Company: PIII
Filing Date: 2025-03-28
Form Type: 10-K
Source: 0001628280-25-015305
Chunk: 8

Company: P3 Health Partners Inc.
Filing Date: 2025-03-28
Form: 10-K
Item: Item 7
Chunk 8
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 Inc. | 2024 Form 10-K | 59

The following table sets forth a reconciliation of our gross profit, the most directly comparable GAAP metric, to medical margin:

Year Ended December 31,20242023(in thousands)Gross profit (loss)$(58,917)$31,635 Other patient service revenue(16,853)(14,066)Other medical expense161,229 117,482 Medical margin$85,459 $135,051 

Key Performance Metrics

We monitor the following operating metrics to help us evaluate our business, identify trends affecting our business, formulate business plans and make strategic decisions. 

Gross Profit

Gross profit represents the amount earned from total operating revenue less the sum of: (i) medical claims expenses and (ii) other medical expenses including physician compensation expense related to surplus sharing and bonuses and other direct medical expenses incurred to improve care for our members. We believe this metric provides insight into the economics of the P3 Care Model, as it includes all medical claims expense associated with our members’ care as well as partner compensation and additional medical costs we incur as part of our aligned partnership model. Other medical expenses are largely variable and proportionate to the level of surplus in each respective market, among other cost factors. 

The following table presents our gross profit (loss):

Year Ended December 31,20242023(in thousands)Total operating revenue$1,500,455 $1,266,375 Less: medical claims expense(1,398,143)(1,117,258)Less: other medical expense(161,229)(117,482)Gross profit (loss)$(58,917)$31,635 

At-Risk Membership

At-risk membership represents the approximate number of Medicare members for whom we receive a fixed percentage of premium under capitation arrangements as of the end of the reporting period. We had 123,800 and 108,900 at-risk members as of December 31, 2024 and 2023, respectively.

Affiliate Primary Care Physicians

Affiliate primary care physicians represent the approximate number of primary care physicians included in our affiliate network, with whom members may be attributed under our capitation arrangements, as of the end of the reporting period. We had 3,100 and 2,750 primary care physicians as of December 31, 2024 and 2023, respectively.

Platform Support Costs

Our platform support costs, which include regionally-based support personnel and other operating