Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Carl McDonald of Oppenheimer & Co.
Carl McDonald - Oppenheimer & Co.
Could walk through the timeline of the Medicaid radiology RFP that you want in terms of when you first came in contact with the customer, how long did the process last and contrast that with differences in time line for any customer that doesn’t have any existing radiology arrangement.
René Lerer, M.D
Sure. Again, you know one of our challenges Carl has been sort of the latency between initial discussions with the customer and then final approval. We’ve been in discussions with this particular customer probably six to nine months before we were able to get a deal signed. Again, some of the key factors that have slowed us down with other customers relate primarily to IT technology issues, implementation issues, and obviously understanding data and being able to underwrite and price the information.
I think, again, probably six to nine months ago between the time we had our initial discussion to the time we were able to sign a contract and then from that time probably three to four months to go live date, although depending on our level of comfort with where we are in negotiations, very often we will start implementations even before we’ve had a signed contract.
Carl McDonald - Oppenheimer & Co.
As we look at the radiology pipeline today, it’s significant weighting of that to customers that don’t have an existing radiology relationship today or is it more customers that do and are maybe looking for another option?
René Lerer, M.D
It’s actually a mix. It’s a mix of both customers who are currently ASO with us or with others as well as customers who are ASO with someone else, or have no RBM at all. So there isn’t a single driver to that. We’re seeing all different sorts of areas in the space.
Carl McDonald - Oppenheimer & Co.
My second question is around the cost of care trends in the quarter, were higher in basically all of the segments. Can you again walk through the unfavorable development in the quarter and how you are thinking about it in terms of continuing in, say, the commercial business versus some of the other segments where you would view it more as a one time.
Jonathan Rubin
I am assuming that you’re referring primarily to commercial when you talk about the unfavorable development?
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