Great. I wanna thank everyone for joining us today. It's my pleasure to be introducing Clover Health. You know, Clover is a tech-enabled insurance company focused on Medicare Advantage as well as ACO REACH. Presenting today we have Scott Leffler, who's the CFO. Ryan Schmidt from investor relations is also in the office in the audience. But, I don't know. Scott, do you wanna start off with anything before we jump into Q&A? Yeah, that would be great, Kevin. Let me just start out by thanking you and Bank of America for having us here today. For those of you who are listening who are either already following the company or have an interest in beginning to follow us now, I just wanna thank you for your interest and your time and look forward to getting you more and more acclimated to the Clover story. As Kevin mentioned, we are a healthcare company with a particular emphasis on the Medicare-eligible population, looking to support the early identification and management of chronic conditions. We are probably best known for our wide network PPO plans. Really our true differentiator is Clover Assistant. Clover Assistant is a physician enablement tool. It's a proprietary cloud-based tool that we developed in order to support physicians in that effort around the early identification and management of chronic diseases. Clover, for those who have tracked some of our history, has had delivered a track record of extraordinary growth during its history. One of the strategic areas of emphasis that we've been discussing now for a few quarters is the balancing of our prioritization of growth versus profitability. We have increasingly emphasized recently our intent to accelerate on the path towards profitability. We delivered an extraordinary improvement in overall performance for the company on the MA side during 2022 compared to 2021, but we really looked at Q1 of 2023 as a very important proof point also to document the incremental benefit from the shift in strategy as we leveraged a maturing membership base in terms of our mix of new versus returning members, benefiting from being paid on 3.5 stars for our PPO plan for the first time, operational enhancements, as well as payoff from the continuing investments that we're making in Clover Assistant. Hopefully, some of you are aware that we did report Q1 earnings earlier this week, and we could not, as a management team, be more excited about the momentum that we have shown here in 2023 so far, reflective in the step change in performance in Q1 compared to the prior year period, but also enough positive momentum that already at this early point in the year, we improved on the guidance for full year 2023 that we had just communicated a few months ago. Again, very excited about the positive direction of the company. For the first time, we did indicate that we see a path to profitability in 2024, and look forward to continuing to deliver more proof points for the investing community. With that intro, Kevin, I'll hand it back to you. Sure. I guess, one of the things that we've been trying to get an answer to this week has been the strong utilization data points that we've been seeing across hospitals, med tech companies. I mean, by and large, managed care companies are saying everything's fine. Your quarter, you know, strong improvement in MLR year-over-year. Like, is there some way that you can think about how to kind of reconcile what seems to be a re-acceleration utilization with strong MLRs and good commentary from managed care? Obviously I can speak most with the highest level of conviction around specifically what we saw out there in the market and then perhaps hypothesize around what's going on more broadly. I do think there's still a little bit of noise in the prior year comp. You know, last year, Q1 of 2022, you had elevated levels of direct COVID-related expenses, but on the other hand, slightly depressed utilization levels. I think it's natural to expect that you would see some amount of elevated utilization relative to that somewhat distorted baseline from last year. In general, what I can tell you what we saw was utilization levels that was more or less in line with what we expected. When we look at our Q1 utilization and what that informs for the rest of the year, we didn't see anything that really changed our view. When you look at our outperformance in Q1, it was really coming from the fact that we delivered 14% year-over-year revenue growth as opposed to anything abnormal on the medical expense or utilization side. That is one of the things that really gives us so much optimism around the rest of 2023, because that outsized revenue performance is something that we believe to be largely sustainable based on some of the internal metrics that we follow. Yeah. I guess maybe dig into that for a second, 'cause I guess, I think the easy comp makes a lot of sense, particularly when you think about non-COVID utilization being up so much. Yeah, from a managed care perspective, it's not just what is utilization, it's kind of what did you price for. When you thought about pricing, and you've mentioned pushing through pricing, benefiting from Star Ratings, how did you think about utilization? Did you assume a normalization in utilization? You know, had that demand, you know, still below the trend line? How would you think about it? Sure. We did assume effectively this normalization in utilization. From our view, at least, we largely saw. You know, although one thing to just bear in mind with respect to us specifically is that given this shift with an increasing emphasis on profitability than what we priced in our plans as far as last year's bid cycle also would have been influenced by some of these other strategic factors outside of our anticipated utilization levels. Okay. No, that's helpful. I guess when we think about, you know, you mentioned, say, your confidence in kind of a profitability in 2024, what still has to happen? What are the drivers to get to that level? Sure. If I start with 2023, I'll just reference the guidance that we updated earlier this week. You know, we are already projecting a step change improvement in gross profit contribution from each of our two business units. For starters, those are obviously gonna be the biggest levers. What we look to see in 2024 and going forward is continued accretion, along with top-line growth for our two business units. Then separate from that, we did recently announce a transformation initiative that includes transferring some of our non-core insurance and back office type operations to UST HealthProof, which is a new partner for us and a leader in the industry. Obviously, we keep everything that is core to us, particularly in terms of the development and maintenance of Clover Assistant, but it allows us to leverage some of the economies of scale that a plan with less than 100,000 members just doesn't have as a, it doesn't have access to. The savings which we had indicated we anticipate reaching $30 million on a run-rate basis by early 2024, is an important part of the overall levers that we intend to pull towards profitability next year. Yeah, I try to think. I mean, that $30 million would be, I don't know, 20% of the, like, of the way there. Like are there other kind of like areas of main building blocks you can size for us? Like how much of it is just kind of repricing, how much of it is, you know, costs, you know, any other ways to think about it? Yeah. Well, that gets down to a level of granularity that's beyond what we've disclosed so far. You know, we do see that path to profitability in 2024, and particularly with this Q1 proof point now. We obviously have an extraordinary level of optimism around our 2023 performance, which then helps to inform the jump-off point in terms of profitability contribution, gross profit contribution from each of our two business segments. Okay. I guess, you know, you mentioned this, you know, UST HealthProof, you know, re-relationship, and again, when I read the, you know, the description of kind of what you're off sourcing, it kind of feels like some of these are feel like to me, like core payer functions, where it's like, you know, like, how do you think about where your role starts and where you're adding value versus kind of where you see some of these more commoditized back office things? Sure. You know, some of the areas that we are transferring over to UST HealthProof are things like member contact, mailing, enrollment processes, some claims activity. These are areas where really we're very proud of our capabilities in every area. Really these are processes where there's a tremendous advantage to achieving economies of scale. We're talking about a partner that across their different lines of businesses, services are around, I believe around 3 million members as opposed to us servicing less than 100,000. It's easy to see how they have access to an economies of scale that we just aren't close to. It is a great opportunity for us to take advantage of the economies of scale that they bring at the same time that we keep what makes us special. Of course, the number one thing that makes us special is always going to be Clover Assistant and the significant capabilities and investment that we've made in that. Also as far as just the overall kind of core activities around managing the plan, managing the strategy of the plan, the bid process, things like that we maintain internally with our management team. Yes, I guess maybe you could talk a little bit about Clover Assistant then, and how you engage patients and where the value add from that is? Sure. You know, the risk of being redundant, Clover Assistant truly is our differentiator. It's a physician enablement tool, which we often say kind of brings superpowers to a physician in the clinical environment, where in today's day and age, you've got so much data that is out there from disparate sources and consolidated data from many sources. It's a machine learning tool, always getting better and adding functionality. Any time in the care environment, the physician is using Clover Assistant to supplement during care. It is giving information, feeding information to the physician in order to help enhance their clinical judgment. One of the things that's important distinction with Clover Assistant is that really what we're doing is we're investing in the clinical judgment of the physician as opposed to trying to supplant it in either way. We're providing what we deem to be useful information to help them particularly in the early identification and management of chronic conditions. Okay. Actually, you know what? Just go back to UST for a second. The savings that you're generating, are there savings on ACO REACH from that as well, or is this really more just supplementing the MA side of things? It's really the MA side/ some amount of impact on the corporate infrastructure. Okay. So, going back to the Clover Assistant, you know, you talked about engagement. So, like, can you give an update on kinda percentage of physicians who are using the Clover Assistant and some of the proof points as far as MLR for those who are using it versus those who are not using it? Sure. That is a statistic that we used to routinely publish, but what we found is that there were some distortions in the number where, you know, particularly during periods where we were in a very aggressive growth mentality and expanding into new geographies, you would have kind of a natural phenomenon where the new geographies, you have less scale there, ends up being dilutive to your KPI in terms of Clover Assistant penetration. We've stopped relying on that. What I can tell you directionally is that in an environment where we are moderating growth, in lives at least, and instead focusing on an, a more optimal mix of returning versus new members, it's natural that your concentration of, or your penetration of Clover Assistant used across your membership base is gonna benefit. Outside of the penetration statistic, we're also very excited about just the overall functionality of the tool which we're always investing in, as well as the financial impact of the tool. We have always referenced the fact that there is over a 1,000 basis point differential in FCR performance for our members who see a physician who's live on Clover Assistant compared to those members who see a physician who's not live on Clover Assistant. On our earnings call a couple of days ago, we made some qualitative comments to the effect that what we're seeing now is an incremental contribution that is significantly higher than that 1,000 basis point differential. I think that's a testament to the great work that the team has done in continuing to invest in the tool. You know, we've made comments in the past that because Clover Assistant was always built to be a cloud-based tool, it makes it very easy for us to roll out enhancements routinely. You don't have an installed, locally installed base that has to be updated over time. Really, we have a fairly routine habit or a routine process around rolling out enhancements. Sometimes it's as often as every couple of weeks that we're rolling out enhancements, and that really allows us to be nimble and responsive to the feedback loop from physicians out in the field as well as other areas that are helping to inform some of the enhancements that we're making. Yeah, 'cause I guess that's an important point because I think from the outside, everyone says they've got IT. Everyone says that they engage the physician or give them the information. It's always hard to tell, like, if where one is better than the other. I mean, is it that ability to flex and consistently iterate? Like, what do you think differentiates Clover Assistant versus, you know, what Humana or United or any other company has? Well, look, I think it starts with the people, and when you look at our CEO, Andrew Toy, who joined the company as the chief technology officer, you're talking about somebody that didn't come from a healthcare environment. He came from a tech environment. This is somebody that lived through some of the most monumental, disruptive technological advancements of our age, you know, kind of creating the smartphone as we know it today and things like that really have had such a material impact on the world that we're in today. Then he brought on Conrad, who's our new CTO, and they have built around them a team of software engineers and product development folks that are not coming from the healthcare background necessarily. They're coming from a disruptive technology environment that helps us to build a tool that really isn't hampered by, I think, the biases of somebody who's kind of used to the way things were done before. That's the foundation of it. I do agree with what I think you were getting at, which is the ability to constantly iterate and have an active feedback loop. Our engagement with physicians who are live on the tool, who give very positive grades and positive feedback on the tool, but also have great constructive input. That ability to continue to evolve it and move it forward helps to improve the efficacy of the tool in terms of clinical outcomes as well as the financial benefit from it. At the same time that we're building the confidence and buy-in from the user base. All right, great. I guess there's been a lot of concern around MA rates. I guess, you know, the final rule came in better than proposal with the three year phase in. It sounds like you guys believe your model maybe means that the company will be not as, you know, maybe a little more insulated from some of these pressures. I'd love to hear a little bit more about your view on the rates and your competitive positioning, you know, into next year. Sure. Well, you know, again, I just wanna emphasize that for the, for the near term at least, we are continuing with the strategic emphasis around profitability over membership growth. It's not as though we're out there, or intending to have very aggressively priced plans in any kind of a share shift effort. We are intending to deliver revenue growth on the MA side, but most importantly, we're intending to achieve profitability as a company as quickly as possible. But, you know, in terms of some of the advance notice information, there are specific nuances to it that I think have been widely discussed, particularly with respect to different areas of coding that are gonna be impacted over a multi-year cycle. We have said that we believe that we're less exposed to that just based on, the types of codes specifically that are impacted and the types of relationships with capitated agreements out there in the field that we don't necessarily have that are often more conducive to that type of coding. Our, our business model in general is one that we think is less exposed to some of those risks. I guess, can you provide a little bit more color on that? I think that from the outside looking in, people look at it and say, "Well, Clover Assistant is about engaging the physician to provide care in the right way, but as an obvious tangential benefit of that physician is documenting that patient better than they would have if they weren't using a Clover Assistant advice which means that the coding should be all else equal better or more full. If that's one of the logical, you know, benefits of Clover Assistant, why isn't removing coding disproportionately bad? Yeah. for you versus the average MA plan? Maybe not as bad as a capitated physician, but still not worse than average. Well, I think the devil's in the details in terms of specific conditions that are being analyzed. I think one example that's often used is around mild depression, which is a condition that, as we understand it, is very aggressively coded across the industry. It's a condition that often is deemed to not necessarily have a significant incremental cost of care associated with it. I think it's conditions like that there's a desire to, you know, assess the level of encoding intensity across the industry relative to the incremental cost of care and make sure that that's right-sized. That example or examples like that are things that we don't necessarily explicitly target at Clover with our tool. I think there are other environments that might explicitly and specifically go after things like that. Okay. You're saying the difference is that the Clover Assistant, you know, system is about documenting things where you do see a direct correlation between that diagnosis and costs, and that what's being taken away are the ones where there isn't such a direct correlation anymore, and therefore you're not over-indexed to those codes that are being pulled. I mean, the nuance there is the logic underlying Clover Assistant is not cost-driven logic, it's care-driven logic. Clover Assistant is taking the, you know, inputs relating to the clinical history of a patient and using those inputs to give useful information to the doctor to enhance care. Okay. That makes sense. You've mentioned a few times about, you know, pricing next year so that you're gonna get to profitability, but you're saying you can still grow MA revenue, but membership is not as important as revenue. That kind of implies with an overall rate update of kind of flattish, that there's gonna be a reduction in benefits for next year. Is that the right way to think about it? If so, where do you think your relative benefit value is versus, you know, the industry? Well, first of all, I think when you just look at our Q1 proof point, we just delivered 14% revenue growth on relatively flat to slightly down membership. You know, it shows what you can do with a maturing membership mix. I think for a long time, anytime we receive skepticism around the margin profile of the company, we were always very quick to emphasize, look, when you have everybody knows in this environment, when you have so many new members that are coming on with the headwinds that are associated with that in the industry, you have to contemplate that when you're assessing the margin profile of your plan. And now we're seeing the proof of that, right? We have a more maturing membership mix. That, that is only one of the levers that we could continue to see benefit from next year. I just wanna be cautious because, while we made the, you know, the general directional comment that we see a path to profitability in 2024, very early in the bid cycle, very early in, you know, crafting some of the specifics of our strategy for 2024, it's early to talk about more details. Okay. I guess when you think about the industry, though, I guess there's some concern that, you know, you guys might not be impacted as much, but on average, the industry is gonna be impacted by these coding adjustments if the rate update is below trend. That broadly speaking, you might see benefit cuts across the industry. How are you think about MA as an industry growing next year? Is that gonna be able to continue to grow high single digits or does a benefit cut mean it won't be as compelling? Yeah. I mean, obviously, there's a lot of conjecture here in trying to respond to that, but, look, MA is incredibly popular. The incremental benefit to MA members from so many of the supplemental benefits and other plan characteristics is not gonna go away. You're talking about potentially some kind of an impact on overall plan economics and benefits around the margins of it. Could that have some slight impact on kind of fringe members who might be right on the edge of choosing MA versus Original Medicare? Hypothetically, that could have some impact, but I wouldn't anticipate that it would have a disruptive impact on the market. Okay. I guess, you know, we've talked a lot about Clover Assistant. One of the other things that you guys highlighted as differentiator is the home care capability. Can you talk a little bit about what it is that you're doing there and maybe how that's different than some of the things that the companies are talking about doing? Sure. you know, we have a concentration of membership base and a rich, deep history in the state of New Jersey. Also in New Jersey, we have what we believe to be one of the largest home care businesses. you know, everybody has kind of a slightly different statistic, but directionally, the view is that your most vulnerable members, Your highest cost members are generally about 5% of your members or so are gonna represent about 30% of your medics, and those are your most vulnerable members who really need the most active support. A home care business like the one that we have in New Jersey is so incredibly well positioned to provide more active onsite in-home support to the members who need it the most. We have been talking more actively recently around the capabilities we have in that area. We have a relatively new CEO of that line of that part of our business who is really working with the team to take their existing capabilities and help to optimize it to make sure that we are visiting the correct members, the ones who are most needing of that capability in the home. What's I think interesting and exciting about that part of our business is that it really is a very kind of comprehensive suite of care services that can be provided. These are physician-led, which is different from, I think, a lot of the other references to home care type services that other companies have, is that they're not necessarily a physician-led pod of practitioners that are able to provide a fairly broad suite of home-based services to our membership base. Okay. Can you talk a little bit about the capital position of the company? Obviously, this year you're not profitable, so there's gonna be cash drain this year. Sure. When we think about profitability, there's always a difference between cash flow and profitability. Getting to profitability, but also free cash flow profitability next year, and how do you think about the cash you have and the needs to get to that point? Sure. First of all, what I'll say, and to emphasize something that we said on our earnings call a couple of days ago and we've said it a couple points over the last few quarters, is that when we look at our current liquidity position, we have sufficient liquidity to meet our expected operating needs for 2023. Our objective is to get to profitability and cash flow positivity as quickly as possible in order to insulate ourselves from any kind of reliance on capital markets or incremental funding, especially in what is a fairly complex market environment outside of Clover specific situation. We've talked about the fact in the past that certainly to the extent that there was an interesting opportunity for backup liquidity, we would certainly consider that. We're not in a position where in the immediate term, we feel like we need capital, and it's a question of how quickly we can accelerate towards that kind of cash flow positive position to insulate ourselves. Okay. Like, so Clover went public, the interesting technology, different way of engaging patients, and a view that the cost control would get you to a point where you could provide above average benefits within a wide PPO network, and you grew very rapidly. As markets have evolved, you've pivoted towards focusing on profitability. If you get to that profitability in 2024, is that a stepping stone to say, now we can relaunch to growth again in 2025 and beyond? Do you need to still kinda, well, profitability step one, there's a certain amount of profitability you need to really be able to fund that growth therefore? Is it a multi-year, you know, margin focus or how should we think about that? Yeah. I wanna be cautious 'cause we haven't provided multi-year guidance of any kind. I can tell you philosophically, over the longer term, Clover is a growth company. We will go back to a growth-oriented philosophy. I think doing it on a profitable chassis is something that is important, and it's especially valid in this market environment. We're just so excited about the momentum that we showed already in Q1 and our optimism around 2023 performance overall as a stepping stone towards that. Right now we're focused on more positive proof points for our shareholders and other stakeholders in order to enable what comes next. I guess one of those levers that's helped so far and is a potential additional lever going forward is just stars. When you think about, you know, going for 3- 3.5, that was step one. How do you think about the path to four stars? When is a reasonable, you know, given the delay of when you do things versus when it shows up, when's a reasonable way to kinda think about when that might start to flow through? As you probably recall, it was in the second half of last year that we were able to announce that we had been re-upped for 3.5 stars on the PPO plan for payment year 2024. On top of that, for the first time, we were awarded 3.5 stars on for our HMO, which would provide, even though it's a smaller part of our business, some amount of incremental tailwind in 2024 as well. Right now they're going through the process for payment year 2025. We don't have an update right now on that, obviously, we're working earnestly around that. Yeah, we don't have a specific target timeline or anything like that to communicate for the path to four stars. We have always said that our intent is to get to profitability without having to rely on four stars, and then it would certainly be an incremental benefit to us if and when we achieve it. Our business model does not hinge on being awarded four stars at any point. I guess there's been some changes to the stars over the next couple of years as far as the different, you know, social economic determinants and HEDIS scores. Like, how do you guys think that you're positioned to? Is that gonna be a positive for you? Do you have to adjust to? Well, directionally, we've always said that when you look at our demographic, it's a demographic, you know, in many instances, kind of underserved segment of the population that often CMS is looking to address in some way in order to bridge care gaps. Directionally, we've always felt like we stand to benefit from those efforts over time, and it's a question of exactly how those efforts unfold. All right. I think that's all we have time for. Thank you very much. Good. Thanks a lot. Appreciate it.