Elevance Health logs $1.3 billion in profit in Q3

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Elevance Health raked in $1.3 billion in profit during the third quarter, and while this was a decrease from the $1.6 billion posted in Q3 2022, overall revenue climbed year over year, hitting $42.5 billion compared to $39.9 billion last year.

The increase was primarily driven by higher premium revenue in the health benefits business, and growth in pharmacy product revenue in CarelonRx due to growth in external pharmacy members served, plus the acquisition of BioPlus in the first quarter.

According to the company's recent earnings report Elevance completed a strategic review of its operations, assets and investments to enhance operating efficiency, refine the focus of investments in innovation and optimize its physical footprint. 

This resulted in a net charge of $697 million, comprised of the write-off of certain information technology assets and contract exit costs; a reduction in staff, including the relocation of certain job functions; and the impairment of assets associated with the closure or partial closure of data centers and offices.

Operating cash flow was about $2.6 billion, or two times net income in the third quarter of 2023 –  a decrease of $2.3 billion as compared to the prior year quarter. Elevance said the year-on-year decrease was driven by the receipt of an additional month of payments to the Centers for Medicare and Medicaid Services in the third quarter of 2022.

During the third quarter of 2023, the company recorded net losses of $124 million. A year ago, the company recorded net losses of $57 million. These amounts are excluded from adjusted earnings per share.

WHAT'S THE IMPACT?

Operating gain in the Health Benefits segment totaled $1.8 billion in the third quarter of 2023, an increase of $213 million from $1.6 billion in the third quarter of 2022, representing growth of 13%. The increase was primarily driven by premium rate adjustments to cover the medical cost trend on higher levels of post-pandemic care, Elevance said.

Operating gain for Carelon, meanwhile, was $650 million, an increase of $9 million from the $641 million in the third quarter of 2022. The increase, the company said, was primarily driven by the continued expansion of its post-acute care services business, the acquisition of BioPlus in the first quarter, and improved performance in the behavioral health business – partially offset by the non-recurrence of out-of-period fee-based revenue recognized in the third quarter of 2022 in CarelonRx.

The company reported an operating loss of $741 million in the Corporate & Other segment for the third quarter of 2023, a decrease of $717 million from an operating loss of $24 million in the third quarter of 2022. This was driven by business optimization charges, Elevance said.

THE LARGER TREND

Elevance Health announced the launch of healthcare services brand Carelon in June 2022. Carelon services range from research to integrated whole person care delivery, pharmacy, behavioral health and digitally enabled solutions.

Elevance acquired BioPlus, a comprehensive specialty pharmacy, in November. BioPlus provides a range of specialty pharmacy services for patients living with complex and chronic conditions such as cancer, multiple sclerosis, hepatitis C, autoimmune diseases and rheumatology.

Earlier this year, Elevance said it would be pursuing an acquisition of Blue Cross Blue Shield of Louisiana. The two organizations said they're "aligned in a mission" to improve access, quality and affordability for Louisianans.

Twitter: @JELagasse
Email the writer: Jeff.Lagasse@himssmedia.com