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PINC Premier

Participants
James Storey Vice President, Investor Relations
Susan DeVore President and Chief Executive Officer
Michael Alkire Chief Operating Officer
Craig McKasson Chief Financial Officer
Michael Cherny Bank of America Merrill Lynch
Sean Dodge Jefferies LLC
Ryan Daniels William Blair & Company
Eric Coldwell Robert W. Baird & Co.,
Jamie Stockton Wells Fargo Securities
David Larsen Leerink Partners LLC
Chun-Wai Yong Barclays Bank PLC
Anne Samuel JPMorgan Chase & Co.
Mohan Naidu Oppenheimer & Co.
Eric Percher Nephron Research LLC
Stephanie Demko Citigroup Global Markets, Inc.
Erin Wright Credit Suisse
John Ransom Raymond James & Associates, Inc.,
Sandy Draper SunTrust Robinson Humphrey
William Sutherland The Benchmark Company LLC
Call transcript
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Operator

Good day, ladies and gentlemen, and welcome to Premier's Fiscal Year 2019 Second Quarter Results and Conference Call. At this time, all participants are in a listen-only mode. Later, there will be a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to turn the conference over to Jim Storey with Investor Relations. begin. may you Sir,

James Storey

and conference to call. Shannon, XXXX Inc.'s second quarter welcome you, Premier, everyone fiscal Thank

and Financial Our the remainder and will update Mike Officer; and Chief today review year. Executive McKasson, speakers are provide outlook Officer; Alkire, Susan the quarter's discuss Chief an and our Susan, of Mike Officer. DeVore, performance, President Craig Craig Chief operations Operating the for

presentation to and we review to remind could accompanying results in SEC, of everyone financial Reconciliations we Form including and which file that, you in Please this we appropriate, speak them. the our to conference XXXX that results contain non-GAAP These supplemental our financial business. note X-K, update the release, materially of encourage today, Management's Before our included to which earnings to want are Form and expect financial Harbor refer get We today. soon. GAAP and we filings our in that with the SEC are no accompanying evaluate release slides expect earnings to slides measures release I remarks statements, our in to also XX-K Report discussed measures section website available detailed the furnish of risk forward-looking as affect XX-Q, might soon. discussed appendix the are factor Quarterly where and measures obligation disclosures. actual to Safe supplemental Factors statements to Form will in non-GAAP Relations these of on future this fiscal started, call earnings today from and differ Investor our at forward-looking copies those the certain of our we XXXX fiscal undertake investors.premierinc.com.

Susan to let over turn call the Now DeVore. me

Susan DeVore

provide the Mike of rest second and look the through thanks, walk year. to in whole. call as joining financials with quarter's revenue a Craig and open performance to pleased the ahead I'm and Premier we'll as for operational another start reporting and of our quarter update deliver earnings our and an quarter questions. report to Company the Jim, to will for an I'll steady will this continued then more the detail. everyone us morning. growth overview a across segments Thanks, And successful

in adjusted Specifically, adjusted EBITDA non-GAAP $XXX.X fully we totaling million earnings share produced consolidated million per revenue, net and consolidated non-GAAP in distributed $X.XX. $XXX

the business to strategy our business performance, and an the remained and year further of last long-term in Based for outlook rest And strengthen innovator well we half guidance we that as generate through the the our Chain and future we our remained steadfastly relationships to $XXX.X to Additionally, year-over-year capital capabilities program. continue to repurchase as non-GAAP the share in build and focused integrating flow And are expand Operationally, businesses invest to and as growth well million. provider for of healthcare this on quarter. Company and members as members. return will well with the expectations the our continue quarter free for we our XX% ongoing cash value financial deploy increased stockholders. to our fully with improvement. growth broadening enterprise-wide We and value significant our on performing Supply stockholders Analytics ongoing believe Premier Performance disruptor as Services, ranges first discussed our for consistent

will and when today. these underlying their additional As Craig discuss reviews he assumptions are such, guidance ranges we reiterating details guidance.

among during group existing results and real purchasing steady make growth Services and segment, achieve cultivating performance driving working with members continued new also at members. from business solid ongoing in we in to an our stable new our engagement, by we contract solutions, Looking perspective, to and a continuing supported progress environment our improvements. quarter, operational Performance patient the our drove In our utilization innovative penetration

significant improvement, alignment. Our cost teams engagements the areas integrated of enterprise management, in physician total managed and member and consulting performance technology

Our some we Applied assets providers advanced leverage to generated during these Sciences also a the cost network business on with of high-value directly to in will outcomes strong and to front, further of broader On our achievements. efforts Mike clinical revenue care. total engage Premier’s overall care a the improve growth of quarter. unique to development enable expand employers reduce

by we currently potential and the growth this exciting still stages, represents early its accompanied opportunity to in believe future. in an new Although be revenue

Looking evolving current on and six a forward, and based trends. our vision leader across our remain we healthcare longer-term emerging major businesses are developing

in models. delivery First value-based the acceleration is to care payment shift the and risk-based

to continue payment physician in alignment and we see alternative participation programs. increased these Second, with

the data these healthcare in is that and healthcare technology, Premier, our over in we've abilities opportunity an our enabler of cultivated to at them. trends contracting great of is critical growing addressing that consumer remains differentiate which developed, to are proposals expanded influence of around chain, analytics care. employers point at change market A leverage performance delivery forefront by component into sixth, just turning capabilities greatly with the continuing that the supply is America, Fourth pricing is the and the Premier Premier is engagement. data trends drives drug consolidation vast also enterprise for trends the driven directly the active for pharmaceutical continues rapidly and Fifth for accompanied improvement. address industry believe providers decades These of we uniquely future insights marketplace. platforms At the trend significant analytics data and our enterprise and Third in will the us represents described. momentum that reform. believe industry. And gaining fuel actionable the dynamic in our I've of evolving I

be fact, seamlessly, analyzed the flow I'll real provider speaker the be system, to effectively that's for In of one more point time a smarter, and at to a responsive caregiver at led, year, care. keynote the data Premier’s consumer-centric HIMS have opportunity in highlight this leveraged where vision as healthcare one and must guide

a and including Premier, these gaps, of and being the with care, clinician which to significant represents care trends constant step we the is by from the drive now are and where At collaborating the urgency vision and influenced these current is flow fueling climate In speed leveraging address data assets, Our at the our environment duplication, healthcare are forward Stanson meantime, our burnout. data quality environment provider regulatory some issues. big uncurated providers in political fragmented we in Washington. current

to in quality, value-based and environment years. bodes ongoing the the few care next and regulatory uncertain payment months. costs, shifting We ever, front cleared models to While as well lowering this delivery the improving political to have is the nation's somewhat move recent believe as seems over for

and as financially, and our future quarter our healthcare performance so execute focused strategy in we analytics So Alkire, to Mike delivered Longer-term, on a sum safety to are consistent improvement partnership and Officer. driven remain growth with and key and chain pursuing capabilities we building value-based well success strategically. here cost, in healthcare the is our to expanded out We Thanks up, Premier data environment. Chief both. Operating enable supply and now as address to end-to-end much, enterprise strategy our insights challenges, their providers second operationally, quality evolving necessary

Michael Alkire

as on nation's initiatives in notable for to joining Health of drug performance, the thanks, the development also as Thank achievements. of well ongoing I'll applied sciences operational shortage you, further our business our Stanson Today our our an and and integration I'll address challenge. highlight call. some Susan, strategic strategy everyone update some generic reviewing and provide review

content, highly along a and acquisition. technology Stanson is strategic channeled clinical into quarter, As to the our discussed with physician workflow. last data support decision includes enable intelligent will analytics evidence-based be It directly that

reduce this providers expect delivery enable We in care cost. variation and to further to healthcare unjustified

with a the in found last increase and in those not or Stanson of Managed EHR the X% the published in physicians fact, notifications, who study August who did experience In increase length-of-stay. complications Journal follow that XX% a patients did American Care compared

analytics who the study the in followed physicians care that physicians following the increase provide or nearly to making and also and improvement notifications quarter. our functions the and integrating update, notifications. X% report the we patient, am combining well. Additionally, Stanson $X,XXX second generated sales experienced our to going during technologies marketing the is the of I clinical per team process cost happy and revealed and other progress or that an We're are performance the strong bookings Stanson and Stanson’s compared good with To solutions same not patient sales

proficiency In from potential planned addition, revenue integration as Premier’s as are Stanson’s into of and existing clinical well we synergies offerings. the cross-selling driving

saving providers and expected Stanson, securing an also opportunities. medical unique and for growth and time our covering completed, these expense furthering this expedite and incremental solution is in prior enhancing pharmacy with solution Once providing benefits. physician partnership a development We’re patient automate initiated tasks, both authorization approvals, payer authorization of prior to large automated by convenience, of the with Premier

So we high strategy to potential remain strategies. provider we analytics component also Stanson represents the a build as longer-term about continue out performance key value opportunity valuable a represented for by our and Stanson. as excited improvement This very earlier. and enterprise enabler the is Susan network mentioned

of and the shortage in have we the continuous and Turning health ensure to developing Premier is drug ahead others and believe solutions medications. achieving all systems to affordable market to generic access and shortage, patients comprehensive

drugs, Premier access to to shortage to to able other of shortage struggled XX uninterrupted members While products. GPO get access has ensure been

a six-year on of manufacturer sourcing the experience legacy area. relationships ongoing direct is deep Our built in strategy and this

for consistent by subsidiary on the additional shortage products, securing In this uninterrupted contracts as drugs and ensure well those products, expands ProvideGx effort supply ProvideGx active generic manufacturers that shortage, working future. ensuring our supply. addition, in ongoing focused sterile be new access XX ingredients pharmaceutical to to targeting and vulnerable may extends currently shortage by inactive to sourcing injectable is as to critical with

secured that been we blood since Baxter metoprolol with shortages emergency a XXXX. pressure and Corporation manufacture drug to week, last subject injection Just to Healthcare contract has

Applied Partnerships, and test, real-world to care new continue and business business with partnerships our We develop, Expertise, data to leaders improvement. Sciences’ Matter industry delivery research proficiencies. also and healthcare growing for with practices, research, teach These interventions Subject enhance

care offering, With the and visits. recent data traces outside that abilities identifies Premier total journey, primary leverage pre-existing now conditions research analytics the adherence encounters, can patient new medication pre- the clinicians setting, post-hospital patients acute-care enhancements as of to to patient and conduct and tracks such or and fills, this diagnoses with

Janssen on projects Amgen, Our include types partners these and Merck. of

As market I trend prevail am are we Susan report consolidation earlier, recruiting a to and of retaining success members good as a that that result continues experiencing pleased in to consolidation. mentioned healthcare provider and the as

improve data enterprise, expanded our a range our of platform, a access information renewed of health Catholic quality nation's strategic Aurora participation matter services costs and and enabling one improvement embed of largest and expands The Support as Health, Premier agreement well efficiency group networks the analytics Bon leverages with insights performance We of warehouse supply and partner and lower This largest system. health solutions. for Mercy for dedicated our country's value recently the enable profit includes Performance continue enterprise-wide control practices technology nations chain and risk-based partnership our of power a chosen bundled high sharing just their well newly to the to of subject This use which to finalizing and experts expansive largest as performance and its process clients and Premier's are have workflow. to team merged as Health. as in the Secours of to agreement successful intelligence for help clinical, to in includes analytics. analytics and operational designed and that the a with provide Advocate provide sophisticated systems and Advocate U.S. solution The health financial, systems. The which we're purchasing Stanson health analytics acquired population EHR customized as integrated And Clinical Decision inside suite our an data includes services. strategy, Aurora Health, payment has relationship not also and needed collaboratives, models. best improvement and payment access XXth Services

opportunities and and these refine future growth we skills our our evolving conclusion, continue in to our member providers resources. healthcare incremental value excited for remain the long-term help We to stockholders. very provide by presented intend for value new to and with So deliver

time and our healthcare remains you partnerships reinvest acquisitions solutions and businesses, new and forward, our your long-term strategic today. providers innovate Looking with our existing strategy. align in plan that to with organically evaluate member Thank for our co-develop

Now to or call let Financial over Chief the me Officer. turn McKasson Craig

Craig McKasson

Mike. Thanks,

means using the ASC we Before did approach, want XXX remind under the through results, we the XXXX walk recognition standard the we prior fiscal I new to year revenue beginning retrospective everyone, new not modified which results adopted in standard. the restate

we results the six-month three previous standard are fiscal prior our standard. year revenue result, and comparing to using results recognition XXXX, new a the As under

quarter, noted, As a consistent Susan perform and demonstrating as across well Company segments the second the growth we in our whole. for business

million in to our decreased Growth from same in walk of oncology From period supply members respiratory by new of from million and members. services a revenue and Within changes related of revenue let's the million year-ago, associated revenue net million year specialty million adoption in ago. Services of offset $XXX or of revenue a in products Supply and quarter a detail. of administrative the a of increased compared X% Integrated Now, through GAAP revenue primarily of to by $XX.X impact primarily period was by to Net a $XXX.X year from second a reimbursement ago. the existing lesser more from recognition same $XXX.X $XXX.X $XXX.X business compression chain quarter’s XXX million million $XXX.X the ASC of the penetration performance driven lesser $XXX.X a consolidated degree, standpoint, increased revenue year-ago. fees impact Pharmacy with net net million pharmacy. further contract extent conversion gross Chain to the $X.X

services second Performance in year million revenue our standard, recognized increased as from services $XX.X the are in experienced to Services, and performance to accounting certain as services. defer revenue no now consulting analytics sciences same proportionally new well and $XX.X services generally we when conditions a Under quarter period have to management is provided, recognition until longer are revenue ago. applied Turning cost the million met. We growth consulting of

of services sourcing. some expenses net administrative offset million non-GAAP was direct in the ago. specialty as selling, Growth in from of ago. $XXX increased accounting B expense in costs $X.X to positive were million the tax recognized the to reflect Supply from same GAAP a $XXX.X to well a net higher primarily the quarter. the decrease recognized year new GAAP From tax ago. adjusted segment perspective, increased million $XXX.X increased in a quarter The by per profitability, reimbursement million $XXX.X for value effective adjusted In Class the Services standard, Year the life rate decrease was $XX.X for reduction to between period the impacted income year in based income common now $XXX.X adjusted at million revenue net Under due Looking commission ago million from EBITDA resulting income the proportionally a X% compression receivable $XXX.X to increase in of Services, over attributable an Performance and deferred federal the measurement the This remeasurement liabilities of partially by tax are of in $XXX.X quarter, provided, a million are capitalized the redemption as in increase required and $X.X tax totaling resulted $XXX.X tax implementation expense for non-GAAP for same fees from reform, of ago. of and by administrative offset year agreement change GAAP million, and with an EBITDA of million After period adjustment of revenue compared balances. tax current on of $X.XX Chain in increased is we pharmacy share. ownership, unit periods, Consolidated million revenue in a of a income by year and expenses. million quarter year result million decreased product-related $X.X the general limited a price of stock costs partners reported non-GAAP increased and the ago non-cash project. EBITDA our a when $XX.X largely million net

The $XXX.X same adjusted same non-GAAP million flow with to the $XXX.X compared year reform. ago, non-GAAP revenue quarter with and Second ago. fully offset attributable earnings by increase ago. and last partially Non-GAAP the driven by and expenses million $XX.X balance year for for fess distributed $XXX.X agreement period administrative a $X.XX liquidity member from first distributed net and quarter The of increase sheet administrative the the increased XX% $X.XX by million tax and decreased tax owners million a $XX.X other receivable with increased the working $XX from the payment adjusted adjusted fiscal million million cash resulting fully million a cash distributions of net decreased per services to adjusted compared year. general limited in the EBITDA or support is From was six-month of offset primarily and income A operating capital totaled for tax approximately needs. a cash rate growth from representing period operations flow selling, of in year-over-year were $X.X six-month year was period million partners and by increased activities compared or XX% XXXX. perspective, non-GAAP lower period $XXX.X to EBITDA share free increase provided

noted, previously software July in As federal tax of initiatives. company's included tax developed Other in June as a the internally this receivable growth in free annual the years timing shifted from our impacting result cash of this filing flow payment the factors to year prior agreement deadline. change

adjusted full exceed expect flow year, non-GAAP EBITDA. XX% that cash free we For our fiscal the will non-GAAP of

an cash billion on Our XX, $XXX.X with XX, June facility. our outstanding the million of million equivalents balance revolving cash ended at and we and with $XXX.X $X five-year at million totaled XXXX, $XXX compared December credit XXXX, quarter

$XX.XX the per six-month share of repurchase $X.XX million for per results program diluted approximately million share. the to close for trading approximately X.X period. through This on $XXX.X added averaging XXXX, XX, Regarding repurchased we had December our ongoing $XXX shares million, share

upon remainder the guidance. and for and full-year our are first in their guidance our performance key outlook ranges more assumptions we detail current of XXXX reaffirming that our ASC let's Now to half turn the to year, Based call first impact financial to fiscal our quarter conference $XX that stock-based only compensation we adjusted $XX assumption at XXX on expense, The now X. million. of million which project we for is changed underlying the November relates

to reminder, reflect under longer expect profitability back the are to a providing or revenue investments a first of timing year related previous standard. as and guidance we price growth as the fiscal recognition reimbursement and half We in impact comparisons relative This updating of to As the margins is planned compression largely extent business. future impact year-over-year competitive do opportunities in revenue new due well no tougher to under the products to incremental standard lesser half. the the the gross revenue pressure the on of

As we respective EBITDA a distributed guidance the anticipate be currently and fully ranges. result, full-year adjusted of adjusted midpoint share that below per non-GAAP their may non-GAAP earnings

Finally, I ongoing quarterly a would on like to update our exchange process. provide brief

disclosed, approximately for already Regarding basis on the $X.X exchange, January A were B million of shares Class XX. exchanged as on we one-for-one Class a stock units common

April next that, Our turn me the Susan. let XX. occur over will call quarterly back to With on exchange

Susan DeVore

with progressing delivering So last remarks few current view you prepared all you objectives the year, is the with thoughts. today sum that on quarter as of August. our steadily as let To initially through with of shared shared and operational We've the Premier a financial the fiscal our well we final up, future. me close it past analysis our

in Company confident industry that is a well as marketplace our the We leader. forward positioned are moving long-term

each transformation work performance chain the better impact our supply come do out day time analytics We while to systems health at about costs to and quality, member the across the improve manage Premier helping and this excited our with strategies. improvement that lead healthcare building services enterprise and All in same delivery can country. of end-to-end our have by collaborating of we us at

Operator, and to members that, today. to you for long-term committed and will value and Thank are for call stockholders. these deliver acquiring continue continuing do time please we need to to strive abilities questions. that our on solutions your for the our create for We open and to building lasting the always we unique

Operator

with Bank comes Thank question Merrill Michael Our of you. [Operator Lynch. from Instructions] Cherny America first

line is Your open.

Michael Cherny

of the out changed to all the last Good morning, you you just midpoint to color and across year? it yourself for shaking potentially would of do end some points are performed far. the how I that guidance. various what see of Craig, tie you seen that relative the the in the in so you guess, What's back want on different guidance made your at the I segments far business about the so comment lead thanks where or half below come data midpoint you've first the versus in event of

Craig McKasson

Michael. Thanks, Sure.

fully So ranges, are quarter. I earnings I revenue quarterly comments previous provide adjusted third From third products for single-digits color low-to-mid on may to per of low the midpoint single-digit Chain guidance growth would Supply relative quarter reiterating Again, we specifically or year below revenue the with in the fourth a do adjusted couple revenue grow ago the to full under anticipate respect standard. guidance to a expect full-year fees Services, the we distributed perspective, think additional reflect net EBITDA and results quarter cadence and share. to and administrative third and we perform but

original to continue of after be comparisons the to we revenue X% XXX. And our factors product the adoption net result two ASC on the of discussed for impacted X% lower recognition result growth the continue previously of the Supply As full-year fees range quarter expect year fourth revenue If of revenue single-digit in to for to anticipation more new Chain revenue adoption previously fees of Services net the gross prior of quarter of we second revenue will Overall, the of in year-over-year a to acceleration growth as be revenue we Performance to for the revenue. the prior to as net would Services a cash XX%. growth we half for adjustment in of standard. X% growth year revenue, low-to-mid turn administrative due assumptions comparable year will fourth discussed, to achieve challenging to high a administrative side, related expect expect

ability revenue year. the First the recognize of the new resulted recognition half additional that under is has acceleration some in the standard of to first revenue the in

as standpoint, share, balance now in previously although, we particularly currently year, comparisons range, is pulled two and recognition the second the be make particularly revenue but quarter, the fully that year, more ASC of experience sheet quarter fourth into may impact the non-GAAP perform fourth estimated result the a earnings the first factors that to in expect will challenging quarter. revenue we of some had result under in as our XXXX acceleration the of XX% performance-based second year. half approximately the just XXX. may in and X, the quarter of result EBITDA equally to was of revenue some year-over-year be Those profitability per and given I established said, distributed that as Performance in achieve, of of revenue standard adoption July We I and discussed as of following the the considerations fourth would Second expect XXX. XXXX onto initially below From a more adjusted as third of a the previous adjusted comparisons recognition a weighted revenue on third quarter challenging that midpoint, the revenue license of we in engagements XX% that highlighted adoption and fiscal fourth previously in half the Services last year-over-year recognized the second half

to planned that the and the that the our overall absorbing into some network, of address development we business. investments are we drug-shortage have of ongoing initiative integration the are high-value addition, for through Stanson, we ProvideGX making do In

Michael Cherny

of thinking follow-up moving Okay. That's And the one about in on ProvideGX. very quick then helpful terms pieces. just

this company Is your a vision that you but I perspective over have, with revenue I'm there other than about guess, have for about as can you could obviously of you this piece the total you terms from time? impact, want where clients do you be in think do, a you big As perspective talk drug financial or sure value-added the of how a shortages? these anything to go for your

Michael Alkire

This a is Yes. strategic is Alkire. It very play. Mike

for us, market. creating a it's supply So healthy really about

from So we drugs currently that is or think a into portfolio our opportunity sort entire an that allowing more standpoint win of win us to those in to opportunities account us purchasing and bringing the having don't have pharmacy we maybe about group today. competition

So differentiation strategy that our core it's truly business more allows of grow. a to

Michael Cherny

Great. Thanks.

Craig McKasson

investments we of that perspective, today. investment nominal where this a Michael, There will places will play an expect investment really deployment significant adequate initiative. make from ensure in be terms but incremental will big wouldn't be amounts we it's huge to supply and to capital And not substantial of available,

Operator

you. Thank

comes next Dodge Jefferies. Our from question with Sean

is open. Your line

Sean Dodge

and Maybe revenue Thanks. moment. just going morning. the Good back to cadence Performance Services, for a

were in As we Craig, sounds head into we there sequentially progression, is see business reporting much items though saying historically the you the that's am you're into expecting some the following It I the recognize for the been ones ambulatory seasonally of third that were to not second. one tick-up seasonal forward stronger be pulled third quarter were maybe quarter you. going like, Even to revenue in the that right?

Craig McKasson

itself, been of couple third that we anticipate revenue high presented have a maybe would still is the as traditionally components into be the watermark you would but second and accelerated I it the not Sequentially, as high will which quarter. Yes. quarter, recognition not see

Sean Dodge

Okay. Very that? the a integrated just compression you been bookends behind good. bit products And mentioned in headwind the how from give that? reimbursement then has and the headwind you color more what's business. some Can Maybe some around pharmacy big business, in on

Craig McKasson

is This Sure. Craig.

a standpoint doing see are still have itself around EBITDA continuing been growing. fees the to the they from been reimbursement that and to payers adjusted we're some try overall but what pharmacy pressure saw. we business, specialty a of industry, we They're not have which compression DIR address with that consistent our So to headwind as material from to a

that medical higher DIR and there. to ratios perform adherence care the relatively out contracts are in marketplace, the We others that positioning are than delivering that's on today, service focus clinical to performance-based continuing we exceptional well on provide delivering and us

key with purchasing for drugs to revenue manufacturers services margin high margin to working volume We and was deliver improve provide looking we're services expand manufacturers. are our certain to value higher and targeted additional streams, relationships economics expanding to added our including it

so industry And DIR remedy, to the pressure pressure, and across in putting Sean, are but we're its we're seeing efforts that expansion relative fees. try the that of consistent place those the been that seeing, to the we've

Sean Dodge

Okay. you. helpful. Very Thank

Operator

Thank you.

Our Daniels Ryan William next with from Blair. comes question

Your open. line is

Ryan Daniels

for pathways bit favorable? the it but and environment Yes. question. the detail ACOs, winding still being next Medicare that uncertain, your they is comments, it base Thanks success relates are Is kind more towards consternation regulatory little Can causing or for the talked go color about you more for care? the what you in down maybe and to the value environment client all Is based noise that to political of systems any means? Susan, one and that to you that's still outstanding. to a moving gen taking speak I your remaining know

Susan DeVore

Yes.

Our uncertainty, out that new with bodies perspective new the political is regulatory the programs. even are putting proposals,

think that commercial we in putting care even is IT moving our value we to and good the do program alternative verbal They're additional and to we environment, and bundled needs; creates We these and in shift faster payers health more double regulatory came accelerated risk you all will think perspective, infrastructure ACO the employers communication the of So way a out opportunity actually for programs if are had moving beyond risk a moving accept providers bundled regulatory we see discussion these speaking the fashion. to to that rules how expect also and sided proposals interoperability programs. more based a payment payment about and talking pretty we've and around do They're providers forward out about growth and payment with collaborative. we how proposals get so risk. systems, in more the as from

to adopt So we continue infrastructure models. models delivery a and opportunity the believe long-term, and it's mid-term provide health help as to us these payment we both new for short-term, systems,

Ryan Daniels

on to bit, months have being you Thanks. for a wins seems release probably follow-up, next Can what a what contracts? competitive Okay. in kind as XX particular? of the but it you Very new more settled the environment? the you GPO the fee then speak XX helpful. down little at both in press what's versus GPO rolling new your, seen growth know then the mentioned like late, comments, of And this on and point have I to it's my admin your driven complaints by and the for vision in

Susan DeVore

Yes.

continues we the bit five good. to more six little pipeline to broad-based like we continue a The Aurora business the of of years, opportunity. Advocate a recruiting historically taker a was it thing We've performance market us for do supply a the so be So indicative a maybe pipeline a normalized sales years, not have Premier of is a more last and merger was big for – Because Advocate one announcement to feels and years so coming that us. think and that have been with chain we platform several customer and capabilities services. and doing and any good and across

academic normalized competitors pipeline, and be more will some level. think have our we to a feels we continue we it continue a taker, to market from have we although some like So pipeline

Ryan Daniels

color. Okay, the great. you for Thank

Susan DeVore

Thanks.

Operator

you. Thank

Our comes from with next Eric question Coldwell Baird.

line is open. Your

Eric Coldwell

first was the sort barely Thanks. bought you for since arguably pharmacy in three issues was morning. you guys, a Good years beginning. profitable was fee it now The business margin DIR challenge than on increases. operational and of it Specialty the it, it's optics of been

I'd to So think views. but two your and don't I'm be is does, makes love curious, profitable business? one does I this in now it to sense it

Craig McKasson

Eric. Thanks Sure.

obviously So anticipate and specialty always is a still profitability a costs acquisition profit anticipate – a do add through basis running color. I'll of full-year the From but given we that it the albeit P&L, that some at can level as profitable venture, on high we've still on pharmacy do basis. it is of start then standpoint a discussed, a full-year is Susan lower it profitable

Susan DeVore

Yes, our strategy, have perspective, our pharmacy assets and Eric, the think we from we we need.

acquisitions planning that future not on we're So in area.

improvement, the improvement, of on. part broader improvement that cost that think outcomes focused we're quality is I it

doing solve And low businesses, Services have it's that business, healthcare helps quality very our integrated well. capability Performance We health population we these their challenges. and are system know – core cost so business, our margin an GPO but

an business will our and and all aspects view thinking And to continue through the so go-to-market we're way. business do best integrated in the way long-term that. the is of what always to But we

Operator

Thank you.

Jamie Fargo. Our next comes question from with Wells Stockton

Your open. line is

Jamie Stockton

Thanks maybe the for mostly for very the it and and in that notion Performance hang performance I was fair strong it on for Services all, it a that consulting. is guess very just morning. consulting, was Good taking of my say, questions. first a quarter the quarter, us strong to hey,

Craig McKasson

was the of business, both I Jamie. think it really parts

very think strong I from benefit quarter, second technology as did yes, quarter solid have a the related well. we in we consulting but had

Susan DeVore

quarter good actually about Services. Sciences good we felt for Performance was it Consulting, Yes, Applied Technology, just a so and

Jamie Stockton

given And Board. on quarters to this great. the year, maybe the little more growth the flow then that's way rates Services, one the a going over are Performance Okay, just all

to commentary And about you helpful level few had of that this great? think the be next are be manage what would years I would achieve, so trying growth you if business it to that any maybe over

Craig McKasson

start. I'll Craig. is This Sure.

of that So had obviously from associated or regulatory hitting reminder, as license have revenue Services, pull lower year. percentage the that we the the some had half of impacts year, adoption. to in uncertain a growth sheet this a Performance We current standpoint adoption and of X% as X% year. did this which given the political in of of range balance And to changes with a XXX majority the back again, we again result the the of guidance the that XXX prior onto to us of environment, for set growth a

in current to single-digit business more of is growth low environment. a it the mid So

mid from and Our above deliver Performance to incremental a And hopefully longer-term to to look continue and back a business growth then deploy organic perspective high to Services to capital that. is in to we'll single-digit clearly be obviously position get growth standpoint. a will be

Jamie Stockton

you. thank Okay,

Operator

Thank you.

Our comes with next Larsen David from question Leerink.

open. is line Your

David Larsen

do little help what XQ where then in to in from quarter, is able engagements just were ACO of manage the any a you type clarity Like to Services expect some sequential color? of revenue? and your Sciences Did deploy Applied downside more some the more Services. maybe pretty XQ Performance have significant, Can a solutions that? on give and more you you Performance Hi, declined risk get docs any exactly are to you – preparing Thanks.

Susan DeVore

Mike two all all perspective, bundled So network the measurement, and with participants can then the that do of we and Applied or I'll is collaborative. of in. things. consulting From work start add from Craig technology different also payment are and really a The payment those ACO ACO in ACO of work collaborative Sciences and bundled perspective a sort our our

earlier. those I So continue as to experience growth mentioned

interested that's insight assets Sciences taking On you that they're improvements half. interventions some with and working we research and Craig, Applied that data in know, quarter. that the growth if also experienced companies back the the pharma revenue around around the have to effectively I want give into in don't

Craig McKasson

has occur Sure. from a higher a decline given quarter, third fourth What as fourth do that regulatory quarter traditionally to quarter third in third been ambulatory I see quarter indicate the typically perspective, third, result the that would cadence that of we sequential quarter. does watermark actually from reporting the

for thing a revenue that, a bit depending similar may a decline. have So that the between we I we only is have recognition in a The bit see caveat if a variability and little fashion expect, quarters generally little across potential sequential quarters of third had would bit. do we we the would of fourth

second closed would should I pull see sequential right into expect would QX. We’re to be, tell decline now, fortunate perspective in you But that December the a our XX. just you quarter broadly to

David Larsen

that more Thanks the Craig. in half required the will any back And be incremental color investments of year? the on

Craig McKasson

Sure.

are integrating to startup that a the type amount and in ourselves as process in strategically in continue we and November, business of to making tremendous it we acquired running an it to not more Stanson big profitability, articulated. we’ll investments actually So entrepreneurial Obviously, of integrated that that obviously, get do an that up the that. company, – make three Mike to was initiatives have so differentiate long-term we're investment so business and we

for of of dollars needs that investment but really systems there eliminate with to that to individuals unjustified and that that with analytics provide helping – future work a would from of talking let those capabilities. place but of to our look to drugs make ensure additional be to piloting. we'll get move variation amount not high-quality to we're agreement come that as ProvideGX, and available continue ANDA procedures Mike operationally, we nature strategically to will we opportunity and and while of an then healthcare We in initiative for color hired some already get downstream. we've connect when that drive the directly our is GPO take you opportunities et can deploy order to about then be of certain rest that where the if manufacture would or aren't to make some that fund we development clinical We I could adequate would will substantial to for will shortage value lead some for earlier, investments in investment, The supply be can something multimillion approval mentioned to make I cetera. drug, to of And investment, and the a network, high to that tremendous for continuing us additional care an employers resources care us the the dollars actually revenue provide investment we look drug large that

upfront. situation So if you it some know investment would is a there don’t is of Mike, anything making add. I

Michael Alkire

it. covered You've

Operator

Thank you.

Our Valiquette Barclays. from next comes question with Steve

open. is line Your

Chun-Wai Yong

Hi. This is Chun-Wai Yong for Steve.

can pull from XQ? into on you how Just the forward was much Services, Performance XQ size of back

Craig McKasson

Yes, just a million few dollars.

Chun-Wai Yong

it issue business? of the more that DIR products the Or more is the And Okay, business, on kind is fees, related just pharmacy? of pressuring thanks. increasing performance-related are then DIR contracts specialty to your prevalence a back of it

Michael Alkire

specialty pharmacies. an ability a very perform relatively all specialty higher we evidence specialty an fee which specific and will us do to that we definitely makes basis well medical to given on well adherence, It's pharmacy. care It's DIR relatively coordination, the for higher vis-à-vis across have not other believe historically Yes. actually industry done our industry actually have phenomenon continue, We pharmacy.

Chun-Wai Yong

Thanks. it. That’s Okay.

Operator

you. Thank

Samuel with Anne from JPMorgan. comes question next Our

is open. line Your

Anne Samuel

speak current much. And expectation hospital then your Thanks backed about of trend? Hi. guidance? the utilization have sort you very Can you what utilization into

Craig McKasson

This Sure. is Craig.

data a our from see continue to to look to in mind we trends. at clinical utilization we and continue utilization our perspective, do So analytics data

see continuing utilization overall flat of non-acute outpatient to declining and inpatient space. in kind – the flat, continue relatively utilization growth We slightly flat utilization, slightly

revenue the continue our in past we a of guidance midpoint couple over to from guidance. net is low-to-mid kind and single-digit normalized administrative growth what's talk fee the year, about As that quarters, past perspective of effectively

extent perform as the vary the across on of to that that on that we do expansion such range, things pickups impact to that can utilization So does Medicaid markets based geographic factors on end obviously us the higher and of see performance utilization cause nature.

what given may kind So they or oftentimes base. indications volumes, that across broadly we're consistently the overall seeing for-profits but working you'll about the our we're of seeing membership where be it hear public trends

Anne Samuel

timing we the Thanks. seeing the moment? of how quickly your value care think what and of How to out some the kind maybe based Great. benefit you're you've at one And then just P&L going the Washington more back do to flow on those that seen acceleration of of about through side? initiatives

Susan DeVore

because come time. plays had rate in in out, of place, It It we to and over the begin just those apply doesn't think accelerates into consulting the immediately. brings are to collaborative, have out us, for for the think there growth it they use and existing those as the technology, plays collaboratives They began additional who and those use to some play customers continued I I they collaboratives use and programs. it. they out it ones

just through it programs, And ACO they the center so those programs, think in that payment CMS payment up multiple the we performance bundled of are rate and through see and But to programs. services. innovation growth programs, we accelerating like picks programs, flow the physician

Anne Samuel

very much. Thanks Great.

Operator

Thank you.

comes Our from Oppenheimer. next Naidu question Mohan with

Your line is open.

Mohan Naidu

timeframe you and seems hospitals? question hospitals up investment following are that of from this Anne, transition pretty infrastructure it your from there to of hearing this like to feels short just prior investment sided Susan, make significant on make questions. to in the are majority couple my ready again solutions taking risk, for years? the it they're this double do a next feels clients Thanks What the need to and the in

Susan DeVore

Yes.

owning So the The providers care meaning Advantage, part, owning I on risk time and wall, Medicare CMS and see risk. the rules also the moving think safety commercial for insurers, quality window. of writing that to are all total new that they cost ACO employers two-year most give

maybe doesn't for feel today. them urgent so And it

they're faster moved think takeout, that talking pressured say then I are what they do they’re needed know they think to need to they in have hence they about to all going it be are data, mostly risk. that they they need is because going would need they they the and recognize significant I – And to think to build need holding maybe But based building be time. I models be need they over to are be that it. risk Stanson building and They infrastructure going think revenues to then I be they that they they think technology, workflow, cost our acquisition.

potential the And so over play it points tailwinds us. for But right out time. we all will to it just think

Michael Alkire

Susan disruption that, on maturity any Hey, it any for build follows model Mohan, only for Mike. is this sort that is The of in industry.

they they're they're that to we're that So right next quite what determine once obviously their trialing looking is looks and XX% the that double we're those there's we're big risk innovators currently working we and not them to falling technology best out support building the sided of in sided through with services innovators now going there And double the the capabilities but and then interest. risk is organizations like layer the need. that that the the are are that of

Mohan Naidu

the maybe remaining much are in on guidance the of year? Thanks embedding Mike. second from Stanson, one Susan, Craig, a quick how current the you for Stanson half

Craig McKasson

the million. ranges, million was the very Stanson Yes. existing small $X to $X within revenue somewhere is of in guidance included company, range a so

a performance the on impact So impact at a significant profitability on material not either. actually all and basis not a

Mohan Naidu

very you questions. Thank my much taking for Okay.

Operator

you. Thank

Eric Percher comes from Our next question with Nephron Research.

is open. Your line

Eric Percher

for pointed it you, long you past a for toward and I as Thank changes. list the items said like the think of below in spoken felt you question are we timing the is cause that through went that or impacting initially when be may midpoint you've to related and concern of many revenue or then you, you. recognition to those Craig, most

when drives the feel I high recognizing operations low and like driven fundamentally much versus at $XXX. feel what midpoint operational? pressure versus how EBITDA investment the products and look and your you are core some So versus it that to of midpoint does – different question My or line is of does is, $XXX the

Craig McKasson

for Sure. the Eric, you thank question.

due that margin to bulk some to a do core through integrated perspective, was We're We pharmacy performing we expectations, as outstanding inventory that some operational of lower and that inventory buys on behind that some performing of way the we that headwinds higher in drivers. the us GPO had have profitability related product forward the but the cleanup little revenues some product done consolidation And out, we've in we warehousing. One, past in I've the discussed. of that efficiency Services, some right higher sourcing expectations, online that's now. the in with bit space, direct through we're distribution we business cleared a from with bit So as of had. on addressing our a couple move Performance have did online due a our then we little costs to a freight have already experienced warehousing costs challenges managing,

will that strategic use improvement expense had see so did the globe we we to So the source around that a some we'll in incremental we some moving half resources make and front change forward. the think We to product and in pressure then year acquisition price little deliver better folks of of that well. as have moving the competitive that bit in marketplace costs seen of we actually a forward. And product running up those get

products has originally that and I at as anticipated. would taken efforts forward. level But not move operational have performed that we'd the operationally remedy say actually So we business, the steps we to

investments business, making, the growth. deliver say would it's million about that now incremental year a So think future when I core to that then make we're as that's end the the multimillion and the of $XX those operations what investment not between be to and we continue to of seated looking but part to I the initiatives we expense relative would get new of

Eric Percher

helpful. Thank you. It's very

Operator

Thank you.

Stephanie comes from Our Citi. next Demko question with

Your line is open.

Stephanie Demko

you for question. Thank guys. taking Hey my

Now, via solution? bit started kind will this me Susan analytics the focus you you of current more shape actionable about benchmarking how product, a a tell about talked but insights. as evolution more Can

Susan DeVore

Thanks Yes. Stephanie.

and So population and chain health. of as around you labor know, several and we applications have total that clinical analytics deliver supply and cost productivity outcomes care

we with acquisition So Stanson. of kinds have of the all analytics

We as analytics clinical well to as ability content those the have take into the workflow.

decisions formulary of our provider patient sitting this see off see that when strategic and that differentiated and can drive they whether analytics front very lower or see, clinical a us the technology time and that near so they outliers data of worse for than And their for peers. if so is also can we clinical is was decisions buying that costs. why are and in change acquisition are outcomes of outcomes point they or care better really a better can a they and real vision evidence is that in or We the and on can they're that set think and at and get than,

technology near that systems provider a assets all also, better real truly as an make to burnout time integrated and implementation. will EHR decisions. tower help assets view allows deal It way we we posts, have that with providers of of these data of so they health having think And a control sort lot of

of need they control to not and just is are And analytics, going very this fragmented going to retrospective point for the to able be part that enterprise risks are to think us assume all forward. solutions allow these so assume not longer-term tower, the because and systems deliberate predictive its we that health

Michael Alkire

Stephanie. is Hey Mike. This

Just on another build that.

not are Stanson or sort insights also actually us So the the as care following whether of protocols. provides clinicians to

that are audit not to did think our risks, provides a sort functionality were have followed in in if whether that systems whether taking ACOs not these and understand unique two-sided ability near-term of or Stanson that's being protocols So the healthcare. have we you very about healthcare

the the So coming of forward out we're significant have to new risk models that those especially on. point are entities that that these for looking some

Stephanie Demko

Got it. That's very helpful.

a as still prior be more that you Stanson your in had at for going So you of your looking of benchmarking, consultant is replace do kind more analytics expand Or to see when products? the value that product solution? that

Susan DeVore

you could We the value in that workflow. put in because see actually still comparisons that in those right benchmarking

those interventions see, practice ordered the So you can] – Dr. more don't clinical ready should. indicate when order these these when gets order, wow, times I protocols can best that XX [A he I or than to of I would

the that definitely in decision we So on to continue comparable very a healthcare information their being country as see useful making. systems across thousand

Stephanie Demko

Thank you.

Susan DeVore

Thank you.

Operator

Erin with comes question Our next Wright Suisse. from Credit

open. is Your line

Erin Wright

or stand the Thanks. Performance sciences applied in and to speak speak this size opportunity Great. relationships how can you your are research seeing science opportunity? of some that any of where Can would Services to And with characterize you and of Thanks. and pharma the traction? where in you you offerings enhanced applied sort you

Michael Alkire

is This Mike. Sure.

commercial by totally start created. I'd months, saying at re-looked me has we've last our applied XX say So over just that first organization way within the the been let of sciences sort

So from strategy development. our the business strong talent our some brought really and help industry to really, in us really with we

really, able that we're team the excited out. So really to we've been build about

do ways pharma that to So assets and systems, very, learning data is have management that's two, in Number interested number these we figuring leverage. unique very one. out

assistants to that how us more move and of that terms as in pharma biosimilars going for taking especially are products actually we bring provided, other intersection the are mark lower-cost care with of in working So really our are healthcare on is being think to is how risks. drugs,

costs. to is nice really with opportunity pharma working intersection there So bring of this down

to some what clinical the we is obviously is on they're in, about world really of the best these want lower a, positive – pharmaceuticals. capabilities going the understand to make those interested real the have target sure are pharma are Once they're pharmaceuticals, where So that to we clinical focused get patients outcomes occurring. that cost figure to in where so deploying are they thinking as some help, some benefit and of out

and system. the rest We push and sort have the that of our broadly that learning of ability system standardize to take management to leverage to that our healthcare

So that we market. think we in unique have don't have some very, the very capabilities others

Erin Wright

the to and you what business strategy, then offering? guess a previous anticipated or deemphasizing speak integrated your incremental great. And in longer-term you I and the you the mentioned at can think to sort just the is would the in of going say all pharmacy specialty you are I question Thanks. Okay, kind no segment, back in but competitive acquisitions of positioning

Susan DeVore

negatively with being I and in intervention population an the overall world health that a positively do pricing think of drug with total can care. cost pharma drug with shortages, or challenges affect

manage Our of pharmacy total analytics, to things subsidiary, generic all the pharmacy GPO, our those our company are for care. systems important healthcare cost

healthcare them of do of systems, pharmacy always terms them business themselves, specialty we you how to it have there options of in that think some are us. some – deliver I do through it

so in think the to And what pharmacy healthcare system. are solve continue through the to the challenges ways really we'll best

know through a do we'll to all to continue and lot And would systems the focused ambulatory say to on that the But our so to generic We're there specialty delivered and ways focused doing the shortage. on make setting. ways how of those drive I focused of that are GPO sure in we're the pharmacy to we're on get in healthcare competition that portfolio we pricing, that. need think

Erin Wright

great. Okay, you. Thank

Operator

Thank you.

John Our with James. next Raymond from question Ransom comes

open. Your line is

John Ransom

almost been simplistic we've decade. hearing care value of – kind a just There's Hi, based a question. for about

much risk to typical revenue, at of of commercial yours? at you risk think $XXX how all be has hospital of or years you at is saying swag really had revenue will some that going led five three And be payers? now? you If the to today it How with much do anything and is of years client from government

Susan DeVore

Yes.

It but I'm average XXX% to kind are Advantage I if and doing said, so the and the we to over there's think XX% Commercial state also really would would probably of to double what publicly is risk Medicare perspective risk today, to on risk, XXXX. today. want by pushing I and want at out CMS is in actively has XX% at it pushing at sided always say varies come basically be XX%. map, all level based to our XX% XX% that's we that market, it's So Medicaid insurers, moving in XX% programs. XXXX of say actively We is follow is often be at CMS we think programs

who of will to in significantly overnight pays something game the the is focusing the method. administrations about focused We have ultimate risk XXXX and into change and think way fundamental the method and piecemeal, value are I doesn't on improving care, we've as XX% play that outcomes it So it problem the risk more while. a But happens fragmented based that and healthcare large in the think it from is are truly shift now shifting not the for we, the It hearing total it's different – who well. will a fee-for-service been cost lowering based, out the democrats country a between get two a and XX% than because now. have cost republicans we and to which for employers at will now be

systems time of we manage quality, over what internally keep will and we is to of to to costs, keep doing there saying what building to infections, so health manage And lot be real time and significant that next a in permutations this But much the time, this clinical in manage our to risk think over that to to continue do the levels your way. going and to we in measure five but of three years to will point, morph outcomes we're do years. to more an too integrated infrastructure

John Ransom

that Is and operational? to pharmacy you when of going you do things it the for thing describe a be of question, is second see mostly Okay. sourcing your be My migrating generics discussed? question branded great have this to you second out fully approximate a mix? answer. or going is as just you Where going the time What thanks that. a some Can to is That was back cost My over high pharmacy? mix specialty? you build generic this

Michael Alkire

Yes.

this subsidiary truly that short it supply. for focused drugs So on company, is are in

how that think gap. of healthcare around and So is close supply short XXX do today it's or costs Because millions the probably we really so systems in that of dollars hundreds of these actually are shortages. to we drug work there's focus that drugs that a

earlier create I And supporting program, all it's really the that's I earlier, to to It's think big differentiation our But us. GPO. program, said within base So have about number that this because I I care we'll differentiation health systems. these for think of think the Susan drugs one. and our said access

all we've need desperately So actually that and the six last for been doing five years. because or frankly work the of years quite

created and differentiation that have of We the gone market has into over some been we've winning that share reasons time.

strategy adjacency market really to as to of just to use create sort we're increased evolve that could continue share. looking So it that and helping us

Susan DeVore

Yes.

it's to access for pharmacy, business. side generic is suppliers, more GPO drugs Just in more just to the It the not through to clarify, that the hospital contract, on of get more we're trying system the drugs pharmacy. the integrated specialty GPO setting and those drugs health

Craig McKasson

once integrated it sector. drugs is either – a sure that help part pharmacy patient or limited of approaches And to for is hospital. to the to health will the strategy system And operating specialty outside systems. delivered discharged Craig. that is care then identify hospital the through our the business, And where With owning pharmacy, our with patients again, of walls health make ambulatory entire this to our articulator, from they're continuing initially distribution Susan and be best that that other continue control as the the for and way we is keep strategy was of population

John Ransom

system direct to employer able went between were at – Do last a of the me, Right. anecdotes recontract this this those? contracting we for X. and direct to What you any trying have savings one you of And are we with Susan interesting. get in

Susan DeVore

Yes.

today able that to who within members drive have national they is markets. have behind share network they a able bring improvement. go shift never been their haven't to and cost direct employers to We market been a and What to

trying direct of from of are We're at outcomes more impact to particular national employers. leverage ability a cost taking employers management now some members from those and for try infrastructure, level national to have all with using at So some a collaboration all employers, our our scale our of our to excellence these learning the clinical have national for data, a centers management contracts. We're those. the both and learnings,

John Ransom

you Are with savings targeting a that? cost

Craig McKasson

Yes.

Susan DeVore

all go the performance But and direct providers. And there how shift network. individual say and the XX% their with others scale XX% Yes. claims how to have, national and at them you a the figure would to Still budget. continue you using insurance all actually data cost of I in to provide. the variation I employers health challenge the working providers and are think decided, capabilities out clinical with I do that we they and financial is to TPA benefit mean think

John Ransom

Gotcha.

Okay. much. very Thanks

Susan DeVore

Thank you.

Operator

Thank you.

Our next Sandy question with comes SunTrust. from Draper

open. is line Your

Sandy Draper

lot lot volume Thank about price much is moving the offset that lot how price into or to when here. drive broad volume, and squeezing the growth I much has the obviously growth, and growth? obviously there there lot Susan going you for – pharmacy to the try me think simply, long-term consideration to the parts there's and Just all [indiscernible] how be we how of Mike, of there bit – think we trying are net quick have insight opportunity Maybe a was very about Performance on really to obviously I'll end. down at going of fees in little going that, business, do the much think the you long-term, supply drive see see guys or taking it pharmacy all into. been questions you about – what for you a similar business, When just Services. on a break mix the the on don't to to about because how is admin if being

us for the where the it's and is all are? parts moving where see So risks sometimes and think growth about, to the Thanks. hard

Susan DeVore

side increases side pharma would I what price there. GPO not do get there, say, we and Yes, from the on the Sandy growth

to competitive drive try to create friction is price there goal and Our down.

drive revenue generic to penetration, bandwidth, the to overall with and contract drive pharmacy up. drive compliance, the price new and to So goal market portfolio the recruiting GPO, share, is down

business of challenging with ago, From has DIR that into mid-to-high speciality growth mid have and it we years And it pharmacy when on sort rate mid it growth all others gets growth the a now so double-digit margins got mentioned, factored that along in, of to or a fees. had several that single-digit on utilization kind perspective, topline has business, single-digit challenging single-digit GPO. the call

why have two the affecting And you of overall sort both of mix and those that's businesses, today, pieces see so of the the result. so we

Michael Alkire

Well it see Susan that as growth – for as the and on We we pharmacy. do think I though, higher opportunity do lifesciences relates to of area us. a

our area. to So that collaborative We to continue we – in our opportunity data were resources and the that and grow this significant leveraging of deploy think to we're to – again going our have we're more the continue do market to business capabilities. lifesciences assets and more aspect business

Susan DeVore

you healthcare you And know, of XX% know pharmacy in as a whole these the is expenditure, systems.

in drive there we pharma GPO and intend we contract share So we to have opportunities the Services And we don't have companies, have Performance do price the over get to grow side opportunities on increases. market – compliance. side, with through

In fact, managed. total the goal cost the is try to pharmacy get to of

Sandy Draper

really That's Thanks. great. helpful. Okay,

Susan DeVore

Thanks.

Operator

Thank you.

Bill from Company. comes question Benchmark next with Our Sutherland

line is Your open.

William Sutherland

acquisition, most opportunities? Thanks. Yes, a let are committing Stanson possibly the as and recent the with me just for you further or near-term be and checked where one. interested real in future there resources you are M&A, little I'm ask you've bit here looking curious, some boxes might out quick most a

Susan DeVore

Yes.

capital deployment capabilities. and organic front-end, machine we improvement, other So performance to technologies in and e-commerce, investments GPO our looking at strategy; are from a continue or be deployment analytics chain and new we services given purchase perspective, learning, end-to-end supply analytics capital enterprise our interested chain, end-to-end – making strategy, supply

data areas Performance to improvement, On is the clinical be ambulatory is subject improvement a ability side, real very data really sets, think take those significant expertise. I consulting what drive we the differentiator productivity, financial both physician sophisticated claims would for mean additional segments. wrap Services analytics, data, the in capabilities technology claims and us, around and so matter to and

William Sutherland

That's Thank list. you. quite a

Susan DeVore

you. Thank Yes.

Operator

I’d further no showing I'm DeVore time. to Susan over this the for questions you. turn back closing at call like Thank to remarks.

Susan DeVore

joining Thank for thanks us today. everyone operator. you, And

scheduled much. seeing May and next speaking few currently for the Thanks to of with look so we many Our is call next months. quarterly and earnings you X, forward over

Operator

Ladies and Thank conference. gentlemen, you concludes today's and wonderful day. this have participation a your for