When insurtech Shiny Well being Crew first emerged again in 2015, it had daring objectives of disrupting the insurance coverage trade through leveraging era. It raised a whopping $2.4 billion — together with from Cigna Ventures — and went public in 2021 earlier than the IPO marketplace dried up.
As soon as a high-flying insurtech that aimed to shake up the legacy insurance coverage trade, Shiny Well being has since observed its wings clipped. Or even a contemporary company rebrand is not going to burnish its symbol.
Within the 3rd quarter of 2023, the corporate reported a $462.8 million running loss and in April opted to get out of the insurance coverage industry altogether. In January, it bought the rest bits of that industry — two California Medicare Merit plans — to Molina Healthcare for $500 million, $100 million much less than what was once up to now deliberate.
After jettisoning its insurance coverage industry, the corporate shifted focal point to its present value-based person care industry referred to as NeueHealth. NeueHealth has two segments: NeueCare and NeueSolutions. NeueCare delivers “value-driven” care to customers around the ACA Market, Medicare and Medicaid thru its owned clinics and partnerships with suppliers. NeueSolutions is helping impartial suppliers and clinical teams tackle value-based preparations thru inhabitants well being gear and partnerships with well being plans and govt techniques.
NeueHealth serves greater than 500,000 customers and companions with greater than 3,000 affiliated suppliers. Desperate to shake off associations with a failed project in insurance coverage, Shiny Well being introduced closing month that NeueHealth can be its company emblem identify. 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?
No person from NeueHealth agreed to be interviewed. A number of trade professionals stated the corporate had no selection however to rebrand given the shift in its focal point however maximum weren’t bullish about its long run.
“The identify is also ‘neue’ however their issues are previous,” quipped Ari Gottlieb, main of A2 Technique Corp., in an interview. “It doesn’t exchange the rest. This was once a essentially failed corporate when its identify was once Shiny and it’s a failed corporate when the identify is Neue. You’ll go away in the back of your previous identify and the legacy that includes it, however you’ll be able to’t go away in the back of your liabilities.”
The corporate is more or less $1.4 billion in debt, Gottlieb estimated. This comprises cash owed to the Facilities for Medicare and Medicaid Products and services (CMS) in possibility adjustment bills, in addition to cash to Cigna Ventures, New Undertaking Buddies 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, by which a 3rd birthday celebration holds onto the budget till positive responsibilities are met, in step with an SEC submitting. The budget will probably be supplied if there’s a a success consolidation of Shiny Well being’s two MA plans — Logo New Day and Central Well being Plan — or if Logo New Day is in a position to reach no less than 3 stars for its Phase D plans from CMS. So there’s a risk that NeueHealth received’t even get all of this cash, Gottlieb stated.
Gottlieb added that the NeueHealth industry isn’t price $1.4 billion, making it not going that it’s going to live to tell the tale.
“I simply assume it is a zombie corporate that no person cares about. … I feel they only drain this after which record for chapter coverage in March of 2025 earlier than they owe the government cash and there’s not anything any one can do about it,” he stated.
Every other skilled echoed Gottlieb necessarily implying the interior issues can’t be glossed over through a rebranding — even supposing a rebranding was once vital to direct focal point to a consumer-focused project.
“It’s converting the window dressing, however it doesn’t exchange the rest significant about their stability sheet,” stated Wesley Sanders, a well being plan advisor at Evensun Consulting, in an interview.
Sanders stated he anticipates NeueHealth both going below or being obtained, specifically as a result of he hasn’t “observed the rest particular about their value-based care preparations that makes me assume that they’re going to have a greater type than any one else.”
In keeping with Gottlieb, a few of NeueHealth’s competition within the value-based care house come with Cano Well being (which simply filed for chapter) and CareMax.
Whilst Gottlieb and Sanders don’t foresee a long run for NeueHealth, one trade follower has a extra positive view.
“Shiny Well being is working in an enviornment that has numerous momentum and tailwinds as payers glance to spouse with organizations which can be keen to take monetary possibility for the care they’re offering,” stated Tyler Giesting, director of healthcare and lifestyles sciences at West Monroe, in an e mail. “Huge payers are vertically integrating through construction or obtaining their method into the gap NeueHealth operates in, which I’d be expecting to simply proceed.
“Between Medicare ACO, Medicare Merit and Medicaid, there’ll proceed to be alternatives for them to lend a hand suppliers transition to value-based preparations in new markets or to construct or achieve their very own clinics in new spaces. I’d be expecting extra geographic enlargement as they construct further scale and develop lined lives.”
Unsurprisingly Mike Mikan, president and CEO of NeueHealth, stated in a information unlock that he anticipates a good long run for the corporate.
“Taking the NeueHealth identify indicates our dedication to turning in cost thru our differentiated care type that uniquely aligns the pursuits of well being customers, suppliers, and payers. Our NeueHealth identification has been a core and a success a part of our group’s tale, and we look ahead to construction 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 luck will in the long run be made up our minds through how neatly its running and care fashions carry out in value-based contracts.
Photograph: carloscastilla, Getty Photographs