Clover Health, an innovative technology company focused on improving health outcomes for seniors, on January 10th announced an impressive membership growth of 37 percent in 2019. From 39,400 members in January 2019, the company reached 54,400 members at the beginning of this month.
San Francisco based Clover Health uses data analysis and preventive care to help seniors and private holders of Medicare find more affordable insurance options. The company’s technology is able to recognize when patients need treatment and sends help through its own team of nurse practitioners and social workers, thus saving money for both the member and the insurer.
One of the fastest-growing Medicare Advantage plans, Clover’s significant increase in membership is compared to the 5-year industry average of just 7 percent year-over-year growth.
The company registered growth throughout the entire year, but experienced a surge of new contracts during the recently ended Medicare Annual Election Period (AEP).
Many of the new members come from New Jersey, a healthcare market notorious for its fragmentation. There, Clover has excellent outcomes — thanks to affordable, high-quality Medicare Advantage plans to ensure patients have access to a wide network of primary care physicians, specialists, and hospitals. Clover has a few advantages, compared to the narrow networks commonly found with other Medicare Advantage plans. Clover provider networks are broad and open, its members are allowed to get treatment from any doctor participating in Medicare who is willing to accept them. Clover focuses on keeping out-of-pocket costs for its members to an absolute minimum and allows members to pay the same low cost-sharing fee regardless of whether the doctor is in- or out-of-network.
In March of last year, the company decided to let 140 people off, despite securing another $500 million only two months earlier, according to TechCrunch. At that moment, one year ago, Clover Health had raised a total of $925 million. Even though the business is supported by top-tier investors and has sufficient capital, it has struggled to shrink its losses. In 2015, Clover Health posted a net loss of $4.9 million only to increase that amount by 7x the following year to $34.6 million, according to financial documents obtained by Axios. At the time, Clover Health had 20,600 Medicare Advantage members, who brought $184 million in taxpayer revenue. According to CNBC, the company’s initial yearly plan was to double its membership base, but the company only managed to expand from 20,000 in 2016 to 27,000 in September 2017.
In January of last year, Clover Health counted 40,000 members in Georgia, New Jersey, Arizona, Pennsylvania, South Carolina, Tennessee, and Texas. The business was earning roughly $10,000 in revenue per member from the Centers for Medicare and Medicaid Services, or currently about $400 million in annual revenue. As a Medicare Advantage plan, the majority of Clover Health’s cash comes from the government.
At the time of the lay-offs, Clover Health stated it had added 35% more members to its popular Medicare Advantage plans in the last 12 months. ”We have made enormous strides in the last year, leveraging our data platform to drive improved clinical decision making at the point of care for our members.
We are restructuring some teams in recognition of our need for deep Medicare Advantage skill sets to continue propelling us forward to fully achieve our mission of improving every life.
Around 140 current employees will be laid off as part of this process. We are immensely grateful for their contributions – we couldn’t have gotten this far without them. But to get Clover to the next level, we need a team that includes new staff with different skills and experience. Clover continues hiring top talent to help fuel our growth and will be opening a new office in Nashville to better tap into the pool of healthcare expertise located in the area.”
Clover is providing services to many low-income and often overlooked communities, the company’s assumed mission is to bring healthcare to people who need it the most and are usually ignored by other insurers. According to a Clover analysis, approximately half of the people in New Jersey who registered into a Medicare Advantage plan for the first time this past AEP chose Clover over the 7 other insurance companies they had at their disposal. The company intends to use this successful formula to generate state-wide growth in its other markets in 2021.
Clover is not only expanding its membership base, but also providing significant clinical value to doctors through its Clover Assistant software platform. Based on AI and machine learning, Clover Assistant, which is basically a GPS for healthcare, establishes prioritized care recommendations according to each member’s healthcare history (including comorbid conditions, lab results, and medications). Clover Assistant also helps physicians select the most effective therapeutics for Clover members, by surfacing the latest evidence-based protocols, thus ensuring patients get the highest level of care. Currently, over a thousand doctors in New Jersey are up and running with Clover Assistant.
Clover members with diabetes, for instance, benefit from customized management recommendations based on their particular other conditions, such as cardiovascular or kidney disease, and are directed to the most appropriate treatment choices within the health plan formulary.