Devoted Health needs more devotion from investors

Continuing losses from underwriting show gross margins at risk

Devoted Health reported continuing losses expected to persist into 2024 as well.

Interestingly, their member base blew past projections (140k vs 103k projected) made in their pitch decks.

Devoted focuses on MA primarily which was a hot segment 2 years back.

However, the higher than normal MLR (as may be the case due to underwriting losses) due to higher care burden for MA members, spike in outpatient volumes (lower realization per episode) combined with surprise Star Rating model changes means the future is still in the red.