Astrana Health Inc. · NASDAQ:ASTH
Astrana Health — Apollo Medical Holdings — Investor Presentation (October 2022)
45 slides from Astrana Health's investor presentation, Oct 12, 2022
Slide 1: Apollo Medical Holdings October 2022
Apollo Medical Holdings October 2022 Powered by Technology. Built by Doctors. For Patients.
Slide 2: Forward-looking statements
This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act and Section 21E of the Exchange Act. Forward-looking statements include any statements about the Company's business, financial condition
Slide 3: Key acronyms
Key acronyms 3 ◦ ACO: Accountable Care Organization ◦ ACO REACH: Accountable Care Organization Realizing Equity, Access, and Community Health ◦ AIPBP: All-Inclusive Population-Based Payments ◦ APC: Allied Physicians of California IPA ◦ CMMI: Centers for Medicare and Medicaid Innovation Center ◦ CMS:
Slide 4: ApolloMed investment highlights
ApolloMed investment highlights 4 1. 2. 3. 5. 6. 4. Proven model for 25+ years with demonstrable clinical outcomes across all populations • MA, Managed Medicaid, Commercial, ACA Exchange, Medicare FFS, etc. Industry-leading unit economics – growing revenue at 38% YoY(1) profitably while maintaining
Slide 5: ApolloMed at-a-glance
66%(1) Fewer hospital admits per 1,000 vs. benchmark $955M(3) TTM revenue $186M(2,3) TTM adj. EBITDA 10-15% Long-term EBITDA margin ApolloMed at-a-glance 5 71%(1) Fewer ER visits per 1,000 vs. benchmark 9,800+ Contracted physicians 1.2M+ Managed lives 20+ Payer partners Apollo Medical Holdin
Slide 6: A growing national footprint addressing the needs of a diverse set of patients
A growing national footprint addressing the needs of a diverse set of patients 6 Served by ApolloMed IPAs and medical groups Served by ApolloMed’s APA ACO Planned expansion Geographic Footprint Revenue Breakdown by Member Population 1H 2022 (% of Total Revenue) 52%27% 16% 5% Medicare Medicaid Commer
Slide 7: ApolloMed is a scaled player with a proven and profitable model
ApolloMed is a scaled player with a proven and profitable model 7 Business Model(1) Affiliate- provider model Affiliate- provider model Affiliate- provider model Staff / Clinic Model Affiliate- provider model Staff / Clinic Model Staff / Clinic Model Members Served 1.2M 856k(2) 352k(3) 282k(4) 67k(5
Slide 8: Industry overview
Industry overview 6) apollomed
Slide 9: The U.S. healthcare landscape is rapidly moving towards value-based care
The U.S. healthcare landscape is rapidly moving towards value-based care… 9 Fee-for-service Value-based care Lack of incentives to improve chronic health conditions Driving a trend of rapidly increasing medical costs Rising patient dissatisfaction with provider relationship and quality of care Provi
Slide 10: Leading to a significant and growing market opportunity
… Leading to a significant and growing market opportunity 10 Source: CMS and HCP-LAN (2021) $920B+ $700B+ $340B+ Managed Medicare Commercial Medicaid Total TAM~$2T
Slide 11: However, the current healthcare system makes it very difficult to succeed
Reporting Contracting Claims Data Aggregation BillingCoding Hospitals Clinics Referrals Provider Group Authorization ClearinghouseIT Credentials PR Quality ? ? ? ? Labs Many More Payers Diagnostics However, the current healthcare system makes it very difficult to succeed
Slide 12: Platform overview
Platform overview 6) apollomed
Slide 13: ApolloMed acts as a single payer connecting health ecosystem participants
ApolloMed acts as a “single payer” by taking on risk-based contracts, connecting health ecosystem participants, and holistically supporting the care process 13 Capitated Payments Utilization & Care Management Claims Processing Ops Automation Point of Care Support Analytics & Reporting Contracting Cl
Slide 14: The ApolloMed ecosystem, powered by proprietary technology
The ApolloMed ecosystem, powered by proprietary technology, connects patients, providers, and payers 14 Provider Point of Care Application EHR(1) Data Patient Care Management ApolloMed Care Team CM/DM, PAC, SDoH, etc.(3) Communications Patient Management / RPM / Real-Time Clinical AI Care Mgmt / Wor
Slide 15: Proprietary point-of-care application is EHR-agnostic
ApolloMed Care Team Our proprietary point-of-care application is EHR-agnostic, enabling seamless transitions through our ecosystem and best-in-class care 15 Provider Point of Care Application Data Patient Care Management Clinic Setting CM/DM, PAC, SDoH, etc.(3) Communications Care Mgmt / Workflow To
Slide 16: Automated payer tools reduce administrative burden
ApolloMed Care Team Automated payer tools reduce administrative burden for physicians and create operational efficiencies 16 Provider Point of Care Application EHR(1) Data Patient Care Management CM/DM, PAC, SDoH, etc.(3) Communications Care Mgmt / Workflow Tools Preventive Care Alerts & Analytics O
Slide 17: Backend engine and data lake power provider solutions
ApolloMed Care Team Our backend engine and data lake power our provider solutions, allowing for workflow automation and data ingestion from dozens of sources 17 Provider Point of Care Application Data Patient Care Management Communications Care Mgmt / Workflow Tools ApolloMed Engine & Data LakePreve
Slide 18: Care teams act on uncovered insights
Our care teams act on the uncovered insights, enabling patients to receive seamless and complete care throughout their healthcare journey 18 Provider Point of Care Application Data Patient Care Management ApolloMed Care Team CM/DM, PAC, SDoH, etc.(3) Communications Care Mgmt / Workflow Tools ApolloM
Slide 19: Provider network and tech platform drive a virtuous cycle
ApolloMed’s large provider network and proprietary tech platform drive a virtuous cycle, powering growth and improving patient outcomes 19 Better outcomes increase value-based incentive payouts and decrease utilization Machine learning models improve with more data Providers succeed in value-based a
Slide 20: Value-based care platform aligns incentives for all stakeholders
Our value-based care platform aligns incentives and benefits for all stakeholders 20 • 300,000+ member outreach calls and surveys completed since 2019 to improve engagement and patient experience • 35,000+ patient visits to wellness center classes and/or seminars since 2018 • 99% of seniors would re
Slide 21: Clinical and financial outcomes
Clinical and financial outcomes
Slide 22: Provider groups improve patient engagement after joining ApolloMed
Provider groups consistently demonstrate improvement in patient engagement after joining ApolloMed 22 45% 70% 76% 2018 2019 2020 A n n u a l W e ll n e ss V is it R a te IPA 1 IPA 2 IPA 3 IPA 4 20% 41% 48% 2018 2019 2020 2% 8% 74% 2018 2019 2020 0% 34% 52% 2019 2020 2021 We have been able to signifi
Slide 23: Culturally competent care delivers clinical improvements
532 597 505 498 174 174 IPA 1 IPA 2 As we expand geographically, culturally competent care has helped us deliver clinical improvements among diverse Medicare and Medicaid populations 23 ER visits / 1K Medicare Advantage patients ER visits / 1K Managed Medicaid patients 423 453 266 380 210 210 IPA 1
Slide 24: ApolloMed IPAs show superior clinical outcomes
Overall, ApolloMed IPAs show superior clinical outcomes 24 National RAF(2) Avg. 1.00 ApolloMed RAF(2) ’18-’21 0.90-1.05 Medicare Advantage inpatient statistics comparison Hospital admits per 1,000 ER visits per 1,000 Average length of stay(1) Inpatient bed days per 1,000(1) Readmission rate(1) 274 1
Slide 25: Model works for both managed care and FFS populations
ApolloMed’s model and platform work for both managed care and FFS populations, helping move FFS care into a value-based care framework 25 $0 $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 $350,000 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Medicare FFS ER Expense per 1,000
Slide 26: ACO has demonstrated sustainable success
Our ACO has demonstrated sustainable success, proving our ability to deliver savings and quality in value-based agreements 26 ApolloMed’s ACO consistently among top analogous ACOs in country: 2020 gross savings $ 2019 gross savings $ Gross savings(1), 2017-2020 *Median gross savings for ACOs which p
Slide 27: Growth strategy
Growth strategy 6) apollomed
Slide 28: ApolloMed has a proven model built over 25+ years
ApolloMed has a proven model built over 25+ years 28 Leading tech platform and time-tested playbook tried and true in a large and diverse market Existing national presence with a comprehensive strategy to deploy playbook in new markets Over 1.2 million members managed Members in Medicare Advanta
Slide 29: Creating additional value for existing membership base
For our existing membership base, we consistently create additional value as we grow by scaling revenue and driving down costs… 29 Increased capitation due to contracting and provider network Better specialty network cost management Additional service lines Reduced outsourced MSO fees Improved quali
Slide 30: At an inflection point with multiple long-term growth levers
… And are at an inflection point with multiple long-term growth levers 30 Multiple drivers of long-term growth of ~30-45% YoY +15% YoY membership growth in Covered California Consolidated and grew Bay Area IPA Medicare Advantage membership by 28% Top 5 insurer partnership yielded over 10k patients i
Slide 31: Financials
Financials 6) apollomed
Slide 32: Strong track record of revenue growth, with robust margins
75 127 174 2019 2020 2021 2022E Strong track record of revenue growth, with robust margins 32 17%($ in millions) Revenue 561 687 774 2019 2020 2021 2022E 23-25% CAGR ($ in millions) Adjusted EBITDA(1) 22-30% CAGR Margin % 18% 22.5%13% (1) See “Reconciliation of Net Income to EBITDA and Adjusted EBIT
Slide 33: Profitable with attractive and differentiated unit economics
ApolloMed is profitable with attractive and differentiated unit economics 33 1 2 ApolloMed’s scale and extensive experience in value-based care result in better per member per month (PMPM) payments vs industry standard 1 Our large network of primary care and specialty providers, as well as our focus
Slide 34: Conclusion
Conclusion 34 ApolloMed’s success and experience in value-based care position the company well to capture a growing $2T market across all membership populations With 25+ years of experience, our MSO has a proven track record of handling the challenges that prevent physicians from succeeding in value
Slide 35: Appendix
Appendix fe) apollomed
Slide 36: 2022 Guidance
36www.apollomed.net $ in millions 2022 Guidance Range Total Revenue $1,055.0-$1,085.0 Net Income(1) $38.0-$57.0 EBITDA(1,2) $81.0-$111.0 Adjusted EBITDA(2) $136.0-$166.0 (1) Net income and EBITDA forecast includes the impact of APC’s investment in a payer partner that completed an initial public off
Slide 37: 2022 Guidance Reconciliation of Net Income to EBITDA and Adjusted EBITDA
2022 Guidance Reconciliation of Net Income to EBITDA and Adjusted EBITDA 37 (1) See “Use of Non-GAAP Financial Measures” slide for more information ($ in millions) Low High Net income $38 $57 Interest expense, net 4 4 Provision for income taxes 20 31 Depreciation and amortization 19 19 EBITDA (1) $8
Slide 38: Reconciliation of Net Income to EBITDA and Adjusted EBITDA
Reconciliation of Net Income to EBITDA and Adjusted EBITDA 38 Year ended December 31, ($ in millions) 2021 2020 2019 Net income $49.3 $122.3 $17.7 Interest expense 5.4 9.5 4.7 Interest income (1.6) (2.8) (2.0) Provision for income taxes 28.5 56.1 8.1 Depreciation and amortization 17.5 18.4 18.3 EBIT
Slide 39: Quarterly and six-month reconciliation of Net Income to EBITDA
39www.apollomed.net (1) See “Use of Non-GAAP Financial Measures” slide for more information. (2) Other income includes gain on sale of equity securities. (3) The Adjusted EBITDA calculations for the three and six months ended June 30, 2022, also include stock-based compensation and APC excluded cost
Slide 40: Summary of Selected Financial Results – 1Q & 1H 2022
www.apollomed.net 40 Three Months Ended June 30, Six Months Ended June 30, $ in millions 2022 2021 2022 2021 Revenue Capitation, net $ 227.6 $ 144.6 $ 449.7 $ 289.3 Risk pool settlements and incentives 18.8 16.2 36.9 34.2 Management fee income 10.0 8.1 20.5 16.7 Fee-for-service, net 11.7 4.6 22.8 7.
Slide 41: Results breaking out excluded assets
www.apollomed.net 41 Six Months Ended June 30,2022 Year Ended December 31, 2021 Year Ended December 31, 2020 $ in millions ApolloMed Consolidated Excluded Assets ApolloMed Assets ApolloMed Consolidated Excluded Assets ApolloMed Assets ApolloMed Consolidated Exclude d Assets ApolloMed Assets Revenue
Slide 42: Summary Balance Sheet – Breaking Out Excluded Assets
www.apollomed.net 42 Summary Balance Sheet – Breaking Out Excluded Assets $ in millions ApolloMed Consolidated Excluded Assets ApolloMed Assets ApolloMed Consolidated Excluded Assets ApolloMed Assets ApolloMed Consolidated Excluded Assets ApolloMed Assets Current assets Cas h and cas h equivalents $
Slide 43: Summary Balance Sheet – Breaking Out Excluded Assets (continued)
www.apollomed.net 43 Summary Balance Sheet – Breaking Out Excluded Assets (continued) $ in millions ApolloMed Consolidated Excluded Assets ApolloMed Assets ApolloMed Consolidated Excluded Assets ApolloMed Assets ApolloMed Consolidated Excluded Assets ApolloMed Assets Current liabilities Fiduciary pa
Slide 44: Use of Non-GAAP Financial Measures
Use of Non-GAAP Financial Measures 44 This presentation contains the non-GAAP financial measures EBITDA and adjusted EBITDA, of which the most directly comparable financial measure presented in accordance with U.S. generally accepted accounting principles (“GAAP”) is net (loss) income. These measure
Slide 45: Investor Relations contact
For inquiries, please contact: ApolloMed Investor Relations (626) 943-6491 investors@apollomed.net Carolyne Sohn, The Equity Group (415) 568-2255 csohn@equityny.com
Apollo Medical Holdings — Investor Presentation (October 2022) on 6ix