Elevance Health(US:ELV)2024-02-20 16:00Revenue and Membership - Approximately 29% of total consolidated revenues were generated from U.S. government agencies for the year ended December 31, 2023, compared to 28% in 2022 and 2021[25]. - The company expects growth in Public Exchange membership for 2024, expanding offerings in 141 of the 143 rating regions, up from 138 in 2023[33]. - The company is experiencing a decline in Medicaid membership due to the resumption of eligibility redeterminations, which began on April 1, 2023, and is expected to complete by June 30, 2024[79]. - The company anticipates a reduction in its 2025 operating revenue of approximately $500 million due to changes in Medicare Advantage Star ratings, with 34% of members in plans rated at least 4.0 Stars for 2024, down from 64% for 2023[87]. - The company is expanding its participation in Individual Public Exchange products, offering them in 141 of the 143 rating regions for 2024, compared to 138 regions in 2023[87]. Business Segments and Services - The company reorganized its reportable segments in the first quarter of 2023, which includes Commercial & Specialty Business, Government Business, CarelonRx, and Other[26]. - The Health Benefits segment offers a comprehensive suite of health plans and services, including risk-based and fee-based products, catering to various customer types such as Individual, Employer Group, Medicare, and Medicaid[27]. - CarelonRx, the pharmacy services subsidiary, provides a comprehensive portfolio including home delivery, specialty pharmacies, and pharmacy benefit management services[40]. - Carelon Services integrates physical, behavioral, social, and pharmacy services, enhancing healthcare delivery through analytics and competitive service offerings[29]. - The company’s Carelon Health subsidiary focuses on whole-person care for members with complex conditions, enhancing clinical outcomes and patient well-being[65]. Competitive Landscape - The managed care industry remains highly competitive, with intense competition driven by aggressive marketing, pricing, and technological advancements[42]. - The company maintains a competitive unit cost position through its provider networks, which are built by securing favorable contracts with healthcare providers[48]. - The pricing strategy for health benefit products is based on predictive modeling and aims to remain competitive while anticipating underlying medical trends[47]. Operational Efficiency and Technology - The company aims to improve customer interactions through digital technology and operational enhancements, optimizing administrative costs while improving service quality[24]. - The company leverages data and analytics to improve healthcare outcomes and lower costs, ensuring timely and accurate reimbursement for providers[44]. - The company has expanded its integrated care management programs, including the digital engagement platform Sydney Health, to improve member access to health resources[65]. - The company’s medical management programs are designed to ensure timely, evidence-based care, with a focus on improving quality and reducing costs[62]. Regulatory Compliance and Financial Health - The company is subject to comprehensive state, federal, and international regulations that impact its operations and may result in additional costs[75]. - The company is required to comply with various BCBSA license agreement standards, including maintaining at least 80% of annual combined local net revenue under the BCBS names and marks[73]. - The Health Plan Transparency Rule requires the company to disclose detailed pricing information on a monthly basis, starting from July 2022[99]. - Effective January 1, 2024, the requirement to provide personalized out-of-pocket cost information will expand to include all items and services[99]. - As of December 31, 2023, the RBC levels of the company's insurance and HMO subsidiaries exceeded all applicable mandatory RBC requirements[84]. Financial Performance - Cash provided by operating activities decreased to $8,061 million in 2023 from $8,399 million in 2022, a decline of $338 million[344]. - Total sources of cash decreased to $8,839 million in 2023 from $10,205 million in 2022, a decrease of $1,366 million[344]. - Total uses of cash increased to $9,699 million in 2023 from $7,684 million in 2022, an increase of $2,015 million[344]. - Cash, cash equivalents, and investments in fixed maturity and equity securities increased to $37,245 million as of December 31, 2023, up by $2,201 million from the previous year[348]. - The consolidated debt-to-capital ratio improved to 38.9% as of December 31, 2023, down from 39.9% in 2022[352]. Employee Engagement and Diversity - As of December 31, 2023, the employee population consisted of approximately 104,900 individuals, with 78,100 in the United States and 26,800 internationally[103]. - More than 90% of associates participated in the 2023 internal engagement survey, indicating strong employee involvement[105]. - The company invested an average of approximately 28 hours of training and development per associate in 2023[109]. - The U.S. associate population was approximately 77% female and 50% racially and ethnically diverse as of December 31, 2023[107]. - Pay for females in the U.S. is within 1% of their male counterparts, and pay for people of color is equal to their white counterparts after accounting for job-related factors[108]. Future Outlook and Strategic Initiatives - The company has authorized a common stock repurchase program of $4,200, with no specified duration[366]. - The company expects to receive approximately $4,400 in dividends from subsidiaries during 2024, compared to $4,909 received in 2023[360]. - Future debt and estimated interest payments total $40,491, with $2,661 due within the next twelve months[368]. - The company believes that cash on hand, operating cash receipts, and available credit facilities will be sufficient to fund expected cash disbursements over the next twelve months[362].