agilon health（AGL）：快速解读：AGL在战略决策会议（SDC）炉边谈话评论总结

RatingOutperformPrice TargetAGLAdjusted EPSAGL (USD)Source: Bloomberg, Bernstein estimates and analysis.We hosted a session AGL CEO and CFO at our 41stannual Strategic Decision Conferenceyesterday, and this note summarizes key takeaways from our chat.MCO interest in contracting with VBC is strong.AGL commented that payers are interestedin VBC solutions as they seek to control costs and manage margins, and recent meetings withMCOs have seen much larger engagement of management teams at the negotiating table withAGL than in early years. AGL is limiting its growth in 25/26 not due to lack of demand fromMCOs, but as a means of margin recovery. AGL reiterated its guide of 30 to 45k new membersin ‘26.AGL is making progress in their recontracting efforts, the key to their turnaround.AGLis focused on four items - 1) carving out Part D, with exposure dropping from 70% last yearto 30% this year, and already carving out it out from one more contract for 26; 2) seekingquality incentive payments (around half of the $50M tailwind in their EBITDA guide coming fromquality incentives), this aligns increased payer emphasis on Stars with AGL ability to drive highermeasures; 3) seeking improved global cap rates (% of premium); and 4) looking for payers toreduce supplemental benefits.Utilization comments consistent with prior 1Q commentary and suggest stableutilization trends in MA.AGL reiterated their guide of 5.3% for cost trends in ’25, which is inline with 24 and 23 at ~7% once adjusted for the impact of 2 midnight rule and payer bids. Q125 came in at 5.5%, 20bps above their target of 5.3%, partly due to flu.Our take- We see VBC as an increasingly important approach for MA plans, in terms of costcontrol, credible risk scoring and quality measures (Stars), and AGL appears to be seeingincreased MCO emphasis on this. AGL is margin recovery focused first, and is limiting growthwhich we see as the right approach in the current environment. AGL has specific actions theyare making progress on in their turnaround which adds confidence in the name. We see AGL asbenefiting from the sector recovery in MA 26-28, aided by the better 26 final rate, along withgreater need for VBC by MCOs for cost control and Stars.See the Disclosure Appendix of this report for required disclosures, analyst certifications and otherimportant information. Alternatively, visit our Global Research Disclosure Website.First Published: 29 May 2025 11:21 UTC Completion Date: 29 May 2025 11:21 UTC F26E219%640.63(59.2)(70.2) F24AF25EF26E(0.62)(0.42)(0.29)FinancialsF24AF25EF26ECAGRReported EPS(0.62)(0.42)(0.29)--Close DateSPXFYEDiv YieldEV (USD) (M)PerformanceAbsolute (%)SPX (%)Relative (%)$8$7$6$5$4$3$205/2408/24 AGL background.AGL has built a unique, long-term, 20-year partnership with medical groups in communities with their PCPshaving long-standing relationships with their senior patients. They help these doctors move their patients and the health plansfrom a FFS model to a risk-based model. Through these partnerships AGL has been able to scale the company with 2,200 primarycare doctors, 30-plus partnerships, in 12 states, and 600k+ senior patients. AGL believes it has driven best-in-class quality andcost outcomes, beating local benchmarks by 20 to 30%.Payer interest in VBC and demand for this solution remains strong.AGL said PCPs are at a critical juncture as they arecoming through year three of a challenging macro environment. AGL believes demand among physician groups for the move tovalue continues to be very strong. It is also strong among payers. AGL believes demand will continue to be strong given the macroand policy risks around quality and audits that require pristine capture of diagnostics. AGL reiterated its guide of 30 to 45k newmembers in ‘26.AGL disciplined approach with contracts.AGL said they are working hard and negotiating with plans to be rewarded for costcategories they control and carve out those that they don’t. They are willing to walk away from a market or payers if they do notbelieve the contract works for them. This approach led to AGL payer footprint shrinking by 10%. AGL believes payers want to workwith AGL as they value what AGL offers them (cost savings and higher quality).AGL comments on risk adjustment reinforces previous guide of 2% .AGL calls risk adjustment “burden of illness program”as it is the foundation of their clinical model. Under AGL process the early assessment and diagnosis are managed and matchedup with care plans to manage chronic diseases, and ultimately, prevent or delay the progression of disease. That philosophypermeates everything AGL does. AGL believes once v28 is complete, it will be a more clinical world, pushing toward reinforcingcompanies that have pristine process around risk adjustment. AGL believes it is one of those companies as they have thoroughchart review and clinical peer medical record review processes. AGL population is coded in line with national average. AGL alsoreiterated its guide of a net