Oak Street Health, Inc. (OSH) Q4 2021 Earnings Call Transcript

Oak Street Health, Inc. (OSH)
Q4 2021 Earnings Call
Mar 01, 2022, 8:00 a.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Hello, and welcome to the Oak Street Health 4th quarter 2021 earnings conference call. My name is Alex, I'll be coordinating the call today. [Operator instructions] I will now hand over to your host Sarah Cluck, head of investor relations, over to you Sarah.

Sarah Cluck -- Head of Investor Relations

Good morning, and thank you for joining us today. With me today are Mike Pykosz, chief executive officer; and Tim Cook, chief financial officer. Please be advised that today's conference call is being recorded, and at the Oak Street Health press release, webcast link, and other related materials are available on the Investor Relations section of Oak Street Health website. Today's statements are made as of March 1st, 2022, and reflects management's view and expectation at this time, and are subject to various risks, uncertainties, and assumptions.

This call contains forward-looking statements. That is statements related to future, not past events. In this context, forward-looking statements often address our expected future business performance and often contain words such as anticipate, believe, contemplate, continue, could, estimate, expect, intend, may, plan, potential, predict, project, should, target, will, and would, or similar expressions. Forward-looking statements by their nature address matters that are too different degrees uncertain.

For us, particular uncertainties that could cause our actual results to be materially different than those expressed in our forward-looking statements include our ability to achieve or maintain profitability, our reliance on a limited number of customers for a substantial portion of our revenue, our expectation and management of future growth, our market opportunity, our ability to estimate the size of our target market, the effects of increased competition, as well as innovations by new and existing competitors in our market, and our ability to retain our existing customers and to increase our number of customers. Please refer to our annual report for the year ended December 31st, 2021, filed on Form 10-K with the Securities and Exchange Commission, where you will see a discussion of factors that could cause the company's actual results to differ materially from these statements. This call includes non-GAAP financial measures. These non-GAAP financial measures are in addition to, and not a substitute or superior to measures of financial performance prepared in accordance with GAAP.

There are a number of limitations related to the use of these non-GAAP financial measures. For example, other companies may calculate similarly titled non-GAAP financial measures differently. Refer to the appendix of our earnings release for a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measures. With that, I'll turn the call over to our CEO, Mike Pykosz, Mike.

Mike Pykosz -- Chief Executive Officer

Thank you, Sarah. And thank you, everyone, for joining us this morning. Joining me on today's call, in addition to Sarah; Tim Cook, our chief financial officer. In this call, I'll start with a review of our 2021 performance, then turn over to Tim to discuss more specifics around 2021 financial performance.

We'll then turn to 2022, and I'll share more on our goals for the year, and Tim will provide guidance for Q1 and the full year 2022. I want to first thank our team for the continued dedication and focus on our patients, our communities, and our mission. Our team used to navigate through a challenging operating environment, including the Omicron Covid surge, and historically tight labor market, especially in healthcare. Despite these headwinds, we achieve strong results across all the major drivers of performance for the fourth quarter.

With strong revenue growth driven by new patient ads in both new and existing centers. We finished the year with129 centers, including 50 new centers opened in 2021. Third-party medical costs, which will cover more detail, more in line with expectations going into the quarter. Despite significant headwinds from our Omicron hospitalizations which were obviously not factored into the guidance we gave in early November.

Direct cost of care corporate costs are all in line with expectations as well. The net result is a quarter in which we exceeded the top end of our guidance range because revenue, membership, and adjusted EBIDTA. The fourth quarter, we generated record revenue of $394.1 million in the quarter, exceeding the high end of our guidance range, and representing a 58% growth compared to Q4 2020. For the year, we generated $1.43 billion in revenue, representing 62% growth compared to 2020.

Our revenue growth continues to be driven by organic B2C marketing approach. This includes both central channels, such as digital marketing, and our core community-based outreach team. [Inaudible] in line with guidance we shared calling Q3. This, combined cost of care sales and marketing corporate costs all in line with expectations and higher than projected revenue growth, resulted in an adjusted EBITDA loss of $228.9 million for the year, which is favorable to the top-end of our Q4 guidance.

We look back at 2021 as a whole, we exceeded our revenue, center growth, and patient growth targets. Our third-party medical costs were higher than anticipated driven directly, and indirectly by the COVID pandemic. We need to lower adjusted EBITDA performance. Tim will cover more detail how these trends progressed across the year and their expected impact in 2022.

Beyond the financial metrics, we took a big step forward in 2021 in our mission to rebuild healthcare as it should be. We made significant accomplishments across the key components of our business. This will lead to a greater impact on our patients and communities, which will drive our future financial performance. We opened 50 new centers in both existing markets, as well as across 8 new states.

To put that into context, it took us 7 years to put up our first 50 centers. This expansion will allow us to serve additional community patients, invest in continuous improvement in our care model, and patient experience in greatly increases the embedded profitability in the business. To help mitigate 2020, I went to running our community-based marketing model from the Delta, and Omicron surges, remarkably scaled our central marketing channels to help fill the gap, and to use these strong results from new channels. We are excited for the time when we can have both our community, and central marketing channels working in concert.

We were selected by the AARP as our exclusive primary care partner, a relationship that we believe will lead to increased patient growth and retention while being a differentiator for years to come. Additionally, we continue to build on our core platform, adding new terminal capabilities and services for patients, which we believe will continue to improve health outcomes and lower third-party amount cost. For example, we publish results from the impact of enhancements to our data and technology platform, such as implementing new machine learning algorithms to better stratify our patients. We expect the acquisition of RubiconMD will allow us to integrate their virtual specialty network into our care model, creating an innovative and differentiated approach to specialty care, resulting in improved care quality, lower unnecessary medical costs, and improve patient experience.

We accomplish all of the above while navigating the twists and turns of 2021. We operated vaccine clinics early in the year and delivered 200,000 plus vaccine doses. We navigated Covid surges in the second half of the year, while still executing at all aspects of our business. We hired thousands of team members, including hundreds of providers, despite historically tight labor markets.

I couldn't be prouder of what our team accomplished in 2021, and I'm excited to see what they can accomplish in 2022. Before I turn over to Tim, I've two recent topics I'd like to address quickly. The Department of Justice inquiry [inaudible] in November and the recent announcements from CMS related to the direct contracting program. On the status of the DOJ inquiry, we have begun, and we'll continue to provide documents in response to that inquiry.

Our discussions with the DOJ have today largely been about the scope of the request and the document collection process and not about the substance of the inquiry. As such, we are currently unable to make any meaningful predictions about the timeline or outcome in this matter. As we said previously, we strive to operate in a compliant manner, and we will work with the DOJ in a collaborative and transparent manner as we address their inquiry. In direct contracting and the recently announced changes to the program, we are participants in the direct contact your program, as enables you to provide our care model to patients with traditional Medicare, with increased supporting services that are typically provided in primary care for traditional Medicare patients.

In fact, in 2021, 100% of Oak Street Health patients in the drug contracting program were located in areas designated by HHS as medically underserved mental health provider shortage areas for both. Last week, CMS and CMI announced important changes to the program aimed at, advancing health equity to bring the benefits of accountable care to underserved communities, promoting provider leadership and governance, and protecting beneficiaries in the model with more persistent monitoring, and transparency. Having been a Medicare shared savings program participant for several years prior to joining direct contracting, we are excited to participate in the ACA rich program, and appreciate the time and effort CMS and CMI invested to modify the program, but also take into account stakeholder concerns. We believe these changes for well the excuse model in the community serve in our long-standing focus on health equity.

The exact details in CMI are still pending, but if the ultimate changes are consistent with what was communicated last week, we do not expect a material impact. With that, I'll turn it over to Tim to cover some more of the details regarding our financial performance in 2021.

Tim Cook -- Chief Financial Officer

Thank you, Mike, and good morning, everyone. We continue to generate strong growth for the Oak Street platform in 2021. To recap the year, we eclipsed $1 billion in revenue, generating $1.43 billion in revenue in 2021, representing growth of 62% from 2020. We exceeded the high end of our initial 2021 revenue guidance issued in March 2021 by 8% and better than the high end of the revenue guidance provided during our third quarter 2021 call.

As of December 31st, 2021, we carried for approximately 114,500 patients on an at-risk basis, 4% ahead of the high end of our initial 2021 guidance, and above the high end of our guidance range on our Q3 call. We opened 50 new centers in 2021, increasing our total center count to 129 as of December 31st. This represents 8 more centers in the high end of our initial guidance range. Captivated revenue for the year of $1.397 billion, representing growth of 64% year over year, driven by increases in or at-risk patient base and our capital rates.

Total prior period development related to capital revenue from prior years, primarily 2020 was favorable by $20.8 million, driven by the result of our 2020 full year risk adjustment payments compared to our rules in-patient retroactivity. Other revenue for the year was $36 million, representing growth of 13% year over year. Approximately $6.5 million of the $36 million was related to favorable prior period development from our performance in 2020 under our shared savings arrangements. The majority of which was related to the results of our Acorns ACO.

Our medical claims expense in 2021, with $1.109 billion representing growth of 80% compared to 2020, driven by the increase in patients under capitated arrangements and an increase in medical costs per patient. Total prior period development from prior year, primarily 2020 related to medical costs was unfavorable by approximately $6.7 billion, driven primarily by patient retroactivity. The majority of these costs were directly offset by the capitated revenue prior period development. As a reminder, patient retroactivity is typical and occurs when health plans pay Oak Street retroactively for patients managed in prior periods, but not previously included in our rosters, and therefore not previously recognized in revenue or medical claims expense.

During our last two earnings calls, we highlighted the three drivers of our elevated medical costs. These areas represented an estimated $110 million headwind in 2021, but we continue to believe they are a direct result of the pandemic, and largely temporary in nature. The first cost from COVID admissions, in our Q3 earnings call, we share that in the first three quarters of the year, Oak Street experienced approximately $25 million of costs directly related to COVID admissions. We estimate full-year COVID costs were approximately $38 million in 2021, including an estimate for the surge in COVID cases related to Omicron variant in December.

We expect January and February 2022 to have elevated cost from COVID admissions as well. We remain focused on ensuring our patients are vaccinated and have received their booster shots. We also have programs in place to ensure our patients have access to new oral antivirals. We hope that these therapies become more available.

They will be effective in reducing hospitalizations and other poor outcomes in future COVID waves for our patients. The second element was non-acute utilization. In our Q2 earnings call, we discussed that non-acute utilization, including specialist visits, diagnostics, and outpatient procedures, increased in March and April following the vaccine rollout for older adults compared to our historical experience. We believe the increase in cost during the spring was partially driven.

That increase comfort accessing medical care once they were vaccinated. Relax payor standards through to the public health emergency, and specialist in hospital system behavior, In our Q3 earnings call, be sure that these costs began to decrease in late spring into the summer, as the year progressed, this trend continued. Comparing to our historical experience, we estimate non-acute utilization was a $35 million headwind in 2021, driven in large part by the elevated cost in the spring. However, we do not expect it to be a significant headwind in 2022, given the lower run rate exiting the year.

This is also the cost category where we feel the acquisition of RubiconMD will have the greatest impact. The final driver was new patient economics.  In our Q3 earnings call, we discussed our new patient medical costs were elevated compared to historical levels, while per patient revenue for new patients declined to a level less than what we received for new patients in 2019, both on an absolute basis and significantly less than what we would have expected when considering premium trend. The net result is a decline of new patient economics, driven by a combination of higher costs, and lower revenue than what we have experienced historically. We estimate patient contribution of our new patients with $38 million lower in 2021 compared to 2019 new patient economics.

We looked at new patients' contributions by geography, center vintage, provider tenure, and marketing channel, and we saw a similar decrease across all cuts of the data. For this reason, we do not believe the new patient economics in 2021 were negatively impacted by new centers or markets, but instead continue to believe the primary driver of lower new patient economics is lower engagement of adult, older adults, especially those in lower-income communities, by the healthcare system in 2020. Lower engagement results in both higher medical costs because of unaddressed medical conditions, and lower revenue because these conditions go undocumented. As a reminder, restores lag by a year and depend on diagnoses captured during provider visits.

Thus, the lack of engagement before joining Oak Street likely had a double effect of reducing the incoming risk score, while also increasing disease burden. As discussed on prior calls, we expect the increase in per-patient revenue in 2022 for these patients who joined in 2021 to be larger than our historical experience, which we believe will largely offset the higher medical costs from these patients. At this point in 2022, it is too early and we have too few new patients who have a firm view on what revenue, medical costs, and therefore patient contribution will look like for our new patients in 2022. While these three drivers led to higher than anticipated medical claims expense, and therefore lower profitability than we expected coming into the year, we are seeing these higher costs beginning to subside and continue to believe that the remainder will subside over time as COVID evolves from pandemic to endemic.

Moving on the cost of care, cost of care, excluding depreciation and amortization in 2021 was $294 million, a 57% year over year increase driven by higher salaries and benefits expense from increased headcount, as well as greater occupancy costs, medical supplies, and patient transportation costs. The growth in these costs related to a significant growth in our patient base at our existing centers, as well as a growing number of centers we operate. Sales and marketing expense was $119 million during the year, representing an increase of 86%t year over year and was driven by a $36 million increase in advertising spend to drive new patients to our clinics, as well as an increase in salaries and benefits of $17 million related to headcount growth. As a reminder, growth in year over year sales and marketing expense was artificially inflated as our costs were partially depressed during Q2 and Q3 of 2020 due to the pandemic, which included the temporary suspension of community outreach activities, and other marketing initiatives.

Corporate, general, and administrative expense was $307 million in 2021, an increase of 65% or $121 million year over year, primarily driven by headcount costs necessary to support the continued growth of the business. Stoc- based compensation represents $156 million of total corporate general administrative costs in 2021, and $79 million of the year over year growth. Excluding stock-based compensation, corporate, general, administrative expense grew 39% compared to our total revenue growth of 62%. As a reminder, the vast majority of our stock-based compensation expense is related to the accounting treatment of equity awards issued prior to our IPO in 2020.

I will now highlight three non-GAAP financial metrics that we find useful in evaluating our financial performance. Patient contribution, which we define as capitated revenue, but medical claims expense grew 23% year over year to $288 million. We expect at-risk per patient economics to improve the longer that our patients are part of the Oak Street platform. Platform contribution, which we define as total revenue, was the sum of medical claims expense, and cost of care excluding depreciation, and amortization was $31.5 million, a 59% decrease your year from $77.5 million.

This year-over-year decrease was driven by the previously discussed increase in medical claims expense, as well as a significant recent growth in our center-based, and therefore the portion of our centers, which are immature. The data we provided during our JP Morgan presentation reflected in the losses we expect for new centers as their performance ramps over time. We expect new centers to generate an operating loss for the first two years of operation and approximately break-even in year three. As of December 31st, approximately 60% of our centers have been open for less than two years, and approximately 70% have been open for less than three years.

Adjusted EBITDA, which we calculate by adding depreciation and amortization, transaction, offering related costs, income taxes, and stock or unit-based compensation, but excluding other income, the net loss, was a loss of $228.9 million in 2021, compared to a loss of $92.6 million in 2020. We finished the year with a strong balance sheet and liquidity position. As of December 31st, we held approximately $790 million in cash, restricted cash, and marketable debt securities. In Q4, we closed our acquisition of RubiconMD, the base purchase price was $130 million, and was paid in cash.

Our liquidity position will support our continued growth initiatives, primarily our de novo center-based expansion. For the year ended December 31st, 2021, cash used by operating activities was $197.2 million, while our capital expenditures were $81.3 million. I'll turn back to Mike now to discuss our focus areas for 2022.

Mike Pykosz -- Chief Executive Officer

Thanks, Jim. Turning to 2022, we're excited to continue on our journey to transform care for older adults. Our focus for 2022 will be on our four core objectives at Oak Street. Provide the best care anywhere, deliver an unmatched patient experience, grow the number of patients in communities we serve and be the best place to work in healthcare.

For the last two years, we've acquired a huge amount of nimbleness and flexibility from our teams in order to meet the needs of our patients and community. In Q2 2020, we essentially morphed into a telehealth company for a time, going from near zero to 90% of our business being virtual. In Q1 2021, we ramped up vaccine clinics across dozens of our locations to ensure equal access to vaccines for older adults in the neighborhoods we serve. I'm incredibly proud of these and many more efforts from our teams to be there for our patients and communities.

In 2022, we're excited to have our teams, both at our corporate offices, and our centers, focusing on the core of what we do in advancing our performance across all of our objectives. We believe this focus will result in continual improvement to and scalability of our model. As a shared in our January with JP Morgan healthcare conference presentation, we expect the Oak Street platform to drive strong economic performance in 2020. To expectations that are centers that are over six years old will continue to be highly profitable with a subset of these centers that have 2300 or more at-risk patients, driving center contribution of approximately $8 billion each.

Additionally, as we showed at the conference, our intermediate centers are ramping better financially than our mature centers did at this point in their maturation. And our newest vintages are starting off similar to a stronger than armature and as the key KPIs that drive center result. It is for these reasons that we are confident in the unit economics of our centers, and the return they will generate for investors while improving the well-being of thousands of patients. As Tim shared in more detail in a couple of minutes, our viewers 2022 center, but the performance that we showed at the conference remains unchanged, and is the basis for our guidance.

Because of our confidence in our economics, the differentiation of our model, and the massive market opportunity that will enable sustained growth over the next decade, we believe we can pursue a strategy that delivers meaningful near-term and longer-term value creation for all stakeholders while mitigating risk from current market volatility. We're updating our new center target to 40 new senators in 2022. Our plan is to open 30 to 40 new centers per year through 2024. By tight-fitting growth of 40 new centers per year over the next 4 years, Oak Street will see substantial growth with an expected revenue compounded average growth rate of over 40% or reaching profitability in or before 2025.

Additionally, [inaudible] with embedded EBIDTA of over a billion dollars for centers opened by year-end 2022, and more than $1.5 billion per center open by year-end 2024, assuming the unit economics we share in January. As we have previously indicated, we have considerable control over our capital consumption through the case of new center growth. If we are able to further improve our unit economics, lowering capital needed over the next couple of years, we will reinvest that capital into an accelerated pace of center openings, by trading our new center growth in this way. We believe that we have sufficient capital to fund center growth until the business is cash-flow positive without the need to raise equity capital now or in the future.

Given the recent market volatility, we think this is the most prudent path to control our own destiny. Mitigate any risk from market volatility and build value for our shareholders. As noted above, we remain confident in our unit economics and accountability to execute across a range of new center openings we've considered. We believe this approach allows us to build a fast-growing, value-creating transformative organization with sustained compound annual revenue growth of 40% and significantly better profitability.

We remain excited to continue to execute our mission to rebuild healthcare that should be. I'll turn it over to Tim and discuss in more detail in guidance [inaudible].

Tim Cook -- Chief Financial Officer

Thanks, Mike. As Mike just discussed, we are setting our initial guidance for our center growth at 40 centers, resulting in a year-end set account of one 169 centers. We expect to care for total at-risk patients in a range of 152,500 to 157,500 to generate revenue for the year in the range of $2.1 billion to $2.135 billion, representing growth of approximately 45% over 2021. We expected our adjusted EBITDA loss to be $325 million to $290 million.

Implicit in our adjusted EBITDA loss guidance range as platform contribution performance within the range that we outlined the JPMorgan Conference for each vintage. Recall that our JP Morgan range took into account unknowns around future direct costs from COVID hospitalizations, as well as new patient economics. Our guidance incorporates the realities that there will be COVID costs, particularly given the Omicron surge in Q1 and new patient economics are largely unknown at present, given we have relatively few of them at this point in the year. Note that due to the fewer centers in 2022, we will not generate the same level of operating leverage as we would have had we opened 70 centers.

We will continue to invest in our platform to drive future performance. We will manage our 2022 new centers to minimize potential costs from delayed openings. But we do expect to incur one-time debt cost included in our guidance related to centers originally scheduled to open in 2022 that will now open in 2023. As we look forward to 2023 and 2024, we would expect to open 30 to 40 centers in each of these years.

At this pace, we will continue to strategically grow the business while minimizing the potential for a future equity raise. With performance consistent with our 2022 guidance, this pace would result in 2022 being the trough of our adjusted EBITDA losses in cash burn positions to be adjusted EBITDA positive in 2025 while generating a revenue CAGR from 2021 through 2025 in excess of 40%. For the first quarter of 2022, we expect the following, total centers in the range of 138 to 139, at-risk patients in the range of 122,500 to 123,500 as of March 31st, total revenue in the range of $505 million to $510 million, and an adjusted EBITDA loss of $45 million to $50 million. And with that, we will now open a call to questions.

Operator.

Questions & Answers:

Operator

Thank you. We were now proceed the Q&A. [Operator instructions] Thank you. Our first question for today comes from Lisa Gill of J.P.

Morgan. Lisa, your line is now open.

Lisa Gill -- J.P. Morgan -- Analyst

Thanks very much, and thank you for all the details. Mike and Tim, just going back to our conference where you talked about 70 centers opening. What's really ensued in the last seven to eight weeks? Is it just simply the current markets, and not wanting to have to go back to the equity markets to gain additional capital? Or has something else changed in the way you're thinking about center growth for 2022?

Mike Pykosz -- Chief Executive Officer

Thanks for the question. From an operational, our market opportunity standpoint, in our view, nothing has changed. As Tim noted, the range of center ramps that we shared seven weeks ago, the conference remains the basis for our guidance. I think we still see a huge market opportunity out there for us.

In some ways, I think the change in center growth is actually somewhat driven by that size of that market opportunity. We don't feel like this is a land grab. We feel like we'll be putting up centers over the next decade and beyond. And so when we looked at the market volatility, we didn't want to be in a position where we had to access the equity capital markets in the future.

We want to make sure we really controlled our own destiny and felt that with this level of growth, we can achieve, as we discuss very strong growth, bring up the timeline to profitability, and really remove the need for a an equity capital raise and to kind of get that combination felt like the right approach, just given the volatility in the markets.

Lisa Gill -- J.P. Morgan -- Analyst

That's very helpful. And then, Mike, just a quick follow-up. You kind of rest across that the new direct contracting that CMS came out with. There were two areas that I feel people are really focused on.

One governance, maybe you can just address that. I don't think that's an issue for you since you employ your doctors. But then secondly, how we think about risk adjustment and the cohort of patients that they're looking at.

Mike Pykosz -- Chief Executive Officer

Yeah. I'm a governance one, I think we have the same read you did on that one that we are a provider organization, so I think the governance rules will be more relevant for organizations that are more contractual or aggregators of doctors versus the Oak Street where that's what we are. So it's that one that was pretty straightforward for us. With all things risk adjustment, the [inaudible] always in the details, so we'll pay close attention as more and more details are released.

But our initial read is this shouldn't be a big change or impact on Oak Street. I think one of the things that's unique about Oak Street, and we're very proud of is we've been taking care of traditional Medicare patients since the onset of the company. And over that time period, we don't we haven't differentiated the quality of care and the investment we make in our patients based on insurance type. And so the type of care that patients received in 2014, 15, 16, 17, 18, 19, all before a drug contract was the program, was very similar, and baseline patient population was a patient population that directly cared for by Oak Street at that time as well.

And so because of that kind of changing the reference here, how you're measuring that baseline of patients has, we believe, limited impact on Oak Street therefore should have limited impact going forward. So obviously, as more details come out well, it will pay both attention. But our initial read is that shouldn't really make a big difference for us in the program.

Lisa Gill -- J.P. Morgan -- Analyst

Great, thanks for the comments.

Operator

Thank you. Our next question comes from Ryan Daniels of William Blair. Ryan, your line is now open. 

Ryan Daniels -- William Blair and Company -- Analyst

Yeah, good morning, guys, thanks for taking the questions. Thanks for all the data as well. Tim or Mike, maybe one for you guys regarding the archetype model that you shared recently at J.P. Morgan with the various vintages.

And I'm curious if you could compare contrast that to kind of where we were maybe pre IPO a few years ago and how that's evolved. Now I realize COVID probably has an impact here. That's transitory in nature, but just any commentary there would be helpful.

Tim Cook -- Chief Financial Officer

Thanks, Ryan. This is Tim. I'll handle that. I know there were some unintended confusion after J.P.

Morgan regarding how their core data shared at that time compared to our expectations that IPO. And I kind of think of this through three different lenses. The first point of your question is what has changed? Our initial model archetype model was created in the latter half of 2019 ahead of a potential 2019 IPO that we subsequently delayed until 2020. When we updated the model in the summer of 2020, at that time, we were hopeful, like I think many in the marketplace where that cohort will be relatively short-lived and the financial impact would be limited and also time-bound.

As we sit here today, we continue to be impacted by COVID, both the direct costs as well as indirect costs, impact or, excuse me, indirect impacts such as the growth of our centers as well as the slower growth we experienced in 2020, which has a cumulative effect on results today. So as we step back and think about the net present value of the center, which is how we evaluate our center performance, we believe the impact from all these changes related it was about 5%. So relatively immaterial overall, just given the fact that our centers are still achieving the same level of ultimate profitability that we thought they would at the time of IPO. The second lens is just a number of proof point substantiating our performance, though at the time of the IPO, we had four centers that were we categorize as most scaled, and they generated approximately $8 million each of annual contribution.

Today, that number is 10 centers that we expect to generate $8 million each of contribution in 2022. Additionally, we had 19 centers today that are six years or older versus only seven at the time of the IPO. And we expect those 19 centers to generate, on average, about $6.5 million of contribution in 2022. And that can only be the third, which is our IPO archetype wasn't based upon our oldest centers performance.

Whereas what we provided in January is based more on historical performance and our more recent centers that are outperforming that historical performance, which is why we have a lot of confidence as we think about our future results.

Ryan Daniels -- William Blair and Company -- Analyst

OK. That's super helpful, color clarifies a lot, and then as my follow-up, just looking at growth in the expected at-risk lives, it looks a little bit lower on a absolute basis year over year versus 2021. So I'm curious if you can go into some thoughts around that. And maybe as part of that, you can address just how your marketing may change.

Here is Koven appears to be winding down and we had in the spring with things warming up. Do you expect your community based marketing to ramp up a little bit here past [inaudible]? Thanks.

Tim Cook -- Chief Financial Officer

Hey, Ryan, I like the [inaudible] Chicago reference right there as opposed to Boston new. I'm the kind of patient acquisition front, our assumptions that we're using for guidance project a similar level of kind of growth percenters as we saw in 2021. I think, obviously, we're projecting to its net growth, and so there's multiple factors that go into it ,more centers, but obviously a larger and patient base, etc.. Last year was going by direct contracting coming in Q2, where that's obviously in the baseline starting this year.

Our numbers today aren't assuming we reached what I talked about earlier is, a goal of maintaining our central channels but getting our community marketing back to where we had in 2019. Obviously, that's our goal. And as COVID transitions from pandemic to endemic, and people become more and more comfortable around the communities. Our hope is we can get our community events ramping back up again, and really get back to the types of activities from our center-based teams, as we were doing a couple of years ago.

And we still have the same kind of staffing and approach there. So that's the way I hope operationally, but that kind of both of those working in concert is not baked into our guidance. Because there's one thing I've learned over the last couple of years, Ryan, is to stop predicting what's going to happen, the twists and turns of this pandemic. So we're so we'll keep assuming kind of performance for 2021.

I hope we can improve from that.

Operator

Thank you. Our next question comes from Justin Lake of Wolfe Research. Justin, your line is now open.

Unknown speaker

Hi, this is Harrison on for a guest. I think you just touched on this a little bit earlier, but I want to make sure not missing anything. I'm looking at this correctly. Currently, you're one to risk-based patient guidance implies eight and a half thousand patient ads in the first quarter, which would appear to imply 11,000 patient ads to the following cause it before your guidance.

I think historically, we've kind of seen the NRA members grow with more weighted toward the first quarter versus the other quarters where anything the unique issue that's driving the shooting cadence is maybe the involuntary attribution of disease patients or anything else to call out.

Mike Pykosz -- Chief Executive Officer

Yeah, I do think direct contracting has slightly changed the shape of growth across borders. Historically, we had a fair amount of traditional Medicare patients coming into the 80 period, and a set of those would change from traditional Medicare to Medicare Advantage, and so they would go from non-risk, at-risk. Obviously, with a contract in place, a large portion of our Medicare patients are in that program and so they're already at-risk. And so if those patients who are direct contract and choose to move over to Medicare Advantage, right, they move, they remain at-risk and you don't really see that movement in our numbers.

I think that what used to be a timing of getting a bump in the beginning of the year from traditional Medicare patients would be to risk. The good news is those patients are already at-risk. And so it's always an improvement overall. But I think you'll see more kind of similar growth quarter over quarter where you won't have as much seasonality, which again, I think that's a nice positive for us that we can be very consistent growth across the year versus being reliant on one period of year.

Unknown Speaker

Got it. Super helpful and maybe one last one. Just found offering leverage. Would you mind expanding upon maybe your updated thoughts on the pacing of the leveraging of the cost ratios, given that you're slowing center growth? And presuming we still have a fair amount of overhead, spread across care centers, and maybe just relative to how you're thinking about it prior to the changing center [inaudible]

Tim Cook -- Chief Financial Officer

Harris, this is Tim, thanks for the question. As you know, what you're referencing is he provided a framework about GA growth during the J.P. Morgan conference. That was sort of as a simple heuristic, if you think about it in a more nuanced level.

Our GAA costs, there's a fixed component, there's a component that's more driven by patient volumes and there's a component more driven by center volumes. The fixed cost component, obviously is what it is. There will be any change to that based upon the change in the number of center we're going to open. Let's say the patient journey costs will not be that similarly reduced this year, given the relatively few patients the 30 centers that were pushed would have had, because those are what we said, literally open later in the year anyhow.

If the center was ready to open in April, obviously we weren't going to push it to 2023 and incur the debt cost of almost an entire year for those centers. And then on the center base cost, they're going to be some savings here, but much of these costs are regional nature. And while we may be opening fewer centers, it isn't necessarily fewer regions in a sense, so we were going to have six centers in the region before it might be four today. We'll get the benefit of that in future years as we ultimately do open those incremental to centers in that example.

So we are still going to see a nice year over year improvement in operating leverage, just not to the same degree that we'd expected at J.P. Morgan. And fundamentally just given the fact that we were doing the math based on center months and there's going to be obviously fewer center months in 2022 than we had contemplated at that time.

Operator

Thank you. Our next question comes from Kevin Fischbeck of Bank of America. Kevin, your line is now open. 

Kevin Fishchbeck -- Bank of America Merrill Lynch -- Analyst

Great, thanks. Maybe just to follow-up a little bit on that question there. When you think about opening up 40 new sites a year versus maybe the 70 plus that you might have been thinking about previously, is there a change at all about where those sites are being opened? You mentioned you had a winter 8 new states this past year. Would you expect the new sites to be concentrated in states that you're already in? Or would you still expect to be entering new geographies and new states?

Mike Pykosz -- Chief Executive Officer

Appreciate the question. No, I think the approach is the same. Well, we'll open centers, both in existing markets, like some of our planned open will be in Chicago as we continue to see opportunity to take care of more patients, and the demand that exceeds the number of centers we currently have. We'll also be opening up in new markets.

In Q1, we opened up our four centers in Phenix, Arizona. We'll continue to build out those, so it'll be it'll be a combination of both as it was prior, probably the way I think about a bit more in the 70 centers when we were planning to open this year. We'll also open all of those catchments to put some of those into in the 2023. But I don't I don't think the approach is different.

Kevin Fishchbeck -- Bank of America Merrill Lynch -- Analyst

OK. And then maybe just to better understand the economics of opening up these centers. It does, opening up a center adjacent to an existing center. Is that a better long-term investment? albeit maybe at the risk of short-term dilution from the existing surrounding centers or entering a new market, kind of a better divestment. 

Mike Pykosz -- Chief Executive Officer

I don't think there's a huge divergence between a new center and an existing market, or a new center in a new market. If you look at our kind of mature centers, the first 19, we put up the one Tim reference earlier, there's a huge amount of variability in the types of markets though centers. So obviously a number are in Chicago, our first market, but even in Chicago, some of them are in kind of more blue collar, middle class kind of think retired teacher type neighborhood. Some of them are kind of dense inner city neighborhoods that have a much higher, higher rate of poverty.

Some of them are predominantly Hispanic communities. But also in Chicago, those first 19 centers are in places like Rockford, Illinois, and Fort Wayne, Indiana, where we have one center each. In those centers, actually  doing quite well, and are certainly in line are better than the average in those in those vintages. We're also in [inaudible] Indianapolis, Detroit and all those places are are part of those first 19.

And so the reason I say that is I think our approach remains similar to go to that breath. and that type of market, both from a size, a market perspective, and from a kind of demographic income perspective. And when we look at kind of the ramp of the centers, it's very, very similar to this speaks to the scalability and applicability of what we do. And I think a lot of ways think about it.

It's almost more retail in nature of what drives your market is the or the center is the catchment around the center. And so, whether you're going to Rockford or the south side of Chicago, it's really about over the 20,000 or so, older adults are trying to serve. And are you able to engage that community and bring people in? And our teams have been historically very good at that across a wide range of markets.

Kevin Fishchbeck -- Bank of America Merrill Lynch -- Analyst

Great, thanks. 

Operator

Thank you. Our next question comes from Jessica Tassan of Piper Sandler. Jessica, your line is now open.

Jessica Tassan

Hi, thank you for taking the question If that's the case, can you just remind us of the impact that diversification has on patient recruitment, revenue and operating expenses? Thank.

Mike Pykosz -- Chief Executive Officer

I thought you broke up there in the middle of your question, do you mind asking again?

Operator

Sorry, my apologies, Jessica, your line isn't the most strongest. It's OK if I can just disconnect the line. [Operator instruction]. Apologies for that.

Our next question comes from Jamie Perse of Goldman Sachs. Jamie, your line is now open. 

Jaime Perse -- Goldman Sachs -- Analyst

Hey, good morning, guys. I wanted to go through some of those areas of increased medical costs this year, and what you're assuming for 2022. It sounds like on non-acute utilization, you're expecting that to be in line with prior trends on a PMPM basis and adjusted for vintage and all that, just if you can confirm that. And then in the ranges the low and high end of your guidance range, what are you assuming for COVID costs and for the new patient economic relative to prior trends?

Tim Cook -- Chief Financial Officer

Sure, this is Tim. Thanks for the question. I think you categorized the non acute utilization well, my guess is there's probably going to be some carry forward, in fact, particularly given Omicron and how it impacted not just patients, but more of the system's ability to manage patients. I know even at our centers, we had a number of employees who were out because they were sick, so we'll see if there is any any potential carry forward in 2022, just from the end of the year.

But I would expect that to be relatively limited from a COVID new patient experience, I think that it's hard to be overly specific with COVID just given the number of unknowns at this point in the year, and sitting here with the Omicron surge, knock on wood behind us. And if we look think back to 2021 when we got to may, we all felt pretty comfortable that that with the level of vaccinations increasing the vaccination rate increasing that we were dealing with COVID, then we had Delta then Omicron. We had about $35 million or excuse me, $35 PMPM, about $30 million of COVID costs in 2021. And I'd say that PMPM rate would be implicit at the bottom end of our range.

And a new page in economics are again very much an unknown by the low end of the range, we're assuming a similar level of experience than what we had in 2021.

Jaime Perse -- Goldman Sachs -- Analyst

OK. Thanks for that. There's been a lot of discussion on the MA environment in the last couple of months. Just curious what you're seeing in terms of MCO pricing for MA patients, and how that impacts you on a longer-term basis for your PMPM assumptions when you get to that $1 billion and $1.4 billion in contribution for your 22 and 24 centers, just any thoughts around what's going on in the AMA market and an impact on Oak Street.

Tim Cook -- Chief Financial Officer

Yeah, obviously the MA market and this is activation of a trend that's been going on for a decade now, the MA market seems to get more competitive with more new plant entrants, and the large existing players to expand into new markets and invest to grow share. And we're obviously seeing, as you're well aware, higher benefits across across markets and across plans. That creates kind of two kind of implications for Oak Street. On the one hand, obviously being at risk, we're also at risk for the benefits.

And so if there's richer supplemental benefits or, cost sharing that obviously creates  expense for Oak Street, although oftentimes that expense is also offset by higher benchmarks in higher rates, the plant or higher staff performance, etc.. The other side of it, as Medicare Advantage penetration increases, a higher percentage of the people that we meet in the community are already on Medicare Advantage, which obviously helps us get a higher percentage of our our patients at risk faster. And so there's also some benefits from that, increasing penetration as as Medicare and becomes more and more compelling for people. So there's some countervailing factors there as we think about not just 2022, but in the future, obviously  higher percentage of our patients at-risk helps, obviously, as plans are investing in something, we'll watch closely.

But again, I think there are positive trends overall because what also it means is that you patients, especially the patient, we're getting more benefits to help them stay healthy and increase their overall being. And so that's the most important thing and that also does help us take care of him.

Jaime Perse -- Goldman Sachs -- Analyst

OK. Thank you. 

Operator

Thank you. Our next question comes from Elizabeth Anderson of Evercore. Elizabeth, your line is now open.

Elizabeth Anderson -- Evercore ISI -- Analyst

Hi, guys, thanks so much for the question. Tim mentioned that part of the different in terms of how you're thinking about the model for this year versus maybe some of the expectations you laid out earlier in the year with sort of a result of the deferral of center openings originally planned from 2022 to 2023? Is it possible to sort of quantify the impact on that? You can sort of see kind of the run rate difference and those sort of core versus some of that, which is presumably sort of like a more one time cost shifting, to the center openings in 2023. Thanks.

Tim Cook -- Chief Financial Officer

Elizabeth, it's Tim, thanks for the question. I'd say for those 30 centers, as you can imagine, it might walk through before our thought process on reduce the number from 70 to 40. We did not, we were focused, we've had great success across all this energy and over time, never close the center. And therefore, as we thought about one versus another, we're fairly indifferent, with rare exception and therefore now we had a mind toward what can we move most effectively, both from a from a bandwidth perspective as well as a cost perspective into 2022.

And you can imagine the centers that were slated to open earlier in the year were by and large are going to open earlier in the year. And the centers that were moved to 2023 were centers that we're going to open later. So on average, those centers we're going to have less of an impact in 2022 from a loss perspective than what an average new center might have in 2022. From a dead cost perspective, proximate $5 million of cost that will incur in 2022 that we otherwise wouldn't, had we opened 70 centers.

Obviously, the benefit is we would have lost far more than that on the 30 centers that we are no longer going to open.

Elizabeth Anderson -- Evercore ISI -- Analyst

Got it. That's helpful. And I know you've have been helpful in providing us updates. Previously, do you have anything to say in terms of the hiring market in terms of both doctors, and then for the sort of the other clinical staff at each of the centers in terms of just sort of wages and hiring pace?

Mike Pykosz -- Chief Executive Officer

Yeah, it's certainly a more challenging hierarchy market than we've seen in the past. But from a provider standpoint and provider hierarchy has obviously never been easy. They've been assured providers since the day we started Oak Street, and we've had a lot of success over the past month and year. Continue to expand, to hire more providers, both for new centers and also for providers to give us capacity existing centers.

And I think that speaks to our team and our provider. Does that work right? And for us, we really feel like we have a differentiated value proposition for our providers, just like we thought, we have a great value proposition for our patients where they can really practice medicine in the way that they want you to help care for patients, have all our resources to help them care for patients. Their incentives are all against the quality of care versus volume. Except, we see that in our scores, right, where 95% of our providers say they recommend Oak Street, a place to work to friends or family, and 99% of them say it allows them to do their best work.

And we're very proud of that. And so I think that despite having a tough labor market hiring, I think that value proposition allows us to continue to hire and be successful in this environment. And so our recruiting, I'd be in trouble if I go to the recruiting team would be outside the door waiting for me. But they're doing a great job in a tough environment and kind of allowing us to execute.

And so far, though, labor shortages haven't had an impact on our ability to meet our goals,

Elizabeth Anderson -- Evercore ISI -- Analyst

And that's true on the other clinical staff and sort of as well as the provider sort of level?

Mike Pykosz -- Chief Executive Officer

Yeah, I think that, I obviously highlighted it providers, but I think that same concept is true across the board.

Elizabeth Anderson -- Evercore ISI -- Analyst

OK. Perfect, thanks.

Operator

Thank you.[Operator instructions] Next question comes from Jessica Tassan of Piper Sandler. Jessica, your line is now open.

Jessica Tassan

Thanks for coming back. So curious to know if 2022 is the first year where Oak Street has zero exclusive centers. And if so, what's the impact of that payor diversification on patient recruitment revenue per patient and apex at the impacted cohort in 2022? Thanks.

Mike Pykosz -- Chief Executive Officer

Thanks for the question, Jess. We haven't we haven't opened explosive centers up for for a number of years now. That was really something that was we did a large number of them in 2015, 2016 and 2017 at a very different period of time for Oak Street, And learning experience, I think we learned, as you kind of alluded to, that it's harder to grow our exclusive. And so that impacts the economics.

And so we also didn't have any last year, the year before that or I think the year before that either. So I think that the kind of ramps we shared seven weeks ago, that's kind of our expected ramp going for that kind of takes into account. These are all multiplayer centers and we actually highlighted in that in that presentation kind of what centers look like, what the companies look like without the exclusivity. So I kind of would guide you to do the nonexclusive boxes in that presentation.

Jessica Tassan

Got it. I thought there were a couple still rolling off this year. That's my mistake. And then just as a follow-up, can you clarify for 190,000 sales and marketing costs per month per center, it's still kind of the correct way to think about apex in 2022, given that the much lower center growth? Thanks.

Tim Cook -- Chief Financial Officer

Hey, Jess, it's Tim, thanks. I'd say that 190,000 number that we provided a few weeks ago is more was contemplated more center months in a year, obviously going from seventy to forty. We are still going to need to make many of the investments we're otherwise going to make. So based on my earlier comments.

That number will be higher. I believe I'm doing this from memory that that number in 2021 one was about $215 thousand. So it won't be that I will forties from year over year leverage, but it won't be as low as 190, just given many of those costs, or we will still incur.

Jessica Tassan

Thank you.

Operator

Thank you. Our next question comes from Gary Taylor of Cowen. Gary, your line is now open. 

Gary Taylor -- Cowen and Company -- Analyst

Hey, good morning. I think that last answer hit on what I was wanting to get after just from a little bit other angle. But when we think about your archetype with the lower center openings, it looks like platform contribution would kind of be targeting around $80 million this year. And then I'm presuming the $35 million even that range in your guidance is probably more around the platform contribution than the G&A spend.

Mike Pykosz -- Chief Executive Officer

Yeah. Yes, that is correct, Gary. I'd say the range is really driven by the two variables that I mentioned around COVID costs, and new patient economics. We have a high degree of control over our G&A expenses, as well as our sales and marketing, and so there's relatively little range for that included in the guide.

Gary Taylor -- Cowen and Company -- Analyst

And then just a follow-up, [inaudible] were up a lot sequential and year over year, but also days claims payable or just your third party medical expense payable was up a lot year over year and sequentially. Usually that medical claims is more tied to health plan final settlement timing, less so than your reserving. But can you comment on either one of those the air days or the medical claims days?

Mike Pykosz -- Chief Executive Officer

Gary, I apologize, hear some sirens in the background, we had a car accident at our office. But the way our contracts work, and I'll be brief and happy to follow-up folks if they ask questions. For some of our contracts we are paid, I'll call it on an ongoing basis where we're making an estimate of what our surplus is, our surplus being the premiums that the plans would pay to Oak Street, less the medical costs that are being paid to third party providers. And so for, some of our contracts were paid to give an estimate of what that net amount will be because obviously you don't ultimately know what that net amount is until all the medical claims settle for a period.

That's about a half of our contracts. The other half are paid more in a manner where we're given a payment upfront by the health plan that covers some fixed costs of this an arbitrary number call $150 PMPM. And then what we're doing is we're settling up at 150 relative to our actual surplus performance in arrears. Because of the way the accounting works until that, not until we settle with the health plan for that period of time, we're carrying that full balance of both the receivable related to the revenue, and the payables related medical claims.

And so you're going to see that build up over time. It's actually not IBNR, it's just a function of how those contracts settle. So there's nothing unusual in there or difference in Q4 than there would have been in periods past the fact that we're continuing to grow the business and that's obviously going to grow those amounts. Indirect contracting is also a factor in that a bit your own because it's a bit of a different flavor.

But but more kin to that, that last, excuse me, the second structure I mentioned where we're not getting paid an estimate from CMS to us to our performance.

Gary Taylo

OK. Thank you. Thank you. Our next question comes from Ricky Goldwasser of Morgan Stanley.

Ricky, your line is now open. 

Ricky Goldwasser -- Morgan Stanley -- Analyst

Yeah. Hi, good morning. So when we think about center growth, 2022, 23, 24. This is a compounding effect, right? It adds up to hundreds of centers ultimately.

So how does that impact your long-term top-line targets beyond 2022? Is my first question. And then second question, just going back to the question about labor and you being successful in hiring physicians, which clearly is great, but at what cost, what are you seeing in terms of wage inflation, and how does that impact out of your 22 guidance in its SG*A  trajectory?

Mike Pykosz -- Chief Executive Officer

Yeah, thanks, Ricky. On the first part questioner on the growth, maybe this nomenclature, but I wouldn't have hundreds of, in fact, if we're thinking, you know, 70 centers, and now we're updating that to 40 centers .Over the 3 years, it would be 30 centers, 90 centers. So it is decrease. But we'll still have by the end of 2024 will still have 250 centers, and actually give us an embedded image of over a billion and a half dollars.

So I'm still building a large profitability. And then from a revenue growth rate, we think that the compound average growth rate over the next three years will be 40 % plus. So again, we still think it will be a robust revenue growth rate. To your second question around at what cost.

I think our physician compensation package is ever made similar to what they've been in the past. You know, we haven't we haven't changed them in a meaningful way. And obviously, we always have cost of living increases every year and kind of small adjustments. But you know, if Tim Sheridan know the guidance rate is still based on the same range we did for that J.P.

Morgan presentation. And one other note I would say about inflation, this is more of a longer term view. But Oak Street is actually very insulated from inflationary pressures in healthcare in the longer term, because our revenue is derived from the benchmark costs right for Medicare, and to the extent that there is higher costs for labor in healthcare, right? Would that be doctors or nurses or metal physicians, etc.? Right. That will directly impact the cost of care for Medicare, which obviously directly impacts the benchmark rate which directly impacts our revenue.

And so obviously, in any given year, you know, the benchmark doesn't automatically increase real time. It may have some headwinds in town with any given year. But talking about  in the two or three, four or five, six seven year period of time, any inflationary pressure that the whole healthcare market is feeling, may be felt by Oak Street, but it will be offset by an increase in our revenue and actually doing a lot of very simply, the cost of tuition will go up to the extent that healthcare labor costs go up. And that means the value of that position we save will also go up.

Operator

Thank you. Our next question comes from Brian Tanquilit of Jefferies. Brian, your line is now open.

Unknown speaker

Hey, good morning. It's Jeff, I'm up for Brian, thanks for taking my questions. Not to belabor it on SG&A, but maybe I'll ask the question in a slightly different way. We're shaking out at about a $30 million dollar gap that is estimated 30 million higher at the high end of your guidance range versus the low end.

I'm assuming that the cohort data you provided is consistent for the low and higher end of the range, as you had provided previously. So I guess I just want to understand what sort of driving that delta, and I know, Mike, you alluded to it a little bit in terms of the variable costs that are in those buckets. But is it more sales and marketing to hit a higher patient number? Is it systems cost that that comes in out of per member basis, I guess any any color to to help us bridge that gap and be helpful?

Tim Cook -- Chief Financial Officer

Hey, Jack, it's Tim. It may be best to compare notes on, I'm not exactly sure what numbers you're using to get to that. As I mentioned, together with Gary with a relatively narrow range or assumption around gaining sales and marketing between the high and low end of the range. I'm not certain if it is something.

My guess is it's something whatever is driving that is more in platform contribution. Maybe we'll just refine assumptions around what's going into that number because I wouldn't expect to see that wider range on the G&A in sales and marketing. 

Unknown speaker

Okay, got it, yeah. No worries. And then maybe just a quick follow-up. Um, I think an interesting point on conversions from direct contracting to MA, I guess along that line.

Have you seen conversion from either MSSP lives under ACORN into MA ,consistently or anything from direct contracting and 21 over to 22,  Is that something that's actually happening and worth noting? And if so, how should we be thinking about impacts on PMPM? Thanks. 

Mike Pykosz -- Chief Executive Officer

Historically, we've always seen some patients who will be on traditional Medicare and choose Medicare Advantage. And obviously there are some patients who are on Medicare Advantage that moved back to their Medicare. It works both ways, although in general we see a net kind of increase in the number of patients issues MA compared to those that move back out of it. And that's obviously microprocessor, but that's a macro trend across healthcare over the last decade as a penetration continues to increase.

So we certainly see that. And direct contracting or in the Medicare program is obviously a claim based alignment. So the patient you generally didn't know that existed or that we're part of the program in the [inaudible] program. And so that program has zero impact on the patient's choice of health plan coverage, right again.

So definitely whether we get short statement or not, it's relatively irrelevant to how the patient thinks about their health plan coverage. And direct contracting, It's a little more known to the patient because they may have to sign a form to a volunteer line. Well, a lot of them do. Some of them are equivalent.

But you know, from a patient standpoint, direct contracting and now the series next year, it doesn't have an impact on what the patient gets from. There's no, it's not it's not insurance cover. It's not. It's not benefits.

It's about how we get paid. And so patients don't have the same choice. Is Medicare Advantage a a better way to get my Medicare coverage than traditional Medicare, right? So that that choice hasn't changed just because you get paid differently for the patient's care? And so that's why I mean, you still see the same movie you've seen in past in past years.

Unknown speaker

Awesome. Thank you. 

Operator

Thank you. Our next question comes from Whit Mayo of SVB Leerink. Whit, your line is now open. 

Whit Mayo -- SVB Leerink Partners -- Analyst

Thanks for keeping the call going for just a little bit. Can you guys just spend a minute on just the the competitive landscape? I mean, we're obviously seeing, uh, more providers put a strategy around primary care and it just feels like perhaps we're seeing a little bit more capacity in some of your legacy or new markets and obviously a lot of new look alike Oak Street models, which is flattering and probably frustrating at the same time. I guess I'm just trying to get a handle on, how this is maybe coloring your views internally about some of the economics in your existing legacy markets, and future markets. Just how do you guys think about what feels like more and more people sort of encroaching on your your turf? Thanks.

Mike Pykosz -- Chief Executive Officer

I appreciate the question. Look, I think overall, I think, we think it's a positive that more and more people are entering value based care and investing in diabetes care because it is the right answer for healthcare, and we need higher quality at a lower cost in this country. And so I think one of the things that we're proud of at Oak Street is that you do hear term look-alikes out there because that means we're helping catalyze change and so that we think that's great. There's a lot of obviously [inaudible] in the space, in the progressive space, but there's a huge variety of how people are addressing the problem, how they're going to market in their relative performance.

And so,  value based care was around long before Oak Street started and it's hard to do what we do. And I think we've really proven out a level of success and scalability. And so from our perspective, the market is still massive, in many, as much as you hear, kind of noise around different groups doing things, etc., you know, a lot of them aren't center based models are more partnered with existing provider groups, which we don't really feel like if that's a competition per se, because from a patient perspective, you know, their experience is still the same. Writing with their doctor gets paid differently.

So from our perspective, it's all about creating a really compelling patient experience, which is what really drives our growth. And so I think a lot of groups that are attacking the problem. I hope they're very successful, but they're really not doing it the same way we are. We don't think it's really directly competitive and even a small number of groups that are more somewhere else creating kind of more of a center based model.

You know, we're all just a drop in the bucket compared to the number of providers out there. I think we share in JPMorgan, there's something in the magnitude of 450,000 kind of primary care doctors, and primary care nurse practitioners at this time. So even if you had a thousand full centers right with with six care teams each, we would still be like, you know, percent percent and half of the total providers out there. We're a long way from a thousand false winners of this time.

So again, I think that that just highlights the massive size of the market. And so I think it's great more people are doing it. And, I think over the next decade, our hope is helping and others can really transform the way we care delivered and along the way. a partnership model.

We're not coming in and then, you know, starting from scratch, you know, kind of with a population of patients is one by one as we had patients and make an impact on them. And so, you know, thinking through to the projections through, there's no um what I would say, kind of assumptions of performance improvement kind of embedded in that plan to get the proper word on 2025, I think, how we how we built our assumptions that how we are performing today is how we perform. And that's how we kind of created the the plan, whether it's the growth rate or probably 2025 or before or kind of all the different components of that. And so obviously, we'll keep focusing.

Our team will keep focusing on improving across all dimensions. Right? That's the right thing to do for our patients and obviously want to drive better performance. But there's no kind of assumptions around that performance improvement built into what what, I'm sure.

Whit Mayo -- SVB Leerink Partners -- Analyst

As you've mentioned a couple of times, a new center cohorts are progressing a little faster toward profitability than old cohorts. Could you give us any color on why that's happening and if you expect that trend to continue?

Mike Pykosz -- Chief Executive Officer

Yeah, I look, we are a much more effective organization today than we were in 2013, 2014, 2015, 2016, when so if you look back and you say the 90s century opened up in those years, obviously they're making, you know, it's Tim said know $6.5 million this year and contribution and the ones that are closer to full are making, you know, $8 million or more. You know, those centers were started in that period of time. Right. And so we are better across the board, whether it's our care model has more programs is more robust, we use data better, we have better technology, we have better training, kind of across the board.

And if we are, we are better at operating than we were in those days. And so we are seeing improvements are 2018 to 2019 vintages, despite the much bigger vintages than than the ones than the earlier ones ramp much faster. Mean we share that that data in our in our presentation seven weeks ago, you can see kind of the ramp that white year has been centers. And then we look at that, 2021 and 2020, centers we just had a relative recently opened.

Look at the KPI for this kind of care model. Metrics are the growth metrics are kind of similar to or better than those same centers. So I think that one of things that gives us a lot of confidence going forward is that obviously the return from those early centers right there, they're very profitable, they're working very well, and we feel like the model is better than it was then. And we have a lot of data to support that.

That's what gives us confidence that all the time is now, well in three or five or six years, depending on what, when they opened will be at that kind of six and a half an investor that eight million dollars the contribution rate.

Whit Mayo -- SVB Leerink Partners -- Analyst

Thank you. 

Operator

Thank you. A final question for today comes from David Larsen of BTIG. David, your line is now open. 

David Larsen -- BTIG -- Analyst

Hi. Congratulations on publishing your [inaudible] break even timeline. Just one quick question for fiscal 23. The Medicare Advantage advance rate notice looked pretty good in terms of expected change in revenue for the plans coming in well above 2022 just any thoughts around that.

And I guess, What are you modeling in your longer term plan for growth in revenue per capitated patient like if it's anywhere near 8% in 23, would that be above in line with? How would that compare to your model? Thanks.

Mike Pykosz -- Chief Executive Officer

Thanks.  Appreciate the congrats. On the 2023 rate notes and revenue. I think one thing to always keep in mind is that we are one step removed from the benchmark and rate changes because the health plans in the middle and the health plan actually provide a buffering mechanism. When you hear about Oak Street economics and so think to the extent that rates go up generally plans, well take some of that increase, and invest it in better benefits for patients, which obviously to the conversation we had earlier in the call is a net benefit that will drive more penetration and more patient on risk Oak Street.

But from an economic perspective, even far our revenue goes up. So we're our middle class largely offset. And so anything happens that there's a worse rate increase notice. It wouldn't have necessarily a negative impact on our profession economics because the same operating mechanism exists.

And so again, I think we are less sensibly to those [inaudible] health plan. Patient revenue growth rate have a higher step up in 2022 from 2021, than we would see in average year. That was an impart because we have a full year direct contracting, and honestly the plan is higher PMPA revenue than a health plan would [inaudible]. And in number two, we talked about pretty sensibly, we felt that our patient basis, specially new patients who are very under documented in 2021 driven by blocking in the system on healthcare on 2020, obviously now that we had a chance to understand the patients conditions and document accurately in 2021.

We are reversing out that under documentation, I don't think that's [inaudible] one time catch-up in that case. Hope I gave you a little bit more color on how you think about the increases.

David Larsen -- BTIG -- Analyst

That's great. Thank you very much.

Operator

[Operator signoff]

Duration: 78 minutes

Call participants:

Sarah Cluck -- Head of Investor Relations

Mike Pykosz -- Chief Executive Officer

Tim Cook -- Chief Financial Officer

Lisa Gill -- J.P. Morgan -- Analyst

Ryan Daniels -- William Blair and Company -- Analyst

Unknown speaker

Unknown Speaker

Kevin Fishchbeck -- Bank of America Merrill Lynch -- Analyst

Jessica Tassan

Jaime Perse -- Goldman Sachs -- Analyst

Elizabeth Anderson -- Evercore ISI -- Analyst

Gary Taylor -- Cowen and Company -- Analyst

Gary Taylo

Ricky Goldwasser -- Morgan Stanley -- Analyst

Whit Mayo -- SVB Leerink Partners -- Analyst

David Larsen -- BTIG -- Analyst

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