P3 Health Partners' Q1 2025: Unpacking Contradictions in EBITDA Plans, Risk Reduction, and Growth Strategies

2025Q1 vs 2024Q4's EBITDA improvement plan progress, Part D risk reduction timeline, outlier payer and cost pressures, outlier payer cost pressures, and Medicare Advantage growth strategy are the key contradictions discussed in P3 Health Partners' latest 2025Q1 earnings call.



Operational Efficiency and Cost Reduction:
- P3 Health Partners realized a $20 million year-over-year improvement in operating expenses and achieved a 18% sequential and 11% year-over-year decline in Q1 2025.
- This was driven by streamlining corporate overhead functions and driving efficiencies in delegated services, while strategically reinvesting in market operating teams.

Payer Contract Renegotiations and Funding:
- The company saw an 8% increase in per member funding on a PMPM basis, reflecting improved capture of disease burden and favorable contract renegotiations.
- These improvements were achieved through renegotiating payer contracts to reduce Part D exposure and improve funding, as well as working with a collaborative outlier payer partner to address performance issues.

Clinical Performance and Utilization Trends:
- Utilization metrics trended positively in Q1 2025, with admits per 1,000 decreasing by 3.2%, emergency department per 1,000 decreasing by 21%, and SNF per 1,000 admits decreasing by 22%.
- This was attributed to enhanced data sharing, better point-of-care decision-making, and the implementation of the care enablement model to reduce medical expenses and improve outcomes.

ACO REACH Growth and Profitability:
- P3 Health Partners reported a 60% increase in ACO membership over the past year, with ACO REACH contributing $2 million of positive EBITDA in Q1 2025.
- This growth is driven by the company's ability to enhance its ability to address members' health conditions effectively, optimizing the network and ensuring appropriate care planning.