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Q4 Earnings Updates

Rundown of key earnings takeaways

Clover Health’s Q4 earnings highlights near term profitability target, questions about future growth

Clover’s Q4 earnings call highlighted how it finds itself at another interesting inflection point as it approaches profitability in 2024, but growth grinds to a halt. Specifically, Clover is projecting to be around breakeven in Adj EBITDA for 2024, and low single digit growth in the insurance business. The opening remarks on the earnings call make it feel as though Clover is moving to a new phase of the business, one where it positions itself as a care management platform based on its Clover Home Care + Clover Assistant model.

Clover shared how the combo of the Clover Assistant and Clover Home Care have enabled them to successfully manage medical spend on a “benefit-rich, wide network, PPO-first approach.” They noted that while trend was elevated throughout 2023, Clover didn’t see any unexpected increase in utilization in Q4, citing the underlying care management platform as a unique asset. It appears this approach will be core to the business moving forward, but it’ll be interesting to watch how Clover attempts to drive growth again beyond 2024 - does it grow as a Medicare Advantage plan, despite having outsourced core insurance functions to UST Healthproof? Or, does it start selling its “care management” offering to other payors?

It feels like they’re moving toward the latter. And there is an interesting underlying narrative in the market, as Clover shares on the earnings call: PPOs have become the norm in Medicare Advantage as members prefer the wide networks on a PPO versus HMO, but they are harder to manage medical spend on because of that wide network. Clover noted that it’s seeing its competitors struggle to manage risk on PPO networks, and that PPOs have grown at 2x the rate of HMOs over the past several years. So perhaps Clover will be able to sell its Clover Assistant + Clover Home Care model to those plans. At the same time, it seems like there would be a lot of questions asked about how well the model really performs in different markets given Clover’s performance in, and exit from, the ACO REACH program.

Relevant Links:

• Clover Q4 2023 Earnings Transcript

• Clover Q4 2023 Supplemental Slides

• Clover Q4 2023 Earnings Release

Charts

Visuals from the week that help convey data, trends, or topics

Automatic health insurance enrollment simulation demonstrates increased coverage for low income individuals

The Commonwealth Fund released a recent report that assesses the impact of an idea for automatically enrolling low income individuals in health coverage. The report finds that an additional 4.3 million uninsured individuals would be identified and receive insurance through this policy. The report finds this would save money for individuals, employers, and providers, at the expense of federal and state budgets - it predicts federal and state spending would increase by $30.3 billion and $7.7 billion, respectively.

2024 Nurse practitioner entrepreneurship report

This was an interesting analysis of the evolving role of nurse practitioners as entrepreneurs. The report looked at 46,036 NP LinkedIn profiles, focusing on those who have moved into business ownership in the form of a ‘founder’ or ‘owner’ title. As depicted in the chart above, it’s interesting to note the top states for NP entrepreneurship include Montana, North Dakota, Idaho, Oregon, and Wyoming — while the more challenging regions are New York, California, Illinois, Pennsylvania, and Alabama.

Other News

A round-up of other newsworthy items

Weight Watchers had a tough week, with its stock dropping 25% on the week. At one point it was down 44% mid week. Concerns are mounting over Weight Watchers’ $1.5 billion in debt and its ability to repay that as the legacy business struggles and it attempts to grow in the GLP-1 market. This CNBC article does a good job sorting through some of the confusion that has occurred this week centered around debt repayment, citing an analyst report suggesting those fears are overblown. Link

The ramifications of the Change Healthcare breach still continue to unfold, as leaders met at the White House on Tuesday. The Bloomberg article linked below does a nice job highlighting the ongoing conversation about how payments are being made between payors and providers, noting that Option Care Health filed an 8-K on Thursday that more than half its claims since the initial breach have been unable to be processed. Link

The House Ways and Means Committee held a hearing on Tuesday about access to rural care. The testimony statements are interesting to peruse. From with some interesting data about RPM reimbursement in rural settings from Cadence’s CEO, to policy ideas about continuing to reimburse telehealth, to witness statements on the impacts of dialysis-at-home and hospital-at-home. The Cadence statement in particular has some interesting data, both about their model and reimbursement rates trends for RPM. Link

Thyme Care, a VBC oncology provider, announced it has launched a new MSO model for oncologists, Thyme Care Oncology Partners. It is partnering with 400+ oncologists across 25 states, and will open up additional shared savings revenue streams to oncologists it is partnering with. Thyme will work with these practices to implement VBC programs, providing participating entities with patient navigation services, operational, and actuarial support. Link / Slack (h/t Kevin Wang)

Eli Lilly announced its partnership with Amazon Pharmacy to offer home delivery services for diabetes, migraine, and obesity medications. Link / Slack (h/t Katie Chlada)

Prime Therapeutics, a pharmacy solutions company, announced its partnership with CapitalRx. Through this partnership, Prime will gain exclusive access to Capital Rx’s PBM software platform, JUDI. In addition to the alliance, Prime will become a minority investor in Capital Rx. Link / Slack (h/t Manas Kaushik)

UpLift, a virtual behavioral health company, announced its acquisition of TAO Connect, a mental health platform for higher education organizations. The combined entity now serves 170 enterprise customers, covering 4 million individuals - including 2 million+ students. Link 

UNC Health and Blue Cross North Carolina have signed a four-year extension to their network agreement, which will continue to give BCBSNC members access to UNC Health across Commercial, ACA, and MA plans. Additionally, the deal will include the continued participation in Blue Cross NC’s Blue Premier program that first launched in 2019 and has since generated $650 million in savings. Link 

This WSJ report highlights how populations in southern rural Appalachia are starting to increase as Boomers are choosing to retire there versus Florida. The population grew by 3.8% - more than 6x the national average - between 2020 and 2022. It has some interesting threads in it about the implications for the local healthcare ecosystem in that part of the country as healthcare facilities adapt to the influx of seniors. Link 

Funding

Notable startup financing rounds across the industry

Zephyr AI, a precision medicine platform, secured $111 million in Series A financing. The company is developing data federation tools and algorithms to advance precision medicine and research in oncology and cardiometabolic diseases. Link 

Codametrix, an AI-based RCM startup, raised $40 million in Series B funding. The company’s AI-enabled platform automates medical coding, serving 200+ hospitals and 50,000 providers. Link 

HiLabs, a health data analysis startup, raised $39 million in Series B financing to support tech enhancements, grow headcount, and expand its product teams. Link / Slack

Foundation Health, a virtual “pharmacy-as-a-service” platform, secured $6 million in Seed funding. Link 

Sugar.fit, an India-based digital diabetes startup, raised $5 million in Series A financing. The company’s diabetes platform leverages continuous glucose monitor to help users track the impact of food & lifestyle on their health - in addition to operating 7 diabetes clinics across Bangalore. Link 

Milu Health, a platform that helps employees identify lower cost, higher quality care options, raised $4.8 million in Seed funding. Link / Slack (h/t Kevin Wang)

Nest Health, a value-based primary care model that does house calls and virtual care, secured $4 million in Seed extension financing. Link / Slack (h/t Michael Ceballos)

Assort Health, a gen AI platform for call centers, raised $3.5 million. Link 

Jukebox Health, a home modification startup, raised strategic investment from Home Depot Ventures. Link / Slack 

Writers Guild

Thought-provoking posts from the broader healthcare community

Specialty Value Based Care: A 2024 Checklist for Survival and Success by Seth Frazier, Jared Augenstein, and Jacob Rains
A good perspective from a team at Manatt Health looking at the opportunity for specialty care models that lies ahead. It offers up some helpful perspective on components of successful models - scalable clinical infrastructure, effective member engagement, and a solid payor contracting strategy.

Payer considerations in 2024 as Medicare Advantage changes by Gabe Isaacson, Cara Repasky, Dan Jamieson, Sonja Pedersen-Green
This McKinsey article wrote a nice overview of the major headwinds and considerations MA payers face in the years to come — from demographic shifts to changes in Star ratings to broker channel constraints.

Use Experimentation to Design Better Health Care Benefits by Lisa Woods and Owen Tripp
This HBR article provides a perspective into Walmart’s decision to expand a virtual primary care offering from Included Health for Walmart associates. It appears the program had all of the positive impacts you’d hope to see from a virtual primary care model, namely improved clinical outcomes for patients and reduced total cost of care.

Featured Jobs

Population Health Associate at Diverge Health, a community health worker model. Link

Product Manager at Synapse Medicine, a clinical decision support platform. Link

Manager, Consulting Relations at Cleo, a parent & caregiver support startup. Link

Director of Partnership Operations at Thyme Care, a VBC oncology provider. Link

Commercial Advisor, Brokers & Employers at Neurahealth, a virtual neurology clinic. Link

Contact us to feature roles in our newsletter.