Despite pockets of higher utilization in Q4, Elevance Health execs say trends aligned with expectations

UPDATED: 12:50 p.m. on Jan. 24

While multiple competitors have taken a hit in the fourth quarter amid a rise in care utilization, executives at Elevance Health said what they saw in the quarter generally aligned with expectations.

Chief Financial Officer Mark Kaye said during the company's earnings call on Wednesday morning that the company's benefits expense ratio of 89.2%, landing at the midpoint of its expected range. There were some specific areas where Elevance saw heightened utilization, though, and that also tracks with reports from other payers.

Kaye said that the insurer saw an uptick in orthopedic services and other care delayed during the pandemic, as well as an increase in services related to respiratory conditions late in the quarter. Given that this trend was identified earlier in the year, Elevance Health did broadly plan for the impacts as part of its estimates on cost trend.

A noted rise in vaccinations for respiratory syncytial virus also aligns with UnitedHealth Group's Q4 report.

Elevance Health beat the Street on both earnings and revenue for the fourth quarter of 2023, reporting $856 million in profit.

The company also posted $42.6 billion in revenue for Q4, according to its earnings report released Wednesday morning. That's up nearly 7% from the $39.9 billion in revenue reported for the prior year quarter.

Profit declined slightly year-over-year. In the fourth quarter of 2022, Elevance Health reported $865 million in profit, making for a 1% decrease.

The insurer's revenue and profit for the quarter both surpassed Wall Street analysts' expectations, according to Zacks Investment Research.

“We are pleased to have delivered another year of strong performance in 2023, enabled by our relentless focus on customer experience and affordability, and continued investments in growth and innovation," CEO Gail Boudreaux said in a press release. "The balance and resilience of our business coupled with the focused execution of our enterprise strategy supports our confidence in our outlook for 2024, as we continue to optimize the foundation, and scale our flywheel for sustained growth of the enterprise over the long term.”

For the full-year 2023, Elevance Health brought in $171.3 billion in revenue and $5.99 billion in profit. By comparison, the company reported $156.6 billion in revenue and $5.89 billion in profit for 2022.

Given the focus on building out its Carelon segment, Elevance now reports its performance and that of its health insurance business individually. The benefits division, which includes its Anthem Blue Cross plans as well as Wellpoint, brought in $36.5 billion in operating revenue for the fourth quarter.

Operating revenue for the full year was $148.6 billion, according to the report.

Elevance Health's membership was 47 million at the end of the year, declining by 1% or about 570,000 members. The company said this was due in part to the ongoing Medicaid redeterminations as well as declines in its employer group risk-based plans.

In Q4, the company lost 364,000 members because of the Medicaid eligibility rulings, which was partially offset by commercial segment growth.

Operating revenue at Carelon was $12.4 billion in Q4 and $48 billion for the full-year 2023. The company saw growth in membership at Carelon Rx, its pharmacy benefit management arm, and touted the acquisition of BioPlus as key drivers, according to the report.

Alongside reporting the fourth-quarter results, Elevance Health set its full-year 2024 guidance at $37.10 in earnings per share.