P3 Health Partners (NASDAQ:PIII) Chief Executive Officer Aric Coffman outlined the company’s turnaround strategy, profitability progress and growth plans during a company presentation, saying the value-based care provider expects to serve approximately 105,000 senior patients across five states this year.
Coffman said most of P3’s patients are enrolled in Medicare Advantage, with additional patients in accountable care organization programs, including ACO REACH participants expected to move into LEAD next year. The company has roughly 2,100 physicians in its network and expects annual revenue of between $1.5 billion and $1.6 billion.
The company has guided investors to adjusted EBITDA of $95 million at the midpoint for the year. Coffman said P3’s core business is expected to generate more than $30 million of positive EBITDA, while the company has also benefited from settlements with payers.
Turnaround Effort and Medical Costs
Coffman said the company’s EBITDA improvement has exceeded $250 million since its earlier losses. During the first half of the year, approximately $18 million of improvement came from the core business, while the remainder of the $80 million reported during that period came from settlements that reduced payer-related deficits.
“The payers want us to be successful,” Coffman said, adding that P3’s quality performance provides value to health plans as quality measures become a larger component of plan star ratings.
P3 reported a negative 1.8% medical trend during the first half of the year, which Coffman described as an uncommon result among public peers. He said medical margin has improved from $57 million to $17 million before reaching a current guided range of $210 million to $240 million across the population.
The company’s approach centers on managing the full cost of care for patients by identifying those with the greatest medical needs, conducting proactive outreach and directing patients to senior wellness centers when necessary. P3 also provides services including care management, utilization management, claims-related functions, quality support and payment integrity for just under two-thirds of its population through delegated arrangements with payers.
Provider Support and Clinical Programs
Coffman said P3 acts as a bridge between health plans, providers and patients. The company helps physicians with contracts, data, incentives and clinical support, while offering services such as home visits, hospital follow-up and care management that primary care practices may not have the resources to provide independently.
The company has also introduced physician coaching intended to support clinicians dealing with burnout, practice-management demands and the transition to value-based care. P3 has deployed practice operations coordinators within clinics to help with patient outreach, data gathering, chart preparation and management of high-risk patients. Coffman said nearly two-thirds of P3’s patient population is now in practices with those coordinators.
In one California market, P3 reduced admissions per 1,000 patients to 109 through the second quarter from 199 previously, according to Coffman. He said admissions averaged about 163 per 1,000 patients last year, representing an approximately 30% reduction so far. The company has also focused on reducing hospital readmissions and shortening skilled nursing facility stays where patients can be safely supported through home health and post-discharge care.
Contracts, Technology and Growth
P3 has renegotiated contracts with both payers and clinicians, pruned portions of its provider network and implemented a provider tiering system, Coffman said. The company also rolled out a point-of-care technology tool that overlays physician electronic medical records and helps clinicians identify prior conditions, potential diagnoses and supporting documentation.
Coffman said accurate coding and documentation are important because patients with chronic conditions may otherwise not be identified for programs that could provide additional services.
While P3’s patient population declined from 126,000 to 105,000, Coffman said revenue increased because the company improved chronic-condition documentation and expanded in what he described as more favorable areas.
The company is also pursuing a newer growth model aimed at mid-market Medicare Advantage plans. Under that arrangement, P3 can provide a combined set of administrative, utilization management, care management and provider-enablement services before assuming full global risk after two years.
- P3 said it raised its adjusted EBITDA midpoint guidance twice during the year, from $10 million initially to $40 million after the first quarter and then to $95 million after the second quarter.
- Coffman identified 63 mid-market plans, generally with 20,000 to 200,000 members, as potential targets for the model.
- He said those plans collectively represent about 6 million patients and often operate Medicare Advantage businesses alongside commercial, Medicaid or other insurance operations.
“The turnaround is delivered,” Coffman said, while emphasizing that P3 sees further opportunity in documentation, network development, quality performance, clinical programs and its new growth model.
About P3 Health Partners (NASDAQ:PIII)
P3 Health Partners Inc is a physician-led healthcare organization focused on value-based care for older adults, particularly beneficiaries enrolled in Medicare Advantage plans. The company works with primary care physicians, health plans and other healthcare providers to coordinate services and improve patient outcomes while managing the overall cost of care.
P3 supports its network through primary care services, care coordination, clinical programs and technology-enabled population health management.
