Bright Health Group announced at a press conference on Tuesday that its investment in value-based primary care clinics is expected to generate US$2 billion in revenue for its medical services sector in 2022, an increase of 66.7% from the previously forecasted US$1.2 billion. .

NeueHealth attributes revenue growth to new members acquired through its insurance department, other payer registrants, and beneficiaries. These members are managed under the Medicare and Medicaid Service Center Direct Contract Program, which puts private entities in charge of traditional medical insurance Patient care.

Dan O’Neill, a healthcare consultant and chief commercial officer at Pine Park Health, said that CMS’s move to prevent new applicants from joining Direct Contracting earlier this year provided a boost to existing groups (such as NeueHealth) that are allowed to manage patient risks. The staff goes to the senior service community.

The company focuses on building new clinics rather than acquiring existing groups Insurtech’s strategic shift, And realized that providing managed service organizations for directly contracted entities is not a viable long-term growth initiative, he said. The company plans to build at least 25 new clinics in Florida, Texas and North Carolina this year, and operate more than 70 clinics by early 2022. NeueHealth was unable to respond to interview requests before the deadline.

“NeueHealth is actually becoming more of a supplier. This is a tougher and slower growth path,” O’Neill said. “However, if they can achieve this goal, then it is more like a way of creating value than a pure MSO. Because sooner or later everyone will look at MSO like this,’Why are you here? Why are you even at the table? You are trying to get a share of economics, but you don’t do much.'”

The announcement was made after Bright Health Group’s disappointing performance in the third quarter The medical loss rate reached 103%, Ranked highest among other insurance company startups Clover Health, Oscar Health and Alignment Healthcare. The company blamed its failure to manage medical expenses on the increase in claims related to COVID-19 and its failure to accurately measure the risk of new registrants acquired during the special registration period. Bright Health’s third-quarter revenue increased by 206.3% year-on-year to US$1 billion, and its net loss expanded by 400.7% year-on-year to US$296.7 million.

Jeff Garro, senior equity research analyst at Piper Sandler, said that in addition to the disappointing performance in the third quarter, investors also questioned the low-income outlook provided by NeueHealth in the second quarter of 2021. He said that before next week’s Analyst Investor Day, the updated guidance will bring welcome surprises to investors.

“In terms of meeting and exceeding expectations, they may turn a new page,” Garo said.

Ari Gottlieb, head of A2 Strategy Group, pointed out that by updating its revenue guidance for its technology services division, Bright Health Group may also hope to increase its stock price, which hit a record low of $3.26 on Tuesday. Bright Health went public in June at a price of US$16.64 per share and raised US$924 million at a valuation of US$12 billion, representing The largest IPO Among the health insurance startups that went public this year.

Gottlieb said that investing in value-based clinics and helping Bright Healthcare manage the health of its individual members may be a good business initiative if insurance companies figure out how to better manage their medical costs. This strategy reminded Gottlieb of Harken Health, a closed partnership between UnitedHealthcare and Iora Health. Gottlieb said that due to the unprofitability of the Affordable Care Act exchange at the time, the insurance-primary care company quietly closed in 2017. Four years later, these exchanges have developed into one of the most profitable insurance products and account for a large proportion of Bright’s 890,899 total registrants.

Gottlieb said: “You have to wonder if they will be forced to sell the NeueHealth business to raise funds to fund health plan obligations.” “Bright has the option. They can sell this asset because they are in desperate need of funding. , And it may be difficult to raise funds when their stocks fall.”