Astrana's Q1 2025: Contradictions on Medicaid Trends, Revenue Growth, and Prospect Integration

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Strong Financial Performance:
- Astrana Health reported total revenue of $620.4 million for Q1 2025, a 53% increase compared to the prior year.
- This growth was driven by their Care Partners segment, which grew 57% year-over-year to $600 million, and contributions from CHS at $95 million in line with expectations.

Adjusted EBITDA and Cost Management:
- The company delivered adjusted EBITDA of $36.4 million in Q1 2025.
- Margins were moderated by planned ongoing investments in growth, integration, and technology, as well as lower near-term margin profiles in areas like CHS and newly converted full-risk members.

Trend in Medical Costs and Utilization:
- Medical cost trend was in line with expectations, in the mid-single-digits blended across all lines of business.
- Medicaid trend was above the blended average, influenced by the flu season increasing ER and lab utilization, but alignment with full-year guidance was maintained.

Growth and Full-Risk Conversion:
- The Care Partners segment reached 910,000 members as of Q1 2025, with 38% of members being in full-risk contracts, up from 5.5% a year ago.
- The transition of membership into full-risk arrangements is part of the company's strategy to expand access to high-quality care while strengthening alignment between patient outcomes and financial performance.