Elevance Health putting focus on expanding Carelon arm in coming year

Elevance Health is putting a focus on growth at its Carelon subsidiary as it heads into 2023.

Carelon includes multiple arms of the company, including its Carelon Rx pharmacy benefit manager, which was previously known as IngenioRx. It also provides digital health services and offers programs to enable value-based care payment arrangements.

The insurer launched Carelon last summer ahead of its rebrand as Elevance, and has made some strategic deals to bolster its services, such as acquiring BioPlus, a speciality pharmacy.

CEO Gail Boudreaux said that Elevance will begin to report Carelon's performance separately from its health plan business so investors can track the company's push to build it out. She said that Carelon Rx and its healthcare services arms will be reported individually alongside its health plan results.

"We will evolve our reporting to better align with this approach," Boudreaux said.

Carelon President Pete Haytaian said that establishing the core team at the company has been a central focus, and that Carelon has "infused a lot of new talent" of late. He said that driving greater risk adoption has been another key area of interest at Carelon.

"We're seeing really good progress," he said.

Elevance Health's profit for the fourth quarter of 2022 declined year-over-year but still beat the Street, according to the company's latest earnings report released Wednesday.

The insurer reported $949 million in profit for the quarter, down 16.5% from the $1.1 billion reported in the fourth quarter of 2021. While it was a notable decline, the results did surpass Wall Street's expectations, according to Zacks Investment Research.

Elevance Health also brought in $39.9 billion in revenue for the fourth quarter of 2022, up 9.2% from the prior-year quarter's $36 billion haul. 

“We made considerable progress in our transformation to become a lifetime, trusted health partner in 2022,” said Boudreaux in the release. “Through strategic advancements, we are making to optimize our health benefits businesses, invest in high growth opportunities, and accelerate capabilities and services, we are delivering on our commitments to our communities and all of our stakeholders."

Boudreaux added that Elevance Health and its team "look forward to welcoming Blue Cross and Blue Shield of Louisiana," an acquisition announced earlier this week.

For the full-year 2022, Elevance Health brought in $156.6 billion in revenue and $6 billion in profit. Revenues were up 13% from 2021, when the company reported $138.6 billion, though profits declined by 1.5% from $6.1 billion.

Membership grew 4.8% year-over-year, reaching 47.5 million. That includes 16.1 million enrolled in Elevance's government plans and 31.4 million in the commercial and specialty market, according to the report.

The company expects earnings of more than $32.60 per share for 2023.