Anthem Reports Solid End to 2021, Offers Initial Look at 2022

by Carrie Pallardy

Health insurer Anthem, Inc., reported solid fourth-quarter results on Jan. 26, with some numbers in line with expectations and others hitting above or below expectations. The company also indicated it’s bracing for medical costs to rise above normal levels this year amid the ongoing COVID-19 crisis — though perhaps not as much as in 2021.

Anthem beats earnings expectations

• Anthem reported $5.14 in adjusted earnings per share (EPS) for the quarter, beating the consensus of $5.11.
• “EPS appears to be aided by better-than-expected investment income to the tune of $0.42, which grew $23% [year over year],” Jefferies analyst David Windley wrote in a Jan. 26 note to investors.
• The insurer recorded a medical loss ratio (MLR) of 89.5% in the fourth quarter, up 60 basis points from the same period in 2020.
• “As expected, total medical costs in the quarter were above normal or baseline levels, but still compared favorably to our expectations, driven by lower utilization of non-COVID care, partially offset by higher than expected COVID-related costs, notably in December,” said John Gallina, Anthem executive vice president and chief financial officer, according to an AlphaStreet transcript of the company’s earnings conference call.
• The company reported $36 billion in operating revenue for the fourth quarter, up 14.2% year over year. The consensus estimate was $36.3 billion. The company hit $136.9 billion in revenue for the full year, according to its earnings press release.

Leadership talks 2022, investing in providers

• Anthem said it anticipates continued growth in 2022, offering insight into expected income, revenue, cash flow and MLR. Adjusted net income for 2022 is expected to be more than $28.25 per share, and operating revenue is expected to hit $152 billion, according to the press release.
• Anthem President and CEO Gail Boudreaux spoke about the company’s care provider strategy, saying the health insurer is investing in primary care providers in its network with a focus on value-based care.
• “These arrangements accounted for more than 60% of our medical expense last year. We expect this strategy to accelerate membership growth, increase star ratings and improve health outcomes and cost of care,” she explained during the call.
• Investment in technology, such as artificial intelligence, to increase digital engagement was also a key talking point during the earnings call. Boudreaux indicated that visits to Anthem’s mobile app, dubbed Sydney, increased 142% and digital registrations grew 150%.

From Health Plan Weekly

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