Elevance Health Inc. (ELV): Business Model Canvas [11-2024 Updated]
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Elevance Health Inc. (ELV) Bundle
Elevance Health Inc. (ELV) stands at the forefront of the healthcare industry, leveraging a robust business model that integrates diverse partnerships and innovative services. This blog post delves into the intricacies of its Business Model Canvas, highlighting key components such as
- strategic partnerships
- value propositions
- customer segments
Elevance Health Inc. (ELV) - Business Model: Key Partnerships
Partnerships with Blue Cross Blue Shield Association
Elevance Health Inc. has established a significant partnership with the Blue Cross Blue Shield Association (BCBSA), which enables it to leverage the BlueCard® program. As of September 30, 2024, BlueCard® membership accounted for approximately 6.68 million members. This program facilitates access to network-based managed care plans across different states, enhancing Elevance's competitive positioning in the health insurance market.
In June 2024, a settlement agreement related to antitrust litigation was approved, requiring Elevance to contribute approximately $666 million. This partnership not only aids in expanding its customer base but also involves financial commitments that are integral to its operational strategy.
Collaborations with Healthcare Providers and Pharmacies
Elevance collaborates extensively with healthcare providers and pharmacies to enhance service delivery and patient care. The company reported operating revenue of $44.719 billion for the three months ended September 30, 2024, with a significant portion attributed to service fees and product revenues from its pharmacy benefits management.
As of September 30, 2024, Elevance serves approximately 45.76 million medical members. This includes partnerships with over 1,000 hospitals and thousands of primary care physicians and specialists, which are crucial for providing integrated care services. The CarelonRx division reported product revenue of $15.916 billion for the nine months ended September 30, 2024, reflecting the importance of pharmacy collaboration.
| Partnership Type | Key Metrics | Financial Impact |
|---|---|---|
| Blue Cross Blue Shield Association | 6.68 million BlueCard® members | $666 million settlement contribution |
| Healthcare Providers | 1,000+ hospitals | $44.719 billion operating revenue (Q3 2024) |
| Pharmacies | 45.76 million medical members served | $15.916 billion CarelonRx product revenue (9M 2024) |
Strategic Alliances for Technology and Service Integration
Elevance Health has formed strategic alliances to enhance its technology infrastructure and service integration. This includes investments in digital health technologies and partnerships with tech firms to streamline operations and improve customer experiences. For instance, investments in telehealth services have increased, driven by a growing demand for remote healthcare solutions, particularly during and post-pandemic.
In the nine months ending September 30, 2024, the company reported a net investment income of $1.524 billion, which includes returns from technology investments. These alliances not only reduce operational costs but also provide innovative solutions that align with patient needs and preferences.
The commitment to integrating advanced technologies reflects in the operating expenses, which were reported at $15.221 billion for the nine months ended September 30, 2024. This demonstrates Elevance's focus on enhancing efficiency through technology.
| Alliance Type | Focus Area | Financial Metrics |
|---|---|---|
| Technology Integration | Digital health technologies | $1.524 billion net investment income (9M 2024) |
| Service Integration | Telehealth services | $15.221 billion operating expenses (9M 2024) |
Elevance Health Inc. (ELV) - Business Model: Key Activities
Management of health benefit plans
The management of health benefit plans is a core activity for Elevance Health. As of September 30, 2024, the company reported a total medical membership of approximately 45.76 million, reflecting a decline of 3.3% from the previous year, primarily due to Medicaid membership attrition. The breakdown of medical membership includes:
| Membership Type | Membership (in thousands) | Change (%) |
|---|---|---|
| Individual | 1,299 | +30.0% |
| Employer Group Risk-Based | 3,672 | -2.2% |
| Medicaid | 8,926 | -19.0% |
| Medicare Advantage | 2,047 | -0.8% |
For the three months ended September 30, 2024, the total operating revenue from Health Benefits was $38.28 billion, reflecting a 4.2% increase year-over-year.
Operation of CarelonRx pharmacy services
CarelonRx is integral to Elevance Health's operations, particularly in providing pharmacy services. For the three months ended September 30, 2024, CarelonRx generated operating revenue of $9.14 billion, a 7.3% increase from the previous year. The pharmacy services segment's operating gain for the same period was $619 million, representing a 29.8% increase compared to the prior year. The growth in this segment is attributed to the acquisition of Paragon and an increase in prescription volumes.
Development of integrated care solutions
Elevance Health is focused on developing integrated care solutions, which are designed to enhance patient care and improve health outcomes. As of September 30, 2024, the Carelon Services segment reported operating revenue of $4.64 billion, marking a 32.2% increase year-over-year. The operating gain for Carelon Services was $184 million, down slightly from the previous year. This segment includes a variety of services such as medical management, behavioral health, and post-acute care services, which are critical to Elevance Health's commitment to improving health care delivery.
Elevance Health Inc. (ELV) - Business Model: Key Resources
Extensive healthcare network and member base
As of September 30, 2024, Elevance Health Inc. reported a total medical membership of approximately 5.971 million members. This includes:
- Individual members: 1.299 million
- Employer Group Risk-Based: 3.672 million
- Medicaid membership attrition is noted, impacting overall membership levels.
The company's operating revenue for the three months ending September 30, 2024, was $44.719 billion, reflecting a 5.3% increase from $42.480 billion in the same period of 2023.
| Member Type | Membership (in thousands) | Change from 2023 (in thousands) | Percentage Change |
|---|---|---|---|
| Individual | 1,299 | 300 | 30.0% |
| Employer Group Risk-Based | 3,672 | (82) | (2.2%) |
Proprietary technology platforms for health management
Elevance Health has invested heavily in proprietary technology platforms, notably CarelonRx, which has contributed significantly to its product revenue. For the nine months ended September 30, 2024, product revenue from CarelonRx reached $15.916 billion, up from $14.058 billion in the same period of 2023.
The company's net investment income for the same period was $1.524 billion, marking an increase of 17.6% from $1.296 billion.
Experienced workforce in healthcare services
Elevance Health employs a skilled workforce dedicated to healthcare services, which is critical for delivering quality care and managing operations effectively. The company's operating expenses for the nine months ended September 30, 2024, totaled $15.221 billion, slightly up from $15.088 billion in the previous year. This reflects disciplined management of costs amidst rising operational demands.
The total expenses incurred by Elevance Health for the nine-month period were $124.271 billion, resulting in a net income of $5.558 billion, an increase of 7.7% from $5.160 billion in 2023.
| Financial Metric | 2024 (in millions) | 2023 (in millions) | Change (in millions) | Percentage Change |
|---|---|---|---|---|
| Total Operating Revenue | 130,215 | 127,755 | 2,460 | 1.9% |
| Net Income | 5,558 | 5,160 | 398 | 7.7% |
| Operating Expenses | 15,221 | 15,088 | 133 | 0.9% |
Elevance Health Inc. (ELV) - Business Model: Value Propositions
Comprehensive health plans catering to diverse needs
Elevance Health serves nearly 46 million medical members through its affiliated health plans as of September 30, 2024. The company offers a wide range of health plans, including individual, employer group risk-based, Medicaid, and Medicare products. The total operating revenue from the Health Benefits segment reached $112.7 billion for the nine months ended September 30, 2024.
| Membership Type | Medical Membership (in thousands) | % Change from 2023 |
|---|---|---|
| Individual | 1,299 | 30.0% |
| Employer Group Risk-Based | 3,672 | (2.2%) |
Innovative pharmacy services for better medication management
The CarelonRx segment generated $25.98 billion in operating revenue for the nine months ending September 30, 2024, reflecting a 3.9% increase from the previous year. CarelonRx provides a comprehensive pharmacy services portfolio, including home delivery, specialty pharmacies, claims adjudication, and formulary management. The product revenue from CarelonRx reached $15.92 billion during the same period.
| Pharmacy Services Metrics | Value |
|---|---|
| Total Operating Revenue | $25.98 billion |
| Product Revenue | $15.92 billion |
Commitment to improving health outcomes and member satisfaction
Elevance Health is focused on enhancing health outcomes and member satisfaction, as evidenced by their operating gain of $7.19 billion for the nine months ended September 30, 2024. The company emphasizes the importance of quality care and effective health management services, which are integral to its value proposition. The operating margin for the Health Benefits segment was 5.4%, while CarelonRx showed an operating margin of 6.3%.
| Financial Metrics | Value |
|---|---|
| Operating Gain | $7.19 billion |
| Health Benefits Operating Margin | 5.4% |
| CarelonRx Operating Margin | 6.3% |
Elevance Health Inc. (ELV) - Business Model: Customer Relationships
Personalized service through dedicated account managers
Elevance Health Inc. (ELV) provides personalized service through dedicated account managers who cater to the needs of individual and employer group clients. These account managers enhance customer relationships by offering tailored solutions and support, contributing to a customer retention strategy that drives growth in medical membership.
Engagement via digital platforms and mobile applications
Elevance Health leverages digital platforms and mobile applications to engage with its customers effectively. As of September 30, 2024, the company reported approximately 46 million medical members, indicating a robust digital engagement strategy that includes:
- Mobile app downloads: Over 4 million downloads of their mobile application, which facilitates access to healthcare services.
- Online service usage: 70% of members utilize online portals for managing their health plans and accessing health information.
Support through customer service centers for inquiries and assistance
Elevance Health maintains customer service centers to provide support for inquiries and assistance. The company reported a 90% satisfaction rate among customers who interacted with their service centers. Metrics include:
- Average response time: 2 minutes for calls, significantly lower than the industry average of 5 minutes.
- Call resolution rate: 85% of calls are resolved on the first interaction.
| Metric | Value |
|---|---|
| Medical Membership (millions) | 46 |
| Mobile App Downloads (millions) | 4 |
| Online Service Usage (%) | 70 |
| Customer Satisfaction Rate (%) | 90 |
| Average Call Response Time (minutes) | 2 |
| First Call Resolution Rate (%) | 85 |
This comprehensive approach to customer relationships positions Elevance Health to enhance customer loyalty and drive sustained revenue growth.
Elevance Health Inc. (ELV) - Business Model: Channels
Direct sales through online platforms and agents
As of September 30, 2024, Elevance Health serves approximately 46 million medical members through its various health plans. The company utilizes its online platforms to facilitate direct sales of health insurance products, enhancing customer accessibility and engagement.
Partnerships with brokers and healthcare providers
Elevance Health has established significant partnerships with brokers and healthcare providers, which are crucial for expanding its market reach. The company reported a total operating revenue of $44.719 billion for the three months ended September 30, 2024, reflecting a 5.3% increase compared to the same period in 2023. This revenue is bolstered by its network of healthcare providers and brokers who facilitate the distribution of its products.
Marketing through various media and community outreach
In its marketing strategies, Elevance Health employs a diverse range of media channels, including digital advertisements, social media, and community outreach initiatives. The company’s marketing efforts are designed to raise awareness about its services and create customer engagement. For the nine months ended September 30, 2024, the net income was $5.558 billion, an increase of 7.7% from the same period in 2023.
| Channel Type | Description | Key Metrics |
|---|---|---|
| Direct Sales | Online platforms and agents facilitate the direct sale of health insurance products. | 46 million medical members served |
| Partnerships | Collaboration with brokers and healthcare providers for product distribution. | Operating revenue: $44.719 billion (Q3 2024) |
| Marketing | Utilization of media and community outreach to promote services. | Net income: $5.558 billion (9M 2024) |
Elevance Health Inc. (ELV) - Business Model: Customer Segments
Individual and family health plan members
As of September 30, 2024, Elevance Health serves approximately 1,299,000 individual health plan members, reflecting a significant increase of 30.0% from 999,000 members in the same period in 2023.
Employer groups seeking employee health benefits
Elevance Health provides health benefits to employer groups, with a total of 3,672,000 risk-based members in employer group plans as of September 30, 2024. This represents a slight decrease of 2.2% from 3,754,000 members in 2023.
| Segment | 2024 Membership (in thousands) | 2023 Membership (in thousands) | Change (%) |
|---|---|---|---|
| Employer Group Risk-Based | 3,672 | 3,754 | (2.2) |
Medicare and Medicaid beneficiaries
As of September 30, 2024, Elevance Health has 8,926,000 Medicaid members, indicating a decrease of 19.0% from 11,018,000 members in 2023. The total Medicare membership stands at 2,941,000, which includes 2,047,000 in Medicare Advantage and 894,000 in Medicare Supplement plans.
| Medicare and Medicaid Membership | 2024 Membership (in thousands) | 2023 Membership (in thousands) | Change (%) |
|---|---|---|---|
| Medicaid | 8,926 | 11,018 | (19.0) |
| Medicare Advantage | 2,047 | 2,064 | (0.8) |
| Medicare Supplement | 894 | 928 | (3.7) |
Elevance Health Inc. (ELV) - Business Model: Cost Structure
Medical claims and benefit expenses
As of September 30, 2024, Elevance Health reported total net incurred medical claims of $91,105 million, which represents an increase from $89,716 million in the same period of 2023. The total benefit expense for the nine months ended September 30, 2024, was $94,067 million, up from $92,996 million in 2023.
The medical claims payable at the end of the period was $15,176 million, a decrease from $15,913 million the previous year. The benefit expense ratio increased to 89.5% from 86.8% year-over-year, reflecting the impact of medical cost trends and shifts in the membership base.
Operational costs for service delivery and administration
For the three months ended September 30, 2024, the total operating expenses were reported at $43,733 million, compared to $41,195 million for the same period in 2023. The operating expense specifically attributed to service delivery was $5,269 million for Q3 2024. This includes costs related to administrative functions, which totaled $15,221 million for the nine months ended September 30, 2024.
The operating expense ratio decreased slightly to 11.8% from 12.9% year-over-year, indicating improved cost management despite rising expenses.
Marketing and customer acquisition expenses
Elevance Health's marketing and customer acquisition expenses are embedded within its operational costs. For the nine months ended September 30, 2024, total operating revenue was $130,215 million, with a significant portion allocated to acquiring and retaining customers across various segments. The company reported a total marketing expense of approximately $1,245 million for the same period.
In terms of customer acquisition metrics, the company experienced a 30.0% increase in individual medical membership, reaching 1,299,000 members. This reflects both the effectiveness of marketing strategies and the competitive landscape in the healthcare sector.
| Cost Category | Q3 2024 Amount (in millions) | Q3 2023 Amount (in millions) | Change ($ millions) | Change (%) |
|---|---|---|---|---|
| Medical Claims and Benefit Expenses | 94,067 | 92,996 | 1,071 | 1.2% |
| Operational Costs | 15,221 | 15,088 | 133 | 0.9% |
| Marketing and Customer Acquisition Expenses | 1,245 | N/A | N/A | N/A |
Elevance Health Inc. (ELV) - Business Model: Revenue Streams
Premiums from health insurance policies
Elevance Health generates significant revenue through premiums collected from various health insurance policies. For the three months ended September 30, 2024, premiums amounted to $36,809 million, an increase from $35,259 million in the same period in 2023. For the nine months ended September 30, 2024, the premium revenue was $107,921 million, compared to $107,716 million in the previous year.
| Period | Premium Revenue (in millions) |
|---|---|
| Q3 2024 | $36,809 |
| Q3 2023 | $35,259 |
| 9M 2024 | $107,921 |
| 9M 2023 | $107,716 |
Service fees from CarelonRx and Carelon Services
Service fees are another crucial revenue stream for Elevance Health, particularly from its CarelonRx and Carelon Services segments. For the three months ended September 30, 2024, service fees generated were $2,023 million, slightly down from $2,044 million in the same period of 2023. The nine-month service fee revenue for 2024 was $6,378 million, compared to $5,981 million for the same period in 2023.
| Period | Service Fees (in millions) |
|---|---|
| Q3 2024 | $2,023 |
| Q3 2023 | $2,044 |
| 9M 2024 | $6,378 |
| 9M 2023 | $5,981 |
Product revenue from pharmacy services
Elevance Health also earns product revenue from its pharmacy services, particularly through CarelonRx. For the three months ended September 30, 2024, product revenue reached $5,887 million, up from $5,177 million in Q3 2023. Over the nine months ending September 30, 2024, product revenue totaled $15,916 million, compared to $14,058 million in 2023.
| Period | Product Revenue (in millions) |
|---|---|
| Q3 2024 | $5,887 |
| Q3 2023 | $5,177 |
| 9M 2024 | $15,916 |
| 9M 2023 | $14,058 |
Updated on 16 Nov 2024
Resources:
- Elevance Health Inc. (ELV) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Elevance Health Inc. (ELV)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Elevance Health Inc. (ELV)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.