Q1 2022 Clover Health Investments Corp Earnings Call
The fence for today's conference. Thank you for your patience and please standby will begin in approximately one minute.
[music].
Ladies and gentlemen, good day and welcome to the Clover Health first quarter 2022 earnings Conference call.
At this time all participants are in a listen only mode.
<unk> and answer session will follow the prepared remarks.
At that time, if you wish to ask a question. Please press star one on your telephone keypad.
As a reminder, today's call is being recorded.
I would now like to turn the call over to Derrick Neuman head of Investor Relations and corporate strategy for Clover House. Please go ahead.
Good afternoon, everyone joining.
Joining me on the call today is our.
Backyard Pally, our president Andrew.
And our interim CFO , Mark Herbers will discuss first quarter results and answer your questions. This call is being recorded before we get started I would like you to remind you that our first quarter earnings materials, including the release are available on our website at <unk> Dot com.
I'd also like to caution you that we may make forward looking statements. During today's call that are subject to risks and uncertainty including expectations about future performance factors that may cause actual results to differ materially from expectations are detailed in our SEC filings, including in the risk factors section of our most recent annual report on Form 10-K.
And in our other SEC filings.
Information about non-GAAP financial measures referenced including a reconciliation of those measures to GAAP measures.
And be found in earnings materials available on our website.
Lastly, I want to know we updated the names of our Medicare advantage and direct contracting segment to our insurance and non insurance segments, respectively. We believe that this better reflect each segment's current role and contribution to our business. There has been no change to the existing composition of each segment and <unk>.
Obviously reported financial results were not impacted by these changes.
Direct contracting will be known that ACO rates, starting next year and will fall into our non insurance segment with that let me now turn it over the call to be back.
Thanks, Derek and thanks, everyone for joining us today.
We are really excited about clover start to 2022, and the groundwork were laying for 2023 and beyond we believe we can deliver growth well above industry averages deliver improving margins and ultimately generate significant positive free cash flow.
Let me now cover some highlights from this quarter before handing it over to engine for a more in depth discussion.
Leading off our Q1 revenue grew significantly to $874 million, while operating expense, our insurance MCR and non insurance MCR improved significantly versus the fourth quarter to 96, 4% and 99, 8% respectively.
And the Clover assistant continues to be a differentiator showing an insurance NCR differential of over 1000 basis points, returning members, whose pcp's use the corporate assistant versus those who dealt with that let me turn the call over to Andrew.
Thanks, Vivek I am also very pleased with our results in Q1, I am cautiously optimistic around the rest of 2022, we don't want to get ahead of ourselves, particularly given our rapid growth.
Unknown surrounding COVID-19.
Therefore, we are maintaining some conservatism as we need more data points before we change any of our expectations.
Our key areas of focus right now on continuing to build an intelligent sustainable and efficient growth model investing in the clover assistant to deliver data driven value based care and rounding out our leadership team with top level talent.
We believe these efforts will benefit 2023 by driving further improvements across insurance MCR.
Contribution from our non insurance business and a more efficient operating structure.
In short we believe there are multiple levers, we can pull to drive margin improvements, while maintaining above industry average growth rates.
As mentioned earlier, we delivered strong topline revenue growth to begin 2000, <unk> powered by our technology driven approach.
First plan strategy and why inclusive networks.
Our year over year insurance growth demonstrates the moat, our PPO product has created in the market by carrying affordability with choice.
Our non insurance beneficiaries growth of 179% since last quarter demonstrates our differentiated ability provided by the quiver assistant to bring more doctors into value based care.
In our insurance business, we are focused on continuing to execute our mission of serving our members with high quality care across a wide network. While also balancing intelligent adjustments to benefit and network design to drive near term efficiencies.
One item worth highlighting is our differing MCR is by region maturing markets such as counties that we refer to as our northern New Jersey region.
Our growth markets, such as Georgia have significantly better dynamics than more challenging markets such as counties that would refer to as our southern New Jersey region.
We are currently working on measures to achieve solid gross margins across all segments and we plan to share more specifics on the next several earnings calls around the actions. We are taking that we believe will drive another step wide improvement in 2023 and the MCR.
In our non insurance business, there was a similar dynamic of balancing growth and margin.
Analyzing data and learnings from the first year of the program to strengthen our go to market efforts around the providers and regions to be target or.
Our goal for our non insurance business is of course forward to provide a positive margin contribution.
We are also working on reducing our operating expenses as a percentage of revenues.
We're seeing some results of the additional efforts as operating expense growth is slowing and we expect year over year growth rates to decelerate throughout the remainder of the year.
On the technology front, we believe that the <unk> system is still in its early innings with incredible potential to be realized.
That said we are excited about what we've already accomplished growth in total lives under club versus that management increased clinician use and our rapid software integration cycle.
And we've done this across a wide network, which is something most plants caf II.
The Copa <unk> assistance untapped potential we continue to invest heavily in the platform I believe it is a key differentiator, particularly strong differential in MCR between members, whose providers used equivalent assistance and those who do not.
To build on this momentum we have a roadmap of new capabilities and features designed to further augment its clinical value.
We also see a number of ways to increase the reach of the Cleaver assistant ultimately, we see <unk> as a way to break more clinicians into value based Medicare on both the Medicare advantage and fee for service side.
We're continually working on wafer clinicians did you see a for more of their Medicare panels and the launch of the direct contracting program, which we noted above will transition to the ACO reach program in 2023.
Second we help with that.
Our goal from our CA products standpoint is to allow for total Medicare panel coverage with any given <unk>.
Including those that have never participated in value based care and we continue to engineered business with this in mind.
Finally, we strengthened our management team significantly this past quarter, we brought onboard our chief Technology Officer General Counsel and head of value based care.
We are thrilled by the caliber of talent, we've been able to attract I believe these executives will be pivotal to helping us achieve our goals as significant long term potential.
With that I will now hand, it to mark for the financial update.
Thanks, Andrew.
We delivered $874 million in revenue in the first quarter, our strong year over year growth was driven by the large increase in lives under Cobra management.
Our differentiated capability to participate in both Medicare advantage.
And original Medicare.
Moving to medical expenses, our net medical claims incurred for the quarter were $862 million.
Alright gap insurance MCR was 96, 4% down 640 basis points compared to the fourth quarter and within our guidance range.
We saw increased COVID-19 costs in January but there was much less of an impact for the remainder of the quarter.
Our non insurance margin was 99, 8%.
First quarter non-GAAP , adjusted operating expenses were $84 $4 million, representing 10% of total revenues.
This quarter also included approximately $10 million of broker payments specific to AEP that will not occur in other quarters. This year.
And head count is only expected to grow moderately.
We also recognized a premium deficiency reserve benefit in the quarter equating to a noncash net gain of $27 7 million.
Our GAAP net loss for the quarter was $75 3 million.
Our adjusted EBITDA loss for the first quarter $71 8 million.
Note that our adjusted EBITDA excluded the $27 7 million of PDR benefit.
As this is not reflective of operating results.
Our cash cash equivalents and investments totaled $723 million as of March 31, 2022.
Additionally, in conjunction with earnings.
We have filed a universal shelf registration statement on form S. Three in order to maintain good corporate housekeeping.
The S. Three is not yet effective and we have no current plans to utilize the S. Three.
Finally, we are maintaining our 2022 guidance.
Now, let me turn the call over to Vivek for some closing comments.
Okay.
Thank you Mark.
To wrap up I wanted to close with some general thoughts.
There is market uncertainty for almost every company today.
What I believe will matter when we look back in 10 years in terms of whether or not a company in health care has a massive market value is if that company did the following one.
A massively positive impact by solving real problems to having accomplished that through the creation of a significant technology moat.
The key ingredients for those special companies I believe will be the following.
Number one an inspiring and ambitious mission that has been consistent to an entrepreneurial team and three demonstrated willingness to make hard decisions.
When we look at various companies recent earnings reports the best can be described as mixed.
Some aspects of Clover that make me excited not just about today, but about the near term to medium term.
Clover is growing while expanding our technology moat, our clinical impact is growing materially along the way.
Margins are improving profitability.
Profitability in the generation of our free cash flow engine are in sight.
On a macro basis, our business is generally agnostic to inflation economic cycles of commodity prices and uncertainty around supply chain.
We continue to believe that if a number of things fall into place. It is even possible. We may be profitable next year on a non-GAAP basis, excluding noncash expenses and nonrecurring expenses.
And we look forward to updating you more on our efforts as the year progresses with that let's take questions.
At this time, if you wish to ask a question. Please press star one on your telephone keypad.
You may remove yourself from the queue by pressing the pound key.
Interest of time, we ask that you. Please limit yourself to one question and one quick follow up.
We'll be taking questions first from <unk> research analysts followed.
Followed by the Clover Health community.
We will take our first question from Richard close of Canaccord Genuity.
Yes, thanks, congratulations on the progress was.
Was curious.
If you guys could talk about the MCR a little bit.
Yes, you're reiterating guidance of 95% to 99%.
But based on the first quarter results.
It seems like you guys are being conservative which is understandable there, but can you talk a little bit like how it progressed from January to March just to give us some perspectives there.
Sure, Yes, Patrick.
Obviously as.
As you say has improved which we're very pleased about which we talked about last year that we hope to see that in 2022.
We did have COVID-19 effects, which I think you were alluding to in the first quarter more in January and February and some of those effects. Obviously flu. If you wait to the economics all of that inside that overall NCR that we've seen and we've decided to take an approach where we're going to look at what happened none of us.
Really know what's going to happen with Covid going forward, we hope however that aspen, even if there are future variants as we learn how to treat that as a society more rewards is now getting baked into how we manage healthcare within the country. So we do believe that our ability to manage their condition managed.
Pandemic is stabilizing and we are therefore comfortable reiterating our guidance.
Round, our MCR. So we do see things generally improving we do think there is a possibility of future sort of like events around our variance and things like that Q1 did have COVID-19.
Yeah.
Okay.
And then with respect to the.
The regional information that you provided for 2021.
Can you just talk a little bit about southern New Jersey and.
I guess that was $1 20 or something like that.
How do you expect to address that.
Is it.
How quickly could you move the needle on that do you think just any details there would be helpful.
Sure absolutely so as youre pointing out our more mature markets you have a lower MTR and we do think that theres a lot of opportunities for our newer market not just south New Jersey, but also Georgia look like our mature ones over time. So we do think that's a natural progression of the business.
In Southern New Jersey itself, we do plan to be more aggressive in our MCR improvement effort, we will have more to share on that but we have a lot of levers in our at our disposal around <unk> deployments around working with our position physician partners in southern New Jersey around deploying things like our in home care program.
Within that region. So there are levers that we can deploy there. We do think we can do better over time, and we did want to emphasize as well that we do.
All of our MCR, it's not just one number but we do see regional differences.
<unk> managed those differences are recently as well.
Okay. Thank you I'll jump back in the queue congratulations.
Thank you.
Our next question comes from Jason Cazorla of Citi. Please go ahead.
Great. Thanks for taking my questions just a quick clarification to start of the 211000 lives under Clover Assistant management I just want make sure virtually all of your 172000 TCE lives are included in that Stat. That's correct.
Got it okay.
So I guess just based on my math it looks like the lives on the cover of some management within your MA book, specifically it looks like it increased from 34000 in <unk> to 39000, and <unk>, but it only represented about 46% of total I MA members in <unk> versus about half last quarter. So is there anything to call out on that deceleration in penetration.
There. Besides just maybe simply higher membership growth to start the year and you would expect greater corporate assistant management penetration within that MA book over the course of 'twenty, two alright thing else to call out there would be helpful. Thanks.
Yeah, Great question, so definitely as you frame that we have quite strong growth.
What will actually happen into those numbers is that we wait to see claims data.
<unk> data, let us know, which pcp's are actually being seen by our members in the various regions, we're going as we expand geographically as well as grow what that means is that it takes a little while for us to build up that CA user base in those markets. We are actively doing that in all of our markets right.
Now, but there is a bit of a lag as we grow in those markets to see which we should be targeting so we feel good about our ability to keep that number moving up into the right. The total number of.
Visits as members, who have a doctor is increasing year over year, but because we are growing rapidly as a percentage you might be a little bit about flattening, but I do believe that we will see that continue to move upwards as we been stabilized and that improvement in your region.
Got it Okay. That's really helpful. Thank you for that color and then just as my follow up here just given the core of our model in your offerings on the MA side and in context of the finalized $5 23 without any risk coding considerations I guess it'd just be helpful to understand how youre approaching I MA bids for 'twenty, three and any color on how you're balancing kind of the growth versus profitability.
For next year.
You're kind of in tune of what you were discussing in our prepared remarks, and I guess just in context of your comments last call on the theoretical building blocks to getting closer or close to breakeven EBITDA it would be helpful.
Yeah, absolutely so.
He said I well first of all bids are being are filed and due in June . So we will have more to report on exactly what we bid coming up soon.
I will be able to talk about that on the jet fuel.
What we want to do is continue to generate industry defining an industry leading growth, but we are now certainly not looking at growing at all costs right, we want to balance our MCR balance our operating cost balance are.
The ability to access the wide network market, which we believe is the product that Medicare eligible are looking for.
Alongside the ability to manage those costs within our plan. So we are certainly balancing those two things as you look at the biggest one tool.
To look at which markets. We enter we have a tremendous amount of data both on the <unk>.
ACO reach side as well as within MA that helps us do that so you'll see us continue to grow strongly but you will also see us focus on having you want data driven choices choices within each of these areas to improve the MTR.
Got it thanks very helpful. I appreciate the color.
Thank you.
Our next question comes from Whit Mayo of SBB Securities. Please go ahead.
Hey, thanks.
I wanted to just go back to the 3600 users on Clover assistant in the quarter I presume. The majority of that growth came from <unk> is there any way to maybe break out.
What the.
Really I guess the organic growth was in the MAA Clover assistant users.
Yeah, So we actually don't break out those particular numbers.
The reason, we don't break them out is because there is overlap between the doctors that were signing up for.
Where it best fit within both the fee for service and the MA population right, sometimes there's overlap sometimes there is it could be it could just be EBITDA. It could just be a fee for service, but as we discussed on the prepared remarks.
My goal our goal is to cover as much of that physician paddle Medicare paddle as possible going forward. So the way we're really tracking this number of Tcp's, who are auden kluver assisted and that's the number that we have shared and we might be able to shed some breakout between like how many of those are double between EMEA and fee for service.
But that's the case generally tracking.
Yeah, Okay. I mean, we can take it offline I guess I'm just trying to get a sense. If you just normalize for DCE just to see kind of what that number is because I do fully appreciate.
But the desire not to breakout between M&A and fee for service.
My other question.
Andrew you referenced I think you were trying to reference Clover homecare sort of in your comments as a potential trend Bender.
In the southern New Jersey market can you just elaborate a little bit more on that maybe discuss the capability. So that we have.
A full appreciation really for that business number one and number two four for what you think you can accomplish with that.
Yeah, absolutely. So kloepper homecare is absolutely a key anchor of our strategy and Thats, where we are saying that at some point with a multi chronic for their multiple co morbid. It does makes sense for them to be looked after in their own home.
And what we say is we've worked with the primary care physician, we continue to manage that with Clover assistant folk within their original PCP and with our home care program and we transfer them at looking after them and having regular visits with them in the comfort of their own home by doing this we're able to provide more.
Accurate care more longer cubital care do you think post discharge.
We got to the hospital.
Because all Ralph Holistically manage them in conjunction with their existing PCP at all throughout the Clover assistant platform is coordinating data sharing and coordinating how we actually rent through care I've looked at license of added Vita here, who have who can add some more commentary on that.
Yeah, Thanks, Andrew Great question.
I think one of the really unique aspects.
Our home based primary care program is it's it's direct employees of Clover in terms of the home based primary care physicians.
We've seen in the in the marketplace is when.
In network primary care physicians are referring to our home based primary care program. There is there is a lot more coordination and collaboration there.
Typical markets.
Where some of these complex care centers.
And then popping up.
Enrollment rate of clinical eligible very rarely goes above 30%. So while there isn't that X impact you have 70%.
Plus.
Those that are clinically eligible won't actually enrolling this programs and there is lots of local market reasons, why and resistance from existing primary care it not wanting to lose their patient population to the.
The quote unquote shiny new centers that are popping up.
That has an influence on on patient decisions when it's actually in a model that's not conflicting with current care, but actually synergistic homebase, we don't have a technology sealing the.
The enrollment rate is much higher so we're.
Last checked I think a little bit north of 60%.
Eligible clinical eligible as are actually enrolled in corporate home based primary care, obviously, the most acute portion of the population.
While we are growing at a pretty pretty rapid clip as well.
Shortly.
Unfortunately since late March 2020.
We're not able to physically be in the home.
And so our home based primary care program hasn't.
It has only been able to go back physically into the home.
In February of this year, we still.
Pain and grew the program that was wholly virtual.
And there is no doubt.
The clinical impact is much much lower.
We're not able to be in the home. So we do think.
We're hopefully going to see.
That impact come back in and scale and a lot more effective way than it did prior to Covid I think one other than kind of an important thing to add is we just launched in a small way and some initial markets.
Our own wholly owned palliative care.
Program as well.
And we'll start to see.
The positive clinical effects of that over the next.
Couple of years as well.
Okay. Thanks, guys appreciate it.
Our next question comes from Kevin Fischbeck of Bank of America. Please go ahead.
Great. Thanks.
To follow up on the.
The regional MLR data I guess.
<unk> as you guys have talked a lot about how.
New Jersey got hit harder from a hospitalization perspectives during some of the Covid space. It sounded like you view the improvement to become coming through.
Engagement and maybe repricing.
You didn't release signal out.
Unusual costs I guess is.
Is it now the view that when you look at it for the year that 123, Youll remember, but it needs to be brought down or is there any kind of elevated disruptive costs that you think is kind of a natural tailwind to South Jersey.
Yeah, absolutely so.
Currently as we look at data this is a place where I'm getting a full year of data we can break it out more it's difficult with the Covid effect like you said and that's why we wanted to share. It now as part of this particular set of results.
Do you think that the way that the health care, it's working the way that Covid effect worked as well within these markets is that certain regions have a bit of a multiplier effect. So the way that health care is delivered in South Jersey makes it it'd be hit a little harder on the Covid front.
Bob.
This is et cetera, given the population mix over there like I said, we've always serve a more underserved mixed but particularly in that market as well, which is all fine and these are things that we can absolutely manage but it was a magnifying effect that we got from Covid. So it's a little too early and we're waiting for data signals and see that as we revert back to hopefully a more normal.
Or a little bit post Covid world.
South Jersey, but I did want to show that to your point like the med <unk> side of things, we're different from a different regional basis and this is something whereby given how far we're spending given how fast we're growing it makes sense for us to look at our cohort data in this way and by market and geography as well.
Okay, and I guess, just as it sounds like getting people engaged with the Clover systems. It's a big part of the story and the cost control going forward I wanted to go back to that kind of go lives.
What are your early answers you made it.
It sounds like a lot of that lower penetration is actually coming from.
New markets is that is that the way to think of it in the more established markets the penetration rates, increasing but it's the new markets, where it's bringing down the average and then I guess.
Any status just show about kind of.
I was under the impression that kind of doing the.
Direct contracting was really going to help accelerate that but I would expect to see a higher picture for MA loss go up because you'd be engaging.
Doctors, a lot more ways, which means you've captured wondering may patients, but it so it's sort of surprising to see it come down even even though you are growing in new markets is a little bit surprising to see it come down so maybe.
Color on that yeah, yeah, yeah, so definitely makes us the way you framed it there so the way to think about that is that all of the effects youre, saying are there between the synergies between fee for service.
MA population within a given doctors panel when we Havent markets say like Georgia, where we grew a lot in one season part of that is in fact, we don't go in and just sort of covered Georgia with CA, what we do as we approach doctors, who have meaningful numbers of life.
I'd say look why are you worried about the clover.
Very good uptake on that program. There is however, some lag between when because we're going to.
Quick say in Georgia for us to identify which doctors to work with because we need to pull that data and we're getting better and better at that so what youll see is we'll go that our team will look at doctors, who have material <unk> alive, who have.
A lot of opportunity on the fee for service side I will start doing that BBB motion, we've talked about where we go with like a sales motion talk to a doctor sign them up the USDA. So we feel good that the story resonates well in all market. It's just that where we have significant put a percentage year over year growth.
There is a natural effect, where it takes a little longer for us to go identify those docs that are signed up get them live and then they will move under management. So we feel like we'll be okay. There.
Okay, but the penetration did increase in your core markets.
Correct correct.
Alright, great I think we're always looking.
Yes.
Okay. Thanks.
Our next question comes from Jonathan Young of Credit Suisse. Please go ahead.
Hi, everyone. It's Nick on for Jonathan today. Thanks for taking the question would you mind, giving us some color around sort of non COVID-19 utilization trends exiting the quarter and kind of how you see those progressing for the rest of the year.
Don Covid utilization trends.
So yes correctly what were see yeah. So what we're seeing right now in the index, it's kind of like the reverse of the Covid question is little bit difficult for us to constantly.
<unk> what is the COVID-19 trend versus the non COVID-19 trends because what we really have is like conditions have procedures done with a COVID-19 diagnosis for example in the inpatient setting or we'll see how many total COVID-19 diagnosis, they are but with the less of the year variance now in play it's unclear, whether it's COVID-19 being treated how much.
Complexity is being added whether that's really a COVID-19 and non COVID-19 say and whether or not there is any deferred utilization at play, which I think is part of your question as well. So what we've really started to say overall, though is that what we see in the Covid data is that Covid is still there right. We think that there is an effective.
The high single digit diagnosis rate within our population for any given you gave it must be looked at that said, we don't think all of that care is appropriately flowing through at Colgate care, if that makes sense Oh by the way we can hear you typing.
If you don't mind.
So so basically we don't classify all of that as Covid care and the ads or somewhere in between generally the way I would think about it what we do.
We think about it is we do believe that Covid is normalizing at this point, we believe at some point the government will remove the extra 2% surcharges et cetera that are being paid for COVID-19 related procedure care, where there is just a COVID-19 diagnosis, which would be a tailwind for us because we don't think all of that if necessary.
It really go into what's Covid care anymore.
Things will stabilize into our overall overall MCR.
Got it. Thank you and then I guess, just as a follow up moving over to Opex, which it looks like it trended lower towards the guided range of 10% to 12% can you give us some insight as to what drove it towards the lower end and how we should expect that to trend throughout the rest of the year.
Yeah, absolutely as Mark mentioned in that like <unk>, where we also have loaded a lot of our commissions are front loaded for this year. So we see those built into our Q1 opex number that you're citing there as well just want to call that out.
So we are absolutely focused on the path to profitability part of that is to continue delivering industry, leading growth, which is critical for us.
Powered by our wide network model.
As superior MCR.
And we feel very good about that and then the third leg of that stool is to also manage our opex growth. So you see that we've started to do that as we started looking at that late last year.
We're starting to see this effect flow through now into our actual numbers and our opex right and it's growing fast by slowing the growth rate is slowing.
We have plenty of efficiencies that we believe that we can deliver this area given that we've been so focused on growth setting our differentiation proving our differentiated model. We think we've achieved all of those things now. So now is the focus on that path to profitability and Youll see us talking a lot more about that now and in future earnings.
Great. Thank you.
Thank you.
We have a follow up question from Richard close of Canaccord Genuity. Your line is open.
Yes.
Talk a little bit more about the clover assist in adoption.
You guys cited the 2018 2019, and 2020 MCR data lower MCR data for <unk>.
For patients managed by the physicians using Clover assistant.
How are you using that that I guess when you go out.
Talk to physicians, how receptive are they do.
Do they really dig into it and.
Just curious thoughts in and around that.
Yes, yes.
Let me see as you say.
And then improvement as physicians use a clear with us that more and more we shared data there before that cohort based upon when the physician who joined music wherever it is that the longer they've been using it the better the MTR improvement.
And as per the previous question, we can see it's a very low churn program. So everyone. What people are audit dissatisfaction is quite high people stay on the program and we feel good about that and it's just now.
About <unk> following our geographic and membership growth to make sure we sign up those doctors, where theyre sneak goes dark and we feel good about that as well, where we're talking to our physician partners about the clever at this that I think the key thing is.
We're all about making sure that we tell them that we're not here to tell them how to practice medicine.
Not here to tie them to life.
Medicine by the numbers, which they don't really want to do at all we're here to make them successful and value based care in many of these physicians have.
Our toe in value based care, but sort of like founded on the appealing for a number of different reasons, but we were able to show that with Clover assistant we truly want to arm them with data. So they can decide how to deliver better care, we want them to arm them with a personalized care capabilities. So they can customize that clinical protocol to the patient.
Sitting in front of them. The fact that we pay them on a flat basis.
Moving basis, let them feel like we're not twisting their arms take any given any given political action, which makes us feel really good and then we showed them that we have more data available to us as the as the plan then they would have in their own EHR that our data platform with clever assistant is able to pull in things like.
Whether someone has to pick up their medication or compliance sort of like Q2 or given a bad like cost comparison data. All these kinds of things that can make them, let them make better decisions that whereas their EHR as morphine is like a documentation tool, where they're sort of compelled to use it. So all of these things together.
Let us bring physicians into value based care, who otherwise probably wouldn't participate.
More on that fee for service chassis.
Seeing that on the MA side Youre seeing that in our ACO reached TCE growth as well like our market is highly claims align because we're able to meet our physicians and patients where they are.
And they sign up quickly to UCA. So as these motions synergize more and more we're still only a year or two of them.
The program after all we're going to see I think a lot of adoption and we're getting a request now for how can you help us with the entirety of our Medicare paddle and Thats something we alluded to is our ultimate goal is to cover the entirety of our Medicare panel enable physicians do you feel like because the value based care with their entire meta.
Care paddle and that'll be a really great place to be.
Okay.
Follow up.
With respect to the ACO reached transition can you talk a little bit.
How you guys are thinking about that how youre position.
To make that transition any.
Milestones that you have to achieve or whatnot in terms of altering the business you have now to meet the.
Requirements for ACO reach.
Yeah. Good question. So we feel good about our ongoing participation in TCE, which is which is D. C, which is still cold this year at the transmission for the eighth year rich.
What are the biggest direct contact with the SEC that will flow through to Obsoleting will be one of the biggest acos as well we have a large amount of data, which we can use to intelligently drive our growth and our.
And drive decisions being made by our physician partners, which we think will be really fantastic as we look for it to be contributing to profitability.
In terms of the changes that were made to the program by CMS and we're generally supportive of all almost all of them if not all of them. So there are things about greater physician participation on the board for example, and we think that's a great idea, we're all about physician empowerment.
And so most of those changes really are things that we're supportive of all that we can make in a.
Our program relatively in a relatively straightforward way and we think that we're going to be quite successful in the program.
Okay. Thank you.
I would now like to return the call to Derrick Neuman for community questions.
Great. Thank you. Our first community question is are there plans to expand to other states in 'twenty two 'twenty three and if so when.
I'll jump on this one so it's still a bit early for us to share too much publicly in terms of our expansion thinking but what we can say is just overall strategy is weighted towards going deeper in our existing markets.
And and that really.
Necessitates a focus on growing in the markets that we're currently successful and where we know we can continue to drive improvements in MCR and we've grown significantly over the last year. We've got the luxury now getting more intelligence around their data a lot of learnings coming from that.
That's going to continue to positively impact MCR.
As we go into next year as well and so as that works best for longer that we're in markets.
Allows us to continue to increase clinical impact increased churn and continued increase in quota system usage.
And I think it's always important to remember that while growing even today than it was about a little over 1000 basis point differential on MCR for returning members as Pcbs used the clover assisted versus those who don't.
Alright, our next community question anything new about as CFO .
Yeah.
So we've been focused on significantly strengthening our management team and we've made a few announcements around that just this quarter. We brought on board a broad for a new Chief Technology Officer.
Who Colorado, who is taking over the CEO role for myself.
<unk> General Counsel, Joe Martin and then we just announced I think today, our new head of value based care again, emphasizing our focus on the ACO Rich program and the fact that we truly believe that cliff resistant kind of help us break positions globally they'll participate in value based care into programs like.
This.
So all of that are significant strengthening of our bench, we feel great about that on the CFO front, we're making very good progress nothing through directly and out there at this time I would our focuses are absolutely getting the right person and we do have the luxury to be selective here given our strong finance team at our interim CFO Mark <unk>.
On the call. So we're making good progress we will have more to talk about.
Had a few days.
Okay. Our final community question do you plan licensing out Clover assistant if Selwyn and is there demand for it.
Yeah. So.
My question nothing to announce at this time, but as I've mentioned previously on the call. Our goal is absolutely to cover the entirety of our PCP Medicare paddle and make it easy for them to deliver great data driven care and be successful in value based Medicare and we are actually getting a lot of inquiry from our partners.
Rouse that because they really didn't.
No difference between how they care for clinically.
Folks who are on Medicare based upon which insurance company or what their form of insurance is whether theyre on M&A whoever it may be for surface and so they want to bring all that together and have a central place that they can manage those capabilities.
We can provide that whatsoever.
So we believe there's a significant opportunity here for us to really play that role with CA for our physician partners and we are definitely looking at that there is a huge advantage coming from a Medicare advantage plan for having built the tool and now we are looking at ways that we can scale up to other parts of the physicians.
Medicare panel as well.
Great. Thanks, guys.
Just to close while we feel very good about where we are today. There is really great and really hard work being done this year to drive continued progress in enabling this is the clover assistant it's providing us a growing technology moat, while we're making a meaningful and positive impact on health equity along our mission to improve every life. Thank you everyone.
Many of us today.
Okay.
This concludes today's <unk> first quarter 2022 earnings call and webcast. You may disconnect. Your lines at this time have a wonderful day.
Okay.
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