Clover Health and Aviana Healthcare at Bank of America Conference: Strategic Growth Plans

On Wednesday, 14 May 2025, Clover Health Investments Corp (NASDAQ:CLOV) and Aviana Healthcare presented their strategic insights at the Bank of America 2025 Healthcare Conference. Clover Health underscored its robust growth in Medicare Advantage membership and revenue, driven by technological innovation. Aviana Healthcare highlighted its expansion in home care services and strategic acquisitions. Both companies conveyed optimism about their future growth trajectories, despite challenges in the healthcare market.

Key Takeaways

• Clover Health reported a 30% increase in Medicare Advantage membership and a 33% rise in total revenues for Q1 2024.
• Aviana Healthcare plans to acquire Thrive Skilled Pediatric Care to enhance its pediatric services.
• Clover Health’s technology-driven approach aims to improve clinical outcomes and reduce costs.
• Aviana Healthcare’s revenue guidance for 2025 exceeds $2.15 billion, with a focus on home care services.
• Both companies are committed to improving patient outcomes and reducing healthcare costs.

Financial Results

Clover Health

• Q1 2024 Results:

- Medicare Advantage membership increased by 30% year-over-year.

- Total revenues rose by 33%.

- Adjusted EBITDA surged by 279%.

- Net income increased by over 300%.

• Cohort Analysis:

- Medical cost ratio (MCR) decreased by approximately 700 basis points from year one to year two, with an additional 800 basis points decrease from year two to year three.

• 2025 Guidance:

- The company is confident in achieving growth in membership, revenue, and profitability.

- Transitioning from a 3.5-star to a 4-star payment year is expected to provide financial benefits.

Aviana Healthcare

• 2025 Revenue Guidance:

- Exceeds $2.15 billion.

• Q1 2025 Revenue Growth:

- Revenues increased by 14%, entirely organic growth.

• Preferred Payer MCO Volumes:

- Increased from 50% to 54% by the end of Q1, with expectations to reach high 50% by the end of 2025.

Operational Updates

Clover Health

• Technology-Driven Approach:

- Utilizes AI and machine learning to synthesize data from over 100 healthcare sources.

• Clover Assistant Software:

- Provides physicians with summarized medical records and care management suggestions.

• Clinical Outcomes:

- Hospitalizations for congestive heart failure patients decreased by 18%.

- Thirty-day readmissions reduced by 25%.

• Geographic Expansion:

- Focused on growth in New Jersey and Georgia.

Aviana Healthcare

• Acquisition:

- Plans to acquire Thrive Skilled Pediatric Care, expanding services to New Mexico and Kansas.

• National Footprint:

- Operates over 340 locations across 34 states, with plans to expand to 36 states.

• Payer Mix:

- Diversified payer mix, with no single payer contributing more than 10% of total revenue.

Future Outlook

Clover Health

• Growth Strategy:

- Plans to accelerate revenue and profitability growth, particularly in New Jersey and Georgia.

• Efficiency Program:

- Gaining traction in improving cost efficiencies.

Aviana Healthcare

• Tuck-In M&A:

- Potential for growth beyond 7% through strategic acquisitions.

• Government Affairs Strategy:

- Focus on improving reimbursement rates in at least 10 states.

Q&A Highlights

Clover Health

• Cost Trends:

- Cost trends are as expected, with a brief increase in flu-related utilization in January.

• Part D:

- Confident in their bidding strategy, expecting favorable outcomes.

Both Clover Health and Aviana Healthcare are poised for continued growth, leveraging technology and strategic expansions. For further details, please refer to the full transcript below.

Full transcript - Bank of America 2025 Healthcare Conference:

Craig Jones, Healthcare Analyst, Bank of America: Hi, so hi everyone. My name is Craig Jones. I’m one of healthcare analysts here at Bank of America. Today I have the pleasure of hosting Clover Health and CFO Peter Kuipers. So with that, Peter, let’s take it away.

Unidentified speaker: Think you

Craig Jones, Healthcare Analyst, Bank of America: have little presentation

Peter Kuipers, CFO, Clover Health: you, Greg. We’re excited to be here to talk about our first quarter results and the momentum that we have. So first, let’s start with the first quarter results, which we published last week. Very strong results across the board. Medicare Advantage membership up 30% year over year.

Total revenues up 33 year over year. Adjusted EBITDA up 279% year over year. And similarly directionally, net income up more than 300% year over year. Now you might wonder what is behind these numbers. What are the drivers?

And we have a differentiated vision and approach. We are a technology first AI driven clinical health plan. So our goal is to empower every physician with the best technology in order to earlier diagnose diseases, to treat those earlier and better health outcomes at total lower cost of care. And that model is working, as you can see in the results. Now actually, how do we do that?

So we have a machine learning and AI powered platform that combines over 100 healthcare medical records data sources, essentially all EHR systems, pharmacy, labs, and also claims. It synthesizes that data to information, to insights, And then that’s powered by over 100 proprietary models. And we were an early adopter of machine learning and also of AI. And we have a moat around this technology as well via proprietary IP. And how does this actually work in practice?

So we are empowering PCPs or physicians at their practice level, at the point of care, at the time of care. So the top right on this page you can see that the machine learning and AI powered medical records are condensed, summarized, synthesized actually with insights. So a lot of data, you can get a lot of data in medical records. But the key here is to condense and get the highlights and the insights, so that a physician can action as well. The physician using the software, our physicians are using the software, can then have of course the visit with the patients, add additional symptoms, and can correlate and then help diagnose.

What helps diagnose here then is the second step in our clinical model, where the AI and machine learning models come up with care management suggestions. So these are suggestions. We are off scale now and have been over the last couple of years. So these are powerful care management suggestions that a physician can adopt. And we’ve published a number of clinical academic white papers showing actually via AB testing that these results are really powerful.

A number of chronic diseases with physicians using the software can diagnose twelve months, eighteen months, or even three years earlier, and can be treated earlier for better health outcomes, and also at lower cost of care. So here’s a summary of the latest clinical white paper that we published a couple of weeks ago on congestive heart failure. So what this shows, we were able to compare via controlled testing, the outcomes for patients that were seeing physicians using the Clover assistance software versus the ones that are not using Clover Assistant software. So what we actually found is that hospitalization for all causes for congestive heart failure patients is actually down eighteen percent and thirty day readmissions is down twenty five percent. Now that is very significant in healthcare.

Another proof point that I think is really helpful to look at is HEDIS is a quality score within STARS. So we received the highest score on HEDIS for plants with greater than 2,000 members. And we did that in a PPO setting. The PPO means that the health plans that we offer are zero premium and free physician choice. So it’s pretty exceptional to have the highest HEDER score in the country, and then the next PPO is not in the top 10.

We thought it’s also helpful to contrast the business models, especially given the current dislocation in the market and in the industry. So this slide here compares the business models of traditional MCOs on the right, and the Clover model on the left. So we are clinically focused at the point of care, at the time of care, enabling physicians to make better decisions to provide medical care. And so that is a couple of months earlier than other MCOs are able to do that. It’s typically more back office focused.

So as a result, we can diagnose, our physicians can diagnose diseases earlier, treat them earlier as well via care management, close care gaps if they are there, versus other MCOs being more delayed and reactive. Also, we’re able to do this on the wide network, again on PPO versus other plans that are mostly focused on HMO plans, which have restrictions on physician choice. Another point really to look at is that our results in our P and L are pure. We have no risk delegation. So that’s really important to notice as well.

Another differentiating factor is our home care. So our home care division is using the same software, the same medical records that the PCP is also using. So you have a longitude care path and care management. Then also our care, home care program is managed by MDs and doctors versus maybe nursing assistants, right? So that then leads to leading cost ratios, both on an MCR and then a BER level.

So we are in a growth phase. Last AEP was very successful, OEP as well. We are very pleased with the results and the choices that new members have made. Again, we are a benefit rich plan with zero premium with a free decision choice. So the midpoint of the guide is about 30% member growth for the year, and more importantly, actually, did get this member growth in the right geographical areas.

So if you think about our model, we want the growth to be around the areas where we have member concentration and where we also have PCPs using the software. So think about it as a land and expand strategy. Worked really well, we had strong growth in AEP, both in New Jersey and also Georgia, which we’re building out further. Now then financially, how does that translate to financials? So if diseases are diagnosed earlier, and also treated earlier, generally that is at a lower cost of care, because you treat earlier disease in an earlier phase.

Typically the treatments are at lower cost. So what we see in our cohort analysis, which we published in the last quarter earnings, is that if we look at the cohorts, so members joining in a year compared to members that joined a year before, we see a decrease of the MCR, so the medical cost ratio, of about 700 basis points from year one to year two, and then we have an incremental 800 basis points in the cohort going from year two to year three. So that proves out the impact of our model. Now we’re currently as a plan in four states, New Jersey, Georgia, Texas, and South Carolina. Or the other states, we are offering the same powerful software, clinically focused, AI powered with powerful outcomes, also to third party providers and third party plants.

We have strong interest both on a regional and also national level. We’ve already published some logos and there’s more to come. Our strategy here is to first expand the number of lives that are covered by the software. Seconds to generate revenue, and then over time also profitability. And we believe that counterpart health can be a meaningful contributor to both revenue and profitability over time.

And remember, when you look at the size of the market, there’s about 35,000,000 people today in Medicare Advantage, and underneath that there’s also a shift from HMO to more PPO. So a very strong market fit. So again, looking at 25 as the focus, we’re executing at 25.

Unidentified speaker: We

Peter Kuipers, CFO, Clover Health: have high conviction in our guidance, and the profitability in every single quarter. So we have membership growth, revenue growth, we’re balancing profitability with reinvestments, both in the technology and in growth and in home care. We’re reinvesting in maintaining four stars or more, and also increasing benefits potentially, and outcomes, and improving outcomes. Again, I talked about counterpart expansion before, and then lastly, we’re also applying AI of course to internal operations, and driving cost efficiencies there. Then looking at the guide for ’25, again, high conviction on both the membership growth, revenue growth, profitability as well.

In our last earnings call, we actually increased the profitability guidance ranges, and we have conviction also around our BER. As an additional note, the cost trends that we have seen and that we are seeing are in line with our expectations. Then moving from ’25 into ’26, there are a number of strong tailwinds. First, we think we’re very strongly positioned for continued, very strong membership growth. I think you’ve seen that some other players in the market have stopped marketing or have reduced commissions or are closing plans.

We are also going from a three and a half star payment year to a four star payment year next year. So that is a financial tailwind, somewhat that will likely reinvest in benefits. You’ve also seen the CMS final rate notice, which is additive and compounding to our tailwinds of the moving from a 3.5 star to four star. And we’ll continue to have benefits from cohort economics and additional capabilities of our clinical platform. And then also we are now seeing more and more traction also on the efficiency program.

Now, putting it all together, what is the flywheel? So we’re growing membership, and growing also the usage of the software. It drives better clinical outcomes, better quality of life, lower total cost of care, that again drives more profitability, that we then reinvest again in growth and technology. That was what it was. Yeah, great.

We still have time maybe for one or two questions. You want to do that? Yeah.

Unidentified speaker: Yeah. Maybe just talk about what you’ve seen as sort of, you know, many things that you’ve seen Tesla and should be have been calling out sort of maybe a couple of hours, and maybe tell us what what we’ve been seeing.

Peter Kuipers, CFO, Clover Health: Yeah. Or maybe even days. Yeah. I would say cost trends are as expected. We saw some increased utilization we get regarding flu in January, but it tapered off really quickly in February and March and April and also May so far.

I would say we’re positioned differently than maybe others because we have earlier insights because we get insights directly at the point of care.

Unidentified speaker: Yeah.

Craig Jones, Healthcare Analyst, Bank of America: The visibility there. So maybe on Part D, right? We’ve seen some changes this year. Anything you can anything, any color you can provide us there in terms of how that’s maybe reshaping your seasonality, or or just anything you can give us there on Part D this year would be great.

Peter Kuipers, CFO, Clover Health: Yeah. First of all, we believe, without having insights in the internal workings of other plans, that we probably bid very well. On plan B, the trends are as expected. So we feel really comfortable there. Again, because we have earlier insights from clinical perspective, we can manage that also better than other plants.

Craig Jones, Healthcare Analyst, Bank of America: Yeah, absolutely. All right, so we got a few seconds left here. So maybe, as we kind of think about Clovers, Clovers kind of zing when everyone wants to zagging, right? So for the last few years shut down growth, profitability went through the roof, right? The industry leading MLRs.

So now when everyone’s kind of shutting down growth, now you’re flipping right around. So maybe talk about sort of strategically, like how you think you’re positioned versus your competitors and how you think you can win in this environment.

Peter Kuipers, CFO, Clover Health: Yeah, so I think we’re very strongly positioned, specifically in the markets that we are in. You see all the plans pulling back, closing plans, stopping marketing. We are very strong on the PPO basis as well. And keep in mind that in New Jersey, probably are around a 12% market share. So there’s a lot of growth to be had.

And then similarly for Georgia as well. So we believe, and we said this in the prepared remarks for earnings, that we actually will see an acceleration of both revenue and profitability growth in the years to come.

Craig Jones, Healthcare Analyst, Bank of America: Yeah. All right. Well, I think we’re out of time, but thank you so much.

Peter Kuipers, CFO, Clover Health: Thank you, Greg. Glad to be here.

Joanna Gajuk: Thank you. Hello everyone, thanks so much for joining us. My name is Joanna Gajuk, I cover healthcare facilities and managed care. Thanks so much for joining the conference and the session. So now we have a very short presentation, but hopefully very punchy, from Aviana Healthcare.

So please introduce yourself and go ahead.

Matt Buchalter, Chief Financial Officer, Aviana Healthcare: Thanks, John.

Unidentified speaker: And very glad to be here. I’m Jeff Shaner, the CEO of Aviana Healthcare. I’m here with Matt Buchalter, our Chief Financial Officer. And thank you for your time today. We’re excited to tell you about our Aviana story and how we’re thinking about insights on 2025 and an update on our year three of our strategic transformation plans.

So really starting with our transformation of how we think of the value of home care. I think first and foremost, what is key to us is we believe scale and density of services are key in the home care market. We think it helps create value for our payer and government partners. And at Aviana, we are a leading scaled national provider of home care services. So I’ll start there.

We’re a diversified platform, as you’ll see. We provide both pediatric, adult, and geriatric home care services. So that makes us unique. And we serve over 80,000 patients any given day and week. Our national footprint is really what is dedicated to driving high quality, cost effective clinical outcomes and reducing total cost of healthcare for our payer and our government partners.

And I’ll end the slide by saying, we believe deeply in aligning our interest to those of our payer and government partners. And we believe by doing that, we can improve access to cost effective, innovative care in the comfort of our patients home. Just touching on a couple of company highlights and updates. I mentioned we’re a national footprint. You’ll see the map here.

We have just over three forty locations in 34 states and growing, and I’ll talk about that. We just recently announced plans to acquire Thrive Skilled Pediatric Care, and that will further enhance our pediatric footprint. Specifically, it’ll add two additional states, Medicaid states, it’ll add both New Mexico and Kansas to our current footprint and take us to 36 states, as well as it will continue to help densify five core states today, Arizona, Georgia, North Carolina, Texas, and Virginia. So really excited. We talked last week on our earnings call.

We expect to close that transaction here in the next few weeks. Our diversified payer mix helps support our impressive 7.5% revenue CAGR over the last five years. And I’ll point out that no single payer contributes more than 10% of our total revenue. That happens to be Medicare. It’s one of our small payer groups.

Last thing on this slide, I’ll just point to, we recently updated our guidance, both revenue and adjusted EBITDA guidance, at our Q1 results. And we now expect 2025 revenue to be greater than 2,150,000,000.00 and 2025 adjusted EBITDA to be greater than two zero seven million dollars So excited about coming out of year strong, a strong beat and raise in Q1 and ready to upgrade guidance right out of the year. I’ll end this slide with, Our business plan is underpinned by thousands of dedicated clinicians and caregivers who provide compassionate care to our nation’s most vulnerable patients. That is the Avionna mission. Just a comment or two on the things as we think about year three of our strategic transformation, we continue to focus on the things that have helped to rightsize our business over the last two years.

There are five things that are primarily five strategic initiatives that are primary drivers for 2025. They are first to enhance our partnerships with government partners and preferred payers to create additional capacity and growth. That is at the core of our preferred payer and government affairs strategy. Second is to continue identifying cost efficiencies and synergies that allow us to leverage our growth. That’s been key to Matt and I’s tenure at Aviana.

Third is to modernize our medical solutions. You’ll hear the word modernize used quite a bit with Matt and I and our businesses. We’re focused on medical solutions this year to achieve our target operating model in our med solutions business. Fourth, managing our capital structure and collecting our cash while producing positive free cash flow. It’s very important to us.

And fifth, and probably most important, engaging our leaders and our employees at Aviana and delivering our mission every day. So those five core strategies are what really underpins our business plan for 2025 and how we think about the continued progress of the company. I do think it’s important to note when we talk about our business plans that our business, as JoAnna knows, our industry does not have a demand problem. Demand for our services, for home and community based care continues to be strong with both state and federal governments and managed care organizations looking for solutions that create more capacity while reducing the total cost of care. But I think as you’ll hear us talk about, it’s really leveraging and leaning into those partners.

Talking about our success with our preferred payers and government partners, this slide really highlights the success over the last three years. First of all, in all three of our business segments, both private duty services, home health and hospice, and medical solutions, we have a dedicated preferred payer and government affairs strategy for each of our businesses. On the left side of this chart, you’ll see this is dedicated to our private duty services preferred payer goal. Our goal for 2025 is to increase the number of preferred payer agreements from 22 to 30. We achieved two additional preferred pay agreements in Q1.

So we’re well under our way of reaching a goal of 30. You’ll see over the three years, we’ve gone from seven initially in our first year to now 22 at the end of twenty four. So almost three times growth with an additional eight focused on 2025. I’ll add to that that our MCO, our PDS MCO volumes, another key indicator that we report, moved from 50% at the end of the year and 24% to 54% at the end of Q1. Matt and I would tell you, we expect that to reach the high 50% by the end of twenty twenty five.

So our clinical capacity is aligning with our preferred payers. Accompanying that is the need for value based agreements. It’s important for us to add value based agreements to our preferred payers. We start with enhanced reimbursement rates to attract nurses and track caregivers through additional wages. But the addition of value based agreements, are bonus oriented for achieving specific clinical outcomes and cost targets are important.

So continued evolution from originally three back in 2022 to eight at the end of twenty four, with a goal of reaching 12 at the end of this year. So excited about the continued growth of that. As we move over to our government affairs strategy for 2025, is twofold. First, it’s to continue to execute on our legislative agenda to improve reimbursement rates in at least 10 states. So at least 10 states and we had five in the first quarter.

So a really nice start to the year with five state rate increases in our PDS business coming into the beginning of this 2025. So off to a nice start for ’25. And secondly is really to focus on the continued to advocate for Medicaid rate integrity on behalf of the children with complex medical conditions. We think it’s critically important for us to advocate on behalf of our families, especially in the current Medicaid rate environment. Lastly, I’ll touch on home health and hospice.

We’ve put a tremendous amount of focus on this business in the last two years. And our goal for 2025 was to maintain our episodic payer mix above 70% while returning to a more normalized growth rate in that business. In Q1, our episodic mix was 77%. And we also currently set up 45 preferred pay agreements for home health. So really nice momentum in our home health business.

We are well positioned for growth in 2025 and beyond. And finally, although it’s not on here, I talked about our medical solutions business. As we have achieved our desired preferred payer model in both private duty services and home health and hospice, we now have embarked on a similar strategy in our medical solutions business. To date, we have 17 preferred payers in medical solutions, and we do expect that number to grow as we achieve our desired preferred payer model in all three of our businesses. Lastly, before I hand it over to Matt, just touch on our growth plan for Aviana.

Our core organic growth at Aviana target is 5% to 7%. And that is really underpinned by the two strategies we just talked about, both the preferred payer and the government affairs strategies. By aligning our clinical capacity with those government and payer partners that value our services, we can achieve accelerated growth in our business. Also with the addition of value based agreements that gives us the potential for both upside to earn bonuses and achieve metrics and cost savings and accelerated growth. Lastly, how do we get from kind of 7% growth annually to 10% truly tuck in M and A deals like Thrive, a skilled pediatrics and other home health and hospice tuck ins that we could do would allow us to really move from kind of that 77.58% growth rate organically that we’ve achieved last five years and push us beyond the 10% growth rate on an annual basis.

So really excited about where Avion is positioned right now from a growth standpoint and being underpinned by over 7% growth is organically is a great place to be. Matt will add some color on our capital structure and how we continue to delever as our revenue and EBITDA grows. And I guess the last thing I’ll say before I turn over to Matt really is I’m incredibly optimistic about our future. We offer a cost effective patient preferred and clinically sophisticated solution for our patients and our families. And we are the right solutions for our payers, referral sources and government partners.

So with that, let me turn it over to Matt. He’s gonna touch on our capital structure and liquidity. Matt.

Matt Buchalter, Chief Financial Officer, Aviana Healthcare: Thanks, Shneur. Now let’s get into and talk a couple numbers here really quickly and start boring everybody on some of that. So just a quick overview of our operating segments. Aviana has three primary operating divisions. Our largest division is PDS or Private Duty Services.

This represents approximately 82% of our total company revenue. Historically, this division has grown in a three to 5% range in a stable market. However, we are currently experiencing accelerated growth in this division. That’s mostly being driven by that government affairs strategy and payer relations strategy that Jeff alluded to earlier. Our medical solutions segment, which we’re very excited about, has a much higher trajectory and growth trajectory historically.

Today, eight to 10% organic growth business has been consistently for quite some time. We will expect that to be a little bit muted in 2025 on a volume aspect, not necessarily on a revenue aspect, but on volume as we execute on this modernization strategy that Jeff talked about earlier. Lastly, but surely not least, our home health and hospice segment makes up the remaining 10% of our total revenue. We believe Triple H can grow in that five to 7% organic range. We are very, very committed though to episodic growth.

And we believe that is the right outcomes for our patients and our families. It not only produces better financial outcomes for the organization, but much better clinical outcomes for the organization as well. As a whole, really excited about all three of these divisions. They continue to operate at a very, very high level. And as Jeff talked about previously, we’ll strategically bring in tuck in acquisitions through M and A when appropriate and when it makes sense to our geography.

So let’s chat some numbers really quick. Taking a brief view at our Q1 financials here, we saw revenues rise 14% year over year, that’s all organic growth that we saw. We achieved year over year revenue growth in all three of our operating divisions. EDS services was the leader of the pack there at 16.5 organic growth that we saw. So that 3% to 5% range that I alluded to earlier, we’re seeing quite that enhancement driven by that preferred payers and government affairs strategy in this division.

Consolidated adjusted EBITDA of $67,400,000 was up 93.1% year over year, so this was definitely driven by that payer relations and government affairs strategy and driving great clinical outcomes this organization. Our preferred payer strategy is focused on delivering these results continuously and not only enhances once again those financial outcomes, but also those clinical outcomes, and it really does position ourselves to be a best and leading class home care provider. Quick view at our capital structure just for everybody. We maintain a strong liquidity excess of $260,000,000 That’s kind of spread between cash, securitization facility and our revolver, which was undrawn at the end of the quarter. A variable rate debt, we’ve got about $1,470,000,000 of variable rate debt, most of all of which is hedged with fixed rate or with caps and swaps.

So leads us to any volatility to the rate market out there. We are really proud of our organization in generating free cash flow and continue to generate free cash flow we did in 2023 and 2024, and We expect to be in 2025 as well on a standalone basis. Last but not least, I also want to highlight that we’ll continue to delever this organization significantly. We did a full turn in Q1 on an LTM basis, and we’re executing the strategy at a very, very high level. And that’s different that’s driven by exceptional growth, cost management, and really, really effective cash collections.

So with fifteen seconds left, you know, I’ll just kinda close this out really quickly. Thanks again for everybody’s time. As we outlined and Jeff did a great job outlining, we’re going to continue to execute on a very high level and stay very, very focused on a disciplined strategy built around scale, clinical excellence, and strong partnerships in government and payer payer relations. With a growing national footprint, balanced capital structure, and strong momentum in ’25, Aviana is well positioned to deliver long term value to patients, families, and our stakeholders. On behalf of Jeff, rest of the Aviana management team, thanks for the time guys, and look forward to updating you after Q2.

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