Clover Health Investments Corp. Takes Steps to Accelerate Profitability with Business Transformation Initiatives
Layoffs
April 19, 2023
Clover Health Investments Corp., a leading healthcare technology company, has announced a series of business transformation initiatives aimed at accelerating the company's path to profitability. These initiatives include a partnership with UST HealthProof, which will see Clover Health move its core plan operations to UST HealthProof's integrated technology platform, as well as additional corporate restructuring actions.
Clover's partnership with UST HealthProof is expected to generate net annual cost savings of approximately $30 million beginning in 2024. This transformative partnership will allow each organization to focus on its core strengths, with Clover continuing to innovate with its strong benefits, wide provider network, and differentiated capabilities in Clover Assistant and Clover Home Care.
In addition to the UST HealthProof partnership, Clover also conducted an independent reduction-in-force to better align its SG&A cost structure with its revenue base. This restructuring resulted in the elimination of approximately 10% of Clover's workforce. The company anticipates that it will continue to deliver additional efficiencies in future periods via continued focus on streamlining operations, improving its technology platform, and continuing to pursue a disciplined growth strategy focused on its core markets.
Clover expects to record a total charge of approximately $7 to $9 million in 1H2023 to implement the UST HealthProof arrangement and the additional internal restructuring actions. Despite this charge, Clover is committed to its long-term success and expects to unlock significant value and deliver real savings through increased efficiency and operational excellence.
“Our focus at Clover is helping physicians detect and treat disease sooner via Clover Assistant,” said Andrew Toy, CEO of Clover. “We’re absolutely focused on delivering a sustainable, profitable Clover Heath to our members and investors, and this is a huge step in that direction.”
“This transformative partnership between UST HealthProof and Clover Health, two tech forward companies, is expected to unlock value by permitting each organization to focus on its core strengths," added Jamie Reynoso, Clover’s CEO of Medicare Advantage.
“We are committed to Clover’s long-term success and expect to unlock significant value, and deliver real savings through increased efficiency and operational excellence,” said Kevin Adams, CEO of UST HealthProof.
Members of LevelFields received the alert of this event on April 17, 9:20 AM ET
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