- Physician enablement company Clover Health is cutting about 10% of its workforce as part of a corporate restructuring plan as it aligns its selling, general and administrative expenses with its revenue base, the company announced Monday.
- It has eliminated more than 60 positions across the company as of March 30, a Clover Health spokesperson told Healthcare Dive.
- Clover, which offers Medicare Advantage plans, will also move its core plan operations to UST HealthProof’s platform, which provides cloud-based administrative services to health plans. This transition along with the job cuts will save the company about $30 million in net annual costs starting in 2024, according to a Clover release.
The partnership with UST and the reduction in staff were unrelated, according to a Clover Health spokesperson. The management team had discovered ways to streamline operations as part of an “independent reduction-in-force.”
Carrying out the move of its core plan operations in addition to corporate restructuring will result in a charge of about $7 million to $9 million in the first half of 2023, the company reported.
The changes will allow the insurtech startup to focus on Clover Home Care and software platform Clover Assistant, which aggregates patient data to help clinicians with treatment decisions and boosts health outcomes.
“Critically, Clover Assistant is in no way impacted by our announced partnership with UST, and we continue to invest heavily in the platform,” CEO Andrew Toy told Healthcare Dive. “We continue to see MCR performance that is over 1,000 basis points better for returning members whose PCPs use Clover Assistant as compared to members whose PCPs do not.”
Toy said Clover Assistant aids care for diabetes and chronic kidney disease, which leads to earlier diagnosis interventions and treatment.
Meanwhile, UST HealthProof will also focus on its strengths in working with health plans to achieve operational efficiencies.
“We are committed to Clover’s long-term success and expect to unlock significant value, and deliver real savings through increased efficiency and operational excellence,” Kevin Adams, CEO of UST HealthProof, said in a statement.
Clover is the latest digital health company to cut costs, after Teladoc announced in January that it would cut 6% of its workforce and Google sibling Verily announced it would lay off about 200 workers. Telehealth startup Cerebral also said in October it would lay off about 20% of its staff.
Founded in 2014, Clover went public in 2020 as part of a $3.7 billion merger with special purpose acquisition company Social Capital Hedosophia III.