Bright Health Group, Inc. (BHG) – Initiation of CoverageJuly 19, 2021
Yesterday, Nephron’s Josh Raskin and Eric Percher initiated coverage on Bright Health Group via ~50 page long form report to clients. The initiation follows on the heels of broader written work in the Physician Enablement space dating back to January of this year and formal coverage of other key players. The team framed their BHG thesis as follows:
Bright Health Group is a combination of assets that targets the most effective parts of health insurance and combines that with the most valuable parts of the healthcare delivery system. Built by a team with decades of experience, Bright Health knows what it is supposed to look like. In fact, the team has first-hand experience at the most advanced integrated delivery system in the country, UnitedHealth Group. With headquarters separated by less than 6 miles, there are four operating executives listed in the Bright Health S-1 (we exclude CFO and General Counsel) and ALL four have worked at UnitedHealth in the past. In some ways, Bright Health has used knowledge amassed over the past two decades, and the evolution of health insurance, to start over and build from scratch. When the company was formed, Bob Sheehy and the leadership stepped back and answered the question of “If you could start fresh, what would the ideal health insurance company look like?”
The key to overall Bright Health Group is the symbiotic relationship between its health plans and its delivery assets. The tight alignment of the providers and members leads to lower costs and lower price points, which leads to a better mouse trap to bring in members to the insurance entity, which then allows the provider segment to scale faster to lower costs – rinse, repeat. This advantage is not lost on the company and in fact will be a key part of the messaging in the future.
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