Bright Health Group plans to implement "disciplined pricing" and limit geographic expansion of its insurer arm in 2022, after medical costs skyrocketed for the insurtech earlier in the year thanks to the COVID-19 pandemic and new members gained through the special enrollment period, Chief Executive Officer Mike Mikan said during the J.P. Morgan Healthcare Conference on Tuesday.
He said it was too early to tell how the Biden administration’s requirement that insurers cover over-the-counter consumer tests would impact the company’s bottom line. The company's net loss widened 400% year-over-year to $296.7 million at the end of the third quarter.
“We think testing is a good thing, good for consumers and good for us to get beyond the pandemic,” Mikan said. “Ultimately, it will be endemic. We believe there are potentials for revenue offsets and that’s kind of how we take it as of now.”
The company’s NeueHealth provider arm will instead provide the lion’s share of the growth in 2022 through continued partnership with external payers and the Centers for Medicare and Medicaid Innovation’s direct contracting program, he said. Mikan declined to comment on direct contracting membership, although the company expects to “meaningfully expand” the program to cover multiple states in 2022.
In 2021, the company expects NeueHealth to generate $2 billion in revenue, with a third of the cash coming from external payers like Oscar Health and Cigna, which recently invested $550 million in Bright Health Group to help bail out the company. The company plans to grow from 75 to 100 NeueHealth clinics by the end of the year, and grow the number of affiliated providers it has take on patients' downside risk.
In three years, the startup plans for its earnings before interest, taxes, depreciation and amortization to break even.