Evolent Health, Inc. (EVH): Business Model Canvas [11-2024 Updated]

In the rapidly evolving healthcare landscape, Evolent Health, Inc. (EVH) stands out with its innovative business model designed to enhance patient care and optimize costs. This model hinges on strategic partnerships and a robust technology platform that drives data analytics for improved health outcomes. By focusing on value-based care, Evolent Health not only supports healthcare providers but also fosters long-term relationships that are vital for navigating today’s complex regulatory environment. Discover how this dynamic company leverages its resources and activities to redefine healthcare delivery in the sections below.

Evolent Health, Inc. (EVH) - Business Model: Key Partnerships

Collaborations with health systems and payers

Evolent Health has established significant partnerships with various health systems and payers to enhance its service offerings. For instance, the company reported revenues of $1,908.2 million for the nine months ended September 30, 2024, a 35.5% increase compared to the same period in 2023, driven largely by new Performance Suite contracts and transitioning existing customers. The breakdown of revenue by line of business includes:

Line of Business	Revenue (2024)	Revenue (2023)
Medicaid	$646,819,000	$587,611,000
Medicare	$794,160,000	$474,535,000
Commercial and Other	$467,220,000	$345,695,000
Total	$1,908,199,000	$1,407,841,000

Partnerships with technology providers for data analytics

Evolent Health collaborates with technology partners to enhance its data analytics capabilities. The company has integrated sophisticated data analytics into its operations, which aids in managing patient care effectively. The average PMPM (per member per month) fees for the Performance Suite have seen a decrease to $21.48 in 2024 from $25.56 in 2023, indicating a shift in service scope while still maintaining a strong analytics framework. The average PMPM fees for other services are detailed below:

Service Suite	Average PMPM Fees (2024)	Average PMPM Fees (2023)
Performance Suite	$21.48	$25.56
Specialty Technology and Services Suite	$0.39	$0.36
Administrative Services	$15.76	$13.88

Alliances with specialty care providers

Strategic alliances with specialty care providers have been instrumental in expanding Evolent’s service portfolio. The company reported significant revenue growth from its oncology and cardiology services, contributing $44.8 million to its revenue in 2024. Evolent’s focus on specialty care is reflected in its unique members, which stood at an average of 40,396 for the nine months ended September 30, 2024.

Relationships with regulatory bodies for compliance

Evolent Health maintains robust relationships with regulatory bodies to ensure compliance with healthcare regulations. This is critical in managing risks associated with healthcare delivery. The company reported a net loss attributable to common shareholders of $62.8 million for the nine months ended September 30, 2024, reflecting the challenges of compliance costs. The regulatory environment impacts operational expenses, which amounted to $1,930.1 million during the same period. Below is a summary of key financial metrics:

Metric	Amount (2024)	Amount (2023)
Operating Expenses	$1,930,088,000	$1,457,702,000
Net Loss	$62,839,000	$100,865,000
Cash and Cash Equivalents	$96,600,000	N/A

Evolent Health, Inc. (EVH) - Business Model: Key Activities

Management of value-based care programs

The management of value-based care programs is central to Evolent Health's operations. For the nine months ended September 30, 2024, Evolent reported total revenue of $1,908.2 million, marking a 35.5% increase from $1,407.8 million in the same period in 2023. This growth was driven by $343.3 million from new Performance Suite contracts, $90.6 million from transitioning customers to the Performance Suite, and $36.8 million from new Specialty Technology and Services Suite contracts.

Data analytics for healthcare outcomes

Evolent Health utilizes advanced data analytics to enhance healthcare outcomes. As of September 30, 2024, the company managed approximately 6,956 average lives on the Performance Suite platform, with average per member per month (PMPM) fees of $21.48. Data analytics enable Evolent to identify trends and improve care delivery, contributing to better patient outcomes and cost reductions.

Development and integration of health IT systems

The integration of health IT systems is crucial for Evolent's service delivery. The company completed its acquisition of Machinify, Inc. in August 2024 for $28.5 million, which included a software platform leveraging AI to enhance healthcare services. This acquisition is expected to bolster Evolent's capabilities in managing complex care needs and streamlining operations across its platforms.

Continuous improvement of care delivery models

Evolent Health is committed to the continuous improvement of its care delivery models. The company reported a cost of revenue increase of $567.6 million, or 54.1%, to $1,616.6 million for the nine months ended September 30, 2024. This increase is attributed to higher claims costs associated with the Performance Suite, which necessitates ongoing enhancements to care delivery processes to manage expenses effectively. Evolent's focus on improving care delivery models is reflected in its strategic initiatives aimed at enhancing operational efficiency and patient care quality.

Key Metric	Q3 2024	Q3 2023	Change (%)
Total Revenue	$621.4 million	$511.0 million	21.6%
Cost of Revenue	$540.7 million	$386.6 million	39.9%
Operating Loss	$(16.3) million	$(17.9) million	9.3%
Average Lives on Platform	6,956	3,653	90.6%

For the nine months ended September 30, 2024, Evolent reported Medicaid revenue of $646.8 million, Medicare revenue of $794.2 million, and Commercial and other revenue of $467.2 million. These figures highlight the diverse revenue streams that Evolent is managing through its value-based care programs and its commitment to improving healthcare outcomes through data-driven strategies.

Evolent Health, Inc. (EVH) - Business Model: Key Resources

Advanced technology platform for data management

Evolent Health leverages an advanced technology platform that integrates various healthcare data management systems. This platform supports its Performance Suite and Specialty Technology and Services Suite, facilitating efficient data processing and analytics. As of September 30, 2024, Evolent reported a substantial revenue increase of approximately $500.4 million, or 35.5%, to $1.908 billion for the nine months ended September 30, 2024, compared to the same period in 2023.

Technology Platform Features	Functionality	Impact on Revenue
Data Integration	Streamlines patient data across various healthcare providers	Contributed to a growth in Performance Suite revenue by $343.3 million
Analytics Capabilities	Provides insights for value-based care models	Enhanced operational efficiency leading to $90.6 million from transitioning customers
Cloud Infrastructure	Scalable solutions for healthcare management	Supports overall revenue growth by improving service delivery

Skilled workforce in healthcare management

The workforce at Evolent Health consists of highly skilled professionals specializing in healthcare management and technology. As of September 30, 2024, the company reported an average of 40,396 unique members served across its platforms, reflecting the effectiveness of its workforce in managing complex healthcare needs. The commitment to employee development has resulted in an operational structure that enhances service delivery and client satisfaction.

Workforce Metrics	Details
Average Unique Members	40,396 (as of September 30, 2024)
Employee Training Programs	Regular training in value-based care practices
Employee Retention Rate	High retention rate due to competitive benefits and culture

Strong brand reputation in value-based care

Evolent Health has established a strong brand reputation within the healthcare industry, particularly in the value-based care sector. The company’s focus on improving patient outcomes while reducing costs has positioned it favorably among healthcare providers and payers. As of September 30, 2024, revenue from Medicare contracts reached $794.2 million, an increase from $474.5 million in the previous year.

Brand Reputation Metrics	2024	2023
Medicare Revenue	$794.2 million	$474.5 million
Medicaid Revenue	$646.8 million	$587.6 million
Commercial Revenue	$467.2 million	$345.7 million

Intellectual property in healthcare solutions

Evolent Health possesses significant intellectual property in the form of proprietary software solutions and healthcare management methodologies. As of September 30, 2024, the company reported total intangible assets valued at $1.050 billion, which includes technology, customer relationships, and proprietary platforms. This IP not only differentiates Evolent in the marketplace but also provides a competitive edge in delivering integrated healthcare solutions.

Intellectual Property Overview	Value (in thousands)
Technology Solutions	$169.7 million
Customer Relationships	$806.7 million
Total Intangible Assets	$1,050.8 million

Evolent Health, Inc. (EVH) - Business Model: Value Propositions

Cost-effective healthcare solutions for partners

Evolent Health focuses on delivering cost-effective healthcare solutions to its partners, which include health plans and providers. The company reported total revenue of $1.908 billion for the nine months ended September 30, 2024, representing a 35.5% increase compared to the prior year. This growth is largely attributed to the expansion of its Performance Suite contracts, contributing approximately $343.3 million to the revenue increase.

The company’s operational efficiency is evident in its cost management strategies, with selling, general, and administrative expenses decreasing by 22.2% to $215.3 million during the same period. This reduction in expenses relative to revenue growth underscores Evolent's commitment to providing value through cost-effective solutions.

Enhanced patient outcomes through data-driven care

Evolent Health employs a data-driven approach to enhance patient outcomes, leveraging analytics and technology to improve care delivery. The company has a significant presence in the Medicare space, reporting $794.2 million in revenue from Medicare for the nine months ended September 30, 2024, up from $474.5 million in the prior year.

This focus on data utilization is reflected in the average PMPM (per member per month) fee for its Performance Suite, which was $21.48 for the nine months ended September 30, 2024, down from $25.56 in the previous year. Despite this decrease, the overall improvement in care outcomes and patient satisfaction remains a core value proposition for Evolent Health.

Customizable technology platforms for healthcare providers

Evolent's technology platforms are designed to be customizable, allowing healthcare providers to tailor solutions to their specific needs. The company reported 72,732 lives on its Specialty Technology and Services Suite as of September 30, 2024. This flexibility enables providers to integrate Evolent’s solutions into their existing systems seamlessly.

Revenue from the Specialty Technology and Services Suite reached $255.99 million for the nine months ended September 30, 2024, compared to $223.60 million in the prior year. This growth indicates strong demand for Evolent's customizable offerings in the healthcare market.

Expertise in navigating regulatory environments

Evolent Health's expertise in navigating complex regulatory environments is a significant advantage for its partners. The company’s ability to manage compliance and regulatory challenges helps reduce operational risks for its clients. Evolent reported total operating expenses of $1.930 billion for the nine months ended September 30, 2024, which includes investments in compliance and regulatory frameworks.

The company’s strategic focus on regulatory compliance is evidenced by its ongoing investments, which contribute to its overall operational effectiveness. As of September 30, 2024, Evolent had $96.6 million in cash and cash equivalents, positioning itself well to meet its ongoing commitments.

Evolent Health, Inc. (EVH) - Business Model: Customer Relationships

Strong focus on long-term partnerships with clients

Evolent Health emphasizes building long-term partnerships with its clients, which include health plans and other risk-bearing entities. As of September 30, 2024, Evolent reported total revenue of $1,908.2 million, reflecting a robust increase of 35.5% compared to the previous year. This growth is significantly attributed to new Performance Suite contracts, which contributed $343.3 million, showcasing the effectiveness of their partnership strategy.

Regular engagement through performance reviews

Evolent conducts regular performance reviews with clients to assess the effectiveness of their services. For the nine months ended September 30, 2024, the company managed 6,956 average lives on its Performance Suite platform, indicating a strong client engagement model. The average PMPM (per member per month) fee for this suite was $21.48.

Dedicated support teams for partner inquiries

The company provides dedicated support teams to handle partner inquiries. This approach has proven effective, as evidenced by a reported decrease in selling, general, and administrative expenses by 30.6% for the three months ended September 30, 2024, amounting to $67.1 million, compared to $96.6 million in the same period of 2023.

Educational resources for partners on best practices

Evolent Health invests in educational resources for its partners, focusing on best practices within the healthcare management landscape. This commitment to education is reflected in the company’s operational metrics, with average unique members on the platform totaling 40,396 for the nine months ended September 30, 2024. This indicates a sustained effort to provide value-added services and knowledge sharing to enhance client relationships.

Metric	2024 (Nine Months Ended September 30)	2023 (Nine Months Ended September 30)	Change (%)
Total Revenue (in millions)	$1,908.2	$1,407.8	35.5%
Performance Suite Revenue (in millions)	$1,344.9	$840.2	59.9%
Average Lives on Platform	6,956	3,653	90.3%
Average PMPM Fee	$21.48	$25.56	-15.9%
Average Unique Members	40,396	41,594	-2.9%
SG&A Expenses (in millions)	$215.3	$276.7	-22.2%

Evolent Health, Inc. (EVH) - Business Model: Channels

Direct sales to healthcare providers and payers

Evolent Health, Inc. utilizes a direct sales strategy to engage healthcare providers and payers. This approach has contributed significantly to their revenue growth, which increased by 35.5% to $1.908 billion for the nine months ended September 30, 2024, compared to $1.408 billion in the same period in 2023. The revenue from their Performance Suite contracts was a major driver, accounting for approximately $343.3 million of this increase.

Online platforms for service delivery and support

Evolent leverages online platforms for service delivery, enhancing accessibility and efficiency. The Performance Suite, which includes advanced analytics and care management tools, has seen an increase in average lives on platform, reaching 6,956 for the nine months ended September 30, 2024, compared to 3,653 in 2023. The average PMPM (per member per month) fee for this suite was $21.48, reflecting the value delivered through their digital solutions.

Industry conferences and networking events

Participation in industry conferences and networking events is a key channel for Evolent. These events provide opportunities to showcase their solutions to a targeted audience of healthcare professionals and decision-makers. By engaging directly with potential clients, Evolent can effectively communicate the benefits of their services, which contributed to the $90.6 million revenue increase from transitioning a customer from the Specialty Technology and Services Suite to the Performance Suite.

Digital marketing targeting healthcare stakeholders

Evolent employs digital marketing strategies to reach healthcare stakeholders. This includes targeted campaigns designed to inform potential clients about their services and innovations. The company reported an overall increase in revenue from commercial and other contracts, totaling $467.2 million for the nine months ended September 30, 2024, up from $345.7 million in the previous year. Such marketing efforts are crucial in expanding their market presence and enhancing brand recognition within the healthcare sector.

Channel	Details	Key Metrics
Direct Sales	Engagement with healthcare providers and payers	Revenue: $1.908B (2024)
Online Platforms	Digital solutions for service delivery	Average Lives on Platform: 6,956 (2024)
Industry Conferences	Networking and showcasing solutions	Revenue from transitions: $90.6M (2024)
Digital Marketing	Targeted campaigns for healthcare stakeholders	Commercial Revenue: $467.2M (2024)

Evolent Health, Inc. (EVH) - Business Model: Customer Segments

Health systems and hospitals

Evolent Health partners with a variety of health systems and hospitals to enhance their operational efficiencies and patient care. The total revenue generated from health systems was approximately $435.1 million for the three months ended September 30, 2024, up from $323.7 million in the same period of 2023, marking a growth of 34.5%.

Managed care organizations

Managed care organizations (MCOs) represent a significant customer segment for Evolent Health. As of September 30, 2024, Evolent reported revenues of $646.8 million from Medicaid and $794.2 million from Medicare, which includes substantial contributions from MCO partnerships. The growth in this area is attributed to increased enrollment and enhanced service offerings tailored to MCO needs.

Government healthcare programs (Medicaid and Medicare)

Evolent Health's business model heavily focuses on government healthcare programs, notably Medicaid and Medicare, contributing to approximately 70% of its total revenue. For the nine months ended September 30, 2024, Evolent's Medicaid revenue was $646.8 million, compared to $587.6 million in 2023, reflecting an increase of 10%. Medicare revenue surged to $794.2 million from $474.5 million, an increase of 67.5% year-over-year.

Specialty care providers

The specialty care provider segment is crucial to Evolent's strategy, focusing on areas such as oncology and cardiology. The company reported $85.5 million in revenue from its Specialty Technology and Services Suite for the three months ended September 30, 2024. This segment has seen consistent growth, with a revenue increase from $81.2 million in the previous year.

Customer Segment	Revenue Q3 2024 (in millions)	Revenue Q3 2023 (in millions)	Growth Rate (%)
Health systems and hospitals	435.1	323.7	34.5
Medicaid	646.8	587.6	10.0
Medicare	794.2	474.5	67.5
Specialty care providers	85.5	81.2	4.6

Evolent Health, Inc. (EVH) - Business Model: Cost Structure

Employee compensation and benefits

Total employee compensation and benefits included approximately $42.5 million in stock-based compensation for the nine months ended September 30, 2024, compared to $28.3 million for the same period in 2023. Furthermore, personnel costs decreased by $17.2 million due to lower headcount and bonus accruals as a result of the 2023 Repositioning Plan.

Technology development and maintenance costs

Technology development costs were impacted by an increase in amortization expenses, which totaled $89.1 million for the nine months ended September 30, 2024, down from $93.8 million in the same period of 2023. The company also incurred $1.6 million in higher amortization on intangibles from acquisitions.

Marketing and sales expenses

Selling, general, and administrative expenses decreased by $61.3 million to $215.3 million for the nine months ended September 30, 2024, down from $276.7 million in 2023. This decrease was primarily driven by lower professional fees and TSA fees related to the NIA acquisition. Marketing expenses are reflected in these overall selling and administrative costs, with stock-based compensation expenses accounting for approximately $42.5 million.

Operational costs associated with service delivery

The cost of revenue increased by $567.6 million, or 54.1%, to $1,616.6 million for the nine months ended September 30, 2024, compared to $1,048.9 million in the prior year. This increase was primarily due to a 35.5% growth in revenue and higher claims costs totaling approximately $569 million. The cost of revenue represented 84.7% of total revenue for the period, up from 74.5% in 2023.

Cost Category	2024 Amount (in millions)	2023 Amount (in millions)
Employee Compensation and Benefits	$42.5	$28.3
Technology Development and Maintenance	$89.1	$93.8
Selling, General, and Administrative Expenses	$215.3	$276.7
Cost of Revenue	$1,616.6	$1,048.9

Evolent Health, Inc. (EVH) - Business Model: Revenue Streams

Per member per month (PMPM) fees from partners

Evolent Health generates a significant portion of its revenue through per member per month (PMPM) fees from its partners. For the nine months ended September 30, 2024, the average PMPM fee for the Performance Suite was $21.48 compared to $25.56 for the same period in 2023. The PMPM fees from the Specialty Technology and Services Suite were reported at $0.39 for 2024, up from $0.36 in 2023. Additionally, PMPM fees from Administrative Services were $15.76 for 2024 compared to $13.88 in 2023.

Revenue Source	Average PMPM Fee (2024)	Average PMPM Fee (2023)
Performance Suite	$21.48	$25.56
Specialty Technology and Services Suite	$0.39	$0.36
Administrative Services	$15.76	$13.88

Performance-based contracts with healthcare providers

Evolent Health's performance-based contracts with healthcare providers are crucial for its revenue model. In the nine months ended September 30, 2024, revenue from new Performance Suite contracts contributed $343.3 million, while transitioning a customer from the Specialty Technology and Services Suite to the Performance Suite added $90.6 million. This reflects a growing trend toward value-based care, where reimbursement is tied to the quality of services provided.

Consulting fees for healthcare management services

The company also earns consulting fees for healthcare management services. For the nine months ended September 30, 2024, Evolent reported $9.6 million in professional fees, primarily from consulting services. This is indicative of the firm's strategy to leverage its expertise in operational management and healthcare solutions to provide added value to clients.

Revenue from technology licensing agreements

Evolent Health's technology licensing agreements represent another revenue stream. The company continues to expand its technology capabilities, and while specific licensing revenue figures were not detailed, the growth in total revenue for the nine months ended September 30, 2024, was $1,908.2 million, a 35.5% increase from $1,407.8 million in the same period for 2023. This growth includes contributions from technology enhancements utilized across its service offerings.

Revenue Source	Revenue Amount (2024)	Revenue Amount (2023)
Total Revenue	$1,908.2 million	$1,407.8 million
Performance Suite Contracts	$343.3 million	N/A
Consulting Fees	$9.6 million	N/A

Updated on 16 Nov 2024

Resources:

1. Evolent Health, Inc. (EVH) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Evolent Health, Inc. (EVH)' financial performance, including balance sheets, income statements, and cash flow statements.
2. SEC Filings – View Evolent Health, Inc. (EVH)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.