Elevance Health, Inc. · NYSE:ELV
Elevance Health — Anthem — Investor Day (March 2021)
72 slides from Elevance Health's investor day presentation, Mar 8, 2021
Slide 1: Anthem 2021 Investor Conference
Wi Anthem 2021 Investor Conference March 8, 2021
Slide 2: Stephen Tanal, Vice President, Investor Relations
STEPHEN TANAL Vice President, Investor Relations
Slide 3: Forward-Looking Statements
Forward-Looking Statements: This presentation contains estimates, projections, guidance and outlook that constitute “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements reflect our views about future events and financial
Slide 4: Gail Boudreaux, President and Chief Executive Officer
GAIL BOUDREAUX President and Chief Executive Officer
Slide 5: A Lifetime, Trusted Partner in Health
A LIFETIME, TRUSTED PARTNER IN HEALTH
Slide 6: Operating Revenue, Membership and EPS Growth
OPERATING REVENUE GROWTH (2018-2020 CAGR) MEDICAL MEMBERSHIP GROWTH (2018-2020 CUMULATIVE) EARNINGS PER SHARE GROWTH (2018-2020 CAGR) EARNINGS PER SHARE GUIDANCE (2020-2025 CAGR)
Slide 7: Slide 7
Slide 8: Whole Health Predictions
WHOLE HEALTH PREDICTIONS 4,000
Slide 9: Industry Leading Growth: Long-Term EPS Growth
INDUSTRY LEADING GROWTH LONG-TERM EPS GROWTH: CORE BUSINESS DRIVES GROWTH 2020 Core Capital 2025 Target Adjusted Operating Allocation Earnings Growth Per Share “Anthem defines long-term in rolling 5-year Increments.
Slide 10: Rajeev Ronanki, Senior Vice President and Chief Digital Officer
RAJEEV RONANKI Senior Vice President and Chief Digital Officer
Slide 11: Digital Platform
—. Anthem. NGAGEMEN INNOVATION DIGITAL PLATFORM
Slide 12: Consumer, Provider, States/Communities, Employer
CONSUMER PROVIDER STATES/ COMMUNITIES EMPLOYER TRUST & TRANSPARENCY
Slide 13: Digital Platform Build 1
Digital 2, Build 1
Slide 14: Provider
PROVIDER
Slide 15: Digital Platform Build 3
Digital 2, Build 3
Slide 16: Communities
COMMUNITIES United States
Slide 17: Higher Satisfaction, More Personalization, More Insights
HIGHER SATISFACTION MORE MORE PERSONALIZATION INSIGHTS
Slide 18: Consumer, Provider, States/Employer, Community Platforms
_ GONSUMER Sydney Health STATES/EMPLOYER Client Information Insights (Cll) COMMUNITY Sydney Community PROVIDER | MA Health OS
Slide 19: Digital Platform Build 2
Digital 3, Build 2
Slide 20: Exponential Technologies
EXPONENTIAL TECHNOLOGIES
Slide 21: Digital Platform Build 4
Digital 3, Build 4
Slide 22: Advocacy and Delivering Better Health
Advocacv & Delivering Better Health Administrative Work
Slide 23: Anthem Digital Platform
Slide 24: Most Valuable Companies Today Are Platform Businesses
7 OF THE 10 MOST VALUABLE COMPANIES TODAY ARE PLATFORM BUSINESSES ERR
Slide 25: Feligia Norwood, President, Government Business Division
FELIGIA NORWOOD Executive Vice President and President, Government Business Division
Slide 26: Government Business
GOVERNMENT BUSINESS OPERATING UPPER SINGLE TO LOW-DOUBLE mvenee DIGIT EAGR $71.68 Revenue Growth
Slide 27: Growth Drivers
- ence GROWTH DRIVERS
Slide 28: Slide 28
Slide 29: Government Business Growth
GBD 2
Slide 30: Growth Drivers
‘tian GROWTH DRIVERS
Slide 31: Complex Partnerships and Population Management
COMPLEX PARTNERSHIPS POPULATION MANAGEMENT
Slide 32: Specialized Populations, Core and ACA Expansion
$49B Specialized Populations $26B Core $7B ACAExpansion
Slide 33: Capture Medicaid Pipeline and Medicare Growth
Capture Medicaid Pipeline Expanded Blues Alliance Relationships Leverage Power of Data Science Above Market Medicare Growth Targeted Integrated Offerings
Slide 34: Peter Haytaian, President, Commercial and Specialty Business Division
PETER HAYTAIAN Executive Vice President and President, Commercial and Specialty Business Division
Slide 35: Commercial and Specialty Business
CSBD 1
Slide 36: Progress on Improving Fee-Based Earnings
PROGRESS ON IMPROVING FEE-BASED EARNINGS LARGE GROUP RISK-BASED: NET SALES GROWTH IN 7 OF THE LAST 8 QUARTERS
Slide 37: National Accounts Selling Seasons
NATIONAL ACCOUNTS 2019 & 2020 SELLING SEASONS HIGHEST BID ACTIVITY IN 5 YEARS
Slide 38: Win Rate on Employers That Switched Carriers
WIN RATE ON EMPLOYERS THAT SWITCHED INSURANGE CARRIERS
Slide 39: Consumer: Sydney Health
Consumer Sydney Health
Slide 40: Market Growth
MARKET GROWTH 1% GROWTH IN SHARE IS EQUAL TO $2B IN INCREMENTAL REVENUE INDIVIDUAL SMALL Affordability and Strong sales and Choice driving: retention delivering growth Incremental growth via sub-segments: Alternative Product Expansion * ACA market growth _ e Ss © Student ¢ Labor * TPAS
Slide 41: Improved Penetration
IMPROVED PENETRATION RISK-BASED T0 FEE-BASED RATIO IMPROVING FROM 5:1 10 3:1 Stop Loss Program Integrity Clinical Programs Pharmacy Baseline Medical Services Fee-Based PMPM Contribution
Slide 42: Jeff Alter, EVP IngenioRx & Anthem Health Solutions
JEFF ALTER Executive Vice President IngenioRx & Anthem Health Solutions
Slide 43: Value Based Care Market Position
VALUE BASED GARE MARKET POSITION 74%
Slide 44: Consumer, Primary Care, Physician, Specialist
Consumer Primary Care Physician Specialist
Slide 45: Health OS
Consumer Primary Care Physician Specialist Health OS } y YoD\AaX ¥ Health OS Quality Clinical & Pharmacy Programs
Slide 46: Maternal & Child Health Strategy
TIN 10 BATHS COORDINATED, IN THIS GOUNTRY COMPREHENSIVE IS WELCOMED INTO MATERNAL & CHILD THE ANTHEM FAMILY HEALTH STRATEGY
Slide 47: Telehealth as a Percentage of Total Visits
ELEHEALTH AS A PERCENTAGE OF TOTAL VISITS Telehealth Visits 5.57% 0.16%
Slide 48: Diversified Business Group
DBG 9
Slide 49: IngenioRx Market Penetration and Opportunity
INGENIORX MARKET PENETRATION AND OPPORTUNITY Penetration 0-5% 5-15% 15-25%
Slide 50: Opportunity: National Accounts
OPPORTUNITY: NATIONAL ACCOUNTS PENETRATION 10% TODAY, 90% GROWTH OPPORTUNITY
Slide 51: Specialty Pharmacy Challenge and Solution
CHALLENGE Specialty Pharmacy costs continue to increase and now represent over 40% of pharmacy spend. SOLUTION
Slide 52: Prescriber
Prescriber
Slide 53: Dr. Prakash Patel, President, Diversified Business Group
DR. PRAKASH PATEL Executive Vice President and President, Diversified Business Group
Slide 54: 20% of the Population Accounts for 80% of Medical Expenses
20% OF THE POPULATION ACCOUNTS FOR 80% OF THE MEDICAL EXPENSES
Slide 55: Affiliated and Unaffiliated Revenue
& Affiliated Revenue ” Unaffiliated Revenue* 25-3084 $5.7B ol a aa . 2018 2020 2025 *Unaffiliated revenue represents revenue from external customers outside of the health plans we own
Slide 56: DBG Market Coverage
DBG MARKET COVERAGE Blue Plans Non-Blue Plans Customers with >1 Solutions
Slide 57: Advanced Analytics & Services
ADVANCED ANALYTICS & SERVICES 60 million members
Slide 58: Advanced Analytics & Services Scale
ADVANCED Ente ig@) rise 80% Blues Plan Penetration ANALYTICS Scale | & SERVICES BOM+ Covered Lives 50 States Served j 12) SI0B+ Cost of Care Savings 90%+ Provider Satisfaction Compared to <20 NPS for average health plan “Cost of care savings represents 2020 savings for Program Integrity and AIM Spec
Slide 59: 17% Ah 23h Ah 67% ah 1.5X
17% Ah 23h Ah 67% ah 1.5X
Slide 60: Joseph's Home @CareMore
Joseph’s Home @CareMore
Slide 61: Social Drivers of Health
SOCIAL DRIVERS OF HEALTH MEMBER NAVIGATION Hospital Skilled Nursing Facility INTEGRATED CARE NOILVNIGUOOS 4uv5
Slide 62: Strategic Growth Priorities
STRATEGIC GROWTH PRIORITIES CLINICAL & PAYMENT MANAGEMENT CAPABILITIES
Slide 63: John Gallina, Chief Financial Officer
JOHN GALLINA Executive Vice President and Chief Financial Officer
Slide 64: DBG & IngenioRx Revenue Growth
DBG & INGENIORX REVENUE GROWTH DBG UPPER TEENS TO.LOW TWENTIES CAGR ag 8218 $578 14% a 2018 2019 2020 2025 Target EEE Affiliated Revenue 9) Unaffiliated Revenue* IngenioRx LOW DOUBLE DIGIT CAGR $5.48 37% $0, 0 63% 53% 45-50% 2018 2025 Target *DBG unaffiliated revenue represents revenue from external
Slide 65: DBG & IngenioRx Revenue Growth & Benefit Expense Penetration
EEE Affiliated Revenue DBG & INGENIORX REVENUE GROWTH & BENEFIT EXPENSE PENETRATION > ene poe DBG & IngenioRx Revenue a Affiliated Revenue as a % of Benefit Expense MID TEENS 20h CAGR $27.68 $7.5B SLB 29% 14% CS 71% 55% 50-55% _ 2018 2019 2020 2025 2020 2025 Target Target *DBG unaffiliated revenue r
Slide 66: Capital Deployment
CAPITAL DEPLOYMENT LONG-TERM 2020 SHARE TARGETS BUYBACK ACTIVITY $286.35 3.7% Average Price Of 2019 Year-End Shares Outstanding >$5.5B IN-LINE Share Repurchase With Long-Term Authorization FCF Target
Slide 67: 2021 Financial Guidance
2021 FINANCIAL GUIDANCE Adjusted Earnings Per Share SG&A Ratio >$24.50 87.5%-88.5% >9.0% increase over 2020 150 bps* decrease over 2020 at midpoint *After adjusting for the impact of the Health Insurer Fee.
Slide 68: 2021 Financial Guidance
2021 FINANCIAL GUIDANCE Operating Revenue ~$§135.1B a 13.5% increase over 2020* Medical Membership* AQ.1M-44.7M 3.4% increase over 2020 at midpoint Risk-Based 18.6M -19.0M 8.7% increase over 2020 at midpoint Fee-Based 25.5M - 25.7M 0.1% decrease over 2020 at midpoint *After adjusting for the Impact
Slide 69: 2019 Investor Day Targets
2019 INVESTOR DAY TARGETS Earnings Per Share Growth Operating Revenue Growth Value Driven By IngenioRx SG&A Ratio Back-End Systems Reduction STATUS 19% (2018-2020 CAGR) > 15% (2018-2020 CAGR) > SS00M 12.3% (2020 Actual) (With Line of Sight to 2 by ‘22) *After adjusting for the impact of the Health I
Slide 70: Long-Term EPS Growth: Core Business Drives Growth
LONG-TERM EPS GROWTH: CORE BUSINESS DRIVES GROWTH 2020 Core Capital 2025 Target Adjusted Operating Allocation Earnings Growth Per Share *Anthem defines long-term In rolling 5-year Increments.
Slide 71: Long-Term SG&A Ratio
LONG-TERM SG&A RATIO il -1.0% Ss 14.4% “1.54 2020 Health 2020 Efficiencies Actual Insurer One-Time Fee Adjustments* *Represents the impact non-recurring charges incurred in 2020. +/-50 bps 2021 Guidance 112% 2025 Target | | 4 T Factors Impacting Long-Term SG&A Permanent Removal of HIF Operating Effi
Slide 72: Operating Growth by Segment 2020-25
——EEET — Sy OPERATING GROWTH Commercial Government 2020 - 2025 cas Revenue (SBillions) 2020 2025 2020 Actual Target Actual Operating Margin* 2020 2025 2020 Actual Target Actual *After adjusting for the impact of non-recurring charges incurred in 2020. ———y Diversified Business Group Upper Teens to L