Healthcare rising MCR and Clover Health's landmark expansion in the Midwest (Illinois)
Hello Fellow Apes,
I want to take a moment to highlight recent earnings reports and news that reflect the rising Medical Cost Ratio (MCR) across the healthcare sector. The increasing cost of healthcare has become more evident, and if you've been following earnings reports closely, you may have noticed a troubling trend. Since UnitedHealth Group (UNH) reported disappointing earnings, nearly every major healthcare company has revealed rising MCRs, struggling to maintain profitability in the face of escalating costs.
One of the primary drivers of this trend is CMS V28, which has introduced new challenges for Managed Care Organizations (MCOs). Additionally, the broader cultural shift in healthcare utilization, along with political factors, is further straining the system.
Despite its poor earnings, UNH—widely regarded as the dominant force in the healthcare sector—remained relatively resilient. While the initial reaction to its earnings was negative, the stock quickly rebounded in the days that followed. This suggests that UNH, due to its market position, enjoys a level of insulation from bad earnings that other companies do not.
However, Oscar Health (OSCR) presents a different case—one that raises serious concerns about market manipulation. OSCR's latest earnings were abysmal: the company reported member losses, financial losses, and a significantly higher MCR. As expected, its stock initially plummeted in after-hours and pre-market trading. Yet, despite this disastrous report, the stock inexplicably surged 5% when the market opened finally declining today.
This kind of price action raises red flags. It strongly suggests that insiders or institutional players may have artificially propped up the stock to facilitate an exit at a better price. There is no rational justification for OSCR's stock to have gained value following such a poor earnings report. The pattern is consistent with market manipulation, where short-term price support is used to allow certain stakeholders to offload shares before the inevitable decline.
These irregularities highlight the need for more scrutiny in the healthcare sector, particularly as MCR trends continue to worsen. Investors should remain vigilant and question the underlying forces driving stock movements, especially when they contradict fundamental financial realities.
Now, let’s shift our focus to Clover Health and its recent milestone. The company just announced a multi-year agreement between Counterpart Health and Southern Illinois Healthcare, a development that carries immense significance for several reasons. If you recall from my post last month (see link below), I emphasized that Iowa Clinic was a key player in Clover Health’s expansion into the Midwest through its SaaS model (Clover Assistant). The reason? The culture of the region. The fact that Illinois is now onboard confirms that this expansion strategy is working.
https://www.reddit.com/r/Healthcare_Anon/comments/1hzybq9/clover_health_trumps_healthcare_and/
For those unfamiliar with the Midwest healthcare landscape, the region has struggled for years to control its Medical Cost Ratio (MCR) and remain financially viable. Many healthcare systems there have invested heavily in Electronic Health Records (EHR) systems, hoping to improve efficiency, but these efforts have largely failed.
Clover Health’s partnership with Iowa Clinic was likely structured around tangible MCR improvements—meaning, if the company didn’t deliver measurable cost savings, it wouldn’t get paid, both in SaaS fees and through cost-sharing bonuses. Now, with Illinois signing a multi-year contract, it’s a strong indication that Clover Health successfully improved MCR for Iowa Clinic—and that success has caught the attention of other Midwest healthcare systems.
The significance of Illinois' contract cannot be overstated. This means that Clover Health’s partnership in Iowa not only delivered results but was compelling enough for another major healthcare provider in the Midwest to sign on.
What’s particularly notable is that Southern Illinois Healthcare has chosen to integrate Clover’s Counterpart Assistant on top of its existing EPIC system, despite already paying substantial amounts for EPIC. This speaks volumes about the limitations of EPIC in improving efficiency, something that those of us who work in healthcare have always known. Like many other systems in the region, Southern Illinois Healthcare is struggling to maintain an appropriate MCR, and this contract suggests that Clover Health has demonstrated the ability to help.
Since the announcement of the Iowa Clinic partnership, Moocao, Upsetweekend, and I have theorized about the significance of the contract. We understood the cultural and structural challenges in the region and believed that if Clover Health could prove its SaaS model in one Midwest healthcare system, it would trigger a cascade of new contracts.
Well, Illinois is the “Beacon of Gondor”—a signal to the entire Midwest that Clover’s technology is delivering real results.
A quick side note: there has been misinformation floating around about Clover Assistant’s ability to integrate with EPIC. Let’s clear this up once and for all—this is NOT a new feature. From the very beginning, Andrew (CEO) has stated that Clover Assistant was designed to be compatible with EPIC and other major EHR systems. The ability to integrate is not the game-changer—the results are.
Here’s the bottom line: If Clover Health can continue demonstrating that its Clover Assistant technology improves MCR while nearly every other healthcare company in the U.S. is struggling just to maintain theirs, then this is the groundbreaking industry shakeup that we’ve all been investing in for the past four years.
This is the moment that could finally send Clover Health’s stock soaring. Buckle up. 🚀 haha
