InnovAge Holding Corp. (NASDAQ:INNV) Q2 2024 Earnings Call Transcript

Jared Haase: Okay, that’s super helpful. Thank you for that. And then I wanted to follow up and I think the theme of some administrative delays kind of at the state level, that’s maybe creating a little bit of a headwind for enrolment trends. I think that’s come up in recent quarters. I was curious, is there anything that you guys are able to do internally in terms of once you’ve identified an eligible potential participant, sort of working with them, working with their families, maybe helping them get through that process and maybe speed up some of that time? Is that something that you have any control over or is it largely out of your hands?

Patrick Blair: Well, it is a great question. I tend to ask the team the same question as well. When there are delays that are sort of outside of our locus of control, are there things we can do to still help the family see the end of the process and feel confident that this is going to be the right solution and it’s kind of worth the wait? So we certainly do engage with individuals and their family and make them aware of administrative processing delays and set their expectations of when we think enrolment will occur. And more times than not, we’re certainly able to achieve that and keep that individual in the funnel and get them access to the services that they need. At the same time, we’re dealing with a very vulnerable population and most of the individuals that are looking to access PACE are in need of rather immediate services and so delays with the processing of applications at the state can and do result in people making alternative choices.

Sometimes it’s going back into the state fee-for-service program. Sometimes it could be, if it’s in California, it could be with a PACE competitor in the same territory or they could pursue maybe Medicare Advantage in the belief that there’s an option there, but it is definitely something we do our best to manage. We’re working very closely with our states audit. The states have been great partners. It’s just the reality that they often use subcontractors for this work and that adds a layer of complexity for us to manage.

Jared Haase: Okay, that makes sense and I appreciate that context there. And maybe I’ll just sneak in one more question. It sounded like you launched a new marketing campaign during the quarter. Would love to just hear any specifics in terms of anything that’s maybe unique or has changed from prior years in terms of just how you’re sort of communicating the message about InnovAge services.

Patrick Blair: Yeah, another great question. We’ll be sharing some of our latest creative, if you will, at our Investor Day. And so people get a better sense for it if they haven’t seen at least our broadcast TV work. I think one of the things that we’re trying to do is to dispel that PACE is only for the absolute most vulnerable. There are a lot of individuals that qualify for PACE that see PACE as a place to enjoy socialization, meet new friends, address nutritional deficits and that’s a large senior population. And so I think we’ve tried to use our creative to drive a message home that PACE is a real resource to a broad segment of the frail senior community. I think maybe a second thing that’s new is we’re trying to appeal more directly to family members.

I think in many cases, family members find PACE as much a solution for them as they do for their loved one. And I think our messaging is starting to appeal to the eldest daughter. Our data will tell us that that’s a big decision maker as an example and so I think we’re just trying to appeal to a broader market segment and I think we’ve been successful with that. We’ve got a lot of great feedback on the creative.

Jared Haase: Perfect, makes a lot of sense. I’ll go ahead and leave it there and hop back in the queue. Thank you.

Operator: [Operator instructions] Our next question comes from Jamie Perse from Goldman Sachs. Your line is open.

Jamie Perse: Hey, thanks. Good afternoon. Maybe just starting with the Colorado enrolment trends, can you provide a little more detail on just the census rebuild there and patient mix that you’re getting? I think you mentioned some balance between community versus facility patients broadly, but any surprises there just in terms of the patient mix and the broader trends on Colorado census rebuild?

Patrick Blair: Jamie, I think I would say that everything’s going as we expected and hoped in Colorado. I think we’re on the other side of what might’ve been some pent-up demand and I would say that that pent-up demand was maybe less reflective of a traditional participant mix. I think we’re on the other side of that. At the same time, I think that, at least our gross enrolments are back to sort of the best period in the company’s history. So, coming out of sanctions, we set a goal for ourselves, at least near term, to let’s get the company back on kind of the track it was in sort of doing all the right things. And I think we’re seeing that. At the same time, it’s an example of a market where, the demand is probably a bit larger than what’s getting processed through the funnel and we are working closely on that issue, but still it’s leading to responsible growth in Colorado and we’re feeling really good about it.