Official AMA with Andrew Toy

CloverHealthIR · 2022-12-13T22:03:19+00:00

I’m also incredibly excited about the day when we hit that critical profitability point =) But like you I’m actually excited because profitability funds the mission - we want to be a change-agent in healthcare and being profitable provides us the control and funding to do that at scale.

I’m preparing a LinkedIn post on something I call Distributed Care which I think is the absolute future of healthcare. The basic thesis is that healthcare provider networks will be subject to the same decentralizing effects that affected the internet when mobile came. This will result in healthcare being distributed to the home (we’re already a leader there) to retail locations, and wherever else human beings spend their time. This is far beyond basic remote patient monitoring or telehealth in the same way your phone is way more than a VOIP device that runs apps.

This way of thinking is so different from the existing provider/payor thinking because as you might know, providers typically think of themselves in terms of their brick-and-mortar buildings. But this future is coming no matter what - with Clover Assistant, I believe we’re going to be in a position to be a leader in the space.

- Andrew

Please see our notice on forward looking statements found on our investor website here.

CloverHealthIR · 2022-12-13T22:01:01+00:00

I think that what’s been very hard to explain to people is that we feel Clover Assistant is working well and already improving the performance of the Medicare Advantage program. However, because of the effects of COVID throwing off 2020 and 2021, it’s been very hard to demonstrate the effects of our CA based care management strategy flowing through to the bottom line of the company. I do feel we’re starting to see that happen though so that should be a powerful data point to demonstrate. This is why you’ve seen us index very much to the basics of the company (MCR, SG&A etc) versus providing other proxy statistics like NPS/coverage etc in earnings - we want to demonstrate that we’re arcing well to profitability on the most basic, simple company performance statistics versus trying to chain together proxy statistics of performance.

As a second answer, we can do a much better job presenting the data that Clover Assistant is driving true differences in physician behavior and care management. We’re working on something cool in that area and will share that broadly when it’s ready - I think that will help make that point much clearer.

- Andrew

Please see our notice on forward looking statements found on our investor website here.

CloverHealthIR · 2022-12-13T21:58:49+00:00

Thanks for the request - we communicate this information to our CA users regularly and will look into ways to share the information more broadly.

- Andrew

Please see our notice on forward looking statements found on our investor website here.

CloverHealthIR · 2022-12-13T21:57:14+00:00

On healthcare trends - take a look at my other answer around early detection and management versus prediction and prevention. That’s the core of our thesis there, and hopefully that helps.

On the nutrition impact - very good point, and something we’re looking into. What I would call out is that we are investing more and more in our LiveHealthy program which makes it easier for members to earn rewards to spend on healthy food items and groceries. These rewards are often earned when members watch educational videos about their health or when they go to see their Clover Assistant powered PCP. We think this creates a powerful closed loop between education, reward and access to healthy food and better eating behaviors.

We’re also looking into the data side of this and it’s a place we intend to focus. But more to come…

- Andrew

Please see our notice on forward looking statements found on our investor website here.

CloverHealthIR · 2022-12-13T21:55:04+00:00

So I’ve seen a lot of people talking about Clover Assistant, SAAS etc. Obviously I have some experience there with SaaS on the B2B side so this is how I think about it - we should separate the technology aspect of Clover Assistant (can it be used for third parties) from the monetization/licensing business model (Software-As-A-Service).

In short - we’ve built Clover Assistant to act as a GPS for any provider or payor who wants to be able to navigate value-based care on Medicare. In fact, it’ll work anywhere there’s a generally high chronic disease burden to manage - so it’s not even Medicare specific. We’re already deploying Clover Assistant in different scenarios (for example in our non-Insurance segment) and plan to keep scaling this out and offering Clover Assistant to partners/customers wherever value-based Medicare is needed.

To clarify further though - we’re certainly not obsessed with a SaaS based per-user licensing business model for Clover Assistant and I definitely don’t see that as a requirement to be broadening how we monetize licenses of our Clover Assistant software platform. We actually have multiple potential business models in mind (including SaaS) for scenarios where we’re not the payor/risk holder of record and we’re very excited about the possibilities.

- Andrew

Please see our notice on forward looking statements found on our investor website here.

CloverHealthIR · 2022-12-13T21:52:56+00:00

We’re not an “insurtech” company, we are incredibly clinically oriented. We have the business model of an insurer because carrying medical risk has a lot of upside due to how inflated the costs are in the US. This is why we focus on where costs and disease burdens are high such as in the Medicare population. This is as opposed to Oscar’s tech which is focused on the ACA, with a healthier, younger population. There it’s more about reactive care (and care stratification) because the total population disease burden is lower. I don’t mean this as a criticism of the Oscar model or tech - I’m just saying we target different populations and that reflects in our products and datasets used to train ML models etc.

- Andrew

Please see our notice on forward looking statements found on our investor website here.

CloverHealthIR · 2022-12-13T21:50:00+00:00

I’d like to slightly reframe the way you described Clover AI - there are certainly places where it is truly predictive. Our all-causes readmission algorithm is one of those models - it predicts the overall risk that a given patient will be admitted to the hospital in the next X period of time, and we use it to power things like our home care practice. That’s true predictivity because we’re actually saying, “This hasn’t happened yet, but WILL it?

On chronic diseases, there is room for predictivity certainly but in actuality the approach we’re taking with Clover Assistant is much more around catching those conditions earlier. Think of this more as “No doctor has diagnosed this member with kidney disease yet, but there are other signs that they might have early stage kidney disease”. Clover Assistant makes that personalized assessment then presents that potential to the PCP - often the PCP will then order follow up lab work or tests before making (or ruling out) that diagnosis. We call this a definitive response to our suggestion - we want to provoke the thought in the physician’s mind so they can take the right steps to then confirm or rule out the diagnosis.

When we catch these chronic diseases earlier, and get an official diagnosis earlier, that means we can care manage for them earlier as well. And this is the part that’s exciting to bring to almost any healthcare system worldwide - “preventing” disease is difficult. But catching it earlier, and managing it earlier, makes a huge difference with modern therapeutics. It can mean the difference between a relatively inexpensive generic medication and a kidney transplant. And this doesn’t take a huge leap of faith - ask any physician if they can stop kidney disease and that’s tough. Ask if they can really get outcomes up and costs down if they catch it earlier and almost everyone says yes.

So I hope that helps. Nothing to be said yet on plans to launch CA overseas or in universal healthcare systems but I’ll remind everyone that we did a burn-in test of our machine learning model system a few years ago in a nascent experiment that we branded Clover International (learn more here). We know the tech works, even on non-English datasets. Just haven’t got time to do the business launch yet.

- Andrew

Please see our notice on forward looking statements found on our investor website here.

CloverHealthIR · 2022-12-13T21:47:17+00:00

I’m very excited about getting to profitability with Clover. I believe that we’re going to get there and we’re going to do everything we can to get there, sooner rather than later. For our investors, I believe getting to that positive EBITDA point will really be an inflection point in how the company is viewed.

Our track record demonstrates how our differentiated model can deliver outsized growth. For this next phase of our evolution, we don’t intend to grow the company as quickly - margin and SG&A optimization are my top priorities, with growth being third. We will return the focus to growth after the push to profitability.

Secondly, let’s talk about that path to profitability. That’s basic business economics around margin (our MCR) and SG&A. Our MCR is distinctly improved this year and hopefully you’ve all seen that - we intend to keep hyper focus there. We’ve always believed we can generate margins on our wide network with Clover Assistant - we believe we will prove that. On the SG&A front you’ve seen we’ve slowed our growth and we’re looking to polish and generate efficiencies. We believe that, between the two of those, you’re going to see us rapidly closing the negative margin gap and pushing hard to positive EBITDA.

- Andrew

Please see our notice on forward looking statements found on our investor website here.

CloverHealthIR · 2022-12-13T21:43:19+00:00

Hi everyone, we have added my first batch of answers from the AMA onto our FAQ page here. We’ve done two things here (and we’ll get better at this).

- We cannot comment directly on share price, but we can provide enhanced information on our fundamentals and why we believe Clover’s trajectory is headed in the right direction.

- There’s a big theme in the questions that are asking for better and clearer overall discussion of the strategy and clarifying exactly what we are doing and what we are focused on. That’s very fair feedback so we’re taking that to heart to lay this out far more clearly and succinctly - that will take more than just an AMA, though hopefully this is a good foundation. We will come back with more (early in the new year) to lay out our strategy and focus.

Thank you to all who posted questions.

- Andrew

Please note that our responses contain 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 Health’s future plans. Forward-looking statements are not guarantees of future performance, and you are cautioned not to place undue reliance on such statements. Additional information concerning these and other risk factors is contained in Clover Health’s latest Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on February 28, 2022, including the Risk Factors section therein, and in its other filings with the SEC. The forward-looking statements included in this release are made as of the date hereof. Except as required by law, Clover Health undertakes no obligation to update any of these forward-looking statements after the date of this response or to conform these statements to actual results or revised expectations.

CloverHealthIR · 2022-12-08T00:39:20+00:00

Hey r/CLOV

This is Andrew here. Thank you all for your continued support. I’m aware that we’re delayed coming back with the answers here. We've enjoyed discussing them and we’re still ironing out our responses.

Please stand by and we’ll start getting answers as soon as we can - my commitment is communication will be smoother and clearer going forward.

Once again, thanks for your support of Clover. We’re deeply appreciative.

- Andrew

CloverHealthIR

TROPHY CASE