Founders’ Letter: Who we are— and why we exist
Co-Authors: Vivek Garipalli, CEO; Andrew Toy, President
Why is healthcare so broken?
This question is never far from most people’s minds. About 7 in 10 Americans say that health care has “major problems” or is in “a state of crisis” — a number that has barely budged for 25 years. People from all walks of life are profoundly concerned about rising costs, falling choice, and finding quality care. Americans want health care that works.
This question is always on our minds. So is another: How do we fix health care so people pay less, have more choice, and get the better care that leads to better lives?
We’ve given a lot of thought to the answer.
One of us — Vivek — is the son of two doctors. Vivek founded five health care companies before age 40, ranging from diagnostic services to hospitals to cancer research. He’s seen firsthand how healthcare is more focused on financial results than improving lives.
One of us — Andrew — came to healthcare after a career in technology. After starting and selling a start-up and working in senior roles at Silicon Valley companies, Andrew set out to build a business that helped people. He saw the biggest challenges and best opportunities in healthcare.
While we come from different perspectives, the two of us reached the same conclusion: Healthcare is broken because it doesn’t empower the right people.
We created Clover Health to right this wrong.
We empower patients — our members — to find the high-quality care they deserve. We give them more and better choices, leading to healthier, happier, and longer lives. Our goal is for every patient to find excellent care everywhere they go.
We empower physicians — our partners — to more effectively do the work they love. We give them cutting-edge tools to help them provide their patients with excellent, personalized, data-driven care. Our goal is for every physician to have the information they need to make the best decisions every time.
Sadly, individual empowerment is at odds with the current structure of the healthcare system. That’s why we’ve developed disruptive technology that enables us to drive systemic change on a nationwide scale. Our unconventional approach can align interests and incentives so that healthcare finally puts people first.
We’re not just here to fix the broken healthcare system. Clover Health is here to improve every life.
What we do — and how we do it
What makes Clover Health different?
From the outside, we look like a typical health insurance company. From the inside, Clover is employing cutting-edge technology to refocus health insurance on improving patient outcomes, not managing financial risk. Our unique approach enables us to deliver what patients want: Better care for less money and with more choice.
Early on, we realized the best way to fix healthcare is from within. Health insurance companies have exceptional leverage and access to data, which gives them an outsized ability to shape how the broader healthcare system works. Insurance is where the power is, and since we want to take that power and give it back to patients and physicians, that’s where we choose to be.
Because we’re not a typical health insurance company, our approach departs from the crowd. Instead of excluding sick patients, we’re working to give everyone access to high-quality care. Instead of building narrow, closed provider networks, we build wide and open ones. Instead of focusing on data to improve billing processes, we use it to improve physician decision-making. We’re as determined to improve the quantity of choice as we are the quality of care.
At the core of our model is technology — specifically, the Clover Assistant. A free software program for physicians, it helps us relentlessly improve individual health by creating a powerful “closed loop” in healthcare.
The closed loop is the holy grail of tech. To create one, you have to be in a position to measure every stage of a process, from start to finish. Then you can analyze the data and improve the outcomes, quickly and repeatedly. Amazon does this with online shopping. Google does this with advertising. Clover Health is doing this with healthcare.
Our software creates a closed loop with patient information, giving us a holistic view of our members’ unique health needs. Primary care physicians use the Clover Assistant to record each members’ conditions, treatments, reactions, and prognosis. This information filters through our clinically based technology platform, which recommends to the physician a personalized, data-driven care plan for each member in real time. The more physicians use the Clover Assistant, the better it gets, with even more tailored care plans for each of our members.
Physicians love the Clover Assistant. Intuitive and easy to use, it gives them the right information at the right time, helping them make the right choices for their patients. This helps explain why the Clover Assistant is so popular. Our plans don’t require physicians to adopt it, but the physicians that do so use it for 80% of their interactions with our members. The Clover Assistant has a Net Promoter Score of +63 — comparable to consumer technology platforms like Netflix, and far above negatively-ranked health technology products, such as electronic health record systems.
In a very real sense, the Clover Assistant is a physician’s best friend. And by empowering physicians en masse, it enables us to empower patients on a massive scale — and at an amazing speed.
Where other companies acquire data at the speed of healthcare, sometimes taking months or years, we acquire massive amounts of data at the speed of software. With that information in hand, physicians and our clinical team then uses medical guidelines and advanced machine learning to curate personalized treatment protocols.
The entire ecosystem is constantly being updated and upgraded with the most up-to-date resources and recommendations. We release a new version of the Clover Assistant every three weeks, on average. Each iteration provides even better support to physicians. Each iteration leads to even better and more personalized care for our members. Each iteration brings us closer to our goal of improving every life.
Where we are — and where we’re going
Our first venture is in Medicare Advantage. Its unique design is friendly to building a flourishing business. It has a population with major care needs, with more than two-thirds of recipients having two or more chronic conditions. In our view, there is no more important market in which to improve lives.
We designed our plans so that we profit by empowering people. As physicians use the Clover Assistant, it improves care for our members and the performance of our plans. As our margins improve, we use the savings to make our plans more affordable and our physician networks larger. As prices drop and networks grow, our plans become the obvious choice. As more members sign up, they find more choices and higher-quality care. The longer this goes on, the more lives are changed
To put a finer point on it: Our technology drives better care, which often leads to better margins, which helps us offer better and more affordable “obvious” plans for patients, which benefits the company by driving membership growth. We’re confident our approach is scalable nationwide, putting Clover in a position to thrive in every Medicare Advantage market in America.
We’ve already seen a glimpse of what’s possible. Clover currently offers Medicare Advantage plans in 7 states and 34 markets. Our “obvious” plans are among the most affordable in their markets. They generally offer the widest physician networks. As a result, they benefit from industry-leading organic growth, [with a 38% annual growth rate compared to an 8% industry average].
Crucially, we can move into new markets, and indeed, virtually every U.S. market. While other companies are constrained by their asset-heavy approach or geographic limitations, our software-centered strategy enables growth potential in every environment — urban, suburban, and rural. Our goal is to provide Medicare Advantage’s more than 24 million consumers with access to our plans and claim most of them as members. Millions of patients with the most pressing health needs would find more choice, lower costs, and better care.
But Medicare Advantage is just the beginning. It is the foundation on which we’re building to transform the wider healthcare world. We see opportunities in the other two-thirds of Medicare. We see pathways to succeed in Medicaid and commercial insurance. Because our infrastructure is built on software, we believe we can enter these adjacent markets in a highly scalable way, enabling Clover Health to lower costs, increase choice, and improve care for hundreds of millions of people.
After all, our mission is to improve every life, and we mean every word of it.
Our promise—and our purpose
We’re looking for investors who share our mission.
We’re looking for investors who want high growth driven by high social impact over the long term.
If you want to invest in just another health insurance company, that’s not us. If you want just another technology company, that’s not us. We don’t think either is capable of achieving our goal of giving better care to everyone. Typical insurers lack the incentives and tech firms lack the positioning. If that’s what you want, we won’t be good for you, nor you for us.
But if you want a company that puts people at the heart of healthcare, then we’re it. We’ve got a long-term vision and we want long-term investors who will help us realize it. Our promise is that Clover Health will always strive to empower people, because their success is ultimately ours.
Of course, we recognize that the healthcare landscape is rapidly changing. The pace and magnitude are likely to intensify in the years ahead. Our technology-centered strategy enables us to be agile and adaptable yet still make ongoing progress toward our North Star — improving every life. We believe we are well positioned to both keep up with rapid change and propel it, continuously giving patients the lower costs, greater choice, and better care they want and deserve.
Healthcare has been broken for far too long. We hope you’ll join us as we strive to fix it and move toward a future where everyone leads healthier, happier, and longer lives.
Read a letter from Clover’s clinical leaders on why they believe the company will revolutionize how physicians provide care to patients: https://medium.com/clover-off-the-charts/clinician-letter-why-we-work-at-clover-health-6ece934db52
IMPORTANT LEGAL INFORMATION
Cautionary Statement Regarding Forward-Looking Statements
This document contains certain forward-looking statements within the meaning of the federal securities laws with respect to the proposed transaction between Clover Health Investments, Corp. (“Clover”) and Social Capital Hedosophia Holdings Corp. III (“SCH”). These forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,” “opportunity,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. Many factors could cause actual future events to differ materially from the forward-looking statements in this document, including but not limited to: (i) the risk that the transaction may not be completed in a timely manner or at all, which may adversely affect the price of SCH’s securities, (ii) the risk that the transaction may not be completed by SCH’s business combination deadline and the potential failure to obtain an extension of the business combination deadline if sought by SCH, (iii) the failure to satisfy the conditions to the consummation of the transaction, including the adoption of the Agreement and Plan of Merger (the “Merger Agreement”), dated as of October 5, 2020, by and among SCH, Asclepius Merger Sub Inc. and Clover, by the shareholders of SCH, the satisfaction of the minimum trust account amount following redemptions by SCH’s public shareholders and the receipt of certain governmental and regulatory approvals, (iv) the lack of a third party valuation in determining whether or not to pursue the proposed transaction, (v) the inability to complete the PIPE investment in connection with the transaction, (vi) the occurrence of any event, change or other circumstance that could give rise to the termination of the Merger Agreement, (vii) the effect of the announcement or pendency of the transaction on Clover’s business relationships, operating results and business generally, (viii) risks that the proposed transaction disrupts current plans and operations of Clover and potential difficulties in Clover employee retention as a result of the transaction, (ix) the outcome of any legal proceedings that may be instituted against Clover or against SCH related to the Merger Agreement or the transaction, (x) the ability to maintain the listing of SCH’s securities on a national securities exchange, (xi) the price of SCH’s securities may be volatile due to a variety of factors, including changes in the competitive and highly regulated industries in which SCH plans to operate or Clover operates, variations in operating performance across competitors, changes in laws and regulations affecting SCH’s or Clover’s business and changes in the combined capital structure, (xii) the ability to implement business plans, forecasts, and other expectations after the completion of the proposed transaction, and identify and realize additional opportunities, and (xiii) the risk of downturns and a changing regulatory landscape in the highly competitive healthcare industry. The foregoing list of factors is not exhaustive. You should carefully consider the foregoing factors and the other risks and uncertainties described in the “Risk Factors” section of SCH’s registration on Form S-1 (File №333–236776), the registration statement on Form S-4 discussed below and other documents filed by SCH from time to time with the U.S. Securities and Exchange Commission (the “SEC”). These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and Clover and SCH assume no obligation and do not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise. Neither Clover nor SCH gives any assurance that either Clover or SCH or the combined company will achieve its expectations.
Additional Information and Where to Find It
This document relates to a proposed transaction between Clover and SCH. This document does not constitute an offer to sell or exchange, or the solicitation of an offer to buy or exchange, any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, sale or exchange would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. In connection with the proposed transactions, SCH filed a registration statement on Form S-4 (the “Registration Statement”) with the SEC on October 20, 2020 (File №333–249558), which includes a preliminary proxy statement/prospectus, that is both the proxy statement to be distributed to SCH’s shareholders in connection with SCH’s solicitation of proxies for the vote by SCH’s shareholders with respect to the proposed transaction as described in the Registration Statement as well as the prospectus relating to the offer of the securities to be issued thereunder in connection with the proposed transaction as described in the Registration Statement. The Registration Statement has not yet been declared effective. After the Registration Statement is declared effective, SCH will mail a definitive proxy statement/prospectus and other relevant documents to its shareholders. SHAREHOLDERS AND OTHER SECURITY HOLDERS OF SCH ARE ADVISED TO READ THE REGISTRATION STATEMENT, THE PROXY STATEMENT/PROSPECTUS AND ALL OTHER RELEVANT DOCUMENTS FILED OR THAT WILL BE FILED WITH THE SEC IN CONNECTION WITH THE PROPOSED TRANSACTION AS THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Investors and security holders will be able to obtain free copies of the Registration Statement, the proxy statement/prospectus and all other relevant documents filed or that will be filed with the SEC by SCH (when available) through the website maintained by the SEC at http://www.sec.gov.
The documents filed by SCH with the SEC also may be obtained free of charge at SCH’s website at https://protect-us.mimecast.com/s/G6-kCXD5W1hrL4jpFDwt5Q?domain=socialcapitalhedosophiaholdings.com or upon written request to 317 University Ave, Suite 200, Palo Alto, California 94301.
Participants in Solicitation
SCH and Clover and their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from SCH’s shareholders in connection with the proposed transaction. A list of the names of such directors and executive officers and information regarding their interests in the business combination will be contained in the proxy statement/prospectus when available. You may obtain free copies of these documents as described in the preceding paragraph.
