Bright Health Group(BHG) - 2024 Q2 - Quarterly Report

Consumer and Care Services - As of June 30, 2024, NeueHealth served approximately 372,000 consumers, including 320,000 value-based consumers and 52,000 fee-for-service consumers[165] - NeueSolutions had approximately 44,000 value-based care consumers attributed to its REACH ACOs and 113,000 enablement services lives as of June 30, 2024[166] - Value-based consumers decreased by approximately 9,000 year-over-year, driven by a decline of approximately 24,000 ACO REACH lives, partially offset by an increase of 15,000 through third-party payor relationships[175] - The company reported a year-over-year increase in enablement services lives from 31,000 in June 2023 to 113,000 in June 2024[174] - NeueHealth's model aims to improve care delivery by fostering strong relationships with consumers and providers, focusing on personalized care[170] - The company is committed to aligning the interests of consumers, providers, and payors to enhance the healthcare experience[172] Financial Performance - Adjusted EBITDA for the three months ended June 30, 2024, was $3.962 million, compared to $7.797 million for the same period in 2023[178] - The net loss from continuing operations for the three months ended June 30, 2024, was $(39.446) million, compared to $(32.584) million for the same period in 2023[182] - Total revenue decreased by $72.0 million, or 24.2%, for the three months ended June 30, 2024, and $127.4 million, or 21.3%, for the six months ended June 30, 2024, compared to the same periods in 2023[186] - ACO REACH revenue decreased by approximately $87.2 million and $155.2 million for the three and six months ended June 30, 2024, respectively, due to a decrease of about 24,000 beneficiaries aligned to REACH ACOs[186] - Capitated revenue increased by $14.2 million, or 28.6%, for the three months ended June 30, 2024, and $26.2 million, or 26.3%, for the six months ended June 30, 2024, compared to the same periods in 2023[193] - Service revenue increased by $1.6 million and $3.4 million for the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023[199] Cost Management - Medical costs decreased by $67.5 million, or 27.5%, for the three months ended June 30, 2024, and $130.7 million, or 25.9%, for the six months ended June 30, 2024, compared to the same periods in 2023[187] - Operating costs decreased by $0.1 million, or 0.1%, for the three months ended June 30, 2024, and $12.8 million, or 8.5%, for the six months ended June 30, 2024, compared to the same periods in 2023[188] - Total operating expenses were $263.5 million for the three months ended June 30, 2024, down from $321.4 million in the same period in 2023[185] - The operating cost ratio increased to 31.1% for the three months ended June 30, 2024, up from 23.6% in the same period in 2023[188] - Medical costs decreased by $84.0 million and $150.6 million for the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023[199] Strategic Initiatives and Growth - The company is evaluating strategic growth opportunities to expand payor and provider partnerships and grow consumer numbers in new geographies[168] - The company recognized $11.4 million in impairments of intangible assets for the three and six months ended June 30, 2024, due to classifying AMD as held-for-sale[189] Capital and Liquidity - The company secured up to $150 million in a new term loan facility with Hercules Capital, strengthening its capital position[167] - As of June 30, 2024, the company had $66.4 million of long-term borrowings under the 2023 Credit Agreement[209] - The company declared $28.2 million of dividends from regulated insurance entities to the parent company during the six months ended June 30, 2024[203] - The company is out of compliance with minimum risk-based capital and surplus levels for certain regulated insurance legal entities as of June 30, 2024[204] - The company forecasts potential inability to satisfy obligations due to liquidity concerns, raising substantial doubt about its ability to continue as a going concern[200] - The company entered into a Hercules Credit Agreement providing up to $150.0 million in term loans, maturing on June 1, 2028[213] - As of June 30, 2024, the company had $261.5 million in cash and cash equivalents and $16.3 million in short-term investments[219] - The cash and cash equivalents at the beginning of the period for 2024 were $375.3 million, compared to $1,932.3 million at the beginning of 2023[220] - The total net decrease in cash and cash equivalents for the six months ended June 30, 2024, was $113.8 million[220] - The company had no long-term investments as of June 30, 2024, across both continuing and discontinued operations[219] Debt and Financing Activities - Net cash used in operating activities for the six months ended June 30, 2024, decreased by $646.9 million compared to the same period in 2023[221] - Net cash provided by investing activities increased by $32.2 million for the six months ended June 30, 2024, primarily due to the sale of the California Medicare Advantage business[222] - Net cash used in financing activities increased by $221.0 million for the six months ended June 30, 2024, attributed to the payoff of short-term debt from the sale proceeds[223] - As of June 30, 2024, the company had letters of credit of $16.5 million and surety bonds of $19.7 million[217] - The company issued 750,000 shares of Series A Preferred Stock for $750.0 million and 175,000 shares of Series B Preferred Stock for $175.0 million[218] - As of June 30, 2024, $52.0 million of non-regulated cash and cash equivalents was restricted as collateral for letters of credit and surety bonds[219]