Elevance Health Inc. (NYSE:ELV) Q2 2023 Earnings Call Transcript

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Peter Haytaian: Yeah. Thanks, Gail, and thanks, Lance. I really appreciate the question. And you know this, we’ve talked a lot about it, but a big part of our strategy is obviously to focus on managing high cost, high trends areas. Gail talked about it today in her prepared remarks. And then obviously, capitating risk down to — through Elevance — with Elevance Health first in mind, and we are — part of our strategy was to drive that value through Elevance Health first and then have that translate externally. And we are seeing that play through very, very nicely. I’ll give you a sense of quickly what’s happening internally and then, Lance, to your question how that translates externally. Internally, we’re working very closely with the P&L.

And we continue to accelerate a lot of opportunity. We talked about finalizing the post-acute care initiative this year. That’s over 1.2 million Medicare members. We just launched a new durable medical equipment offering as well with our Medicare business and we’re expanding that to commercial. And in our medical benefits management, which was formerly AIM, we’ve insourced a lot of critical services around genetic testing and things like oncology. So a lot of energy around that and then of course the behavioral health, physical health opportunity and assuming full risk on that is a tremendous opportunity as well. And interestingly enough, we are have — where we’re having a lot of success internally, that is actually translating in our external pipeline, and specifically with the Blues.

As we talk about the Blues and they see us having a lot of confidence and good performance internally in Elevance, they’re interested in some of those same solutions. So I would say at the top of the list, when you look at our pipeline and the growth in our pipeline, the home solutions through myNEXUS, an uphold of Carelon post-acute care solutions, is getting a lot of visibility. The post-acute care offering that we just launched in our Medicare business internally is also driving a lot of excitement in the pipeline. And I would also say that there is a decent amount of interest in some of the innovations around payment integrity. So I think a lot of opportunity, not only still internally, but that will translate as it relates to the Blues.

As it relates to advanced home delivery and the launch of CarelonRx Pharmacy, that was the second part of your question, again, really, really excited about this initiative. And as we’ve talked about overall for our pharmacy strategy, its aim is to source the strategic levers that really matter. And we’re doing that both with obviously what we’re doing in specialty and in sourcing this activity. But I wouldn’t look at this as only in-sourcing mail. I would look at it more broadly in terms of what we’re trying to do to get closer to the member and differentiate in terms of our experience overall with our consumers. Think of the capabilities that we’re deploying. Number one, this is going to be connected to Sydney, our consumer engagement platform.

There’s going to be a convenient quick scheduling of medications. If you think about access to pharmacists and how critical that is, we’re going to have access to a pharmacist 24/7. So that’s a big differentiator. And then importantly, I think a lot of people know that the experience with mail isn’t necessarily always smooth. And so we’re going to have an easy view of where delivery stands, an Uber-like experience, quite frankly. So you know where your pharmaceutical stand in terms of their delivery. So a lot in that regard in terms of really differentiating ourselves on experience and we’re excited about that. And as Gail said, we’re ready to launch that heading into 2024.

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