DocGo Inc. (DCGO) September 2026 Conference Transcript

We are ready to begin. Thank you all for coming. First, I want to start with a disclosure. For important disclosures, please see the Morgan Stanley Research website at www.morganstanley.com forward slash research disclosures. If you have any questions, please reach out to your Morgan Stanley sales representative. Lee, thank you for being here. Maybe I'll pass it over to you for a quick intro on your side.

Yeah, absolutely, Chris. It's great to be here with you again. I know you know our story very well. For those new to .go, we're a mobile health and medical transportation company. We bring care to where patients are, or we transport them to and from care. Over the last 12 months or so, we've transported about 700,000 patients. We provide services across multiple states, across the U.S. and the U.K. We also have a 50-state virtual practice that does about a million telehealth visits a year. We also remotely monitor patients, keeping track of patients, making sure their chronic conditions are not getting worse, a lot of heart failure patients. We monitor about 55,000 patients today, and so we have a growing business of medical transportation and mobile health, and, you know, we're really excited about it.

Excellent. Thank you. So I want to start off with mobile health. You know, mobile health is experiencing a lot of significant growth in recent years. What sort of services are in that division? And can you discuss a little bit about the types of customers you're treating in that division?

Absolutely. So, you know, first off, we start with the problem. And in the U.S., there's a big problem, you know, with Americans suffering from chronic conditions, which is talked about a lot. There's over 160 million Americans suffering from at least one chronic condition. Many are suffering from more than one. And as a result, it's crippling the system, right? So patients are getting sicker. It's costing the system more money. As it costs the system more money, it becomes more and more strength. And so our goal really is to meet patients where they are. We think if we meet patients where they are in their home, for example, one of the things that I didn't mention in that intro is we'll go and visit 150,000 patients in their home this year. So we're going to meet patients where they are. We think when you meet the customer, in our case, the patient where they are, they're more likely to improve their health outcomes. We can help them improve their health outcomes, and as a result, they live happier and healthier lives and cost the system less money. And so, again, we're really targeting patients and helping patients with chronic conditions. We're dealing with aging populations. We're dealing with clinician shortages. We're dealing with rising health care costs. And so we've built an integrated mobile health platform, again, that brings care where patients are, either virtually through our virtual health care practice. We remotely monitor them, or we will go and visit them in their home when it's necessary. And that's sort of the suite of mobile health care services that we provide. It all works with our proprietary tech platform. So our tech platform is optimizing the right clinician with the right diagnostics, with the right licensure, delivering the care with the right modality in person or remote, all for the right patient need, and optimizing that across the system. So again, we have about 1,000 vehicles providing care in the field. We have 3,000 to 4,000 health care heroes, ranging from EMTs, paramedics, nurses, advanced providers, MDs, and our goal is to optimize the right clinician with the right diagnostics, with the right modality. If we can do it virtually, we want to provide care virtually. It's efficient and cost effective. If we need to be hands-on with the patient, we can also do that as well, and that integrated mobile health platform is really what differentiates us.

Excellent. So there's been a lot of focus on your path to profitability. your goal is to be adjusted EBITDA positive by year end. How are you going to get there?

Okay, so I'm really glad you asked this question, Chris. I know you and I have been talking about it. And, you know, I really want to be comprehensive and give very, you know, detailed specifics. So, you know, the first thing to note that, you know, while the company has been generating negative EBITDA the past several quarters, most of our business lines are actually providing a positive EBITDA contribution. So, you know, .go, we talked about it just now, consists of multiple service lines and currently only a handful of those service lines and the corporate layer are responsible for the losses of the company. So out of projected 2026 revenue, we shared as approximately, we guided a little over 300 million of revenue, about 240 million of that 300 million is coming from business lines that are currently today adjusted EBITDA positive on a contribution. So I wanted to share that detail. And so our plan and our requirement is that every business line that we continue to operate is going to contribute positive adjusted EBITDA to the portfolio, and we're expecting that that to happen by the end of the year. And so any business and any service line that's not generating positive EBITDA contribution is either going to be eliminated or redesigned as we progress through the year. And again, those steps are already being put in motion. So I really wanted to share that today. Now, somebody asked, like, why haven't we done this already with some of the service lines? Why haven't we started to redesign or sunset some of these service lines? And I think for us, we have multiple service lines that are growing very, very nicely. And as they grow, the scale, you know, helps us achieve profitability. Some service lines are not. And as a result, again, some of our transportation markets are not. And so, again, as we progress throughout the year and as we enter into next year, our plan is to either, again, sunset some of that work or redesign how we go to market there. So that's the first piece in terms of the revenue and where the profits in the company are coming from and where the investments are that we're making and how long we're going to continue to make those investments in some of the markets we serve. Then there's the gross margin. And so, again, we talked about the top line and which businesses are contributing. EBITDA are going to continue on, on the gross margin, we expect to return to about a 34% gross margin from our current level of 30.5%, which is what we shared on the last earnings call. Now, it sounds difficult to do that, but we've been, you know, we're not, our plan is not raise prices or lower wages, right? We have, some of our underperforming markets are in the mid single digit gross margins, and so just simple math, as we reduce those markets that are producing lower gross margin, that's going to improve the overall gross margin of the business, and we think that's very, very achievable. So just to give you an example, in the lens of our Q2 results, our revenues were in line with expectations, but on the gross margin side, again, using medical transportation as an example, we recorded 32% in transport gross margins in Q2, which was lower than we expected or that we'd like. Again, our goal to be at that 34% level, but if we remove the two worst performing transport markets from the portfolio, okay, one of which is in the process of being eliminated, the other one's being redesigned, the transport gross margins would have been 35.6%. So up from 32%, transport would have been 35.6%, again, if we remove those two underperforming So that is a big, big factor for us. Again, we're going to continue to optimize the service lines and the geographies, and And that's going to ultimately drive the gross margin higher, which ultimately will lead to the company achieving its profitability goals. And then on the SG&A side, again, in addition to the organic growth that we think we're going to see in Q4, Q4 is seasonally a very big quarter for us on the growth side. Winter months bring infectious diseases, bring respiratory illnesses. So we tend to see volumes go up in Q4. So again, on the growth side, we'll see improvement. On the gross margin side, I just talked about how we're going to see improvement. And on the SG&A side, we still need to cut about $3 million per quarter from where we reported our Q2 numbers. And so that's our goal. We already executed a pretty major rift in June that's going to be more apparent than the second half financials, and that's going to help us, again, cut down on the SG&A of the company. So the overall profitability is absolutely a priority. I wanted to kind of give those examples of really how we're going to achieve it, both from a top-line growth perspective, a gross margin perspective, and what we still are in the process of cutting on the SG&A side. But as we're executing on all three of those, we, again, we share that we intend to exit the year on a profitable run rate basis.

Thank you. That's very thorough and helpful. Can you spend a minute on the recent HiQT Health deal that you did and how that adds to the business? Congrats, by the way, on that deal.

Yeah, we're very excited. So for those that don't know Hyquity Health well, we announced on our last earnings call that we signed a definitive agreement to acquire Hyquity Health. I'll talk a little bit about it today, Chris, because I know we wanted to touch on it. But we also wanted to flag that we're going to be hosting a deep dive webinar by the end of the month. So we're going to be putting out a save the date on that to really deep dive in terms of how we plan to integrate Hyquity, some of the savings we think we could achieve, some of the growth vectors we think we could achieve. But at a high level, Hykuity is a virtual care platform. They provide tele-ICU, telemetry monitoring, and virtual nursing services to hospital systems. Again, hospital systems is a big customer bucket for us as well. We work with many, many, many hospital systems. They do as well. And so they provide virtual care services for hospital systems. The reason why that's incredibly exciting for us is because we think there's a big opportunity to improve health outcomes by being present with the patient from the hospital to the home. So often the patient is getting dropped post-discharge. In the hospital, they're receiving great care. In many cases, again, they're receiving great care in part with high-cuity services. But then when they get discharged, the patient kind of falls out of the system again. And then as a result, they end up bouncing back to the emergency room or being readmitted and, again, costing the system a lot of money. And no patient wants to end up back in the hospital. So we think there's a really tremendous opportunity for us to bridge the hospital to the home, be present with the patient when they're in the hospital through HICUITY suite of services. Of course, we have our medical transportation division that's transporting patients out of the hospital or to the next care setting. And then we can follow up with the patient virtually and in their home to make sure that their condition is continued to get better, the incision site is not getting infected, their meds are titrated, they're receiving the proper follow-up care so that they don't end up bouncing back to the hospital. That continuum of care that we're going to be able to achieve with the Haikuity acquisition is going to have a profound impact on patients, and if we have a profound impact on patients, it should be very, very valuable to hospitals and insurance customers.

Thank you. Okay. So as it relates to Haikuity, you're assuming $52 million of debt for that deal, plus gaining access to additional funding up to a total of $100 million from that. Can you just talk a little bit more about how you plan to kind of service the debt?

Yeah. Another great question I'm glad we're touching on. So first of all, we do not intend to hold a substantial amount of debt for an extended period of time. Okay. So there is a debt component to this acquisition. We're assuming the current debt on Haikuity, which is $52 million. The lender on that is also going to provide us with additional funding of availability, should we use it, up to an additional $50 million. Now, there's five components to how we're thinking about this debt. So, the first off is profitability is a big, big component of this. As the company achieves profitability, which I just laid out, that gives us a lot of avenues for paying service on the debt, you know, refinancing the debt, and so forth. So that's number one. Number two is Hikuity is already coming to us with adjusted EBITDA, with profitability already. So Hikuity, as you mentioned, has about $65 million of revenue, and it has about $4.5 million of adjusted EBITDA today. Okay, that's before we effectuate any synergies, any integration, and so again, we think that there's opportunity to improve the profitability of Hikuity as we put the companies together. So that's, again, profitability. Haikyuti is already coming with adjusted EBITDA. Number three is, you know, we have a, Chris, I know you know this and people that know our story well, we did a tremendous amount of emergency response work for the city of New York. During COVID, there was a migrant crisis that happened here in New York where asylum seekers were being bussed up from southern states. And we did a lot of work with the city. they still owe us about $13 to $15 million, which we expect to collect here over the balance of the year. So that will bring in additional cash and capital that we can use to pay down the debt as that money comes in. And then the other piece I think we're looking at is we have an opportunity to sell some non-core service lines of the company, which, again, will bring in additional cash into the company. So through those avenues, profitability, high QT coming in with profitability, synergies that can be effectuated there, the collection of the city receivables that they owe us, which will bring in a significant amount of cash, and then our ability to sell sort of some of our non-core service lines. Even the markets that we're perhaps looking to exit on the medical transportation side have licenses that we can sell that will bring in additional cash into the company. Again, all used to either service or pay down the debt, and so we have a very concrete plan on how to handle that.

Okay. Thank you. Can you spend a minute on the front and back-end tech stack for the business? How does EHR integration with Epic, Athena, impact overall referrals and enhance functionality for your business?

Yeah, so tech is a big component of what we do. I like to share that the doctor coming to your home is an old idea. I know we've spoken about this, Chris, before in the past. It's just wildly inefficient to send a doctor door-to-door. There's drive time. There's lag time in between patient visits. Sometimes you show up, the patient's not home, right? So the doctor's office, you know, the physical doctor's office kind of solved that, right? They'll book 12 patients. They don't know which two are not going to show up, but they have capacity for 10. They book 12, and two don't show up. But they're there, and, you know, they're waiting for the patients to arrive, and they're dropping in from room to room. So we've essentially recreated that experience, but in the patient's home. So what we do is we send an LPN or a phlebotomist or a medical assistant, Actually, a big component of us making these visits more and more profitable and achieving profitability for these visits is our ability to use lower-cost medical assistants or mobile phlebotomists to go to the home. And then the physician or advanced practice provider telehealths in and directs the clinician in the home what they want. I want to take a swab. I want to provide a vaccine. I want to do a bone density scanning. We do about 45 different clinical offerings in the home. the clinician that is overseeing the visit remotely is the one treatment planning, prescribing, and diagnosing. And they're dropping in home by home virtually while the mobile health clinician, the lower-cost clinician, is driving door-to-door. So we've built that entire tech stack to be able to make it feel like the doctor is in your living room when in reality, again, we have a mobile phlebotomist there and the clinician is remote. The other piece that we've done is We've integrated our logistics and routing platform into Epic, and this is a big deal. So directly from the patient's chart in Epic, a discharged nurse can click a button and order medical transportation to come pick that patient up at discharge. And now they're not picking up the phone calling an ambulance company to say, hey, when can you be here? They're clicking a button in the patient's chart, and they're seeing exactly, just like Uber, just like Instacart, when we're going to arrive. And as a result, housekeeping knows when the bed is empty and now it's available to be made ready for the next patient. Intake knows when the patient's left. The patient is more likely to be ready when we get there because the discharge nurse knows when we're arriving. So that integration into the hospital's workflow is very valuable. It's very valuable for us because the patient will be ready when we get there. It's very valuable for the hospital system because it integrates into their day-to-day workflow. It allows us to optimize all the vehicles in the field and on the road. And once we integrate it, the hospitals love it. And because they love it and because it's integrated, it tends to be very, very sticky.

Thank you. So I want to talk a little bit about labor and the inflationary environment we're in. How have you navigated this labor and inflationary environment? And then can you talk a little bit about your ability to adjust staffing, automate processes, to address this area?

Yeah, so any, I know there's a lot of biotech and pharma companies at the conference, and there's some healthcare services company. Any healthcare services company is dealing with labor, is dealing with the clinicians, is dealing with those heroes that go into healthcare to help patients, and there's a lot of dynamics happening right now. The last time we spoke, there's always puts and takes, right? So what's the difficulty right now we're experiencing? So number one, on the inflationary side, we're seeing gas prices hurt us, right? We drove 11.5 million miles over the last 12 months, to give a sense. And so for every dollar at the pump, we see about a 37% margin erosion. So, again, we don't control gas prices, and our goal is to be more efficient. The goal is not to drive more miles. The goal is to drive fewer miles and see more patients with those fewer miles. And so, you know, being more efficient in the field allows us to address the gas prices. But we see some gas, you know, the gas prices are obviously, from an inflationary perspective, hurting us. We think, you know, hiring, we have to hire up for the back half of the year. And so the cost to hire, typically we'll see that rise in the first half of the year and then help us to serve the bigger volume in the back half of the year. So that part is we're seeing pressure there. What we also do, though, which we haven't seen in previous years, is AI is helping us a lot with the pressure we're experiencing on gas and sort of higher clinician costs. We're able to automate a lot more of what we're doing. So as an example, we are automating a lot of our patient scheduling, a lot of our patient outreach. When a patient texts us or has a question, our system is able to answer that question for them, reach into the patient's chart or reach into our protocols or reach into what to expect during a visit and answer the question so that a human being doesn't actually have to answer the question. We have to schedule. Sometimes patients have to reschedule. Sometimes we want to confirm with the patient. We want to confirm they're going to be there when we arrive. We're automating all of that. All the order intake. We used to have multiple people receiving mobile phlebotomy orders. Now we've automated about 80% of that. So net-net, our North Star, is anything that is not involved in the clinical delivery of the service, sticking a needle in someone's arm, taking someone's blood, scanning someone's bone density, doing a diabetic retinal scan, anything that doesn't involve the clinical care, anything that's relating to admin, anything that's relating to coordination with the patient, we're automating. And so that's what gives us an opportunity, right? And we're not just a health care company. We're a technology company. We built that routing and optimization platform, right clinician with the right vehicle for the right patient need, all automated and optimized. And now we're also using our tech resources to automate a lot of the function that's not directly involved in the clinical delivery of service. And as we do that, we have about 10 initiatives right now that we think are going to save us about $6 million on the SG&A line. So that's a new, we've always been pressured by gas prices, rising clinician costs, but now finally we have something that we're implementing that allows us to drop the cost of the delivery of our service, which everyone will benefit from. As we drop the cost, our company becomes more profitable and more successful, and then we can offer a much more comprehensive, robust suite of services to our patients. So that's the difference this year from last year or prior years where we've been very successful and we have a number of different projects that are working towards automating and allowing us to scale without having to scale up, you know, the same size team.

Thank you. So let's talk a little bit about the payer opportunity, including care gap closures, chronic care management. How are conversations with the payers, particularly around the dual eligible Medicaid populations, any opportunity in Medicare Advantage? Can you talk a little bit about that payer opportunity?

Yeah, so by far the biggest opportunity in health care right now, and certainly for the payers, and by the way, the payers includes commercial plans. You mentioned maybe a commercial Medicare Advantage plan or a commercial plan obviously struggling with MLRs, but it also includes CMS, Medicare and Medicaid obviously as a huge stakeholder in kind of how things get paid in the system. The number one focus is just improving outcomes. Improving outcomes, improving outcomes. And I think we've been talking about this for three years. I think it's starting finally to come to fruition. So I know, Chris, you and I were talking about it earlier today. Just yesterday I was in D.C., CMS was hosting a huge event for this access program that they launched, which is, if anybody take a look at it, 150 companies were admitted to this access program, which is all designed to use technology to drive the cost of care and reward outcomes. This whole program is set up to reward outcomes. They have 150 companies that are seeding that program. We're one of those 150 companies. We were invited yesterday, and Secretary Kennedy was there. Dr. Oz was there. I mean, so this is clearly a very, very important initiative for them. And the entire thread of the two-hour meeting was improving outcomes. They do not want to reward activity. The more tests, the more the clinician, the more revenue gets generated for the clinician. The more procedures, the more visits, the more office visits, the more surgeries, the more the hospital or the clinician or a provider like us, the more money we make. They want to stop that. They want to move from an activity-based model to an outcomes-based model. That, I think, is the biggest shift change that can help the healthcare industry. Without it, I think you're just going to continue to see rising costs. The entire system has to be set up for improving outcomes, and that's really what we're designed to do. We're going to the home to do a cancer screening. We're going to the home to do a diabetic retinal scan or a bone density scan or provide vaccinations. Everything we're doing is designed to help manage chronic conditions and reduce hospitalization, reduce the cost, reduce the number of visits that patients have to do. Patients don't want to be sicker. Patients want to be healthier. The healthier they are, the less activity gets generated. The less activity that gets generated, the more the system saves. So improving outcomes, improving outcomes. Any health care provider or company like ours that's improving outcomes, I think, will be rewarded over time.

Let's spend some time on M&A. You hit on that a little bit earlier. Can you discuss potential opportunities in M&A, particularly in mobile health? And when we think about that, are there areas that you think of kind of on the horizon for strategic expansion?

Yeah, so I know, again, you know, Chris, and we talk about this pretty regularly. But, you know, our company has been pretty active. So we've completed several mobile health M&A transactions in recent years. Most notably, I think last year, we acquired a mobile phlebotomy company called PTI. and we also added a 50-state clinical platform called SteadyMD, which is the telehealth platform that I was alluding to before. And both of those added capabilities to us. It allows us to send phlebotomists to the home, so that's a lower cost than us sending nurses to the home, which is a big component to us getting the in-home visits profitable. And now it gives us a 50-state clinical practice that's providing virtual visits to behavioral health, digital health, AI startup companies, but also doing the virtual visits for .go and our own patients. So we've been able to scale that. Again, I want to share some specifics. So when we acquired PTI on the mobile phlebotomy side, they were doing about $3 to $4 million of revenue. We've grown that over 20% to 30% year over year. So they'll do over $5 million this year, and we think there's opportunity for us to do more. We just expanded them to South Florida with one of our major hospital customers that we already had. And SteadyMD, when we acquired them, they were doing about $25 million of revenue and trailing 12 months, and we think they're going to do well north of $36 million this year. So we've been successful in acquiring, integrating, and then scaling those businesses. And so I think we will look to do that with Hyquity. I think we'll have our plate full with that. we'll always continue to be opportunistic but I think right now our focus is on integrating Haikuity really well getting the synergies that I talked about and making sure that we're continuing to scale the mobile phlebotomy, the virtual care platform and now Haikuity as part of that virtual care platform and implementing kind of the cost savings I was mentioning. That's going to be the big focus for the company I think as we proceed in the near future here for sure.

Thank you. So let's spend a minute then expanding on that a little bit, capital allocation. So when you think of it from a priority perspective, how should we think about what you would prioritize? M&A, share repurchases, increase the sales force, tech spend? What do you think about that?

Yeah, so I think anything that, first and foremost, anything that's relating to the growth of the company, right? So again, we're going to invest in the technology that allow us to automate and ultimately bring down our cost structure, right? So that's an area where we can grow, scale the business and also do it more profitably and more efficiently. We're going to continue to look to invest there. And I think, you know, I talked in detail about it. I think our goal also is going to be, you know, paying down any of the debt, right? As we're generating profits, you know, as we are perhaps divesting of non-core assets, as we bring in the city receivables, I think a lot of that cash will go to growth and will go towards addressing the debt.

Okay.

And I think that will be a big focus area for us. I know in the past, you know, we've allocated some capital to improving sort of our fleet. You know, I think our, you know, our goal over the next, call it years, we're going to be de-emphasizing the growth of the CapEx. In the transport segment, we're going to focus on maintaining the vehicles we have versus, you know, buying new vehicles, you know, and only doing that when it's absolutely necessary. So I think over time, you're going to see us spend less on the capex on the fleet, get more and more efficient in the field, and address paying down any debt, and ultimately, first and foremost, making sure that our teams have what they need to grow the business, see more patients more efficiently, and as we see more patients and as we scale, the company is going to become more profitable.

Thank you. So let's talk a little bit about the RFP process and your capabilities there. When you think about how you've grown the business, diversified the business, do you feel that you have all the components to kind of target these larger contracts? And then can you discuss a little bit of what that progression has been like as you gear up for some of these larger contract situations?

Yeah, so in terms of the progression, so we've always won and been successful with large contracts. So typically when we'll win a new opportunity, it's us to come in and provide our software and our medical transportation for the entire hospital system. So we do well with that. And also historically and before in the past, we we bid and won on these large-scale emergency response-type contracts, multi-hundred-million-dollar contracts. And I think for us, and I've shared over time, we're de-emphasizing these emergency response, COVID-style, migrant-crisis-style contracts, and we're really bidding on evergreen opportunities where we can come in and provide longitudinal care, provide care year in and year out for needs that patients have today. They have it tomorrow. They're going to have it next year. they're going to have it the year after. So from an RFP perspective, I'm really proud of our team. I think we've successfully, you know, conducted that pivot from sort of this emergency response, you know, style, you know, RFP process to now more evergreen-type opportunities. You know, our current pipeline is robust. We have a total of about $185 million in annual contract revenue across our business lines, and that includes new opportunities and renewals for business we already have. You know, our win rate over 25 and 26 tends to be around 26%, you know, to give you a sense of, you know, so we win about one out of every four contracts that we bid on, whether it be new or renewals. And I think, you know, we expect, you know, a similar win rate as we go. I always like to say if you're winning too much, you're probably not being ambitious enough. You're probably not bidding on, you know, frontier-type opportunities. And if you're winning too little, you're probably delusional on bidding on things that you shouldn't be bidding on. So, you know, I think the Goldilocks, you know, not too high, not too low rate, you know, for any organization is probably you're winning about 25% to 35% of the opportunities you bid on. I think that means you're being ambitious. You know, you're going after lots of opportunities. So our pipeline is pretty robust. I think that's going to continue. You know, again, we'll continue to bid on things that we're already doing today, so contract renewals, and we're going to bid on evergreen-style types of opportunities, and, you know, I think we'll continue to have a similar type win rate.

Thank you. So let's talk a little bit about market expansion. You've entered quite a few new markets. Can you discuss a little bit how you assess entering into a new market and then what are you particularly looking for, I guess, kind of when you think across the service lines when you enter a new market?

Yeah, so when we enter a new market, we require essentially embedded demand, critical mass, an anchor customer, I like to say. So as an example, you know, we just launched a new market in southern Florida that came with one of our major hospital systems here in New York where they have footprint there. And so they asked us to scale some mobile phlebotomy services in southern Florida. We like the demographics in that market. We were able to do it, you know, at a relatively low cost basis. It allows us to achieve profitability very quickly in that market. And again, we already have embedded demand. And in addition to that anchor customer, we're already integrated with their ordering platform. We're already integrated into their workflows. We already have a strong relationship with that hospital system. So those are the ways we look to grow. We already have an insurance partner that we're working with in California, and they want us to scale to a new state. And of course, there's enough volume for us to make a good business case out of it. And that example I love to share in Florida is, again, we already have an integration with their ordering platform. and we're already working with that hospital system, they brought us the opportunity and we're able to achieve profitability in that new market with that dynamic. So that's how we look to grow from a geographic perspective. I think you'll see us focus on the geographies we already have. Again, with a big focus on getting to profitability, I think we're going to look to grow in the markets we're in. Of course, if there's a big opportunity in a new market, we'll evaluate that and it has to make good business sense in the near and long term. But I think we're very focused on the markets we're in.

Okay, thank you. So for mobile health specifically, given the growth you've seen in that segment, can you discuss a little bit about where you see that market going generally and how you create value for your various channel partners, whether a hospital, a payer, a municipality?

Yeah, so I really think it goes back to improving outcomes. That's really, you know, the goal. I give one 30-second example. You know, I talked about bridging the care between hospital to home. We work with one very large payer in California, has about 2 million members, and they refer us to patients that are getting discharged from the hospital, and we go and follow up with them in a 30-day readmit window to make sure that they don't bounce back to the hospital. And so, again, in terms of the value and where do I see mobile health going, if we can improve the likelihood that that patient does not bounce back to the hospital, we're going to be successful. So in that example, they give us some of the sickest patients that they have. It's called a LACE score, which is length of stay, acuity, chronic condition. On a scale of 1 to 10, we have the 9.4s, and we've been able to reduce hospital readmissions, again, bridging hospital to home by over 50% for those patients, and that's why that program has been growing so quickly, improving outcomes.

So I think we have time for one more question. I want to make sure I hit on medical transport as well, because I've spent a lot of time on mobile health. Can you discuss a little bit about that market opportunity as well? And then you've got some great partnerships with Jefferson, Northwell, HCA. How big do you think this market can be, the market opportunity, the cross-sell? Can you talk a little bit about that?

Yeah, so the medical transportation business for us is about a $200 million business. Again, we're going to be focused on growing the markets that are profitable and paring back the ones that aren't. From a medical transportation perspective, We think the TAM is about $7 billion here in the U.S. So very fragmented. Again, we're one of the larger providers, but we still don't have a huge percentage of that market, so there's a big opportunity there. We're going to continue to partner with our big hospital systems. You mentioned Jefferson. You mentioned Northwell. In both scenarios, they utilize our tech platform that we talked about. And Jefferson, as an example, we've been working with since 2019. Northwell, we've also been working with since 2019. team. Both systems, we service all their facilities. For Jefferson, as an example, we've done over 135,000 transports for them. Our goal is to provide them great quality, predictable service that's tech-enabled, that's integrated into their workflow and very sticky, and we're going to continue to do that. We think that we can improve the gross margin of this segment, again, by focusing on the markets that are being profitable for us and driving that gross margin, which we think we could drive much higher as we pair back some of the underperforming markets.

Excellent. Well, Lee, thank you again for being here today.

It's always great to join you. Thanks, Chris, for having us. Thank you, everyone.