Astrana Health (ASTH) Barclays 28th Annual Global Healthcare Conference summary

Business performance and growth

• Achieved record revenue, free cash flow, and Adjusted EBITDA, with 40%-50% year-over-year growth and guidance for 20%-30% growth in the coming year.

• Maintained profitability and rapid expansion, with revenue increasing six-fold and free cash flow nearly eight-fold over seven years.

• Operating leverage improved, with G&A as a percentage of revenue reduced by 75 basis points (110 on an adjusted basis) from 2024 to 2025.

• G&A efficiency at 6.8% of revenue, outperforming industry peers who typically exceed 10%.

• Positioned to expand market share due to resilience against industry headwinds and a diversified model.

Membership and trend management

• Forecasts mid-single-digit Medicare growth, 10%-13% Medicaid decline, and 20%-30% ACA exchange decline for 2026.

• Medicaid declines driven by disenrollment, especially among undocumented immigrants in California.

• Exchange membership expected to drop after auto re-enrollment adjustments in April.

• Maintained medical cost trends in the mid-single digits, outperforming peers amid industry volatility.

• Conservative actuarial modeling, with a 5% trend assumption for 2025 to account for adverse selection and new acquisitions.

Regulatory and rate environment

• Anticipates tailwinds from Medicare Advantage rate updates, offsetting Medicaid and exchange headwinds.

• Engaged with CMS on risk model calibration, advocating for adjustments to address fraud-driven coefficient distortions.

• Expects Astrana's MA rates to increase 2.5%-3%, outperforming the flat industry average due to conservative risk adjustment and encounter-based reporting.

• Margin impact from MA rate changes expected to be minimal, with potential for margin accretion in 2027.