Astrana Health Inc. · NASDAQ:ASTH
Astrana Health — Apollo Medical Holdings — Investor Presentation (November 2022)
45 slides from Astrana Health's investor presentation, Nov 8, 2022
Slide 1: Apollo Medical Holdings November 2022
Apollo Medical Holdings November 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: ApolloMed investment highlights
ApolloMed investment highlights 3 1. 2. 3. 5. 6. 4. Proven model for 25+ years with demonstrable clinical outcomes across all populations (Medicare Advantage, Managed Medicaid, Commercial, ACA Exchange, and Medicare FFS) Industry-leading unit economics support strong growth, with 3-year revenue CAGR
Slide 4: ApolloMed Overview
10,600+ Contracted Physicians ApolloMed Overview 4 $132M TTM Adj. EBITDA2 $1.05B TTM Revenue2 ApolloMed is a tech- powered, value-based healthcare network for all Americans We enable best in class clinical outcomes within our value-based care provider organizations We provide quality care to traditi
Slide 5: Industry Overview & ApolloMed Value Proposition
Industry Overview & ApolloMed Value Proposition
Slide 6: The U.S. healthcare landscape is rapidly moving towards value-based care
The U.S. healthcare landscape is rapidly moving towards value-based care… 6 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 7: Leading to a significant and growing market opportunity
… Leading to a significant and growing market opportunity 7 $920B+ $700B+ $340B+ Managed Medicare Commercial Medicaid Total TAM~$2T Source: CMS and HCP-LAN (2021)
Slide 8: Providers must navigate a complex web of administrative functions
Reporting Contracting Claims Data Aggregation BillingCoding Hospitals Clinics Referrals Provider Group Authorization ClearinghouseIT Credentials PR Quality ? ? ? ? Labs Many More Payers Diagnostics Currently, providers are forced to navigate a complex web of administrative functions in order to take
Slide 9: ApolloMed acts as a single payer by taking on risk-based contracts
ApolloMed acts as a “single payer” by taking on risk-based contracts, connecting health ecosystem participants, and holistically supporting the care process 9 Reimbursement, Capitation, Shared Savings Hospitals LabsUrgent Care Clinics Diagnostics 20+ total payers Multiple population types 14 IPAs /
Slide 10: Ecosystem powered by proprietary Value-Based Enablement technology suite
Our ecosystem is powered by our proprietary Value-Based Enablement (VBE) technology suite, connecting patients, providers, and payers 10 Provider Point of Care Application EHR1 Data Patient Care Management ApolloMed Care Team CM/DM, PAC, SDoH, etc.3 Communications Patient Management / RPM / Real-Tim
Slide 11: Platform manages risk-based payments and generates shared savings
✓ 25+ years operational expertise ✓ Tech-powered quality improvement and workflow automation ✓ Population health support ✓ Nurse-led case management ✓ Deep local community ties The ApolloMed platform allows us to successfully manage risk-based payments from payer partners and generate shared savings
Slide 12: Growing nationwide presence and healthcare relationships
We have a growing nationwide presence and 25 years of healthcare relationships across diversified lines of business Served by ApolloMed IPAs and medical groups Served by ApolloMed’s APA ACO Planned expansion Our Geographic Footprint Key relationships with national and local payers 55% 25% 15% 5% Med
Slide 13: 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 13 Improved primary & preventive care leads to greater shared savings Tech-enabled support for providers helps them provide best-in class primary care Providers suc
Slide 14: ApolloMed is a scaled player with a proven and profitable model
ApolloMed is a scaled player with a proven and profitable model 14 Business Model1 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 856k2 356k3 282k4 102k5 145k6
Slide 15: Clinical Outcomes
Clinical Outcomes 6) apollomed
Slide 16: Provider groups improve patient engagement after joining ApolloMed
Provider groups consistently demonstrate improvement in patient engagement after joining ApolloMed 16 45% 70% 76% 2018 2019 2020 A nn ua l W el ln es s V is it R at e 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 significan
Slide 17: 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 17 ER visits / 1K Medicare Advantage patients ER visits / 1K Managed Medicaid patients 423 453 266 380 210 210 IPA 1
Slide 18: ApolloMed IPAs show superior clinical outcomes
Overall, ApolloMed IPAs show superior clinical outcomes 18 Medicare Advantage inpatient statistics comparison Hospital admits per 1,000 ER visits per 1,000 Average length of stay1 Inpatient bed days per 1,0001 Readmission rate1 274 197 93 Benchmark Competitor 66% fewer 500 465 143 Benchmark Competit
Slide 19: Model works for 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 19 $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 20: ACO has demonstrated sustainable success
Our ACO has demonstrated sustainable success, proving our ability to deliver savings and quality in value-based agreements 20 ApolloMed’s ACO consistently among top analogous ACOs in country: 2020 gross savings $ 2019 gross savings $ Gross savings1, 2017-2020 *Median gross savings for ACOs which par
Slide 21: Growth Strategy
Growth Strategy 6) apollomed
Slide 22: Growth Strategy by Market
Growth Strategy by Market 22 CA Core Markets New CA Markets Ex-CA Markets Moving toward global risk via RKK1 and leveraging MSO relationships will drive growth in core markets in CA Expanding our specialist, facility, and payer partnerships will be the largest growth driver in the Bay Area Existing
Slide 23: Headway in new markets along the risk spectrum
With a strong track record of managing professional and full risk in our core markets, we are making headway in new markets in and outside CA along the risk spectrum 23 FFS PCP Cap Professional Risk Full Risk1 Global Risk Core CA 500,000+ N/A 250,000 – 500,000 250,000 – 500,000 10,000 – 100,000 New
Slide 24: Growth in core California markets
Moving toward global risk via RKK and leveraging MSO relationships will drive growth in core markets in CA 24 Current Presence / Activity • We are currently in 17 counties across our core CA geographies • Extensive network and long-term partnerships provide consistent and attractive economics • Acqu
Slide 25: Bay Area partnerships as largest growth driver
Expanding our specialist, facility, and payer partnerships will be the largest growth driver in the Bay Area 25 Current Presence / Activity • Added ~19,000 new members total in new CA counties (including ~5,000 FFS patients) • Added ~550 new providers in new CA counties Growth • In process of acquir
Slide 26: Expansion outside California
Existing anchor payer and provider partnerships will allow us to expand and take on more risk outside CA 26 Current Presence / Activity • Entered 2 new states outside of CA • Rolled out network development plan for new markets • Hired regional medical directors and leaders to oversee ops and growth
Slide 27: Financial Overview
Financial Overview 6) apollomed
Slide 28: Strong track record of revenue growth and robust EBITDA profile
We have a strong track record of revenue growth and a robust EBITDA profile 28 ($ in millions) Revenue 25-26% CAGR ($ in millions) Adjusted EBITDA1 36-45% CAGR 1,095- 1,115 (1) Adjusted EBITDA is calculated as earnings before interest, taxes, depreciation, and amortization, excluding income or loss
Slide 29: 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) 29 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
Slide 30: Managing care across outpatient and inpatient risk contracts (2/2)
Our ability to succeed at managing care across our outpatient and inpatient risk contracts allows us to capture significantly more upside than our peers (2/2) 30 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 automa
Slide 31: Clear path to move 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 31 FFS Professional Full Risk Global
Slide 32: Revenue from capitation on professional risk contracts
A significant part of our revenue today is generated by capitation from our professional risk contracts 32 FFS Professional Full Risk Global 1 (1) Operating expenses excluding interest, tax, depreciation, and amortization
Slide 33: Additional revenue from full risk contracts shared with facility partners
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) Operating expenses excluding interest, tax, depreciation, and amortization 1
Slide 34: With an RKK, managing the whole capitation dollar
With an RKK, we will be able to manage the whole professional and facility risk capitation dollar and achieve more downstream synergies and upside 34 FFS Professional Full Risk Global Total Premium Prof. + Facility Cap Medical Expense Overhead EBITDA from VBC VBE Rev COGS OpEx VBE EBITDA Plan Sub-ca
Slide 35: Conclusion
Conclusion 6) apollomed
Slide 36: Key Takeaways
Key Takeaways 36 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 va
Slide 37: Appendix
Appendix fe) apollomed
Slide 38: Our ApolloMed Leadership team
C o p y ri g h t © 2 0 2 0 b y B o st o n C o n su lt in g G ro u p . A ll r ig h ts r e se rv e d . 38 Our ApolloMed Leadership team Thomas S. Lam, MD, MPH Co-Chief Executive Officer & President Brandon Sim Co-Chief Executive Officer Chan Basho Chief Strategy Officer, Interim Chief Financial Office
Slide 39: Key acronyms
Key acronyms 39 ◦ 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 40: Updated 2022 Guidance
40 $ in millions 2022 Guidance Range (as of May 5, 2022) 2022 Guidance Range (as of November 3, 2022) Total Revenue $1,055.0-$1,085.0 $1,095.0-$1,115.0 Net Income1 $38.0-$57.0 $50.5-$67.0 EBITDA1,2 $81.0-$111.0 $107.5-$133.5 Adjusted EBITDA2 $136.0-$166.0 $136.0-$166.0 Updated 2022 Guidance (1) Net
Slide 41: 2022 Guidance Reconciliation of Net Income to EBITDA and Adjusted EBITDA
41 ($ in millions) Low High Low High Net income $ 38.0 $ 57.0 $ 50.5 $ 67.0 Interest expense 4.0 4.0 8.0 8.0 Provision for income taxes 20.0 31.0 30.0 39.5 Depreciation and amortization 19.0 19.0 19.0 19.0 EBITDA1 $ 81.0 $ 111.0 $ 107.5 $ 133.5 Loss (income) from equity method investments $ - $ - $
Slide 42: 2022 Reconciliation of Three and Nine Months Net Income to EBITDA
($ in millions) 2022 2021 2022 2021 Net income $ 27.4 $ (5.4) $ 50.1 $ 68.6 Interest expense 2.4 1.0 5.3 4.3 Interest income (0.2) (0.4) (0.7) (1.3) Provision for income taxes 13.9 (0.1) 26.1 31.6 Depreciation and amortization 4.8 4.7 13.5 13.1 EBITDA1 $ 48.2 $ (0.3) $ 94.3 $ 116.3 (Income) loss fro
Slide 43: Reconciliation of TTM and Annual Net Income to EBITDA and Adjusted EBITDA
Reconciliation of TTM and 12 Months Net Income to EBITDA and Adjusted EBITDA 43 Year ended December 31, ($ in millions) TTM as of Sept 30, 2022 2021 2020 2019 Net income $30.8 $49.3 $122.3 $17.7 Interest expense 6.4 5.4 9.5 4.7 Interest income (0.9) (1.6) (2.8) (2.0) Provision for income taxes 23.0
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: For inquiries, please contact ApolloMed Investor Relations
For inquiries, please contact: ApolloMed Investor Relations (626) 943-6491 investors@apollomed.net Carolyne Sohn, The Equity Group (408) 538-4577 csohn@equityny.com
Apollo Medical Holdings — Investor Presentation (November 2022) on 6ix