Cigna CEO David Cordani told investors Friday that the company isn't planning to begin snapping up large swaths of doctors as it continues to chart a growth strategy for its Evernorth subsidiary.
Instead, the insurer is focused on finding the right partners to continue building out its service offerings, such as its recent investment in VillageMD, Cordani said. There are segments, though, where Cigna is looking to buy, he added, namely home health, virtual care and behavioral health.
These segments of the industry, he said, have been deemed by Cigna as "unique" and "highly differentiated," making them attractive for M&A.
In November, VillageMD announced plans to acquire Summit Health, backed by investment from Evernorth alongside the company's parent, Walgreens Boots Alliance. The collaboration made Evernorth a minority owner in VillageMD, and opened the provider to its service offerings, including analytics and pharmacy.
Cordani said that they see the relationship as an opportunity to strengthen VillageMD's reach with value-based care, and highlights the payer-agnostic focus of Evernorth's services.
"We see this as a great win-win and additional growth opportunity for Evernorth," he said.
Overall, though, the company sees the provider space as one where it can offer services that extend their reach without necessarily bringing them into the Evernorth fold.
The relationship with VillageMD is built on this mindset, he said.
"It's also a clear depiction that we see the healthcare delivery system community as an addressable market for us," he said.
Cigna beat the Street on both earnings and revenue, reporting $1.2 billion in profit for the fourth quarter.
The company also brought in $45.8 billion in revenue for the fourth quarter. Analysts polled by Zacks Investment Research expected $45.5 billion. Those figures are both up slightly from the prior-year quarter, when Cigna posted $1.1 billion in profit and $45.7 billion in revenue.
For the full year 2022, Cigna earned $180.5 billion in revenue and $6.7 billion in profit. By comparison, the insurer reported $174.1 billion in revenue and $5.4 billion in profit for 2021.
At the end of 2022, Cigna had 105.6 million pharmacy members, down from 107.3 million at the end of 2021. Medical membership was up, however, hitting 18 million compared to 17.1 million at the end of 2021.
Cigna said the membership growth was largely in the commercial sector and offset a decline in government business accounting for the divestiture of its Medicaid arm.
Evernorth continues to be a key source of growth for the company, with revenues at the health services arm growing from $131.9 billion in 2021 to $140.3 billion in 2022. Revenue at Cigna Healthcare, the company's insurance business, also increased year over year from $44.7 billion to $45 billion.
In addition, Cigna established its full-year outlook for 2023 in the report. The company said it expects to earn at least $187 billion in revenue, with earnings per share of at least $24.60.