Bright Health Group, Inc.

Hello and welcome to today's Bright Health Group third quarter 2022 earnings call. My name is Bailey and I'll be your moderator for today's call. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. If you would like to ask a question, please press star followed by one on your telephone keypad. I would now like to pass the conference over to our host, Stephen Hagan, Investor Relations Director. Please go ahead when you're ready.

Good morning and welcome to Bright Health Group's third quarter 2022 earnings conference call. The question and answer session will follow Bright Health Group's prepared remarks. As a reminder, this call is being recorded. Leading the call today are Bright Health Group's President and CEO, Mike Mikan, and CFO and Chief Administrative Officer, Kathy Smith. Before we begin, we want to remind you that this call may contain forward-looking statements under U.S. federal securities law. These statements are subject to risks and uncertainties that could cause actual results to differ materially from historical experience or present expectations. A description of some of the risks and uncertainties can be found in the reports that we file with the Securities and Exchange Commission, including the risk factors in our current and periodic reports we file with the SEC. Except as required by law, we undertake no obligation to revise or update any forward-looking statements or information. This call will also reference non-GAAP amounts and measures. A reconciliation of the non-GAAP to GAAP measures is available in the company's third quarter press release, available on the company's investor relations page at investors.brighthealthgroup.com. Information presented on this call is contained in the earnings release we issued this morning and in our Form 8K dated November 9, 2022, which may be accessed from the investor relations page of the company's website. With that, I'll now turn the conference over to Bright Health Group Chief Executive Officer Mike Mikan.

Thank you, Stephen. Good morning, everyone, and thank you for joining Bright Health Group's third quarter 2022 earnings call. I'll open my remarks with comments on our business, provide additional details on the strategic update we announced last month, and then I'll turn the call over to Kathy to go over our third quarter results. As an organization, Bright Health Group is going through a significant evolution. However, one that at its core keeps us focused on our mission. At Bright Health Group, we are focused on making healthcare right together. Our model continues to be built on the belief that by connecting and aligning the best local resources in healthcare delivery with the financing of care, we can deliver better outcomes at a lower cost for all consumers. Our evolved value driven business model allows us to continue to do so in a more capital efficient way for our customers and shareholders. On our call last month, we announced that we will be focused on delivering affordable health care for aging and underserved populations in the largest health care markets in the country. And continuing to leverage our fully aligned care model with external payer partners and affiliate care providers. We will continue to build on the value-driven care model that we've been advancing since the start of the company. We are well underway in taking steps to move to this more focused model while continuing to keep front and center the commitment to delivering on our financial targets for 2022. Our overall performance so far this year has been in line with our expectations and that continued in the third quarter across our businesses. Our medical cost management efforts continue to achieve our cost saving target, and utilization remains stable in the third quarter. Our risk adjusted medical expense remains in line with our forecast, as lower medical costs are balanced with revisions to our risk adjustment forecast. Based on our performance year to date, and our expectations for a strong finish to the remainder of the year, we are lowering the top end of the guidance range for our full year medical cost ratio. We have also positively revised our adjusted EBITDA guidance range based on the narrower MCR forecast. And as Kathy will discuss in greater detail, the strong results in our Medicare Advantage and new health businesses gives us confidence in our target for 2023 profitability on an adjusted EBITDA basis. For anyone that couldn't join our strategic update call last month, we announced a more focused business model and a capital raise from existing shareholders, strengthening our capital position. We expect that our more focused business model and our strengthened capital position will support the business through profitability. Our more focused business model means that Bright Healthcare will no longer offer individual and family health plans for 2023 or Medicare Advantage health plans outside of California. And we will be focusing our new health business on continuing to grow our partnerships with external payers and the government through the ACO REACH program. We have a scaled Medicare Advantage business in California, the largest market for aging and underserved populations. And we have built a high performing, fully aligned care model with our care partners across the state. In Florida and Texas, our new health risk bearing care delivery and provider affiliate management business continues to deliver differentiated results. And we expect to expand our footprint over time serving the aging and underserved consumers in Medicare and the consumer marketplace together with our key health plan partners. We will also continue to grow our ACO REACH business, which remains on track with our expectations for the year. We have begun implementing the restructuring plans to adjust our cost structure in order to achieve our 2023 gross margin and operating expense targets. including impacts to many of our employees. We will continue to take steps to adjust our expenses in line with milestones in the marketplace business through the end of the year and over the course of the run-out period. While we are exiting the ACA marketplace insurance business, at our core, we are focused on serving aging and underserved populations through our fully aligned care model. We have demonstrated and continue to believe that when you connect and align the best local resources in healthcare delivery with the financing of care, you get the best outcomes. This is at the heart of our value-driven business model, and we see significant growth opportunities for our Medicare Advantage and new health businesses serving this population. Both businesses are in attractive markets with strong tailwinds. where we have demonstrated differentiated performance and are expanding our payer and aligned provider relationships. We expect to manage both businesses as well as the enterprise to reach adjusted EBITDA profitability next year while building for long-term capital efficient growth. I'll now hand it over to Kathy to go over our third quarter performance and our updated outlook.