美国管理式医疗：WCG偏好的风险与回报

1、COREU.S. Health Care - Managed Care Favorable Risk / Reward for WCG, CNC Ahead of North Carolina AwardNCRFPAwardExpected:OnMonFeb4,theNorthCarolinaDepartmentofHealthandINDUSTRY UPDATEU.S.HealthCareServicesNEUTRALUnchangedEquityResearch22 January2019HumanServices(NCDHSS)isexpectedtoannounceatleastfou

2、rstate-wideawardsfor itsMedicaidRFP(onschedulewiththetimelinelaidoutintheRFP).NorthCarolina (NC) is the largest state by Medicaid spend ($13 bn) that has not yet allowed managedcareplanstoparticipateinitsMedicaidprogramandremainsoneofthemost attractiveRFPsintheMedicaidpipeline.Oncefullyimplemented,w

3、ebelievetotal managed Medicaid spending will be at least $10 bn and could approach $12bn. Further,NCremainstheonlydemocratic-leaningstatenottoexpandMedicaid,which representsapproximately$4bnofincrementalspending.Thus,NCawardsshouldbe wellreceivedbyinvestors,particularlyforWCGandCNC.Seefulldetailsonp

4、gs2-10.Bidder Details: In October, the NCDHSS released a list of eight RFP bidders.Our understandingisthislistrepresentsallRFPbidders,includingpotentialregionalbidders. WebelieveallfivepubliclytradedMCOs(ANTM,CNC,CVSviaAetna,UNH,andWCG) arestate-widebidders.Thus,ifthereareanyregionalbiddersincludedi

5、nthislist,this increasestheprobabilityofastate-wideawardfortherestofthegroup.Thenotable wildcardbidderisMyHealthbyHealthProviders,aproviderledgroupof12NChealth systems,whichhaspartneredwithPresbyterianHealthcare(private).Theentityis deeplyembeddedinthecurrentstateMedicaidprogramandappearstohavebidfo

6、ra state-widecontract.Ifso,thispartnershipcouldtakeanawardspotoverapublicMCO.CNCAmongThoseWellPositionedforanAward:BasedonourdetailedRFPtrack record and scoring analysis combined with company-specific initiatives and existing state-businessrelationships,weviewANTM,CNC,andUNHasbestpositionedto secure

7、anaward.Amongthese3companies,wenoteCNChas:1)thegreatestleverage totheawardannouncement;2)thebestMedicaidRFPtrackrecordamongpeers;3) hascreatedaprovider-ledhealthplantailoredtotheRFP;and4)willscoreexplicit bonuspoints(worth2.5%oftotalRFPscore)forits2019NorthCarolinaMarketplace participation.Atatarget

8、marginof2.5%,thetotalRFPspendcouldbeworthupto$0.30ofEPSor3.0%ofour2020EPSestimate.Bycomparison,webelievethe contractawardisworthEPSof1.0%orlesstoANTM&UNH(fullestimates HYPERLINK l _bookmark0 Figure4).Attractive Risk/Reward Set Up for WCG: While we view WCG as having a lower absoluteprobabilityofwinn

9、ingtheNCRFPcomparedtopeersnotedabove,apositive awardoutcomeherewouldbemostmeaningfulrelativetoWCGsearningsbaseversus otherpublicMCOsandthusmayrepresentanotherveryattractivestockheadinginto theRFPawardannouncement.Ata2.5%netmargin,webelievethetotalRFPcouldbe worthupto$1.20ofEPS,whichrepresentsnearly7

10、.5%ofour2020EPSestimate beforecontemplatingadditionalMedicaidspendingfrompotentialMedicaidexpansion. CoupledwithWCGsforwardearningsoutlookandcurrentvaluation,weseeavery favorablerisk/rewardset-upaheadoftheRFPaward.CapitalInc.oneofdoesandseekstodoinitsresearchAsabeawarethatthe mayhaveaofthattheofcons

11、iderthisasonlyafactorinmakingtheirANALYSTONPAGEU.S.HealthCare-ManagedCare SteveValiquette+12125265496 HYPERLINK mailto:steve.valiquette steve.valiquette BCI, USAndrew Mok, CFA+1 212 526 2687 HYPERLINK mailto:Andrew.Mok Andrew.Mok BCI, USJonathan Yong+1 212 526 3647 HYPERLINK mailto:jonathan.yong jon

12、athan.yong BCI, USMorgan McCarthy+1 212 526 1168 HYPERLINK mailto:morgan.mccarthy morgan.mccarthy BCI, USBackground on North Carolina Medicaidppruniy:thCanastheagettaebyMdcadpnd($13 bn)thathasnt yetallowedmanagedcareplanstoparticipateinitsMedicaidprogramandthusremainsthe oneofthemostattractiveRFPsin

13、theMedicaidpipeline.Thestateisexpectedtoannounce atleast4state-wideRFPawardsonMondayFebruary4.Biders Inclue: 1) Atn; 2) Amrath Carts th Cana; 3) CC athy Blue(Anthempartnership);4)CarolinaCompleteHealth(Centene);5)MyHealthbyHealth Providers;6)OptimaHealth;7)UnitedHealthCare;and8)WellCareHealthPlans.r

14、rm Ipleention:hentalmpmnttnwlbecndctdntophass(by regionspecifiedpost-awardannouncements)andcover1.5mlnABDandTANFmembers, or$6-7bninspending.Phase1willbegininNovember2019andPhase2willbeginin February2020.Fromthere,additionalpopulationswillbephasedinoverafive-yearperiod. This includes Foster Children,

15、 Behavioral Health and Individuals with Intellectual/DevelopmentDisabilities,Duals,andNursingHomeResidents.Allsaid,once fullyimplemented,webelievetotalmanagedMedicaidspendingwillbeatleast$10bnand couldapproach$12bn.enil r id xpnion: Fnay we ne that rth Cana mans the ny democratic-leaningstatenottoex

16、pandMedicaid,andthereforespendingcouldgrow furthershouldDemocraticgovernorRoyCooperstrikeadealwiththeRepublican-led legislaturetoexpandthestatesentitlementprogram.IfNorthCarolinaweretoexpand Medicaid,weestimate$4bnofincrementalspendbringingthetotalpotentialMedicaid opportunitytoatleast$14bn.FIGURE 1

17、NC Managed Care RFP Opportunity OverviewInformational Items:Initial Populations CoveredABD, TANF ($6-7 bln)Future Populations CoveredFoster Children, BH I/DD, Duals, Nursing Home Residents ($3+ bln)# of AwardsAt least four statewide PHPs and up to twelve regional PLEsContract PeriodFive yearsGeograp

18、hiesStatewide defined by six regionsAuto-Assignment10% Floor, 40% Ceiling per regionTimeline:RFP Proposals DueOctober 12, 2018RFP Awards ExpectedFebruary 4, 2019InitialPopulationPhase1StartDateNovember 1, 2019InitialPopulationPhase2StartDateFebruary 1, 2020Future Populations Phase-InFive-year period

19、 post-initial implementationFinancial Information:Capitation Rate$341 blended statewide PMPM (initial population)Minimum MLR88.0%Target SG&A Ratio8.20%Target Underwriting Margin1.75%Premium Taxes2.01%Cost Bid ComponentNoneCost Growth Managementleast 2% below national Medicaid spending growth statesS

20、ource: NC DHHS, Barclays ResearchFIGURE 2NC RFP Margin TargetsMargin TargetsAdmin / Util.MgmtCare MgmtTotal G&AProfit MarginPremium TaxTotalAged, Blind, Disabled3.7%3.3%7.0%1.75%2.01%10.6%( 1)4.1%3.3%7.4%1.75%2.01%11.0%TANF, Minors (1-20)7.6%3.2%10.8%1.75%2.01%14.3%TANF, Adults (21+)4.8%3.3%8.1%1.75

21、%2.01%11.6%Maternity0.8%3.4%4.2%1.75%2.01%7.8%Total4.9%3.3%8.2%1.75%2.01%11.7%Source: NC DHHS, Barclays ResearchFIGURE 3Capitation Rate Summary for Initial, Standard PopulationMembers Months (000)Region 1Region 2Region 3Region 4Region 5Region 6StatewideAged, Blind, Disabled1472633292793102671,594TAN

22、F, New Borns ( 1)78145211171135109850TANF, Minors (1-20)1,2202,2973,2442,6622,1831,73413,340TANF, Adults (21+)2704697125095414082,909Maternity5913109753Total1,7163,1734,4963,6213,1692,51818,692PMPMRegion 1Region 2Region 3Region 4Region 5Region 6StatewideAged, Blind, Disabled$1,373$1,356$1,529$1,416$

23、1,278$1,159$1,355TANF, New Borns ( 1)$749$707$737$660$736$564$695TANF, Minors (1-20)$166$149$142$142$147$137$145TANF, Adults (21+)$414$438$394$386$422$374$404Maternity$9,556$9,760$9,431$8,858$10,193$8,844$9,442Blended$364$345$338$322$358$327$341Implied Members (000)Region 1Region 2Region 3Region 4Re

24、gion 5Region 6StatewideAged, Blind, Disabled122227232622133TANF, New Borns ( 1)712181411971TANF, Minors (1-20)1021912702221821441,112TANF, Adults (21+)233959424534242Maternity0111114Total1432643753022642101,558Implied Spending ($mln)Region 1Region 2Region 3Region 4Region 5Region 6StatewideAged, Blin

25、d, Disabled$202$357$502$394$396$309$2,160TANF, New Borns ( 1)$59$102$156$113$100$61$591TANF, Minors (1-20)$203$342$459$377$321$237$1,939TANF, Adults (21+)$112$205$281$197$228$152$1,175Maternity$50$90$123$87$90$64$505Total$625$1,096$1,521$1,168$1,135$824$6,370Source: NC DHHS, Barclays ResearchSizing

26、the Total North Carolina Opportunity SetOncefullyimplemented,weestimateatotalRFPspendof$10bnasomewhat conservativeestimateinourview.Wethenaddanincremental$4bnofspendingshould NorthCarolinaalsoexpandMedicaid,bringingthetotalpotentialMedicaidspendinthe stateto$14bn.Fromhere,weestimatethefollow-through

27、earningsimpacttoeach companyunderourcoverage.Allsaid,WCGhasthehighestpotentialearningsexposureto thestate,followedbyCNC.Twocaveatsareworthnotinginthisanalysis.First,planshaveformedanumberof partnershipswithlocalentitiesandthepotentialearningsdilutionthismayultimatelyhave onprofitsisunclear.Forexampl

28、e,ANTMwillalmostcertainlysharetheeconomicsofthe contractwithBCBSNC.However,evenCNCisunlikelytoretainfullcapitationifthe companyisshiftingrisktoitsJVpartners.Second,whileNorthCarolinasratesgenerally appearmoreadequatethanotherstates,itisstillunlikelythatanyplanservingNorth Carolinawillactuallyearnapr

29、ofitonthiscontractinyear1giventheinherentmedical uncertaintyofanunmanagedpopulationandtheinvestmentrequiredforanewcontract.FIGURE 4EPS Estimates from Total RFP Award and Medicaid ExpansionState EstimatesInitialPopulationFuturePopulationsTotal RFPExpansion SpendEstTotal NC OpptySpend Estimate ($mn)$6

30、,500$3,500$10,000$4,000$14,000Assumed # of Awards44444Allocation Estimate$1,625$875$2,500$1,000$3,500InformationalANTMCNCCVSUNHWCG2020 Shares/Outstanding (mn)2542121,31995052Barclays 2020 EPS Estimate$20.30$9.75$8.16$16.65$16.25Total RFP AwardANTMCNCCVSUNHWCGRFP Revenue$2,500$2,500$2,500$2,500$2,500

31、Target Net Margin2.5%2.5%2.5%2.5%2.5%Net Income$62.5$62.5$62.5$62.5$62.5Potential EPS from RFP Award$0.25$0.29$0.05$0.07$1.20% of 2020 Barclays EPS1.2%3.0%0.6%0.4%7.4%Medicaid ExpansionANTMCNCCVSUNHWCGMedicaid Expansion Oppty$1,000$1,000$1,000$1,000$1,000Target Net Margin2.5%2.5%2.5%2.5%2.5%Net Inco

32、me$25.0$25.0$25.0$25.0$25.0Potential EPS from Medicaid Expansion$0.10$0.12$0.02$0.03$0.48% of 2020 Barclays EPS0.5%1.2%0.2%0.2%3.0%RFP Award + Medicaid ExpansionANTMCNCCVSUNHWCGMedicaid Expansion Oppty$3,500$3,500$3,500$3,500$3,500Target Net Margin2.5%2.5%2.5%2.5%2.5%Net Income$87.5$87.5$87.5$87.5$8

33、7.5Potential EPS from Award$0.34$0.41$0.07$0.09$1.68% of 2020 Barclays EPS1.7%4.2%0.8%0.6%10.4%Source: Barclays ResearchWhos Best Positioned for an Award?BasedonourdetailedRFPtrackrecord( HYPERLINK l _bookmark1 Figure7)andscoringanalysis( HYPERLINK l _bookmark2 Figure8)combined withcompany-specifici

34、nitiativesandexistingstate-businessrelationshiplaidoutbelow,we viewANTM,CNC,andUNHasbestpositionedtosecureanaward.However,all5public MCOsbiddingonthiscontracthavebeenlayingthegroundworkforseveralyears,and manyhaveformedcollaborativepartnerships.Key Partnerships to WatchBCBS NC / ANTM willbesubmittin

35、gajointbidtoleverageANTMsscaleandMedicaid expertisewiththelocalBluesbrandandstaterelationships.Webelievethisstrengthens ANTMsoverallbid,butthejointbidmaydilutetheeconomicsofthecontract,similarto thatofthecompanyscurrentMedicaidpartnershipwithBCBSofMinnesota.CarolinaCompleteHealthisajointventureestab

36、lishedbyCNCwiththeNorthCarolina StateMedicalSociety.TheJVisaprovider-ledhealthplan(1ofonly2provider-ledbidders) andappearstobewell-tailoredtothestatesmember-focusedapproach.MyHealthbyHealthProvidersisthemostuniquepartnershipinourview.Itisaprovider- ledgroupof12NChealthsystemswhichhavepartneredwithPr

37、esbyterianHealthcare.The entityisdeeplyembeddedinthecurrentNCMedicaidprogramandappearstohavebidfor astate-widecontract.Ifso,thisintriguingpartnershipcertainlycouldtakeanawardspot overapublicMCOFIGURE 5Notable Partnerships / Initiatives in North CarolinaCompanyInitiativeMarketPlaceCommercialPresenceM

38、edicarePresenceANTMFormedHealthyBlue,acollaborativewithBlueCrosstoleverage scaleandMedicaidexpertiseandBlueCrossNCslocalbrandand relationships.Very HighVery High*Medium*CNCFormedCarolinaCompleteHealth,aphysician-directedhealthplanwithMedicalSocietyandCommunityHealthAssociation.Entering CVS (Aetna)Pa

39、rtneredwithCommunityCareof(CCNC)andCommunityCarePhysicians Network(CCPN)tosupportcomplexpatientswithmedicationusesupport,care managementandcoordinationofcommunitytoaddresssocialdeterminants of health.MediumMediumUNHEstablishedaCareMedicalHomeandcaremanagementnetwork withCommunityCarePhysicianNetwork

40、LLC(CCPN);alsopartneredwithHealthSystemtosupportD-SNPpopulation.HighHighWCGPartneredwithCommunityCareof(CCNC)andCommunityCarePhysicians Network(CCPN)tocollaboratecaredelivery;alsointendstoestablisha communityadvocacyprogramtoaddresssocialsupportLowMyHealthProgramandmanagedbyNorthCarolinaProviderOwne

41、dPlans a collaboration of 12 health systems in partnership with PresbyterianHealthcareSgramboastsmorethan3,500locations acrossthestateand15,000physicianpartners.NANANASource: Barclays Research, Company Documents. *Includes Blue Cross NC membershipState RelationshipsBothANTMandCNCwilllikelyscoreexpli

42、citbonuspoints(2.5%oftotalRFPscoring)for participatinginthestatesMarketplace.BCBSNCparticipatesinallcountiesthroughoutthe stateandCNCenteredDurhamandWakecountiesfor2019.Aetna,ANTM,andUNHalsohaveameaningfulpresenceinthestate;namelythroughthe employergroupandMedicaremarkets.Thismaygivethesecompaniesaf

43、ewadvantages. First,plansmaybeabletopointtospecificexampleshowtheycurrentlyimplement programstomanagemembersinthestate,particularlyontheMedicareside.Second,these MCOsalreadycontractwithprovidersinthestate,whichmayhelpthemdesignprovider networksfortheMedicaidcontract.Scoring CriteriaIndraftingthisRFP

44、,thestatehasexpressedastronginterestinpurchasinghealthoutcomes nothealthcare,perse.Thescoringcriteriaareheavilyweightedtowardsthefollowing:Improvedhealthoutcomesthroughenhancedmemberexperience;Coordinatedcareprogramsthatdeliverwhole-personcare;Accesstohigh-qualitycareforallmembers;andImplementationo

45、fvalue-basedpurchasingtodrivequalityimprovement.Withthatsaid,howMCOscommunicatetheirplanstoincorporatesocialdeterminantsof healthmaybeakeyvariabletowholepersoncareandmemberexperience.Finally,itisno secretthatthestatewantstomovetovalue-basedpaymentquicklytoimprovehealth outcomes.Thetwoprovider-ledbid

46、dersCarolinaCompleteHealth(CNCJV)andMy Healthmaybeabletomoreeffectivelydemonstratevalue-basedpaymentmodels.Finally,itsworthpointingoutthatthereare2.5%ofbonuspointsexplicitlybuiltintothe RFPscoringforinsurersthatparticipateinthestatesMarketplace.Thisshouldbenefitbids byANTM(viaBCBSNC)andCNC.FIGURE 6S

47、coring CriteriaCriteriaSub WeightWeightsOfferor Qualifications / Experience20.0%Scope of Services100.0%70.0%Serve as an effective partner in delivering Medicaid Managed Care7.5%5.3%Improve health outcomes by enhancing member experience15.0%10.5%Developcoordinatedhealthprogramsthatdeliverhealththroug

48、hwhole-personcare25.0%17.5%Develop robust provider networks and ensure approriate access to care for all members15.0%10.5%Develop comprehensive quality improvement and value-based purchasing to advance high-value care15.0%10.5%Engage and integrate key department partners7.5%5.3%Promote and monitor N

49、Cs medicaid managed care sustainability10.0%7.0%Promote a culture of compliance5.0%3.5%Use Cases5.0%Client References5.0%Bonus Points: Marketplace Participation2.5%Total Available Points w/ Bonus102.5%Source: NC DHHS, Barclays ResearchFIGURE 7Barclays Proprietary Medicaid RFP Track Record AnalysisMa

50、jor RFP ScorecardAETANTMCNCHUMMGLNMOHUNHWCGHealthMajor RFP Bids (At Bats)141419541118149Bids as % of Total RFPs64%67%86%23%18%50%86%64%43%Successful Defenses5910102751New Business Wins216131423Major RFP Wins710162331174Incumbent Losses410203400Non-Incumbent Losses333115375Major RFP Losses743318775Wi

51、n % (Batting Average)50%71%84%40%75%27%61%50%44%StateStartDateProgramOpportunity TypeAETANTMCNCHUMMGLNMOHUNHWCGHealthSpend($B)Members(000)IowaApr-16Iowa Health LinkGreenfield StatewideLWLLLWL1W$3.7600West VirginiaJul-16Mountain Health TrustRebic,CoreMedicaidSSICarve-InWW$1.5450IndianaJan-17Healthy I

52、ndiana Plan & Hoosier HealthwiseRebid, Core MedicaidWWL$4.51,000NebraskaJan-17Heritage HealthRebid, Behavioral IntegrationLWWWL$1.1230MissouriMay-17MO HealthNetRebid, Statewide ExpansionLWWW$1.7700GeorgiaJul-17Georgia FamiliesRebid, Core MedicaidWWLLLWL$3.81,300NevadaJul-17Managed Care ProgramRebid,

53、 LTSS Carve-InW2WWLWL$1.5400MassassachusettsDec-17MassHealth Managed CareRebid,ACOModel,LTSSCarve-InL$7.1850VirginiaDec-17MLTSS (fka Commonwealth Coordinated CareRebid, LTSS Carve-InWWLWWL$3.4210IllinoisJan-18Integrated Care Program and Family HealthRebid, Statewide ExpansionLWWW$14.02,700DelawareJa

54、n-18Medicaid Managed Care ProgramRebid, Core MedicaidLLLLW$1.7200MississippiJan-18MississippiCANRebid, Core MedicaidLWWWL$2.8500PennsylvaniaJan-18Community HealthChoicesGreenfield LTSSLWLLLW$7.2420VirginiaAug-18Medallion 4.0Rebid, Core MedicaidWWLWLWL$3.5740ArizonaOct-18AHCCCS Complete Care Reprocur

55、ementRebid, Behavioral IntegrationWWWW$4.51,500FloridaJan-19Managed Medical Assistance (MMA)Rebid, Core MedicaidWWWWL3WW$12.03,100FloridaJan-19Long-term Care (LTC)Rebid, LTCWWWWL3L3W$3.2100KansasJan-19KanCare 2.0Rebid, Full MedicaidWLWWLL$3.0400New MexicoJan-19Centennial Care 2.0Rebid, Core Medicaid

56、LWLLLL$4.5700WashingtonJan-19Apple Health Integrated Managed CareRebid, Behavioral IntegrationWWWW$5.71,600IowaJul-19Iowa Health Link - ReplacementMCO ReplacementNAWNANA$3.7600PennsylvaniaTBDHealthChoices (Protest)Rebid, Core MedicaidLWLW$10.51,700Source: Barclays Research. 1Won RFP award but state

57、terminated contract. 2Awarded contract but company withdrew following low enrollment. 3Lost significant share but retained some regions.FIGURE 8Barclays Proprietary RFP Scoring CompositeTechnical Scoring Rank: Green = RFP Award Red = RFP LossStateLTSSProgramAETANTMCNCHUMMGLNMOHUNHWCGAmeriHealthAward

58、sIllinoisYesIntegrated Care Program and Family Health316465IowaYesIowa Health Link61578234103FloridaYesSMMC Comprehensive: MMA and LTC532476185KansasYesKanCare 2.041115663MississippiNoMississippiCAN4123563MissouriNoMO HealthNet432143NebraskaNoHeritage Health4213563NevadaYesManaged Care Program134725

59、74New MexicoNoCentennial Care 2.082375683VirginiaNoMedallion 4.0215837106Virginia LTSSYesMLTSS (fka Commonwealth Coordinated Care)21541138126WashingtonNoApple Health Integrated Managed Care241355Average Rank3.04.1Average LTSS Rank8.24.3Cost Scoring Rank: Green = RFP Award Red = RFP LossStateLTSS AET

60、ANTM CNCHUM MGLN MOHUNHWCG Ameri Awards HealthIllinoisIntegratedCareProgramandFamilyHealth624165KansasKanCare2.046113563CentennialCare2.046817183ManagedCareProgram13136374AverageRankNANA5.06.83.8Source: Barclays ResearchFavorable Risk / Reward Set-Up for WCGInNorthCarolina,WCGhasbe