Jason Clemens: Sure, Richard. I would tell you that from the last year specifically, yes. During the third quarter, we have met the earnings commitment, the cost-out commitment of $25 million in year for 2023 and $40 million annualized. So that program, we put a bow on that. The final reductions were made in early September, and so those dollars will start flowing. In terms of the overarching ability to get cost out by leveraging technology. We absolutely believe there is more to go. We’ve made reference in the last 90 days of when we guide in 2024 — or for 2024, we will expect to have a commitment on cost management. And as you said, it’s a result of these technology investments that we’ve made as well as the heavy integration work that we’ve been focused on throughout the year.
Richard Close: Okay. That’s helpful. And then with respect to the strategy on expanding enterprise sales. Can you just go maybe more in detail on that strategy and potentially sizing the opportunities there?
Richard Barasch: Yes, sure. This is Richard. The traditional Adapt sales model has been an individual sale generated by a referral from a provider which results in a prescription, which results in a fulfillment of a prescription. So we’re dealing with literally millions of individual transactions. In enterprise sale, like what we are doing with Humana, aggregates patients in one place. And the issues that we’ve got with Humana, which by the way are going to be great learnings and just want to reemphasize that our relationship with Humana is in great shape of working together on all these issues. So I made that very, very clear. But by having a large relationship with a payer or a hospital system to aggregate all of the — in a particular category, like CGMs, like PAPs, like respiratory, that we can achieve savings for the system, the most important — most importantly, reduce friction by having a set of parameters that are not individual prescriptions being fulfilled by individual providers.
So we think the market is large. We think every payer is a potential customer for this. We think that every health system is a potential customer for this. We’re generating a pipeline, even in a very short time, that we’re very happy with. And quite frankly, we expect to see a lot of good results in this category in 2024.
Richard Close: Great, thank you.
Operator: [Operator Instructions] And our next question comes from Joanna Gajuk with Bank of America.
Joanna Gajuk: Good morning. Thanks so much for taking the questions. I guess a couple, I guess different follow-ups, if I may, I guess coming back to diabetes. So I guess this quarter sounds like slightly lower than expected down 8% year-over-year in the quarter. And previously, you talked about kind of flat for the year, do you still expect it? Or is it more kind of down slightly for the year? And I guess for next year, how should we think about diabetes revenue? I guess, previously, you talked about a slight growth. And then I guess, as it ties to your previously expressed long-term outlook for that business growth. Any changes there?
Jason Clemens: Hi, Joanna, thanks for the question. This is Jason. I’d say, firstly, on the pump and pump supply revenue. Again, we expect about a $9 million or $10 million year-over-year headwind in the fourth quarter. As we think about ’24 on pump and pump supplies, and I’ll get back to CGM in a moment. I mean, I think we need to look towards the pump manufacturers insulate, but there will be five product that is continuing to take share. And we are indeed a distributor of OB5s [ph] on our pharmacy channel. So we do intend to continue to grow that. Medtronic and Tandem are continuing to come to market with upgrades to existing products. And all of that in the mix, we do think that pump and pump supplies will be another headwind in ’24 over ’23, but not as much as it was this year, so perhaps half.
So that’s still our expectation. In terms of CGMs, year-to-date, we’re — we grew about 3% year-over-year. Again, that’s short of our expectation of where we want to be. We were flat in Q3, planning about the same, maybe up a point or two in Q4. But we do expect the effect of the big investment in Salesforce to start yielding results as we get into ’24. I think it’s a little early for us to comment on specifics of what we think CGM growth will be. But I do think it’s safe to say with the large investment we’re making, we do anticipate a return to growth for CGM in 2024. And that’s the data that we’re able to share today.
Joanna Gajuk: Okay. That’s helpful. And I guess, sleep, obviously, much better, but I see tough comps for next year. So I guess, how should we think about the sleep business into next year when it comes to growth? Because I guess this year is shaping up to be a mid-teens or maybe even better for the year.
Jason Clemens: Yes, absolutely, Joanna. I would say that as you think about the full year, the first half, in particular, we’ll have a tougher comp, particularly on PAP equipment, as we had record setup levels in the first quarter as well as the second quarter of 2023. Due to that 13-month, the reimbursement cycle, those patients will come off of the rental reimbursement However, they will come into our resupply reimbursement, and we’re continuing to grow that double-digit year-over-year. So we certainly expect sequential growth in our census as we go from here until through 2024.
Joanna Gajuk: And if I may, on the sleep business, so I guess you talk about some surveys you’ve done on the GLP-1 use by CPAP patients. And you did say something to the effect of potentially could at some point, I guess is the utilization of these drugs increases meaningfully could impact that business. But any thoughts in terms of how you think it might change your long-term growth outlook for that business versus how you were thinking about this previously? Does it change at all? Or at this point, you kind of still expect similar growth when we look out, I’m not talking next year, but longer term. Thank you.
Richard Barasch: I think what I tried to express is that there’s a lot of speculation from a lot of people, including something that came out from Bank of America, which was the stat about the 3%, which we thought was incredibly good for thinking about the growth of our business going forward. But we just don’t know. We just don’t know how fast the adoption with the adherence of the adoption of GLP-1s is going to be. And we do know that, if there are fewer people who are obese, there are likely to be, on the margins, some level of fewer people who are going to use PAP therapy. What we need to do is to — even if we assume that’s the case, what we need to do is take steps internally to make sure that we don’t lose from any reduction in TAM that might occur.
