Cigna backs Bright Health as part of $750 million fundraise

Bright Health, the parent company of a health insurer and physician clinics, has raised $750 million from Cigna's venture capital arm — a new investor for the company — and longtime investor New Enterprise Associates.

Why it matters: Cigna, one of the largest national health insurers, is putting a lot of money into a company that is a competitor but also a possible purchaser of Cigna's extra health services.

The big picture: Bright Health is copying the model of health insurers owning medical practices, with a goal of coordinating care better for patients.

• Yes, but: It's also more profitable for insurance companies to send their members to the clinics that they own.

Zoom in: Bright Health started as an insurer in 2016 focused on selling Affordable Care Act plans with narrow provider networks and has expanded to sell Medicare Advantage and employer plans.

• Bright Health then joined the trend of insurers buying doctors' groups, and now owns or is affiliated with 131 clinics as of September.
• Those clinics are part of Bright Health's NeueHealth unit. Executives told investors during the company's initial public offering that NeueHealth "will become increasingly important to our business and prospects, contributing an increasing percentage of our overall revenue in the long-term."
• Bright Health executives told investors today that growing NeueHealth's "external revenue" is a focus for 2022. The insurance arm, meanwhile, continues to lose a lot of money like other startup insurers.

Between the lines: Cigna bought Express Scripts in 2018 and folded Express Scripts and other companies into a new drug and health services division called Evernorth.

• Evernorth is where the investment in Bright Health will come into play.
• Tom Richards, head of Cigna's venture capital division, said in a news release Cigna will explore "new ways that NeueHealth and Evernorth can potentially provide services to each other's customers and clients."

The bottom line: Cigna is getting a foothold in Bright Health, and both companies will be trading people's health insurance premiums more with each other.