Elevance Health, formerly Anthem, sees $1.7B in profit in Q2
Medical enrollment hit 47.1 million members as of June 30, a 6.1% increase from a year ago.
Photo: Al Mast/Getty Images
Elevance Health, formerly known as Anthem, logged a $1.7 billion profit during the second quarter of this year, and while that's down almost 8% compared to Q2 2021, revenues for the quarter were up, which the company attributes to increased enrollment.
Overall, Elevance beat industry expectations with double-digit growth in revenue, operating earnings and adjusted earnings per share.
GAAP net income was $6.79 per share in the second quarter, including net negative adjustment items of $1.25 per share. Adjusted net income was $8.04 per share, up 14.4% from $7.03 in the same period a year ago.
Medical enrollment hit 47.1 million members as of June 30, a 2.7 million, or 6.1%, increase from a year ago.
Government Business enrollment increased by 1.6 million lives compared to the prior year, which the company attributed to organic growth in the Medicaid business. It was also aided by the suspension of eligibility recertification efforts, the launch of Healthy Blue in North Carolina, the acquisitions of Paramount Advantage and Integra Managed Care and organic growth in Medicare Advantage.
Commercial and specialty business enrollment increased by 1.2 million year over year, primarily driven by strong sales in both fee-based and risk-based businesses.
During the quarter, medical enrollment increased by 276,000, driven by organic growth in Medicaid due to suspension of eligibility recertification, higher BlueCard activity and the acquisition of Integra Managed Care, which added 43,000 members.
WHAT'S THE IMPACT?
Operating revenue was $38.5 billion in the second quarter of 2022, an increase of $5.2 billion, or 15.6%, from the prior year. The increase, according to Elevance, was driven by higher premium revenue due to membership growth in Medicaid, the acquisitions of MMM and Paramount Advantage, and premium rate increases to cover overall cost trends and growth in Medicare Advantage and commercial risk-based membership.
The increase in operating revenue was further attributable to the growth in pharmacy product revenue within IngenioRx, the acquisition of Integra Managed Care and the launch of Healthy Blue in North Carolina.
Operating cash flow was about $2.5 billion, or 1.5 times net income, in the second quarter of 2022, an increase of $769 million as compared to the prior-year quarter. The year-on-year increase was driven by the impact of working-capital changes, including the timing of certain provider pass-through payments.
THE LARGER TREND
Anthem first announced plans to rebrand with the name Elevance Health back in March, which was spurred partly by Anthem's evolution when it comes to offering products and services beyond traditional health insurance. Specifically, the company highlighted its digital capabilities, pharmacy, behavioral, clinical and complex care assets, with a focus on an "integrated, whole-person approach."
The corporate rebranding is a first step in the company's effort to optimize its brand portfolio, according to Anthem. While Anthem Blue Cross Blue Shield health plans' names will not change, the company expects to streamline other brands in the market to reduce complexities and improve consumer experiences.
Anthem's efforts to rebrand follow a number of moves in recent months, including an agreement in November to acquire Integra Managed Care, a managed long-term care plan in New York that provides assistance to adults with long-term care needs and disabilities.
In October 2021, Anthem Blue Cross and Providence St. Joseph Health System announced they were building out their value-based care program through a new partnership with Vim, the maker of a tech platform that connects payers and providers.
ON THE RECORD
"The disciplined execution of our strategy, and the balance and resilience of our diversified portfolio of businesses, has enabled us to deliver another quarter of strong organic growth, and we have raised our outlook for 2022 earnings per share as a result," said Gail K. Boudreaux, president and CEO. "Our recent name change to Elevance Health and the broader rebranding strategy underscores our transformation to a lifetime, trusted health partner and our diversified set of businesses that lend resilience in any business environment. We are uniquely well-positioned for growth in the future as we remain focused on meeting the needs of our clients and customers."
Twitter: @JELagasse
Email the writer: jeff.lagasse@himssmedia.com
