Clover Health sees losses cut, revenue climb in 2017
- Alphabet-backed startup Clover Health lost $22 million in 2017, a marked improvement from the $35 million lost the previous year, Bloomberg reports.
- The San Francisco-based company, which sells Medicare Advantage plans in New Jersey, saw revenue climb to $267 million versus $184 million in 2016. Its strategy employs data analytics to drive down insurance costs.
- For 2018, Clover anticipates revenue in the $330 million range based on current enrollment rates, co-founder and CEO Vivek Garipalli told Bloomberg.
For 2018, CMS lowered Clover’s rating for Medicare down half a star to three stars out of a possible five, meaning reduced payments on some claims. The lower payments shouldn't affect this year’s performance, Garipalli said, adding the company is upgrading the way it measures customer satisfaction to address issues before they are reported to officials.
Despite a rough couple of years, Clover has enjoyed strong investor backing. Valued at $1.2 billion, the company has raised $425 million in five funding rounds. Major supporters include Sequoia Capital, First Round Capital and Alphabet’s venture capital arm GV.
Accenture recently counted the company among the 10 highest-funded digital health startups in 2017.
Whether investors will keep pumping money into Clover is unknown, and their decision could have a major impact on its financial stability. The MA market is hot right now, fueled by the country’s aging population. In 2016, Clover’s New Jersey operation had 20,600 MA members, up from just 7,200 members a year earlier.
Data analytics is also hot — a fact that Clover is betting on as it expands its MA solution beyond New Jersey this year to Georgia, Texas and Pennsylvania.
While healthcare generally has embraced the wave of digital solutions, the insurance market has been dominated by larger players with more negotiating power. To cut costs, insurers have focused on policies that reward outpatient treatment, up patients’ share of healthcare utilization costs and swap fee-for-service reimbursement for risk-based contracts.