CVS Health (CVS) 16 Feb 212020 Q4 Earnings call transcript

Ladies and gentlemen, good morning and welcome to the CVS Health Fourth Quarter and Full Year 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow CVS Health's prepared remarks at which point we will review instructions on how to ask your questions.

As a reminder, today's conference is being recorded. I would now like to turn the call over to Valerie Haertel, Senior Vice President of Investor Relations for CVS Health. ahead. go Please

CVS good Eva fourth and I'm Welcome the CFO. President Relations to Haertel, morning joined Thank Karen Executive by and morning Vice full Health Lynch, for Investor of quarter Vice CEO call. I year CVS am Senior this and you and President everyone. Health. Boratto, XXXX Valerie and earnings President

Lotvin, that President host will remarks Caremark. our we'll a Officer question and answer Operating prepared Alan Jon include session of Roberts, Chief Following and

Our on press presentation slide the have been along with posted website release and that with to our form filed morning. our annual we this report SEC XX-K

and we consumer our current make our financial performance, products to of market this forward-looking statements well industry our and financial will as the conditions views call benefits and as expected related projections. reflecting our services future During events, certain future

may actual We could Our differ information materially forward-looking uncertainties these press review to SEC reports and in statements form in what concerning risk risks that forward-looking indicated XX-K. section risks and the are the to we to results encourage significant you be file in cause subject from uncertainties morning's those that strongly in regarding included are cautionary described statements the with factors this in statement release particular and in earnings the and our them.

on you with measures when regulations financial non-GAAP this accordance portion comparable call about year. reconciliation GAAP the investor press find archived talking it of morning's During posted SEC this the of performance is our non-GAAP on company's financial we measures will website. will the where In relations call earnings one be and condition. a to use in our measures these website can reconciliation for Today's document being broadcast and the release

turn over call to Karen. would I to like Now the

call and morning and our today. Thank thank you joining you Valerie everyone for good

unique the to for bold for Before future. leadership. Merlo's the healthcare job country. Larry He we assets a our Health to like I'd this CVS set industry did foundation incredible change and begin path in together establishing an acknowledge Larry our bringing

the over leading the transformation company. diversified enabled to become Our us decade health nation's last services has

As of allows meet they consumers their bigger across part to in brands communities are the in one most everyday country health. America us and presence where the our becoming trusted of

and Our health unparalleled capabilities, in more CVS our and services support Americans with year. nearly we during day to a members times to important. this meaningful with to in that on their uniquely locations. them the and moment and times home achieved been us CVS purpose support testing communities our responsibility our COVID face-to-face virtual XXX,XXX customers, We am difficult colleagues vaccines, these team of all over care past lines on reach of and delivering. unprecedented we've are for has every and their care the millions never I throughout our front of million CVS understand Health and helping hundred help in relationship proud on health These people to colleagues better positions are are and path every lifetime. people the

during providers the we nearly PBM supporting investing growth. in continued history. our our Advantage. our in performance, one cash of delever nation's X% strong crisis revenues results prominent solid our $XXX business billion and biggest for operations strong from to of adjusted in We to earnings while commitments in served health as growth our working. achieve XXXX our We once both show business, government again in adjusted and model while our business to Medicare Turning strategy are communities and continue a results future growth. $XX achieving flow generated customers, strong services year-over-year in exceeded EPS billion. X.X% grew delivered We that delivering We public revenue of role We

of to mid our guidance more continue adjusted XXXX against our detail our EPS we to performance strategic with progress into will and outlook. and about single $X.XX roadmap our baseline. digit much Eva set $X.XX go We growth from

in We higher aggregate, COVID our fourth to quarter, healthcare in seasonal to total levels segments. for line our We services of delivered with X% of Turning normal were expectations. lower strong the was with business total In operating utilization offset results offset three services. traditional near Benefits in business. the partially by Healthcare the by government levels partially return in our somewhat related the in year we declines saw increases costs XXXX Adjusted by income revenue more segment. as grew in businesses commercial

we into lines in XXXX As on January. year for Medicare of of growth growth. product within another are each we very our head Medicare Overall strong we track demonstrated

careful local, individual consideration the re-enter we've For our voice market we as to policies, for programs the decided and of state XXXX. access years After levels Americans. to have public regulations all January used to national advocate affordable and care for support X, exchange at that

earlier participate remedies ACA is has these the structural stabilization in of evidence is As now markets. evolved time It to issues. for market there and us to

that great show value to those will can who coverage. we bring We seek

to You can our expect and plans exchange future about more updates. re-entry hear

Turning to our PBM.

results. Long-Term customer programs health medication our of outcomes. and level the our and in to retention business clinical to achieved in subscription new momentum Care the has We customers members. continue rates demonstrated bring which segment And with customers adherence been our positive pandemic. Our our we winning we in advance Retail our pharmacy to resilient engagement and value loyalty and we the improved increased and XXXX. strong achieved services high We We finally satisfaction segment also

trusted rapidly year our market needs strengthened partner role We in a last community. and we COVID and pivoted new personal healthcare we as response for COVID-XX. delivered innovated the customer to meet in solutions During to the testing and

in the our locations according testing million our XX% to touch social the nationwide. U.S. organization than digital testing administered also points. tests We've CDC seamless XX have for communities a in at experience more of Today CVS with significant administered largest We create Over the index. approximately support across remain X,XXX to vulnerability community these advanced need been we capabilities tests Health

with our launched we work These they X.X have to to grow. help to solution Health. leadership to To-date over are interest with individuals through relationships school and return new hundred approximately and Such people continuing enrolled to strategies. Additionally, representing as enabled execute COVID consumers us million efforts. clients their million who CVS return X a establish employers testing new our are universities ready

long-term and the administered million more were of administration one vaccine to in We patients care and facilities staff skilled selected doses We've facilities. across first than planned. vaccine the with the month Turning months. to administration the in We complete federal will for the as country. second the facilities vaccines. the care by nursing of doses several We've government X all vaccine doses as for the been vaccine over and of long-term readiness working XX,XXX distribution on partners end completed

doses by linchpin plan Federal for to the This vaccinate by million the the also for as This Americans long-term Pharmacy end We the is partners living track to mid-March. Program. national our the commitment administration's fulfill selected of summer. care facilities. of facilities vaccine of Partnership administration to are We've the Biden will one on both administer been assisted complete XXX vaccines in of

has As across overall each locations immunizations in-person over very customers in part XX XXX week. states approximately CVS feedback and of channels. positive across and both this program COVID from on we Early our digital experience are been XXX,XXX administering their

We will continue to increases. vaccine add supply the as stores

will XX the to to million doses time testing With we depending the administer with XX engage month for employees commitment through million new availability. Health administration have services. and customers hard the capacity and work vaccine on CVS supply of of our per first Millions

bring. the will expand that create deepening a our the We customers. opportunity base health relationships we with will to use It value opportunity this customer shape current while experience demonstrates to

health important have strategy with assets company utilizes integrates measurable We and care. the consumer our of addresses superior all a total for experience and cost that made them that services our progress firmly as

are professionals model. biometric and of we personalized that platforms care, within to a consumer-centric creating points local health example, healthcare all combine remote monitoring access For

an diabetes program this. example of new is Our

pharmacy members. We expect in at our the Aetna add revenue Key the have MinuteClinic increased to cross members We pharmacy zero locations, and fully formulary plans. XXXX. Benefits to copays standard XXXX. new integrated XX% in to segment in our million include services. Caremark X.X to penetration integrated approximately with had and incremental use markets deepened in reception Aetna our This features this expected plan connected quorum $XXX plan, result of dollar medical We've million program of infusion and in about approximately is XX Healthcare plan in representing strong sale

of offers patient-centered and with end-stage services dialysis kidney a We hospital chronic approach. reduces delays more the disease It options. onset home program simpler supports into are disease. to the better bringing renal people treatment admissions manage This

kidney members. And currently will oncology and the cohort eligible across available finally over to a treatment on million engage clinical patients patients matches our program trials. best program start Our helps eligible targeted businesses X.X to

Our the overall of cancer care outcomes at point goal patient journey. is to and every improve costs lower

Our systems than states program has expanded across Aetna's over of XX% XX provider population. insured more to XXX covering oncology

MinuteClinics to we complex engage with broader their launched copay health consumers care. new care. costly affordable to at designed prevalent, concentrating lives on we in medical their copay impacting low or are As quality access benefit most conditions expanding offer access plans and addressing We’ve also no to

today. enrolled first our pharmacy their X to bringing use million group MinuteClinics In XX% the CVS needs. was CVS adopt and product approximately scripts healthcare strongly to Medicare value continues of small achieved members XX%. increased from to to and members Assets of have This together which the demonstrate we support XX% greater across We commercial retail

integrated including health just We expand also hubs system. healthcare we over to engage with are to of many health channels our that continue complement XXX XXXX the with hubs underserved their consumers in for one approach. traditional We care nationwide ended delivery have Health through locations communities. access

in-network Consumers footprint virtual We both with needed. E-clinic care directed virtual service in then we continue can with face-to-face the convenient care our They care to for provide our interact experience. able to launched or to virtually. MinuteClinic with expand now a episodic We as nurse help this capabilities. are and lower as Through launched practitioners care across high Columbia. District our We care integrated our customers sites comprehensive offering providers MinuteClinic states way. XX provider quality of and in primary a such care cost settings Members other are care program. virtual longitudinal in of engage first

by around where healthcare. closing, are delivering need we centered creating superior starting momentum. are is and value system strong they We XXXX with want In that a the consumer

shareholders. a health needs consumer our solving value belief customers, accelerating pace strategy are all; that's built upon of to our our will our people We our drive consumer-centric progress communities, the our create and fundamental strategy, for

further leverage driving. refine to will are in the U.S. on underway of top healthcare and develop our that rapid We many in only strategy trends but shift we the places not in

work focused we touchstones As strategy the our following the this in areas. of will with remain move forward

We of will expansion portfolio enhance of digital of value and the channels. demonstrate to platforms consumer CVS Health's experience We'll through connect services in-person the seamlessly and the assets. unique that integrated products

expand lower our improve medical will creating costs consumer-oriented while with health, that portfolio We new outcomes. innovative solutions health better

customer build right is confident performing thing am be health improve to purpose way experience the continue better healthcare a to is and reflects the lower partner. our help empowered well-being. in passionate CVS trusted serve Health about to that will future their will people path We we their populations our I consumers access to the enhance and that health. on organization costs, ability do in and for diverse high our right

to Now officer I'll it chief Boratto. turn our financial Eva over

morning and Thanks good everyone. Karen

in time. fourth stated As strong the continued executed this on during challenging Karen we as our performance the our quarter strategy enterprise across

For We've importantly expectations. the of rate integration $X.XX full end XXXX synergies hit share $XXX year per adjusted million synergies earnings embedded the above run we the in achieved over and the the delivered high of business. and fully are our

pandemic $X.X billion year a above year $XX.X our quarter end the we the at we from in and the to billion in maintained XXXX. the goal billion invested of low which ratio. to dividend our Aetna operations remain in the bringing Since four support accelerate $XX.X track of full on leverage We our is and exiting quarter also three and debt times close customers with paid net our leverage have transaction than ratio billion the and our the we debt of paid more while generated our future colleagues During expectations in to high down we $X.X enterprise low of growth. times down cash during net

X.X% increased investments the quarter. segment received was by our quarter during payment line adjusted driven in year-over-year our the total results income exclude reinstatement segment the the products fourth Adjusted Healthcare Total of respond membership sequentially the redeterminations. revenues our expectations with in ACA and divestitures $XXX and our to reflecting states risk testing at eligibility Benefits XX,XXX of HIF. largely government up and by our Looking with the costs PDP revenues planned Adjusted comp operating business. the Aetna treatment quarter by the benefiting COVID-XX growth million suspending membership and fourth to increased membership related Medicaid pandemic about continue XXX,XXX about COVID-XX workers customers, as

additional strong in increases due portfolio sub-membership] continues XX,XXX offset were members attrition partially membership commercial growth X%. Medicare sequential about Medicare a our up COVID-XX. [Med with Advantage increasing Additionally, about of driven and to show by These to growth modest XX,XXX membership decrease by over sequentially

the with of to with was testing of excluding reserves. an baseline QX, basis by of points divestiture line the confident related The in XXXX our year. representing costs, than by prior QX, consistent the and HIF. the PDP payment quarter Overall for days payable day expectations treatment driven increase QX, investments, was a pharmacy lower our costs. the by was COVID-XX our were ACA XX in for payments. XXXX MBR quarter reinstatement COVID-XX claims higher Days remain business with offset our adequacy and and We adjusted driven the largely generally ‘XX in the the utilization fourth higher including MBR partially compared line related XX.X% XXX Our of

flu Services, pharmacy year to inflation. quarter losses of and CVS growth. declined revenues client to drug several welcome Momentum price pharmacy and Moving investments operating to also compared specialty new was support brand clients claims higher customers to versus economics decline continued managing approximately and fuel in The to with partially generic success pharmacy The by benefit with adjusted Health XXXX to the retail by the sales. X% income inflation, services partially growth in a approximately X% from primarily by immunizations grew Improvements previously long-term and and year-over-year driven X.X% a in well our And our in continued net year X.X% as benefits last season. and grew quarter driven including the price Total care decline as disclosed in pharmacy diagnostic total continues continues revenues ongoing compression. our increase in from by by X% total offset specialty X.X% reflected Pharmacy compared our X.X% volume driven purchasing launches last store testing brand finally prescription in QX strong year. increasing front last the in offset successful fourth business. revenue

approximately and flu-like of affected cough was part nearly Our in was scripts sales programs. driven continued XX% points by million COVID-XX diagnostic adoption and operating cold for and Prescription the pressure Gross XXX segment testing the in offset care and driven COVID-XX. by discussed the contributed basis cost quarter. the XX%. nearly flu growth as year-over-year by versus continued related to Adjusted in items incidence mix growth of declined Offsetting as XX.X% reflecting the reduced margins partially well our flu XXXX front declined store illness related program XXX patient I've which income reimbursement testing. lower by

HIF. development $X.XX, of is as expense $X.XX of about single our line tax a compared debt from mid adjusted the X% XXXX realized in from our of in our gains QX adjusted the lower primarily higher return year an and X% to Moving down expectation. was guidance income XX continued full to $X.XX and excluded the pay to with the practice result baseline increase expected approximately losses incurred be and digit years’ to outlook. we Transitioning our interest QX, or range our XXXX with EPS due to on to Consistent growth to items in statement the other capital of net are of rate prior

We to the contributed outperformance. of that and in expect timing payables $XX.X flow XXXX. billion XXXX certain from receivables our impact includes cash billion to operations $XX between of and of This generate

Our digital expenditure app as continue investments and enhancing in historical $X.X to to gross expectations is our our capital our hubs. health invest workflow systems in $X billion of we and we expand and levels billion above technology

As impacts there the positive noted negative over from and behavior. XXXX were across course many from of changes that offset COVID-XX, in segments stemming consumer our

adjusted in enterprise growth We we demand are to at is healthcare. impact pleased and pivot our with on services to products an continued XXXX expected to share. our to our immaterial deliver as to a create deliver In better earnings COVID-XX way have the drive per ability

have slides a have long-term have to expected is retail to segment. we benefits the COVID-XX an care As benefit unfavorable impact temporal healthcare in to highlighted our and the segment

to enterprise operational our we in as and by we continue such reduce working Key changes as office we resulting along about XX% will improvements savings initiatives we ongoing operations drive well our segment. each of deliver as including throughout digitization our with are to centers, billion in Importantly, to workforce expect and savings year. of changes businesses system which cost will how decision initiatives management and our real move efficiency billion from $XXX include between within productivity drivers the our ramp space as COVID-XX technology call estate and $X.X

billion range billion X.X%. be with expect of operating billion full-year We consolidated the to range X% billion revenues $XX.X up $XXX.X of in to consolidated total $XX.X $XXX.X adjusted the income to in to

share. We are maintaining our shareholder dividend per of $X

million $XX.X billion. in a to business. segments XXXX of transition result lines Partially between be the our large is in Medical continued in be growth strength by Medicare expected in of membership fueled products $XX.X members is to Medicaid of Medicare and medical HCB expect Moving to offsetting Medicare of total revenues two $XX.X end million we on of at to the growth our each contracts. the range of billion $XX.X the as

an well We includes for of $X.X that billion. XXXX our range benefit expectation believe the our state plan us unmatched expect and guidance Our positions to enterprise that adjusted utilize income healthcare in designs billion not XXXX. in redeterminations the beyond. we operating strength return do of Within benefits assets $X.X

the the to XXXX reflects decrease approximately recent to expect of the attributable growth fee Consolidated $XXX strong membership. income million the to HIF impacts we million Appropriations insurance impact and adjuster changes Act, Medicare adjusted largely million operating approximately the COVID-XX outlook the negative Our from and of $XXX which risk removal $XXX in Medicare of regulatory by

MBR is to single brand be rate retention expected driven The and season selling is maintained compression. XXXX mixed approximately X.X partially purchasing income expected is plus reflects digit billion, normal billion improvements the billion our and wins full-year economics operating in $X.X shifts in basis largely Our expect XX% to net range pharmacy growth to XX.X% range strong business of levels adjusted of with and we Pharmacy revenue minus continued be continued lower billion the removal $X.X total ability industry-wide of$ of in points drug and drive more complete to of by to gross we $X utilization. price the driven range. a to specialty offset business. billion revenue The our or by risk HIF, mid return inflation further of growth be Adjusted the which in Services, in within to billion. strong $XXX.X In XX $XXX the specialty by new to

care to of to $XX.X we billion revenue long-term retail $XX.X billion. Turning expect

$X.XX vaccinations. return execution expected to continued the adjusted provider Patient growth successful strong Programs, and of our $X.XX visits range COVID-XX of expect We the of in by driven script Care

as expect year. store throughout traffic move the we We will increase front

unfavorably $X.X adjusted benefiting of impact We to volume positive from approximately the to the with from investments in billion COVID-XX. also our to by affected expect The in impacts of reflects to front COVID-XX of income continued $X.X be range and protocols. be continued partially Operating $XXX these adverse pharmacy offset million programs by vaccines million net from the growth benefit and operating billion continues $XXX associated pressure. reimbursement income pharmacy COVID-XX store testing related and revenues, cost related and growth

income our to other statement management pay about debt of expect actions and to expected reflecting tax down we Moving our the interest the items, be approximately expense liability rate of is from HIF. effective repeal billion the XX% and $X.X our of benefiting

is the In on the lowest cadence of quarterly fluid quarter. expect higher we and first season. year. part continue on in course expected advance persisted we half front the expected expected vaccine traffic QX. perspectives to ramp but the financial our lower segments guidance Finally script our Healthcare deliver weaker achieve in me to in confidence to and lowest let the in the be In to share to year. of to and be course initiatives store Benefits the over for program. our earnings QX Cost Care to earnings is the we Term are investments due year to lower XXXX year the savings outlined QX also the some is have the of over has today. into by the quarter across volume summary, ability our Retail impacted flu and earnings January our the fourth Long expectations

progress are growth. toward making long-term sustainable We driving

to the future. of the meet are accelerating of health consumer-focused strategy As our needs mentioned consumers aspects Karen we

grateful Before take her the work for thank CVS in during here to wish advancements I moment was up for Health. time investor next I opening it made the venture. leave a of next that like it I month in am to best for luck but Valerie to relations. she Valerie am see Valerie Valerie would disappointed over our the the questions, with

let's Now up it questions. open to

JPMorgan. Please with ahead. And Instructions] Lisa question will go our take first from [Operator we Gill

Thanks to first hope back just comments wanted go I Karen, me hear care. made around primary to the can you okay. virtual you very much. I that

better you first in that the that virtual primary today physician how care, How maybe then into a want bit better they for network virtual it one just just MinuteClinic. to understand when working number people about is understand then to and help me the up were just able of XXXX? there? the secondly is you people program set you many can to program have how that you does and think So enrolled little I enroll that come

Lisa. Hi Good morning.

program they virtual is started care first do is of care to virtual we're They they a that's doing doctor this the seen first care is what one person kind select we've with to On and that that primary primary needs large accounts. send a them they our physician. if national interact with then that what be Essentially virtual the the MinuteClinic needs there but contracted so with be into would our customer of to we pilot it that forward. expectation go we've we'll first then way large one providers It and national and refer is and if would out care. virtual continue they're is primary in-network to as our with in roll other then there they but be this them their interaction and

kinds we of that Can client program potential things? about versus you kind savings a cost around what to these as give the traditional idea is us any commercial of think interest like

to little little early too account lower to but so national We've it early tell being primary a It's we're care seen a with we expecting savings physicians and cost for virtual to when lower point. at customers. costs pitching are this tell that's the but

guidance capacity for in you XX million the follow-up heard have you month, per to Okay. XXX,XXX guidance XX then for million do but around the And the Great. actually have what Eva that around you the for would comments I in what just week vaccines? at this gave today? us my per be point

that Thanks X.XX% question. about the Care start Lisa. it's for as percentage of we're fluidly ready I Obviously percentage Retail depend segment million you contributing do the the of to to prescription would look availability XX on vaccines still as X morning selection per to I'll to X in think X.XX%. but Good supply with about Term the guidance of XX Long growth the said Karen points Health month. and of million growth. at that CVS

term to contribution were complex vaccinations through say the costs profit were contributions a is about the visits site was long care Lisa, we've would it that with EBIC I the As and minimis you stores of profitability think pretty as from administer and vaccine to that flu the the vaccinate as requiring our a in program worked vaccination similar the there for the lower multiple higher. individuals overall de process to

as So de I that would think minimis. about

Okay. Great. for comments. Thanks the

Robert will question ahead. with Jones Please go We take from Goldman. next our

the the could normal at to much closer year normal long-term questions. the about a care just to ex Thanks so that to in on returning of ex-COVID we enterprise benefit, off maybe Great. we $XXX COVID so million importantly as thinking one $XXX other $XXX to on or follow to expect clarification through million level? back retail this just million you And benefit of to $XXX get then as assumptions I the more up just the about related the guess the just Maybe million top the we the the be underlying think about XXXX share little year? for bit is point baseline, facility how of you're $X.XX

some over I'll Eva the Alan of for with some and it of the metrics. let me assumptions start to kick

in modest business. back Medicaid to we year. that On or Relative we're that all emergency a utilization utilization public and head assume to baseline. impacts the place normal stay assumptions first so health we that the in quarter assuming the then would the assumptions for we Obviously have deferred

the near had had an As impact COVID XXXX on we utilization year ended baseline normal obviously we that. of levels of

but modest year returning the normal about on levels some the virtualization to Eva? very think think about you as utilization front. So

I offset incur. side. the COVID as we cost categories. care million you look cases continuation that the as on by benefit. At the impacts the remain level I as benefits couple a elevated One Yes and to about our on COVID to from question while would think testing the vaccination de Bob at of retail outlined impacts minimis retail obviously and of HCB program million your side of the on related the said the $XXX that across long-term is incremental enterprise the $XXX just the the business will side is Karen

it. ‘XX. to then decision more markets quick re-enter could many be targeting? And just process might and Maybe the a individual just that interesting guess an you a geographies there about and Got decision Karen if little bit for markets you as you follow-up how one I year about share think

Yes.

we for the a obviously individual while. time. it's studying What over stabilized been So we market have decided

of in Some opportunity there's we into to gives million put into the million XX CVS those. Aetna we remedies product Health of the participating will a still market the in the our competitive big the view we Health We to haven't XX people relative put place. market. combination a to of number the the first Assets that that market aren't finalized put today. markets insurance and a been It have that us Clearly CVS unique product branded be and

second So come the we more when talk to in quarter.

much. so Thanks Great.

And ahead. we will Please Stanley. Morgan go move next with Ricky with Goldwasser

Yes. morning. Hi, good

Karen any us members Aetna what in you that benefit? zero you notes a health an maybe of kind to the have earlier members of third just talked Can indication and are copay that update using members So of early give hubs. these any about about and been is but quarter six how the weeks today percent again the that have access it's

Yes Ricky.

went on cost turned XXXX. Medicare as have as members copay no we well that from X So corner that copay, zero this X we the the X We the put into so year million now have to benefit. Aetna it we business

have seen MinuteClinic from business small on copay that adopted visits this increase of in XX% where this an seen we've about individuals. early cohort of our We group had --

that in indication are So interested with copay that people it using design. MinuteClinic using is an or it

able So we'll million that year. is where the that's though, watch and are to throughout be the that's we the number X

can a more bit little like as just business, you mix give in business on change follow-up PBM kind the a the on And the in of if season just the the into about strong color you remarks XXXX. just and prepared talked

about mix key will into XXXX and for are the to think So you for how and year what continue owning you opportunities marketplace business selling should year next in up new this products the think new are we that

approach integrated very comment with just and the PBM We're Ricky, pleased on side. our PBM. the first let healthcare with me

a incremental remarks had XX% As million I new $XXX $X.X mentioned business in and we integration. billion us drive to revenue. said The of That been about PBM sales. for of our retention have focus Eva has opening

and and So we're give to business me we're turn more around it performance with over the who details PBM of the that products can pleased the quite you selling. Alan services let the

Yes. Hi the Ricky. you Thank for question.

to key just resonating the in what's couple on respect think I points. with there's So of a market

was that separate up to to of from the for now specialty So the That's the terms sort earlier whether continued digitally one connect with right and the our own also prior better our for a and seen the us management for of us past oncology. whether really up It's area customers groups in than and billion about year in XXXX important two things $XX what's that's we in we've pack as of respect differentiate that our of products things billion with when and to that it's the what's most two customers, $XX of connect the is thing mentioned renewal exposure look years it's compared advance series of to range to ourselves management years. is digitally our that to smaller driven customers we've at a renewal. provider

Thank you.

Cowen. ahead. our And Charles go from next we'll Please take question Rhyee with

Thanks the guys. for question taking Yes.

integrated members about first you a Aetna guess you are seen maybe in you membership. Karen, was Aetna's members cost Can think more First sort diabetes in the by terms about I this this them million program talk I question savings of insured about, X.X management approach? XX% little XX% Caremark going of and you have bit about talked and said represents through of is clients the in kind that ASO what fully of others participating are and data the representing

Yes.

So Charles diabetes the on just comment let me program.

approach. I split mentioned can the XX% of as Basically gaps you some it's we don't multi-channel optimization, focused do and members. focused a a adherence, targeting all X.X it's nutrition of in our We million member monitoring. get We're represents lifestyle members. medication on and blood split. certainly have you driven five We kind data and identification areas. First point. glucose at medication of know specific on The screenings, that

results of large about diabetes showing Medicare XX% it. have are engagement launched well We for preliminary do we’ve rate that group on but it those a account as engaged We're So gap improving. closing members. our is

results new what the is preliminary we've relatively with it's So far the market. to seen pleased we're but obviously

to need we So it is longitudinal see sort study but of that resonating our with customers.

the general channel? And broadly more MinuteClinic is through hubs the it health or delivered being is through themselves that

through integrated from hubs at being Caremark Aetna through and we're it delivered and and the both really health sold itself perspective. the teams looking being It an is

All have got one right. I follow-up. more

digital efforts are to once appointment? for for talk the digitally that the through then app are you you first Are coming CVS little percent through like they is they talked they're first of of store a they digital retain about strategy out and book that Obviously a because in lot also coming them looking bit members CVS to or can first they coming example CVS maybe the through How the about through maybe You to COVID channel. post, reaching time. what the leave?

Hey assume and about you're vaccines. testing interactions the Charles, with our talking I

All digitally. is digital of are it for coming an make our are and experience. in appointment a customers required They all to

pleased been our to their that they've others such those from We are trying having. they and and our systems digital also incredibly received to the get those most response positive digital have we digital experience. are in but our in getting don't stable. experience team when coming people we're have level I'm digitally. response as customers results are from have elsewhere experiences positive comparison our appointments of customers of We've the been to capability quite receiving with customers relative for very phone Clearly

you. Thank

We with next will ahead. Please with go Borsch move BMO. Matt

Thank you.

on early demand gather influence Just in some factors we utilization what if your year. Are catch deferral that of the sort question expecting much for outlook some or this you're not normal projecting and see will of you your and I utilization really are then pent-up up that after that. year the view there?

Hi, Matt.

Hi Karen.

let How spent a healthcare year we will in to projecting we system. the out of and are pent-up system tell me the also would demand. levels demand pent-up gaps are members lot reaching on I just capacity think So have close of in to care. use not constrain that you? time We our that clearly this comment you high

probably sort pregnant that we been we Obviously so but we didn't there of everyone periods specifically I virtually an that not that have the that long diabetes, of that So is were the have services will a huge individuals catch so impact moms occur very time. over them think that have that if system could we we out connecting so to it connecting demand acuity to obviously. were pent-up could targeting have we them are constrain reaching them but

could Well, if that with go year? commercial how coming and things I with makes into new follow-up the did sense a accounts enrollment the it's large

I'm sorry didn't Matt. I hear you.

asking I the sorry. retention I'm X? January just was the and in follow-up large for side HCB coming enrollment a about account into on coming

you I have Relative XX/XX/XX it flat retention. for What to as solid as membership. was essentially national would had was commercial tell membership we pipeline did a would account it not the assume strong We anticipated. for

you. Great. Thank

of America. our question Bank ahead. Cherny And take of go Please we'll from next Michael

a with in to on some and some you've want I digital of regards first more primary investments that that morning. process have basis of you other you're maybe a care the either to to Good of overarching little the the bit thought the components. sprinkled some making. further Karen dive regards with

step that how them order spend you digital of measure to making. timeline the of thinking enough? you be to about kind factors hurdle you especially of in investments are What rate strategic you and and the that about As the in judge success the some those up you successful in conversion of are you're giving the think yourself have terms to need

Thanks question. for the

are As or capabilities investing would in we person demonstrate our seamless digital more connections connected that digital capabilities. in our to to imagine experience clearly you

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our talk Eva. can it turn me to She Let about return.

for Yes. Thanks the Mike. question

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a So you. I'll examples for highlight couple of

utilize First XX% to scheduling out deploying our this and intelligent deployment vaccine XX% and the our able for we've of to took center. see what the we're agents centers the of outset this calls at the technology our of call across stores been technology call we and COVID is

time. of meaningful in short real a very So period impact

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color side? the on could vaccine all I quick ask you've If more your pacing. Thanks. one current I around the appreciate just one given

of ones think of J&J able or about what Is rough having the the on contribution dynamic in having of As is current the on built some what's to that you're in what side is the that available dispense? market? and on script other terms or on dependent to of new you to vaccines, molecules some dependent that's that much relative the how coming

of to Obviously approved put up needs country to dependent think has currently ramping the as upon J&J administration numbers the getting current get anticipate Biden get out get the approved allocations to it vaccine, is for will the are Our the the have the on approved. we rest year based there. about the that has what J&J government we that

Jon, manufacturers, I add about And conversations with estimating end between the is we're the of and pharmaceutical in of would say our June. vaccine that XXX this now million doses just

to supply in April. up there's good going and to it So we should think open be begin

with Deutsche Please ahead. Hill with next George Bank. And Thanks. move go will we Great.

other taking growth KPIs, and had targets in guess earnings mentioned hate hold XXXX that long-term think look what XXXX get we you to other question. that and Good any far leverage Eva forward but of the the or ratio analyst of thanks of or couple double-digit other morning any the reset day XXXX would should targets a guys the the earnings the for do provided ask is I I I the COVID? target there is reason because

our focused Yes. what Thanks George, growth long-term remained on question. very I'll we say outline. for we the that targets

a As now. very fluid it's right you think about environment XXXX

the it's on explicitly we're focused difficult over to targets. comment but organization forward to deliver on the our term driving longer that So on

about pieces like my brief way COVID, of the retail I tailwind and maybe the particularly the is I'll is any that that, the moving segment ‘XX. about there's the the LTC looks it that follow-up you in right reimbursement? then be all it would I big to Okay call and don't other growth to think represents know could talk guess if

that one. George I'll take

care at programs As %X.XX% COVID-XX as which is our as includes X.XX% XXXX, rate the the in algorithm to growth retail growth you vaccination. single well rate prescription look strong high attributable to our digit patient

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Okay. That's helpful thank you.

Bernstein. Wilkes Please with will next Lance with ahead. go We move

interested and to Yes. or understand little investments a through will bit in be about Could was which just in Good talk comment just organic targeted morning. an also increase those of the both it on areas you acquisitions? pace your

marketplace. Hi digital assets Lance. our we focused have the on for investment there organic also investments investments into re-entry technology, ACA our to really and Relative some are

me So incremental comments to those it and Eva turn are let more of some primarily the add here. some to

I think think it all. Karen, you I got

Okay. Well.

on related any already. obviously of rules, just org added you're little about for to that? structure, Perfect. then your new Thanks. etc. talent as implications you talk you And bunch comment additions there are that thinking and then could just a a about bit Can if you've talent

digital also workforce Officer who our change, brought can in the that with brings brought the is three drive leader who cultural organization. brought So I'm onto individuals talent the the of our significant Peluso who and we consumer team. People again Havanec and Chief really brings quite new in Laurie retail experience. Lance, experience, and have leading board. the new we've we've Michelle new diversity brings pleased a also experience, help the She some Neela future. in of Montgomery digital inclusion team great, marketing We've customer on and experience across

drive the very to pleased talent of the forward. complement business with So

Great. Thanks.

we for Operator have time question. more one

from we go A.J. Rice last take question Suisse. ahead. And will Credit with Please our

everybody. Hi Thanks.

to margins the in this think sort where you asking this Just land year know are about do you of X%. I M&A and February morning decisions give XX-K that'll this numbers. national cost flavor outlook, CMS little up coverage us for the talking the is file the Could course you're you're your a and I maybe maybe the morning, It and about of know go Advantage like of out with looks medical of over year-to-date care where CMS makes Medicare year? you increasing think local going question

Hi A.J.

Let back. step me just take a

Medicare at the products have January our and portfolio. as in Medicare business I of it's look of each we to in portfolio a products grown think So in our important

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files you strategy in as in supplement strategy business MA saw strong very in that impressively was business large you Advantage a grew XXX% in our [duels] commercial XXXX. progress as to the made and We've had a growing duels ours group saw part Medicare of would deliberate business. And business in well. as also We've in We have We our our then our January. grew morning performance our that have as might Medicare a group recall conversion well this we're of

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targeted margins are We business at A.J. targeting our our

expect that's the we where will performance be. So

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Yes.

still to So our our for we're the evaluating come IBL market. pricing, more

question front more So answer come and to on ask then store you. to Jon for that relative that to vaccines let me and

see Health we CVS relationships customers. the customers So convert opportunity with them long-term and building do to with vaccines an to new

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And ultimately we passes is end. then of So MinuteClinic the education store these coming pass customers shopping remember, through as our said in care front from digital on to every one and earlier boarding.

their email. have we So

the their with regularly. them We message have text and communicate to ability have we

think customers CVS to business would as the business. would I the about their it new I just add-on So front adding of plus store store. getting pharmacy and it front their beyond channel think

this thank to like for call everyone would morning. I our [indiscernible].

I'll see on pace for say to we and With for that strong all with strong progress you health joining starting employees as do measurable and made approach services thank drive can want today. we're our progress you important and As their are momentum a company, thank of of consumer-centric us performance. to we've again our XXXX our strategy accelerating our I

Thanks everyone.

Call Health and full Webcast. year and XXXX Earnings concludes quarter This today's CVS fourth

line your disconnect Have day. a wonderful this may You at time.