When insurtech Shiny Well being Group first emerged again in 2015, it had daring objectives of disrupting the insurance coverage trade by leveraging know-how. It raised a whopping $2.4 billion — together with from Cigna Ventures — and went public in 2021 earlier than the IPO market dried up.
As soon as a high-flying insurtech that aimed to shake up the legacy insurance coverage trade, Shiny Well being has since seen its wings clipped. And even a current company rebrand is unlikely to burnish its picture.
Within the third quarter of 2023, the corporate reported a $462.8 million working loss and in April opted to get out of the insurance coverage enterprise altogether. In January, it bought the remaining bits of that enterprise — two California Medicare Benefit plans — to Molina Healthcare for $500 million, $100 million much less than what was beforehand deliberate.
After jettisoning its insurance coverage enterprise, the corporate shifted focus to its present value-based client care enterprise known as NeueHealth. NeueHealth has two segments: NeueCare and NeueSolutions. NeueCare delivers “value-driven” care to customers throughout the ACA Market, Medicare and Medicaid via its owned clinics and partnerships with suppliers. NeueSolutions helps unbiased suppliers and medical teams tackle value-based preparations via inhabitants well being instruments and partnerships with well being plans and authorities applications.
NeueHealth serves greater than 500,000 customers and companions with greater than 3,000 affiliated suppliers. Desperate to shake off associations with a failed enterprise in insurance coverage, Shiny Well being introduced final month that NeueHealth could be its company model title. It additionally moved its headquarters from Minneapolis, Minnesota to Doral, Florida.
However will a number of thousand miles and a brand new avatar save the corporate?
Nobody from NeueHealth agreed to be interviewed. A number of trade consultants stated the corporate had no alternative however to rebrand given the shift in its focus however most weren’t bullish about its future.
“The title could also be ‘neue’ however their issues are outdated,” quipped Ari Gottlieb, principal of A2 Technique Corp., in an interview. “It doesn’t change something. This was a basically failed firm when its title was Shiny and it’s a failed firm when the title is Neue. You may depart behind your outdated title and the legacy that comes with it, however you may’t depart behind your liabilities.”
The corporate is roughly $1.4 billion in debt, Gottlieb estimated. This contains cash owed to the Facilities for Medicare and Medicaid Providers (CMS) in threat adjustment funds, in addition to cash to Cigna Ventures, New Enterprise Associates and CalSTRS, he stated.
As well as, $100 million of its $500 million from its MA sale to Molina Healthcare is being put into an escrow account, during which a 3rd get together holds onto the funds till sure obligations are met, based on an SEC submitting. The funds can be offered if there’s a profitable consolidation of Shiny Well being’s two MA plans — Model New Day and Central Well being Plan — or if Model New Day is ready to obtain a minimum of three stars for its Half D plans from CMS. So there’s a chance that NeueHealth received’t even get all of this cash, Gottlieb stated.
Gottlieb added that the NeueHealth enterprise isn’t price $1.4 billion, making it unlikely that it’ll survive.
“I simply suppose it is a zombie firm that no one cares about. … I feel they only drain this after which file for chapter safety in March of 2025 earlier than they owe the federal authorities cash and there’s nothing anyone can do about it,” he stated.
One other knowledgeable echoed Gottlieb basically implying the inner issues can’t be glossed over by a rebranding — although a rebranding was essential to direct focus to a consumer-focused enterprise.
“It’s altering the window dressing, nevertheless it doesn’t change something significant about their stability sheet,” stated Wesley Sanders, a well being plan marketing consultant at Evensun Consulting, in an interview.
Sanders stated he anticipates NeueHealth both going below or being acquired, notably as a result of he hasn’t “seen something particular about their value-based care preparations that makes me suppose that they’re going to have a greater mannequin than anyone else.”
In keeping with Gottlieb, a few of NeueHealth’s rivals within the value-based care house embrace Cano Well being (which simply filed for chapter) and CareMax.
Whereas Gottlieb and Sanders don’t foresee a future for NeueHealth, one trade follower has a extra optimistic view.
“Shiny Well being is working in an area that has a number of momentum and tailwinds as payers look to associate with organizations which can be prepared to take monetary threat for the care they’re offering,” stated Tyler Giesting, director of healthcare and life sciences at West Monroe, in an e-mail. “Giant payers are vertically integrating by constructing or buying their manner into the house NeueHealth operates in, which I’d count on to solely proceed.
“Between Medicare ACO, Medicare Benefit and Medicaid, there’ll proceed to be alternatives for them to assist suppliers transition to value-based preparations in new markets or to construct or purchase their very own clinics in new areas. I’d count on extra geographic growth as they construct further scale and develop lined lives.”
Unsurprisingly Mike Mikan, president and CEO of NeueHealth, stated in a information launch that he anticipates a constructive future for the corporate.
“Taking the NeueHealth title signifies our dedication to delivering worth via our differentiated care mannequin that uniquely aligns the pursuits of well being customers, suppliers, and payers. Our NeueHealth id has been a core and profitable a part of our group’s story, and we look ahead to constructing on its sturdy efficiency as we take the lead within the trade’s shift to value-based care.”
The sunny tone however, Giesting of West Monroe believes the corporate’s success will finally be decided by how effectively its working and care fashions carry out in value-based contracts.
Picture: carloscastilla, Getty Photographs
