Bright Health raises $175M, cancels some operations for 2023
Bright Health Group announced it has raised $175 million, as well as major changes to its business operations.
Bright Health is a value-based healthcare company that operates affiliate care providers that manage population risk. The company has been operating its fully aligned care model in Florida, Texas and California. However, Bright Health stated it will no longer operate individual and family plans through Bright HealthCare, or Medicare Advantage products outside of California and Florida in 2023. Instead, it will focus on its fully aligned care model.
That means Bright Health will not offer individual and family health plans in Alabama, Arizona, Colorado, Florida, Georgia, Nebraska, North Carolina, Texas and Tennessee after 2022. By discontinuing services in these areas, Bright Health reduces its regulated capital need to release excess regulated capital of approximately $250 million upon settlement of all medical liabilities and approval from state regulators.
The company also noted the $175 million it raised in committed convertible preferred equity capital is expected to close in the coming weeks and carry the company through to profitability.
The new changes focus on the company’s biggest healthcare markets where it operates its fully aligned care model in partnership with external payors and care providers. The move aims to provide a faster path to profitability, create greater predictability and be more capital efficient. Bright Health expects to be profitable in 2023 thanks to the announced changes.
“We have demonstrated the power of the Fully Aligned Care Model in serving aging and underserved populations and progressed the marketplace towards seeing the promise in value-based care across all populations,” Mike Mikan, president and CEO, Bright Health Group, said in a statement. “The changes announced today give Bright Health a strong and stable platform for profitable growth at much lower risk. This is one more strategic step to building a differentiated and profitable business at scale.”
With all focus on profits, Bright Health also said it will serve underserved populations through its risk-bearing care delivery business, Medicare Advantage products and the ACO REACH Program in states that cover 26% of the aging U.S. population.
Amy joined TriMed Media as a Senior Writer for HealthExec after covering home care for three years. When not writing about all things healthcare, she fulfills her lifelong dream of becoming a pirate by sailing in regattas and enjoying rum. Fun fact: she sailed 333 miles across Lake Michigan in the Chicago Yacht Club "Race to Mackinac."