Bright Health to Buy California-based Central Health Plan Amid Ballooning Growth
Maybe the strongest indication about the robust growth of Minneapolis-based Bright Health is the number of current job openings the company has posted. On Friday morning, the company’s website listed 89 current openings across all departments and locations.
“For the past three years we’ve just gone through exponential growth,” said Sam Srivastava, Bright Health’s chief operating officer. “We’re kind of tripling in size each year.”
Founded in 2015, the company now has approximately 1,500 employees. The company started with the goal of building a brand-new health insurance plan from scratch. Today the company offers health plans in 13 states and more than 50 different markets, covering more than 500,000 consumers. As 2021 opens, its membership numbers have more tripled over the last year.
Bright Health officials say the company topped $1 billion in revenue for 2020, though they don’t disclose other financial specifics.
It will keep getting bigger. Bright Health just announced that it has finalized an agreement to acquire Central Health Plan of California Inc.
Bright Health is not disclosing the purchase price, but it’s clearly no small deal. Filings with the state of California show that Central Health Plan had $488.7 million in premium revenue for 2019, a 19.7 percent increase from 2018.
“We believe we’re transforming health [care] by really having a partnership with providers, doctors and hospitals and building an alignment model so that we can take the abrasion out of health care,” said Srivastava. “That alignment model of partnering with doctors and hospitals…that’s exactly what Central Health Plan has.”
Srivastava added that the diversity of Central Health Plan’s customers was also appealing.
“They have a lot of cultural competency and cultural sensitivity that we felt aligned with our personal care model and we can help export…for example, they serve a large Chinese-American community, they serve a large Vietnamese community, a large Latino population,” said Srivastava. “We find that to be kind of a portion of the future of health care. We better be local and understand our communities.”
Bright Health is a startup unlike any ever seen before in Minnesota. The company has raised nearly $1.6 billion in backing through five rounds of financing. It announced raising $635 million in its Series D financing round in December 2019. Just nine months later, in September 2020, the company announced raising another $500 million through its Series E financing round.
Is Bright Health currently trying to raise more money? “I think we’re happy where we are,” said Srivastava.
Bright Health previously acquired another California-based company, Universal Care Inc., which does business under the name Brand New Day, in April 2020. Srivastava said that Brand New Day was similar in size to Central Health Plan.
There are likely more deals to come.
“Our priority is organic growth,” said Srivastava. “[But] we’re always looking at acquisitions to advance our strategy which would be to potentially move into new markets, new products that we may not have…or to accelerate capabilities and technology that we have.”
Largely under the radar, Bright Health has also expanded into a new business line: being a health care provider
“We actually own advanced primary care clinics as well. We have over 40 clinics today,” said Srivastava.
Bright Health has been building its clinic portfolio through a series of acquisitions but has not been broadcasting the news.
“We’re just emerging in terms of building those out,” said Srivastava. “They’re primarily in Florida today.”
More on Bright Health CEO G. Mike Mikan in the TCB100.