Specialist
Former executive at Bright Health Group Inc
Agenda
- Bright Health Group’s (NYSE: BHG) financial health update and recent news flow surrounding the company’s violation of its credit lender agreement and risk of bankruptcy
- Bright Health’s IFP (Individual and Family Plan) and MA (Medicare Advantage) market exit strategy, plus risk adjustment challenges
- Outlook for Bright Health’s single remaining health plan in the California MA market
- Overview of Bright Health’s strategic refocus on NeueHealth and assessment of its differentiated ability to help the company become profitable in 2023
- 2023 outlook, highlighting the current leadership team
Questions
1.
What major trends and developments have you been following in the value-based insurtech industry over the past 9-12 months or so?
2.
Could you highlight a couple of key headwinds and tailwinds that we’re seeing for the value-based insurtech industry?
3.
Could you provide some updated background on Bright Health Group’s current value proposition, as we’ve seen a lot of changes with the organisation recently?
4.
Where would you position Bright Health currently amid the competitive landscape of value-based insurtech companies? What is your reasoning behind this?
5.
Bright Health spent the USD 350m available in its revolving credit facility, due to costs associated with being able to discontinue its exchange business, which violated the terms of the agreement with its lenders. The company noted it has until 30 April 2023 to raise at least USD 250m of cash. Its most recent earnings report indicates that it has USD 100m-150m sitting in its balance currently. What insights do you have on the challenges that come with trying to pull through rounds of funding from investors?
6.
You provided two scenarios – either Bright Health selling its medical groups to raise cash and just becoming a health plan, or selling its patient lives and becoming an MSO [managed services organisation]. Is one approach easier than the other, or do you think they’re both relatively of the same difficulty?
7.
In Q4 2022, Bright Health announced that it was going to exit all of its exchange markets and cut down its MA [Medicare Advantage] offering to just two states for the 2023 plan year – California and Florida. What are your thoughts on this strategic move, tying in your valuation of the company’s growth trajectory within the California and Florida marketplaces?
8.
You mentioned there is a certain amount of degradation of the MA product as you see growth exponentially. It might be different for every organisation, but what aspect of that MA product tends to deteriorate first from Bright Health’s standpoint?
9.
What crucial improvements would you make to Bright Health’s MA care management or internal operations to improve efficiencies and enable it to handle a greater growth rate in a couple of years?
10.
In the California network, how would you assess Bright Health’s relationships with the physicians? Did the company have strong relationships with physicians, or was strengthening those relationships with physicians in the California market part of its focus?
11.
What are your thoughts on the strengths and weaknesses of Bright Health’s medical risk adjustment department? What improvements do you think the organisation could make to improve its risk coding process?
12.
Bright HealthCare received a 2.5-star rating for its 2021 MA plan year, so the information is just a little bit dated. Given the company’s restructured focus on its MA offerings within the California and Florida markets, what are your thoughts on how its star scores might be able to improve for the 2024 plan year?
13.
What did you see as some of the reasons behind Bright Health’s lower star ratings? Where might the company need to improve to bolster star ratings? Obviously, as you said, this isn’t going to happen overnight and it’ll be a couple of years before we see improvements.
14.
What efforts has Bright Health made over the years to improve membership engagement within its MA offerings? What challenges typically arise when trying to engage a member earlier in the process?
15.
How would you assess the tech infrastructure of Bright Health as an overall company? Are there any improvements that could be made to better manage cost of care or work out some of the administrative pain points that you touched on, such as claims?
16.
Do you expect Bright Health’s pricing strategy and MA benefits to shift at all, given its current rough patch? Is it possible that the company could increase membership premiums or co-pays as a way to bring in extra cash?
17.
Bright HealthCare’s full-year and medical cost ratio for 2022 was around 93.9%. What changes do you think need to be introduced for the company to drive down MLR [medical loss ratio] into the mid-80% range? I believe it said 87% was its guidance for a mid-point range.
18.
When we’re looking at PMPM [per member per month] capitation payments from CMS [Centers for Medicare & Medicaid Services], do you expect that to significantly change at all, now that Bright Health has just reduced its MA segment? Alternatively, does that not necessarily fluctuate at all, depending on the footprint size?
19.
NeueHealth, Bright Health’s consumer care segment, projected a range of 275,000-300,000 total value-based consumers, including approximately 65,000 from its ACO [Accountable Care Organization] Reach programme, then an additional 210,000-235,000 from ancillary value-based relations with other payers. What factors do you think are driving NeueHealth or the consumer care membership growth that we’re seeing?
20.
When do you think Bright Health may be able to retake on the global risk, as it did previously?
21.
What split do you think NeueHealth will experience between full and partial risk membership growth over 2023?
22.
How would you describe the risk dynamics within commercial contracting that have played out for NeueHealth thus far? What challenges come with Bright Health transitioning existing members into full risk agreements?
23.
What are your thoughts on Bright Health’s ability to take on additional growth opportunities from a primary care clinic standpoint?
24.
Could you provide any rough unit economics for Bright Health’s owned clinics as well as its affiliate model? Which bucket is more favourable for the company to experience a growth in either of the two models, and why?
25.
What are your thoughts on Bright Health potentially trying to enter the Medicaid market in a few years? Do you view this as a growth opportunity for the company when it becomes more financially stable?
26.
What are your thoughts on Bright Health’s executive leadership team? Do you think this group has the necessary skills and experience in place to steer the company towards financial stability?
27.
What 2-3 core measures do you think must be implemented for Bright Health to pull off a successful turnaround strategy, hopefully towards a positive-adjusted EBITDA profitability in the near future?
28.
Do you see any probability for lay-offs for Bright Health in 2023?
29.
What is your 12-month outlook for Bright Health? Do you think the company can pull off adjusted EBITDA profitability by 2024?
30.
Is there anything else that you’d like to add on Bright Health or just the value-based insurtech market?
Gain access to Premium Content
Submit your details to access up to 5 Forum Transcripts or to request a complimentary 48 hour week trial
The information, material and content contained in this transcript (“Content”) is for information purposes only and does not constitute advice of any type or a trade recommendation and should not form the basis of any investment decision.This transcript has been edited by Third Bridge for ease of reading. Third Bridge Group Limited and its affiliates (together “Third Bridge”) make no representation and accept no liability for the Contentor for any errors, omissions or inaccuracies in respect of it. The views of the specialist expressed in the Content are those of the specialist and they are not endorsed by, nor do they represent the opinion of, Third Bridge. Third Bridge reserves all copyright, intellectual and other property rights in the Content. Any modification, reformatting, copying, displaying, distributing, transmitting, publishing, licensing, creating derivative works from, transferring or selling any Content is strictly prohibited
