Earnings call transcript Q4 2022

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Operator

Hello, and welcome to the Bright Health Group Fourth Quarter 2022 Earnings Call. My name is Alex, and I'll be coordinating the call today. [Operator Instructions]

I'll now hand over to our host, Stephen Hagan, Investor Relations Director. Please go ahead.

Stephen Hagan

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

reminder, a this is being As recorded. call

Leading Cathy Smith. President Health and the and are Mike CFO Officer, CEO, Mikan; Group's Administrative Chief call today and Bright

statements we can are forward-looking experience subject that cause and that or U.S. we and to required may begin, information. to that we undertake actual Securities call laws. risk the uncertainties statements A description the the reports in revise found expectations. including of could differ in present historical by law, to or factors be risks or want Before federal materially with results you securities the as periodic we file remind this the Except some contain obligation Commission, forward-looking Exchange under statements reports from and to These uncertainties no we with of any current update our filed and SEC. risks

is call this which Form company's call the this This on of GAAP company's from in page at Investor Information non-GAAP available page in A the be measures. release, is measures we non-GAAP X-K and the issued website. of the in presented accessed release morning dated Relations amounts earnings may March contained the XXXX, our and XX, quarter on reconciliation the Investor to Relations press investors.brighthealthgroup.com. available company's also fourth will reference

Bright Group's Mikan. With that, turn Mike Officer, I Chief Executive over will conference Health now the to

Mike Mikan

XXXX and earnings Health Good joining fourth Stephen. quarter Bright everyone, morning, for you you, Thank thank call. Group's

insurance that results. the company why over before on ongoing turning call go XXXX will our briefly future. to is year to discuss ACA we a over the well few are business and continuing I'll marketplace full to for the comments and exit fourth start efforts Cathy then our business, our I quarter positioned share the confident with

our for to of continuing significant off that XXXX our is a business. transition business report start. pleased And marks year strong I'm a to

January, focus an in success recall, is continuing may strategic built we you business, of the care. overview value-driven the provided in As and how for it for

we when of enthusiastic common satisfaction at value set of care managed consumer the care a the on outcomes what is about our additive of our that, continuing discuss I'll business future. focused we're are we delivery and layer that Importantly, healthcare, cost capabilities speak health confident of value and care, across value-driven in and lower care. With and why better drive

care our includes segments: a Consumer care of continuing senior Bright managed delegated which business two our As and reminder, HealthCare, Care, is business. consists value-driven delivery which business; our

and to in segments model. profitable continue to adjusted in we to the both our enterprise business, our level in expect on the rightsize Importantly, XXXX. as execute be believe we And EBITDA efforts we at

Importantly, we less business significant greater volatility. in a of predictability with have with outcomes its range

our our In value-driven care from has each core commitments our it because attracted markets. and in payers significant results, that, model of demonstrated differentiated Consumer of has Care segment,

Approximately XXXX. Medicaid to payer our lives contracts to business consumers including our REACH of care XX,XXX by are Medicare partners, of being mix ACO Advantage Marketplace, balance of expect with the the manage XXX,XXX to value-based end attributable a We and value-based XXX,XXX those with Consumers.

have In on to of eliminated level we segment. Consumer adjusted first contracts EBITDA we're in our focus downside in contracts, risk the of the our year Care prudent been achieving across have these profitability the and assuming

to move care, sharing these fully consistent with capitated will over greater contracts we our to belief However, models continue in time. risk and value-driven

impact The explain treatment, in further, revised our greater revised billion served have Care not expect which revenue the or segment. Consumer or will lives adjusted Our recognition the in expectations care but for due the Cathy number $X.X does of revenue a value-based EBITDA Consumer Care changed, now segment. not we accounting of revenue segment accounting to

our attribute and our partners building and with payer our this Care Consumer engage able relationships segment, quickly live to members. growth have and because strong foundation, a and year model, of We with unmet positioned long-term we have been in have our been segment model. consumers care clinical through strong for well continue is capital-efficient, build needs fully-aligned This aligned our that underserved aging to serving

segment in managed strong market with is fast-growing Our Bright our California delegated the for profitable performance build growth. Medicare partners. opportunity its business well care to and significant on delegated provider with continues positioned HealthCare our segment Advantage senior This long-term

and operational in segment on adjusted focus on improvements We integrating business, to profitability an the XXXX towards continue driving basis. executing EBITDA

performance over strong and to resulting XXX,XXX over the And enrollment growth consumers, the forecasting our a grow consumer reminder, our XXX,XXX had given in in ending net expect and we positive Medicare Medicare the the we addition, Advantage with with Advantage positioning special California. annual strong started within period In needs in consumers. in year year plans, year as

XX% to meaningfully $X.X generate in this contribute revenue segment medical of a We to profitability and XX%. cost over EBITDA adjusted to enterprise ratio overall expect target billion with

discussed As insurance coverage carrier, marketplace the the seizing we exited in an at October, have end of as we Act Affordable XXXX. Care

to discuss discontinued one-time and Cathy costs. will winddown there As that elements are impacted moment, business, a our related exit-related several the in financials specifically

set met ratio the that adjusted you range medical for XXXX and March. annual cost exclude such we if However, last we EBITDA costs, guidance

into through costs reduced in April cooperatively our have SEC XX. liquidity facility. us with The filings, requirement liquidity $XXX and and our to as credit that we our the associated a are million discontinued our covenant minimum described bank working to $XXX waiver which our minimum been in fall group caused pleased We've with we amendment million below entered operations report

of long-term financial are actively based Directors our expectations. and the and with Board advisors on to engaged We best structure outside our size find capital

interests in While our we those confident taking that resolutions, of best to on speculate actions of we outcome the are continue cannot and and the I'm that discussions the shareholders. will take are

and to now our quarter it to I'll performance updated outlook. Cathy over hand fourth our go over

Cathy Smith

morning, good and Mike, you, everyone. Thank

I'll changing business our our discussing outlook. Medicare sheet. From results future briefly for full results. business, that of our performance. performance and the an for provide XXXX recap business' there, I'll continuing less balance means fourth the of I'll and then review quarter our composition XXXX Advantage start Since outside overview historical are of year XXXX by informative the our then

Starting with sheet. our balance

billion non-regulated and by December in over cash long-term approximately of XX, As additional our We of short- subsidiaries. or which XXXX, of had cash investments we $XXX in million was had nearly held liquidity, $X.X insurance in cash regulated all equivalents.

million letter the cash, facility minimum business. of our short-term credit to as credit fully which Our end when $XX of to support in contracting of credit committed facility covenant, liquidity drawn flexibility. million $XXX our had maintain the QX, The direct million us limiting factoring was in required $XXX a

a the and As agreement we received we year. credit XX have liquidity today, from in group, until the and in noted minimum our we filed fell covenant X-K in our this bank which January, of the amendment covenant below liquidity waiver April minimum reduces

of end in non-regulated week, XX, we over last As of February cash. had the $XXX million

I'd included XX-K. will With like be touch that some on information to in our that in mind,

XX to a the company's fund going-concern Our on next qualification, months. to capital is over predicated the financial additional obtain our ability will which operations ongoing statements include

to is business. credit the facility early needs credit for and set year, current options continued have of we next to the on mature Our work

business less predictable This as our go expected Mike said different a credit profitable, is volatile. forward. is we very earlier, to and As profile be

discontinued of Additionally, discontinuing size the regarding certainty actions of to our in believe with taking liability the We preserve we including have the are is our line we operations, estimates. cash, efforts. operations significantly year-end more which

for remaining December the [indiscernible] XXXX. paid operations gain latest XXXX the risk-adjustment based settle insight additional We with continue report and the on through to claims February discontinued in liability, the claims received on

working obtain qualification. going-concern additional alleviate are to We hard to financing

We on as and addressing provide will are these laser-focused updates appropriate. issues

billion continuing HealthCare fourth million and quarter, million quarter billion was Care the respectively. year. the operations was Consumer $XXX Bright and The $X.X the revenue BHC billion. segment quarter was revenue $XXX $X.X contributed $X.X year for full revenue Fourth for In full full year, the and $XXX fourth for million and

exited cost was medical XXXX ratio HealthCare XX.X%. year reported full we XXXX. The medical the of Medicare includes Bright that at The cost Advantage states ratio BHC end

Advantage excluding XX% our MCR represents claims. our prior-period This range. solid towards reference, approximately operations XXXX XXXX, Medicare an achieved in California target MCR progress For

adjusted was $XXX EBITDA loss $XXX adjusted million fourth million. loss quarter was continuing The for EBITDA year full operations, the and

investment combined full It operations billion. Our for net costs impairment the important is this charges, and includes continuing loss that was operations million year exit-related and charges. charges, non-cash the of $X.XX note approximately $XXX to restructuring discontinued

year. including In within of the full addition, in EBITDA adjustments March approximately investment XXXX of range provided guidance would XXXX non-GAAP $XXX last still adjusted our other million, year bridge losses,

XX,XXX were XXX,XXX, Medicare approximately through well lives relationships through external moving and in Of care XX% affiliate the we our to to served were contracts, our Care direct expanded clinics. been retaining our our Value-based those Consumer we from Turning external from clinics. from attributed in from and relationships to contracting Advantage as approximately over payer update XX,XXX Bright said Consumer January, as in successful other And very directly consumers to modestly in Marketplace, payer as the lives, across segment. up have over consumers being value-based QX XXX,XXX Care Medicaid. HealthCare, including

driver XX directly This performance clinics lives midpoint the on BHC differentiated better at number the points. consumers last the over attributed in clinics guidance. In the our commercial key to gross is BHC attributed own margin our to by managed performed XX% served XXXX, other and in over our increase of a lives than by year percentage compared

revenue In gross elimination recognition recognition payer segment full revenue XXXX, we change includes fourth for Care Consumer away with enterprise which this in from full Care was The XXXX the mentioned associated year to costs, recognition medical HealthCare and recognized earlier. third-party payer Consumer Further gets area I contracts. impacted move the in revenue reported the net lives, we by moving third-party entirely XXXX, commercial to year accounting change consistent the In consolidation. relationships. Bright some as the eliminated goes with quarter,

In now by Care true-up than Commercial performance the gross million, we flows a and strong breakeven through was year business an in basis. by of adjusted gross more ACO with $X margin full a REACH, impacted to demonstrated first contracting, revenue risk-adjustment full that margin Bright direct our were on Consumer Consumer EBITDA approximately HealthCare year, and for that Care capitated estimates year-to-date premium lives. recognized the

be fully-aligned in solid Consumer contracting. a our summary, for and XXXX Care to ACO well well external in in lives and payer growing performed is performance REACH. positioned care managing segment In of payers delivering with XXXX, external in direct number successful The model

early In view financial XXXX provided our and of expectations. January, updated metrics we an

revenue lower in in due to care are for for time, provided that for we XXXX expectations are forecasting change continuing While a consistent value-based our the at recognition the range business view our with revenue XXXX. contracts,

important to revenue share prudent risks. is finalized is managing medical This we It are contract lower downside of lives risk year, our than the net more and in we have external underlying structured but recognition. their costs contracts contributing to significantly with reiterate that of years last early the performance-based levels

between This revenue for and billion billion We in $X.X from in to revenue and billion expect HealthCare than $X.X XXXX Consumer billion. Bright $X.X segment an $X.X Care reflects billion expectation from our our segment. enterprise forecast greater $X.X revenue

HealthCare, expect and the be medical end-of-year to for XXX,XXX, XX% the served we greater Medicare Advantage Bright In XX%. to segment cost we of than ratio consumers expect

to relations of XXX,XXX Marketplace, we value-based the Care, XXX,XXX including Consumer Advantage Medicaid. In from a approximately total ACO XXX,XXX XX,XXX to payers value-based total across Medicare and consumers, other program REACH from with our XXX,XXX and expect

operating adjusted between our contribution, the segments company those adjusted operating of operating to income continuing charges. result excluding on profitable EBITDA a be for we profitability in ratio an year. XX% And We business segments total combined non-cash and to expect XX%, with cost expect both basis, enterprise

to in confident forecast. more the EBITDA each profitability little items bridge want XXXX, in are for path and segment our that detail We on adjusted a I our to support provide

clinics improving consumers of Consumer largest REACH and Care, the agreements, ACO versus mix more growth through served of In of our members. is membership payer profitability our affiliates, driver shift growth, new

to operating lower in restructuring. further a any asset we've from an and operating benefits from that in intangible We of implemented cost also was also reductions run loss XXXX expected rate expect XXXX. impairment recur to basis, the benefit is the expenses due a to-date depressed not segment GAAP On

segment, the improvement profit to RAF management was and continuity due cost pricing, increases due our Bright initiatives. (ph) HealthCare medical [member] to primarily In year-over-year

had business excluding a approximately As ratio reminder, claims cost prior California Advantage Medicare of period our in a XXXX. medical XX%,

midpoint and RAF In to nearly The increases initiatives our expect XXXX, and basis medical we of for now guidance to recur XXX pricing our Bright to basis, approximately XXXX to be rate This HealthCare. MCR the XXXX basis goodwill range XXX benchmark included cost contribute points, HealthCare impairment a contribute benefit basis approximately MCR XXXX. net also points of GAAP forecast XXX improvement. management a Bright results On charge to is to points. takes that us in

have that and XXXX in We to drive margin are Medicare revenue and trends the in greater stable Care our our expect likely we've our the high and predictability contract our business. visibility Advantage results items in to on improving seen based in gross Consumer

I Before back appreciate I across Mike, call the team turn our just how Health country. know I to amazing to the Bright want much

for Mike here's some final Now, comments.

Mike Mikan

Thank you, Cathy.

segment, serving environment well segments: consumer the both fast-growing continuing future growth ahead and that future, Care we look and confident XXXX, we significant our business model. for and current expand We're As aging market for business is our and underserved we Consumer opportunities to the we as continuing across HealthCare. see our are Bright the positioned both refined

have is and at that, to this recognize We what stage, intend do. exactly much we to we prove that

We have taken focus actions our simplify to business going and forward.

on taking to steps are strengthen of gaining our our more the We obligations discontinued position. we final and operations are capital certainty

effective team business While is so do a ensuring an on significant manner. is an challenge, we focused in the efficient exiting in insurance and

turn to we for Bright their at and healthcare want focus our over we right thank we on team it questions, as making the Health hard I as make in work transition together. this business Before to

the first Operator, let's take question.

Operator

Nephron Our Research. line your from Raskin Instructions] now first Please is open. Joshua, comes go Thank Joshua ahead. and you. from today for [Operator question

Joshua Raskin

management. the Good morning. focus EBITDA on in thanks. to cost to of the Hi, improvement from coming million wanted MA revenue $XXX $XX I in million that's growth medical

a sort up. membership? more couple more you But about basis broke color that us little coding a talked like that? statistics points, flattish, be bit think, of on is what's think be drivers some although months revenue might of a year-over-year give in could just of on little -- there a give looks the Maybe I It you on scores. I think I growth member Cathy, color on you improvement but risk that? driving will out just us

Mike Mikan

in do biggest is expect -- we've California, driver rate since we Josh, grown Hey, know, the acquired Josh. business I grown mean, as MA we we've significantly. if the -- increase, but we've you our

and that's year, continuity, going years with we've that or we're in we've lift we that to to naturally, -- get about now couple several So, got a RAF, respect of and a of we memory coding, basis XXX think improved so points. worth lift expect RAF next --

drive trying working points the XX% continually unnecessary down senior kind our basis the is normalized XXXX in you XXX that's include of So, from points. -- points. basis the increase you then, midpoint rate of another of medical initiatives about how RAF, basis delegated When of is cost MCR partners to bridge costs. And range XX% with XXX care and XXX drive our down to

the really rate is an how and RAF. revenue that's So by you improvement in bridge, but

Joshua Raskin

a then, cash ops the sense sense. us Could flow you April. like? follow-up of business of makes a lot I from some here, have give That runoff. there's claims on you And situation know looks till some seasonality just what got of you've just and the Okay. cash

I just cash, I be? April to how about how so, could thinking aren't help of going And going competing here sort XX? normal feel guess, much what forward. But forces understand by And potential need be like you're there's that options maybe you us

Mike Mikan

-- let from level. start me high Well, let's a

flow Josh, at going adjusted believe going level all, different Obviously, of for profitability with EBITDA is business very the insurance both -- ACA -- volatility. it's was about, talked less profitable is positive our we've forward, business the segment profile. risk forward, So, as first cash We a us. going volatile

going So, to going without forward, predictability. improve that, that's

So, I'll start there.

need The second and is part on certain cash our the operations. fixed discontinued to getting a liability of

working paying had in with around through discontinued February As around our [indiscernible] we've said consistent with paid, to last late, then, we've of down year-end prepared the operations. liability is adjustment. months, regulators worked the gotten fixed in clean claims, her latest component as February through the that of job a risk it's of report and claims good really really couple remarks, we've And And of our get the estimate. Cathy state done

liability every fixed getting day certain very the discontinued we booked that's So, believe we're and line around to year-end. with ops closer and what and in we consistent at

is. a good our what when cash pretty So, need those you got we've we of two, believe take understanding

or Cathy position Josh. As XXXX $XXX million of corporate cash we had million $XXX end we risk-based to a believed $XXX with XXXX. cash in closed our with was corporate come previously said at XXXX the early the conference over in is we What current would in risk would back to 'XX about million by our Morgan true-up us about said, adjustment million J.P. is, capital likely out we as of about on -- increase side, that payable. risk impacted time, That $XXX an

that, pay fixed in risk had that's our interest that realized and exit loss we XXXX. loss then, and adjustment we the given a about addition unrealized and million rates, the claims long-term investment as down an both remaining in obligations, in of rising $XX portfolio will to turn into business now treasuries And invested the income,

So that the those at -- number. impact

we we renegotiate knew have So, with year today, we our $XXX next million credit coming to that had due that. facility that was regardless,

put capital of our minimum, is replace profile access risk working our credit of business So, representative advisors liquidity that we're a full to the more Board with going at credit in permanent and structure the and the with facility to, forward. a

needs with year. we and cash a that's coming the that have So, hopefully credit facility you next our our current on due gives perspective situation

Joshua Raskin

Okay.

zero today based to by like $XXX what the you $XXX sounds million the solved to realized of the for true-up April. losses, with where probably to closer on it are and that's the and million has get So, is end

Mike Mikan

Yes, that's about right.

Joshua Raskin

you. right. Okay. All Thank

Mike Mikan

you. Thank

Operator

Thank you.

comes from Jason open. Please Citigroup. go Cassorla ahead. your Our question from Jason, next is now line

Ben Rossi

Good Hello. question. and morning, for thank taking my you

You have here Jason. Rossi for on Ben

the thinking commercial contracts regarding collars your -- about plans Care when contracting how discussions about commercial year-over-year? in changing have risk thinking segment, and commercial So, with landscape, Consumer gone contracting

to your you membership can XXX,XXX And of of XXX,XXX full guide members, for between remind split then, value-based and partial risk? us

Mike Mikan

start let's with contracting. Well,

HealthCare Care our Bright segment know, the the as you in partnership So, of business was our our XXXX Consumer and majority between business.

While we was majority external HealthCare. with business in payer the did -- Bright do have contracts the of XXXX, have

And ACA to payer partners. with an perform we decided much that a got so, insurance well other when with to exit believe being business very integrated the that insurance carrier, can respect platform we've we strong

we Medicare Marketplace we relationship to with of develop expanded the marketplace, an have payers say, to so, the in other and relationships we And a serve, marketplace in commercial current addition and way that to we aligned group went the the payers those as to Medicaid.

contract best to of believe sharing we we that's downside of at kind the with across all those was conversations product over time, in think those in upside categories, And so, impact both to prudent and because get of the that time, they're stages, which to But especially the arrangements risk greater contracts the performance. And the some We over And with value-driven think the year the the fully gone want the we contracts you're move care. beginning going of was risk do. we're to committed marketplace, develop where, limited relationship. to we'll and full a start where That's thing one have hence, well. our downside. cases, in ACA

relationships gone time. building negotiations And contract deeper So, we're have we think really the over well.

ACO XX,XXX between remember, full With out, and are which XX,XXX those somewhere And contracts. move call, lives, greater product I are risk they will the split would are remainder time XXX,XXX is then, of in upside respect you about and I there as the or Advantage value-based to if are with And XX,XXX said, our over partial Medicare to category. REACH that the performance-based collar of value-based XXX,XXX arrangements, risk, but around risk. a downside, to

Ben Rossi

quick follow-up you. Thank as footprint. your just here And clinic it. a on Got

need clinics, current do And care of in-clinic Just we're have but is kind in growth a assuming to with in your of capacity your lot of available CapEx from XX centers? going you what needs come base membership mainly for the what XXXX? think kind you'd do owned clinic growth, primary you

Mike Mikan

location. Well, we capacity, still by have it varies

And we based And or but quote sure before, I I'm clinic amount, is our have as not but on predicated capacity. talked some not our the we've to strategy that the with would only have we our about really risk. risk build community managing we on aggregate an manage But, demand so, expected customers. model still community

opportunities So, growth but know, expect we don't forward. going we do

there markets likely So, on adding current time, But we in clinics are still in more and Fort additional Houston, Dallas, our we over current Lauderdale, either to capacity new or growth. be Miami will have of locations. locations take our marketplace,

Ben Rossi

color. Got it. Thanks the for

Operator

you. Thank

Our Fischbeck Kevin is line go comes of Kevin, Please next from open. ahead. your now question Bank of America.

Kevin Fischbeck

Consumer and Thanks. show you of little which a provide favorable about around to think million each buckets Can between kind the that? $XX the just would where members driving Care, I of those affiliates. to versus what's kind the improvement, you economics growth a the in? the you more Can million exactly see more up giving mentioned be Great. that the EBITDA of us $XX little here mix remind clinics bridge in of members on bit the color you're

Cathy Smith

Yes.

So, I'll then, and help, Kevin, start, can too. obviously, Mike

But payer contracts, than more will structured what affiliate we the the those we is, bucket a be third-party believe to to saw associated we to model. strongly for take first And going We moved still just time, the your did that better that is while for clinics. into then, profitability. balance point, as forward contracts value-based good lives mature. next note the our we the affiliate what over it owned with clinics consumers care we've those are serving us time in performed in remarks prepared in So, think

and also better, which do are that think, prepared the perform shift, clinics I mix in own we said, I remarks. our today, So, seeing

million bridge. $XX $XX what's that that's really So driving see million you on to the

Kevin Fischbeck

Does fully that protection lose But mean will just expect contracts and you're allow were putting I in money about -- you and these in you -- understand I comment you in the in these losing that now contracts. [indiscernible]? guess, don't XXXX, less more that downside to these contracts,

Mike Mikan

XXXX, Remember, year, risk. with relationship Florida had ACA in invest they one, this a as cost in downside year Texas we significant Bright HealthCare in Yes. start-up the were invest in last full marketplace, year to and

nature So, they those the shared in of start-up markets.

And so yes, our XXXX. -- established with expectation for we've is going forward those for payers the perform lives relationships with markets in us that external that the will we're serving our in better with

Kevin Fischbeck

update, Okay. the And guess, thoughts profitability then, Any new you're business? particular, adjustment business but in to on in to also it segments. rate like your looking impact the how both coding in health the might and looks California, Medicare that initial get then I

Mike Mikan

ahead. go Yes,

Cathy Smith

Yes.

would Sorry, still... say about coming it, you are I I -- out about ask if think the we're and you're decisions asking that' that RADV

Kevin Fischbeck

proposed changes more update code Not that MA limiting of RADV, coding aspect rate the some and the codes, rate update? ICD-XX, X% the in adjustment, but the the of

Mike Mikan

on the adjustment. this And related bridge XX% includes the midpoint. to XX% about ratio the XX%, about the of basis to Yes, of you which medical offered to to to year. restated points at our get We're start not medical that's cost ready XXX focused we're rate the the year initiatives, up risk us from XX% when and we've from next bridge include for cost talking midpoint and XXXX, the

Kevin Fischbeck

Thanks. Okay.

Operator

you. Thank

Lake Wolfe Justin Research. comes Our from of next question

Justin, your open. line go is now Please ahead.

Justin Lake

I you there. up being us a physicians your morning. -- to us full full of is if the around the how of of the contracts you to of running wanted you risk up and the -- or of color lives, medical kind terms contracts could managed the maybe little are at of the upside/downside? path kind the then give Thanks. But be maybe in terms And once we could give on cost Good set those comments in on lowered risk the the that capitation for yet in side revenue those embedded follow taking full get you number all on risk? would more What top-line? terms maybe

Mike Mikan

I would previously. I number, that but -- range up given end incrementally would know the the been know grossed range that have total the we Yes. revenue or had of that another higher $XXX have we don't so completely, in of million the had we

can follow an care a to our our with current up be contracts. based the number with difference on that accurate cost of we the guidance related total net you on of more risk-based incremental basis. Justin, But revenue of would

downside. downside. then collars upside they've all the With sharing of total but essentially the have entered we have and intended contracts into consistent, and -- got partners to a to our contracts, medical agreement we with targeted are sharing respect are today, around cost around a our upside ratio, care, on an loss which not we them the They're risk and the and the

consumer care of the the the managing at care, from capability referral manage can care of willing knowledge just managed business. we're base, said, that alignment on more model all time on of the as business, results. gain our understand contracts all local the better networks enter a to preferred improve those we we we the as referral hone and we than patterns, we're point need And the side or with, market new a in the and more with or partnership, of perspective new we a to the patterns know we of As into risk, over insurance take working which to it of network because we book

and going point believe we forward. that's take So we'll some those take that on. over how can on and work eventually, time full how contracts risk we We'll collar loosen up at

Justin Lake

only model there just then And Did for Got it question of is it. of a early. that and Kevin's was your I you risk said view before. he CMS follow-up. that ask new the caught about I a too apologize. piece and XXXX, out

make want that's sure Just to embedded.

Mike Mikan

Yes. commenting It's start too early to on that.

Justin Lake

Got it. Thanks.

Mike Mikan

Thanks, Justin.

Operator

Thank ahead. next now is Please your Sachs. comes Instructions] line Our Rich of from Goldman [Operator open. Nathan you. go question Nathan,

Nathan Rich

bridge EBITDA you're a around for Great. profitability type Good assumptions and REACH serving 'XX. questions. of about could bit Thanks of expecting the in few the for if morning. from be you'll ACO the you detail more your on 'XX? the that I in MLR little base talk wonder members what A that

Mike Mikan

conjunction partners, We year alliance comparable our but own pretty our expect performed well the we clinics. first our -- physician partners, as well a in with in in

in -- XXXX, and we year, that. to equal believe perform So that next we'll

actuals and for it the -- XX% expectation we're so around was XXXX our ratio So, -- the XXXX think expectation and is or XXXX. loss for for it's we we believe

Nathan Rich

operating bridge, already And for mentioned that both I Cathy, confirm improvement have just in I on the those that as Okay. of actions reflect you of the savings the have front that wanted that of visibility taken. of corporate, we the year in just those ranges well plays as realization Consumer expense as think, terms Care Great. out. terms been that to level in

Cathy Smith

Yes.

as business. January that. business a I to the of in that noted for said, the significant we've So, go-forward structure exactly subsequently October in actions and then We taken amount

actions the of majority vast those have been taken. so, And

that seeing year. you're the coming this into rate of what is run So, impact

Mike Mikan

we're a And we're seeing seeing the run year-to-date rate through. through -- that basis, come on

Cathy Smith

Yes.

Nathan Rich

you. Great. Thank

Mike Mikan

you. Thank

Operator

you. Thank

questions further no for have We today.

joining. that Thank So for today's you call. concludes conference all

now may disconnect You your lines.

NeueHealth (NEUE) 1 Mar 232022 Q4 Earnings call transcript