Revised 2023 expectations and early outlook for 2024 reflect higher medical and non-medical costs
Company is taking targeted actions to improve visibility, balance risk-sharing, and improve predictability of results in 2024 and over the long term
agilon health to host conference call at 8:00 AM Eastern Time today
agilon health, inc. (NYSE: AGL), the trusted partner empowering physicians to transform health care in our communities, announced revised guidance expectations for 2023, reflecting higher-than-expected costs, and provided an initial outlook for 2024.
During 2023, agilon health experienced an increase in medical expenses attributable to higher-than-expected specialist visits, Part B drugs, outpatient surgeries, and supplemental benefits, partially offset by lower hospital medical admissions. While a number of programs have been launched to improve visibility, balance risk-sharing and enhance predictability of results, management has assumed higher costs will continue into 2024.
“Higher-than-expected costs became visible to us in mid-December during the November close process given updated data from health plans and will impact our FY2023 medical margins. As a result, while Medicare Advantage membership growth and ACO REACH performance are in line with prior guidance, we are lowering Medicare Advantage medical margin guidance for 2023,†said Steve Sell, chief executive officer, agilon health.
agilonâ€
Sell continued, “We have implemented a number of initiatives which we believe will enhance operating performance and improve the predictability of financial results in 2024 and beyond including accelerating operating efficiency, refining payor partnerships, improving data visibility and analytics, and expanding onboarding support for newer PCPs in mature markets. Taken together we believe these changes support Adjusted EBITDA growth in 2024 and beyond.â€
Given the lower-than-expected baseline now projected for 2023, agilon is withdrawing its previously issued target for 2026.
Revised Outlook for Fiscal Year 2023 ($M) 1 :
Year Ended December 31, 2023
Updated Guidance 1
Previous Guidance
Low
High
Low
High
Medicare Advantage (MA) Members 2
386,000
387,000
384,000
386,000
Total Revenues
$4,295
$4,305
$4,310
$4,320
Medical Margin
$340
$360
$455
$470
Adjusted EBITDA 3
($69)
($55)
$6
$18
Geography Entry Costs 4
$71
$71
$69
$67
- Guidance for the fiscal year 2023 excludes MDX Hawaii.
- Membership reflects managementâ€
s outlook for end of period. - Adjusted EBITDA contribution from ACO REACH is expected to be approximately $39 million for 2023.
- Geography Entry Costs represent the corresponding expense included in the low-end and high-end of managementâ€
s outlook for Adjusted EBITDA.
We have not reconciled guidance Medical Margin to Gross Profit or Adjusted EBITDA to net income (loss), the most comparable GAAP measures, and we have not provided forward-looking guidance for net income (loss) because such reconciliation is not available without unreasonable effort due to the high variability, complexity and uncertainty with respect to quantifying and forecasting certain items that may impact Gross Profit or net income (loss), including non-cash stock-based compensation.
Initial Outlook for 2024 ($M) :
Year Ended
December 31, 2024
Low
High
Medicare Advantage (MA) Members 1
548,000
553,000
Total Revenues
$6,350
$6,420
Medical Margin
$560
$600
Adjusted EBITDA 2
$40
$60
Geography Entry Costs 3
$70
$70
- Membership reflects managementâ€
s outlook for end of period. - Adjusted EBITDA contribution from ACO REACH is expected to be approximately $39 million for 2024.
- Geography Entry Costs represent the corresponding expense included in the low-end and high-end of managementâ€
s outlook for Adjusted EBITDA.
We have not reconciled guidance Medical Margin to Gross Profit or Adjusted EBITDA to net income (loss), the most comparable GAAP measures, and we have not provided forward-looking guidance for net income (loss) because such reconciliation is not available without unreasonable effort due to the high variability, complexity and uncertainty with respect to quantifying and forecasting certain items that may impact Gross Profit or net income (loss), including non-cash stock-based compensation.
Webcast and Conference Call:
agilon health will host a conference call to discuss the companyâ€
About agilon health
agilon health is the trusted partner empowering physicians to transform health care in our communities. Through our partnerships and purpose-built platform, agilon is accelerating at scale how physician groups and health systems transition to a value-based Total Care Model for their senior patients. agilon provides the technology, people, capital, process, and access to a peer network of 2,400+ primary care physicians that allows its physician partners to maintain their independence and focus on the total health of their most vulnerable patients. Together, agilon and its physician partners are creating the healthcare system we need – one built on the value of care, not the volume of fees. The result: healthier communities and empowered doctors. agilon is a trusted partner in 30+ diverse communities and is here to help more of our nation’s leading physician groups and health systems have a sustained, thriving future. For more information visit www.agilonhealth.com and connect with us on Instagram , LinkedIn , X and YouTube .
Forward-Looking Statements
Statements in this release that are not historical factual statements are “forward-looking statements†within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include, among other things, statements regarding our and our managementâ€
NON-GAAP FINANCIAL MEASURES
This release includes references to non?GAAP financial measures, including but not limited to Medical Margin and Adjusted EBITDA. We believe medical margin and Adjusted EBITDA help identify underlying trends in our business and facilitate evaluation of period-to-period operating performance of our operations by eliminating items that are variable in nature and not considered by us in the evaluation of ongoing operating performance, allowing comparison of our recurring core business operating results over multiple periods. We also believe Medical Margin and Adjusted EBITDA provide useful information about our operating results, enhance the overall understanding of our past performance and future prospects, and allow for greater transparency with respect to key metrics we use for financial and operational decision-making. We believe Medical Margin and Adjusted EBITDA or similarly titled non-GAAP measures are widely used by investors, securities analysts, ratings agencies, and other parties in evaluating companies in our industry as a measure of financial performance. Other companies may calculate Medical Margin and Adjusted EBITDA or similarly titled non-GAAP measures differently from the way we calculate these metrics. As a result, our presentation of Medical Margin and Adjusted EBITDA may not be comparable to similarly titled measures of other companies, limiting their usefulness as comparative measures. Medical Margin and Adjusted EBITDA have limitations as analytical tools and should not be considered in isolation or as an alternative to GAAP measures or other financial statement data presented in agilonâ€
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Investor Contact
Matthew Gillmor
VP, Investor Relations
investors@agilonhealth.com
Media Contact
David Tauchen
Senior Director, Communications
media@agilonhealth.com
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