Clover Health: A Path to Profitability

Hi everyone,?

Let’s start by clearly defining who we are as Clover, and what makes us different.

Our mission at Clover is to Improve Every Life. We’re working to ensure that every single person gets access to data driven, personalized, primary care from a physician they know and trust.

Every one of us will need that primary care, especially as we age. That’s why we’re so centered on Medicare as our opportunity. Not only is it a massive market but it’s also a place where data-driven-primary care can make a real difference in giving patients longer, healthier and happier lives.??

Setting our sights on helping every single Medicare patient differentiates us from almost every other approach. Others rate and rank doctors, then narrow available care to just a few preferred physicians, which narrows the scope of patients those organizations will serve.?

At Clover, we recognize a far more existential issue; the country just doesn't have enough doctors - and certainly not primary care doctors.? While the number of physicians is rising, it can’t keep up with demand, particularly given the growth of our aging population - and the complex care they require.?

This ever-increasing demand for medical services will lead to dramatic physician shortages. It will affect all of us, but the brunt will be on those who do not have existing access to care and those with chronic conditions.?

Narrow networks will serve those lucky enough to utilize them, but we will never solve the problem of high quality provision of healthcare by narrowing who our members can see.?

So instead Clover takes a different path to scale. We aim to support every primary care physician, arm them with the right data at the right time and thereby help them care for their patients. We ask our physicians to spend a little more time per care encounter and use our platform, Clover Assistant, to deliver personalized care. With Clover Assistant, our aim is for physicians to catch diseases earlier and manage those diseases better. When that happens we believe everyone wins, and we couldn’t wish for a better impact from our work than healthier members, a more sustainable healthcare system, and doctors feeling more fulfilled in their mission.?

We’re proud of the large number of members who have seen a Clover Assistant powered doctor in the few short years since the launch of the platform? - and our ambition is to keep scaling this upwards.?

We see a real difference in the care given by these doctors as they’re catching and managing conditions earlier. As a result we’re focused on continuing to grow our physician user base and are taking a multi-pronged approach to doing so.?

We are also absolutely focused on physician delight. We know that workflows are burdensome for PCPs, resulting in high burnout. We’re investing in UI improvements, our data interoperability and EHR integrations. We already know that physicians love what Clover Assistant can do for them, and we will continuously make it easier and easier to use.?

Within our Non-Insurance segment, our Clover Assistant powered Direct Contracting entity has experienced tremendous growth. Based on this incredible demand from physicians you will see us invest even more deeply into Fee for Service and we plan to launch into other value based programs to broaden our portfolio.?

Finally, I want to talk about our in-home care capabilities that we’ve built up over the last few years. Our home-based primary care team is dedicated to achieving improved health outcomes, reduced medical expenses, and preventing hospital readmissions. Furthermore, our home care practice has grown tremendously within New Jersey, and we believe that we have been very successful in managing the care of members in a distributed environment. The pandemic showed us that care is decentralizing from brick and mortar and our Clover Assistant powered Home Care practice is leading the way to that new world.?

As we go into 2023 and 2024, the next phase of Clover is absolutely about profitability. With the COVID headwinds receding, we believe the hard work we’ve done over the last couple of years will firmly emerge in the economics of our business.?

On the Insurance side, we will be paid at 3.5 stars in 2023 on our flagship PPO. The increased revenue from STAR rating improvement will help fund great plan benefits for our members, as well as improve MCR performance. We believe this, combined with exciting operational improvements that already have been affecting our 2022 MCR results, will be strong tailwinds for MA economics.?

While we intend to continue to grow at industry-beating rates, we're firmly prioritizing profitability through achieving? smart sustainable growth, which will help power MCR improvement. We feel we have absolutely proven that our wide-network high-choice plans are fundamental differentiators and that growth is a moat for us - so balancing that growth with MCR improvement is something you will see us do year over year.?

On the Non-Insurance side, we will drive hard on broadening our appeal to practices looking for help moving their fee for service population onto value based care.?

We have received significant interest from providers in working with us to care for their Medicare fee-for-service patients and we are exploring various opportunities for doing so -?ranging from continuing participation in innovation programs such as ACO-REACH to potentially launching into statutory programs such as the Medicare Shared Savings Program.?

Between both the Insurance and Non-Insurance business lines, we’re excited to be bringing Clover Assistant to more doctors, helping more eligibles, and to be focused on delivering profitability sooner rather than later. We will of course have to prove this through the rest of 2022 and into 2023 but we’re very excited to do so.?

At the end of the day, for those who work at Clover, those members served by Clover and those who are investors in Clover, I want to assure everyone that we are laser focused on building a fundamentally profitable company that can scale, by way of our physician-centric technology, far beyond those companies that work with limited physicians or who depend on high levels of professional services.?

Technology is part of who I am, and it is part of what makes Clover different. That, paired with our mission to improve every life, is what will make us forever different.?

I’m honored to be stepping into the role of Clover’s CEO and to have the support of our amazing management team. We’re excited about the next chapter, and hope you are too.?

Thank you,

Andrew Toy

The statements contained in this document are solely those of the authors and do not necessarily reflect the views or policies of CMS. The authors assume responsibility for the accuracy and completeness of the information contained in this document.

This article contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include statements regarding future events and Clover’s future results of operations, financial position, market size and opportunity, business strategy and plans, and the factors affecting Clover’s performance and objectives for future operations. Forward-looking statements are not guarantees of future performance, and you are cautioned not to place undue reliance on such statements. In some cases, you can identify forward looking statements because they contain words such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “going to,” “can,” “could,” “should,” “would,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential,” “outlook,” “forecast,” “guidance,” “objective,” “plan,” “seek,” “grow,” “target,” “if,” “continue” or the negative of these words, or other similar terms or expressions that concern Clover’s expectations, strategy, priorities, plans or intentions. Additional information concerning these and other risk factors is contained in the Risk Factors section included in Clover’s Annual Report on Form 10-K for the year ended December 31, 2021, which was filed with the Securities and Exchange Commission (the “SEC”) on February 28, 2022, and in Clover’s other filings with the SEC. The forward-looking statements included in this article are made as of the date hereof. Except as required by law, Clover undertakes no obligation to update any of these forward-looking statements after the date of this article or to conform these statements to actual results or revised expectations.