Medicare Advantage provider Clover Health (CLOV) is both despised and loved, depending on whom you ask.
The newly-public company has earned a prized status among top meme stocks. But the company is also facing significant backlash in the form of lawsuits after a scathing report from short-seller firm Hindenburg Research.
It's something the company's normally media-shy CEO, Vivek Garipalli, recently discussed in an interview with Yahoo Finance.
"I always find it fascinating when folks root against Clover, because it's like, well if we're successful, look who benefits. Why is that bad? Why would you want to root against us? So it's just always kind of bizarre to me," he said.
"I get it if we're a coal-fired plant or something, maybe you should bet against us. But it never made sense to me what anyone gets out of Clover's demise. Now, we still have yet to prove whether our business model's going to work. But our intent is pretty clear ... (and it does) lead to business value, long-term," he added.
The company has struggled to gain traction in its eight years since inception, but recently scooped up two former Uber and Palantir executives to help drive growth.
It currently has fewer than 100,000 total members. By comparison, other startups in the Medicare Advantage space, such as Bright Health (BHG), which began offering plans in 2018, have already surpassed 100,000.
Garipalli said he and president Andrew Toy "are in a bit of a unique spot, which is, our ego is not tied to some near-term financial success. Or, you know, whatever the stock price does it does. And we think our real measurement of success and impact may be where our stock price is in five to 10 years from now."
The company is still in an infrastructure-building phase, he said, and probably won't see significant progress for another three to five years.
"It's hard to really argue that the real value is going to come out in the next six months or 12 months. I mean, that's what everyone, every research analyst and everyone wants to see...it's just not how it works," he said.
"Our success as a business is tied to our ability to actively improve health outcomes. We're confident in our approach, but seeing its full impact will take time," Garipalli added.
It's why the company is cooly waiving away skeptics and critics alike.
“You can be skeptical about whether we’re going to succeed or not, but ... it’s probably not a bad thing if Clover does well," Garipalli said, adding that, "the vast majority of businesses in health care are set up to make more money, with consumers being a byproduct."
'The pendulum is going to have to swing'
Garipalli is a serial health care entrepreneur, and says he is taking his learnings from previous companies and putting it into Clover.
"I’ve seen so many different types of health care businesses and I understand it on a very nuanced granular level. And I’ve taken a career path where instead of just copy-pasting the same business, I tried to think through how do I shift from just building cool business models actually trying to solve real problems," he said.
Garipalli believes that from around 2030 onwards, health care companies will pivot to executing on missions that drive business value, because “that’s the only way to really save capitalism at the end of the day.”
Pre-1970s, before everything became “maximize shareholder value at all costs,” it was very normal for companies to put workers first, he said. Employers were “pillars of the community, people were proud of the company they worked for.” And generations of families would work for the same company.
And then in the 1970s, “Milton Friedman publishes some stupid book or whatever, it takes the MBA classes by storm and then all of a sudden (it became about) maximize shareholder value, then you have corporate ratings in the 80s and leveraged buyouts. And so, the pendulum is going to have to swing. And it’s got to go back to this thought of, ‘If that company does well, is that good for society?’”
Which is why Clover's CEO emphasized the company's focus on serving the underserved.
"The bet we're making is, from the public policy perspective is, CMS will want to support organizations that promote health equity. So, if for some reason, five years go by and they decide the existing system is perfectly fine, then that's probably not great for us," he said.
Garipalli has previous experience with underserved populations, owning and operating three urban hospitals in underserved areas of New Jersey. The overarching company ran the hospitals as for-profit and successfully turned the companies around from bankruptcy to profitability — not without criticism.
So what has changed for the company since going public via a reverse-merger SPAC earlier this year?
"There's obviously a different spotlight. There's a whole level of governance as a public company versus a private company ... but it doesn't change how we think about investment decisions," Garipalli said.
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