final approved regimens still are very frequently more costly than those in that very top row. One final point, everything in that top row is quote-unquote meets medical necessity, i.e., we would approve it in a prior authorization model, our goal is to take a step beyond prior authorization and medical necessity to what is the best outcome for the patient. On the far right, you'll see some of the results. On the left-hand side, you'll see the cost of care of metastatic HER2/ neu- positive breast cancer. A regimen off our pathway costs $68,000. That's for a quarter, for 3 months of therapy. Our pathway choice, $42,000. This is where the savings come in play from following our pathway. On the right, metastatic colon cancer, decreasing the cost from $14,000 to $8,000. It's great to have pathways.
How do we get physicians to use them? That is the key behavior change. What I can tell you is it takes multiple different tactics, and it takes time. It does not occur overnight. It is a process. We use five different methods to try to create this behavior change. The first is our technology. Our CarePro platform clearly highlights our Level 1 Pathways. It also clearly highlights a few different regimens which we consider very low value. It automatically applies dose rounding. If a provider is using a dose that requires a third or fourth vial, but it's only 10% or less above the dose which is required, that means you're going to discard and waste and bill for over 90% of the drug. We round to the vial size, and that is in accord with guidelines.
We also give instant auto-approval of the regimens that are chosen that are on our pathways. Second pillar, education. We create white papers which outline all of the medical evidence. We share them with providers. We have our pharmacists meet with the pharmacists of practices. These pharmacists and practices have a great deal of influence over the treatments that are utilized. We share these white papers, and we share this data with those pharmacists to educate them. The third is influence. When a provider picks a low-value regimen or is off our pathway, we have another one of our clinicians of the same specialty, medical oncologist to medical oncologist, radiation oncologist to radiation oncologist, reach out to the provider and discuss the evidence with them. This is colleague to colleague.
It's very similar to when you pull your colleague across the hall and say, "What would you do with this patient?" We know that when we reach that provider for one of these peer-to-peers, more than 85% of the time, we get the change we need. This is not a denial model. It feels much better to collaborate. The fourth pillar is financial alignment. Our intent is not to decrease the financial viability of community practices. You can see in this example here, given that, as Scott referenced, about 30% of a practice's revenue is dependent upon drug margin, when we decrease the cost of a chemotherapy regimen from $20,000 to $500, we're decreasing the cost of their margin from $1,200 to $300. We make that up with alternative payment plans. These plans generally create a bonus pool.
They increase their bonus pool by following our Level 1 regimens, and when they pick one of these very low-value regimens, it subtracts from the pool, but it gives them an opportunity to not lose margin by doing the right thing and following our pathways. Last is scorecards. We meet with the practices. We share our data. There are quality metrics, adherence to our Level 1 Pathways, cost of care. Physicians are very competitive. They've been achievers all their life. They hate to be below average. If we can show them our data and show them they aren't performing as well as their peers, this will drive change. I'm going to give 2 examples that show this in action. The first is an oncology example. I mentioned before the multiple different choices that they have.
This is a case of a patient with recurrent small cell lung cancer, two different drugs, one that's been around for quite some time, topotecan, the other a new drug, Lorbrena. It's got a lot of play. It's the sexy new choice. If you look at the data, median overall survival, progression-free survival, objective response rate, very, very similar. Look at that cost difference, $42,800 for three months versus $620. Our approach, first, we highlight the Lorbrena regimen as low value in our portal. We have a white paper that summarizes all this evidence in great detail. If the provider still wants to use that regimen, we reach out to them for a peer-to-peer discussion. We don't always get the change we need.
Even if we don't, they may have already talked to the patient, told them how they were gonna be treated. They don't wanna call the patient back in and have another discussion. We've had an opportunity to educate the patient or the physician, and they may not use it the next time. We have our financial incentive, which rewards following our pathways, subtracts for using these low-value regimens. Finally, the data, benchmarking against their peers. They're using this. No one else is. That may drive change. End results, improved quality with increased use of our Level 1 Pathways, decreased use of our low-value regimens, and every time we avoid this low-value regimen, we save $42,000 every three months. Here's an example in cardiology, a patient with congestive heart failure.
The request is for the patient is on 3 drugs for that congestive heart failure and has had 2 hospitalizations in the last 6 months. Request is for pulmonary hypertension monitoring, something called CardioMEMS. The patient is on 3 drugs, but it doesn't meet guideline-directed medical therapy. The doses have not been optimized, and there's 2 other drugs that have not even been used. Our approach, use our portal to make sure they use guideline-directed medical therapy. Education of the practices, meeting with them, sharing our guidelines and policies. When our nursing staff identifies someone not having optimized guideline-directed medical therapy, we reach out to them and have a peer-to-peer discussion, cardiologist to cardiologist. Alternative payment plans which reward for following guideline-directed medical therapy. Last, again, sharing performance data and metrics.
Final result, improved quality, a 29% decrease in mortality when guideline-directed medical therapy is optimized. Every time we make certain that this is utilized rather than the MEMS procedure, $15,000 in savings. Gonna turn briefly from the provider to the member. We use predictive mortality modeling to identify patients who are at increased death within the next six months. We use claims data and the data we collect clinically off our prior authorization portal. This data is used to identify those patients so our specialists can reach out to them. We have strong endorsement of this program by our cardiologists and oncologists who encourage patients to participate, We can utilize their names when we reach out to the patient.
Our behavioral specialists are trained in motivational interviewing, they walk the patient through, meaning their goals, preferences, and values and shared decision-making. How aggressive do they want their care? We outline that for them and help them put that down. Is there a critical change point? A point where, "Okay, you want very aggressive care now, but if your condition were to deteriorate, would you want less aggressive care, more concentration on quality of life?" All of this is put into an advanced care planning document, which is then shared electronically with the provider, so they have a copy of this. Additionally, we use that technology to refer patients to palliative care and hospice when appropriate. Finally, when they hit one of those critical change points where their care has deteriorated, we communicate with the physicians so the care itself can change.
I believe a story will illustrate this far better than I can walking through that previous slide. Due to patient confidentiality concerns, we cannot have a patient here to share the story, but we do have one of our advanced care planning specialists here on video to share that story.
This is the experience of Diane, a 42-year-old mother preparing for her son's high school graduation, diagnosed with lung cancer. She found herself scared, overwhelmed, confused, and immersed in a complex web of our healthcare system. We were working with a partner of ours who we do integrated oncology and end-of-life navigation with. Utilizing our predictive model, we identified Diane as a patient who could benefit from our services. Our partners rely on us to act as an extension of their clinical staff. They trust us to use their practice names and physician names during our outreach, which builds an immediate sense of trust, partnership, and rapport with their patients. Throughout our engagement with Diane, she shared that her priority was maximizing the quality of time she would have with her children.
Through our specialist education, she decided that a palliative care program would provide the quality of life she desired. In accordance with her wishes, our team helped her navigate enrollment onto the program. She also found the strength to document a detailed advance directive, alleviating the decision burden that otherwise would have fallen on her husband. We, in turn, ensured that these documents were uploaded to her medical records and alerted her oncologist, as well as the other partners involved in her plan of care, to its presence to prompt further discussion on their next visit. Diane went through to follow our program through completion. At the end, she shared these words: "You gave me a voice. You connected my care teams. You listened, you cared, and most importantly, you continuously gave me a reason to keep living.
I anticipated it might be hard to follow that, but did wanna close this section just with a few key takeaways and also reference it's hard not to get up in the morning with a mission that is attached to that level of care and compassion for patients and for members. In terms of our oncology and cardiology program, we are deeply clinical and have a bench of leaders and experts driving meaningful improvements in cost and quality. We have proven capabilities to engage and satisfy providers, both initially and increasingly over time, and we are more and more moving the member to the center of the care journey. With that, let me welcome to the stage two of my colleagues, Dr. John Tam, our Chief Strategy Officer, and Dr. Matthew Walker, a practicing spine surgeon and Medical Director.
Thanks, Scott. Dr. Matthew Walker and I will talk about our musculoskeletal solution, and you'll hear a lot of common themes that Seth, Dan, Scott, and Dr. Hertler, as well as our clients, have talked about earlier today as well. Just to orient you, when we think about musculoskeletal, we think about all the specialties within that, as well as incorporating our radiology solution and advanced imaging. These pieces come together to form our episode case solution and are supported by the elements you see below in terms of our next-generation clinical support, provider alignment models, and our technology platform. Why MSK? The first component is obviously cost. MSK is typically a top 3 spend area for both employers and health plans. As we all know, we're all getting older. Aging hips, backs, shoulders, knees, these parts wear out.
There is a lot of cost pressure on MSK going forward. On top of that, the journey itself is incredibly complicated. We looked at a health plan partner of ours, and we mapped out the patient journey for back pain, which is one of the most common reasons people see the doctor. As you can see from the middle of this page, it is a jumbled mess. There is no standard of care. Patients bounce around from specialist to specialist across disciplines, and Dr. Walker will talk more about this. What the end result of this is uneven quality, uneven outcomes, increased cost, and a worse patient experience for everybody. On the right side of the page, further complicating matters are just as in oncology, this is true in MSK as well. There are misaligned incentives.
Surgeons, manufacturers, they want to use the latest shiny toys, which tend to be the most expensive devices. Furthermore, the majority of spine surgeons and orthopedic surgeons tend to be affiliated with manufacturers and receive consulting payments in some form or fashion. All these together make MSK very challenging to manage. How do we do it? It starts with the team. It starts with our clinical intellectual property. As I just mentioned, because patients can bounce around from PT to pain to spine, to chiropractor, it requires multidisciplinary expertise. Some of the faces you see on this page here represent that multidisciplinary expertise. We have surgeons, we have physical therapists, go down the list, many of whom are still in practice, such as Dr. Walker. Again, supported by our accreditations and our scientific advisory board.
It starts with deep clinical expertise, multidisciplinary approach, to be able to manage cases and patients no matter where they show up in their journey, no matter which specialist they end up seeing in their journey. Three, four pillars represent our solution in MSK. On the left-hand side, think of this as trying to avoid or redirect unnecessary or inappropriate procedures. These represent maybe 10%-20% of the cases. A lot of literature suggests that maybe 10%-20% of cases are inappropriate or can be avoided. As I mentioned, we have multiple points of entry to be able to catch members no matter where they may start their MSK journey, and then we try to improve clinical decision-making to get them on the right course of care. That's on the 10%-20% side.
What about the 80%-90% of cases for whom procedures are appropriate? This is where most people's solutions tend to not address this part of the problem. This is a solution we have that represents trying to make sure that the appropriate cases do occur in the appropriate care setting, the lowest cost care setting, which is typically the ambulatory surgery center. On top of that, if the case needs to occur, to make sure that the optimal clinical device is selected. This represents our holistic solution and our approach to ensure evidence-based medicine is applied to MSK. With that, I'll turn it over to Dr. Walker.
Thanks, John. John had alluded to this image that you see on the left-hand side earlier, it's a pathway taking a back pain patient through initial encounter with the healthcare system and running them all the way through potentially to surgery. If we look at the entry points, they're multiple, right? They could go to a chiropractor. They could see a surgeon like myself. They could go to the ER. They could go through physical therapy. No one path clearly delineated here. As you move through this, and this is my daily life, helping people to navigate through this system, it can be very confusing. Among practitioners themselves, the communication is poor. We're all busy. We don't all work out of the same location, so to communicate is a challenge.
The care pathway, to put together a succinct care pathway for patients rarely ever happens following through on this diagram. What does this create? This creates a very confusing path for patients. If you were a patient, and I told you, "Look at this diagram and track your path through the care of your back pain," what would you do? How would you move yourself through? The high variability in this process really leads to confusion. As a practitioner, oftentimes when people come to me, I don't have the information to know where they've been. Lots of confusion in the process for patients and a very inefficient process overall, as you can see. How do we try to improve upon this? How do we optimize this process for patients?
Well, if you look on the right-hand side of this slide, you'll see multiple different aspects of care that come into play. We've got pain management, imaging, physical medicine, and then the surgery side. In order to do this well, you need to understand deeply each of these areas. You need to bring all these areas under one roof. You need all of these areas communicating well with one another. Then in that process, we can create a much clearer path for patients as they move through a diagnosis again, such as back pain. In order to do this well, you've got to know each of these areas very well. When the patient comes in and surgery is indicated, you need to move the patient on to surgery. For most patients, immediate surgery isn't indicated.
You need to know which patients will then benefit from conservative care, conservative treatments. As John mentioned, I'm an orthopedic surgeon, and I live in this world. I was just in this world yesterday morning doing surgery. This is my every day. I submit requests for surgery to insurance companies, and I get approvals, and I also get denials. There's a right way to go about this process of guiding care, and there's a wrong way. The right way is engage with providers. Our model does that. It engages with providers.
The wrong way is to send a denial to a surgeon and not clearly explain why the case is being denied, also to not allow the surgeon to have a conversation with a surgeon to explain why this case is unique and why this case needs to be approved. Very frustrating as a provider to live in a world where you're being told no, and you feel like you have no opportunity to speak with someone who understands what you're trying to accomplish for your member, for your patient. It's very frustrating. As Dr. Hertler mentioned earlier, our process is deeply rooted in the clinical evidence. That's where things start. We bring this process to life through this digital platform that you see here, also through our specialty matched peer-to-peer process, we'll go through some of that.
We have algorithms so that when surgeons request or providers request services, if everything lines up well, if the information that's submitted is a very straightforward case, that case then moves on to approval. As a provider, I love that. Less time of my staff having to make phone calls. We can expedite care and get things moving. We allow in our process for images to be uploaded. If it's a case that is complicated, that is hard to explain in a note, we allow providers to actually upload images through our system. Our clinical reviewers can sit and have a conversation with providers based on the actual images. We're not relying on interpretation of a radiologist to determine whether or not something's there. We can see the actual pictures. That helps to expedite care as well.
We also through our digital process allow for some nudging for where the cases are performed. If the patient is a healthy individual that could benefit from having a case done in an ambulatory surgery setting, which is oftentimes more convenient, less costly, we nudge the care to be performed there. Obviously, there are circumstances where that shouldn't happen, and we try to make sure that the place of service is correct according to the patient's clinical background. All cases, though, don't fit nicely into this digital platform. There are some cases that require more personal touch, more human touch, and that's where our specialty matched peer-to-peer process really comes into play.
When I talk about a specialty matched process, what I mean is, as a practicing orthopedic spine surgeon, I would really like to be able to talk to another practicing spine surgeon if we're going to get into the details of a complicated case. When I'm in the middle of a busy office and I've got 3 patients waiting on me and I've set up a time for a peer-to-peer and I pick up the phone and the person I'm talking to is a primary care physician or maybe a nurse that's never performed a spine surgery, and I'm trying to explain to them why this case needs to be done, and I can tell that they're reading off an algorithm on a page, that is extremely frustrating, right?
I'm trying to take care of my patient, and I'm trying to take care of these other three patients, and you're wasting my time, really. As a surgeon who's lived in it, to have the opportunity to sit down, schedule a time with a practicing surgeon to discuss the intricate details of a case, it's as good as it gets in the world in which I live and practice. We make sure with our peer-to-peer process that you're talking with a true colleague. If you're a physical therapist, you're talking with a physical therapist. If you're a surgeon, you're talking with a surgeon. It allows for a level of clinical exchange that oftentimes doesn't happen.
Unfortunately, where I practice, the health plans that we work with don't serve, so I don't get to take part in this process, unfortunately. I wish I could. Wish I could. John.
Thanks. We talked during the last section about creating the right set of financial incentives. The same thing's true in MSK. This is an example of how we help incent shifts to ASCs, which are a lower cost site of care. Think about ASCs as being small businesses owned by surgeons and local entrepreneurs. They think about what cases can they perform that are profitable. What oftentimes determines the profitability of a case is the case rate that is paid by the payer and the cost of the medical device, which is the most expensive component of the case. Payers have an incentive to try to lower unit costs as much as possible, but that ends up having some unintended consequences.
If the case rate becomes so low, the case becomes unprofitable due to the high cost of the medical device, as a result, instead of performing the case at their ASC, they'll send the case to the hospital, there it's gonna cost twice as much money. What do we do? We have a solution that carves out the cost of the medical device from the reimbursement that the payer gives to the ASC, we're financially accountable for the cost of medical device. The ASC isn't responsible for the cost of medical device, therefore, every case that they perform is profitable. We've rewired their financial incentives, they start to perform more cases at their ASC. Does it work? Well, let me show you an example. Here is an example of where we looked at two payers.
One of our clients, two, a prospective client, both in the same state, looking at the same ASCs, controlling for membership size. What we found, unsurprisingly, is that the payers that we work with were seeing 3 x as many cases being performed in that ASC compared to the payer who wasn't working with us. Very powerful. On top of that, we would suspect, we would hypothesize that the other payer's cases were actually getting performed adversely selected into the hospital outpatient department. This is why payers choose to work with us. On top of that, scorecarding, a theme that we heard about earlier. Because we are responsible for sourcing and paying for all the devices, we have full transparency into the devices that are being selected. This is something that payers don't have.
They're paying at a case rate, they don't know what's being selected. We have this level of transparency, and we use it. We create scorecards and dashboards looking at specific surgeons, specific procedures, and the intensity of the device that they're selecting. Here's just an example on the left side of such a scorecard, and we highlight the outliers. I think we all know that surgeons are competitive, physicians are competitive. If they're being ranked and judged, they don't want to be an outlier, and that's what you see on the right side. When we present this information to them and educate them on their practice patterns compared to that of their peers, they tend to get in line.
We also share this information with payers, and they use this as well when they come up with providers with renegotiation, so they can reward the better performers and also withhold from the ones who are not as strongly performing.
All right, let's get into something that I'm a lot more comfortable with, which is going through a patient scenario here, okay? This is a 59-year-old. For the last year, he's been having a lot of right knee pain. He's gone through all the appropriate conservative treatments, he's tried therapy, he's tried anti-inflammatories, tried ice. Tremendous amount of limiting knee pain. Something more needs to be done. He sees his physician. They order some imaging studies, order an MRI scan of the knee. They order some X-rays of the knee. Shows a degenerative meniscal tear. Meniscus is a cartilage that pads within the knee joint, and also then the articular cartilage showed some significant wear. You'd see some joint space narrowing on the X-ray. Patient sees a surgeon. Surgeon recommends, "Hey, let's go in.
We'll do a knee scope, quick, easy procedure. It's just a little trim up. We'll trim up that degenerative meniscal tear. We'll trim up your arthritis. We'll wash everything out. You're gonna feel great. That's the procedure that's requested. Unfortunately, the literature says that's a bad idea. The likelihood of that giving you prolonged relief of knee pain is very low, and a lot of those patients end up within 3 to 6 months having recurrence of significant knee pain requiring surgery. The evidence also shows, oh, by the way, if you have a knee replacement surgery done after the knee arthroscopy, the likelihood of you having an infection, having failure of that knee replacement is much higher. Bad decision, right?
Just to take a step back, 20 years ago, when I was in orthopedic residency, it was very common on Fridays for our joint surgeons to have a scope day, and they would do 15-20 of these procedures, and then in 3-6 months, we'd see the same names come through, and that's how I learned how to do knee replacement surgery. This was a common practice 20 years ago. The evidence base over time, though, has shown us that was a poor practice. That should not have been done. Following our patient through here, we have our rules engine, evidence-based, comes in and says, "Hey, this is not a good idea. This is not the right procedure for this patient." Instead of just denying surgery, we then have a specialty match peer-to-peer like we talked about before.
We have a knee surgeon talking to a knee surgeon, right? We have this clinical conversation. During that clinical conversation, our reviewer can share with that reviewer, "Hey, you know, latest evidence base shows that these patients benefit much more from a knee replacement than they do from a knee scope. Have you considered that? Have you thought that through?" The knee replacement is a more expensive procedure at the outset, so I think this really illustrates we're trying to get to the right decision for the patient. We're not trying to go with something that provides significant initial upfront savings. We're looking at the long play here for knee replacement.
After that peer-to-peer, the surgeons agree, yes, knee replacement is the right way to go. That surgeon then says, "Well, I'd like to do this operation in the hospital. That's just where I typically do it." Our process allows for a nudge to say, "This is a healthy young patient, would likely have a great experience at an ambulatory surgery center. Oh, by the way, it's gonna cost a lot less. There'll be significant savings associated with it." A gentle nudge is then given to the provider to move toward the appropriate care setting for this patient. Patient ends up having a total knee at the ASC, has a really nice experience, lower cost for everyone, and comparable quality that we've also assured.
Just a case example here to show how this whole process works for a real patient. Appreciate that, John
Thanks. I'll just wrap it up here. Can you guys hear me? Okay. First off, we talked about a very fragmented journey. It's really critical to have all the disciplines under one roof, so you can catch patients no matter where they start their journey, no matter how they navigate their journey. Secondly, we talked about the ability to address an unnecessary spend, but as well address the spend that is necessary to make sure it's in the right location with the right devices. Third, transparency to improve clinical decision-making. Thank you. Oh, sorry. I'd like to introduce Emily Rafferty, our Chief Operating Officer, and Jordan Silvergleid, Chief Product Officer.
All right. Good morning, everyone. I'm excited to be here with my colleague, Jordan. What we hope to do over the next several minutes is to provide visibility and share a little bit into how we are powering everything you just heard throughout the day. When you really think about our global operating model, our technology platform, it's really the underpinnings of everything you've heard today, and it's how we are driving both operational scale and driving continued innovation and growth throughout our organization. As Seth mentioned earlier today, we have come together as One Evolent. We are aligning under a single brand, and that's powerful in and of itself. What I wanna emphasize is it's more than just aligning under a single brand. We are truly integrating as an integrated operating entity and organization.
Many of you may be top of mind of it's more than just integrating the recent acquisition of NIA. It's really looking at all of our capabilities, all of our technology, all of the legacy business units, and integrating them and pointing and channeling all of them towards our value-based specialty strategy. It's been a really powerful, big moment for Evolent over the last several months, and we'll continue to be on this transformation journey over the next several months and years to come. When you really think about, what were we trying to do? Why was this transformation required? What's interesting about it is we've been operating under a BU structure for the last several years, so independent business units with different flavors of focus.
One more focused on operational and technical capabilities, one more focused on clinical innovation and growth, one more focused on building deep provider relationships and networks. What's really powerful is that we are now positioned today to execute more than we ever have on this, on value-based specialty strategy, not in spite of that structure, but because of. We are now able to take all those capabilities that we have been building and harnessing over the last several years to align them together against our strategy.
What really led us to recognize why this transformation was required was, one, to be able to leverage our deep bench of operational and technology expertise and leaders across the organization and truly be able to leverage and optimize all those capabilities that we've been building, to really integrate our global operating model and drive the operational scale and efficiency, and to fully capitalize on the global model that we have today to really harness all of the technology and automation capabilities that sit across our organization and channel them to drive administrative scale, and to execute on our innovation roadmap, which Jordan will talk through here in a few minutes. What this slide represents is really the face of One Evolent.
We have been cultivating talent and skills across the organization, and this leadership team here is a direct reflection of that. We have leaders here that not just represent the core tenets of our strategy from operating capabilities to technology to product to clinical to medical operations, but these faces represent also the legacy business units that and a reflection of what we're trying to do to take the talent that has been living channeled in different directions and align them towards our value-based specialty strategy. We have leaders here representing the legacy NIA organization, leaders representing from the legacy New Century, from the legacy Evolent Health Services.
While we're moving away from those brands and aligning, I think it's important that we have leveraged our internal mobility strategy to really channel all this talent and integrate as a united integrated operating leadership team. The expertise run deep throughout our organization. It's not just this leadership team. As you've heard today, the stats on the number of physicians and clinicians and data scientists and operators and technologists that exist throughout our organization that, again, we've been cultivating and bringing all those together is really what allows and gives this team the power to deliver consistent results over the last several years. The integrated operating model, I think spending a few minutes diving deep into what is the intent behind the integrated operating model.
One of the first targeted results is to be able to recognize and drive both financial and operational synergies as a result of the operating model. When we look across the organization, we had over 60 capabilities that we are bringing together and integrating across the organization. One of them in particular is call center, and that's the example highlighted on the bottom of the slide here. Just within call center, we have 4 call centers that we are integrating into a single global call center model. We are migrating to a single telephony technology platform. We are centralizing all of our workforce and performance management.
What that does is really allows us to drive scale in that we can flex our staff, we can have a single view across all of our products, all of our specialties, all of the partners we serve, but it also allows us to connect the dots for our members, for our providers, you've heard connection is a huge theme today, and deliver a single voice to our partners. It's both driving simplification, scale, but also improving the experience to ultimately those we are interacting with day to day. As you saw on this on the last slide, we have a deep bench and a lot of individuals focused on operational excellence and operational efficiency. I think we think about efficiency and scale in 2 different ways. Internally, we're looking at how do we remove manual touch points?
How do we automate standardized processes within our operations today to lower the cost to deliver, to make us better able to scale? Jordan will talk through a couple of those exciting examples here in a few minutes. Also, it's externally focused too. How do we remove low-value touch points to our providers and members? How do we streamline their interactions? When we think about operational efficiency and scale, it's both pointed at internal and external operations. We've really been able to, through this integration, centralize and optimize our process engineers, our data-driven capabilities to really harness a focus, a deep focus on operational efficiency.
One just example of this is where we had our process engineers partner with our provider teams that were directly interacting with providers, with our account teams who are day-to-day interacting with our clients, our operators, our products, and our technology team on an initiative that was designed to increase the amount of electronic auth submission. Through this 1 initiative, over a 12-month period, we saw an 18% increase in electronic auth submission and also a 13% decrease in the amount of calls per auth. Just 1 initiative that drove huge efficiency, not only for removing the manual touch within an internal operation, but obviously providing a better experience for our providers and increasing the turnaround time on an auth submissions.
Another key component of lowering our cost to deliver is obviously having tight consolidation of our vendor costs, not just to lower the price point of our vendors, but tighter control of the vendors we rely on through a centralized view, which is another key focus of our integration. When we think about our integrated operating model, another key design choice was to better power and enable the cross-sell opportunity to increase how do we help better position ourselves, increase the product per member. As Dan shared, that's a huge part of our growth strategy. When we think about integrating capabilities, it's not just our operating capabilities, it's integrating our account, our growth teams.
It's looking at all of our clinical teams where that historically may have been focused on a specific specialty, so radiology or cardiology, and bringing them together because what we have heard from our clients and what we know to be true is you can't just have all the capabilities. You have to actually integrate and connect all the capabilities. That's what will really unlock the power. Having our account team have access and represent the full breadth of what we do, positioning our operating teams to be connected and to be able to deliver a connected story and experience to our partners and providers, was a key design element of our operating model as well.
Then, integrating our technology strategy to have effectively ruthless prioritization so that every dollar we spend, every tech decision we are making is designed to move the needle on our specialty-led strategy. That has been a key element that again is kind of a theme here today of our integration, is really aligning all of our capabilities, all of our talents against the specialty vision. Our one of our differentiators has been our global model. I think oftentimes when folks hear about a global model, they think that it is only a lever to drive cost.
While that's certainly a key element of a global model, what we have found is our global model is not just about lowering our cost, it's about delivering increased and improved service levels to our providers, to our members, to our customers. We have today, our global model is two key geographies, one in India and one in the Philippines. Within India, the most of the capabilities that we are building there are focused on our administrative backend capabilities, IT operations, product and engineering, analytics, data science, which is complemented by our Philippines operation, which is deeply focused on clinical operations. They follow U.S. education patterns, we can actually extend our global model and have extended it into our clinical operations as well as customer service. As I referenced earlier, having a global customer service center.
Again, to emphasize, we believe we have a truly differentiated global model, in that, 1, we have scale. Approximately 25% of our workforce is actually through our global model, and all of them are Evolent badged. That's a really important distinction because we have found that the captive model where you are leveraging and employing and standing up your own operations in a global market is how you actually attract and retain the best talent, and we've seen that through our engagement, through our retention of our global talent, and certainly earning us one of the top 100 places to work, workplaces in India. Second is because of our scaled and employed model, we obviously realize significant labor arbitrage.
That's not just a mechanism to lower our cost to deliver, but certainly allows us to offer competitive economics to our partners. Lastly, as I mentioned, it's not just about cost, it's also about increasing our service levels. We have, it's partially due to not just having a 24 / 7 operating model, but when you think about what we do and the tight turnaround times and listening to Dr. Walker share the frustrations of wait times, having that 24 / 7 operating model is certainly critical. We also have unlocking access to highly skilled workforce. A lot of our production staff actually have higher education degrees. We not only are accessing talent at a lower cost point, but also a highly skilled.
This global model, again, we've seen it have huge dividends in where we've deployed it, and the large opportunity that sits in front of us is expanding that into our specialty strategy and to the theme of what we have been talking about of integrating towards One Evolent. This is one of those capabilities that has the opportunity to make a huge impact in our specialty strategy and we are underway in rolling out and expanding our global model into our specialty strategy. With that, I think you've probably heard a common theme that our integrated operating model is driving both administrative scale and allowing us to drive innovation and growth. I think as Dr.
Walker said to him, our clinical interactions and peer model is as good as it gets, as a COO driving operational efficiency and the integrated operating model is as good as it gets. I'm gonna pass it over to Jordan, who's gonna share more about our technology strategy.
Great. Thank you, Emily. Good morning. You've heard over the last several hours about a number of the challenges that our customers have in managing specialty care. I'm gonna underscore two of them as it relates to clinical reviews. The first is it's a very labor-intensive process. Unfortunately, our payer customers are broad but not deep, they're often deploying generalists across multiple specialties. In highly complex areas like oncology, cardiology, and MSK, that means these generalists can miss subtle but very important details. They're not up to date on the latest evidence, they can fail to engage specialists who, if they wanna talk to the payer at all, wanna talk to a peer, not a generalist. The second problem is that these clinical reviews are very cumbersome for both payer and provider. Typically, a provider will fax in a lot of information.
The payer will pore through it, have follow-up questions, more phone calls, more faxes, a lot of friction. Our decision support tool, which was purpose-built for specialists, simplifies this information gathering. We're pleased to see an 85% national utilization rate compared to fax and phone. Over the last several years, we've also been leveraging more advanced technologies to streamline the process even further while maintaining our deep specialty expertise. I'm gonna go into 2 examples, first in the clinical and second in non-clinical. On the clinical side, specialists today can use our decision support tool to upload patient records. Normally, this would require human beings to pore through those records looking for the key pieces of information.
For the last two years, Evolent has been leveraging natural language processing to pull out, to extract key structured data to review that against our carefully coded clinical criteria, which is constantly changing, and then if it passes a certain probability threshold to approve the case automatically. We've seen dramatic results. As you can see on the right, within imaging, where we first deployed this, a 10% increase in auto approval rates, which allows our clinician team to focus on more sophisticated tasks. We've also brought this capability out to providers to improve their experience and ultimately the experience for patients. We today can enable instantaneous suggestions and approval within the physician EMR. Dramatically reducing time to treatment and providing a much better experience for those providers.
We're very pleased with the results that we've seen, and we are expanding into additional specialties as well as exploring other types of AI, including generative AI. Our efforts here are gonna look very similar to what you see on this page. We're gonna be leveraging artificial intelligence to complement and scale our human intelligence, and we're very bullish on AI to help extend our leadership position in specialty care, value-based specialty care. I also wanna emphasize that we do not automate denials or recommended denials ever. Second, in the non-clinical area, there's a lot of manual processes, and we have been leveraging robotic process automation to wipe these out. First, in claims processing and adjudication, there are a number of steps which are manual today because there's a lot of edge cases and non-traditional claims that come in.
We have been singularly focused on automating those processes, including pulling out edge cases to allow for more streamlined processing. Second, we have a number of data interfaces internally and externally with our providers and customers. Historically, we've had human beings monitor these, but we have now nearly 100 bots that are monitoring these data exchanges and alerting us to any issues. These two examples have enabled us to do more with less in these areas, but more importantly, they enable us to increase consistency and quality, reducing manual errors, improving our auto adjudication rate, and reducing issue resolution times. The Evolent Health Services division has really refined the use of RPA. They have a center of excellence that we are excited to broaden now throughout Evolent.
I'd like to step back now from these two examples to share a little bit about our overall technology innovation strategy and the number of benefits it provides to stakeholders. As you can see on the left, we have a layered or modular architecture, so the application layer is separate from the data layer, separate from the infrastructure layer with services connecting these. This type of architecture enables faster new product development, scaling, cross-selling because we don't have to build the whole stack when we have a new use case that we want to address. Second, the centralized data layer enables a 360-degree view of patients and providers and enables us to support the use cases that you heard earlier today. This is what prevents siloed care. It enables connected care.
Third, the streamlined infrastructure enables us to narrow the focus for our InfoSec group. It enables us to narrow the types of tools and capabilities that we need to build and deploy, so highly efficient. Finally, because it's a services-oriented architecture, we're able to push those insights directly into our users' workflows, as I mentioned earlier. In conclusion, three takeaways that I'd like to leave with. Number one, we have a deep bench of leaders within the technology and operational area that will enable us to execute our exciting vision. Number two, we have a proven global operational model that will deliver financial and operational synergies. Number three, a really significant opportunity to continue leveraging advanced technologies and that global scale. Thank you. I'd now like to introduce Kali Beyah, who is going to talk about human capital.
Thanks, Jordan. I get to talk about the people who make all of these things we just talked about happen every day. You got to see a great selection of them today already, really the leaders, and strategic minds, at play. I'm excited to unpack that a little bit more and let you know how we prioritize human capital at Evolent, and how it really is a differentiator for us. I think a few folks have stolen some of my favorite highlights here, Seth Blackley. You know, in a time where people have been talking about, you know, resignation and quiet quitting, you know, we've had very much the opposite at Evolent, and I think we should feel really excited about having created that.
We have 89% engagement, and people in the midst of being fully engaged in their work are also giving 19,000 hours in 2022 to their communities where we live and work. In addition to that, we've got 5,000 employees now, 95% retention of high performers, right? You need ambitious, high-performing people to deliver on ambitious, high-impact strategies like we've outlined today. Clinical expertise and depth, we've talked before about 1,400 people who are clinicians in our organization. You've gotten to hear from two of them today. We feel really proud about that as a differentiator, along with being a diverse and global workforce to power some of the operational excellence that Emily talked about.
We're increasingly structured and aligned as both, in terms of our org and what our charts sort of look like and how we bring it all to life, but also as a brand, so we make sure we're bringing our full capabilities to deliver on the strategy. If our people are our differentiator, right? If human capital is, where it's at for us in a lot of ways in terms of how do we bring it to life, how are we making sure we build on and develop that strategic advantage? Well, our human capital strategy is really a reflection and intended to accelerate our business strategy. That means that our priorities include becoming One Evolent, right? Becoming a sharpened focus on specialty care and the specialty value-based care opportunity and organizing ourselves to deliver on that.
Attracting, growing, and retaining the best talent to do that. Sparking joy and nurturing culture in a way that keeps people glued and wanting to be a part of this in the midst of a changing world and busy priorities. I'm gonna unpack each of these a little bit, but we spent most of the day talking about the specialty care opportunity and about how we have really sharpened our focus. It makes sense that a big piece of this and a huge mile marker on that journey was the acquisition of NIA earlier this year. We closed on that in January, and we got after really quickly, making sure we integrated folks intentionally. The NIA, 1,500 people that joined us, right? So 1,500 out of our 5,000 people joined us from NIA.
We worked to make sure they felt like they had what they needed, they understood what they were becoming a part of, because the faster they integrated, the faster they understood, the larger picture here at Evolent, the faster they could get to impact and continuity in the work they were doing for our customers and ultimately for patients. They've told us, and we've measured, that we're on the right path on that, right? 80% of the folks said we continue to feel welcome, that they feel supported and informed, and that they understand what's expected, and they have the tools they need to be successful.
Our leaders, the folks you heard from today, took time out of their schedules to make sure they met with those folks, showed the NIA team that they're part of the journey and that we're building something that takes all of us together. We'll continue to work on that, right? It's a few months in, we're on the right path. We'll continue to work at it and also measure how we're doing. You know, someone asked me this morning, I joined Evolent 8 months ago, someone said, "What have you liked most about being here? What have you found most different about being here?" I think, look, lots of places will say our people, right, are what's special.
I think it is really true that Evolent punches above its weight when it comes to high-performing, high EQ, high IQ, mission-driven people. That has been different and the thing I liked the best and continue to like the best about it. What I especially like, in part because of my role, is that we do it with intention, that it's not just good fortune and happenstance, right? That we're building a high-performing culture that's focused on attracting, growing, and retaining the best talent. We need that to deliver on the ambitions of changing healthcare for the whole nation. Let's talk about how. First, internal growth and mobility. You know, that's a focus for us in this year to continue to do that, but we've got a good track record already.
Lots of places can tell you about programs and things that they're doing, and we can do that too, but I think what tells you even better is to take a look at a few of our folks who've grown with us, who've been wonderful, who demonstrated wonderful capability here and then seen that really poured into and cultivated. Jessica White started with us really early on in our in the Evolent journey as a leader in IT, or, I'm sorry, as an analyst in IT, actually, she was a director just as recently as 2013. Today, she leads us as CIO. Brian Seay, who works in Performance Suite, which you heard about with Scott earlier, started out as a senior director in our transformation space. He's now our SVP of Performance.
Then Jessica Somers, who started out as a senior director in corporate development, and is now our SVP of Finance. You know, these. It's like a Bruno Mars, right? Don't believe me, just watch, right? If people say, "We attract people, we grow people, we retain people," this is our just watch for our talent and our people. We feel really proud about that. I think it's a reflection of our philosophy, which is some of the best minds in healthcare are already here. Our job is to make sure they then see their future here too. That's why we're focused on internal mobility. That's why you see that 77% of our most senior leaders were internal promotions. That you can build, you can buy, you can borrow talent. We lean hard into build.
We're setting the ethos to keep building, so that's why we have diverse leadership across our company as well as in our board, as Seth mentioned earlier. We have the right values that we continue to be anchored in. Then, you know, we're inclusive. We want people to be able to bring their whole selves to work because we want your whole cognitive load given to the work we've got to do and not given to figuring out how to navigate in a place where you can't be your whole self. We think we're hitting the mark and working hard each day to keep hitting that mark, and being open and honest when we miss it, so that we can get back on it. I know every investor day must have a spark joy slide.
I'm sure this is not uncommon. I think it's one of my favorites and one of the things I think is exciting for us to differentiate as a workplace. You know, we have a, I think, a unique opportunity because of the work we're in to be thoughtful about how we make the workplace a special place. Let me tell you why it makes sense to have this, right? There are a couple of reasons. One is, let's be honest, the talent game has changed. People are choosing how to spend their work and give their talent in a way that is maybe different than they would have just a few years ago, pre-pandemic, right? People often talked about the great resignation.
It was also often called the great reevaluation because people were evaluating differently what it was and what you expected in a workplace. Our strategy reflects that in part. The second reason it makes sense is, look, we're in the healthcare space. At the end of the day, all of the work that the team has talked about is about centering the patient so that they don't have to see themselves as a patient, so they can see themselves as a grandparent who spends time with their grandkids, so they can see themselves as a person who can go to work and doesn't need to be on leave, so that they can live a life that is thriving for them. It only makes sense then that in our own workspace, we get to try to model a little bit of that too, right?
What's the life people might want to live, that would be at least as fulfilling as our part can do to contribute to it. We're doing that in a few ways. One, we're investing in the moments that matter. That's everything from onboarding, to highlighting our brand reveal and bringing employees along on that journey. The brand reveal, you know, we've talked about the brands we're sunsetting, and it's more than sunsetting a name, right?
People have a sense of, "I built this company, that you're now sunsetting the name." A sense of, "It stands for some piece of the journey that I was really a part of." We engaged employees in that process, just like we went out to market and talked to decision-makers at providers and said, "Tell us what you think of our brand," so that when we knew both inside and outside the equities we were pulling into our future as Evolent, and in our future as a with a focus on specialty care. We also, you know, celebrate each other in the day-to-day. We have recognition platform that 75% of our employees are engaging in. Those are the little moments that matter, and those moments matter even for continuity of the business.
When you get onboarding right, for example, as a little moment that matters, 20% increase in 3-year retention, right? That we have long retention. We want to be continuous about investing in that so that we can keep getting after the work that we want to for our clients and ultimately for patients, our customers and patients. Then differentiated benefits and flexibility. This only makes sense, right? We're doing benefits management. We want to be serious about how we show up in the benefits for our employees, and we do a lovely job at that offering. Most recently, I'm excited to share we've added mental health benefits, and 100% of our people have mental health coverage, can get 12 visits a year with access usually within a few days.
Given all that has happened in the world, that is a difference maker, and it matters. The recent study shows 81% of folks say their choice of employer for their future will factor in the support for mental well-being. Our people work on heavy stuff. They work on cancer. They work on cardiac issues. We wanna make sure they and their loved ones have that support, and we've done a nice job on that. We also have a flexible workplace and allow people a day a quarter to spend. It's a personal impact day that they can work in the communities, and they're doing that. Lastly, effective listening and communication.
That's important, especially in a hybrid world. I think it's also important really kind of for the reasons that Pat Geraghty talked to us about earlier, right. He said, for our business and why, you know, GuideWell trust us, right. It's about trust, and trust. We're also building trust inside, right. It's a virtuous circle of building trust inside, just as our employees then are building trust in partnerships with our with the providers they work with every day. To build trust, we talk with our employees. We're listening regularly. What you see here on the right side of the. I think that's the right. The left side of the screen for me is feedback on how we're doing when we have a forum.
If we're reorganize ourselves, as Emily mentioned, to deliver on an integrated operating model, that's a lot of change. We're talking regularly and listening regularly with folks about how does that resonate, what works, what's not, what would you like to understand more so that you know the strategy that your day-to-day contributes to. We're tracking well into the 80s with each of the different forums that we've had so far this year. At the end of the day, look, we wanna see how are we doing. In addition to measuring internally, we're excited that folks have said externally, we're doing all right. We're on the right track, and we get to keep nurturing this advantage.
Whether it being a best place to work, as measured by H.R.C., the Human Rights Campaign, best places to work in India, an important factor for our global model and our global advantage as we look at arbitrage opportunities, et cetera. For Parity.org one of the best places for women to advance. This we just found out last week that this is our fourth year in a row, as being recognized for parity in the workplace. All of these things really are the differentiators for us and an advantage that we're keeping after. Takeaways about Evolent and the people who get to bring the strategy to life every day.
We've got a diverse and engaged global workforce, and we're structured to deliver on our mission, to be focused and bring our full talent density to the value-based specialty care opportunity. We've got strong leadership and a great leadership bench, a history of successful integration of employees, and fostering a shared identity, and then a differentiated talent experience, with a culture that's actively fostered each day. With that, I will bring up Seth Frank to tell us about some next steps in logistics. Seth?
Thanks, Kali. That was great. All right. We're running a smidge long, but we're gonna keep the trains running. We're going to stop the webcast for 15 minutes. At 25 minutes past, we'll start up with John Johnson, then go into Q&A and try and preserve all the time. These doors will fly open here in a minute, and there's lunch outside. Please grab it, definitely please be in your seats at 25 after so we can start right on time. Thanks.
Ladies and gentlemen, we will begin shortly. Please take your seats. We will begin shortly. Ladies and gentlemen, I'd like to welcome to the stage John Johnson, Chief Financial Officer.
All right. We will bring this to a close now. I'll talk for about 15 minutes, 15, 20 minutes, and then we'll do some Q&A. You know, we designed this day to hopefully really start to give this community some insight into how we're creating the value that we're creating from a clinical perspective, from a partner perspective, and from a member perspective. Now we're gonna talk about shareholder value and how all of that translates into consistent and sustained earnings growth over a long period of time. I'm gonna hit 4 things. You're gonna hear me say some version of the word diversify at a number of times over the next few minutes because it's very important to us. We're gonna talk about the growth algorithm a little bit more using the same framework that Seth introduced earlier.
We'll talk about our gross margin performance in our different business lines and talk a little bit about capital allocation. You know, early on in the day, Seth talked about our two basic economic models, one being our capitated product, the Performance Suite, where we're making a margin based on ultimately lowering the clinical costs for claims costs in those particular specialties. With the rest of our products largely being subscription-based, where we're driving our margin based on differentiation and volume. We really like having these two models together. They play off of each other. The willingness on our part to take risk in the Performance Suite supports the tech and services sale, and the volume within tech and services, where we have 60 million product members, really provides an innovation engine for the Performance Suite. Seth introed this slide.
I thought I'd do a little bit more math on it. This is how we get paid with a particular focus on the subscription-based products where we get paid per member per month. For example, in the Performance Suite, we had 3.2 million product members in the first quarter of 2023. On average, the fee for those members, the capitation fee, was $24.66, which would annualize to $960 million of Performance Suite revenue. In the same quarter, we had 60.5 million tech and services members, product members, with an average fee of $0.36 per month. Why is that so different than $24.55? Ultimately, there are two reasons. The first and largest is the $24.66 includes the claims cost that Evolent takes responsibility for in a subcapitation model.
We also provide and do more intensive work in the Performance Suite than we do in the tech and services suite to drive ultimate value creation, again, both for us and for the plan and for the member. Lots of ways we can grow here. What might that look like going forward? Seth introed an expectation that we continue to grow this business in the mid-teens plus plus. What does plus plus mean? Plus plus means we expect the mid-teens year in, year out to be a floor. We believe there will be some years where we have particularly strong growth in the Performance Suite that could allow us to grow significantly in excess of that number. We'll talk a little bit more when we talk about margins on why we really like this balance. Here's the growth algorithm in more detail.
The first three columns, adding partners, expanding members within those partners. For example, adding a new state with a national partner, or adding products to an existing partner. For example, adding cardiology where we're already doing oncology services. Those three together, we target 6-8 new partners or significant expansions per year and believe that that level of growth can drive baseline member and revenue growth of 10%-14%.
The upside in our model, both historically and as we look out into the future, comes from shifting Tech and Services members to the Performance Suite, where each 1% shift in the product member mix, recall that we had $66 million product members in Q1, each 1% shift from Tech and Services to the Performance Suite would represent revenue growth of almost $200 million, which is about 10% on this year's guidance midpoint. That together gives us the confidence to be able to project multiple years of sustained, meaningful growth on the top line. Now let's talk about translating top line growth into bottom line growth. Here for simplicity, I'm gonna focus just on these two key PMPM-based products. We also, as you know, have case-based products which have a slightly different structure and do not have members in the denominator.
For simplicity, I'm gonna focus on these. Our Performance Suite, we've articulated a multiple year margin maturation curve, which you see here on the right. We have given broad ranges for these products between 4% and 6% in year 1, ramping up to between 12% and 18% in year 3. We continue to expect those to be our target margins for this maturation curve. What we're showing you here today is the actual experience of all of the clients that have gone live with us since 2019, since we've owned this particular part of the business. To dig in a little bit, 2.5 million lives have launched on this platform since 2019. In the first 12 months of operations for those 2.5 million product lives, they averaged a margin of 6%.
We have 1.4 million lives that have been on the margin for more than a year or been on the platform for more than a year. During that second year, they averaged a margin of 11%. We have half a million lives that have been on the platform for more than two years that have gone live since 2019. They are now at our target margins of 15% or better, which is also where we see our mature markets that have been with us since before 2019. I think there are two points that I would make on this graph. The first is this is not a small data set. This is millions of members in large plans and small plans, national plans and regional plans, Medicaid, Medicare, commercial.
The second is this is an average. Within any given partner within any given year, because this is a risk-based product, there will be variation. That variation typically can come in one of 2 key ways. The first is geographic idiosyncrasy, which can impact this curve, and the second is there are distinctions between Medicare and Medicaid that can change how a particular regional plan can evolve over time. Where we feel particularly comfortable is in these averages, which again are across a diverse group of partners are our targets going forward based on our history in the past. The second key piece of our product suite, right, is our specialty tech and services products. We have 60 million product lives in this particular part of the business, running a gross margin of about 50%, which is around our target.
If we think about why we believe it is very valuable to our sustained earnings path to have both of these growth opportunities, growing in capitation models like the Performance Suite and growing in services models like the tech and services suite. I like to think about it in terms of what size deal does it take to grow earnings by a specific amount. You see here on the page, we can grow our gross profits by about $13 million in two ways. We could add 1 or 0.15 products per member. That would be, for example, selling 1 product to a large national with 6 million lives. We could add 300,000 new capitation members in the Performance Suite. Those have the same bottom-line dollar impact and a pretty different top-line impact.
The faster that we grow the Performance Suite, the faster the business will grow on the top line. The faster that we grow the tech and services suite, the faster our % margin will increase. I like this from the CFO's chair because it means that we can remain extremely disciplined in our underwriting, in our capitation products, because it is not our only way to drive earnings growth in the business. That combination, along with what we spent the bulk of the day on in terms of how we're creating value, has led to this performance over the last several years on both the top and the bottom lines. The last thing to talk about is translating that profitable growth into cash flow.
We've put out an expectation starting today that at scale, we will convert between 65% and 70% of our Adjusted EBITDA into cash that we can deploy for organic and inorganic investments. This is consistent with our recent history, which you see on this chart, where we generated $133 million in Adjusted EBITDA in the TTM period. We used a portion of that for interest. A portion of that was eaten up by working capital. The rest, 56%, was deployable for organic and inorganic investments. We made some inorganic investments during that time, our final reported operating cash flow for that period was $38 million. Over the next several years, we would expect our working capital dynamics to be somewhat variable, consistent with our history, based on specific partner dynamics and needs.
We'd expect in a few years, once our NOLs are exhausted, to become a federal cash taxpayer. We've had three clear capital allocation priorities for the last several years, and we are reiterating them today. They are, first, continuing to invest in the business that we have, driving some of the product and innovation that you heard, for example, Jordan talk about, so that we can continue to have what we believe to be a real lead in value-based specialty care. The second is discipline and strategic M&A, as most recently evidenced by the NIA and IPG acquisitions. Third is accomplishing those two objectives within a disciplined and efficient capital structure.
Now, we've been quite clear since the close of the NIA acquisition that our near-term priority in capital allocation is de-levering, and we continue to reiterate that today, with a goal of being below 2x net levered by the end of 2024. We also continue to expect to generate this year more than $120 million in cash before paying interest. We just talked about our long-term expectation of EBITDA to cash. Seth opened the day reiterating our $300 million exit run rate target coming out of 2024. This is the bridge to get there. We had $106 million of Adjusted EBITDA in 2022. That 106 included $10 million of EBITDA from the IPG acquisition.
On top of that, on a fully synergized basis, we had $85 million from NIA and another $15 million from IPG. We expect, based on the curve we talked about a little bit ago, we would expect maturation between $40 million and $50 million by the end of 2024 coming from our Performance Suite contracts. That gives us a strong line of sight into EBITDA with no new growth on our current business of approximately $250 million. Between now and the end of 2024, we do plan to continue to grow the business. We would expect a growth in our EBITDA of an incremental $50 million to hit our exiting run rate of exiting 2024 at $300 million in Adjusted EBITDA.
Finally, before we open it up for Q&A, to reiterate our financial framework, as we think long term, we really are highly focused on sustainably growing the EBITDA of this enterprise. Here, having an outlook once we have achieved the $300 million target exiting next year to continue to grow that EBITDA by at least 20% a year. We expect that to be supported by revenue growth in the mid-teens or better, with possibility to meaningfully outperform that number in any given year based on strong growth in the Performance Suite. We expect to generate nice amount of cash from our Adjusted EBITDA, and we continue to expect a steady state Net Leverage Ratio of approximately 2x. With that, I think I'm gonna ask Seth and Dan to come on up. Seth Frank has a microphone, and we're gonna launch into Q&A.
All right. Okay, here's how this is gonna work. I'll just go around, raise your hands, and we'll take questions. John just did a great job with capital reallocation by giving us an extra five minutes, can thank him for that when we're done. Direct your questions up on stage, and if we need to bring in our other speakers, we'll do that. All right? We'll go first, Charles.
Yeah. Thanks, Charles Rhyee with TD Cowen. John , just wanted to just follow up on your presentation there, where in the bridge that you gave to get to the $300 million, the $50 million is where the... is implying... Is a combination of both growth in the base business plus any additional, let's say, tech and services deals, or what... You know, how much of that do you expect to come from maybe new tech and service contribution? Cause obviously we had the Centene one just earlier this year?
Focusing in on that last $50 million in the chart, right? We expect the majority of that to come from new tech and services deals. Now that could be specialty tech and services, so adding oncology tech and services to a cardiology partner, for example. It can also be growth in IPG, surgery management solution, and anything else that delivers near-term EBITDA. It's not likely to meaningfully come from the Performance Suite, given that maturation curve that we looked at. It's mostly gonna be on the fee side.
just to follow up, in that long-term guidance, you're talking about at least 20% Adjusted EBITDA growth from 2025 onwards. That's using 2025 as the baseline, so we're kinda really looking out to 2026 and beyond.
That's right.
I'd imagine the $300 million at the end of 2024 is still annualizing a much greater rate in 2025. Is that fair?
That's correct, Charles. Yeah. That's a good point.
Okay. Great. Thank you.
Thanks. Anne Samuel, J.P. Morgan. You guys spent some time today talking about the integrated operating model, you know, and a lot of efficiencies, and I was wondering if you could maybe touch on how much of that is embedded within your synergy guidance and if maybe there's any incremental opportunity for cost savings?
Good question. Most of it is fully embedded. You may recall back in November, we outlined a $15 million synergy target for the NIA acquisition, and an important component of that $15 million was the global model, and leveraging the model that we had at Evolent for those NIA operations, which were all state-side at the time. The majority of that is already captured in our guidance. Now, I'd love for there to be upside, but think of it as in-included in that 15.
Just had to check.
Yep.
You know, maybe one more. You talked about opportunity to convert some of your tech and services customers to Performance Suite over time. Just wondering, you know, how big is that opportunity? How many of your customers right now really make sense to make that change? You know, how do we think about what proportion of that makes sense?
Go ahead, Dan.
Yeah. I'll start, and Dan can add onto that. I think, Annie, it's very significant in the sense that the percentage we showed today, it's 5% penetrated effectively within the current base. I think the litmus test for why would I want the Performance Suite is if I'm a health plan that is struggling to make the numbers work. I have an MLR issue, I have a profitability issue, and I think nobody's immune to that, you know. I think in particular, everybody's looked at the risk adjustment changes that are coming down the pike. There's a number of other changes that are similar to that. I think what that does is creates more pressure, and it creates a need to address the savings through utilization.
You can't do it through coding anymore in the same ways that you could over the years. I think, you know, what we're hearing from our customers is that that pressure is likely to ramp up the focus on specialty care. Again, I don't think there's, you know, immunity to that anywhere in the marketplace. You know, I think you're not gonna have a specific formula, Anne, on.
You know, which type of plan or which market it's gonna be based on that kind of pressure that we look for.
Yep, Sean Dodge, RBC. John, on the margins on the Performance Suite, you talked about, at maturity, there can be some variation in those. Maybe just give us a sense of how much variation there are. Then I think you mentioned too that it can vary by payer. How much variation kinda do you see at maturity amongst the different payers?
Yeah. It's within a range, of a couple of percentage points, at maturity, is what we tend to see. It's not a big variation at maturity. Where you can see more variation, Sean, is in the path to maturity. We've seen, for example, customers in areas that are sort of ripe for this ramp to 15% quite quickly, and we've seen them take a little bit longer. You tend to see more variation in the pacing than you do in the final outcome.
Okay. Then you talked about early on incubating a Performance Suite program for musculoskeletal. Maybe just should we think about that operating much like cardiology and oncology, and then, you know, when do you kind of work to scale that up?
Yeah. I'll start, and Dan can chime in as well from a product perspective. you know, on timing, the sales cycles for these Performance Suite deals, as we've talked about before, are relatively long. Talking 6-12 months. As we contemplate when might a product like that be live in the market, you're probably talking about 2025 at the earliest on a realistic basis. Dan, you wanna talk a little bit how we might sell it?
Yeah. I would add a few points to that. As we have our voice of customer and we're engaging with health plan executives, MSK is always a top three pain point, along with areas like oncology and cardiology. We feel like we have the ingredients to create a lot of value in MSK. Just to remind the group of what we talked about earlier, 4 ways we create value in MSK, we can prevent unnecessary surgeries from happening in the first place. Number 2, for the surgeries that do need to happen, we can make sure they happen at the most appropriate site of care. Number 3, we can work with the surgeon to optimize their device choice. Number 4, we can engage with device manufacturers to optimize unit cost of those devices. Again, 4 different levers we have.
Right now, we sell MSK on a tech and services basis, but certainly we see opportunity to stitch those four levers together and over the next 18 months start to build out that solution such that in 2025 and beyond, that could be a third meaningful Performance Suite solution for our business.
Hi, guys. Thanks for taking the question. We heard in the customer testimonials kind of a lot about care navigation for, what I think was the first time. It seems like a new but very reasonable capability. Is that broadly deployed across all of the Performance Suite today? Is there incremental margin potential, relative to that 15% as you deploy, navigators and drive increased patient compliance with the, Level 1 Pathways?
I'll answer the first part of that question, John, I'll pass to you for the second. In terms of care navigation, agree, the various customers did mention that, this is in part why we did the Vital Decisions acquisition a couple years ago. If you think about end of life care in the United States, 35% of the care that happens in the last 12 months of life is either unwanted or unwarranted. That's a problem throughout all of U.S. healthcare, in particular for oncology and cardiology. As I mentioned earlier, shared decision-making is something that gets talked about a lot but gets done very little. We believe there is a significant mission opportunity, first of all, but also business opportunity to integrating the member voice throughout the entire journey.
As to the question of the Performance Suite, we wanna make sure that we are aligning our Performance Suite contract with structures that would allow us to capture value from the savings we're creating. In Performance Suite contracts where we've done that, yes, we are deploying the end of life care navigation in those relationships. That is something that we do in a handful of our Performance Suite contracts right now, but something going forward that we wanna be doing in every place we can.
Yeah. The way that I think about the margins is in 2 ways. The first is it will increase our confidence in underwriting, in evaluating a new opportunity, knowing that we have this lever. The second is it will increase our overall sustainability in driving those margins. You know, we think and strive to think on a pretty long time horizon with our partners and have a perspective that our goal should be to fairly share in the value that we're creating. We believe that meaningfully impacting our customers' bottom lines also supports our bottom line. This is code for saying we're not gonna go out there and try to drive a 25% medical margin in these kind of specialties. What we are going to do is really seek to drive the most sustainable partnership that we can.
For the transcript, that was, Jessica Tassan at Piper Sandler who asked the question.
Thank you. Jailendra Singh from Truist Securities. I want to ask about the Medicaid redeterminations. I know, last earnings call you talked about 8% to 10% impact. Any updated view there given since your last update, there have been some states coming out with some update on first tranches of redeterminations. I know that those are not your key states, but curious, like if there any feedback from your key states, how are they prepared, make sure that they don't see similar kind of disruption?
Yeah, that's a good question, Jailendra. I think the punchline is no change in our assumptions. as you note, we have been sort of monitoring what's coming in, from states across the country. We tend to be particularly dense just by happenstance in states that are expected to execute on redeterminations later, Illinois being a good example. To remind folks, what's in our guidance and expectations is a gross loss of between 8% and 10% of Medicaid members by the end of this year relative to where we started the year. Now recall, we're growing meaningfully in Medicaid, so we'll actually have a much lower net loss.
We expect that's about 2/3 of the way there, expect the aggregate reduction in Medicaid membership, again, on a gross basis to be in the mid-teens by the time all is said and done, that's what's incorporated into our $300 million build.
Just follow up to that. On anything on risk pool as such, like, I mean, any update there as you think about the impact of redetermination on risk pool?
Yeah. No update. We do have incorporated into our guide an expectation that the average cost per member of those who fall off the rolls as a result of redetermination is lower than those who remain. That impacts on our. It's incorporated into our $300 million target as well. Still too early, I think, to really have any update on those numbers, we continue to watch it. Yeah. Obviously, we're not gonna guide for 2024 and 2025. Appreciate it, though. Look, I think what we're seeking to do here is reiterate two things. The first is our confidence in reaching that $300 million target exiting 2024. Of course, 2025 will be meaningfully higher than that, right? That's an exit number.
An expectation that we can continue to grow the earnings of this business for multiple years out by that 20%+ number. I think specific cadence on 2024 and 2025 is gonna depend on cadence of go lives, maturation curves, and so on. That's the way that we're thinking about the long term of the business.
Sandy Draper at Guggenheim. First question is a short one for John on the 2 x leverage. Wanna understand, I know that's the target, but it sounds like, is that a sustainable... You're comfortable in maintaining it, or is the longer term goal, given the cash flow, do you wanna delever completely and you said no debt, or do you think long term 2 x leverage is where the business should be?
Yeah, it's a good question, Sandy. I think what we're hoping to communicate with that target is at some point when our balance sheet is in a position to do so, and we have completed the integration of One Evolent that we laid out today, we believe we've been pretty successful with M&A, and at some point in the future, we believe we will do that again. There may be a debt component to something like that to efficiently finance the transaction. And what we're seeking to communicate today is we would do that in a thoughtful manner with that sort of steady state Net Leverage Ratio in mind of 2x.
Okay, great. The next question's a broader sales question. It relates to something that Seth said, and also, John, you said about this length of the sales cycle. Just thinking about the length of the sales cycle on the Performance Suite especially, it's longer, but what gets that RFP out there? Is there stuff that you can do with the customers to drive it and push things, or is it really the customer has to. Its own internal pain point. They say, "We need to do something. We're gonna put in an RFP," then you can respond. Are there things you can do, and maybe tying it into the One Evolent, that could maybe accelerate customers saying, "We need to move now," or is it really a wait and then pounce when the opportunity is there? Thanks.
Yeah, Sandy, good question. You know, interestingly, the Performance Suite's not purchased through RFP. They're not competitive dynamics generally. It's generally our solution directly, and it is usually us going to the plan and proposing it, or them coming to us and saying, "Hey, we need help." It's a more proactive on our part. Often we spot it in the data, right? Here's the savings we think we can generate. What you'd normally see is a cadence where we reach out and say, "Hey, look, we did some math. Here's how much we think we could drive in savings. Here's what that would look like. Here's the process to get that deal done." We're, you know, we're commercially minded and pretty aggressive about identifying those opportunities, and that's how it's gonna play out typically.
I like that because it allows us to pace the cadence, Sandy, of when we're ready to do those, when we wanna do those, but also picking out markets.
Opportunities that we feel really good about hitting our mature margin profile at, right? To me, it is a very thoughtful process that is proactive, where we're picking our spots carefully. That's, I think what I wanna take away from that.
Hey, David Larsen with BTIG. Can you talk a little bit about the percentage of times you're actually communicating with members and/or cardiology/oncology practices? Just what I'm getting at is when you go from that 6%-15% margin over a 2-year period, how aggressive are the actual interventions? Let's say there's 100,000 lives. Let's say 10,000 of them have some sort of an oncology case or cardiology case. Are you communicating with 100% of those members, making calls to each one of those members? Are you communicating with 100% of those physician groups? Are you basically managing the call center that the members call into? Can you maybe just talk about, like, give a little more detail around how frequently you intervene there?
It's a great question. Let me address providers first. Then we can talk about members second. In terms of the provider side, ultimately our goal is to make sure the provider gets to the optimal decision to treat for their patient. We don't care how they get to the optimal decision, we care that the optimal decision is gotten. We are going to deploy all the different capabilities that Dr. Hertler and Scott talked about earlier to help the oncologist make the best decision we can. Oncologists are extremely busy, so are cardiologists and surgeons. We wanna start with the fact that our technology should make it as easy as possible for the surgeon or the cardiologist or the oncologist to choose the high-value regimen.
We're gonna drive up usage of our technology engine as much as we can, right? That's why we talked about automatic nudges and highlighting preferred regimens. We wanna take the human touch out of it when it's not necessary. For cases where it is necessary, that's where we have our peer-to-peer engagement model. That's about 15% of the time where one of our physicians is engaging with a physician in a local market, where they're talking about the challenges of the case and the different treatment options, and here's the efficacy stats, and here's the toxicity profile. Let's make sure we are focusing our human energy on those high-value touchpoints, and otherwise, let's use technology to get to the right answer.
As I mentioned earlier, the goal is getting to the right decision for the patient. We are going to try to engage that provider in so many different ways to make that happen, right? We talked about technology as a way we engage and try to take out the friction and make it easy. We're gonna try to have alternative payment models in place so that we're influencing the physician to not be worried about fee-for-service economics. We're gonna be providing quality data, scorecards, all of that, ultimately in service of getting to the right answer. When human touch is necessary, we will do that, but that is not where we start, right? We're trying to make this as easy as possible for providers. On the member side, just to shift to that, it really depends.
Most of our engagement with members goes to what you were talking about earlier, which is: How do we help members navigate their care? We do that mostly today towards the end of life, in terms of advanced care planning. We see a big opportunity, though, over time to make that more longitudinal in nature. That's a bit of the case study I talked about of, you know, hey, specialty care is so complicated, helping members navigate the entire journey. In those examples, we're helping that member navigate the journey. We might, you know, engage with them for 4 video sessions or 5 phone calls. Ultimately, in both the case of the provider and the member, we're gonna match what they need, right? If they need to engage more, we'll engage more.
If they need to engage less and they wanna use technology, that's fine too. It really depends on what the model is.
Just a quick follow-up. When they use the technology to engage, is there a separate portal that the oncologists or cardiology practices will log into? They'll use your technology like 100% of the time, and maybe 15% of the time a conversation is.
Mm-hmm.
-needed. Is there a separate login, and are you tracking, like, that utilization rate?
Yeah.
of that technology?
Our tool is a decision support tool that also provides authorizations. That tool is used by physicians as well as their practice staff. It could be nurses or other staff members in the practice. They are using that tool, and again, our technology's gonna try to make it as easy as possible. When necessary, it'll trigger a peer-to-peer consultation, and that's where we're actually talking human to human. Again, we wanna have not a family medicine doc talk to a spine surgeon, but we want it to be truly peer to peer on the scientific evidence.
Thank you.
Jeff Garro from Stephens. First one for John. Just thinking about the long-term top-line expectation. It can be a little bit challenging with the very different PMPs from the different business lines. Maybe you could help us by framing that long-term revenue expectation in terms of member growth and then that product per member metric that you introduced last quarter.
Yeah. you know, a couple things that I'd say on that one, Jeff. On this products per member stat, we think is a useful way of thinking about the penetration of the business.
You know, you can grow the earnings, right, by 10% from the current LTM number, by just adding 0.15 products per member. That as an example, would be about the same number of product lives as cross-selling cardiology to half a Centene. On the Performance Suite side, the deal that we recently announced with Humana, that expansion, we scoped at $250 million of revenue per year. That obviously is a very significant annual growth on a business that's doing $2 billion of revenue a year. The reason for giving the revenue guide the way that we have, that revenue outlook, is we really are focused on driving that sustainable bottom-line number.
In that world, we believe it's important for us to remain extremely disciplined on the underwriting process as we're crafting these specialty capitation deals. So we're gonna have years where you can grow at 30% because you get a couple deals like the Humana capitation contract. But there may be years where we grow less than that, still in excess of our mid-teens target. But less than that, because it's mostly coming from technology and services. That's the way that I'd think about it.
Great, very helpful. Then maybe one for Seth or Dan. Just, you know, one thing we didn't hear about today is adding additional specialties. There's no doubt that there's lots of additional pain points for providers, and certainly recognize the capital allocation priorities. There's a potentially organic lever there as well. Just curious on the interest level and appropriate timeframe to think about adding additional specialties to the platform.
Mm-hmm.
Yeah. Look, I think given how low our penetration is today of our products on a relative basis, our energy is around cross-selling and selling what we have into the market, and I think what we have is sufficient to give the breadth that you heard about from our customers. They want that breadth. That's gonna be our priority. Of course, over time, I do think there will be more specialties that we add, and I think there are a number of ones that are interesting we can get into. Okay, Dan can walk you through what would be next and after that, and after that. I think for now, the focus is really not on adding specialties. I would say, you know, you look out a couple of years, that could change.
Jared Haase from William Blair. Excuse me. You talked a little bit about market density, and I think you mentioned Florida as an example where you've had strong growth. Could you just talk a little bit about any benefits you realize in terms of either, the variation in margin ramp, or I guess any other administrative efficiencies that you benefit from when you do achieve that density?
Yeah. Let me talk about the dollars, and then Dan can talk about the operations. You know, I think in those markets where you're particularly dense, you tend to see, the margin ramp happen a little bit faster, on average. Now that's gonna be pretty geographically dependent, right? If you dig into Florida, North Florida is different than South Florida. It's a very local business at this level. Where you do have high density of providers, and payer partners, you can see a faster adoption of our pathways. You want to talk about operations?
Yeah. Let me just talk about density and why we think it matters. If you think about a market where we're working with multiple payers, that means for that specialist, we represent a greater share of their patient panel. That means if we have an alternative payment model in place with them, it's covering a much greater share of their economics. If they're using our value-based pathways, now they're using it for more patients. They get used to our model, so we get more mind share. For lots of reasons, we see that drive up performance. The more they work with us, the better they get. That helps quite a bit in terms of driving medical cost savings.
Also, when we're in a market with a lot of payers or a lot of specialties, we get to understand the local infrastructure in that market. We get to know the PCPs and the MSOs and start to engage with them upstream around referrals like we talked about earlier. Again, lots of reasons that network effect is powerful. Then, you know, on your specific question of operating expense, I would say most of the benefit is driving higher performing physician behavior. However, there is also operating efficiencies that come from having multiple payers in a given market. Our local market team, the pharmacists we have there, the folks that go into the provider offices, again, they can scale across multiple payers. Again, benefits for both medical expense as well as operating expense.
If I could add one thing to my answer so that you know what to put in your models. We are, just to be clear, we're particularly dense in South Florida, and the Humana deal that we recently announced is in North Florida, so I would not expect that to ramp faster than what you saw on the page.
Thanks, guys. On the 3rd quarter call, you talked about expecting $180 million in revenue from Molina this year. If we look at the 1st quarter report, you did closer to $56 million. We annualize that number, you get well north of $180. How would you bridge what seems to be upside from Molina over the last, you know, six months of communication?
Two things that are countervailing forces. One is that Molina has seen some nice growth, and you can expect when we're giving forward-looking numbers, we have a little bit of cushion for go-live timing, because that's very important. That's not something that we can control. The second is, almost all of that population is a Medicaid population, and we would expect that to see a meaningful decrease by the end of this year. We may well outperform the $180 million number, but I would not annualize the first quarter, and assume that's what that Medicaid revenue is from that partner for the rest of the year.
Dan, well, two questions, maybe one for Seth and one for Dan. To a prior question you outlined, we're trying to influence behavior in multiple ways. I think everybody in this room appreciates that financial rewards either plus or minus you know, have a, a very specific impact on behavior. If I'm a physician and, you know, I'm not really kinda on board, the question is: In your kind of dinging that physician practice, how proximal is that to my activity?
Because if I kind of learn about this six months later or even three months later, you know, in my own mind, I may have rationalized many different reasons why I did what I did, and I may not even kind of appreciate that, you know, my practice group just got dinged for that. That's one question. The second question is, you know, as the business leaders of these physician groups, you know, kind of talk through this, they think, "Well, okay, I'm gonna get perhaps a reward for doing this, but alternatively, I'm gonna get dinged, you know, on my buy-and-bill," and, you know, does one offset the other?
I wanted you to just speak to kind of how big is that pool relative or how do you size that pool relative to some kind of perspective of the revenues of that practice.
Mm-hmm.
I just had a different question, but I'll let you take those. Thank you.
Yeah. Great, great questions. Ultimately, we are trying to drive behavior change, as you said. We're trying to do it for a 10 or 20-year period, right? We're trying to do it sustainably, the only way that happens is if providers wanna play ball with us and see value in our work. I would just reiterate, we think about driving behavior change in a multitude of ways. We're trying to appeal to the mind, the heart, and the wallet of specialists. In terms of the mind, we're showing lots and lots and lots of data, really getting into the real-world evidence of all these different studies that, you know, as per Dr. Hertler's point, maybe got approved based on a comparison to something that's not even a standard of care anymore.
Again, appealing to the mind with data and evidence, appealing to the heart by making sure, again, they're aware of the member goals, values, and preferences. In terms of wallet, that's where we get into alternative payment models. If you want a different result than the fee-for-service construct will naturally create, we believe it's important to have an alternative payment model in place. We believe the rules of the road on that are, you have to make those APMs tied to areas of quality, right? It has to be quality that drives cost savings. That's sort of one principle. Second is, you know, the exact scores and weights and benchmarks have to be extremely clear to the physician at day zero.
They have to understand it from the beginning in terms of, you know, how is the test gonna be scored. To your last point, we believe in constant feedback, right? You can't tell the physician 6 months later, you know, "Hey, you're, you got a C instead of an A." They wanna get that feedback sooner. We spend a lot of time in terms of our scorecards, getting that in front of the physician. If they're starting to veer off the wrong track, that's where Dr. Hertler and his team and our network teams go have conversations, really digging into why the performance is what it is. That's our philosophy on alternative payment models. In a world of ASP plus 6%, so buy-a nd- bill, there's a 6% add-on, to use an oncology example.
If you take that example, you know, there's a $100 drug or a $1,000 drug, and if we run them through our pathways, and they're roughly equivalent in terms of efficacy and side effects, but one's $1,000 and one's $100, that physician might make $6 or $60. Either way, the problem is not what the physicians are making on the drug. The problem is the actual cost of the drug, right? We spend a lot of time, we've been doing this for years upon years upon years, getting really sophisticated on ways to keep the physician whole, and frankly, to have the physician be even better off by choosing the value-based decision that aligns with quality.
Yes, thank you. Seth, just a different question. I don't know if this is actually how it plays out, but if you take a multi-year contract like that you announced at the beginning of this year with Humana, I somewhat envision your actuarials, you know, are going head-to-head with the plan's actuarials, right? Then there's, you know, a certain amount of margin that you obviously want to have. My question is that with the new kind of phase-in for 3-year risk scores, the information that the actuarials are looking at is historical, and the question is, with new risk scoring phase-ins, how might? That might differ or that might affect the historical data that you're looking at.
How would that impact, you know, the kinda two sides trying to look at historical actuarial data that is likely to change over the next two to three years.
Mm.
because of new phase-in risk scoring?
Yeah. I'll give a very simple answer. Dan can add to it. It's not gonna have a huge impact. The reason is we're looking at the prevalence of cancer in a population, the acuity, using that example, Chris. We use that to price it. The, you know, acuity of cancer we probably have better data on than the risk adjustment data that they have just based on a population and what's typical and what we've seen historically, Chris. We're gonna rely more on that versus the risk coding scores. Risk coding I think is particularly helpful when you're looking at a 100,000 life population and how sick is it on average across all the different conditions. For that primary care footprint, you know, that's super important. It's everything.
When you're looking at something more narrow like we look at, I think we have good enough data, Chris, to be able to sit with the plan, have that conversation, say, "Look, here's what we've seen over 60 million lives, and it's pretty consistent." I think that's not gonna be a big driver for us.
Thank you.
Thanks, Chris. Is there anyone who didn't ask a question? We can take one more who needs to ask one. Richard.
Thank you. Richard Close, Canaccord Genuity. John, I was wondering if you could go into a little bit how you develop guidance on a quarterly basis and an annual basis? I mean, obviously last quarter you had some positives, some good guys, some bad guys. Just, you know, how are you thinking about setting the guidance quarterly and having the confidence on the full year visibility?
Yeah, it's a good question. You know, we focus a lot on the year. As we look across the year, we typically, at the beginning of the year when we're giving guidance in February, will have a pretty good sense for what that total quantum will be of EBITDA. Where we will not have as much insight is on the specific timing of some of the performance elements of our earnings. What we seek to do, we give a relatively wide range, right? On the, on the bottom line. And give ourselves a reasonable estimate on a quarter-to-quarter basis of what do I know is coming in in this quarter and what do I think might come in next quarter.
Sometimes you'll see us, as we did, in February and then in May, update our timing expectation, where in February we had an expectation of relatively flat EBITDA across the quarters. Some of that was pulled forward into Q1 based on data timing, we communicated an updated sense of timing across the quarters. Our goal for expectation setting for everyone in the room and on the phone is to give that transparency by continuing to provide quarterly guidance, and a sense of what's contained in that guidance. Overall, though, you know, where we feel the strongest is in our ability to forecast a year. I think our track record on that has been pretty good.
Seth Blackley, you wanna make a closing remark?
Yeah. I just wanted to thank everybody for being here. We're obviously very excited about where we're headed. We have a lot of confidence in the path that we have ahead. Not just the quarters ahead, but really I hope you saw today the years ahead. I think we have a tremendous amount of confidence. A lot of that's thanks to the team, the 10 other Avalon executives who presented today. I just wanna thank them and the other 5,000 that are out there. I really appreciate what they've done, and we appreciate you being here. We'll see you soon.
Yeah. Thanks very much, everyone, for joining us, and maybe give a round of applause for everyone who helped put this together. You know where to find us, and we'll see you on the road. Thanks for making the trip.