Elevance Health, Inc.

Ladies and gentlemen, thank you for standing by and welcome to Anthem's second quarter earnings conference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session where participants are encouraged to present a single question. If you wish to ask a question, please press star then one on your telephone keypad. You will hear a prompt that you have been queued. You may withdraw your question at any time by pressing star then two. These instructions will be repeated prior to the question and answer portion of this call. As a reminder, today's conference is being recorded. I would now like to turn the conference over to the company's management. Please go ahead.

Good morning, and welcome to Elevance Health's second quarter 2022 earnings call. This is Steve Tunnell, Vice President of Investor Relations, and with us this morning on the earnings call are Gail Boudreau, President and CEO, John Golina, our CFO, Peter Haitayan, President of Carillon, Morgan Kendrick, President of our Commercial and Specialty Business Division, and Felicia Norwood, President of our Government Business Division. Gail will begin the call with a brief discussion of the quarter and recent progress against our strategic initiatives. John will then discuss our financial results and outlook in greater detail. After our prepared remarks, the team will be available for Q&A. During the call, we will reference certain non-GAAP measures. Reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are available on our website, ElevanceHealth.com. We will also be making some forward-looking statements on this call. Listeners are cautioned that these statements are subject to certain risks and uncertainties, many of which are difficult to predict and generally beyond the control of Elevance Health. These risks and uncertainties can cause actual results to differ materially from our current expectations. We advise listeners to carefully review the risk factors discussed in today's press release and in our quarterly findings at the SEC. I will now turn the call over to Gail.

Thanks, Steve, and good morning, everyone. Today, we're pleased to share that Elevance Health delivered another strong quarter. In the second quarter, GAAP earnings per share was $6.79, and we grew adjusted earnings per share over 14% to $8.04. Based on our results in the first half of the year and the momentum in our business, we've increased our full year adjusted earnings guidance to greater than $28.70 per share, representing growth of at least 13.9% off of the adjusted baseline we provided at the beginning of the year. Before we discuss the quarter in more detail, I want to spend a moment on our recent name change and rebranding strategy. We officially changed our holding company name to Elevance Health on June 28th, having secured shareholder approval in May and are now trading under the new ticker symbol ELV. This marks the culmination of a multi-year journey in which we have transformed from a traditional health insurance company to a lifetime trusted health partner, addressing the physical, behavioral, and social drivers that we know are critical to achieving optimal health. Elevance Health captures the fact that we are now much more than a health insurance company and reinforces our commitment to elevating the importance of whole health and advancing health beyond healthcare for our consumers, their families, and communities. Last month, we also announced the launch of our new healthcare services brand, Carillon, and the health plan brand, WellPoint, which join the company's family of brands that include Anthem Blue Cross and Blue Shield. Our simplified brand architecture will streamline our brand portfolio, reduce complexities, and reinforce our evolution as an organization delivering solutions beyond health insurance. Grounded in our mission and fueled by our bold and ambitious purpose to improve the health of humanity, Elevance Health reflects our position as a health leader. Strong growth in all of our businesses continued in the second quarter, demonstrating that our employer, consumer, and state partners are universally looking for whole health solutions that address underlying drivers of cost while enhancing the consumer experience. Our strategies and investments in these areas are propelling strong organic membership growth in addition to creating opportunities to scale our services division. Medical membership grew 6% year over year to 47.1 million members. maintaining Elevance Health's position as the largest insurer by U.S. medical membership. Over the past year, we've added more than 2.7 million net new members, including over 1.5 million net new government members and nearly 1.2 million net new commercial members. In Medicaid, the ongoing suspension of eligibility redeterminations and our industry-leading RFP win rate continues to drive organic growth, which we continue to supplement through programmatic health plan acquisitions consistent with our strategy. In the second quarter, we closed the acquisition of Integra Managed Care, a Medicaid plan in New York focused on patients in need of long-term support services to help them live in their homes and communities. We're excited to welcome the Integra team to the Elevance Health family. Their commitment to patients with complex and chronic needs is well aligned with our focus on serving the needs of the people who need us most. In Medicare Advantage, personalized health solutions are resonating with seniors, notably dual eligible members with complex and chronic needs, and our supplemental benefits, which emphasize social drivers of health, supporting members with in-home support, transportation needs, healthy groceries, assistive devices, and more continue to gain traction. We remain on track to produce double-digit organic growth in our individual MA business, led by growth in duals, and are excited about our plans for 2023. In the employer market, our share gains are being driven by our leading cost-to-care position and innovative solutions focused on consumer experience and engagement. Employers have come to expect more, and we're investing to meet their needs. Today, we have strong traction in our Total Health Connections suite of advocacy solutions that serves 3.9 million members, representing a 33% year-over-year increase. The programs guide members to the next step in care through a simple, intuitive, and personalized experience. We leverage real-time data analytics to identify health risks so their advocates can personally connect with members to proactively facilitate preventive and at times responsive care. Our commitment to whole health solutions extends to our care providers where we continue to advance value-based care and are increasingly looking to integrate health equity and social drivers of health measures into our contracts. The early indicators we are seeing in commercial Medicare and Medicaid businesses demonstrate that value-based care delivers higher quality care and greater affordability. In fact, our value-based providers are helping us achieve significantly higher quality scores for impacted plans, including an eight-point improvement in quality compliance measures for commercial members and value-based arrangements. In addition, Our value-based provider partners are conducting 12% more annual wellness visits with our members on average and delivering lower overall costs for our commercial, Medicare Advantage, and Medicaid members, with 19% lower emergency cases per thousand for members in value-based arrangements compared to those not, and 15% lower inpatient admissions. With the highest local concentration of membership of any health insurer, We're taking a market-by-market approach to our provider strategy to accelerate value-based care. Our local market density is unique and a valuable strategic advantage that provides optionality, allowing us to balance partnerships and investments in certain care models and geographies with select ownership through Carillon in markets where we see opportunity. We do not believe a single primary care model will prove superior for all populations and markets over time. And we are committed to a thoughtful approach that considers the structure of care delivery in our local markets and our membership density across lines of business, notably with respect to complex and chronic members. With our deep roots in our communities, we're continuing to leverage our proprietary Whole Health Index. a dynamic model tracking the health of our communities across local, social, and clinical drivers. We're increasingly using the tool to measure our impact on the health of our communities and to identify and better address local, social, and physical drivers of health with an emphasis on health equity and members who need us most. We've leveraged the tool to identify at-risk or equity-challenged member populations across Medicare, dual special needs plans, Medicaid, and our commercial exchange-based populations. And we're working with community-based partners to coordinate engagement, outreach, and support, bridging physical, behavioral, and social services. In practice, we're reimagining the ecosystem of care delivery for our most vulnerable members. with plans to scale learnings for even greater member impact and care coordination over time. We're privileged to be in a position to positively impact our members' lives, especially in light of the challenges faced since the beginning of the pandemic. In addition to helping us achieve our purpose as an organization to improve the health of humanity, we're confident that our efforts are being recognized through our industry-leading Medicaid RFP track record. Core to our enterprise-wide focus on whole health, we also continue to accelerate our service and capabilities business through Carillon to connect people to accessible, affordable, and integrated care with focus on those with complex needs. The top priority for Carillon today is to work in concert with our health plans to develop offerings that drive differentiated value for the 47 million medical members we serve, including more than 20 million fully insured members and the more than 118 million consumers we support across Elevance Health. Partnering with owned and aligned providers, our near-term focus is driving greater affordability and quality outcomes. by providing the right care in the right settings, such as enabling care in the home or more effectively managing specialty pharmacy. As an example, MyNexus, with its deep experience in managing home-based care, recently launched a new post-acute care product serving our Medicare health plan in Indiana via a capitated risk-sharing arrangement. Enabling providers with better technology and tools MyNexus will help optimize appropriate levels of care post-inpatient discharge, delivering a much better patient and provider experience while having a positive impact on our health plans and driving growth for Carillon. Over the next six to 12 months, we expect to scale the post-acute care product to all of Elements Health's Medicare markets. For more than 30 years, we've been recognized as a leader in behavioral health management An area that is a major driver of healthcare costs today and a critical component of whole person health. We manage behavioral health benefits inside a carillon for more than 40 million consumers and our expertise in the space was reinforced recently when beacon a carillon company. was awarded a contract to participate in the operation of the new 988 national suicide prevention lifeline. The launch of 988 is a game-changing shift in how mental health services are accessed in our country, and we're proud to be part of this historic milestone. Guided by our enterprise strategy, we are fueled by a passion for making a positive difference in the world. In fact, environmental, social, and governance frameworks are integral to our enterprise strategy, and we understand the connection to long-term business success. Accordingly, we continue to invest in key areas such as health equity, greenhouse gas mitigation, and community health as part of our ESG practices. We're also proud to be an initial signatory to the Healthcare Sector Climate Pledge focused on achieving net zero greenhouse gas emissions by 2050. We are confident in our organization's ability to adapt and to achieve our pledge having met our goal of powering all of our operations with 100% renewable electricity earlier this year, four years ahead of schedule. We're proud that these efforts have been recognized externally. Elevance Health was recently named to Points of Light's 2022 list of the Civic 50, a national standard for corporate citizenship. Just 100 ranked our organization first among healthcare providers for just business behavior, and we are the highest rated managed healthcare company by ISS and Sustainalytics, including a perfect quality score from ISS. In closing, I'd like to thank our nearly 100,000 associates for the important work they do every day on behalf of the members we are privileged to serve Our passion to improve lives and communities is unwavering, and we look forward to making a meaningful difference as Ellevans Health. Now, I'd like to turn the call over to John for more on our operating results. John?