Elevance Health, one of the largest insurers in the U.S., will continue to aggressively pursue acquisitions, CEO Gail Boudreaux said Monday at the HLTH conference in Las Vegas.
Boudreaux said that Elevance is targeting early stage companies in an effort to find cost savings and improve the quality of its operations. Her comments come a week after the payer announced its acquisition of specialty pharmacy BioPlus.
“We really are looking for companies that have potential to help us diversity capabilities, but not for diversification’s sake alone. They have to fit into our core,” the CEO said. “We are interested in tuck-ins around the health plan side, but we are doing a lot around Carelon services as we scale that capability.”
Carelon is Elevance’s health services business, which supports its own plans and sells to third-party insurers.
It includes businesses like palliative care provider Aspire, specialty behavioral health company Beacon and home-based nursing management company MyNexus, all of which Elevance acquired in the past few years. Carelon also includes pharmacy benefit manager IngenioRx, which Elevance launched in 2017 to replace its contract with Express Scripts.
Elevance, which built Carelon to complement its health benefits business, wants to continue building out the platform, according to Boudreaux.
The company is growing “very aggressively” into adjacent care services, Boudreaux said.
Most recently, Elevance agreed to acquire BioPlus, a specialty pharmacy that caters to patients with complex conditions like cancer, to bolster IngenioRx. The company said that BioPlus would help it identify patients needing behavioral health support or at-home care in an effort to connect them to the company’s additional services.
Other insurers have also been active in dealmaking to prop up health services businesses that drive a growing portion of their revenue.
CVS Health, parent company of Aetna, this year agreed to buy primary care and home provider Signify Health for $8 billion, while Humana acquired the remaining stake of Kindred at Home, the nation’s largest home health provider, in a multibillion-dollar deal in 2021.
In October, Elevance beat Wall Street expectations for the third quarter as profit climbed to $1.6 billion, leading the payer to raise its earnings target for the full year. However, the company said it was bracing for a potential recession, which could cut into commercial enrollment.