Specialist
Former senior executive at Cano Health Inc
Agenda
- Value-based PCP (primary care provider) market overview, highlighting Cano Health's (NYSE: CANO) relative differentiation
- Evaluation of Cano’s unique approach to patient engagement and localised healthcare
- Land-and-expand strategy, including key markets of interest
- Cano’s possible sale to healthcare giants such Humana (NYSE: HUM), UnitedHealth Group (NYSE: UNH) or CVS (NYSE: CVS), including relative acquisitive rationales
- 2023 outlook, management overview and strategic assessments
Questions
1.
What are some major trends and developments in the value-based primary care physician group market over the past 12 months or so that may better inform our discussion on Cano Health?
2.
It was reported last week that CVS Health is in exclusive talks to acquire Cano Health, although nothing is finalised until HSR [premerger notification] forms are filed and the FTC [Federal Trade Commission] approves. What are your thoughts around the potential acquisition and CVS’s prospective strategic rationale?
3.
What would happen to Cano Health’s JV with Humana, in the hypothetical event that CVS or another buyer does acquire the company? Cano Health runs many clinics in Texas and Nevada for Humana Medicare Advantage plan members. Would members be transitioned over to Aetna or another big player’s plans?
4.
The Owl Creek activist investor letter of August 2022 stated that it would like to see “a larger and stronger vertically integrated partner with access to capital is needed to execute the company’s business plan” to purchase Cano Health. Where might a strategic buyer with deep pockets deploy capital to help fuel growth and profitability?
5.
How aggressively do you think Cano will expand over the next year or so? How might the company balance growth vs profitability considerations when entering new markets? We’ve seen start-up insurtech health plans scale too quickly and exacerbate pain points on the cost management side. How will the company think about that, especially in a tricky macroeconomic environment?
6.
What initiatives has Cano employed on the organic membership growth side to maximise its prospects for this year’s Medicare Advantage open enrolment period? What balance is the company striking between selling channels such as third-party brokers, e-brokers and organic advertising to get new members enrolled?
7.
How do you assess Cano’s efforts to manage SG&A cost as it scales? What is the company doing via sales and marketing to efficiently augment its plan membership base? How important is word-of-mouth synergy and/or brand recognition to this equation?
8.
How would you compare Cano Health to VillageMD? How do the companies’ business models, expansion strategies and tech infrastructure differ?
9.
What is Cano doing differently from other PCP [primary care provider] groups that allows it to better manage costs of care? What advantages does the company have in its tech platform, engagement capabilities or prudent geographic expansion?
10.
How has Cano set up its primary care centres to create an innovative and highly personalised model for seniors? How is the company customising centres to fit the specific communities that it is operating in?
11.
Approximately how long does it take to reach profitability in a new market? I appreciate this will vary substantially by region.
12.
What is Cano doing to accelerate risk coding and population health management capabilities when entering a new market? What is it doing to better understand new patient populations and assess risk profiles?
13.
How complete are Cano’s primary care centres? The company recently began offering dental care via its collaboration with Onsite Dental. How else could it improve offerings or create a more holistic experience for Medicare Advantage members?
14.
What qualities does Cano typically look for when evaluating a provider group to acquire? What have been the core considerations in the company’s “Buy, Build and Manage” growth strategy when selecting provider partners?
15.
What’s been Cano’s strategy when a leading, renowned physician decides to leave the practice post-sale? How does the company replace that relationship with patients?
16.
How might macro staffing shortages of physicians and nurses weigh on Cano’s growth prospects? How competitive is it to recruit reputable providers into the network?
17.
What has been Cano’s pitch to incentivise providers to join the company over other options?
18.
How are EBITDA multiples trending for provider groups? How have these shifted over the past 2-3 years?
19.
Cano has been able to enjoy solid profitability on some of its more mature managed populations. At what point do payers or CMS [Centers for Medicare and Medicaid Services] step in to readjust the stipulations of capitated arrangements? What haircuts could we see in bundled payments to Cano?
20.
Which areas represent the most attractive opportunity for Cano to move into next? Is it looking for similar patient populations to south Florida and Texas? Do you think it could be successful in a region with a different demographic make-up?
21.
What is your updated perspective on care utilisation dynamics within the core southeastern geographies Cano operates in? How do you anticipate MLR [medical loss ratio] to trend over the next 6-9 months, perhaps based on updated coronavirus dynamics, Hurricane Ian and the macroeconomic backdrop?
22.
How do you expect Medicare Advantage adoption to unfold vs traditional Medicare over the next 3-5 years? Where do you see the Medicare Advantage percentage trending and what kind of tailwind does it present for Cano?
23.
Who would make the best suitor to acquire Cano and why? What is your outlook for the company if it does become owned by a large payer or other healthcare behemoth?
24.
Do you have any closing remarks that you’d like to highlight around Cano?
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
