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Segment Reporting
 12 Months Ended
Dec. 31, 2019
Segment Reporting [Abstract]  
Segment Reporting Segment Reporting

We define our reportable segments based on the way the chief operating decision maker (“CODM”), currently the chief executive officer, manages the operations for purposes of allocating resources and assessing performance. We classify our operations into two reportable segments as follows:

•
Services, which consists of our technology-enabled clinical solutions including total cost of care services and specialty care management services and comprehensive health plan administration services; and
•
True Health, which consists of a commercial health plan we operate in New Mexico that focuses on small and large businesses.

In the ordinary course of business, our reportable segments enter into transactions with one another. While intersegment transactions are treated like third-party transactions to determine segment performance, the revenues and expenses recognized by the segment that is the counterparty to the transaction are eliminated in consolidation and do not affect consolidated results.

The CODM uses revenue in accordance with U.S. GAAP and Adjusted EBITDA as the relevant segment performance measures to evaluate the performance of the segments and allocate resources.

Adjusted EBITDA is a segment performance financial measure that offers a useful view of the overall operation of our businesses and may be different than similarly-titled segment performance financial measures used by other companies.

Adjusted EBITDA is the sum of Services Adjusted EBITDA and True Health Adjusted EBITDA and is defined as net loss attributable to common shareholders of Evolent Health, Inc. before interest income, interest expense, (provision) benefit for income taxes, depreciation and amortization expenses, adjusted to exclude loss from equity method investees, gain on disposal of assets, changes in fair value of contingent consideration and indemnification asset, other income (expense), net, net loss attributable to non-controlling interests, ASC 606 transition adjustments, purchase accounting adjustments, stock-based compensation expenses, severance costs, amortization of contract cost assets recorded as a result of a one-time ASC 606 transition adjustment, acquisition-related costs from acquisitions and business combinations, and other infrequently occurring adjustments.

Management considers revenue and Adjusted EBITDA to be the appropriate metrics to evaluate and compare the ongoing operating performance of our segments on a consistent basis across reporting periods as they eliminate the effect of items which are not indicative of each segment's core operating performance.

The following tables present our segment information (in thousands):

 
Services
 
True Health (1)
 
Intersegment
Eliminations
 
Consolidated
Revenue
 
 
 
 
 
 
 
For the Year Ended December 31, 2019
 
 
 
 
 
 
 
Services:
 
 
 
 
 
 
 
Transformation Services
$
15,203

 
$
—

 
$
—

 
$
15,203

Platform and Operations Services
671,919

 
—

 
(12,481
)
 
659,438

Services Revenue
687,122

 
—

 
(12,481
)
 
674,641

True Health(1):
 
 
 
 
 
 
 
Premiums
—

 
172,722

 
(980
)
 
171,742

Total Revenue
687,122

 
172,722

 
(13,461
)
 
846,383

 
 
 
 
 
 
 
 
For the Year Ended December 31, 2018
 
 
 
 
 
 
 
Services:
 
 
 
 
 
 
 
Transformation Services
$
32,916

 
$
—

 
$
—

 
$
32,916

Platform and Operations Services
514,515

 
—

 
(14,325
)
 
500,190

Services Revenue
547,431

 
—

 
(14,325
)
 
533,106

True Health(1):
 
 
 
 
 
 
 
Premiums
—

 
94,763

 
(806
)
 
93,957

Total Revenue
547,431

 
94,763

 
(15,131
)
 
627,063

 
 
 
 
 
 
 
 
For the Year Ended December 31, 2017
 
 
 
 
 
 
 
Services:
 
 
 
 
 
 
 
Transformation Services
$
29,466

 
$
—

 
$
—

 
$
29,466

Platform and Operations Services
405,484

 
—

 
—

 
405,484

Total Revenue
434,950

 
—

 
—

 
434,950

 
 
 
 
 
 
 
 
 
Services
 
True Health (1)
 
Segments Total
 
 
For the Year Ended December 31, 2019
 
 
 
 
 
 
 
Adjusted EBITDA
$
(14,667
)
 
$
3,699

 
$
(10,968
)
 
 
 
 
 
 
 
 
 
 
For the Year Ended December 31, 2018
 
 
 
 
 
 
 
Adjusted EBITDA
$
21,310

 
$
1,915

 
$
23,225

 
 
 
 
 
 
 
 
 
 
For the Year Ended December 31, 2017
 
 
 
 
 
 
 
Adjusted EBITDA
$
(2,204
)
 
$
—

 
$
(2,204
)
 
 
(1) 
The True Health segment was created in January 2018.

The following table presents our reconciliation of segments total Adjusted EBITDA to net loss attributable to Evolent Health, Inc. (in thousands):
 
For the Years Ended December 31,
 
2019
 
2018
 
2017
Net loss attributable to common shareholders of Evolent Health, Inc.
$
(301,971
)
 
$
(52,658
)
 
$
(60,665
)
Less:
 
 
 
 
 
Interest income
3,987

 
3,440

 
1,656

Interest expense
(14,534
)
 
(5,484
)
 
(3,636
)
(Provision) benefit for income taxes
21,536

 
(40
)
 
6,637

Depreciation and amortization expenses
(60,913
)
 
(44,515
)
 
(32,368
)
Goodwill impairment
(199,800
)
 
—

 
—

Loss from equity method investees
(9,465
)
 
(4,736
)
 
(1,755
)
Gain on disposal of assets
9,600

 
—

 
—

Change in fair value of contingent consideration and indemnification asset
3,997

 
4,104

 
(400
)
Other income (expense), net
(492
)
 
109

 
171

Net loss attributable to non-controlling interests
3,609

 
1,533

 
9,102

ASC 606 transition adjustments
—

 
(4,498
)
 
—

Purchase accounting adjustments
(1,915
)
 
(861
)
 
(1,467
)
Stock-based compensation expense
(15,618
)
 
(17,609
)
 
(20,437
)
Severance costs
(17,350
)
 
(2,205
)
 
—

Amortization of contract cost assets
(2,876
)
 
(2,456
)
 
—

Acquisition costs
(10,769
)
 
(2,665
)
 
(15,964
)
Adjusted EBITDA
$
(10,968
)
 
$
23,225

 
$
(2,204
)


Asset information by segment is not a key measure of performance used by the CODM. Accordingly, we have not disclosed asset information by segment.