Astrana Health (NASDAQ:ASTH) executives outlined the company’s delegated risk model, growth strategy, and recent integration priorities during a company presentation followed by a Q&A session. The event featured remarks from Brandon Sim, with Chief Operating and Financial Officer Chan Basho joining for audience questions.
Delegated risk model and “single payer” operating approach
Sim framed Astrana’s strategy around what he described as systemic problems in U.S. healthcare, including limited access, dissatisfaction for patients and providers, and a lack of coordinated care enabled by technology. He said Astrana aims to replace fragmented fee-for-service relationships with a delegated risk model that routes payments through Astrana, which then administers and coordinates downstream provider networks.
He argued the design creates “flywheels” for three stakeholder groups:
- Members: Astrana seeks to engage patients longitudinally across life stages and lines of business, which Sim said can support more preventive investment because the company is not dependent on a patient staying with a single insurer.
- Providers: Sim said providers in the network face lower administrative burden by interfacing with Astrana rather than many plans, and receive support from Astrana’s corporate clinical and care management teams.
- Payers: The company positions itself as helping reduce medical cost ratio volatility, manage risk on difficult populations, and improve member experience over time.
Market footprint and reported clinical/utilization metrics
Astrana described operations across 16 markets, with historical roots in California and expansion into other regions including Southern Nevada and additional Sun Belt markets, as well as Mid-Atlantic and Northeast areas. Sim highlighted how the company uses a combination of contracted affiliate providers and employed “care delivery” sites, which it locates strategically within its footprint.
In terms of outcomes and utilization, Sim cited several company metrics for its Medicare Advantage population, including:
- 67% fewer hospital admissions versus a Medicare fee-for-service benchmark
- Shorter inpatient length of stay
- A “vast majority” of prior authorizations automatically approved
Sim also said Astrana serves 1.6 million members in value-based care arrangements with partial or full risk, works with about 20,000 providers, and has provider retention of over 98% year-to-year. He added that revenue is diversified across Medicare, Medicaid, commercial, exchange, and other fee-for-service arrangements, with Medicare representing 61% of revenue, and that the company is not heavily concentrated with a single payer, noting its largest payer accounts for just over a quarter of revenue and that Astrana contracts with more than 20 payers.
Growth levers, full-risk shift, and Prospect integration
Sim described four key operational levers: membership growth, revenue per member, medical cost control, and reducing G&A through operating leverage. He said the company’s approach includes using technology to first drive administrative efficiencies and then reinvesting savings into clinical programs such as care management and disease management over time.
On revenue per member, Sim emphasized the company’s shift toward full-risk arrangements. He said Astrana has increased full-risk exposure from essentially 0% of members in 2021 to about 80% of revenue coming from full-risk arrangements as of January of this year, describing full risk as aligning accountability for both outpatient and inpatient outcomes.
Both speakers addressed the acquisition of Prospect Health, which Sim characterized as a roughly 600,000-member platform in value-based arrangements primarily in Southern California. Sim said the Prospect deal value was $707 million, and that Astrana has guided to $12 million to $15 million of synergies within the first 12 to 18 months. He said integration remains on track and that the company continues to execute against those cost synergies.
Sim also discussed leverage concerns related to the acquisition, stating the company had guided to getting under 2.5x pro forma net leverage within 12 to 18 months and said the company reached around 2.5x in the first quarter reporting the consolidated entity.
Technology platform and automation efforts
Astrana executives highlighted an internally built technology platform intended to support providers, care management teams, and payer-like administrative functions. Sim said the company’s provider tool can operate standalone or within an EHR and is used for quality and administrative workflows. He cited internal performance comparisons, including roughly a 24% improvement in HEDIS gap closure and more than a 30% improvement in annual wellness visit completion among providers using the tool, which he described as statistically significant.
Sim also described internal care management tools that classify members at risk of adverse events and recommend “next best actions.” For non-clinical outreach tasks, he said Astrana is automating phone calls and text outreach using AI agents, such as reminders for appointments and post-discharge primary care follow-up scheduling.
On analytics and utilization monitoring, Sim argued Astrana’s delegated model provides near real-time visibility into prior authorizations and claims before payers receive the data, which he said enables earlier detection of cost spikes by specialty, provider groups, or region.
Regulatory and market backdrop; guidance reiterated
Sim addressed industry scrutiny around risk adjustment, stating Astrana does not “play the risk adjustment game.” He said that in the first two years of the V28 phase-in, the company’s RAF score increased from about 1.0 to 1.02, which he said suggests members may be undercoded and could be more appropriately coded over time.
On utilization trends, Sim said Astrana is not immune to higher utilization but cited a 2025 blended trend of around 4.5% across lines of business, adding that the company believes it is on track to meet or exceed that number.
During Q&A, Basho said Astrana has spent the past 24 months building out its Medicare book and remains “very bullish” on Medicare Advantage growth. On exchange (HIX) and Medicaid, Basho said the company expects that subsidy reductions could lower exchange membership, and he referenced changes to Medicaid enrollment for undocumented populations in California. Basho said Astrana’s Medicaid membership reduction has been about 20% to 30% less than the overall California reduction, and said the company is preparing for potentially larger cuts over the next 24 months if they occur. Both executives said they are working with plans on quality measures to remain a “network of choice,” and Sim suggested headwinds could drive longer-term consolidation toward organizations able to manage costs and quality at scale.
Asked about market expansion criteria, management said the company targets markets with sufficient population density (generally more than 1 million to 1.5 million people), a diverse provider base, and payer interest in alternatives to Optum, while maintaining what they described as a prudent expansion pace.
On contract negotiations following the Prospect acquisition, Sim said the “large majority” of previously discussed outstanding contracts have been finalized for a first-quarter 2026 start, consistent with prior guidance. He also described the company’s approach as collaborative, sometimes using “creative” arrangements intended to address payer profitability concerns by taking on higher medical loss ratio populations or offering alternatives to higher-cost medical groups.
Sim concluded by reiterating Astrana’s 2025 full-year guidance and said the company expects to report in early March, with results consistent with the ranges previously shared on its third-quarter earnings call.
About Astrana Health (NASDAQ:ASTH)
Astrana Health, Inc, Inc, a physician-centric technology-powered healthcare management company, provides medical care services in the United States. It operates through three segments: Care Partners, Care Delivery, and Care Enablement. The company is leveraging its proprietary population health management and healthcare delivery platform, operates an integrated, value-based healthcare model which empowers the providers in its network to deliver care to its patients. It offers care coordination services to patients, families, primary care physicians, specialists, acute care hospitals, alternative sites of inpatient care, physician groups, and health plans.
