Elevance Health pulls down $1.6B in profit in Q3

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Elevance Health, formerly known as Anthem, took in $1.6 billion in profit in the third quarter of this year, marking a 7.2% gain from Q3 of 2021. Revenues reached $39.9 billion, up 11.5% from the $35.8 billion in revenue posted a year ago.

President and CEO Gail Boudreaux attributed the financial performance to "broad-based momentum" and the "focused execution" of the company's associates.

The revenue increase, according to the latest Elevance financial report, was driven by higher premium revenue due to membership growth in Medicaid (including the acquisitions of Integra Managed Care and Paramount Advantage); growth in Medicare Advantage and commercial risk-based membership; and premium rate increases to cover overall cost trends. 

The increase in operating revenue was further attributable to the growth in pharmacy product revenue within pharmacy home delivery business IngenioRx. This was related to membership growth and higher utilization of prescription drugs, the company said.

Operating cash flow was about $4.9 billion, or 3.1 times net income, in the third quarter of 2022 – an increase of $2.4 billion as compared to the prior year's quarter. The year-over-year increase was driven by the timing of payments from the Centers for Medicare and Medicaid Services received in the current quarter, partially offset by a BCBSA litigation settlement payment that occurred during the quarter.

WHAT'S THE IMPACT

Elevance also broke down financial performance by its four reportable business segments. Operating gain in the Commercial and Specialty Business segment totaled $785 million in Q3, an increase of $165 million from the $620 million posted in the third quarter of 2021. The increase was primarily driven by improved medical underwriting performance in the commercial risk-based business, partially offset by an increase in operating expenses in support of growth.

Operating gain in the Government Business segment was $868 million, a decrease of $99 million from $967 million in Q3 2021. Elevance attributed this to higher operating costs in support of growth of its government health benefits business, partially offset by increased gross profit in the period.

For IngenioRx, operating gain stood at $516 million, an increase of $71 million from $445 million in the third quarter of 2021. Meanwhile, the company reported an operating gain of $101 million in the Other segment for the Q3, an increase of $74 million from $27 million in the prior year's quarter.

THE LARGER TREND

Anthem first announced plans to rebrand with the name Elevance Health 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.

Twitter: @JELagasse
Email the writer: jeff.lagasse@himssmedia.com