NeueHealth, Inc. (NEUE) Earnings Call Transcript & Summary

Good afternoon, and thank you for joining us for the JPMorgan Virtual Healthcare Conference. My name is Lisa Gill, and I'm the health care services analyst here. With me this afternoon, we have Bright Health Group. We have our -- the CEO, Mike Mikan, that will do the presentation. And then Cathy Smith, CFO, will join us for the Q&A. With that, let me turn it over to Mike.

Thanks, Lisa, and thanks for having us at the conference. Good afternoon, everyone, and thank you for joining us for Bright Health Group's presentation. Before we begin, we want to remind you that this call will contain forward-looking statements under the U.S. federal securities laws, including statement about our future performance. These statements are estimates only and are subject to risks and uncertainties that could cause actual results to differ materially from historical experience or present expectations. A description of some of the risks and uncertainties can be found in the reports that we file with the Securities and Exchange Commission. This call will also reference non-GAAP measures, including adjusted EBITDA. A reconciliation of these non-GAAP measures to the most directly comparable GAAP measures is available in the appendix of the presentation slide deck, which is also available on our Investors website. With that, let me jump in. We always start with our mission, which is central to what we do at Bright Health Group. Making health care right together is built on the belief that by connecting and aligning the best local resources in health care delivery with the financing of care, we can deliver better outcomes at a lower cost for all consumers. Bright Health Group is building a truly unique model that we believe will transform how health care is delivered. We believe when health care is delivered in a fully aligned and integrated system of care, we can bend the cost curve and most importantly, enhance value for both consumers and providers. We hosted our first Investor Day in December and discussed how our business is maturing and how we are just starting to realize the full potential of our differentiated model. Bright Health Group has grown quickly over the past 5 years, going from serving 10,000 members in a single state to serving over 1 million members across the national footprint today while simultaneously building our differentiated NeueHealth care delivery business. Our Bright HealthCare business is focused on the consumer health care markets in the individual market exchanges and Medicare Advantage where we believe we can demonstrate the greatest impact. We are now in the 5 largest exchange markets. And this week, we updated our projection for initial 2022 enrollment to over 1 million members. We have a strong health insurance business and expect to drive disciplined growth in our existing state footprint with significant opportunity for expansion and market share gains in these states. Core to our strategy is deep alignment of payers and providers, financially, clinically and technologically. This includes not only alignment between Bright HealthCare and NeueHealth but also with external care partners and external payers. Our fully aligned model has delivered strong proof points, and we will continue to shift our business toward this model in 2022 and beyond. We expect to grow Bright HealthCare membership in aligned plans, add scale to NeueHealth to serve more patients and continue moving our relationships with care partners toward the fully aligned model. We will look to deliver rapid growth in our NeueHealth business and diversify the business through growth with external payers. There is also a significant opportunity for NeueHealth in the CMMI direct contracting model. The growing external opportunities are in addition to the expanded relationship with Bright HealthCare. NeueHealth delivers capital-efficient growth and the potential for higher long-term margins relative to our health plan business. Overall, we're confident in our model and believe our fully aligned, integrated systems of care will deliver differentiated results. We're achieving scale in our business and expect fundamental execution and productivity gains to drive us toward our target for breakeven adjusted EBITDA in 2024. Bright Health Group has the team, capital and strategy to execute on our model. Taking a step back for people that are new to the Bright Health Group business. As I mentioned, we have updated our expectations for annual and open enrollment period members to greater than 1 million for 2022. And we now expect 2022 revenue at the high end of the $6.3 billion to $6.5 billion revenue guidance range we provided. The increased forecast for 2022 enrollment reflects better-than-expected performance, particularly in retention rates, which were in line with better than historical trends in the broader IFP market. We would also note that the solid performance in member retention comes even as we have taken price increases in key markets and saw expanded 2021 enrollment due to the extended special enrollment period. In 2022, we're operating across 17 states, including 4 new states this year and offering IFP products in California for the first time. We have extended our NeueHealth clinic footprint to Texas and North Carolina, expecting approximately 100 owned clinics in 5 markets that are supporting an influx of new patients in 2022. NeueHealth is expected to generate approximately $2 billion in revenue for 2022, with approximately 1/3 of the revenue from external payers. At Bright Health Group, we are building a diversified business with the breadth across both products and geographies. At our Investor Day, we provided a look at the evolution of the Bright Health Group business. With Bright Health -- while Bright Health remains a young company, we now have data on where we can drive results and are moving to a more focused, disciplined growth model. The first phase for the company was building the foundation for our future growth. We established a consumer-driven health plans across the retail marketplaces in IFP and Medicare Advantage, expanding this model from 1 state in 2017 to 13 states in 2020. We first offered Medicare Advantage in 2018 and our first special needs plan in 2019. We worked with care partners during this time to build the foundation for an aligned model of consumer health care. The next phase of our growth was establishing and scaling our NeueHealth care delivery business. We formally launched the NeueHealth brand in 2020, quickly reaching over 20,000 value-based patients. We started with NeueHealth clinics in Florida, serving both Bright HealthCare members and consumers from third-party payers. During this time, we also worked on transitioning our financial relationships from fee-for-service models to value-based contracting models where possible. Our NeueHealth business is already an emerging leader in taking on global risk for the consumer retail health care market. 2021 was a year of substantial growth for the company, driven by our significant market expansion in Florida. We have meaningfully expanded our fully aligned model and demonstrated the proof points that our model delivers superior performance. The Centrum acquisition added materially to our own clinic model, and we grew the business by affiliating Bright HealthCare members to the NeueHealth clinics. We are now positioned to realize the full potential of the Bright Health Group strategy. Our 2022 footprint covers the 5 largest IFP states as well as very large Medicare Advantage markets. Going forward, we expect to focus on these states and look to increase market share where we can offer a differentiated model at competitive price points, supplemented by disciplined geographic expansion within existing states. We also expect to grow NeueHealth by attributing a higher percentage of our Bright HealthCare membership to NeueHealth's fully aligned providers. The expected growth in NeueHealth external revenue will continue to diversify our business. More modest market expansion for Bright HealthCare with NeueHealth growing faster than the overall business and greater NeueHealth revenue from external payers will result in more capital-efficient growth. With 1 million health plan members, we're reaching the necessary scale in our business. Our performance going forward will be driven by our fundamental execution and our ability to drive productivity in the business. These will be key in our target to achieve breakeven enterprise adjusted EBITDA in 2024. Our model is built to serve consumers in retail health care marketplaces, including the individual exchanges, Medicare Advantage and other emerging direct-to-consumer models. We expect the health care market to continue to move forward -- move toward consumer-directed health solutions, including increasing Medicare Advantage penetration and growth of the consumer marketplace. We also believe there is a growing trend with consumers and providers moving from traditional fee-for-service to value-based reimbursement models. We have strong conviction in our model that aligns the financing of care with the delivery of care. We believe our fully aligned and integrated care model, which is purpose built around the needs of the consumer, not the broad PPO networks of the past, is well positioned to address these market trends. Our Bright HealthCare business offers consumer health plans with a differentiated value proposition, combining competitive pricing, leading consumer engagement and networks built around high-performing care partners. Bright HealthCare is also clinically, financially and technologically aligned with our NeueHealth business. The NeueHealth business incorporates our integrated system of care, including our own clinics, fully aligned affiliates and our broader care partner network. The Bright HealthCare and NeueHealth businesses are connected technologically through the Bright Health Intelligent Operating System, or what we call BiOS. The alignment between Bright HealthCare and NeueHealth is built to drive personalized care for consumers, leveraging member and provider-facing technology solutions. While our model is built around the relationship between the consumer and their primary care provider, our integrated systems of care go beyond just the primary care setting, to support members in navigating care across all care settings. This is a critical differentiator. We believe the health care system works best when there is deep alignment between payers and providers. The core elements are clinical, financial and technological alignment. We believe these 3 key areas of alignment drive better outcomes for consumers. Clinical alignment means that we are collaborating with care partners to develop and operate joint clinical programs to ensure evidence-based practices are consistently followed. The highest level of clinical alignment comes when care is delivered through our NeueHealth clinics, which removes any friction between the health plan and the provider. Financial alignment is when Bright HealthCare enters value-based arrangements with care providers. These arrangements range from upside risk to full capitation, and we look to advance care providers over time to financial arrangements that include greater risk sharing. Technological alignment helps bring the clinical programs to the point of care for consumers and providers. The combination of BiOS and our DocSquad consumer-facing solutions drive better consumer engagement and better outcomes for patients. Our fully aligned model has demonstrated success in delivering differentiated results, giving us additional conviction in shifting our membership base toward the aligned model and expanding the model to new geographies. We're looking to leverage this fully aligned model as we pursue disciplined growth with greater focus across our businesses. The current Bright HealthCare IFP footprint includes the 5 states with the largest addressable IFP markets, providing meaningful opportunity for growth without the need for expansion to additional states. Our Medicare Advantage business will focus on the 5 states where we have a differentiated value proposition for consumers. We believe we will continue to grow Bright HealthCare membership faster in our fully aligned model, driving differentiated clinical and financial outcomes. And we will maintain pricing discipline with pricing reflecting our underlying unit economics, cost structure and the benefit of our alignment model. We expect NeueHealth to execute on the integrated system of care performance in Texas and North Carolina as well as building on our success in Florida. NeueHealth will also continue to grow the network of fully aligned providers by preparing affiliates to take downside risk. In addition to the growth of Bright HealthCare, NeueHealth is expected to diversify revenue materially in 2022, while driving profitable, capital-efficient growth. The growth of both Bright HealthCare and NeueHealth will be supported by our technology investments. We will continue to enhance our consumer and provider-facing tools, supporting our fully aligned and integrated care delivery model. We also expect to generate operating efficiencies with a target for an operating cost ratio of approximately 15% of revenue by 2024, excluding noncash items. At our Investor Day, Sam Srivastava, CEO of our NeueHealth business, discussed the way NeueHealth delivers value to strategic payer partners, in addition to the value provided to the Bright HealthCare relationship. The partnership with Bright HealthCare has demonstrated NeueHealth's value and ability to perform in a fully aligned model. It drives patient volume in NeueHealth clinics, reducing the time required for the clinics to reach breakeven. Bright Health Group enterprise performance benefits from this deep alignment with better care management and lower medical costs. Ultimately, the consumer wins with a better experience and lower costs. We presently have managed care agreements with most major payers. The NeueHealth clinics have been payer agnostic from the start, and we're growing the external payer portion of our business, which is a great example -- a great example of this opportunity is NeueHealth subsidiary Centrum's partnership with Oscar Health. We are expanding this relationship to manage more lives in the Florida market. External payers bring additional volume to our clinics and affiliate practices, driving additional revenue with limited incremental capital need. In addition to partnering with national payers, we are contracting with local and regional payers at our clinics. These partnerships also improve utilization of the clinics in a capital-efficient manner. NeueHealth has relationships with payers that span across individual, Medicare Advantage, Medicaid and commercial products. Sam also discussed at our Investor Day the newest opportunity for our NeueHealth business, direct contracting in the Medicare fee-for-service population. We're excited about the scale of this opportunity, with nearly 2/3 of the Medicare spending outside of Medicare Advantage, representing a $440 billion addressable market that is relatively untapped. NeueHealth is well positioned to penetrate this untapped fee-for-service Medicare market and migrate patients to more tightly managed models as part of a continuum of services for our patient base. Direct contracting aligns with the CMS Innovation Center's long-term vision around accountability for quality and total cost of care. Strategically, for Bright Health Group, direct contract opens a new market, adding to the opportunities in IFP and Medicare Advantage. While the direct contracting model is very new, our consumer-focused approach is well designed to serve this segment and help drive lower costs. We have a targeted approach centered around our tightly aligned NeueHealth clinics, affiliated practices and care partner networks. NeueHealth has 2 global DCEs that were approved by CMS. We expect to meaningfully expand our participation in DCE in performance year 2022 to cover multiple states. We provided high-level numbers on our NeueHealth expectations for 2022 at our Investor Day, forecasting approximately 400,000 value-based patients at NeueHealth in 2022, with a growing contribution from external payers, including DCE. And we guided for approximately $2 billion in revenue for NeueHealth in 2022, 4.2x our $475 million 2021 guidance, excluding investment income. We expect approximately 1/3 of the $2 billion in NeueHealth revenue will come from external payers. We're excited to scale the NeueHealth business in 2022 and to expand our alignment model with external payers. NeueHealth is diversifying its revenue and product mix while becoming a meaningful contributor to value creation at Bright Health Group. Looking longer term, our goal is to achieve breakeven adjusted EBITDA in 2024. At the MCR and gross margin level, we're focused on growth and scale within existing states for Bright HealthCare and increasing contribution from NeueHealth. As we start to reach scale, we will be even more focused on disciplined growth, fundamental execution and improving productivity with the expectation that we will drive down our operating cost ratio. Our operating cost leverage will benefit from specific efforts over the next couple of years around migrating to 1 operating platform, integrating acquisitions and transitioning financial and people systems to common platforms. We expect to see workflow efficiencies and process improvements driven by our technology investments. We expect our operating cost ratio to continue to decline over time with the forecast for approximately 27% in 2021, 22% to, say, 23% in 2022, and we are targeting an operating cost ratio of approximately 15% in 2024, excluding noncash items. Our increasing scale, differentiated model and improving productivity give us confidence in our ability to achieve breakeven adjusted EBITDA in 2024. We provided our 2022 guidance at our Investor Day in December. As I mentioned earlier, we have updated our expectation for total enrollment across our commercial and Medicare Advantage markets to over 1 million members. With the annual enrollment period complete and the open enrollment period far along, Bright HealthCare has seen strong growth with a very successful entry to the Texas market and strong retention in across existing markets. We expect a more normal year in 2022 with much lower in-year enrollment and normal IFP attrition rates over the course of the year, partially offset by in-year growth in Medicare Advantage. Given these dynamics, we are forecasting 2022 end-of-year Bright HealthCare membership between 950,000 and 1 million members. We now expect revenue to be at the high end of our prior guidance range of $6.3 billion to $6.5 billion. We plan to provide an update to our full 2022 outlook alongside our year-end 2021 results, at which point, we will have additional clarity on final open enrollment period performance, business mix, including metal tier, final effectuations and other key drivers of performance. We guided to a 2022 enterprise medical cost ratio between 86% and 88%, which at the midpoint of 2021 and 2022 guidance represents a year-over-year improvement of over 500 basis points. Our guidance for adjusted EBITDA in 2022 is for a loss between $400 million and $500 million at the midpoint, representing a 20% improvement compared to the midpoint of our 2021 guidance. Additionally, at the midpoint of our guidance ranges, our adjusted EBITDA margin improves from negative 13.9% of our 2021 revenue to negative 7% of our 2022 revenue. Finally, we guided an intercompany revenue elimination consisting of payments from Bright HealthCare to NeueHealth of between $1.2 billion and $1.4 billion. At a segment level, we guided to Bright HealthCare medical cost ratio between 85% and 87%. As I indicated before, we expect NeueHealth value-based patients of approximately 400,000 and revenue of approximately $2 billion. The investments we're making in the business and our disciplined growth plan positions us for long-term success. We expect to deliver strong performance in 2022 and to see additional benefits as the business continues to gain scale and we progress toward realizing the company's full potential. We continue to drive revenue diversification across Bright Health Group. We now have large businesses across risk-bearing care delivery, commercial health plans and Medicare Advantage health plans. We also have a health plan membership base that is spread across more markets, lessening the impact of regional trends in pricing or medical costs. In 2022, Bright HealthCare's IFP business is in states that cover 2/3 of the total addressable market. Our Medicare Advantage business is focused on 5 states where we have a differentiated offering. And our NeueHealth business is expected to have approximately 400,000 value-based patients in 2022 across Bright HealthCare as well as external payers. We have several tailwinds for business in 2022. We expect higher average member duration as the mix of returning members increases, and we expect a more limited impact from in-year enrollment. We forecast lower COVID-related costs and less disruption related to COVID. Higher member duration and more limited COVID-related disruptions should be positive for 2022 member engagement, risk coding accuracy and risk adjustment performance. We're continuing to improve to move toward the fully aligned model and expect approximately 40% of Bright HealthCare's IFP members to be fully aligned with NeueHealth providers in 2022. Last week, we announced the closing of our $750 million preferred equity capital raise. We're pleased to have Cigna as a new strategic investor with a $550 million investment. We believe Cigna's Evernorth capabilities and NeueHealth's differentiated care delivery model create significant opportunities for mutual value creation. We're also fortunate to have the support of our largest existing investor, NEA, who contributed $200 million. NEA's participation represents continued support from our longest-standing investor who has participated in every private and public financing since the Series A in 2016. We're confident in the power of our aligned model and the long-term trajectory of our business. With 1 million health plan members and a fast-growing complementary care delivery business, Bright Health Group has built a differentiated enterprise focused on the consumer health care markets. We're achieving the necessary scale in the business and have established the key markets that will drive our performance. With our recent capital raise, we are positive on our balance sheet position, and we expect to deliver more capital efficient growth going forward. We also continue to execute on improving medical costs and driving productivity throughout the organization. Our disciplined growth and improving operating cost ratio will support our path to breakeven adjusted EBITDA in 2024. We appreciate your interest in Bright Health Group. And now Cathy Smith, our Chief Financial and Administrative Officer; and Stephen Hagan, our Investor Relations Director, will join me for a Q&A session. Thanks, Lisa.

Thanks so much. Hi, Cathy. Nice to see you.

Hi, Lisa.

So let me start. Mike, thank you so much for all the comments. And I want to start with a question that really came up yesterday afternoon with the Biden administration now making at-home tests reimbursable by the insurance companies. And you talked about your expectations around COVID costs going into 2022. Can you talk about what you had originally in your expectations around COVID testing? And then secondly, what are your expectations now that home test will be paid for? Is there a potential opportunity that the home test is about $12, the average PCR test is well over $100, that there could be some kind of benefit? But how are you generally thinking about it?

Well, let's start with the COVID costs. We -- as we talked about at Investor Day, I believe, we -- when we priced the IFP products earlier last year, we assumed -- given just the uncertainty of COVID and just the duration of COVID over time, we assumed that utilization generally would go back to a normalized baseline. So that was kind of the general assumption we made across markets. And then we add an additional premium for what we call the COVID impact. And whether that's deferred care coming back in, the endemic over time, testing, whatever it may be, we add an additional amount for that. So for things like, as an example, the Biden administration requiring the health insurers to take on in-home test, it's too early to really tell what the impact of that will be from our perspective. But we do see potential offsets, as you say, PCR tests in office visits, things like that, at 2022, right now, we have a shortage of supply. So I don't know how big of an impact it would be nonetheless in 2022, although I commend the administration on making improvements in that regard. We think testing is a good thing. We think it's good for consumers. It's good for us to get beyond this pandemic or what ultimately what we believe will be an endemic. But we don't know the net effect of it, but we do believe there are potentials for offsets, and we'll see how it goes. And that's kind of how we take it for as of now.

And how do we think about Omicron, right? Like so I think if we look at all the news reports are that it is more contagious, but the severity is less. I've been saying for the last 2 days that if you don't know anyone that has Omicron, you don't have any friends. So it's pretty much everybody at this point has it. Have you noticed anything? I mean have you seen any kind of uptick when we think about hospitalizations or any shift in elective surgeries where we see a push off from those costs in 2021 to 2022?

Obviously, COVID has just been a challenging year for the -- or really over the last 22 months. And how it's impacted our business, Lisa, was last year this time, COVID, the Alpha '19, was really impacting the vulnerable senior population that was unvaccinated. That particularly hit us hard, unfortunately, because we serve that marketplace in a highly concentrated way. It's a big percentage of our business, especially in Southern California with the C-SNP population. And so we were hit really hard then because we were seeing the vulnerable senior getting admitted to the hospital and long average duration in the hospital with intense severe cases. So it was very impactful. And then come mid-February or so, we saw it start to subside. It went down to a baseline. We thought we were starting to see the end. And unfortunately, come late in the second quarter, we started -- middle of second quarter, we started to see the rise of what became the Delta variant. And the Delta variant became a very different impact on our business because it impacted not only some of the vaccinated, but it impacted the younger population, some of those that weren't vaccinated, but the younger, the 44-year-old female or male who were admitted to the hospital. And that was a particularly hard impact on us again, kind of the perfect storm because of 2 reasons. One, we were going through special enrollment, and we were getting a lot of new lives and transitioning other lives out of our plans that we got to know earlier in the year. And then we need to get to know them in the consumer retail market so we can accurately code them. And unfortunately, it hit the Southeast, our biggest markets. And so it constrained all the care resources. So it hit us double whammy. Medical costs greater than we thought initially, and then, of course, impacted us with risk coding. And then as we started to really engage with our members with -- especially with our owned and managed clinics in September and October, rises Omicron. And while it's very different impact, it's much more pervasive as we see it. You see a lot of asymptomatic cases with people not going to work and what have you. And it's -- sure, we're seeing it in hospitalizations, again. It's a lot less in duration and less severe as we see it today. I do believe you're still going to see continued deferred care. That being said, I'd note 2 worthwhile points with respect to that. One, we are seeing our doctors. We're talking to our members and our patients. And if you deferred care for a colonoscopy or a cancer procedure screening or what have you back starting 22 months ago, we want you in getting care. So we believe we're starting to get past. People are no longer willing to wait that -- to get care. So we're starting to see that uptick just as people are getting more comfortable with the endemic. And then the second thing that we're seeing that's a little different than before is we're not immune to shortage of supply of services with our nurses and our doctors because they're getting diagnosed with it. And so we've had the load balance in our clinics. We manage 75 clinics today, growing to 200 or 100 clinics by the end of the year, and we've seen a shortage of supply. So it's impacting us in different ways. The bottom line is COVID is still here, likely to stay, to some degree. We believe it will go down to a relative baseline, and we think we price for that.

One of the other things that's come out, Mike, is just pricing in Medicare Advantage for 2022 as well as retention and new lives. I noticed in your presentation, you talked about strong retention. And were you talking about across all lines of business, specific lines of business? And when you think about the overall value proposition in Medicare Advantage this year, how do you think that your product lined up versus some of the others? And just adding on to this, I think you also talked about the ability to raise price. And I would assume that, that was more in the individual market or the exchange market. Is that where those comments were coming from?

No, both in retention -- and we saw strong retention across our book of business in general, especially in our existing markets. And we took pricing action in markets like Florida as well. So we saw -- we were -- we saw good price increase and strong retention generally speaking. So we're proud of that. Now for us, for Medicare Advantage, while 1/1 is important annual enrollment, we want to grow, and that's a target for us. But we're concentrated in serving that vulnerable market, that C-SNP, D-SNP space, that's a big concentration of our book of business today. And so we want to grow all year long. So while we saw some benefit, call it, pricing action from others that we couldn't compete with over the short run, we don't think it's necessarily long standing, but we were impacted by that. But net-net, we held our own, so to speak, but we really look to our growth, as I talked about at the Investor Day for in-year growth, like we saw this year and last year, that's where we see opportunity and growth. And we do think our benefits stand up against the competition, and we're excited about that.

Mike, you talked about NeueHealth and you talked about the 400,000 members in value-based type programs. So as we think about that, and you also kind of [ weaved ] in some comments around your direct contracting entity. How many of those 400,000 are part of direct contracting?

Yes. I'm sorry to say, Lisa, since we're a new participant in 2022, I'm told that we're limited in what we can talk about until the formal release comes out. And so unfortunately, I can't speak to it. But I would say this, we see the DCE opportunity, but we see the broader opportunity partnering with the government, the federal government as well as state governments in a value-based way with our care partner and affiliated network and our own clinics. We think that's a great opportunity in the future. We think it's a huge addressable market. Medicare, obviously, $440 billion non-Medicare Advantage. We see it as a big opportunity. I think we're going to walk before we run, but we see it as a great opportunity.

And then you also project a big step-up and increases from external partnerships with NeueHealth. Are there any specifically you can talk about there? I think you mentioned Oscar in your presentation. Are there other health plans that you're working with?

Yes. We've got contracts with most major payers. Within our Medicare Advantage business with patients, we've got major payers contracts. We do mention Oscar with our NeueHealth Centrum business in South Florida, our subsidiary, Centrum. And so we're excited about external payers. And look, at the end of the day, we look at ourselves as an integrated risk-bearing care delivery business that connects with consumers. And consumers, great partner with Bright HealthCare, they'll always be our partner on the financing side. But we also looked at other external payers. We believe we've got a low-cost high quality with great outcomes and a great consumer experience. And that's a great value proposition that we think external payers will seek to take advantage of. And we have a lot of conversations, and we think it's a great growth opportunity and diversifying opportunity as well as capital-efficient growth for our enterprise.

You also mentioned the $750 million investment between your largest shareholder as well as with Cigna. Can you talk about maybe the uses of that cash over the next couple of years?

Yes, I'm happy to take that one, Lisa, and then Mike will provide some color. So first, we are very pleased, obviously, with our balance sheet after that recent raise. And then thinking about cash needs going forward, it really depends. So it's going to depend on the mix of the business. So are we going to see continued more NeueHealth growth? Mike just shared that's far more capital efficient for us, especially when it's a third-party payer or the government. And then also, we're going to focus Bright HealthCare more on existing markets. And so, as you know, when that first year into a brand-new market in the exchange, you have to front-load a lot of the capital to meet the RBC requirements and stuff. So second year, third year, et cetera, into those markets, our capital requirements will be less. So the combination of that will help us to understand where the cash is going to go. And then lastly, as Mike said, we have a strong path to breakeven profitability in 2024, which means our operating costs have got to come down, and we've got a plan for that this year through next year and on beyond. And that obviously will take some of the cash, but that will continue to lessen that burden over time.

And Mike, when you made the comments about Cigna, you talked about NeueHealth and Evernorth and perhaps working more closely together. We have about 30 seconds left, but is there anything that you could highlight to us as you see a future opportunity for the 2 entities?

No. At this point, that would be the cart ahead of the horse, but we are -- there's lots of -- we believe, lots of opportunities to partner together to better each of the organizations. And as a young company, obviously benefiting from the scale and capabilities within Evernorth, we think that, that's a great opportunity for us. Picking up 3%, 2%, 4% here and there, that's a big opportunity for us. So we're really excited about the Cigna investment, but also the strategic partnership and opportunity to work with them going forward. More to come.

Okay. Great. We'll have to leave it there. Thank you so much to Mike and Cathy. If you have any questions, feel free to reach out to me or anyone on my team or to Stephen on the Investor Relations team at Bright. Thanks, guys. I hope to see you soon.

Thanks, Lisa.