Elevance Health Inc. (NYSE: ELV) has raised red flags surrounding its Medicaid business this year, while also signaling its commitment to home-based care ventures.
On its second-quarter earnings call, company leaders touted Carelon, Elevance’s health care services division.
“In our health services businesses, we are making progress on our key strategic priority to scale our enterprise flywheel for growth,” Elevance CEO Gail Boudreaux said on the earnings call. “Carelon Services delivered robust growth in operating revenue and earnings in the quarter as we gained traction with external clients both through new business wins and the expansion of risk-based services to existing customers.”
Elevance’s Medicaid woes are derived from the “attrition” of healthier members, according to the company, which has led to higher utilization of care services.
“We are also seeing signs of increased utilization across the broader Medicaid population, including in outpatient home health, radiology, durable medical equipment, as well as some elective procedures,” Elevance CFO Mark Kaye said on the call.
Carelon has helped offset some of those woes, however. Its operating revenue grew by over 26% year over year, and operating earnings increased by more than 30%.
Elevance also agreed to acquire Paragon Healthcare, a major infusion therapy provider, earlier this year.
Paragon provides a significant amount of home-based infusion services, which Elevance leaders highlighted on the call.
“As it relates to Paragon, again, just to reiterate the opportunity there, we feel very, very good about that,” Carelon President Pete Haytaian said on the call. “We’re talking about $16 billion of infusion spend as it relates to Elevance Health with about 50% of that being in the hospital setting. So again, a great opportunity for us to have care be provided in a more appropriate setting, be it in an ambulatory site or in the home, and we feel very good about our positioning and the density that we have in our markets as it relates to that.”
Overall Elevance Health operating revenue checked in at $43.2 billion in the second quarter, which represented a year-over-year decrease of $200 million.
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