InnovAge (INNV) 44th Annual J.P. Morgan Healthcare Conference summary

Business Model and Differentiation

• Operates a scaled, vertically integrated payer-provider platform focused on frail, dual-eligible seniors, delivering comprehensive, interdisciplinary care through a center-based model with full financial accountability for outcomes and costs.

• Maintains full risk for all Medicare and Medicaid services, averaging $9,500 per participant per month, with over 90% of participants able to live independently.

• Differentiated by unified economics, no delegated risk, and small panel sizes (under 100 per provider), enabling deep, frequent engagement and superior outcomes compared to Medicare Advantage.

• Controls more than 40% of total care costs directly through in-center teams, resulting in fewer unnecessary hospitalizations and better alignment of clinical and financial outcomes.

• Serves a highly complex population: average risk adjustment factor of 2.42, over 10 chronic conditions, and high rates of daily living assistance.

Growth Strategy and Market Opportunity

• Focuses on responsible growth, margin expansion, and leveraging technology and data to manage risk and outcomes.

• Market remains underpenetrated, with PACE programs serving only a small fraction of eligible duals; for-profit participation is recent, and capital constraints have limited expansion.

• Joint ventures with health systems are key to growth, strengthening referral pathways and expanding access.

• Pipeline includes both de novo center development and bolt-on acquisitions, with recent success integrating early-stage programs and growing census and revenue.

• Evaluates new markets based on senior population growth, state rate adequacy, and managed care penetration, with a pipeline of opportunities over the next few years.

Operational Transformation and Technology Investments

• Multi-year investments in scalable technology, including Epic EMR, Oracle financials, and Salesforce, have improved quality, compliance, and efficiency.

• AI is being leveraged to analyze provider ordering variation, optimize staffing, and support clinical decision-making.

• Insourced key clinical functions such as hospice and pharmacy, enhancing quality and operational control.

• Operational improvements have led to consistent revenue growth, expanding margins, and positive cash flow.

• Margin expansion is expected as center occupancy increases and fixed costs are leveraged.