Elevance Health, Inc.

Ladies and gentlemen, thank you for standing by and welcome to the Elevents Health Third 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 1 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 2. 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 third quarter 2022 earnings call. This is Steve Tennell, Vice President of Investor Relations, and with us this morning on the earnings call are Gail Boudreau, our President and CEO, John Galina, 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 filings with 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. This morning, we reported third quarter GAAP earnings per share of $6.68 and adjusted earnings per share of $7.53 ahead of expectations and reflecting strong revenue and earnings growth across our businesses. Based on our year-to-date results and confidence in our momentum, we are increasing our full year adjusted earnings guidance to greater than $28.95 per share, representing growth of approximately 15% 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 the recent hurricanes that have tragically impacted the lives of people in Florida and Puerto Rico, including some of our own health plan members and associates who live and work in the impacted areas. As an organization deeply rooted in our communities, the impact of these disasters is personal. I'd like to thank our associates who are leading efforts to provide water, food, durable medical equipment, transportation, and shelter, along with our clinical teams, social workers, and behavioral health specialists for their extraordinary commitment to support those in need. It's in times such as these that our culture shines through. and I am proud of our associates for the work they are doing to support their colleagues and communities. Turning to our business performance, we are pleased to report ongoing broad-based momentum across Elevance Health, a testament to our integrated and personalized whole health approach to addressing the physical, behavioral, and social needs of our members and communities. Our focused efforts and investments And these areas are resonating with employers and state partners, driving strong organic membership growth in our commercial and government health benefits businesses, as well as rapid growth for Carillon and IngenioRx. While our business trends remain strong, we are mindful of the inflationary pressure and general uncertainty in the economic environment. and are focused on delivering affordability and value for customers and consumers in all of our businesses. Medical membership grew 5% year over year to 47.3 million members. Over the past year, we've grown to serve 2.2 million more consumers with both our commercial and government businesses delivering robust growth that solidifies our position as the largest carrier by U.S.-based medical membership. In the employer market, we continue to gain market share on the strength of our leading cost-to-care position and innovative consumer products, such as our Total Health Connections suite of advocacy solutions. Total Health Connections is an example of where we're delivering an integrated, whole health experience for consumers by guiding members to the next step in care through a simple, intuitive, and personalized experience. Our clinical advocates help members navigate the healthcare system, leveraging real-time data analytics to identify health risks that enable our advocates to personally connect with members and help them proactively manage the medical, behavioral, and social issues impacting their health. Health Connections has grown more than 60% over the past two years and will support more than 5 million of our members in 2023. In addition to advocacy solutions, our integrated digital offerings are also gaining momentum. Sydney Health, the digital front door for our members' health needs, continues to rapidly expand the number of registered users and is now hosting more than 6 million visits every month. We are also seeing strong member satisfaction with our virtual primary care offering, which is available through Sydney Health and integrated into our commercial products and is increasingly being used to support members with chronic conditions such as hypertension and type 2 diabetes. Our findings reflect that 62% of the top 10 diagnoses to date have resulted in the treatment of chronic conditions, demonstrating that virtual primary care can improve access to needed care with the potential to improve health outcomes and reduce overall costs. Turning to our Medicare business, we're well-positioned to achieve another year of above-market growth in individual Medicare Advantage membership. For 2023, we expanded our Medicare Advantage offering to 145 new counties and added PPO plans in 210 counties, significantly increasing our reach into this important market as we continue to deliver differentiated value for seniors with strong core benefits and industry-leading supplemental offerings. With widespread pressure on the cost of daily living, affordability and value are more important for seniors than ever, and our health plans are positioned to meet their needs. Nearly 75% of our Medicare Advantage plans will have a $0 premium and no copays for primary care in 2023. Our supplemental benefits include popular over-the-counter offerings, transportation, dental and vision, as well as in-home support and healthy groceries. Seniors on our plans will also now have a simplified way to access and keep track of their benefits with a single prepaid card that is customized with spending amounts for their unique benefits and can be used at thousands of participating retailers or on an online portal. Medicare star ratings remain a key focus area across Elevance Health. Many of our affiliated Medicare Advantage plans continue to earn high-quality scores, and we're particularly pleased with the performance of our Health Sun health plans in Florida, which received a five-star rating for the sixth year in a row in the recently released 2023 Medicare Advantage star ratings, which will impact the 2024 payment year. In aggregate, we did see a modest drop in the percentage of our members in four star or higher rated plans for the 2024 payment year, predominantly due to the end of COVID era relief. And while we will decline by less than the overall industry, we remain intensely focused on our long-term goal of achieving and maintaining star ratings at the high end of all Medicare Advantage plans in our markets. Carillon continues to accelerate its impact and drive differentiated value for Elevance Health Plan members. In the third quarter, we began implementing and rapidly scaling the MyNexus post-acute care management product, which is now serving our Medicare Advantage members in 15 markets, with plans to add more markets in the coming quarters. This new product offering represents a major service line expansion that helps optimize appropriate levels of care post-inpatient discharge by working with acute and post-acute facilities to safely manage patient transitions and thereby reduce hospital readmissions and average length of stay. Carillon is also delivering distinctive cost and quality results for our commercial business at scale. As we discussed earlier this year, Carillon's AIM specialty health business expanded its risk-based contract with our commercial health plans to perform focused management of select clinical conditions, such as oncology, surgery, and diagnostic imaging, to cover our entire 14-state footprint at the beginning of this year. AIM has been performing well year-to-date, benefiting our commercial members while producing stable, predictable cost of care for complex conditions for our commercial health plans and driving growth for Carillon. Our enterprise-wide focus on health equity remains central to our strategy and continues to guide our business decisions and targeted investments. We were pleased that our Simply Healthcare Plan in Florida recently achieved Health Equity Plus accreditation by the National Committee for Quality Assurance with an almost perfect score. Similarly, Anthem Blue Cross's Individual Exchange Plan in California achieved NCQA distinction in multicultural healthcare. Awards like these show our commitment and progress to identify and address local, social, and physical drivers of health with an emphasis on members who need us most. These results would not be possible without the dedication of our more than 100,000 associates, and I would like to thank them for the important work they do and the impact they make every day. Their passion and commitment is reflected in our recent recognition as a great place to work for the third consecutive year and also in our inclusion on the 2022 Fortune Best Places to Work For and People's Companies That Care lists. Our associates take pride in the work they do and the difference their contributions make to our company, our members, and the community. We see this every day, and most recently in the results of our associate engagement survey, which showed that 96% of associates understand and are inspired by our purpose to improve the health of humanity. These strong results and national recognitions reflect our commitment to leadership, and represent our employees' experience, defined by high levels of trust, respect, credibility, fairness, and pride, and help our efforts to recruit and retain top talent, a reflection of our culture. Our passion to improve lives and communities is unwavering, and we look forward to making a meaningful difference as Elevance Health. Now, I'd like to turn the call over to John for more on our operating results.