BHG - Earnings call transcript Q1 2022

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Operator

Hello. Good morning and afternoon. Thank you very much for joining us today for Bright Health Group First Quarter 2022 Earnings Call. My name is Jemma, and I'll be the operator for today. [Operator instructions]. pleasure over the Stephen our have Hagan. now of to handing host, I Stephen. go Please ahead, very you Thank much.

Stephen Hagan

session Health Good Group's earnings question-and-answer first And quarter follow morning. welcome XXXX conference to call. prepared remarks. Group's Bright Health will Bright A

recorded. Officer, this Bright today Cathy President CEO, Smith. being Group's CFO and the Mike call As a Mikan, is and Leading reminder, and call are Health Chief Administrative

Commission, These call Investor we and statements of first obligation call in non-GAAP May investors.brighthealthgroup.com. in measures begin, and Except in company's differ dated risks or Investor available page Before or reference statements release will press X, of subject also we as we the file that in actual reports including of federal the update information. amounts XXXX, or to may issued this of undertake uncertainties contain want is any this the to may can factors A that non-GAAP to company's This US Relations cause reconciliation earnings the Relations forward-looking the expectations. Exchange we page Information X-K SEC. GAAP call we which no at available with quarter measures. the in our the accessed forward-looking revise release our the the present and we in this on presented is some securities materially the periodic from with Form risks risk contained company's morning website. be current and reports you required laws. are to could be experience found the uncertainties under statements remind file law, A description from that and historical to by and results Securities

XX. Health Chief Group Before we May Mike would Bank Executive to Healthcare Bright Mikan. now conference of Bright begin America call, to be Group Conference Health like on that, turn I the With I over in that participating will the will note the Officer,

Mike Mikan

you, I'll healthcare XXXX and with recent our and joining the over thank everyone, Bright on our additional Good of call last At Then remarks you some first we announcements. first Group's discussed strategic quarter call. and provide Stephen. on technology earnings updates. open we've to overview right turn quarter to mission. the we morning, We on are call actions details together. my for Cathy our results Thank start always product Health on on our made some making progress an focused earnings Group, and commentary give I'll the Bright Health with

that care, solid is in the by can Group substantial motto a built cost on for the Our the deliver belief connecting growth. we the financing with demonstrating the to performance start strong resources delivery year, Bright at outcomes quarter of in a had lower better aligning to best all first consumers. deliver continuing and Health healthcare local while

to both in In business. performance the Bright in the HealthCare Now, overall strategic well that expectations, executing differentiated we addressable continued first XXXX NeueHealth our necessary commercial made significant our in and as exceed to care with optimizing growth initiatives. states establishing with Advantage, as markets significant with was our delivery Medicare Health we and our quarter, in as business and a maturing We've marketplace line targets. the a position as Bright company the Group reached on on is have focused investments our competitor scale,

performance as expanding NeueHealth of next company markets We growth business. focus more be our and on our expect within we the to for the phase capital-efficient

now our supporting technology costs X.X performance. positioned with lives and serves tailwinds NeueHealth to underlying actions drive value-based Bright contracts. is million in enhance investments and leverage Group are we Our Health maturing XXX,XXX XXXX to approximately capabilities HealthCare improving and served has under consumers, strategic continue Bright day well key operating over reached as our each and better down performance.

including overall Carolina, on at with new expectations HealthCare's in XXXX produced A XX%, XXXX North entries. strong business scale us our have was meaningfully renewal solid growth, than markets, We and to Florida, major our rates lower new and from impact XXX,XXX commercial Texas, over serving year-over-year in now lower Advantage membership marketplace consistent Medicare California. percentage market that Bright was consumers. of

medical expect actions comparable cost a on of and in we excess basis. technology we've in are platforms both to ratio underlying much at our Bright Medicare on have while lever call, significantly is markets. detailed reducing The cost our it path NeueHealth's backlog, XXXX in On took profitability. which results. looked initiatives. of as differentiation membership progress our continue implementing remain actions action Those our pricing we to important stronger unit legacy Two, included, and a to position, fourth our Overall, in one, our on improved reductions year-over-year pricing and core our our an on in HealthCare a specific meaningful we contributor results. when for Advantage resulted management We operationally improvement cost actions overall made our business the commercial claims successfully in to earnings demonstrating becoming in markets net commercial in quarter meaningful an we majority new net medical pricing XXXX drive medical trends to

opportunities meaningful improvement. progress We made for we areas on year the last have unit as cost and also that identified medical management

closely on out-of-network more cases. specialty We rates, are and initiatives contracting, specific networks focused provider managing high-cost in

taken initiatives risk Three, in contribution actions these forecast. to bridge on have on have XXXX our actions. management EBITDA included adjustment visibility and cost to the delivering We the we medical

new combined which engagement, early with in Texas. engage better for physicians affiliated our This to affiliated and this markets local year. allowed earlier us ensure we we investments well to partner members including of owned the such and and in on new population enabled higher the market and successfully risk platform new The prepared owned on year capabilities, with were our our commercial attribute our administration our their networks helps accurately one-third and capturing of the We are the clinical membership covers as nearly has platform new performing of and Four, operational claims much is high-performing X/X/XXXX. significant to platform and membership. strong launched made serve. physicians claims membership faster, renewed Our data we in care claims members growth, Florida all That stabilization.

seeing we so the far system. the also on We platform, will that progress outsourced to this are our of on added made year. in performance resources the claims additional impact platforms legacy provide details Cathy and we've and technology our improvements

the members commercial management claims to platform the to We our continue X/X/XXXX. remainder will on expect that new transition of we

currently. our we system, expenses that we team structures. this delivering disciplined commercial clinical enhance expect addressing focus on on also Bright talent productivity our year proprietary expense is remain structure. we market have on multiple all our selectively operating is growth all We operational legacy to markets a by as to to to And Our to are performance. of and our cost gains benefits Panorama, successful and while support Health continue model unique significant across Panorama XXXX. has five, and also our adding commercial with membership leverage, on Group Panorama And, performance our

scale markets deliver financial fully model targets. on We care and in we where the to aligned will our where deliver can results, continue where to differentiated get we our lean can sufficient can

have These our marketplace We individual decisions states and believe success family through where differentiated consumers. place aligned states long-term a in substantial XX% these are us we commercial approximately We believe commercial care drive to and at for in our the offer care can business plans focusing members of value best XX our position fully model. partners. to addressable market achieve the we

group We in enterprise seven have and supports care states. with improve in our will Optimizing in relationships EBITDA states our Florida, Utah, capital-efficient be have beyond. are Illinois, for than will business. X% in revenue represent to to on South year and growth our XXXX. well for Texas Bright the an the Mexico, partner as our and XXXX plan employer opportunities impact other meaningful we markets in New the our target The for Bright exiting commercial enterprise six breakeven performance Carolina, X% XXXX Virginia strategy of in scale immaterial of adjusted – Oklahoma, XXXX profitable, forecast exiting HealthCare are membership, XXXX on discontinuing contribute as and – strong Carolina, revenue HealthCare our marketplace total path growth and and approximately North less footprint

our currently expect also growth. in these to increased operating to This million we recover savings benefit we is the to statutory position add or time, an claims. exit expenses range savings after adjusted of have of redirect capital of opportunity invested markets. capital Over XXXX medical markets we We to which all capital the guidance the example expect needs. resolve $XXX an states expect cost the HealthCare's on marketplace business. been build we focus year. Advantage Bright XXXX as need our the presence growth will reduced for not we Bright and in exiting, commercial as future to in And capital-efficient are We grow Medicare and deepen forecasted capital total has associated the with Health will our provided to in approximately in the as Group contemplated modest we on we also continue states EBITDA reduced spending XXX,XXX-member we

Bright and deeper continue penetration expanding external business, the business to grow relationships. including NeueHealth care NeueHealth and We will delivery payer also provider the enablement in HealthCare

differentiated, business. a to Smith, our and XXXX care consumers aligned over model over our updates on Officer, success healthcare I'll fully the Chief for quarterly for the provide our go long-term are CFO experience now model built Cathy business. and best to the it to additional and decisions on We some of Administrative hand our focused performance for deliver have this optimizing market and

Cathy Smith

everyone. morning, results, details Thank provide made I'll And some outlook. quarter XXXX you, over the we've walking our by Mike. improvements first through operational and then begin go our on good you

open a solid segment The terms $XX new revenue Health achieved Medicare line And revenue in this our segment in markets top year. QX. markets the year-over-year of enrollment manageable $X.X revenue strong new Advantage quarter better in with Bright Group to billion consumers. we quarter million of in million XXX,XXX this operationally consumers and Bright with we first year. in entrance systems processes. the point growth to our ahead prior XXXX million Our HealthCare visibility to membership our forecast, and existing consolidated to the compared We at and $XXX in results positioned X.XX XXX% NeueHealth prior over billion, increased and member and ended reflect XX% much our grew commercial period. $X.X while to are compared the year, is year-over-year of growth

our from our $XXX the was Our was this adjusted quarter in and this Starting million. margin quarter. adjusted $XX loss of $XX mark-to-market which EBITDA quarter of have EBITDA, was first investment million in million, gains loss gross losses excluded first we and a XXXX, a

Our COVID up first medical at to QX that, in ahead quarter future of experienced lot XXXX our a ratio of subsequently growth SEP, that a transpired, XX.X%, cost processed quarter of for have meaningfully not first at our we did or if much from higher XX.X% adjustment cost Recall Therefore, expectations. yet. of risk XXXX, the last and was the MCR. impact we was restated enterprise have level We forecast year, haven't the visibility from medical XXXX. looking QX in and claims would

a membership. last of year represent to the this and different our numbers our year applied business. have percentage Retained is learnings higher from forecast, a We very

We are earlier. attributed them members have our and engaging

faster. claims processing are We

expectations, prudent a is approach payable system and taken have efficient to effective. more our risk adjustment and We infrastructure

our impacted DCE points DCE, by basis MCR MCR. enterprise revenue would is booked at Without addition, lower. QX XX% XXX be In also XXXX MCR

COVID per as first hospitalizations well. and a revenue, our of in COVID member quarter, down quarter. the with the in COVID full-year growth, our costs are come as the were impact basis per quarter as combined down have in have year-over-year. Medicare early membership down XX% But were cost of On higher-than-expected cost And on basis through unchanged. the commercial the member a led population cases approximately expectations Omicron a to Our Advantage XX% approximately decreased costs percent and variant,

the our Member and in expectations. loss, our of in quarter expectations, Excluding broker revenue volume-related with and offset premium expenses investment were ahead costs but line medical the commissions. the by impact from results first were growth higher modestly

to and like I'd some Next, cover product highlights. technology

processing, across from claims significant interface and the technology administration team management administrative our clinical milestones progress consumer platform. to made has Our and board, to our against

our Our fully on technology team focused support is to model. capabilities adding care aligned

markets Mike mentioned, have and improving we commercial legacy As meaningfully the to handle cases. utilization the time Panorama to platform, transitioned automation reducing management needed all significantly

management care data their to Importantly, leverage to care. workflows implement our NeueHealth in Panorama at the able activities providers of and are point

the has digits COVID, business, increases Medicare our authorizations as portal, our resulting satisfaction our strong significant submitted We electronic utilization in down well driven percentage per results management have admits, commercial authorization provider showing to provider electronically. in excluding skilled legacy members, This also behavioral our moved the markets lowering In admits. of X,XXX new and metrics. efforts in inpatient have as by nursing mid-single facility improved

to our legacy For contracting and have all contracts. we transitioned the contract activities including system, all implementation, of Panorama

faster tools support care implemented have out-of-network We for of utilization to management identification interventions.

complete to to more. processes are providers And leveraging and and we functions the care the time identify critical utilize technologies loading to also NeueHealth XX% into to and for needed attributing by like business are providers. improved and We've likely or department. reduced needed services We members members our like time analytics that partner these systems members predictive higher-cost reduce have our the more emergency processes to

have improvements has handling our legacy management we improve increased claims to of fourth the systems, automation claims us our XX-day performance over average age claims queue. legacy during claims reduction claims we made our non-par was system, the to our our improvement significant top further a decrease in meaningfully where quarter, first XX% XX% We and which achieved particularly comps allowed Additionally, pending on the pay in for saw the in quarter. of

financial we the business. Over financial process increased On a the consumer-facing strong side, level traction growth automation. more DocSquad out significant more rolling transitioned system broadly infrastructure data in our with to give core ratings this and end-to-end our virtual of members. this continues will us new support our into the faster time, and have over visits close timely platform and finally, gain And to since to insight consumer platform

XXX,XXX remainder of from were NeueHealth Total strong as QX on approximately value-based Bright build direct end external contracting patients relationships. of payer from Our value-based including HealthCare, XXXX. growth business continued the from XX,XXX of care the to the XXX,XXX, and

the $XXX First growth an the quarter quarter unrealized investment $XX by was for our NeueHealth from contracting mark-to-market due The sequential program. quarter loss. direct was revenue impacted first and with strong million, for million first revenue revenue contribution NeueHealth negatively to recognizing

grew NeueHealth nearly X,XXX% Excluding investment revenue year-over-year. income,

coding. perform and Our well, care outreach clinics in fully accurate risk to aligned care model NeueHealth and our are members order our Bright to management continues HealthCare supporting drive to adjustment

integrated to aligned and to resources across continue NeueHealth We capabilities the add care. support model of

got with pre-COVID improvements were business for gross contracting solid to benchmarks. and start the direct quarter direct contracting metrics clinical to quarter, profit level key direct for first to Our with the in Financial expect a on year. continue in results relative to our off cohort the we contracting expectations XXXX from line breakeven from full and first compared

our sheet. balance Turning to

caused million liquidity, As million of investment by the highly $XXX non-regulated and we equity XXXX, term. $XXX in March over XX, liquid million had short in cash and equivalents $XX a including passive in

our regulated investments We by held have short about subsidiaries. of insurance cash as billion long-term additional or $X.X

different investments were new Our needs entries. previous in capital big than we business making of is phase years at when state a

to we're other the taking exits statutory We've our have and to to any position. reduced capital to markets. expenses by headcount The to it renegotiating growth. actions expect markets capital in bring or vendor reducing over announced capital redirect recently we Additionally, support parent And back time, such operating company market we to future eliminate contracts. infusions remaining improve

carefully capture needs, to targets our expenses We in to of the risk achieve capital. with balancing most to the need we and accurately our growth serve, for of quota financial medical efforts sharing. increasing plans population managing potentially are drive our reduce the and order more the includes use our ways This seeking continuing capital-efficient cost growth our better external capital and

which performance this We on and our evaluate release reaffirmed future business. of continue full-year we our capital In the outlook. XXXX to needs, will depend the earnings growth morning, our

Specifically, enterprise $X.X range be billion. we to to of expect to the continue billion revenue $X.X in

in of guidance be the on investment to with and from to ratio which, XXXX loss range cost call, medical and million, $XXX EBITDA provided any to enterprise our $XXX the we gains expect million mark-to-market adjusted of be excludes impact fourth in quarter range consistent our We of XX% to full-year the XX% losses. a

revenue to our below the markets. of our XXXX year On XX% sources. maintaining contribute approximately revenue, down to operating be immaterial to our the confirmed billion are HealthCare in expect our Bright end XXXX continue basis, with direct exit external the participation to we contribution to segment Full-year approximately we as end-of-year in operations support $X.X revenue program ratio we XX%. to NeueHealth. wind markets XXXX cost We The member through forecast month, continue NeueHealth million these NeueHealth expected will financials of with and a approximately are our generated while we X members. expected an have is Last for from members contracting these XXXX

We states have Northern contribution California distributed million. $XXX Southern being our the of total great the six and largest The in contracting see success with in is the approximately positioned management addressing and Florida across population and for long-term and direct approximately XX,XXX DCE fee-for-service lives market markets. a as and revenue membership for under believe NeueHealth We program. reach is a opportunity Medicare ACO well expect

quarter full-year us gives the confidence our year start first and projections. represented a in Our to strong

XXXX, Our guidance. on loss based The in losses quarter. guidance XXXX adjusted over the EBITDA from reflects from our approximately strong last of consistent reduced of going drivers EBITDA a expectations midpoint are XXXX with revenue X% of revenue slightly the XXXX XX% improvement of our to

made taken into in made positive a of base took member and The management XXXX us actions we've our to medical XXXX accurately improvements margin to unit actions estimated and and our strong visibility growth cost, capturing for smaller medical we gives we growth pricing platforms in revenue membership new the risk our management process support the our the forecast adjustment Our impact the investments for in transition we've contribution. costs. claims in showing risk care and the improve XXXX. The results are cost gross medical

our risk savings, further have cost our risk remains risk have to our expenses Additionally, on the our there have to capture the taken our maintained from market cost factors consumers largest including initiatives. to and operating on we forecast, are medical the range some actions ability visibility the COVID, guidance. to timely note impact accurately and our we guidance management of of and We benefit and exits. the The

the our Before to Health country. turn changing Mike, I Working back across call healthcare. the Bright I are appreciate amazing together, team we

I want national shareholders Additionally, thank system for our to as a continued integrated their we support care. of build

some for the additional Mike comments here's Now, business. on

Mike Mikan

you, Thank Cathy.

heard scale company capabilities. Group and greater becoming mature morning, this you've As is Bright with Health more a improving

We and care, systems the are fully we in to the we've integrated strategic strategy our offerings where the actions business confident our performance. aligned of drive making to are have taken differentiated investments we focus around

commercial dynamics business. are a to of in offerings strong states these attractive in Medicare We outperform building and competitive and will states model significant path in markets profitable over our Advantage. and these have with believe time. addressable The in supportive differentiated to We both market us marketplace markets business the allow our

established. organically we footprint expect to the Looking forward, on we've grow

mature long-term our member with partners drive approaching We competitive above consistent levels what are as at or targeting relationships. NeueHealth retention markets our we're care seeing and and more rates XX%, in

predictability mature markets, medical partner margin strong longer and result costs and in ability of care for combination We to retention the to expect greater drive our more expansion. member the relationships

are to out where opportunity also building profitability to business. the delivery contribute adding our NeueHealth care expect targets, in our we profit states We to

of ratio to towards cost Overall, expect to the toward off operator, drive progress and consolidate up are questions. we And solid and drive XXXX team let's and inefficiency taking and the it platforms well, to operational gains. like we're as on technology for we partners. moving adjusted from our to improve fewer our target. start now, as strategic open productivity a we As to XXXX EBITDA steps our peak operating care that, our to XXXX, I'd With thank

Operator

Instructions]. [Operator

of Sachs. Rich question today Goldman from Nathan comes first Our

Lindsay Golub

additional This been Rich. on since you've Can for the is any XQ? color start utilization patterns on Nate non-COVID you Lindsay the of provide seeing

Mike Mikan

It's Mike.

for which of utilization for may deferred you priced So we utilization would us, pre-COVID we potential the expected as care or have we a for recall, endemic that for. uptick some year. it whether you we levels And baseline call kind COVID, anticipated

admissions. to the mid-single commercial So in far, a Medicare, seeing seeing we've well non-COVID seen inpatient business, down Medicare. favorable that slightly as in as well. as utilization we're utilization population we're commercial And the favorable Cathy as utilization both noted, digits from

Operator

Our comes Sternick J.P. on line the of Calvin Morgan. question from next

Calvin Sternick

then over I anything could the care utilization the the follow-up of sort differently see course If just were saw of quarter? the And And NeueHealth, significant of then quarter good. also deferrals. how on expecting. you and you there just because pretty quickly the in just NeueHealth the quickly that related on Is in touch MLR that kind on evolving looks first than year we in the MLR least came at just

color on you should think if could maybe we going give some curious NeueHealth forward? that about and seasonality and how MLR Just

Mike Mikan

don't I I that have on utilization. to much add Well, know

In terms of uptick an have the procedures in year deferred you, of procedures. we quarter elective and last fourth saw of the elective what kind

their through and scheduling surgeries way a lot And have terms the deferrals believe of what of in worked you. so, we that have

which NeueHealth, the in when obviously high they also ratio DCE Texas because respect include absorb of we if included pricing paying book contracts, I the weren't a market, that – intensity capitated diagnoses of But medical we're a those for impact what like of relationship. that that with early higher to – include in got is those and wellness compared we given emerge just getting the conditions certain think not market. will favorable to cancer first-year things terms loss for With I'm And the our NeueHealth, over we've is across you attention of time thing business that of sure diagnoses care a for utilization, medical conditions the but you DCE is anticipated. is that, to first-year missing utilization like on?

included seasonality, IFP have impact that the type be So, both would they're contract. in risk would those of the same MLR. And Medicare in terms a since and take they the business in of they as risk-bearing the

Calvin Sternick

you your members I XXX,XXX IFP NeueHealth value-based MA I more. attributed can patients. the just what give know sense NeueHealth are and us If ask for doctors? to of one percentage Can

Mike Mikan

For IFP, and it's about business, South NeueHealth. XX% business our external Florida book then, and is our of IFP of mostly Texas. And Houston in mostly in Medicare

payers. external it's So

Operator

[Operator instructions].

Our Joshua ahead. next Raskin Nephron of Research. comes from your Joshua, question in line is go open. Please

Joshua Raskin

wanted and on I design, talk MLR on about XQ. seasonality in year. low to just the assume, XX.X% the IFP the of that to the for book be going I benefit based that's the

silver some so, more And rest that there to you effect factor? your the larger MLR or to other maybe your take Or are efforts just kind you're guidance the going that change assuming in through management of some something the year? for medical year is mix, get of to

Mike Mikan

correct if can I Cathy, Josh, something, me. you unpack Let And, miss it. me

and Bright XX.X% HealthCare cost an the DCE was cost the a other of difference I as XX.X%, NeueHealth So, is ratio The previously result enterprise medical relationships. noted medical the ratio. and

think as well would course, as health a IFP blend XX.X%. risk plan I Medicare So, the business. it about of And, Advantage of our that's members, as

also with year. is through as IFP off the deductibles with Of there's Medicare But well. Advantage course, there seasonality as inverse the that were the business

started we as into Florida, a factors the the get as in coming Florida. last related second market on to that what processes, year came of expected year, book our around number growth we last at business the adjustment as a into confidence year gains, QX. our of to But, the of expected reported you course, ratio had half took as got When the from us we XX.X% gives if comparable into so, year-over-year, medical we XX% risk Josh, the in we with basis year, And payment big remember, the our riskier claims share compares last we compare to year loss we of population. that well consideration. challenges looked our year, And our the is

much so, we factor we lower with where ended. a started adjustment And risk was the year that than

throughout a a didn't But claims fact Of course, enough fast that actually data, got we up with we of we SEP then, the year population because have as COVID that as that that, the impacted impacted some. and we got SEP. as trued population. we result the and healthier couldn't by engage well

coding our we hoped so, what below accuracy had for. was And

you adjustment, we plus you adjust be number QX. about claim what and an risk the when those, between the XXX-basis restated impact So, that had get difference the would for reported point number

when look comparable So, at is XX%. the comparable, to XX.X% more you it

XX%. roughly into development. so, for last that, in COVID, impacted last from consideration the we when is period of XXX.X% significantly the impacted what that take we you us so had got as prior as And – pretty When you the or of year, about half loss year year, well exclude our ratio last

QX really take that managing year. remarks, our think to the comparable you things we for good last in high-cost the that what difference take of our about basis, that to continue cases the with and year feel we we range we're medical on feel compare between guidance and remainder and within reported actions if cost we expectations we a So, prepared the it outlined our in and initiatives the well

Joshua Raskin

That makes a ton more sense.

are So to helpful. basis points apples full super I the plus X,XXX year? potential sure the more improvement around year, to where roughly XXX-basis-points track want just or kind you raise apples. apples number with from Cathy's capital? kind there is on your you make That's comments for follow-up means apples, which capital Were a the improvement were so to is just Or you of Can risk? an points, a of consistent ask or that of basis sort X,XXX I I suggesting was of understood. just no this for here outlining and need

Cathy Smith

a helped. said, different that moving As significant been much detailed. we've our taken We've to actions, capital needs in previous of years, taking and, few strategic on first we as as exit phase markets states we we our where company the this And a lot obviously, for very a well. more year versus decision expenses at requirement. operating we're off, action remember the were Obviously, into a significant new capital

helps so, And capital reduce need the that as to well.

based And and continue next performance, evaluate support do our for as go we'll have we forward. growth we our year. needs our believe to on capital the we the so, capital business Obviously, enough to

Operator

our comes Jason from And on Citi. Cassorla line of question next the

Jason Cassorla

came costs on the lower Just expense operating sequentially. front, much in

You targeted this front. on improvement

And expense quantify You I'm million XQ $XXX had efficiencies those pieces do realized of discussed in moving target. much throughout how for your areas worth of all you're of savings cost just how prepared then, the I all in savings guidance, But to kind operating different XXXX see reductions. the pieces those moving the specifically? you of comments. thinking you year? help can I the in expectations was looking developing guess, and

Cathy Smith

we a operating First through our either came called that but off, had one-time. – it QX that expenses are non-cash we of out, or had number items

took, bridge, markets, adjusted the that you'll impairments them can in costs EBITDA So, you identify the see but we kind some et exit of restructuring cetera. there's for some asset there,

throughout throughout year, the below you the we've cost come taken on when all we're of the below or that, pretty consistently actions course well the adjust year. of So, structure we're will XX%. The

of biggest is think track out for change So, events on and expenses, one-time the kind remove and/or of just guidance. non-cash the operating the I our we're

Mike Mikan

opportunities of to technology Cathy our very about, technology And XXXX, significant achieve about breakeven we've opportunity one add talking been our come noted, is cost major we've as this – that's scale ratio big I'd – year that Mike XX% as as the EBITDA to implementation path And with adjusted gains. this made we leverage, just what and we on. lower that or breakeven, target Jason, planned of productivity the in our talked all gains objective to XXXX. got ours in operating for XXXX, productivity and a drive and there's us a for focused we're and

Operator

comes Bank America. The Kevin next from question of of Fischbeck

Kevin Fischbeck

as of far an to that MLR the just Health were down looking outlining if related progression next guidance. years understand. to direct guess, perspective. to seemed was guidance Bright you to get going I looks margin guess, like close is than of help you businesses. your couple XXX%. might from that It most Health like kind wanted higher consolidated MLR just you're I NeueHealth to for for of of applicable the I as more MLR Bright maybe your be I things I could how both you're NeueHealth. some to just things than wondering really was the specifically NeueHealth guess, more MLR

Mike Mikan

start you level performed sure. well NeueHealth if very with, we look non-related customers, would XXX% I Bright HealthCare well, has below for that first, at our as the business Well,

Texas in capabilities And is absorbing NeueHealth. some this so, entries we've year, year, market course, a got that NeueHealth new achieve implicit we Florida. results the last being know of better we've with of to had, the and entry significant

high in that with just impact the as contractual the HealthCare DCE over is XXs and to a customers. the out going that relationship from the ratio given an perform NeueHealth margin our how tried loss for relationship separately on XX%, XX%, with comparably margin believe, to the break and we The external NeueHealth of Bright going other high basis. incremental we've additional drive perform is enterprise to so, to or enterprise, And local we're that's government markets time, with our how we contribute both to so,

Kevin Fischbeck

internal are things there flow as actions you're well? to the NeueHealth are then business? to there improve things plan, are separate guess, Or have I to initiatives, does the health But, saying, repricing, the just of those through happen that improve MLR micromanagement the the if kind like NeueHealth that you in that

Mike Mikan

the sides risk-bearing parts both our the getting cost of initiatives, and of employee is of both Yes. objective building from When we're network the they're performance an well have physicians physicians, as business. out medical but a as better affiliated together, provider, affiliate working business

the both it degree improve going improves, of obviously NeueHealth business. So, is to sides to the

Operator

Ricky of Goldwasser have question. the Morgan you Stanley, next

Christine Lung

This your Goldwasser. rate cash for about borrowing Ricky capital of is from of rest of on Christine evaluating. for and XXXX Morgan kind are sources anticipated Lung the Stanley Curious the you

know I you plus in $XXX – then $XXX million cash, facility. and have you credit the in think mentioned I million unregulated

quarter. as along or $XXX of anything cash of million there we of missing are lines? your Does available other that components end sound quota capital that's in tapping share regulatory terms such right of those cash into So, the arrangement the available are as or

Cathy Smith

happy I'm Christine. take to that,

of as noted investments. about cash let's in the capital million unregulated well, First off, first. $XXX level, I think your highest point, at stage the think short-term set we To

we other of million the available So, And of facility credit we have then, now. letter than $XXX we noted. cash right have the credit, as

the majority that's of vast So, available still. to us

things capital In to Further, continuing reductions, work which things we're other help on like will quota extend additional et position. addition, we sharing, expense are, noted, pursuing us cetera. as we've our like to

the the that year. all thinking cash So, into our for for for of goes year and the capital

quickest though, our our EBITDA is about just way I to think think look to EBITDA guidance, cash the burn, guidance. adjusted

million our probably that's you the was guidance, minus a $XXX it. to to And $XXX remember, million for about good year. So, minus think way

Christine Lung

sense. Makes

As or a separate a follow-up question.

guys and impacted the and how in on on saving or great. guys also are you the the might impact anything $XXX conversations willingness You of curious other cash, side, is if six markets providers at will sitting which are wondering exited markets in that there's having, this front? contract been recently have million But you to

Mike Mikan

NeueHealth, markets, around is as in well our which our affiliated care improvements regard. our our that the building continue the to in, we've which positions. our relationships think relationships with make core and includes local fully we're centers, major as and capabilities. refine markets that evolve care contract strong aligned continue we differentiation, own And market In model to we we're I in staying care partner partner our got

markets So, where overall, remain are we local care partner the our networks in strong.

Operator

question next comes [ph] FactSet. Our from Misarga of Jemma

Jeff Garro

Can hear you Garro is Jeff me? This Piper. from

Mike Mikan

Yes.

Jeff Garro

on process go-forward claims ask processing. that and of your MCR legacy about you claims and Could performance systems? expand down system processing to break and for improvements your I between wanted improvement

Mike Mikan

There's which to a answer I'll and we're our membership began But Cathy of, go processing are new XX/XX/XX. our on XX% try it into in things that. we and of remaining platform can. as that unpack year succinct last issues lot off that I as mentioned, legacy really migrating our by claims system, as it we'll the migrate

what timely. the size with. have getting was that a we anticipated we ended Last we contracts of Florida, than up accurately is issues One less year loaded in much that core and

quarter what providers, for had well into get bunch the call, which created we remediate year the of fourth of talked year. where to in to loaded year a that in the a around claims XX% that we the of where, the period, we during fourth of for so, obviously, XXXX XXXX late significant into That's year. first play physicians claims we we quarter in the other work. add And our of our and And, had impacted catch up and didn't as QX, backlog into quarter processed about the – time was a amount significant which whole

backlog, news it this numerous in with amount – two did to claims off in contract going costly where fourth growth date. physicians we is, the and one our a of us ahead processing the prepared each claims well issues was pay were I our down it markets put of quarter, the our in through system. more of with had our we us, network business, would terms that While The fourth things year, bring payments starting down it claim partner into we while much for as loaded to note affiliate more much under that in we're had quarter. the and one, as of good position having that our care of And

But down our continued we're system, claims improvement our significant also below today, backlog. a X%. noted, is legacy XX Cathy As over in in days seeing

the with new that than our pleased metrics that we're that. regard. On we've in better system, progress are made our even So performing

with encouraged we're so, And we're moving where to.

is remediate today, we our going we're to with challenges throughout improvements to system, see those. where have the still we remediate we good year. continue those them, know challenges we again legacy the news While are and And as

with the until challenge our the XX/XX/XX. results, note but encouraged on get system off we're we entirely So,

Jeff Garro

follow-up for on special periods me A and broker enrollment relations.

changing enrollment in has concern then to current ramifications the for approach. any date, Just during SEP curious enrollment open and of brokers whether brokers if potential the because from incentives about impacted future SEP period there's

Mike Mikan

because So, remind of year, just month September, opening of XX,XXX course, per average of to the impact give the SEP SEP. year. last mid-March of those had a it again, administration last added to SEP, on we us lives on little I'll bit From color about through up that about –

This that but attrition today. a be typical well. normal, degree. we impact, and unusual year, only things to And we'll seeing We're were that think on a call to anticipated with it, business had that midyear able seeing impact the managing, year. But as demand so, other significant during services just book enrollment the in Obviously, the pent-up Medicaid expectations that event. that more that came we manage of not for along that impact redeterminations some could we're and we within SEP

and we expectations below SEP, normal in you'll the that we're and our what So where we're there out seeing why attrition for are. membership note hence end-of-year put is target line today with at

Operator

very you much. Thank

questions have line. the on We further no

hand Mikan Mike to I'll closing back Thank remarks. So for over you.

Mike Mikan

our in we your in company. want your you look further interest future. Take the for thank time, Again, care. updates Great. to We to forward

Operator

very That much. Thank today's call. you Goodbye. concludes

a your disconnect afternoon. Have wonderful You now lines. may

NeueHealth (NEUE) 9 May 222022 Q1 Earnings call transcript