Specialist
Former VP at Anthem Inc
Agenda
- Recent trends and developments in the US managed care market, focusing on Elevance Health (NYSE: ELV)
- Competitive landscape and profile differentiation among key players such as Centene (NYSE: CNC), Humana (NYSE: HUM), Molina Healthcare (NYSE: MOH) and UnitedHealth Group (NYSE: UNH)
- Strategies to recapture Medicaid patients following redeterminations in April 2023, CMS (Centers for Medicare and Medicaid Services) star ratings and Q4 2022 earnings analysis
- Partnership and JV analysis regarding Aledade and BioPlus, drug therapeutics exploration and recent M&A activity
- Potential tailwinds from Inflation Reduction Act and downwards pressure on ACA (Affordable Care Act) subsidies, plus 2023 outlook
Questions
1.
What major trends and developments within the managed care organisation space have you been following in the last 12 months or so pertaining to Elevance Health?
2.
What are your concerns for Elevance with regards to CMS’s [Centers for Medicare and Medicaid Services’] recent release of the RADV [risk adjustment data validation] audit rule, which will commence in April 2023? I know there is a lot of grey area and uncertainty with the methodology CMS may use. Could you outline the best- and worst-case methodologies it could choose to implement?
3.
Elevance is really good at acquiring excellent-performing five-star Medicare Advantage plans, but what do you think is missing or contributing to the company’s inability to deliver an organic five-star plan?
4.
What’s your assessment of Elevance’s physician engagement strategy? Is the company using a physician engagement strategy to convert more Medicare Advantage contracts to value-based care contracts? What are some of the pain points that it’s experiencing in this regard?
5.
From Elevance’s full-year 2022 earnings report, it’s trying to improve its medical underwriting performance. Could the company try to outsource this portion of the business?
6.
You said there’s a black hole in terms of Elevance’s digital initiatives that are soaking up too much capital per se. What’s your analysis of Carelon’s digital engagement strategies across its specialty health plans? As you said, it can decide to execute something, but if it decides too late or isn’t quick enough, its new engagement is effectively already a little bit worn out. Could you elaborate on any specific populations that have been difficult for Carelon to effectively engage with?
7.
Could you elaborate on Elevance’s acquisition of BioPlus, completed in February 2023?
8.
How significantly could the Inflation Reduction Act’s CMS drug pricing reforms negatively impact operating margins within Carelon’s Rx [prescription] business? I think you noted around 6.5% operating margins for 2022. What’s your margin-compression forecast given that figure?
9.
Elevance’s revenues grew more than 9% in Q4 2022, but profit dropped about 16.5% YoY. How could the company better structure its cost containment strategy given the inflationary pressures we’re seeing and the uncertain macroeconomic conditions that lie ahead?
10.
How do you expect Elevance’s growth strategies to shift in 2023? Management said its strategic focus for the year was on Medicare Advantage and commercial plans to offset some of the member attrition it may see in the Medicaid business. Could it focus anywhere else?
11.
What’s your assessment of Elevance’s ability to recapture Medicaid members following the termination of the public health emergency in April 2023? How are you stacking the company up competitively vs more Medicaid-heavy managed care organisations such as Centene and Molina?
12.
What are your 2-3 main concerns for Elevance that we should monitor over the course of 2023?
13.
Is there anything else you would like to add regarding Elevance?
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