Thank you, Kotte.
Kote?
Yep.
Just put your name.
Yeah, no, my name is perfect.
Welcome. Thank you, guys, for joining. We have GoHealth, who is, say, the leading, I'd say, MA broker. Is that probably right? Probably the largest, most scaled MA broker. You know, really, really cool business, who, for those of you who don't know it, we have Vijay Kotte, who's CEO. We'll dive into it, but, you know, from the, you know, just, I guess, my take is that I look at a lot of different insurance distribution and, you know, this is the business model in general that's been emerging and building. Today, from a sector standpoint, I think it's much better off than it was a couple of years ago. You know, Vijay and GoHealth has actually taken it in a pretty unique direction.
So, you know, I think what people looked at a couple of years, GoHealth is, not saying just the organization, but, you know, they've really come up with a much different model to fit where the business is going. And with that, Vijay?
Thank you, Adam. I really appreciate everybody taking the time to listen to our story and where we're going and what are the unique differentiators that I think makes us special, and really committed to a population who can really use the help that we provide. So as we go through this deck, I hope to provide you that quick synopsis of what we do. I'll kind of flip through these. You can refer to these at your own time. These are standard legal disclaimers about forward-looking statements, et cetera, so please acquaint yourselves with them later. We'll jump right into the meat of it. Let me start with our management team. As Adam referred to, I am the CEO here at GoHealth, have been here for two years exactly tomorrow.
So, tomorrow's my two-year anniversary, and what you'll see on the page is we've assembled a very unique team, most of whom are new over the course of the last two years. They were brought in with very specific skills to handle the dynamics that Adam referred to. Medicare is a unique population. It's a regulated program and requires your astute capability to serve the population while anticipating the needs of the population, as well as the regulatory environment in which you're going to operate. This team has the skills of being able to react and serve the population that we address. Also on the page, you'll note that there are two green boxes on the page. Myself and our COO, Mike Hargis, became licensed agents as well.
So what we did is we went through the full licensing process to understand the experience of the most critical asset within our shop, which are our licensed insurance agents, the training they go through, what they do with consumers, so that we can help integrate that into the strategies that we operate with as an organization.
Now, this is an investment highlights page. I'm not going to dive into the slide right now, but this is what you would take back to your teams to describe what is interesting about GoHealth, and at the end, we'll revisit it again, and I'll show you all... Hopefully, provided you enough color throughout the process, to be able to substantiate why these are true. Now, let's take a quick glance of the market landscape that we serve and what we most recently delivered for those consumers.
First and foremost, the Medicare market. The Medicare market is made up of 65 million Medicare consumers. A lot of different criteria to become eligible. Of those, about 30 million have had some sort of interactive experience with GoHealth over the course of the last, call it, 5-6 years. As you think about the growth of this population, it's growing at approximately 11,000 consumers a day, so it's going to continue to grow. They continue to need more and more support. Last year alone, GoHealth served over 2 million consumers, assess their benefit options, and think through what would make appropriate sense for their healthcare coverage.
We enrolled 825,000 consumers into new plans that met their needs, delivering $735 million in revenue, $75 million in Adjusted EBITDA, and uniquely, $109 million in cash flow from operations. I say uniquely because if you looked at 2021, we had burned over $300 million in cash in 2021, and now we generated a positive $110 or $109 million in cash in 2023, a swing of nearly $400+ million into the positive direction, and there's a number of reasons that are associated with that, and we'll illuminate those as we go through. Now, what's special about GoHealth? The big piece that most people don't recognize is that we are really built on very significantly purpose-built proprietary technology.
So as I said, we have 30 million interactions with consumers. All that data set feeds our proprietary logic for scoring all the health plan options that are available out there, and then matching consumers with the right options, and doing that in a way that can deliver scaled leverage with efficiency on a cost per acquisition. Our cost per acquisition is the lowest in the industry, and it is built off of this technology that we're able to enable that, so that for each additional dollar we can invest in our team, we can get incremental growth and efficiency that comes out of it.
Tech-driven, proprietary tools, unique contracts, and as Adam alluded to, because of the volume of significance that we are to the carriers and how we've been able to uniquely serve their needs, we are able to enter into different innovative contracts that nobody else in the industry has. It was originally Encompass, and we'll talk about some of the new ones that we're deploying now as we anticipate the needs of the population.
We talked a little bit about the growth in Medicare Advantage market. I won't drone on this slide, but what's really important are the middle sections. So Medicare is growing, and what you'll see is there's two distinct populations within the Medicare pools as it relates to health plans and their attractiveness to health plans. You have the traditional Medicare consumer, generally ages 65+, ends up being eligible for Medicare.
Then you have the special needs population, those who maybe are disabled, low income, or have chronic conditions. Those chronic conditions and/or low incomes or special needs populations deliver nearly three times the margin for health plans versus the average Medicare consumer. And when you skew to the right of the slide, what you'll see is that GoHealth uniquely attracts that population into our shopping experience, such that though the overall market is made up of only 25% of special needs population amongst those in Medicare Advantage plans, we enroll 42% of those that we of our total enrollments are for special needs plans. So that, not only from a volume standpoint, indicates our significance to health plans, but also from the mix and quality of the consumers that we bring to them is valuable as well.
Here's a quick snapshot of many of the logos that we work with. There are more. These are the major health plans in the country that are part of our marketplace, and we are of significance to nearly every one of them, in general, being the leading enrollment source for almost all of them on the page. And we have continued to be in that position for years, despite all the changes that have happened in the industry. And it's really been because we've been able to deliver and orchestrate new service delivery programs that meet the continuously changing needs of the consumer, but more specifically, how those align with the different pressures the plans are facing at different points in time.
Now, when we think about the value-added service we provide, this is intended to be that, the problem we're solving. So you can stare at the slide, but let me give you the high-level concept. Here in Cook County, in Chicago, if a Medicare consumer goes to figure out what plans they want to enroll in, they're gonna have... They will go to the cms.gov website or medicare.gov website, and they'll put in their zip code, and they'll spit out about 60 different plan options. Some of them HMOs, some of them PPOs, some of them special needs plans. They don't know what they're eligible for. They don't know what their doctor's in. They don't know what drugs, if their drugs are covered. Now, think about most of you in the room, employer-sponsored benefits. You probably have an HMO, a PPO, and an HSA.
Those are the options. You pick one of the three. That's hard for some of us. Now, you're talking about a Medicare consumer starting to navigate 60 different options and having to know that the most important need that they have to fulfill with is their healthcare needs is dependent on making that choice right? And gosh, even if you go to a seasoned agent who's trained on this, how can a human differentiate all these 60 different plans and show you the nuance between it? So what we really do is we solve that problem, not only by being an objective source for the consumer, but also being able to support the agents so that they can actually efficiently navigate the different options and do comparisons for the consumer so that ultimately they can feel empowered.
The consumer must feel empowered to make the right decision for themselves, not be sold something. We empower the shopping experience. We don't sell policies, and I think that's a really important crux of how we operate. Now, this is a demonstration of the objectivity of who we are, and sometimes buyers and shoppers of, in the Medicare space don't know what they're getting. They get a sense of what they think they got, but here's what's really happening. On average, there are three different ways that health plans, enrollments happen in the Medicare space.
Far left is when a consumer knows, let's say, for instance, they know they love United, and so they go call United directly, and what they do is they will talk to them to that agent on the other side of the phone, and they won't be presented Humana plans. They'll be presented United plans. That United agent probably doesn't need a lot of technology to compare the plans because they're only comparing with the United, and the consumer is likely going to be pushed into one of the United products, right? The second scenario is a field-based agent of some sort.
What most don't know, when a consumer goes to an agent, they assume that that agent, again, in Cook County, is representing all 60 plans available in the county, and they're gonna help you pick the one that's best for you. In reality, it's inefficient for most independent agents to be appointed to write all of those products. They might have 2 or 3 of them, and of those 2 or 3, they'll pick one, and sometimes it's a lot of different motivations as to which ones they're gonna pick, and they'll put that consumer in one of those plans. But that consumer probably felt like they got broad-based selection. Now, you move to the far right, which is GoHealth. We have all the major health plans in our marketplace. Our consumers are going to get broad-based choice.
Our technology is gonna make sure that we can do a full comparison for their specific needs to match them to a plan, because two people living next door to each other may have all the same birth date, same age, same everything, they may have very different personalized needs that yield a different best plan option. So you can't just ask your neighbor, but our tools can enable that matching. And ultimately, the last piece of this, which is so important, is we have an unbiased PlanFit CheckUp, which means we assess all of that, and we tell you which one matches best, even if it's the plan you're already on. And if it's already on, we're gonna tell you, "Do nothing." We're the only ones in the industry that pay our agents to do exactly that because that doesn't trigger to...
It hasn't triggered to the compensation to the agency. But we pay our agents to do it because it's the right thing to do to build a long-term, trusted relationship. The philosophy we operate here at GoHealth is that we start with doing right. Do the right thing first and then find a way to make money doing it. Because if you do the right thing, again, we can still be ferociously capitalistic, which is we believe there's a long-term asset we built, which is a trusted relationship that will pay back over time. So you can do the right thing and make it a good business decision, too. So this is how the company has evolved, and as I highlighted, major dynamic change in the way that we've handled our capital structure to be able to generate positive cash flows.
We've paid down over $230 million of debt over the last 18 months. We started with about $670 million when I started two years ago, and now we're down to about $425 million of term debt today, which we're in the process of assessing all of our refinancing options to get lower interest rates on. Our operating model has gotten a lot more tech-driven, supporting our precious asset of really tenured agents who know what they're doing, or enable them to be able to do more with less, right? So we have fewer agents doing more than they have ever done because the technology is enabling it. That's the true unlock of the technology we built.
We continue to be one of the largest in the industry, and as I said, generating positive cash flow. This is the overall experience. I won't go through all of it in the interest of time, but the net-net here is you have a standardized approach to this. It was extremely variable before. Depending on which agent you would get connected to, you may have a different experience of how you flowed through this. We establish a unified agent experience for our agents, and what that does is it really doesn't change the experience at the top end of our performing agents. What it does is it speeds the acceleration for which a or it accelerates the speed at which a new agent can get to average.
When you can do that at scale and do it quickly, that is the unlock for cash efficiency, operating efficiency, and overall experience for the consumer. That's what this model does. You have a shopping experience, you do a personalized matching experience, you have a secondary verification of a real-time audit of that experience, so you're not jammed into the wrong plan. We confirm it, and then we have an activation. The key to satisfaction within the Medicare population, frankly, most products, is you bought the product for a reason. There was something unique, one or two things that really made you want it. In the first 60, 90 days, did you access it? Did you get it the way you expected to? That's activation in our world. We're supporting activation to make sure you decrease the risk of buyer's remorse.
And then you continuously enable access to those benefits, as well as continuous shopping when changes happen. And that's one of the things that I think is really important, I'm gonna focus on in a second, which is when changes happen, and we are on the precipice of a major change, disruptive change for more consumers than we've ever seen before, which is, absolutely what is going to be a tailwind for us as we think about where we're going this fall. This is, again, I won't focus on this.
We've talked a little bit about the PlanFit CheckUp, of how a traditional broker would likely try to enroll anybody they get on the phone, versus what we do is we tell a consumer when they are on the best plan, to stay on that plan so that we can build trust for the long term. And that's Anne on the far right. Anne has a plan that's pretty good today, one of the top three plans. Disruption and change is really stressful. So if you don't need to change and we think you're on the best product for you, or at least the most suitable plan, then we'll tell you to stay on it. And that's why we believe that Anne now becomes a loyal customer for us the long haul.
So our goal is to keep Anne for all of those dots on that timeline, all 20 shopping experiences. The green ones are where she was already on the right plan. The ones with the little GoHealth leaves in it, those are the times when there was some sort of change in Anne's life. She got diagnosed with a new condition, she adds new drugs, she moved. A lot of disruptive things can happen, and those are natural things that come in the Medicare life cycle. In that journey, we've got to be able to assume that plans should change, and that is the model upon which we build this, is bring in Anne through the whole process, and don't try to get overindexed on just trying to maximize retention in one policy.
Accept the realities of what's true for your consumer and build your business around it. And that's what we've done, and that's why we think PlanFit CheckUps are a true differentiator for us versus the field. Now, I'm back to our investment highlights. When we think about the investment highlights, you've got a very large and growing market. We talked about 65 million, growing at 11,000 a day. The unbiased shopping experience is unparalleled in the industry. Nobody else is being able to drive technology to force the right decision for the consumer every time. And one of the unique elements that we've done in our business model that separates us to do that is we have already said it's a very nuanced thing. There are three parties in this equation. There are consumers, health plans, and brokers.
A typical broker model is the broker brings consumers to health plans, and they get paid by those health plans. Therefore, whichever health plans will pay them, whichever relationships they have, that can influence the way they operate. For us, we change that model. We bring health plans to consumers. The consumer is our customer. Their needs are paramount, and whoever's plan is the best match for them is the one we're going to offer them. And that is what really supports this concept of unbiased. If a health plan wants to pay us more to get more membership, it's not gonna change the way we operate. We tell them, "If you invest in benefits, and if you're the best quality product for the consumer, you can rest assured you will win in our model.
But if you're not, you can rest assured you're not going to win." And that, I think, is, you know, kind of a breath of fresh air in the industry, to know that when you think you'll win, you will win, and that there's no headwind coming against you of opposing forces. Unique Encompass offering. That workflow we described is that Encompass workflow, a very diligent, QA-driven process supported by technology that enables not just our cash dynamics, but yes, it does help our cash dynamics. We've found ways to bring cash forward so that we have less risk on the tail commissions. But more importantly, that Encompass workflow enables standardization, where you can use the technology to drive efficiency and, most importantly, that high-quality experience every single time. So that's what the Encompass offering enables. Proprietary tech, again, all built for purpose.
We have our own proprietary tools that are built to integrate perfectly into our process, to enable API connections to simplify how we get doctor and drug information from the consumer. I mean, I, I'm sure most of you have not gone through this type of experience over the phone, but our average agent spends 13-15 minutes with a consumer just trying to understand which drugs and doctors they have. Right, there are API integrations where we can get that within 2 minutes or less if the consumer gives us the authority to, to, to tap into the databases there, and then just confirm the data. It wins for everybody. But antiquated worlds, which most of the industry is still working on, sits and spends 13-15 minutes on that if they're doing it the right way, because you do need to ask that question.
And so we've enabled our proprietary tools and the ability to integrate into those. Our experience management team. Our team has a diverse set of experiences, as I highlighted. I've been in the Medicare industry for nearly 25 years now, and the one thing I'll tell you from our experience is that Medicare is cyclical. It will change. Every year you get a new CMS rate notice. Every year you get new CMS guidelines. Every year you have health plan dynamics, and the key is you have to expect that it is going to materially change every 2-3 years. You need to be prepared for it, and that's the key. It's preparation, not avoidance. And so when you can prepare for it, you can do things like what we did with the Encompass model.
We anticipated where the market was going, we understood the risk of churn coming, and we got ahead of it with the Encompass model. Similarly, we see where the regulatory dynamic is going, we understand the compensation changing for health plans, and so we came in with PlanFit Saves ahead of when the market was going to need it. So we prepare to be prepared and ready, and now we're already in plans for what we expect the next disruption to be, either because of election dynamics or because of what the expected financial implications are to consumers and health plans. That's the key to the experience of this. Expect the change, prepare for it, don't try to avoid it, because that is delusional. Now, the internal marketing sources, we're able to do that and not be dependent on external, non-branded sources. That's another unique element for us.
Our relationship with health plan partners, like we said, being the leading enrollment source for nearly every major carrier in the country, enables us to innovate and work with them at the most senior levels to support our ability to, again, be proactive and plan for the change that's likely coming. Then finally, our balance sheet. We are paying down our debts, not just transferring and moving them around. We are paying down our debts, and we are operating with a rigor on cash flow to manage the cash we have and ensure that we only spend what we can afford to spend while still supporting continued growth. So we think this is a great snapshot of who we are, what differentiates us, and how we can support really being opportunistic in the new market dynamics that are coming.
This AEP, with a lot of disruption, which we think is uniquely the first time we've seen this in the last at least 3-5 years, and will absolutely be one that our unbiased model will tap into new consumers who have never shopped, or haven't shopped for at least that same time frame. So it's going to be an exciting time for us. With that, I will now turn it to any questions that we have in the room.
I'll kick off with-
Sure.
Actually, can I-
I'll switch spots with you. Here you go.
First, I've been remiss. For conflicts or disclosures, please check William Blair website, so sorry about that. You know, first question: with all the movement back and forth, what is the appetite of some of your bigger health plans to use the broker channel today versus maybe two, three years ago?
It's a great question that the carriers and their appetite to work with brokers and the broker channel. I think what I've seen is that they're being much more selective. They're not all hungry for growth at any cost and willing to take any risk to get it. So they're being selective, and they want to work with those parties that they know are auditable, and they can confidently feel that they're not exposing themselves to more regulatory risk because there is a lot of scrutiny today, and there will be more scrutiny on this.
So I would say that there is still an appetite to work with the broker model because it is a highly cost-efficient and cash-efficient model to grow, but they're being much more selective to going to those that have the infrastructure to give confidence of compliance.
And probably related, probably should have led with this, so... And going back to both CMS and market, that, you know, CMS reimbursement rates have come down, Medicare costs from the plan standpoint have come up. What is the... and I know there's a number of market reactions. Is that reducing health plans participation? You said it's getting more targeted. How are the health plans through you reacting to those pressures?
No, it's a great question of the reaction to the, again, shrinking revenue coming down, costs going up, margin compression, right? It's a, it's a disaster story for most, but that's an aggregate. That's what people are describing in an aggregate, and I think that's what this is about. It's a nuanced strategy for the health plans. They're looking and saying in certain markets, yeah, they need to cut bait and run. But what cut bait and run means they're likely introducing a new product that has a different cost structure in it. So they do need support to be able to still attract those consumers that they lost from the other plan to move them into the new one. And there are plenty of geographies and products where they want to actively grow significantly.
When you think about what's attractive to the carriers, it's those that can really be that specific of supporting, "I want to grow here," "I want to forget about this market," or, "I want to support transitions in this market." And that's what I found in our conversations has been most attractive, is that regardless of what their strategy of focus is, every carrier wants to grow someplace, and that's the key. And so we can support that dynamism of where they will be investing and be a winner and support that effort.
Okay. And this is probably more future. Talk about, you know, maybe some of the potential impacts of GLP. I understand CMS is, on a restricted basis, more allowing that, probably going forward than it had been in the past, the GLP drug. So what are, and this is probably for the next, next enrollment period, what are you seeing from the plans? And just some crystal ball, what does that, you know, long term maybe do to the MA business? Sorry.
No, it's, it's a great question. I mean, obviously, bids just got filed yesterday. We're not there yet to know exactly what people, how people will apply this into the benefit designs. It's a very unattractive space. I don't want to go off on a tangent as to what I feel about the GLP drugs in general, but what I will tell you is this, that, there is going to be interest from consumers to understand which plans offer and what the cost shares will be, what the availability will be, and what restrictions on use there will be, based upon the tierings, et cetera.
More to come, but I do think it's going to be very interesting to bring in populations into the MA pool that have generally not considered it, because this is a motivating factor to actually open up the idea of shopping with an MA plan that they didn't think of before, because this is a gateway opportunity for them. So I think it could be attractive, but it really depends on ultimately the implementation of how the health plans are complying with the new opportunity around GLP.
And yet it's, you know, it's not done, so we can't say, but do you think a material amount of plans, not looking for a number, will actually have GLP as part of the plan, or is it gonna be, you know, just a very, very restricted amount?
You know, I can't tell you. I have not had the conversations directly. I would say, from my own personal belief, from having done benefit plan design, I would say there will be a limited set of scenarios with specifically designed products where that makes sense.
Okay.
I wouldn't do it across the board for everyone to make it a winner across the board.
Right, right.
But I would have designed products that made the cost-benefit trade-off made sense.
Okay. And so from, you know, from the outside, so next year, well, for enrollment period, we'll start getting some visibility. Is that correct?
Sorry, of the drug dynamics?
The GLP. Yeah, the GLP.
Yeah, we'll probably get some information about that as the formulary data comes out much later than the benefit information that we get, but that'll be late or early October.
Right. And from a broker perspective or, you know, advisor perspective, 'cause you play both roles, maybe a leading question, but do you think, you know, is that more of a positive for you if GLPs do become bigger part of the plans, or is that... Yeah, there's probably both ways, but, yeah, how do, how do you think from your perspective?
So it's an interesting thing. Anytime you get a new benefit that attracts consumers to come in, they think about getting that benefit, and they don't always hear what you tell them about the trade-offs that come along with getting that one benefit. They want to hear, "I got this." They don't realize that they might have given up something else, even though you said it three times, right? We hear what we wanna hear. So I think there's an opportunity of more shoppers that wouldn't have otherwise shopped. I do worry about how we make sure that they're fully getting a great experience of understanding what they're getting to get these new benefits that they are. You know, we've seen in the past with other benefits, like Flex Cards and give back products.
There's a trade-off, and sometimes only the headline benefit is the one that they look sought after. But I do think that the upside is that you will likely have more shoppers, because I'm sure somebody's gonna be advertising.
Okay. Okay. At this point, with a minute, I think we'll cut it off, and then we'll definitely follow up the break up then.