As the healthcare industry continues to shift toward value-based care, behavioral health is emerging as a vital frontier for innovation and reform. One of the most prominent players leading this transformation is Elevance Health (NYSE: ELV), which is doubling down on full-risk behavioral health initiatives—particularly for individuals with serious mental illness (SMI) in the Medicaid population.
A Bold New Direction: Whole Health, Full Risk
Elevance is positioning itself at the forefront of the behavioral health revolution by launching comprehensive, full-risk behavioral health programs. These initiatives reflect the company’s belief that integrated, accountable care is the path forward for improving outcomes and reducing costs—especially among high-need populations.
“We have new offerings that are whole health full-risk opportunities, like assuming full-risk in oncology, as well as in Medicaid with behavioral health with the seriously mentally ill population,” said Gail Boudreaux, Elevance President and CEO, during the company’s Q4 2023 earnings call. “These are significant initiatives that are really propelling the trajectory of our business.”
Building the Infrastructure for Change
Elevance’s shift into full-risk behavioral health didn’t happen overnight. The foundation was laid back in 2020 with the acquisition of Beacon Health Options through its Carelon division. Now operating as Carelon Behavioral Health, the unit has become a central pillar of Elevance’s whole health strategy—integrating behavioral health, physical health, pharmacy, and social support services under a single umbrella.
The company’s approach focuses on the intersection of mental and physical health, targeting systemic fragmentation that has long undermined effective treatment for individuals with SMI. Through Carelon, Elevance has created the operational infrastructure to take on full-risk behavioral health contracts and deliver measurable outcomes.
Strategic Growth Through Partnerships and Acquisitions
Elevance knows that scaling full-risk behavioral health care requires more than internal alignment—it demands strong partnerships. During its Q3 earnings call, Peter Haytaian, Executive Vice President of Elevance and President of Carelon and CarelonRx, emphasized the company’s openness to acquisitions and collaborations.
“When you think about these highly specialized areas of care, we’re not naive to think that we have the capabilities internally to handle all of it,” Haytaian said. “We will be looking not only for partnerships but acquisitions that can help us in that regard.”
This strategy reflects a pragmatic understanding of the complexities surrounding full-risk behavioral health, especially when addressing the diverse needs of Medicaid beneficiaries with serious mental illness. By leveraging external expertise and community-based networks, Elevance aims to expand its footprint without sacrificing quality or continuity of care.
Financial Momentum Supports the Strategy
Carelon’s performance reflects the growing demand for integrated, full-risk behavioral health solutions. In Q4 2023, Carelon’s operating revenue reached $12.4 billion—up 14% from the previous year. For the full year, Carelon brought in $48 billion in revenue, marking a 16% year-over-year increase.
Meanwhile, Elevance Health’s total operating revenue for 2023 climbed to $170 billion, a 9.3% increase from 2022. These gains underscore the market potential of Value-based behavioral health care and its role in Elevance’s broader growth strategy.
The strong financial performance isn’t just about numbers—it signals that risk-based behavioral health can be a scalable, profitable component of managed care when executed strategically.
Elevance Isn’t Alone: Industry-Wide Shift Toward Risk-Based Behavioral Care
Elevance may be leading the charge, but other major payers are also embracing full-risk behavioral health models. Magellan Health, a Centene Corporation subsidiary, is pushing for more measurement-based approaches within behavioral health, aiming to tie payments to outcomes rather than services alone.
“We’re believers in value-based care,” said Dr. Caroline Carney, President of Behavioral Health and Chief Medical Officer at Magellan. “We started using value-based care in behavioral health to work with facilities and large provider groups around evidence-based metrics.”
This momentum toward full-risk behavioral health reflects a broader realization: fee-for-service models often fall short in addressing the complexity of mental illness. Transitioning to value-based arrangements encourages proactive treatment, better resource coordination, and long-term engagement with patients.
Why Full-Risk Behavioral Health Matters
The significance of Elevance’s investment in Value-based behavioral health care extends beyond financial performance or strategic alignment. It’s a recognition that mental health is inseparable from overall well-being—and that payers must take accountability for delivering comprehensive, person-centered care.
Individuals with SMI often cycle through emergency rooms, hospitals, and crisis centers due to gaps in preventive care and community-based support. Full-risk behavioral health models incentivize early intervention, multidisciplinary collaboration, and holistic support, ultimately reducing these high-cost touchpoints.
If Elevance succeeds, it could set a powerful precedent for the rest of the industry, showing that large-scale Value-based behavioral health care is both feasible and effective.
Final Thoughts
With its bold investment in Value-based behavioral health care, Elevance Health is redefining what it means to deliver care to our most vulnerable populations. Through integrated models, strategic partnerships, and outcome-based accountability, the company is charting a new course for Medicaid behavioral health—one that prioritizes long-term outcomes over short-term services.
As other payers follow suit, the industry may finally be ready to meet the behavioral health crisis with the scale, innovation, and compassion it deserves.
