Astrana Health Inc. · NASDAQ:ASTH
Astrana Health — Apollo Medical Holdings — Investor Presentation (March 2023)
45 slides from Astrana Health's investor presentation, Mar 13, 2023
Slide 1: Apollo Medical Holdings March 2023
Apollo Medical Holdings March 2023 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: ApolloMed at a glance: key metrics
$140M TTM Adj. EBITDA1 1.3M Patients Managed in VBC Contracts2 $1.14B TTM Revenue1 >4.2X Gross Savings vs. Median ACO 2017-20213 (1) For more information, see “Reconciliation of TTM and 12 Months Net Income to EBITDA and Adjusted EBITDA” and “Use of Non-GAAP Financial Measures“ slides for more infor
Slide 4: ApolloMed investment highlights
(1) Medicare Advantage, Managed Medicaid, Commercial, ACA Exchange, and Medicare FFS (2) ApolloMed 2019 to 2023E revenue and adj. EBITDA growth, using midpoint of 2023 guidance for both metrics. Please refer to the “2022 Guidance Reconciliation of Net Income to EBITDA and Adjusted EBITDA” and “Use o
Slide 5: We have laid a solid foundation for rapid growth
55% 25% 15% 5% Medicare Medicaid Commercial Other third parties Our Geographic Footprint Longstanding Relationships with National and Local Payers + Many more payers Served by ApolloMed’s IPAs, medical groups, and ACO Served by ApolloMed’s APA ACO 2019 2020 2021 2022 2023 Yearly Revenue 1 Average te
Slide 6: Payer agnostic platform captures outsized TAM
Payer agnostic platform captures outsized TAM and delivers better experience for patients, providers, and payers Source: CMS and HCP-LAN (2021) 6 Better for patients Enhanced patient experience and care continuity across payer, plan, and stage of life Better for providers Can be empowered across the
Slide 7: VBC infrastructure and tech stack drives replicable, scalable results
VBC infrastructure and tech stack drives highly replicable and scalable results across all patients, allowing providers to grow and succeed across value-based arrangements • 1.3M patients managed in value-based contracts • We serve Medicare Fee-for-Service (Original Medicare), Medicare Advantage (MA
Slide 8: Industry Overview and ApolloMed Value Proposition
Industry Overview and ApolloMed Value Proposition
Slide 9: Providers face complex administrative and care coordination hurdles
Providers currently face complex administrative and care coordination hurdles Reporting Contracting Claims Data Aggregation BillingCoding Hospitals Clinics Referrals Authorization ClearinghouseIT Credentials Quality Providers PR Labs Many More Payers Diagnostics ? 9
Slide 10: ApolloMed acts as a single payer connecting ecosystem participants
ApolloMed acts as a “single payer,” connects health ecosystem participants, and integrates clinical, tech, and administrative support for providers 10 ApolloMed is paid to assume risk for the care of our patients 1 We reimburse providers in a subscription model and share savings, aligning incentives
Slide 11: The ApolloMed 360° care model
11 The ApolloMed 360° care model seamlessly wraps around our providers’ operations, enabling them to thrive in value-based care arrangements 360° SpecialistsAncillary ApolloMed Ecosystem PCP-Patient Relationship Facilities Clinical Programs UM1 & Care Management Point of Care Tool Revenue Cycle Cont
Slide 12: Physician-centric approach providing flexibility and scale
We are changing healthcare through a physician-centric approach that provides flexibility and scale for our providers Industry Status Quo ApolloMed Patients supported throughout care journey by our ecosystem and care teams Entrepreneurial physicians can remain independent and partner with ApolloMed
Slide 13: Platform powered by proprietary technology suite
Our platform is powered by our proprietary technology suite, connecting patients, providers, and payers Provider Point of Care Application EHR1 Data Patient Care Management ApolloMed Care Team CM/DM, PAC, SDoH, etc.3 Communications Patient Management / RPM / Real-Time Clinical AI Care Mgmt / Workflo
Slide 14: ApolloMed Provider Portal
ApolloMed Provider Portal Quality performance Member eligibility Care plans Authorizations and claims Gaps in care Longitudinal patient record 1 2 3 4 5 6 1 Point of Care Application 14
Slide 15: ApolloMed Patient App
Telehealth scheduling Personal health data Virtual wellness checks Past and upcoming visits 1 2 3 4 2 Patient Care Application Note: Patient and provider data has been sanitized 15 ApolloMed Patient App
Slide 16: ApolloMed flywheel
ApolloMed creates a flywheel powered by deep experience, an extensive provider network, and proprietary technology Providers will succeed in value-based arrangements with ApolloMed Personalized & effective care will engage patients and lower the total cost of care Improved care pathways and predicti
Slide 17: Growth Strategy
Growth Strategy 6) apollomed
Slide 18: Two clear levers drive 30%+ growth per year
Two clear levers combine to drive 30%+ growth per year Data as of Q3 2022; (1) Note that in CA markets we have capability to more quickly accelerate new patients along risk ladder, and start patients beyond PCP Cap Only; (2) Increasing risk in value-based contracts corresponds to larger opportunity
Slide 19: Multi-faceted growth strategy across our markets
Multi-faceted growth strategy across our markets Where we are today Growth strategy Recent developments Core CA New CA Ex-CA ✓ 7 counties across core CA geographies ✓ Extensive and long-standing provider network ✓ Entered two new states (NV, TX) ✓ Executing network development plans ✓ Operations and
Slide 20: Outcomes
Outcomes 6) apollomed
Slide 21: Consistent clinical outcomes across diverse populations
Consistent clinical outcomes across diverse populations and demographics Medicare Advantage and ACO Clinical Outcomes Purpose-built technology platform enables best-in-class clinical outcomes to be delivered for all Americans Ethnicities Served5 48% 21% 12% 6% 13% (1) Figures based on analysis of Ja
Slide 22: Our ACO has demonstrated sustainable success
Our ACO has demonstrated sustainable success, proving our ability to deliver savings and quality in value-based agreements Source: CMS, Kaiser Family Foundation, US Census, Internal data and analysis (1) Gross savings defined as total benchmark expenditures less total aligned beneficiary expenditure
Slide 23: Key takeaways
10%-17% adj. EBITDA margins over the last 4 years1 Bed days 54% below benchmark; ER visits 61% below benchmark2 1.3M members across Medicare, Medicaid, and Commercial LOBs #1 among analogous ACOs in gross shared savings for the past two years Key takeaways Strongly positioned to create a future wher
Slide 24: Appendix
Appendix 5 apollomed
Slide 25: Financial Data
Financial Data 5 apollomed
Slide 26: Strong track record of revenue growth and EBITDA profile
561 687 774 1144 1400 2019 2020 2021 2022 2023E We have a strong track record of revenue growth and a robust EBITDA profile ($ in millions) Revenue 26% CAGR ($ in millions) Adjusted EBITDA1 27% CAGR Source: Internal data; (1) Adjusted EBITDA is calculated as earnings before interest, taxes, deprecia
Slide 27: ApolloMed is a scaled player with a proven and profitable model
ApolloMed is a scaled player with a proven and profitable model Business Model1 Affiliate-provider model Affiliate-provider model Affiliate-provider model Affiliate-provider Model Affiliate-provider model Members Served 1.3M 856k2 358.6k3 93.5k4 101k5 Serves All Patient Types1, 6 P P O O O Market Ca
Slide 28: 2023 Guidance
2023 Guidance ($ in millions, except for per share information) Actual YE 2022 Results 2023 Guidance Range Total Revenue $1,144.2 $1,300.0 - $1,500.0 Net Income1 $50.5 $49.5 - $71.5 EBITDA1,2 $110.1 $89.5 - $129.5 Adjusted EBITDA2 $140.0 $120.0 - $160.0 EPS - Diluted $1.08 $0.95-$1.20 (1) Net income
Slide 29: 2023 Guidance Reconciliation of Net Income to EBITDA
2023 Guidance Reconciliation of Net Income to EBITDA and Adjusted EBITDA ($ in millions) Low High Net income $ 49.5 $ 71.5 Interest expense 1.0 1.0 Provision for income taxes 23.0 38.0 Depreciation and amortization 16.0 19.0 EBITDA1 $ 89.5 $ 129.5 Loss (income) from equity method investments $ (0.8)
Slide 30: Reconciliation of Net Income to EBITDA and Adjusted EBITDA
Reconciliation of Net Income to EBITDA and Adjusted EBITDA ($ in millions) 2022 2021 2022 2021 Net income $ 0.5 $ (19.3) $ 50.5 $ 49.3 Interest expense 2.6 1.1 7.9 5.4 Interest income (1.3) (0.2) (2.0) (1.6) (Benefit from) provision for income taxes 10.0 (3.1) 36.1 28.5 Depreciation and amortization
Slide 31: Reconciliation of Net Income to EBITDA (Full Year)
Reconciliation of Net Income to EBITDA and Adjusted EBITDA (Full Year) ($ in millions) Year ended December 31, 2022 2021 2020 2019 Net income $50.5 $49.3 $122.3 $17.7 Interest expense 7.9 5.4 9.5 4.7 Interest income (2.0) (1.6) (2.8) (2.0) Provision for income taxes 36.1 28.5 56.1 8.2 Depreciation a
Slide 32: Summary of Selected Financial Results – Excluded Assets
$ in millions Year Ended December 31, 2022 ApolloMed Consolidated Excluded Assets ApolloMed Assets Revenue Capitation, net $ 930.1 - 930.1 Risk pool settlements and incentives 117.3 - 117.3 Management fee income 41.1 - 41.1 Fee-for-service, net 49.5 - 49.5 Other income 6.2 - 6.2 Total revenue 1,144.
Slide 33: Summary Balance Sheet – Excluded Assets
$ in millions ApolloMed Consolidated Excluded Assets ApolloMed Assets Current assets Cash and cash equivalents $ 288.0 30.2 257.8 Investments in marketable securities 5.6 4.5 1.1 Receivables, net 52.6 - 52.6 Receivables - related parties and loan receivable - related party 67.2 - 67.2 Other receivab
Slide 34: Summary Balance Sheet – Excluded Assets (continued)
Summary Balance Sheet – Breaking Out Excluded Assets (continued) 34 $ in millions ApolloMed Consolidated Excluded Assets ApolloMed Assets Current liabilities Fiduciary payable, accounts payable and accrued liabilities $ 57.7 2.8 54.9 Medical liabilities 84.3 - 84.3 Income taxes payable - - - Dividen
Slide 35: Summary Statement of Cash Flows – Excluded Assets
Summary Statement of Cash Flows – Breaking Out Excluded Assets 35 $ in millions ApolloMed Consolidated Excluded Assets ApolloMed Assets Cash flows from operating activities Net income $ 50.5 (18.4) 68.9 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation an
Slide 36: Summary Statement of Cash Flows (continued)
Summary Statement of Cash Flows – Breaking Out Excluded Assets (continued) 36 $ in millions ApolloMed Consolidated Excluded Assets ApolloMed Assets Cash flows from investing activities Payments from business acquisition, net of cash acquired $ (16.4) (4.7) (11.7) Proceeds from repayment of loans rec
Slide 37: Path to Global Risk
Path to Global Risk 5 apollomed
Slide 38: Managing care across outpatient and inpatient risk contracts (1/2)
Our ability to succeed at managing care across our outpatient and inpatient risk contracts allows us to capture significantly more upside than our peers (1/2) Facility / Hospital Outpatient To ta l P re m iu m D ol la r ApolloMed EBITDA from VBC We have an integrated inpatient- outpatient system fea
Slide 39: Managing care across outpatient and inpatient risk contracts (2/2)
Facility / Hospital Outpatient To ta l P re m iu m D ol la r Health plan We reduce administrative costs using our MSO’s proprietary automation tools— this allows us to profitably scale, enhancing operating leverage 3 1 1 1 VBE Rev COGS OpEx VBE EBITDA 3 3 Mgmt. Income from Non- Consolidated IPAs Our
Slide 40: Clear path moving contracts along the risk spectrum
We see a clear path to success as we continue to move our existing contracts along the risk spectrum and expect to do so in new markets as well FFS Professional Full Risk Global 40
Slide 41: Revenue from capitation on professional risk contracts
A significant part of our revenue today is generated by capitation from our professional risk contracts FFS Professional Full Risk Global 1 (1) Operating expenses excluding interest, tax, depreciation, and amortization 41
Slide 42: Additional revenue and upside from full risk contracts
We also receive additional revenue and upside from full risk contracts that we share with our facility partners FFS Professional Full Risk Global Facility / Hospital Outpatient ApolloMed EBITDA from VBC Health plan 1 1 1 To ta l P re m iu m D ol la r VBE Rev COGS OpEx VBE EBITDA Mgmt. Income from No
Slide 43: Managing the whole capitation dollar with an RKK
With an RKK, we will be able to manage the whole professional and facility risk capitation dollar and achieve more downstream synergies and upside FFS Professional Full Risk Global Total Premium Prof. + Facility Cap Medical Expense Overhead EBITDA from VBC VBE Rev COGS OpEx VBE EBITDA Plan Sub-cap P
Slide 44: Key acronyms
Key acronyms ◦ 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: C
Slide 45: Use of Non-GAAP Financial Measures
Use of Non-GAAP Financial Measures 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 measures a
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