Bright Health Group(US:BHG)2023-11-07 18:13Financial Data and Key Metrics Changes - Bright Health Group's enterprise earnings for Q3 2023 were $269 million, with strong performance in the care delivery segment offset by lower ACO Reach revenue due to expected revisions to benchmarks [3][19] - Enterprise adjusted EBITDA was $1.2 million in Q3 and $1.9 million year-to-date, with adjusted EBITDA before corporate expenses exceeding $12 million in Q3 [42][48] - The company expects 2023 enterprise revenue between $1.14 billion and $1.19 billion, with an unchanged adjusted operating cost ratio forecast of 17.5% to 18.5% [19][46] Business Line Data and Key Metrics Changes - Care solutions segment revenue in Q3 was $200.8 million, impacted by adjustments related to ACO Reach program benchmarks [14] - Care delivery segment revenue was $67.1 million in Q3, with strong performance in medical cost management contributing to gross profit [39][61] - The ACOs achieved a combined gross savings of $30.3 million, with a savings rate of 4.4% compared to benchmarks, exceeding the program average [8] Market Data and Key Metrics Changes - The Medicare Advantage business experienced a 17% growth in premium revenue compared to Q3 2022, with a year-to-date medical cost ratio of 89.9% [58] - The company serves over 290,000 consumers in its care delivery business, with expectations to transition contracts to total cost of care arrangements [20][47] - The company is focused on expanding its presence in Medicaid and engaging new provider groups to serve various payer categories [36][71] Company Strategy and Development Direction - The company is concentrating on a value-driven consumer care business model, aiming to improve quality and cost of care through integrated care solutions [6][50] - Bright Health is working on the wind-down of its ACA insurance business while positioning its consumer care business for long-term profitable growth [49][64] - The company plans to reduce corporate operating expenses in Q4 to support enterprise adjusted EBITDA in 2024 [15] Management's Comments on Operating Environment and Future Outlook - Management noted that while there is pressure on top-line growth related to the ACO Reach business, overall margins are expected to improve [2] - The company is optimistic about the potential for further upside in care partner relationships and has taken a conservative amount of risk in contracts [34] - Management expressed confidence in achieving enterprise adjusted EBITDA profitability for the year, supported by strong year-to-date results [48] Other Important Information - The company has entered into repayment agreements for $380 million with CMS regarding unpaid risk adjustment obligations, due in 18 months with an interest rate of 11.5% [16] - The sale of the California Medicare Advantage business is expected to close by Q1 2024, pending regulatory approvals [9][18] - The company has made significant progress in the wind-down of its ACA insurance business, with claims inventory declining and visibility on remaining obligations [10][64] Q&A Session Summary - There was no Q&A session conducted during this call due to the pending regulatory approval for the sale of the California Medicare Advantage business [32][23]