We’re talking about replacing paper and for connect on call, that’s a capability. It’s like we’re replacing a call center operator that costs just a phenomenal amount of money to a practice to have someone answer your phone and take down a message. Like, it still blows my mind that that even exists. It’s like and when we talk to doctors, they’re mostly just using very, very old like, that is what they’re using. They’re using call centers that they pay per minute with minimums every single month, we just think about that as a capability that just drives a phenomenal like, by adding this technology and these capabilities, we add just a phenomenal amount of value to our client base. And it’s been a strategy that’s worked unbelievably well for us for almost 20 years.
Operator: We’ll take our next question from Ryan MacDonald with Needham & Company.
Ryan MacDonald: Thanks for taking my question. It was great to see that PAM was included in the MIPS calculation for 2024. As we think about the rollout of that and sort of how you monetize moving forward. One, is this going to be included in all calculations just right off the bat in ’24, or are you sort of rolling out gradually in specific patient populations? And then two, as you think about how the effect or impact of monetization is this going to be a potential usage-based monetization, license fee? And what does this mean maybe potentially for adoption amongst provider customers over time? Thanks.
Balaji Gandhi : So, from a MIPS measure, it is up to the practice, and I’m absolutely we have experts at Phreesia that could do a much better job of answering these questions. So, I take my really high-level answer as it be. But this is first off, this is just massive immaterial in getting broad scale awareness and adoption of the PAM as a measure and as the measure gets adopted, we believe very strongly will materially change outcomes, both health outcomes and clinical outcomes for these patients. And practices, we believe, will, over time, very much adopt this measure as what it is seen in policy and clinical worlds as the best of breed. And so, from a MIPS standpoint, it’s up to the practice as to what they submit as part of their MIPS measures.
So that’s I want to say it’s like 1,500 pages. And depending on your specialty, there’s different categories of what you could pick, how you pick it. And in year one, this measure, the PAM, pro PM, is included as a bonus measure. So, it’s between 7 bonus points and 10 bonus points to the practice, which can contribute up to 1% in additional revenue to them on their Medicare revenue. So, it’s significant, in terms of its impact, but it’s part of what you get when you get Phreesia, and we’re pretty excited about making this part of Phreesia. And so, we’re running hundreds of thousands of TAMs right now.
Operator: And we’ll take our next question from Jeff Garro with Stephens.
Jeff Garro: Good afternoon. Thanks for taking my question. Wanted to ask for some more color on what you are seeing in the life sciences end market. Curious how you would describe customer behavior coming into year-end around remaining budgets and those customers in their planning cycles for next year. Thanks.
Balaji Gandhi: Look, I think it’s still early in the cycle. But what we have seen is that clients, life sciences clients are really very much focused on scale and ROI, and tried and true, platforms that could deliver both of them. And I think it’s been very nice to see that we’re continuously at the top of their buy list, but it’s still early. And I think the team is out there working their butts out for all of us, and we’re pretty, we have a lot of hope that next year will be another really strong year.
Operator: We’ll take our next question from Jack Wallace with Guggenheim Partners.
Unidentified Analyst : Hi, this is Mitchell on for Jack. Thanks for taking the question. So, just considering the trial promotion period and the recent acquisitions. How much of the near- to medium-term growth algorithm in the software subscription segment is based on revenue per client expansion? Thanks.
Balaji Gandhi: Can you repeat that again? I’m sorry.
Unidentified Analyst : Yes. Just considering the recent the trial promotion periods and the recent acquisitions. We’re just wondering how much of the near- to medium-term growth algorithm within software subscriptions, it’s kind of based on revenue per client expansion?
Balaji Gandhi: Oh, got it. So, I think and we mentioned this in the letter I mean, I think just the fact that Connect on Call, in particular, brought a number of clients, I mean, in the 100, with very little revenue. I mean, tiny. I mean, so in fact, on a quarterly basis, it’s like in the 100 of dollars revenue per client. So, that has an impact of just dragging that number down. I think outside of that, I think it’s more of what we’ve talked about, which is you have to think about the totality of our revenue and the fact that we have different ways of generating revenue across the client base, inclusive of network solutions. But I don’t think outside of that one comment and how that impacts 3Q it impacted 3Q a little bit, it will impact 4Q a little bit more, and that’s really it.
Operator: [Operator Instructions]. We’ll take our question from Sean Dodge with RBC Capital Markets.
Tom Kelliher: Hey, good afternoon. This is Tom Kelliher on for Sean. Thanks for taking the question. Wanted to maybe following up on the earlier question on pricing. I think that one was mostly targeted toward payment processing. Wanted to refocus that on the subscription platform. So more specifically, when prospective customers are evaluating different intake solutions. What are the key factors that these are going to make decisions? Like, where does price fit into there? Are you able to rank those factors and, have those evolved at all over the last couple of years? Thanks.
Balaji Gandhi: When we work with any of our provider clients, they want to know, capability, I think capabilities and value are the number one things that they talk about first and foremost. And frankly, we tend to win on both of those like hands down against lots of little point solutions and solutions that are often tied to specific mark, EMR markets or specialties. And our ability to provide just the breadth of solutions at the same time that we drive a phenomenal ROI and are willing to show that we can more frankly really quickly. While also at the same time just being able to intake the vast majority of their patients. But more and more we’re not just selling on intake, we’re selling on the breadth of being able to drive more patient visits, drive more appointments, drive a lower cost of running the practice. But I’d say intake is becoming less and less of the reason why people are buying us even though it’s still our number one driver.
