ALHC - Earnings call transcript Q1 2024 | Alignment Healthcare, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good afternoon, and welcome to Alignment Healthcare's First Quarter 2024 Earnings Conference Call and Webcast. [Operator Instructions] Please note that this event is being recorded.

Leading today's call are John Kao, Founder and CEO; and Thomas Freeman, Chief Financial Officer.

Before we begin, we would like to remind you that certain statements made during this call will be forward-looking statements as defined by the Private Securities Litigation Reform Act. These forward-looking statements are subject to various risks and uncertainties and reflect our current expectations based on our beliefs, assumptions and information currently available to us. with the from could discussed our these detail our of to actual in annual some the ended in materially including December XX-K differ forward-looking filings fiscal report of on factors section for cause that results more Risk Form Descriptions Factors SEC, the of year the statements XXXX. are XX,

any reasonable, statements our believe no undertake we after we this expectations occur are call. reflect to to Although changes that revise obligation

reconciliation be will fiscal the in evaluating XX, company certain the the website that and be note please believe to and historical in that addition, measures quarter financial important can XXXX. relationship Form measures the measures they found press for GAAP XX-Q ended company's measures performance. discussing that our in March most the non-GAAP In non-GAAP non-GAAP on comparable the between is of financial are these Details release posted on

like hand your would I over and John Kao, to today, speaker to Founder now CEO. the conference

You may begin.

John Kao

and on call. you first quarter earnings conference Hello, joining our for us thank

and progress solid EBITDA the end represents of high full XX.X% D, of of the membership our Adjusted year-over-year $XXX quarter of $XX producing approximately exceeded grew million range XX.X%. our XX% quarter members excluding represented and year-over-year. objective. XXXX, revenue health a million of approximately plan an MBR Part year XX% gross of EBITDA ACO our excluding profit first MBR, REACH. XX%, $XX and Total approximately was For Meanwhile, consolidated our growth negative million, adjusted toward XXX,XXX outlook adjusted first

number improved operating Meanwhile, operations by new our This to insights, members, the and outlook of integrated result our our increased partnerships adjusted scaling data Xx and outperformed competitive demonstrates the in member risk to continued expectations. provider platform. the offerings. support Growth be to quarter model, ability while EBITDA of clinical achieve power product shared significantly driven sales retention, first

expand our emerging into to rapid to The increase quarter our despite relative strong is AVA's clinical consolidated D while first reflecting is of excluding and improve new success further deploy MBR results our XX% to indication our seasonality modest year early trends, our costs, both led visibility ago. a teams combination and differentiated rapidly Part in growing D, control year-over-year in membership will us managing a a achieving which to underscored only in XX.X% and expectations result capabilities Part a consistent Central medical of and on even allows XX% these outcomes of MBR growth. MBR of an our to This D more Part XX.X% his MBR, with remarks. by XXX%, Thomas of members. a care

we quarter, adjusted end the profit our are and first our strong EBITDA narrowing adjusted guidance, year guidance and of raising membership revenue low raising our a Following full range. gross

Our growth of greater confidence a updated operating our leverage improving adjusted reflects guidance expectations in mix momentum, clinical new for and our continued on model SG&A. membership members,

and disenrollment exceptional engaging our Google the experience member [indiscernible] To new service X.X experience From rating first in-sourcing have health results. than members efforts needs. our in with rate first were with priorities of quarter more year-over-year quarter a at consumer a the delivered significant membership our across XX% NPS an new stars in and providing X,XXX These in exceptional reviews. and of resulted XX reduction our investments end chronic growth, manage voluntary XXXX, member our standpoint, who members past greatest top the onboarding delivery in a

our star we the lower measures, our costs, our membership. value accomplished satisfaction our lifetime increase All achieving disenrollment of this By growth was of acquisition raise and over XX% and net reducing improve membership member while growth. improving member rates,

us to We high-risk in successfully acute immediately XX% for members to allows visibility the overall. standpoint, and members costs From by XXX inpatient admissions January manage management new care to a new of new and care quickly utilization managing control market. XXX by episode per engage began data created engage members real-time experience market per This members approximately and admissions X,XXX X,XXX an resulted post in our discharge.

as quarters MBR member fourth months. at-risk new improvement see improvement the typically throughout discharge, drives outcomes lab improvement We the our jump with gives sources. our XX over and following upon This strength net opportunity This, information combined throughout improving our the in real-time XX% full confidence a consistent Once feeds in presents third year engaged, anywhere focus of and transfer our these our raise claims analyze the levels. AVA quality in outpatient which cost other continued expect engagement high-risk to with build ramp stratification we significant year care enrollment on engagement. after as with second, us days up pharmacy cost, values, lower XX data, a results admission, high-risk as outlook. members we the our year, greatest sees data the us data of member institutional

we above margins. XXXX, to while health positioned plan XX% we believe to membership expanding are grow ahead well Looking at or

plan bid our cycle, that the believe tailwinds we current for we support distinct financial position we competitive advantages. and As have

plan are who per Meanwhile, are today, X-star X% XX% have HMO our approximately be receiving in dropping will approximately payment XXXX. X-star that are plans roughly in million revenue. less in X-star stars California XXX,XXX is X-star next The will California difference X.X-star of a First, member that above between level year. rated will in a there are our members payment are but X below a and plans that plans in be who over in members below or including XXXX, X.X markets payment

between XX% and a less X-star is member difference approximately X-star revenue. a the plan While

our attractive expect We advantage ability while this to support consolidated funding improving margins. benefits offer to

rate in model notice, Advantage change effective the national we Medicare third, both X%, phase-in which in our the improvement following strong to and us continued our expect new ability These further and average double of the of in our average believe adjustment. margin differentiated will a growth risk the combined we platform advantage risk weighted growth factors, of Second, of members, X.X%. than announcement deliver confidence more relative widen our VXX XXXX. of changes with operating final And in the gives retention rate

each Advantage employees like In thank part for it to of of being means that standard conclusion, what our the Medicare for I'd the raising to team do is right.

enabling execution, the in unique Our and sector facing our our visibility, is combined dynamics confidence degree outlook. to the of navigate clinical gives with and us MA XXXX operational us

model the increased benchmark margin strong tailwinds in with believe relative will risk Combined phase-in, continued changes achieve I both and on stars in advantages, XXXX. we positioning XXXX into and improvement growth clarity XXXX scale, on in

today model and together, continue alignment Taken the we optimal platform is prove believe will our Advantage future. Medicare for to operating the for

Now call further to over the financial to I'll our results and discuss turn outlook. Thomas Thomas?

Robert Freeman

Thanks, John.

our our at range membership This of members. For of our as XX% year-end well XXX,XXX XXX,XXX exceeded quarter to membership the plan growth ending increased quarter XXXX, of the of midpoint guidance as health XXX,XXX year-over-year. expectation XX% March our first guidance

to higher Our was growth top first resonate XX% line of our excluding superior proposition market. continue quarter REACH. function revenue value a growth, as $XXX million outperformance ACO plan the in membership health of XX% year-over-year primarily represented The and

over modest $XX new grew an strong XX.X%. portion XX% in our of was a Adjusted of million, we gross MBR XX% quarter compared larger membership was even reflecting The the representing medical control members, as to year-over-year year a driven increase profit ago. costs by significantly by

performance relative X% XXX, of was year-over-year. by utilization overall quarter declining with driven inpatient admissions First favorable inpatient expectations to per X,XXX

benefit inpatient by unit offset Our higher performance fee-for-service XXXX utilization. increase in costs greater was favorable supplemental partially and utilization to CMS' related rates

John mentioned, quarter of As in reflect results first a D, an with both expectations. line and D MBR of MBR, excluding our Part XX.X% Part XXX%,

D of as the the cost plans declines phase. course As over a coverage profitability year after the meaningfully reminder, improves health the initial share Part

points and increased with by seasonality, the quarter expect points. first of XXX the net our remaining quarter. consolidated our consolidated results remainder Part the year. to of Consistent Through change XXX the basis basis points X This Part between by in roughly normal basis quarters the we first lower during a year, MBR the MBR of D D XXX

expect primary will the Part rest quarter We quarters. Part between first X the MBR the C that of for the seasonality meaning following B be our of only the higher modestly driver and be to year,

that clearing house. During claims were a not it's impacted we the materially worth noting by national that disrupted quarter, incident the cybersecurity

not we house Importantly, use do for prior authorization those pharmacy payment claims claims, clearing or functions. provider

a small number flow temporary dip house use providers, levels. claims experienced we our we at are to believe of While claims currently of a due we in impacted February the the normalized by in clearing received

the SG&A was in million. $XX.X quarter

decreased year-over-year. Our revenue, adjusted Adjusted an XXX excluding basis year-over-year. points was as of increase $XX SG&A, of percentage a REACH, XX% SG&A approximately by ACO million,

shortly. improvement ratio over share SG&A expect quarters, to I on next continue even will more which We greater the X

million, adjusted EBITDA track Lastly, us ahead year of our and guidance. to $XX adjusted EBITDA putting expectations was full achieve negative our on

balance Moving end strong sheet. at the and remain investments of in the a cash to the with position $XXX quarter. in We million

Turning to guidance. our

For to $X gross $XXX million, members, $X the and million adjusted and EBITDA XXX,XXX million revenue to range to be to between the of and million. second the expect million be quarter, between adjusted range plan be we XXX,XXX million, $XX $XX membership and be in health of in positive profit $XXX to

profit $X.XXX be of to full to range billion membership members, be $X.XXX to EBITDA we $XX and a to revenue adjusted $XX in million of year range positive plan $XXX adjusted gross the XXXX, million. between $XXX and to the be the million million, between XXX,XXX health be expect For XXX,XXX billion, and of in and loss

quarter of and momentum our through year full the first our continue our year. to the member increase and The outperformance and revenue follows remainder expectation membership will outlook strong that membership retention sales

XXXX. the membership revised guidance midpoint now reflects growth for Our membership year-end XX% at

down Moving the P&L.

adjusted outlook. low range following our increasing within captured and profit are outlook. narrowing our profit EBITDA We adjusted our gross the gross adjusted elements updated The end are of

our First, our incremental the new begin while MBR. MBR membership guidance gross a growth the dollars, increase the increases by contributes new profit at higher year-end typically implied members membership as in

benefit related in continuation the profit from greater incremental new a we expectations. CMS' unit Second, fee-for-service gross inpatient both to member of offsetting higher XXXX expect higher and rates increase costs supplemental utilization,

Third, to pace us in first we admissions per for objective. The experienced inpatient the in decline XXX to per X,XXX year-over-year the expect on partly member this we on mix. well moderate X,XXX XX from a admissions decline places XXX deliver quarter year, due to full

As mentioned carrying deployment from to high as our those benefit members new we to the identified earlier, risk. resources continued with ongoing expect engagement and of see

with engagement Our the headwinds and have sector core differentiated utilization providers of new experienced. that the both has degree alignment in same is some why others experienced the not members reason

our being implemented. have currently programs are we to in course operations, identified Fourth, that addition normal integrity payment new

solutions the additional year, We expect in remainder second provide these of to throughout the half. particularly the upside

seasonality basis is of D Part and expected to our course This quarter the XXX and And MBR first improvement drive of historical between experience with year. is lastly, consistent the seasonality. roughly points remainder normal our the

our an Adjusted improvement XXX also REACH, expect SG&A percentage guidance leverage. as highlights points continued the to improvement at be midpoint, in operating our of XX.X% We adjusted EBITDA revenue, ACO year-over-year. excluding a of basis now

leverage greater improvement membership growth are by operating the continued gains of the including: in third, XXXX, also leverage, half the expense with and associated factors, in next leverage elimination concentrated X first, sales which quarters in of second and year; year-over-year and combination driven insourcing productivity of second, is Our to fixed over functions second cost measures; onetime were a and expenses most the experience of member marketing which half. of last incurred relative

our resources robust Advantage start pace and both to In are testament and on and to has in margin are growth XXXX. year platform. is set our conclusion, the for to we up outlook by deliver growth well clinical our year, a Medicare After managed improvement against been full our differentiated strong believe our we operational and

questions. to let's that, call the With open Operator?

Operator

question comes from Sachs. of from Rich Nathan first line Our the Instructions] [Operator Goldman

Nathan Rich

use about the John, see of XXXX I to advantage advantage you where the revenue wanted that follow bids the to company's planned or you up maybe maybe I on your to, plan -- how benefits kind can talk relative market cost how of you in to kind flowing for positioning. comments on on and and what through that see you're going? planning your position guess, you

how design of D the to XXXX. then wanted does things And ask any And into about to unique that plan next in your on go for create the as you will was challenges changes year? position specifically to I plans one and Part effect the that more price think

John Kao

that. A right Nate, for of competitive the studying bids thanks be for to we going We're We're of of how I'm now. design. the with important is comfortable the going questions to of on question. middle not right the dynamic. our of of each position Part competitive comment nuances benefit aware the bid-related right years very in our been to part now acutely last nature We've IRR due so D markets. of We're just in know very couple the

improvement we've that you the the context though this to -- be very new on is from that doubles we've to very breakout us the if say our management on the just very growth would margin perspective, of in that medical kind a our do then said always year down for compliant on then is I members, And adjustment at of manage growth you basic look had XXXX perspective. existing getting double of in kind ability much for exciting And us. of risk vintage to this margin. analysis margin math, strong performance just of that the the just year and continued a levels and membership, the onboard can growth going on

for So last are be I all and think just year couple of leading to is very, of a very with have margin a very us And expect the good. that growth it's for to by year you disciplined, we those and very that. encouraged who 'XX been years we

Nathan Rich

Does could guess, and ask strong quick line post it And top quarter how the in the I this at that. not the all, guidance strong X? another see looking updated next of matures? of all? minimal you maybe just this EBITDA. The of base expect year at change like kind year, margin this to you membership if stronger growth dampening growth you I up to potentially gains, follow-up seems membership trajectory And drop was the on million, the a do and as -- but kind about $XXX a growth year goes that at impact maybe like changes margin or through relatively over much Do of that kind feel the gross Or year stronger dynamic margin 'XX.

John Kao

be tailwinds really, growth great Yes, everything XXXX. we're have we're it's next expansion XX% mean to you piece grow do think that's the think going question. again we at saying margin good a in year think I I'm I is to -- our don't But I I not of focus And going at not for going can the XX% on growth, we important. look to get get the publicly margin And really just I growth. and available. with If the read it. favor.

or irrational of XXXX. You might the in X that. at that before. done They've that's we'll competitors look Stars very past have -- There confident very that's I'm And part do okay. things. be a good But ratings. that X the very,

Operator

[Operator from Instructions] the Our line question Daniels next of comes Ryan Blair. William from

Ryan Daniels

you business. coming related into Interesting dive strong book the Yes. the to X,XXX the Congrats the on one younger despite bit that data any for year. key both Is the your because Thomas, in they driver? little Can healthier number lower are overall be patients Just to haven't of that and would per there then interesting. admits a Is and new clinical cost they start in the patient you. programs? been maybe new on a that color fact more?

John Kao

it's Ryan, John.

that. not is to that comment navigating utilization some And now. members with we're immune we Thomas with that. pretty me is answer up. on happy right question yes. of But think the certain some And the the issues I hotspots picked let Wi-Fi new We're just to

of And have of all members, not markets, couple a different we that inpatient we're of higher a still just some markets. utilization, over members a couple but had have it. We actually lot

it. to visibility have We

needs daily the patients addressing basis. these a of on are care We

just it we're really aggressively. so managing And

we happy it's So per with on the book ago a what lot the did better I'm XXX -- admissions a is performance even. the whole year really X,XXX. for than

I pay And kind got some Care that actually start so us off. the starting we making continuous maturing are we're we've even AVA to clinical. as initiatives of other to these to more improvements opportunity really there's think and And for that in Anywhere

Ryan Daniels

other data question directed providers seen your control I HMOs is as talking and and your you some for providing it exposure mostly is another We've Perfect. about MLR better versus patient. then XXXX? PPOs Do we the also HMO that some with picture you. stability to of Advantage with think of cost Medicare unique ability enter HMOs utilization what lives players seeing peers. and versus or manage advantage stability lot as know to MBR your maybe Right. you the a And a versus bigger the are recently to comes

John Kao

Yes.

I fair. think that's

statement. fair a that's think I

provider the lot contracts this we bit partners answer. way is notion of is is something misnomer a our of though of I of part a a think we provider of and that what our prior a auto also, auth in lot Kind design I of that think, that's do auth.

in we a a Stars are quality from perspective making of to that kind for it's dynamics, on if timely having I highest that important the in will, fashion think the in preferred care provider, access. those sure kind you providers a a care I the That's proper the ] of things HMO. you of of network, kind to right, get kind into have right the the people cap HMO navigation with [ get a think, all and navigating really

on documentation the That better those the a engaging is without get sure vulnerable that And of think engaging and and identifying principle on difference. PCP dedicated PPO members with done of coding who caring carrier, one and job the big think holds them them PPO we've on I still Ryan, PPO then as I for model proper well. makes a the a members we PPO, things really the high-cost with stratification making the side.

Ryan Daniels

again. Congrats

John Kao

Ryan. Thanks,

Operator

comes Raymond [Operator from of Ransom Instructions] next from John James. line the question Our

John Ransom

do issue use the when claims know guys One your this you you confidence what thing when you is your that kind your accurately, have costs and lag around that But your Care to And medical look you with And of especially tools how you outpatients. cost here the what what what you technology XQ for -- report industry some -- say do I accrue about quarter, like? what when and has ability and AVA stand changed? the know a Anywhere know maybe plan. of your competitors

Robert Freeman

question. John, this the I appreciate is Thomas.

a I So track things have very any to QX us beds It's discharge like actually heads visibility run expenses. visibility underpinned have to for management that in to single in data, think with our or information accrue day words, actually ability quarter from allows create things transfer standpoint it's medical our the our or reserves performance financial we to financial in we medical and from do not that control a In other actually other every order visibility. and accrue actually i.e., the the that day we day, by to that business much we is our emission and standpoint. use then

more spend broader spend. about outside setting, there's the a of correlation the inpatient different And specifically, between the so of I think when of categories lot

the discharges XX% through hospital, for go skilled so a of the home the facility health they're about nursing conversely, And on of ER when go X/X of way our about instance, a facility. or hospitalized. to And members out our

and KPI between correlation move. spin how of that PMPM claims of moves inpatient categories degree high a there's So other how also

data length track like of course, do, then things per home nursing, on cetera. that, et metrics, X,XXX, outpatient skilled beyond stay, health ASC other surgery And or of hospital off we

us quite pretty to ability around. day-to-day opposed is the good underpinned is PMPM our claims think running as visibility the I the have to But to overall that way using So strong. it's other information by for quarter first how

John Ransom

what's then favorite, [indiscernible] guidance have any your is Medicare my and Advantage XQ Great. second my embedded today? sweep? And as question, But And like on the the we weeds in question. this visibility sit you do midyear

Robert Freeman

Yes.

then quarter. on typically the receive get typically end which the the the final is payment of we different X And the get the June we in sweeps payment June May which in in sweep file. also last XXXX end One we comes So from at second file. membership, the sweep our midyear at of there's year, July

in financial would speaking, typically of X results. sweeps both XQ those reflected be our So

which would on sweep We accrue outsized expect year. any years, addition we -- that say, in is is there, see kind financial normal a probably sweep of think year. near I of final COVID from But guided. we we the at in depends look typically year, it of to nonetheless, don't the pickup have year. favorability didn't associated It sweep. results if particular, much last if positive a or as currently favorability upon the anything prior But in do what indicative last more you the with saw I would be, our think, I year,

new the a course And in paid with guidance points similarly, in From allows is our us build few sweep of paid that's we RAF be we new really pickup to kind be see year year. full year full very standpoint, on the that expect new is we consistent a members, for member of typically January over get the the we basis whatever paid January. members our of have the whatever what how midyear we on actually got to

that year mid-year in don't control. with whatever that plan. kind was midyear assumption upside. like comes bank that, the That also documented guidance on our extent the more that last our sweep, of it's comes favorable out health We to of the from in members because could prior To be sweep

It year So conservative but I think last be position, of COVID, what same modest going seen typically could I a not is time, that upside. to given significant in us the after be major outperformance. some think it puts at a driver we've also

Operator

the next Ron America. of from from Adam [Operator comes Our of question Bank line Instructions]

Adam Ron

don't high track think, EBITDA you saying and at important. margins, still next was are new So points. on increase growth that I in if could be members and have year, a to, margin come year more look XXX I you potentially mentioned that super margins year where even year you're basis they But like this this

are shouldn't there kind again? REACH margins expansion So year, is important, skewing ACO that if there like margin reason a that? next why items of see of onetime more we kind Or are

Robert Freeman

Adam, Thomas here.

the XXXX. part improvement of profitability driver 'XX REACH is not that question, of from a last On ACO significant to

to we $X range $X think 'XX terms sized in improvement of or I million kind maybe million dollars in to million that $X of the guidance. like of from XXXX

So of of through XXXX in coming about, Advantage SG&A our as the we that the majority business. adjusted really coming the vast majority is is vast improvement from really talked Medicare And from leverage the improved line. operating

And trying and by to today on competitors. think have we year, less XXXX, both what broader sand while question so a I draw XXXX year line were by we're that improvement in remarks amplify think we're the do for growth margin VXX, to where we I our impacted not relative we John's to we is margin I tailwinds your think we're And really in next because local of while in going think I are described, to think ability some goals our impacted on that again -- the position the also. of to John next

have Stars then competitors advantage standpoint, funding for the a XXXX. And vast very our majority over from we of much a

that for set next a the achieve and us flexibility forth we little to XXXX. year think So continue more gives I on both trajectory

Adam Ron

see the headwinds. that reimbursement in then of one you your thing how is most relative But competitors And L.A., Makes was direction by members would X%, [ like your that sense. in expanding a the and where very other X widening advantage is the things sort fact mentioned is in about a couple your which are strong. XXXX pushing remarks, benchmarked, of ]

cut some they are help reimbursement close overcome that a of that you and -- actually headwinds expectations? Like needed maybe relative kind of Like they the they to don't is thinking more? have that for advantage your that? about to tailwind such competitors relative you that or does because their your So benefits reimbursement how

Robert Freeman

I So a things. of think couple

think So those to in have increases. also I markets particularly the higher benchmarks inpatient unit cost some California, your outpatient in the point, of seen markets, of and Southern of some terms

XXXX And dollars of is us with so relative sort a of and from think bit think, updates of competitors kind we minuses. look of competitive a and for it I funding pluses CMS. XXXX or the our at in us rate has little our I that, of overall But pool reimbursement catch-up standpoint, and as each own one to

in have us. think extent a and market a cases, relative major helps sort I neutral be I the I to competitor in of that I X% market, of don't think think So agree us. has our that hurts either it really X% there's necessarily Everyone would That's other advantage average, going X.X some we where, But a necessarily factor. are factors, that on it X competitive be the X or one what creates is in our only Stars. X.X. in HMO to plans X, our markets. else don't

funding advantage counties for think, some I extra even revenue on X%. of benchmarks the a is, major by to going X% advantage Stars are XX% alone up XXXX, PMPM that so certain if And in

Adam Ron

in. squeeze could more I If one

that? out my be the like reimbursement a changed last Or about on would at based recently has EBIT, the industry around have talked you Humana So on That new all view view potentially settling at not Do your EBITDA. X%. margin question. environment? That's

Robert Freeman

Yes.

is think unchanged I of that fundamentally is of Advantage our view overall unchanged. long-term margins the Medicare in the program structure

what more X% EBITDA term, X% we changed think margin. adjusted about in And went the ago, years you think pretax when has which to you're macro X% environment, about to more like a several margin recent is So a long right. when X% we public I talked

has place VXX in of I spend. on COVID a across of the seen the of of put some board, gotten introduction of categories tougher think been been removal introduced. Stars. kind speaking, protection of the the mechanisms pressures have [ broadly Stars then with that And different X key utilization in ]and variety were has

get industry have I pressure of while to at close large efficiently the number day, plans We're think the so getting an think the pretty that, demonstrated end from the at standpoint, on And at rule And that, XX% that's SG&A to term, I MLR in run in the don't is short changes MLR down unchanged. the a ability XX% given opportunity XX% the put below with starting or below. XXXX. to of it fundamental

just think today of a I or structurally, year was So the years a no opportunity is than different ago. couple it

in factors, And more or ago. to requirement win current have changes do would can player. generate could X% pressure if still the have the term, environment, think think to to on and macroeconomic you low-cost you you're put be the years I though, high-quality, have a in same that, expected margins several able this long X% I pretax

John Kao

Adam, let This is Just echo me John. that.

cost Let better you're the the sure model why you for me so control that without to we've that's spent if or a you It's are. And lowest the have quality. the the an you cost. lowest have making to measured cost effort the belief Stars get reimbursement structure in and because that. much more, that time a model by gets that's and structure But quality it opportunity organizations to get care, that echo can compromising manage care the position

are relied That's that our experiencing sea a that tough think the margin right philosophy. on I from the those -- to been day have And change just compression that's of be risk successful adjustment X, now. there's ones somewhat

it's like by CMS. structural a change intentional So

in gone political kind kind and the it seniors see been have have these of X don't for blips. MA, just reimbursement who wave X so slowing. aging years those power so of of of business But the of XX the And this of we or or through

win what And in still requires I positioned penetration will next MA. who of market in going a it we to forward change we're I really think In XX% X that. will terms well share from mean, in think fact, years. I an see I succeed it's and going opportunity. And structural the so think XX% for

Operator

[Operator Instructions] Mayo of comes Our the from next from question line Whit Leerink Partners.

Benjamin Mayo

The are switching, in any lives new switchers, -- if And lot there the of the intelligence the you market you picked that quantify you first that? much how quarter, agents any on a switchers? were themes if maybe versus of up can have those on

Robert Freeman

is this Thomas Whit, Yes. here.

was our our through very OEP to say I'd which eligible similar So experience, X April experience. beneficiaries, the AEP lasted

majority those of markets. a switchers. swath our we the a of or from is the switchers plan variety competitors that our by see the But mean broad sales membership I what new so across coming were And planned of

most or of competitors. so from. to really, and really also I competitors X disproportionately from in advantaged that in share large of local national just or terms the X competitors not think, this And the of markets share or regional X We're of take a there's both variety year taking many kind were players,

we of think end members mix, sitting it's that our board. the here are pretty I our is of product been duly at consistent about year. still across XX% products of are broadly in have terms where like one enrolled which C-SNF And pretty [indiscernible] ended And also to we our today, our in the eligible, of or distributed last

Benjamin Mayo

the between forward looking the what's question, a the there but a the wanted this P&L was. And there's at difference guess $X was favorable is maybe footnote million Okay. that in but references to reserve and dumb impact Q, -- XXX,XXX. below roll X your I what PYD, of I

Robert Freeman

absolutely. Yes,

-- period we think the top margin for trends. we that of the excluding typically prior reserves, look kind factor footnote you're at try we reserves we adverse -- put of a on referring to the change to, So in X% on

X%. that about think so And

As you X% for it. given of -- best kind month, added you your estimate when together put a to add you

X% release future. But months pad. at is If your time, will just in an additional with new the estimate perfect, the same adding X% always on that you're that month

releasing over a P&L And and kind it time. constantly of a adding so you're from it where it wash becomes standpoint

So that that's in footnote. we IBNR in and we on X%, that the excluding report change what the our really like to focus number is

first for I to was reserves it and strong end $X little XXXX, intact that year-end think quarter. for of we're meaning our correct, relative experience the under quarter, very a the first the claims you're So just million right, the through paid

Operator

next [Operator line question from Our from Instructions] Jess Piper Tassan Sandler. of the comes

Jessica Tassan

just I'm looks XXXX curious to funding in favorable California. know

significant where have just obviously growth. brand in in 'XX beyond guys you from a You new the thoughts a intend geographies any strong to momentum participate your remains factor whether and around perspective, there network. that, market in entries provider updated Curious,

John Kao

to kind get what that generated No, to past And in momentum into John. goal, we ex-California is aggressive see is the The in XX,XXX -- And is said market the obviously, markets much in we're way lot momentum. even X,XXX, above we're And up suspect XXXX. new states ] faster. core the so just internally in on going the lot X,XXX member most you to fund to seen of And then expansions to to in in what got that been it's focus would more we're a efficient from get I've X,XXX cash. has just grow. we getting we've from to I have, And be California, we're that Jess, a range. our obviously, in not the past going we've is XXXX. of markets. going [ currently

And to of in more would aggressive be states. expect new XXXX so in I terms us

come been those and And conversations you'll we've the together a large I the pretty that would year that systems this health kinds February more of much will service end organizations 'XX. very in I X provider heading of so arrangements expansions file say into think done that XXXX, by the with which encouraging. of require I of deals say, area us we have has to had see can

Jessica Tassan

the potential growth states' Or that future? That's any you of in contending just the I'm thoughts dual about in guess, your for book? the pressure kind helpful. to initiatives then kind with future of for curious DSN And alignment thinking I how are population just on

John Kao

the think, to the out, and some of CCI certainly, last with address I that we've Coordination the Alignment Care aligned that years programs advantage. survive chronic respect rule just the chronic of But the quality, in had think to little and CSNPs have something beyond recent gives the kind and it's is just the regs been couple programs products of for serve think -- going have. the programs folks California. Medicaid kind think reality the for solution. we of the in to seniors certainly needs that's better in lookalike is Yes, about been of special care of we of the Medicaid us. came And kind forced The very some time bit what needs any of are And feet the are a actually voting And it's than better we special XXXX with of if you it's kind the care frame. I to that of quality. quality think model their that have with are programs we people that an of most I successful the we advocating kind over

Operator

Barclays. comes Mok of Instructions] line the from [Operator question Andrew next from Our

Unknown Analyst

Tiffany for Andrew. is This on

inpatient calendar those and into utilization you higher color to unit bit a of call benefit out Could into else you called MLR seasonality? And out that costs supplemental expected anything year. little on points pressure more half? back the continue cadence to separately, just You expect give the to the impact on

Robert Freeman

think I so specific supplemental the cost or a unit course standpoint over nothing Tiffany, from of the benefit inpatient year.

cost the will on months So unit inpatient inpatient or we that impact have overall. utilization where quarters side, obviously any higher

much of in flu of So uptick quarters, quarter-to-quarter benefit when have a don't bit the the those you unit And But season. supplement think QX, December we seasonality lower year. change think remaining similarly, costs. to second and of in be the the utilization then expect generally side, on utilization about next we the there an anticipate next X lot third would X speaking, quarters typically inpatient I don't and around over a around specifically

I ability in IP XQ would I think to and initiatives year, really that be other tremendous there manage XQ strong a When half so MLR back described to be lower growth think year similar tends though high areas years particularly you this where be are XQ from underway think be to while uptick an I overall very some we to quarter and where point first QX our and think higher, a the tend [ year. our the we over tends for modest to seasonality the to about improvement of do standpoint, remarks, the year. was can better, ] on prepared expect this we far our think it demonstrates we

navigation, think And So getting today, you but we we things do it as from we do are is getting a there the of such good job -- that care more great. we opportunity the given those internally how the things achieved future, of stay to -- half pretty see we very where even certain post an on, standpoint, in say already we've from discharge on from our a better can job clinical dial good that can back rate, SNF world-class we levers a but of growth we the over areas still are length in admission bit favor year. management, think

our accurate think see the we half. partners parties help under do kind feel there's Integrity of like the inpatient in use Payment year. third claim back us ensure think second in side, I unit over as different to submissions to an to the started year, opportunity the I in last course particularly uptick our costs on looked the we provider on some that of of from have this, we've to we similarly, the And hood an half

of range. said think as remarks, position us that in the a for towards But of first things drivers kind John some think continuous are those overall I guidance are I nonetheless, puts earlier So improvement year quarter in our full our that biggest be his of going to the us. strong really

John Kao

cost And we right, that acute much performance of the XX. clinical month continued excellent kind in management, on. to has be per on offset kind spent I I XX,XXX, some increases. the of clearly it's year, -- Thomas, all Tiffany, were readmission the mean, those mean, Yes. drivers offset require X the going think kind last X unit to to and of X,XXX, It's so quality and improved ] clinical of XXX admissions we've unit [ of to I management, that cost, that time admission

Operator

[Operator Instructions] comes line next Raymond James. from Our question from John Ransom the of

John Ransom

remember good another on could [indiscernible] the I got there. had I I question. knew I [indiscernible]

in these then a you the back, difficulty and getting of plans lot MA with pushing lay physician hospitals having VXX. about plans, press your a groups some of more been lot risk there's So of killed contracting off that probably with are downstream

or that think out there So year your good well provider how ago? anything bad? to a there, call when about you And versus contracting, is does

John Kao

durable. much contracting risk And shared we our model. think about [indiscernible] question. Great it's more

in I institutional it professional costs. risk comes in then the form the for the think either and capitation PCP share capitation that of and/or associated we

the providers, also IDNs, if health have think principles to and the systems, hospital downstream these cut we be And with in we but systems so not with future of with part shakes only of space how the work we I together all going and terms out. that's the deals and aligning personally

the EHR using the using not through the us but we patient, holistic in that so patient view to, the XXX that that the to patient allowed exposing of is that's action outcomes longitudinal just tools, of data the shared have And providers risk data in have a information the providers what's limited take that with model providers, we access that AVA have. some the the to our to to and having we tools get

would it, company, and I It's capital-efficient a, our mortar. we expensive. had call in it's bricks At old of And model. a a very lot

that I tools are aligning. the want that are we that se, and thesis community health have And them have clinically with is consolidated work networks create and so -- that give per the doctors and whole integrated the systems don't independent and/or economics

systems, other John, the has the say, and capacity at long us, is to XXX% is will health overcapacity, their of winded, they're meaning really They're tier top I the approached but apologies are for would important. the allow. XXX% this thing ones physical us particularly the approaching what health And systems going, top

we what they're they're that backfill with admissions, they seniors they facilities? of confident can paid us admissions, commercial the if getting lower partnered, And are our which have us is, senior can asking that more. they well, so into And admissions so those you senior lower just help admissions

getting Medicare. of they're So Medicare, they're XXX% getting XXX%

folks much systems. the, a these going for where of, but of reimbursement, see think, certain only macro protocols I some kind the are call using And partnerships. dynamics of to I not respect of M&A going with doctors, with tighter forward. to you're all lot happy factored the MCOs plan, and health kinds not with those kind of facilities think are And that the claims-editing I'll these are we for it, see So into

we asked answer. respect kind the to how they're so And of gets some I be to with markets. is going XXXX questions that the in provider coming us about of And as think just it's think partners back new to with to in growing alternative. And an do that

John Ransom

Do the ever that's might. longest in think you've answer given your it John? you career, think I

John Kao

shot. by long Not a

John Ransom

Thomas SNF? alluded kind you in this. Or every mentioned home of Nova we the terms the can And redirecting best is other there, is as we still terms Health. and Optum years laying made is that But do my chop X of redirecting kind lot Have to post-acute see question, But post-acute? these guys of people I out at know of of doing in we ago, for what a XXX them we discharges, off this into headline weeds. to? we We there the wood the health versus done are some can to conveners. all

John Kao

You're talking for about for the us industry

John Ransom

Well, for you guys.

think in of... -- you're do guys at of terms peak you You

John Kao

is that. huge amount And opportunity to at I there a very think topical it's us be for for of better us.

can post-discharge have have this, and to care I have that short it, think it how do, do think -- answer. do and the we we to so us I acute do know things it well, even those we I but and just think focus opportunity for we SNF better, to rounding, much is we I the We navigation, on admissions. -- alluded And all inpatient

John Ransom

on the Is of have get the off other direction. that an Because up discharge with charming offense what it your some guys compete to against to you're of it with Is -- industry planners? these just doughnuts playing front to the kind planners? is and do discharge dropping do the with in hard pushing you

John Kao

health the CEO conversations at the the the would now. say alignment the system and we're level, are alignment I with but that relationships planner with Those facility, the at facility, discharge not of having level.

health we economics, And people with extent the of health That and work of see want And people actually deal it to us. is delivery with the to like John, doctors the At of most care. aligned care they care services, model. consistent, the their what's optimizing matters them. doing. end that is with, to and quality systems, in they what day, about the And care people we're

Robert Freeman

significant you institutions. markets. levels better more different I would become have and those John, us that's, those of to And add of at many ability to is opportunities today, bigger across to affords about when within thing think to I care think, the our starting the different well, that us And in engage just as we're the One given get, us different sites conversations. more it we

John Ransom

their shut data, of a on me, you industry of I'll cost XXXX. growing. well up admissions these Yes. through this, done to after stable the back going it's to has on SNF, SNF but pushing discharges have into forces how been when just paper I all surprising mean medtech just me is the kind to of that yet in big That's care, suppress this literally still the been -- are -- the where we cost those industry and are

editorial my that's anyway, So comment.

Operator

today's Thank you call. participating. Thank conference you. This concludes for

You disconnect. may now

Alignment Healthcare (ALHC) 2 May 242024 Q1 Earnings call transcript