Elevance Health Inc. (NYSE: ELV) experienced significant growth in 2023, driven in large part by its integrated behavioral health services, which played a key role in boosting Carelon, the company’s health care services arm. Carelon’s success in 2023 demonstrates the growing importance of combining physical, behavioral, social, and pharmacy services to provide affordable, whole-health solutions.
According to Elevance’s third-quarter earnings call, Carelon’s operating gain surged by $9 million from the second to the third quarter of 2023. This growth was largely driven by the success of its behavioral health services, along with its post-acute care management solutions. The company’s focus on integrating multiple facets of health care has been a key factor in Carelon’s strong performance, positioning it for continued growth in the future.
Gail K. Boudreaux, Elevance’s President and CEO, expressed her satisfaction with Carelon’s momentum during the earnings call, highlighting the company’s strategy of integrating physical, behavioral, social, and pharmacy services to create affordable, comprehensive care. She remarked, “We are pleased with our momentum in Carelon as it continues to advance its strategy of integrated physical, behavioral, social, and pharmacy services to deliver whole health affordably.”
Expanding Integrated Behavioral Health Services
The company’s commitment to expanding integrated behavioral health services is clear. Elevance has made substantial strides in behavioral health and sees this area as a critical part of its growth strategy. John Gallina, Elevance’s Chief Financial Officer, highlighted that the company expects continued growth for Carelon, particularly driven by new product launches and the expansion of integrated behavioral health services.
The company is particularly focused on enhancing its behavioral health offerings, with a special emphasis on serious mental illness (SMI). Elevance’s leadership recognizes the growing need for specialized care in this area and is committed to addressing it through a mix of internal capabilities and strategic partnerships. As Peter Haytaian, Executive Vice President of Elevance Health and President of Carelon and CarelonRX, explained, the company is exploring opportunities to take full risks with the SMI population. To achieve this, Elevance plans to look for acquisitions and partnerships that will help strengthen its expertise in integrated behavioral health services.
“We will be looking not only for partnerships but acquisitions that can help us in that regard,” said Haytaian, emphasizing the company’s proactive approach to expanding its capabilities in this specialized area of care.
Carelon’s First Physical Facility: A New Milestone for Integrated Services
A significant milestone for Carelon came in April 2023 with the opening of its first brick-and-mortar clinic in Fayetteville, North Carolina. This 4,760-square-foot facility offers behavioral health services alongside physical health care, family planning, and marriage counseling. The opening of this clinic marks a new chapter for Carelon, as it continues to integrate different aspects of health care under one roof.
The clinic is an important step forward in Carelon’s strategy to provide integrated, holistic care. By offering both physical and behavioral health services in one location, Carelon is improving access to care while ensuring a more comprehensive approach to treatment. This model of care reflects the company’s ongoing commitment to delivering integrated behavioral health services that address the full spectrum of a person’s health needs.
Challenges and Opportunities for Continued Growth
Despite the strong growth of Carelon, Elevance faced some challenges in 2023, particularly with Medicaid membership attrition. The company lost around 140,000 Medicaid members in the second quarter due to eligibility redeterminations and the entry of a new competitor in one of its state programs. However, Elevance’s strong performance, driven in large part by integrated behavioral health services, helped offset the impact of this membership loss.
Elevance reported a 7.2% increase in third-quarter revenues, reaching $42.5 billion year-over-year. The company also reported a profit of $1.6 billion for the quarter, reflecting its ability to continue growing despite external challenges. This resilience is a testament to the strength of Elevance’s integrated approach to care, which includes a growing emphasis on behavioral health services.
Looking Ahead: Continued Expansion of Integrated Behavioral Health Services
Looking ahead, Elevance plans to continue expanding Carelon’s offerings, particularly in the behavioral health sector. The company’s focus on integrated behavioral health services is expected to be a key growth driver in the coming years. As Carelon continues to integrate more services and open new facilities, Elevance is confident that its comprehensive approach to care will help it stand out in the increasingly competitive health care market.
With a strong foundation in behavioral health services, Elevance is well-positioned to meet the evolving needs of its members and continue its growth trajectory. As the demand for integrated health care solutions increases, Elevance’s focus on expanding its behavioral health offerings will help it lead the way in transforming the health care landscape.
Conclusion
In conclusion, Elevance Health’s 2023 performance highlights the growing importance of behavioral health services in the broader health care ecosystem. Carelon’s success, driven by the expansion of these services, underscores the company’s commitment to providing comprehensive, affordable care. With continued growth in behavioral health and other integrated services, Elevance is positioning itself for long-term success and is well-equipped to meet the complex needs of its members in the years to come.
