Specialist background
- Extensive experience in the contracting space and is currently the decision maker in selecting vendors for care delivery’s non-traditional models for Medicare Advantage
- Can discuss major trends in the space including the very high growth and valuations based on growth, low barriers to entry but significant competition to grow scale, etc
- Strong knowledge of the relationship between health insurers and value-based care providers such as Cano Health, with views on how contracting works between a value-based care provider and a Medicare Advantage plan
Questions
1.
Starting on a very high level, can you walk us through how the contracting works between a value-based care provider and a Medicare Advantage plan?
2.
We've heard, a lot of people will enrol in a Medicare Advantage Plan at Cano. They'll show up because whatever their neighbour says, "You should come to Cano with me, they've got great food or we can go dancing," whatever and then they sign up for a Medicare Advantage Plan. I assume, there's some level of vetting that happens before people are enrolled in Medicare Advantage or I guess if you're eligible you're allowed in. Can you help me understand maybe if I signed up at Cano exactly how that works?
3.
Should we think about the plans you can get if you want to go to a Cano as being a sliver of all of the Medicare Advantage plans offered in a certain geographic area or is it usually from the top-tier Medicare Advantage plan all the way to the lowest cost plan, they all will allow you to go to Cano? With respect to some of these ancillary benefits how that might flow through? If a plan is top tier and offers you all the ancillary benefits, if that something that you would have to be in to go into a Cano or can you be in any Medicare Advantage plan that is Cano eligible?
4.
In your view on both sides, whether they're coming from Cano or from a Humana, United, Aetna side and picking their provider, should Cano have a good idea of, "Individual A, this is the exact plan that they're enrolled in, these are the ancillary benefits that are provided to them, this is our estimated cost?" I don't know how closely you have followed Cano's earnings. It seems like they are claiming that they didn't have good visibility into, these OTC Flex Cards and the usage there. Is that something that is valid or something where they just dropped the ball and they have all the data provided for them and it's a function of their inability to process it?
5.
From a poorly run standpoint, in your and more in the industry's view, what are the things that Cano does particularly poorly that are something maybe other providers in the space don't do?
6.
On the facility side if you are running this business, how do you make these facilities profitable? What is the actual operational uplift here in your view to turn the operations around, assuming that you had all the resources at your disposal? In addition to what you would need to do, what other resources would need to happen for this to happen for you to turn this business around?
7.
It sounds like this is a time issue plus maybe some incremental capital in order to fund the losses until you reach maturation. But my question on the back of that is if that's true, the company also seems to have missed the boat on the Medicare risk adjustment and they keep taking MRA losses. Is there anything else operationally that you think needs to be done in order to prevent them from just taking these write downs year after year?
8.
In your view, is this a complete overhaul of the business? Do you have to replace everything or put in systems to fix the coding so that at least you're estimating revenue correctly to get better doctors, so that you're keeping these patients and from taking them out of the hospital, again, outside of just capital and time? What are the key elements having been in the industry that need to be replaced?
9.
On the membership pipeline again, when someone signs up for a Medicare Advantage plan, how do we go from, "We've signed up to a Medicare Advantage plan," not signing up at Cano or even if you sign up at Cano but, "I'm part of a Medicare Advantage plan and now Cano is getting a monthly PMPM from the insurance company?" Can you just tie those two things together?
10.
To touch on the economics again, when I think about effectively Humana is getting USD 1,000 from the government a year, they're paying USD 720 to Cano a year and you're saying they have USD 5,000 worth of medical expenses. Can you help me rectify that or was it USD 1,000 a month?
11.
Switching gears a little bit to the upcoming enrolment season, how do insurance companies look at their value-based care providers when deciding whether they should be included as a potential provider on the plan? We all know that Cano is undergoing some serious financial issues. Does that prevent them from being potentially eligible as a provider for this upcoming enrolment season? Would Humana or United or anyone just say, "We don't want to have to reassign all of these members if you guys end up going under," how do you think about that or have you ever experienced that sort of situation?
12.
Two follow ups here. One, want to double check on the liabilities before we do that, is it fair to say that during this enrolment period, it's unlikely the Humana will actively move members away from Cano, in your opinion, but they're probably not going to help them? Want to make sure that we're understanding it correctly and that it's basically status quo going into this enrolment period and the members will decide. Is that a fair statement?
13.
You mentioned that Humana has some outstanding liabilities or Cano owes Humana money. Is it just a question of the flow of funds or how should we think about that?
14.
When you think about patient loyalty and you mentioned some sort of leakage. Are they more loyal to the doctors or the organisation? If you have a bunch of doctors leaving Cano, do their patients follow them or realistically is it just convenience?
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
