CVS Health (CVS) 6 May 202020 Q1 Earnings call transcript

Good morning, and welcome to the CVS Health First Quarter 2020 Earnings Conference Call. A question-and-answer session will follow CVS Health's prepared remarks.

As a reminder, this call is being recorded.

I would now like to turn the call over to Valerie Haertel, Senior Vice President of Investor Relations for CVS Health.

Thank you, and good morning, everyone. Health XXXX CVS conference the to first earnings quarter call. Welcome

I'm being reminder, Investor Valerie Health. President by and this Executive a Eva recorded. Merlo; Relations this and Larry call CVS CFO. of As Vice President is I'm Boratto, morning Vice Haertel, for joined Senior

Executive of the that and President President and to no Following Officer; Chief more limit Vice our and session Karen prepared Alan and Roberts, Jon with order Lynch, President host Caremark. ask provide question to people In to we'll include a chance a remarks, yourself Vice quick more one with President Operating Q&A, the Aetna; of Executive than Lotvin, question question-and-answer Executive a follow-up. during will Vice President please

press make Form that impact call, our reviews we and future our In enterprise. of XX-Q, posted presentation future events, the will this note financial COVID-XX market website. and future a related Please industry conditions, addition we certain to release and call, and our to slide on our on statements financial including performance, projections this our during have

factor are those the disclosures XXXX risk with reports in risks annual of significant filed particular management's and and Forward-Looking forward-looking Form uncertainties, Risk subject the we our on that on Form are XX-K encourage are to and other XX-Q. quarterly Concerning our strongly Health's Cautionary you to including beyond Statements are Our described review projections information these Factors the impact SEC statements factors, and assumptions on estimates, of of COVID-XX CVS on report based regarding the many control, which future uncertainties the in in Statement enterprise. section We and our and

earnings review also Cautionary Concerning this the in Statements morning's release. should section Statements press You Forward-Looking entitled

to non-GAAP document a Relations During website. a in earnings and financial comparable GAAP regulations, of the can these the conditions. measures about we'll release performance find you use measures this portion reconciliation with reconciliation financial and company's posted call, accordance most our non-GAAP measures directly talking on the when of In morning's SEC this press Investor

is And our where archived. the to broadcast being call Larry. today's as it always, over will turn will call website I be on

everyone And COVID-XX colleagues Well, Valerie. And for for on These have earnings with solutions you working morning certainly colleagues to country. in Good gratitude for take all. their are of express work organization. CVS phenomenal XXXX to pandemic, and moment unprecedented joining a They real in our been thank I Health thanks, parts in the call. time proud of not sincere and communities, I'd to be responding of our patients like more times a responding could dedicated our to our at across the the doing against needs of and are us the my our fight frontlines consumers QX the efforts. for job their all

private has sector state the of all its to virus population over economy. our situation Federal, governments, we the spread have rapidly last months, the on of worked from the intensified couple as Now, the coast-to-coast. partnership in local as pandemic the and the know, impact and spread has curb with and

colleagues, digital efforts these of supporting is the difficult community services, capabilities are of the offerings, part solution we broad providers through of presence, we largest healthcare our and one local during and Health CVS essential these reach, working are As our times. hard

priorities COVID-XX me we've of an let two response in key mind. actions in with overview taken provide So the to

the colleagues, is of well-being communities serve. we and safety First consumers and our

most that, clients our consumer strategy are to and being we while Second support of advancing In is maintaining long-term and businesses consumers, investments the our company. relationships deepening our operations. of members the do and continuity our centric making health order

took practices, action and we cleaning We kept running colleagues, social them swift barriers. minimal with protocols, outfitted our distancing operations other to disruption. our up implemented while enhanced designed equipment keep stores with plexiglass with safe, distributed and we Starting protective stores and personal

our for also resources, including bonuses for provided and and colleagues work. enhanced support with outstanding our frontline their family announced benefits We colleagues

All of ensure these a at continuity help are they of our actions operations needed time the most. the when

For resulting continued of some and and them quality from members we are with the costs to while our consumers pandemic. impacted added stress relieving providing COVID-XX, by the access healthcare,

diagnostic related insured As previously announced, members. our for waived of co-pays we testing all COVID-XX for

Commercial waived out-of-pocket a mental health through to costs pandemic, helping June. our taken visits and programs of telehealth Advantage admissions the members. impacts broad expanding for telemedicine our We've approach related and to for employee emotional the For including member we early and address assistance Medicare COVID-XX our access members, inpatient and

We're associated we're fees support. the CVS home delivery Caremark waived And them. extending products has also store for about most refill at and Pharmacy and access members our them and members to educate and care proactively limits prior medications. approved previously support consumers the risk sending authorizations work clients in to Aetna resources accompanying out with to to measures both and show for and all their protection medication affected members COVID-XX by adherence and prescriptions to for with early front maintenance care available and waiving to reaching packages

allow care. timely we policies, payments making And Aetna policies enhancing are focus healthcare to processes, for to streamlining telemedicine providers, on easing them our administrative and contracted patient

our local, as federal To well solutions alongside communities, peers. creating state government based support action partners, are and industry as we

working helping results. our with testing five important reopening the play real across testing in role economy. sites, We're scale will tests an states, have COVID-XX the also large and of opened administered which continue have to expand capabilities, example, For further we with to-date X,XXX to we time nearly

when retail with nationwide. vaccines they therapy and help patients positioned And at locations recently medication well We Coram hospital expanded services up working important available IV to providers care, become capacity. our finally, in home we partnership provide our nationwide, transition eligible to based hospitals freeing to are therapies and pharmacy

pilots strategy conjunction we've taken our such best And their to and we innovation. access, seeing additional to emerge. be actions as there of norm actions helping we what didn't. with and achieve Now, new are as result, will local making become part normal expect have healthcare point regulation, and in that accelerate tomorrow's all while relaxing will near And the simple, people worked routines. health. evaluation future, And worked we an of of new a And a everyday what point today's elements of the in

businesses taken enabled role And to have we our responding actions key differentiated these in a the right at cost, the come in our to the while we play investments to response the pandemic and a in our are decisions. people have us pandemic. offerings believe And

become trend me engagement So more digital more QX place. we've as response centric of QX, relevant environment XXX% it a is stay higher visits provide up began are is the assets telemedicine for current of through and examples. achieved Retail you taken? in has technology clear, in to the what in January X,XXX%. We've MinuteClinic been levels in consumer COVID-XX. strategy few a home delivery using more virtual they to the than has our And across digital people actions while compared our prescription is even about Utilization Well, which 'XX. let accelerated with up

of fourfold store it saw let's call store increase attachment the we front adding rate. number their deliveries, in the items a front Additionally, consumers prescription to

Pharmacy, and in percentage were year-over-year. approximately an as double-digit across specialty saw also increase in app pharmacy, usage Caremark specialty up And CVS XX%. digital We example, refills

our first Aetna in Additionally, three XXXX. QX more engaged in in did Health quarters we of the app, households than we

enabled sites, testing team COVID-XX which our positive has platform our experience. support of a for highlighting to with launch XX% And scheduling our used screening testing, to consumers online and quickly streamlined experience, a digital

of and will thanks colleagues' are continue combat hard virus. work our innovation. we And to resources support to So, to nationwide customer to and higher the pleased see we our mobilize efforts loyalty, to satisfaction rates

me $X.XX, of let X%. COVID-XX on and of the quickly share total touch business $XX with revenues quarter, adjusted impacted So nearly delivered results billion has with earnings how our per In quarter first performance. our we up that,

approximately Our largely discretionary adjusted all strong by to driven in performance an a performance modest activity underlying earnings was utilization, and our and share. QX store our per in added $X.XX dispensed, reflects prescriptions of COVID-XX. acceleration related sales, March And COVID-XX medical front strong reduction core business

been of our Red resonating expertise adequate increased supply the an from results meet across medications scale impact maintain care stakeholders with aside success which And the the of is to demand strategy, we've to setting and of from Oak. the system. the demonstrate able our integrated health our Now continued customers, healthcare QX COVID-XX, benefiting of

variety of leaving rest harnessing is on note the we unchanged to clients guidance as EPS risks adjusted to while And opportunities and as well saving deliver Eva minimize our to forces and our solutions working you present assured, diligently to market through full $X.XX we Now, as are will cost It take we are $X.XX forward. members. affordable effects the year at their are to there to adverse that move care a XXXX important and the key access and considerations our will guidance. that actions range expand opportunities

importance to will holistic approach. fight frontlines demonstrates Health of CVS and pandemic enterprise-wide continue consumer-centric our this on challenging time this the the

out serve. are We the that the stronger nation supporting on together committed other the we come we communities to so that side with

call Eva. that, turn will with And the I over to

for this their opportunity want to morning, work, hard courage time. everyone. as good navigate and Larry. colleagues thank to all we And Thanks, this I my Like difficult dedication of take Larry,

led more to of The about across cost continued synergy As our pandemic brought to and support been us response the and has has reduction become enterprise. stakeholders. pandemic, COVID-XX rapid challenges the us, goals priorities, to to to this transformative to those business all we've in operations country initiatives. a Larry including Through new CVS key accelerate the mentioned, changes goals COVID-XX delivering adapting our our onset of our integration some of advance digital

bonds and we of issued steps severely scenario. to the strengthen We in our In measure against in our light needs X enhance preemptive COVID-XX in capital. adverse as liquidity a cash also billion a uncertainty, March took

add and over to flows. commercial liquidity March, we're issuing weather XX billion available cash under X cash X well it the expense facility short-term million access a by interest additional end potential our paper While operating as in about this billion borrowing us and at credit monthly, as of investments to strong will backup with of strong crises, puts position

to the expect we normalcy repay to return incremental debt. we Once

prudently planned We will our by reduce expenses our and year. capital operating manage $XXX million expenditures this to continue will also

and unchanged target. leverage debt target remains no and planned until we we leverage with prioritize paying down our to Our continue our maintaining our meet dividend long-term repurchases share

quarter year-over-year with $X.XX, nearly prior year. Moving earnings adjusted increased than to revenues all growth results, Consolidated share segments. higher from XX% first per X.X% was coming

We COVID-XX. due cash generated $X.X our to strong consumer and part in $XXX exceeded dividends approximately to member expectations, resulting performance elevated to in execution ability returned QX. meet and business million from of and operations billion shareholders cash Our from needs our through

also partially was to revenue brand the and we the QX to X.X% increase. segment: offset continued compression. increased activity. of revenue growth our Specialty total client XX% IngenioRx basis contributed on-boarding reflecting XXXX, Total disclosed for related Pharmacy adjusted the Turning increased with revenue by operating quarter losses year-over-year. XXX that increased full Total by Services approximately pharmacy price benefit in results COVID-XX inflation XX.X% the points previously to scripts started

continued mentioned from volume, operating economics Services increased the rate. client income partially dispensing an quarter COVID-XX the our and year, compression. impact was and income minimal quarter. last offset pharmacy generic driven specialty previously in Services operating adjusted was purchasing in continued there losses in XX.X% improvement during Within increase Growth Pharmacy by to by Pharmacy price the versus first

a more retention XX% Services with progress season to strong selling renewals nicely in continue with of complete than rate. We Pharmacy XXXX

income year-over-year. COVID-XX Care, up of had drove meeting retail adjusted Retail/Long-Term segment A key operating with needs with consumers a and Total XX.X% impact performance, X.X% revenues factors few to Moving essential the our results. patients. meaningful on pharmacies were up

growth of related patient Larry and script basis estimate COVID-XX front-store volume script COVID-XX we about mentioned, X.X% the our care and adjusted We continued primarily Adjusted of As day. impacted leap strong points. was by by volume. delivered pharmacy XXX programs, adoption growth driven

which Front increased a total significant was portion X.X%, COVID-XX. store of to revenues due

Before driven the adjusted SG&A SG&A, growth store generics, total favorable the resolution by to of began, up surge improvements COVID-XX about benefit strong with about pharmacy operating growth revenues from was The and were sales store continued the for reimbursement X%. related performance, impact margin Adjusted income monetization was efforts. matters front ongoing contributed growth of expenses. partially of income legal additional quarter, reflecting COVID-XX including our by lower front pressure. offset XX% and operating the operating

or membership X.X% the our growth, sequentially. with pleased of Health our XX.X%, membership acquisition primarily labor. total of Advantage sequentially, industry average. driven strength focus, we're we're Consistent XXX,XXX primarily to growth Care with Benefits, increased membership Moving In due outpacing down a sequential sequential strategic is pleased of the public with strong and IlliniCare. decline our the also Medicaid, in by membership Commercial Medicare to

a the basis, costs offset products due our On membership growth, reinstatement primarily to the increased and year-over-year to X.X% related to strong total government prior initiatives expenses including growth. increased including synergies. was approximately members. of IlliniCare revenues due Operating year increase HIF higher primarily versus integration of partially on-boarding savings This by government

MBR from the primarily reflecting XX.X%, was HIF. return improvement the an of

impact and This utilization COVID-XX was also offset reduced During related leap at in day. government mid-March. the growth business saw partially we discretionary the the started quarter, by to of that our

the pleased on flu are Benefits’ growth, in heavier and slightly to as well as income adjusted due season, with membership in operating part Care MBR claimants certain states. while we experiencing In our lower the we of net the year-over-year, longer was cost Health reflecting higher pressure quarter just the Health all are a Medicaid, the segment income, Care including as offset discretionary first deferral losses. lower for than realized on impact COVID-XX investment utilization from described. Benefits a more had impact capital factors modest I

This operating legal segment over was by million XXXX. costs. adjusted related Corporate higher loss to The and $XX increased transformation predominantly

recorded the volatility related QX. In addition, markets capital realized the segment losses capital to in

compared due to approximately the average to was Going XXXX. for XXXX below $XX debt interest QX lower line, lower expense the million by

COVID-XX, underlying our performance core to was strong. business Prior

full pandemic as severity flow to is $X.XX continue guidance full to While and the the key range of including to leaving to $XX.X is subject Cash inherent U.S. the its patterns. its global our view unprecedented operations COVID-XX pandemic, and impact, GAAP and the also $XX the $X.XX we utilization behavior unchanged economies, from billion and enterprise and consumer $X.XX number billion uncertainty the a COVID-XX exist to including acknowledging EPS and of unchanged. of ongoing considerations This around that uncertainty XXXX significant on are respectively. EPS surrounding impact $X.XX duration for year at guidance year and healthcare adjusted

factors become come. and impact months the governmental the on seen. Additionally, of in legislation company stimulus the to the and scope timing, of The be remains pandemic will other to responses clear financial impact to these

on in this April. situation unusual the Given elaborate are we seeing quarter, metrics for I select will what

about compared in Our as by in physician Prescriptions additional and slides are reverse the as drop of related large provide more Retail/Long-Term XXXX along prescriptions XX%, sales comps April as new forward Care store compared prescriptions increased in Front reduction with April lower size offset the the Pharmacy we March comps for basket context. than April XXXX are visits. Services a both to saw down a about and store hold. took was to shelter-in-place traffic to pull flattish

March our Benefits started could suggest Health the data of utilization discretionary XX% based decreases in MBR that And compared an utilization today, to lowest continued of about at Care we across see on April. level what Early its for of QX. reduction month know April in through XXXX. in April The to array services be in mid

in health. adversely conditions Additionally we impact its could members affect their delays utilization mistreatment cannot what chronic on as will with predict have

a recognize expenses related Larry increase continuity in the significant reflect operating will In business initiatives QX made QX and the as over other we addition in we mentioned. COVID-XX investments

moving we performance patterns, detailed to more all we our than time quarterly at likely pieces, and is expected providing of not out to the play of earnings of earnings are from the a key are call, guidance cadence likely last given today. historical The metrics vary other differently

up line open let's for that, With questions. the

take Thank you. [Operator Morgan. Instructions] question We'll of Gill our JP first from Lisa

Your open. line is

that, And on you, for thank lines. the is all Larry and doing CVS team that front

expectations core in first performed of versus is what Let maybe comments on strong I expecting. guidance, about front core that overall underlying areas And want your impact to how you're was quarter. you about one talk you results. going Eva, better me the the just Can start. you we the side first a think give made to end the incremental but than just to were and not just any the know I understand there

the update, you about it appreciate the does If period So end. results gave? the front the being think talked that stays down April you core that that I how on for we some and time, XX.X% like impact about that as of guidance overall

Eva. Thanks for thanks question your about doing. everything is it’s and Hi, company Lisa, the your for comments

core, commented underlying we strong as with the PBM. think I the right, start I'll on

specialty strong really the sales the growth realizing of that last and PBM. started the top-line some with saw underlying initiatives the of we year We're bottom-line had leading benefits in You way. and

So expectation. our initial with we're reported pleased and we've performance the was above that

programs business. you're pleased Additionally, X% store look reported strong prior X% front care when the we're And in Again, X% as still growth MBR you the the with above pressure Medicaid at have COVID, Care for you to largely strong ex-COVID, script the government a as perspective, Benefits pleased we adjust say sector. our our from you. performance we retail some with results I'd working the script that's outlined, But that and in the I growth COVID, of and over comp continued and through. side patient on continuation have line. growth We're of what Health were

want different the pieces. I tried consistent be on store? the And factor the a as and back question, assumptions at Jon, underneath state-by-state And right, it's the there leaving Lisa, coming are based anything add look on of unchanged. across it'll country, don't it's you if things all I'll guidance host number to front factors, to on you on-board, think say of really guidance our a we've of

down from categories obviously listen are Well, in early. and March I April Lisa, coming mean the in all still peak it's off very

But very we hours our are we're beginning are have operation We and data. seeing of to orders return limited to shelter-in as sales lifting improve. normal hours, see we that the

So, is the still but improving. early view early,

sales. front Larry, enterprise of And team continues important. one point when be underlying Lisa, job has of performance maybe was in it, X%. to front a now sales final store great about -- Keep just the revenues, store specific to done And X% X%, terms it’s the think mind around on you represents ex-COVID, in

in activities seeing that are the learning that are you we're that today about that today's prepared of lot norms migrate to happening -- heard in the about one around think and and remarks, things routines, a today's reflects and delivery. the part that dramatic will personalization. I increase that things But things we of we've our of talked So, we've a seen Lisa, is past norm. home as in tomorrow's from everyday talked

the again, store increase prescriptions accompanied being always store that questions we the of attachment seen had is, terms And rate a we've a those to with purchase. One of we've do how prescriptions? front increase fourfold in front

So, return to say, a that's we as we begin environment. normal on, an new capitalize to, think we opportunity can that I’ll

Percher comes Eric Nephron question next of from Our Research.

open. is line Your

and Josh from look here norm Raskin like. may last Eric new what Percher on question Nephron. a Maybe of building the

see think love You And spoke in occurring share as then to are think scripts, you How infusion. models, I'd the shift gain mail, the And and home whether obviously ways. the and material channel there X% Do same couple capture specialty a mail to specialty of your of all well? is is from you can as you hospital shifts in infusion on hear across and some of shift, being material. I the these?

on more Larry. I'll to it’s talk ask Eric, Maybe start and Alan Yes, mail. specifically

something great do which infusion have right you visits a When ties as the nurses the and about I we've many provide the the setting back cost. hospital about therapy, continue think being that well infusion for think the home is and is as since up to great expediting what back home, talking those XX,XXX with and important talked how And who working a variables that care terms we pandemic to in opportunity require enough to about, into of do began, core the we by convenience care times. home made able provide and were service. to capacity -- we're comfort the discharge in we're that hospitals the IV terms to example patients in within needed of with of freed well of their our

goes for healthcare about last back whether of, of to we've years the So, in do couple to in Eric, the a simple, lot what of terms been that your hand. we make talking home strategy in of the or in can community, palm the and it's the this local

in couple we've and that's when early dramatically. delivery, bring Jon add Alan Eric, patterns the mail points. home we also And decline in only about mail we're but to One, mail, not in traditional we're talked the we an a but same home would it’s seeing not network. the seeing, specialty of ability on home seeing retail power and up prescriptions about as seen delivery make as through think think of mail the So I and talked I'll from that increase Lotvin. about of also you the in to home retail we're point people's that delivery view through is enterprise, into I have last April, with the what

of views, change to pre-authorizations where lines on in that any early the may move? that same relative XX% are you seeing HCP along And decline, side the

tell Hi, pre-auth it’s XX% that XX% up, pre-cert yet. but would dramatic And uptick In in Karen. we and Difficulty] April. prior April, opening as pre-auth, saw states increases almost you authorization. through a down I it's decline are we Eric, [Technical in utilization not however, in

Mizuho comes question Hynes Securities. of Ann from next Our

line is Your open.

line in just So your kind clarification. Eva, know segment Care said results for Benefits I with estimates. Health of were you

your Benefits, guidance Care to guidance Health for So the at profit operating X% look was when I prior X.X%.

your in Can of you in just you. is, that X.X%, my you remind your I us year? which QX some did decline be initiatives touched going with in this know Thank prepared It the -- you into decline will in negative that expectations is So remarks. XXXX such resulted line second question. strong my results? question in specialty, was first the And

sure. Yes,

Health So results spoke year. spoke through. some I and costs Ann to QX, in we let to as that we of say I specialty we're We're as that as pressure before. Aetna-PDP would our down as well is a that about That the as the some operations growth year and certainly in think of I initiatives. the said in aggressively we're the business I did go elevated the Medicaid Alan to related you working bringing on the said, And throughout And last on the IlliniCare couple MBR the stranded as on divestiture. working on-boarding line the things acquisition additional something Benefits, results, highlight that And some of some are the color recall Care I’ll Medicare provide are largely on. and

for So Expedite, prescriptions been on has we’ve a in community. of patients, short sorted accepted way getting program provider and a It expanded very side, the physicians of specialty simplify Ann, process the which well we both to the call time. Specialty is in

patients. messaging, really for text interact members and the Specialty as digital with us We ability refine resonates the these creates approach provider up strongly with Connect, Specialty secure tailwind very continue very And popular continue just and we a prescriptions. to to or adoption we drive at work retail Specialty pick more off a again to approach. via our to community. Again, our drop closely patients which allowing our in is to very, prescriptions

those XX% final point. in we now Larry, Specialty mind Keep one maybe Ann, in Specialty includes just it's talk growth numbers the Ingenio And as business within that well. when about

next comes Our Rhyee question Cowen. from of Charles

is line open. Your

taking for questions. the Thanks

with the were think responding accelerating but of between of strong a about then Maybe life, may earlier, is business. of back first. not in traffic And it to to, business sort to back talked from like responding the give Thank seeing this I lot be consumers to less PBM you you foot breakdown activity you. the about going new Anything, prepared details should earlier a retention that you're normal states. And around Jon, disruptions I question is seeing, can is front-end? talk are reopen follow-up the activity? around in just as about they we a business more Just what that how in question you going think a and kind Lisa's rate looks all it fair any are like that remarks expect talk the just new Is experience employers think are year. also pharmacy kind

Jon, start. Charles, this is I'll

are So impacted. we are, big to of you operation we're normal. lifted, less orders a personalization. of impact turning most with sales the are marketing our mean our at But is we the positive shelter-in-place that COVID programs sales part as are hours more I We're of and the pharmacy front That on where our back driving in in areas programs. also back returning look if a both in seeing -- of significant we're cases the than see other

to an or operation, up. reduced So was open returning hour, so community as and the back stores return it XX% the about store is their of of as normal our XX% of front example hours those

I our in about biggest the in Larry lot really that headwind seeing think of X%. early, we're less to we but said I But starts. very new about some a In hour’s of that think an we're seeing In earlier. reduction an program pharmacy, are still listen, home seeing less delivery I positive remarks. is of But it's pharmacy, due did pharmacy around as we of his impact trends therapy is and talked now

year are seeing saw and doctor down a less seen of starts or as result about April we ago. you've that than a So XX% we're visits for lower new therapy

typically classes includes this such events. new to And acute maintenance down grow are In drug XX%. year. new prescriptions starts each they as as antibiotics for So, prescriptions, as about XX% well X% certain

physicians normalize. seeing we as start again, to this So volume patients, expect

Alan, the question. it’s in, new jump on I'll So business

about So retention. first talk I'll

were about we mentioned, of XX% over XX% XX% retention the a XX%, Eva own way a our As little rate. through we're to at book,

you seen happy quarter. that that RFP consistent years. talk will with business, we've new So very what more with tell few respect With about next the last But to we'll over we're is that. activity I

Obviously, of now, the We to get as we two seen of going last in But have can't much predict towards seeing slowdown. weeks. year. I as of the not the end what's we're a what consistent we've seen happen roughly

Goldwasser question comes Morgan Stanley. of Ricky next Our from

Your line open. is

on around cut if Question we talked starting some forward of -- focused that Medicaid rates. But yesterday your the comments are an to higher states look Medicaid article about is cost.

and at your thoughts year to rate long-term think about about your year this impact so that? the on cuts are think it’s be potential Investor prevalent we target what mid-single-digit, next Day the to how of was low-single-digit So and impact should going margins? I how on

Hey, Ricky. there on to in the that is, around two tell. go unusually the to a impacted longer And really to forward a It's the a first pressures claimants basis, your being had business. Medicaid second Medicaid. flu Medicaid. the Relative Relative season One really we was Karen. high business Medicaid on There's it's factors. in some early little question cost

our working very Medicaid are closely We states. with

we obviously rates margins and we enrollment see single increase unemployment to medical maintain our us obviously operating yet, appropriate. and any to over had haven't would -- states our on but improved back and we in to those expenses Medicaid, expect continue see try to We cut as manage to as time, come costs

if add, think as for point. at really rosters, policy that a between this it’s is, the this enroll going issue really I’d is, for acknowledging subsidies COBRA. open to not an to subsides go relationship of it's what the stimulus out dialogue look Ricky, your there an some unemployment question are example, individual COBRA as of I a the applied now you as with some no question Washington, the happens activity for does and increase versus could that Medicaid margins that of forward, stimulus look a question it Larry. today Because be on stimulus has to there's happens there is back to what if COBRA in around final point framed addressed assuming and individuals Medicaid beginning at One be number, you

around. we'll something that's and closely So, discussion that watching be having

what maybe signing around you benefit. in you that. since sicker risk past would think you your given be might younger you a to it's different got the section cross population one actually up? on see pool of and you Just seeing Do enrollment, and view used that? Medicaid uptick in on Medicaid in population how to the risk of up what any kind signing COVID Do we're follow-up have population profile Wondering impacting have are what like that that the thoughts

we healthy. you was we if think a XXXX, expect speaking saw patterns as back when look got in, I well, look business Medicaid we’ve What we see as more XXXX, population seen would come when we've healthy to historical commercial we in Ricky, relatively increases and well. saw unemployment, at because that at

change think skew profile healthier would will So the I growth. risk a somewhat and to

of Wolfe is question from Lake Research. Justin next Our

A couple of things here.

incremental then costs us And help understand in And thoughts quarter about about noted bottom-line you March to that have for rest legal we incremental costs think can COVID First, in benefit business would the benefit that the pharmacy COVID of benefit? resolution just of revenue you've the of you of offset the results? year? the then what going us in the incremental that the you be the the much from here the how in my tell forward that might on the And benefit on some discussed can that about? that should in $X.XX how follow-up was terms

Eva, it's I'll that Justin, question. Hi, take

protective would segment can Larry at really, are in QX, this I gear really line Other puts benefit, the and nature outlined, underlying we've largely I margins, end compensation the the made, you that investments and modest quarter. the see as has had Retail the a about really there's the and think benefit There ramped from as on that but lot to takes. as are think you And the coming we you some the those additional and XX. you so investments, I impact, if you segment, as look with that of those outlined and the Slide investments $X.XX about what our of margins underlying think the the think generally given really the think pretty on towards came about and other hit in benefit. largely have some investments more QX, investments of going

you break see to Going We back I'm Care have on favorability some had explicitly some your to year. in could But year-over-year year-over-year, segment, underlying the we had not costs. out Retail/Long-Term last favorability the matter. going And other question year. we legal our costs this

So net-net as was a positive it you that look at growth. outside

from America. question is Cherny of Michael Bank next of Our

home. you the and tied through you in early had. on want of details for on few you're at a to thanks the kind all some some summarize other the morning, Good increase to I so deliver to went Larry, benefits telehealth, a to questions of seeing details of ability far. the tied lot of the dynamics

build in As taking educate strategies, how investments pause pandemic longer particularly would the there this store think traditional average HealthHUB, away is from of dynamics want on term, more. you're to at that about out around that the retail lot anything appear you're you a you long-term are learning point better a think that help there into to people can through of in the versus this given about that place and have to on coming to stay some

they so where entire their balancing front having just dynamics a outside end incremental much your the how approach is differentiated at with those to healthcare house. rethinking time service world time want towards spend And this

the whether testing. we're talked and and that's and earlier I seeing Yes. telemedicine, cases the that absolutely is we community home Mike, see question. I'll play strategy touched some validating delivery, of we're it's great we in a used this one it's our what a that that touch And seeing on -- bit about out and

in it. one plays what a do, your omni-channel call terms home, in think for palm how the of we're So, we about about, we in here and each individuals, of and what you health, that community, we Mike, is of our when it when defining it, do Think three role. as hand. all we as the the care, triad need we'll But do in

the your that part further role And the important we're broader important it to we validates an working the to and question, part everyday strategy; to I'll one, routine. optimize seeing our learnings become back two, of number so what to And speak experience that we're that, COVID we're today. seeing; on as of testing yes, focused we're in part strategy. monitoring community of diagnostics an But there's being HealthHUB universe testing our the see an of becoming a diagnostics of and number

going So a the drawing services things you're result we're that evaluating and board products accelerate we're I'm experiencing. are of some as roadmap, what our of to of the us and see on all sure

Giacobbe next of Our Ralph from is Citi. question

back economic I as between you the versus hoping commercial decline relates appetite factors the it is then ASO. get market? that, commercial shift to could was to just And just if up bifurcate there point? the at bigger you're greater way exchanges And a in to either membership viewing Thanks. risk economic a specifically backdrop to how follow any or loss the into then this

to decline also it Ralph, very we a basis in membership, to have know, on and pushing large the cases a insurer from a labor know on in we decrease Hi, as reflecting really small have move to overall in were you which Relative small year-over-year -- cases, group ASO. been -- you we been we've And decline it's as And group. is lost small Karen. fully two folks they membership. insured

the We the seeing to in of continue the in already six April our the some We book downturn. we trends. see result question weeks, the expect a of see unemployment half commercial are economic in do on last to to those as year. latter Relative decline membership declines in

seeing However, as Medicaid well our we an in April. in membership increase are

what So and of that's except do depending we're see But really out that our on we'll what continue duration plays to this in book. commercial the doing. we this, how decreases

exchanges? And then the

to obviously look it's you we’re to XXXX. we we'll in as won’t be that know something exchanges, continuing it, we at today, and The evaluate are -- continue exchanges

next is of Hill Our from question George Bank. Deutsche

two. I have

is I'm planning First see strategically. for the guess, negative this rate. of how I a wondering, you mail, talk online benefit two And Walmart hour little lapping I the savings and unpack about thinking you impact then a you Larry, the the answer I into service. the inclusion kind to if challenge an performance CVS the you versus PBM retail can of are maybe bit, guess versus guarantees? attachment of do Eva. little a economics follow-up delivery rebate a home Ingenio cost the about of improved for for as about retail? launching bit purchasing free talked and guess

the that look as you spoke we I to a the income right, think right, spoke sales would to QX Obviously, But your at of some how first as spoke relative the the given outsized COVID. full So operating prior disproportionately the growth what as George, I'll annualization quarter Alan we about specialty in you about. that start with at generics we new is earlier, question benefits the about benefiting around above initiatives Alan PBM. think QX, growth, relation, that year, year as and full have the look it's about

well. We to related also though, other the had performing At core timing very specialty is some accruals.

I that in numerous would be XXXX minimis 'XX would and curve times down shape the -- in continues. de the that headwind I've XXXX, it rebate peak, was the that the we On described in say continue that of to manage diminish and come or

management to cost continues well just a integration be as that as So synergies. from benefit benefit and

the home of any for question. coast. on discussions sure And don't George about fall expanded George, in space then few we your terms think white the year And been leave last we it do think having was coast we in started it we've last how delivery we markets to home for and where disruption. delivery a I probably make

in the door our terms today most pick mailbox, on can office the or through think of at up stores the the front lawn your the through and the at you we're George of prescription in drone. UPS maybe you inside drive-through, experimenting in about, store with a So

when and to of you terms do from and convenience the for of time. look it's all what given point we integrated convenience. can at our -- view want avenues makes model, a in you be satisfy in you who sense point any in access So And of most access

program delivery our is home would customers pandemic that engage thing successful was is is, XX% reason to have took the we our as so this And of retail only add hold digitally. The George, this I Jon.

them for easy make very to was transition. it So that

help So decide as their get will that prescriptions want the us they I in people to think future. how

Ransom James. John from of question next our take Raymond We'll

Karen, COVID? the quarter first without would like in was and I have wondering what for loss medical the ratio looked

on impact had quarter. COVID minimal the

if that have at continuing as minimal. see will it in a impact ratio Obviously, state to it's So we're up. April you look loss utilizations big

at relevant as market, you look to combine some in using marketplace, commercial more, follow-up would margin able call such PBM package. as cross that when is the think Do My a to things, single the less we and rebates we sell I and less two go or the you're subsidization businesses you and you see them single that is, Aetna other would as such i.e., the guaranteed maybe package? what

that case Yes, margin obviously case. and when will that and the total whole whole do on we a we'll that we case we at to price get the look to price today it get want

the look or the and So subsidize we what we case would whole at month not write necessarily the We at. it want other.

we to forward. the generated just add be the value that enterprise we'll right, can move across at Karen as look to And that,

is of Bernstein. Lance next question Wilkes from Our

thanks that in a CVS is the out there the for again, community. And doing team lot everything

in follow-up build-out an talk how to the expanded a significant acquisition important separate what a wanted how the MinuteClinic care more could you in HealthHUB to little aspects. look talk at urgent drop-off Just of are you're going and going HealthHUB telehealth and capabilities much maybe now physician Is I become the is, on are One given to structures? focus environment little bit how at with and wanted volumes. your integrated And bit in today, on some within forward. it if with you that? is HealthHUB the or of to guess is two about And particular and Those practice forward the is, going thoughts going acquisition targets the retail? part the delivery as instability care

Yes, Lance, this is MinuteClinic. Jon. I'll telehealth and take

And the telehealth we operate visits. telehealth every in that do significant state Larry MinuteClinic XXX% spoke was the I increase, think have we in. So in it capabilities about to in

example, part year consumer getting be and sentiment one to are an in how that of saw this going just it's And some sentiment compares get last in we would flu to to consumer their is their as integral their this got local vaccines? interested that prefer the forward. office. moving research pharmacy So year's recent vaccines flu a consumer and doctor's we significant we And in to they uptick consumers opposed where go-to-market

choice it's how that able telehealth good and provide a example and So looking MinuteClinic like be plus will consumers services that the provide convenience to for. are

could And on using respect just to the the And a on the maybe actually having follow-up themselves the centralized the format? you the looking is how practices that opportunities -- clinicians present with guess in you're on there. I telehealth, deployed that telehealth at are are out it MinuteClinic or

And well just is an one as applications. telehealth a integrated which physician the we And actually the we specialist in, other were related? with daily basis, digital in, concerns accessed increase both as increase, XX,XXX anything behavioral not we about things call seeing we're answer the as an our through is it health let's talked it's telehealth I'll utilization telehealth And as Lance, have well. is dramatic say engagements with well PCP looking as of about increase on a MinuteClinic is Is the increase at. services. of where no, it, COVID Yes percent and type

complementary a hand. to what brings our in believe home do we HealthHUBs community we're with it right So and that back role doing it to us plays

We'll -- time for two got more we've questions, take please.

Suisse. a Certainly. A.J. from We'll Rice question Credit of take

safe. made I impact broaden on could appreciate were the the How differently an respond positioned into wonder the years and the it last economic the been about last do everyone's business. downturn? comments they Benefits went how I XX since we downturn. may economic it's you if all are Glad Obviously, think we economic other to that versus be does-- how Health businesses the hear today time out.

you triad we bigger cost of in and your believe last you of an you the point, provision about latter there the care is issue our of a and And offerings I care with that A.J., about part has what our as the say the the difficult with we're be the and that as become we've to lot and probably going premature home will degree over and of of Yes, assets a our to challenging health describe and looking business associated lot retail recession-proof provision us about look, strategy a I role we XX around lot A.J., that awful it's in year. XX to as our to it's nature hand, have that years. when a the about of changed because asset think you're uncertainties where Larry. we recession-resistant. talked a fact whether the community the the comparison it's wouldn't are at to still this a the in more will integrated economic have cost the capabilities think environment, model. and think

looking Larry, A.J the PBM situation at of difference is, an lot But highlighted, on Larry some I this unknowns. is Medicaid. a And if Medicaid. add so could back have unprecedented Karen where we and got is as questions just In our have very assets. you, diversified a large past we as many

and of some saw expanding testing. we're Medicaid, large you health our have Larry's heard and the very diagnostic in that a around offering and prepared We you remarks services accelerating

to really business in to of -- we're the moving work So there And drive amount tremendous drive these going times. is forward a challenging to pieces.

question We'll of take Valiquette our Steven from final Barclays.

okay. me hear can you Hopefully

in or April array of of physician particular much it any the separate question lower from analytics you in utilization pull higher forward view tied is determine reduction there the to physician quick follow-up an down with healthcare obviously? mentioned that services telehealth, line XX% reduction XX% is visits or in in in-person from And just that April. a Are visits? your to of trends; Just April versus the how from prescription the I'm slowdown capabilities is your March way curious if regarding in in in

Steve, Hi Karen. it's

and over Let were almost our down me was lab be down We our physicians and about XX%. flat. of all XX% our in to the science radiology We just April almost then in-patient And would and about saw which -- health Pharmacy I'll they down give XX%. you other, about pieces outpatient down some and utilization. XX%; relative were services saw

reduction utilization. in could the have So XX% to pieces that case you broad the a array in this of contributed

this conversions would so starts lot April in did a about being I And visit. some when therapy in pipeline. John. say of March that XX-day is as that the out think And I prescriptions saw then, new think in physician of Steve, XX being line about talked Pharmacy, with down, -- the We to is it I take we

start offices volume we that and coming physician open patients normalize. So to expect as start back

and of do something the because quite work I'm to supply problem health not compounding of their our we you've hard at with I we've done Steve, one continuity our seen another thing is have work this system. pharmaceutical chronic The sure has would industry a staying lot want that problem that disease done. the proud to I'm medications and proud the not everyone with emphasize, the those in And COVID just are that news and that the frankly make CVS that that has gridlock care of today adherent to worked with chain

job a been really done in it's that well regard. So

times do an continue remain future. the our for wrap to enterprise just me as Q&A innovation-driven through both crisis to from CVS across up let these healthcare model long-term the continue that, that and you've believe, pleased the quarter. focused and is with well And participants the had it will again, and We we'll as the we healthcare our system healthcare invest growth. performance benefit very business with to So in in the integrated we're integrated heard so, unprecedented underlying growing into on we've dialog proving in sustainable and

safe for morning again thanks please and you and joining healthy So and to stay this soon. talk us we'll

webcast. disconnect earnings today's and CVS Please This a day. time at wonderful does your XXXX Health this conclude have quarter first and line call