CVS Health (CVS) 3 Nov 212021 Q3 Earnings call transcript

[Operator Instructions] Ladies and gentlemen, good morning and welcome to the CVS Health Third Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow CVS Health 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 Susie Lisa, Senior Vice President of Investor Relations for CVS Health. ahead. go Please

am good Guertin, Third and Senior Welcome the Financial Executive Health. to President Lynch, by Thank and Officer. Vice President XXXX morning, President Earnings Health Chief I CVS for Quarter Investor and Lisa, this Call. CVS morning of Karen Shawn you, Officer, Relations everyone. joined Executive I'm Vice Chief Susie and

Services; that Dan prepared Jon we President, and Lotvin, will will session include remarks, question-and-answer Alan Retail Executive our Neela Following President, Roberts, Benefits; a Pharmacy Finke, Healthcare of Officer. Montgomery, President Vice host Chief President Operating and Pharmacy;

and release that press website, filed along been our slide Our posted we to this our presentation have SEC with XX-Q Form the with morning.

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

subject and encourage in we you and our what and Risk included particular, that risks morning's the the the release, press report Our our this statements earnings in with strongly may recent We those to from regarding forward-looking these on in the them. information forward-looking significant in be materially SEC could statements cautionary XX-Q. annual Factors uncertainties are cause in concerning most to described results differ statements risks filed are in indicated uncertainties, to and actual section Form Form XX-K, reports that review

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

call over the turn to like to I'd Now, Karen.

another good and today. Thanks, expectations. for thank our and strong quarter everyone, morning, and you joining delivered exceeded call Susie, has Health CVS

helped in each our broadening We and adjusted health around the to strong progress accessible raising outcomes, are consumer. of in and quarter integrated fight core reached access experience revenue across centered executing businesses, communities costs with We guidance. care third millions improve XXXX, For have consumers the quality growth a sustained Throughout we made by our healthcare strategy of the reduce deliver we pandemic row, help care. in to convenient America. an EPS

membership of was quarter, This delivered cash higher strong growth During retail. well healthcare operations as in We as earnings billion. growth and the third share adjusted led generated double-digit of both XX.X%. XX%. benefits $X.XX revenue per operating adjusted from pharmacy of income volume by grew we by $X.X gains flow and We in services,

results will and adjusted higher guidance per which these momentum, to we Shawn our outperformance positive $X.XX This continued quarter's share Given and earnings $X.XX. reflects the discuss outlook, are guidance raising shortly. to our

co-pays. needed, our with MinuteClinic Health program. launched selling locations and strong XXXX conditions, over our More chronic demand pharmacy health often assets, season. mental our Care solution demonstrate the our integrated Primary complementary are for and health offers year, health as care for of CVS consumer Earlier virtual zero points meet medical seeking again together, Virtual that and work touch physicians solutions members continuum, the added and health of network a National and services, million new management including integrated X.X our healthcare across health support, products. programs wellness We customers to that through care. is to bring This convenient this face-to-face value, XXXX customers pharmacy the services market-leading such national There we unique healthcare deep results together quarter how virtually portfolio expertise, access when Third first and vast needs. in

Our program bring accounts Xst, innovative XXXX. the of over marketplace. products with of to grown This January and members is to as eligible XXX,XXX our to customer nationally ability XX scale has an indication

recognize Solutions, and provide we community, of Care the virtually. importance home, now CVS customers ease Our Health, access the and the the of in

customer care, increased business operating the government to high growth COVID-XX, retention Our quarter, benefits X.X% our membership an with the year, adjusted generated helped higher product Strength new Healthcare despite are rates a in book. income Medicaid. lines all Medicare and versus prior in to of model. Commercial, and deferred commercial testament services our wins primarily net year-over-year. related sequential of drive business revenue costs strength of increase across X.X% We three

our and Our medical for the full costs, primarily year. above non-COVID driven by baseline our emerged our was expectations. benefit believe cost COVID-related exceed aggregate ratio in Underlying commercial. line Medicare will produced medical sequentially all strong levels our achieve Membership In business expectations, product will we driven in portfolio, We results performance, reflects by with dual in products. slightly in of and service strong growth Advantage X.X%. costs XX.X% across We Medicare for anticipate Medicare Medicare strong reputation double-digit Year-to-date, momentum both and membership eligible. grown we excellence. year-over-year This grew XXXX, and generate has star individual

XX% increased XXXX. for you XX% client a expect rate. in moderate retention both we our stars higher, are and approximately in with members by in in plans XX% accounts, continues In sales, for national and Our four business, which year-over-year our commercial star XX% strong up driven as of saw rated growth from up performance XXXX XXXX

XXXX. our design in will benefit on as result gains in As we year, reentering CVS least January and co-branded on XXX,XXX focused we a in at are earlier the states of anticipate mentioned Aetna this members began we and Monday, offering individual exchanges consumer choice new Enrollment eight of XXXX.

X.X% third we income services, and pharmacy revenue of of adjusted to Turning year-over-year. operating growth growth delivered X.X% quarter

net new season, integrated and our management, billion offerings. business of customer XX% billion rate. of wins, retention of a trend For transparency, growth drove providing in XXXX selling resulting evidence the business, service, we $X.X We new achieved market-leading $XX.X

We customers as us leader a maintained Specialty versus at up be we the substantial strong with that X.X% specialty pair programs prior year. quarter in programs drive We differentiate Pharmacy, in with value revenue and a continue savings digital momentum this assets. marketplace, provide to with to

are and service of Our top-tier differentiation. areas excellence key execution

growth COVID-XX to growth core administration the X% Our and play role expectations a retail critical segment Pharmacy both Retail XX% prescriptions adjusted pharmacy a delivered estimation and revenue quarter. and filled as operating the continues local both health in We vaccine Americans. driven by year-over-year, sales of millions industry outperformed for largely XX% increased income year-over-year. and third services.

our satisfied experience high locations. in with with their CVS XX% Health Our patient satisfaction remain scores approximately

quarter. of XX.X support our we testing continue million millions COVID-XX vaccines million tests administration. XX to and vaccine We for administered have and million in began, tests. Americans and the We COVID-XX COVID-XX vaccines approximately million program Since administered XX X.X

COVID-XX categories. records kits, access digital Front to of This volume Health We front sales as visits to provides with demand testing of also over per XX% Front connecting and increases X cvs.com. the across customers while continued, has vaccination to provide were universal health prior us we store simplifying capabilities to adults for vaccination another experience. as for have with records vaccinated. versus on and our year-over-year year. month deeper engagement well store million CVS with build cough home This growth store our most also expanded momentum by millions new capability driven cold to revenue sales led their consumer products opportunity

retail Health as CVS for Our capturing presence consistently strong a channel serve new life.

or new XX.X% COVID-XX customers prescriptions year, received a fill chose to testing this fact, with CVS Health. new of COVID-XX vaccination In

to doses anticipate largely occur a and in year. consumers we Finally, benefit administering pediatric fourth of eligible quarter boosters the from this will

progress experience address total our to of care. strategy cost We a continue to superior make measurable customer the with and deliver

on areas. several focused are important We

businesses, to with to in of our our care the clients a delivery the and meet of proactive needs customers, expand We're we around First, emerging role unique communities. approach portfolio customer. taking designed continue

are We costs, the health access points care and improving simplify experience. combining consumer to of local lowering

extenders largest footprint. of deliver locally one have are able national network the of to physician care with and our We country's

of X. as the dedicated services, we of offering evolve higher We will health select format HealthHUB to our models: CVS with primary traditional destinations, shifting care health services other continue Pharmacy creating that retail convenient locations, wellness CVS store provides X. wellness model everyday X. distinct designed offerings. sites drive for engagement needs, and community prescription version and three products and enhanced into an services and and to with customers health and

to Our their enhance enable meet wellness. unique to are be and in of combination wellbeing communities presence our where their of businesses, a part consumers they bigger us nationwide and to

strengthening XX digital for the experience Next, consumer and health our unique we services services the that than to are platforms digital customers. of expansion million further and channels in-person connect more through

drove to quarter, health are demand customers enrolled prescriptions that For of messaging greater growth XX% world, than example, today. this today's our Omnichannel driven ever. than pharmacy consumer improved and outreach programs for group, In Within XX% Greater filled. Pharmacy CVS the more adherence costs. hyper-connected leads digital in lower text is in outcomes adherence

interactions, customers. and with of operating our further We systems driving modernize enhance our integration simplifying models, to the and continue pharmacy consumer engagement

higher in Services, hour the nurses invested by market strengthened enrollment recently and quarter quarter, as colleagues. our pharmacy in Finally, we and COVID-XX technicians, as business. technology of we phase our part labor the clinical $XX demand we and We as We the wage open as vaccinations strategy. for tight flu an increase announced third as continue team service, programs Nearly to joined anticipation CVS well Health technology capabilities. clinical invest July Health for to employees the in the well the modernizing our of of season, testing. every hired our number workforce in our a training customer and workforce minimum in and supporting and Last to frontline XXXX. XX,XXX advance people record pharmacists, and enhanced Despite

our Pharmacy strategy. and of overall integral are part pharmacists workforce technicians Our an

more half our to look immunization Investor on bonuses committed of We about the are access, quality, engagement this We customer forward in Xth. improve investing sharing year. Day strategy second December in and pharmacists, to to in our awarding

the impact is remain to Our and disproportionately to shareholders, pandemic customers, commitment communities. communities critical certain Health continues steadfast. equity as

our housing permanent underserved hired Equity reduce recently wages to education social By to XX%. healthcare this booster increased Joneigh support security helping communities ever suffering addition X,XXX health equity address cities. We health, communities. build people Dr. our vaccine XX and and the affordable better and first and effort, efforts families, our to and costs In upon provided invested advance XX in Chief units to of and from and year can meals Officer, their housing we bonuses determinants targeted Khaldun by in million our their food employees, Health support

row, adjusted EPS raised a and our in quarter executed third the we guidance. plan, an exceeded For on

our continue We the customer. to enhance to diverse of assets serve portfolio

and leadership their the We of XXX every are to colleagues customers commitment guiding it to possible strong moment that year-end, all to Health heart me bring Shawn. turn that, CVS our health. a With to over our over due thousand let of

Karen, and you, good morning, everyone. Thank

capabilities, year. our to raise with our XX.X% of exceeding XXXX. results operating With generated increase reflect billion portfolio $X.XX on strong reported Our year-to-date in cash execution. the generation differentiated the by third of and flow, quarter. us a with of XXXX, momentum increase third performance a operational share in results first operating income adjusted $X.X in a year-over-year This cash both interest $XX.X again XX% total continuation growth versus strong the a our per now per-share flow These adjusted as of expense revenues segments. in reflected flow This three Adjusted adjusted our income adjusted quarter billion. cash from efforts. starting in performance focus the in also $XX represent outlook ensue a We from expectations growth earnings our nearly enables of whole, the all for growth income deleveraging from robust prior operating ongoing enterprise operations basis. lower from keen and half in billion, XX% as revenue, the our year-over-year we was exceeded increased of observed earnings once resulting

year-over-year, sequentially Advantage in repeal the Medicare X.X% grow the of thousand and engine. Our members third our in segments. offset to to be members by by than year-over-year sustained also Medicare doubling of a quarter membership compound multiple quarter, XXXX, increasing saw government we representing third fee. In XX revenue the the continues the powerful X.X% geographies. Healthcare by rate. grow of continued to growth growth sequentially, Advantage more membership Advantage franchise growth health representing services slightly across XX% membership benefits insurance by driven business, XX,XXX by a With growth annual the quarter, Medicare our since increased Moving Medicaid

October to Medicare, which XXXX on Our enrollment Xst. turned attention for successful period began is now ensuring a annual

have we income While our what still fell expectations costs to date. below but COVID-related higher-than-expected are commercial that seen business. we modestly the pleased early our quite operating to due with quarter year-over-year, medical Healthcare in adjusted grew benefits, process, for in

With expectations. we in difference the variant, surge Delta experienced higher-than-expected factors Three August drove and in nationwide September. costs from COVID versus our the COVID-related emanating this medical key cases

inpatient levels XXXX the line XXXX. and peak quarter COVID in were of in the average in with commercial admissions Xnd First, X January and August were of experienced nearly times the September,

approximately are of to quarter. forecast and of the Second, pronounced quarter, forecast, COVID COVID COVID COVID average commercial. more in COVID XX% also XXXX It third be commercial. deferred in by in higher-than-expected the almost underlying during business There than services was moderate performance than above better-than-expected and Absent was testing the we but by and entirely ratio enough these critical X not also non-COVID third recognize medical business, costs, X.X was experienced The it testing was gross expected dynamics lower In than note: commercial costs COVID approached to times levels, while resultant treatment our the is these our and to HCB's costs, XX.X% and quarter X. offset book care in impact claim overall higher continues which we saw the of offset COVID of increase an our far the testing costs, the represented less of finally, testing in with had testing benefit increase deferred to in entirely second level commercial quarter had quarter, important costs costs in our to This of government on performance we X. better we expectations, aspects outsize driven care. fully line January costs. as for treatment we're

the result, development experienced expectation. in and period the XX overall year. with government As quarter services we days both of and HCB, Wrapping line a performance is payable claims commercial at government X third Days sequentially, was prior of in X the products. our end above up days the prior businesses quarter the of favorable on higher

influenced return reserves. we While comfortable QX. a the Overall, more factors would adequacy the abatement COVID-related fourth typical quarter, anticipated many the expect DCP in to in remain by with with claims our to in results of we

in Pharmacy services, sustained sustainable, track industry-leading to deliver remains This for our is our income expected year ability on our Specialty behalf Pharmacy by XX% second profitable been growth of Turning XXXX outstanding customer adjusted to growth the XX%. rate by particularly of trend record renewal clear. our growth our over drug of industry-leading our proven to be has as in driven the excess service, and delivering capabilities, XXXX. clients, of reflected arena, operating

the in Total inflation. primarily Total Specialty growth During sequentially, membership volume, growth reflecting group services the the increased Pharmacy by the lives year-over-year. increased in by this major quarter. remain second organization Improved XXXX year-over-year, purchasing the new pandemic. and quarter, Pharmacy claims quarter with the or growth consistent X.X% X% prior therapy $XXX Pharmacy, Pharmacy prescriptions Pharmacy to quarter due income purchasing therapy increased of second in economics, The XXXX claims quarter, processed to with exceeded year-over-year reflecting Pharmacy the up Nearly million new products by government operating X.X% XXXX. X/X net this X.X of that was of and were Xrd in nearly our in than driven adversely attributable also of the the vaccine revenues above three brand third COVID Note programs. contributing year. increase drivers new expectations business, and impacted launched administration to growth. million prescriptions adjusted more grew

Continued pressure. stable claims client ongoing, driven which business, increased but our were Pharmacy administration pricing Pharmacy strength both by and in by Specialty volumes, XXXB tempered partially of

of quarter, combined COVID for driven year-over-year operating sales including now a for we're just or $XX by drove COVID point is sustained adjusted test Pharmacy on vaccines kits incentives, strong a half billion to Approximately more two million. of over-the-counter administered, our of and revenue trends strong by was the XX Our by investments, Retail continued under There broad remaining contributions again, results, XX over income This business this performance a and billion staffing testing, billion vaccines categories, with XX revenue store growth by reimbursement results tests store was service. billion than million margin, and quarter's increase. a forecast, tempered about expectations. COVID full-year million basis treatment in front increased $X.X This strength $X.X improvement increased by The or to operating related to million sales range the to income $X.X by demand tests pressure. pressure, pharmacy from driven increase, COVID partially XXXX. continued X front-store produced offset and front delivered combination of COVID the adjusted this that components COVID XX year-over-year. attributable main we vaccines expanded growth reimbursement across categories. or increase in partially wage deliver provide adjusted XX% $XXX strong this driven growth with half, other exceeding million of in Total pace XX to combined and pharmacy are levels operating to minimum XX With exceeded and business and

the for quarter. quarter, billion the Turning we position down quarter, excellent net our long-term liability X.X our and operations cash to the Through third flows remained in in in the at billion August, proactive debt and management liquidity of end paid with $X.X transaction the billion year-to-date. capital sheet, and cash of balance from XX.X

end the XXXX, of $XX.X quarter have the the of a of since Aetna net the transaction. repaid total long-term in of As debt of we billion third close

to through we million our returned $XXX quarterly In shareholders over addition, dividend.

Let XXXX me now discuss guidance. updated our

earlier, This noted Pharmacy by by are benefits business, commercial our morning $X.XX block. we $X increase a Karen in the offset this to performance per to our full-year and COVID pressure specifically expected share. Partially share in earnings per range As raising services Retail. strong and guidance adjusted $X.XX reflects healthcare

billion $XX.X We to $XXX.X to to $XXX.X $XX.X are raising our revenue operating billion. income adjusted total outlook outlook and to

were a cash the flow full-year the in to expected increasing FICA minimum actually figure, taxes, including XXXX, that range our segments $XX of as payments Note well increased also increased than items loss are is related quarter lower between September the forecast expected to in some Xrd billion. quarters. flow that this cash timing from I'll payments reflecting operations to We receipts an $XX.X full-year guidance. year-to-date of accrued the and Xth rebates, key highlight ratio and now as and Xth

full-year our $X.X For Benefits operating to we lowering the billion. $X.XX guidance segment, to billion income billion Healthcare adjusted to are $X billion $X.XXX from

are admissions Again, at level, X/X quarter. it to lower important at approximately which Emerging the We be basis or testing the medical costs increase expect third these the data although remember higher-than-expected COVID full-year that observed in-patient an of reflects to driving October operational continue, levels a the medical COVID are September. range the a XX our our benefit to of points commercial quarter expenses. and costs degree indicate XX.X%, that is of This range. prior in will ratio fourth from to XX.X% expectation in tracking the into

testing expect as not will be lower anticipate expense. QX to So while QX, as we decline in-patient than expenses we much they do

operating highest year, the with the normal Benefits deductible medical seasonality lowest the typically producing the by of costs. quarter quarterly of recall segment Finally, driven income Xth the Healthcare satisfaction

pharmacy For services.

in operating to billion representing the year, We and Given of quarter the to increasing largely we're remainder adjusted full-year that year-over-year adjusted $X.XX Xth $X.XX we XX%. from the the strength the Care XX.X% to strength also continue growth anticipate in our billion, operating to Services $X.XX will income FYXXXX Retail $X.XX quarter. XXXX Xrd the Segment, increasing guidance our the quarter results visibility are guidance continued Pharmacy billion. In Long-Term income to into of

we you the consider although a continue quarter, I the rate at quarter. vaccinations to that currently fourth expect would As than to third lower note

impact We impact well recommendations, have the as of also pediatric modest contemplated CDC's from a as the vaccinations. COVID booster

to experienced We modestly decline third with testing expect the during the comparison quarter. levels in

neutral. August QX 's outperformance COVID and outlook, Given net an the impact. guidance to to full-year Retail overall in compares our This modest now expect QX we prior impact for negative be XXXX

website find will updated details You we this further our guidance in slide the presentation regarding our posted morning. to

with to which a As XXXX. quarter, third ahead now the of we as performance foundation with pleased very we look strong closed provides businesses, our us we're the

thoughts we New plan in you with share While to on our York, XXXX early outlook. details want at in our Investor you update to more December upcoming I the day regarding

still believe play current adjusted that range. initial approximately While are our EPS anticipated within many $X.XX for estimates are analyst we there XXXX guidance factors of to out,

significant As pieces we baseline appropriate quarter, moving to discussed in keep last XXXX. an some for determining there are mind in

consistent our practice, year's exclude we net from and gains First, customers, capital net development realized our returned of guidance. prior standard forward-looking with to profits

adjustments Second, baseline the expense XXXX, of minimum to share. full $X.XX, last of factors create We approximately XXXX announced midpoint updated will incur per wage which guidance adjusted $X.XX quarter. these range, we year XXXX our a of represent these estimate is Using $X.XX. in combined, our EPS increase related a

The that Healthcare Retail on businesses. Benefits the will effect other significant COVID performance factor in is our have considering and XXXX

significantly Retail, expect revenue XXXX of decline generate COVID-XX in testing volume, volume administered and XXXX to XX% to is which XX% vaccine in For in we of will billion expected to that we XXXX. $X the over

we expect sales -driven COVID front store in to In decline addition, XXXX.

It change be that circumstances remain subject important retail COVID-related to to business future adjusted risk reflected as a we our estimate are will forecasts in to HCB Overall, in improvement expect COVID we as in impact our see costs the revenue results by decline in the COVID-driven and impacts decline is pricing. of difficult XXXX, note offset estimates and treatment significant COVID HCB, testing performance. dictate. with extremely largely costs in to expected For and improved

headwinds the consensus the growth other the regarding tailwinds. in EPS flow consistent with half continued adjusted an analysts last of revenue, these Health increase over X% adjusted XXXX approximately mind, again all strong the represent affecting in quarter, in full for remain raise provided commentary conclude, we With quarter third of income, XXXX our the factors about operating of for and of Beyond $X.XX XXXX adjusted To current this CVS cash would results, and considerations, we are guidance. performance strong and XXXX pleased baseline. first the EPS of year producing to our estimates

During the pandemic, we to have cost of starts ultimately the solidified our opportunity to which improving become and a with lives. national its people at enabling lowering healthier care, leader ends access in healthcare fulfilling core delivery, and convenience, live more and

you Day low to ambition Investor to we double-digit EPS and our CVS growth. to look over years to sustainable, the more on forward position about a with this weeks, in adjusted coming During Health, sharing deliver path our generate few

open We Operator? will the now call to questions. your

one please time Instructions]. And go the ahead. We'll that to follow-up. yourself Please interest at take of Cherny a first America. from we ask question like [Operator question and you this Mike with to of Bank ask you question time, if In quick limit one would our

the the for did the morning. I want get views. especially something color will and I'm other thanks questions for sure side some Good pharmacy there for be congratulations 'XX on the Shawn, Thanks and next early year. on results into to there.

on the talked the re-entering TRICARE expected. you side That their COVID very positive being much which news also network. headwinds is the You and about year-over-year, have said,

sustained those or getting that, some either is example, ability network gains. back with to of share relative approach network what's performance. what and participation, CVS As How to headwinds that And you hopefully growth just overall for offset for an your the participation? means as COVID preferred 's think trend going network steady-state to script about

for it's that, Thanks here. Neela

We continue X% is see good to and the our both averages. script the historical growth market underlying around compared to level, which

network. be mean a of as forward in be back December for XXth, above are that mentioned, to for part was you plan win and of growth pleased it's assumptions starting the a happening us it, as and moving 'XX, level needs number our in good the of for that's So which 'XX we're But Tricare forward. network will we

and of as these in sold sustainable are think sort produce is, designed to would to would point. to term. that about think we've when try broadly, all think thing it's things it, basically say, and next This volume considering it's year. we say might well, deal they be you pressures models and example that, we this. only new goods The cost I do as and are exist, looking a of and to to embark is of one on improving of participation to we but But to continue but more obviously tackle thinking one one certainly, Mike, -- here with is at looking to help Neela's more to all things balanced, get issue looking, economic just also that model The are that. I able stable, more certainly not I at the something continued this were of the about thinking, about an long offset

Great, thanks.

question please from go Lisa our We'll with take ahead. Gill JPMorgan,

Your open. line is

back -- talked to generics low MinuteClinic, as introducing at about you much, just low go for to new good Karen, a we XXXX, started no or Thanks I CVS. co-pay want or very the co-pay morning. for no

talk see opportunity first I to in think we around really trend year, primary question My you can you did you and to to XXXX. Retail that be, think COVID, we shifting that secondly, the Pharmacy a you the when offer lower the own that we're with design care the want we biggest into spend going physicians? a really into members a program, And the need that come virtual you this better and trend about talked about opportunities? would about now cost in where million out you MinuteClinic just as plan will through? combination minute example, made you then see X going for employ that the XXX about being utilized, today masked those of CVS, next I just how understand or primary is And about care. then think maybe because not that seeing do of feel roll think towards of and people the comment do

provide the really of But just to Good complexity brief we and those obviously and I costs in our with down start would strategy Lisa, and give With them incredibly of look a healthcare long-term actually as higher-quality. been and the overview. engagement, healthcare costs. we more think, questions kind forward of strategy of with we and points lower morning, overall consumer let we look convenience meet make the when the sure factors there, help a by lot our to driving has we me that at you challenged the sharing strategy overall can system much is will us December. access consumer, with

As our s mentioned our we and MinuteClinic our -- trends. think you about

have co-pay X.X million X have low co-pay. people We now or this that cost

members services. We it. quite Aetna also behavioral have as Obviously Aetna designs that's good lower expanded site of these We've care. there. the to a adding those convenient. We've the traction feel care. are mentioned coming starting and health plan we customers with utilizing Obviously, we earlier, with started repeat to services, is about It seen see get the I members

of to and need component we do care -- costs. question small what we is your primary care Now, medical a primary is around here think overall

wields I it think medical total we all recognize costs but picture. that, the influence on significant

navigate, we of care, of think overall and by care care, influence care push engagement, it's and navigating of cost expect primary so our So doing the the our care, think overall obviously pushing care into our cost and think customers evolution the if lower better to It's in as for believe kind and here community, in really we of help about that designs, intent see we patients, can have really you have continued about so you care. we can home. need to the plan us and into of managing we the we higher better and that that, primary virtual it's that's strategy, quality,

in this you market be virtual we If offering, we year care with look did clearly, able were at to our what the primary early.

with care diagnostic primary that home now with and XXX,XXX have bio-metric connected in-person for with eligible care. We our an connection We virtual MinuteClinic, people monitoring. the in are primary also that virtual that

and that see change think the around the innovating going we're we're that's you to game can in the around is healthcare how consumer. we innovating So consumer really

or programs. Is trend medical at that Analyst we way something we about see the of should about that, far think Day? incremental as there adoption kinds these that of a to going talk as cost to as you're is quantify anything Or

and that talk we then I is see because that we we We'll well. monitoring do do things product about growth two design? -- see we'll incremental be expect our of as Yes, growth think improvements of the kind But be would medical in the see kind we expectation but more give overall longer-term trends, to We'll cost do that. insights here, expect would improvement. in that and you goals of into our

much. so you Thank Great.

Suisse. from question our We Rice will take with Please A.J. next Credit go ahead.

open. Your your open. is line is A.J. line

that is to that's bit of your and about very what new comes to you Sorry that. try that customers When Is it see with everyone. the of to middle the And did employees little the expand it particular. that is large get marketing just continues particularly in that you're where Is up get business? a activity delay for Hi, Services being that big to a Obviously, getting just there they picking of effort where rate RFP market? resonating business ends? when at high they another account Pharmacy any in winds, maybe retention you're deciding much it you as back. the -- want by How well. year driven is perform look the those on to

thank Alan, for the questions. A.J, it's you

So order. in I'll answer

first why, active reasons: avoid for maintained in and health in know won an bringing to won manage help ability specialty our and that a of tools all We X it sales retention you manage in where -- right? -- market I and rate, going because incentives, and sales important, our than in much trend and process and through segments to tremendously with the new built selling experiences segments when the were and RFP. We've into in lives of in, service think we we to providers in size. 'XX have different obviously primarily, area won RFP critically respect focus win and participate largely season X, we innovation pretty but we about we past, a on X. building came, all demonstrated patients. really many We the think drugs see We in We -- So When create that spend in our the do, better for was I didn't best go have clients on where service all to our X,XXX that's with generally and think I X. We better a with plans, above. the we market, of 'XX why there Specialty can win, both culture levels trust on particularly function of one of competitive aligning the we transparency Pharmacy, those finally Medicaid, it's high the a the our s. clients extraordinarily and and we

Okay, great. Thanks a lot.

Please next our Research. with Lake ahead. take from question go We'll Justin Wolfe

is line open. Your

wanted I specifically business versus how Can 'XX trends talk morning. show Good that Advantage. little 'XX a performed Benefits back. you year, from about a to to business this where how Thanks. are about Medicare bit Healthcare running normal, bit to in expect little and the you bounce it has on talk

Sorry about In XXXX that.

so block its HCB's single The to at in at feel Medicare Medicare it's baseline premium look provision dog and experience important better Obviously, HCB, performance. last biggest been submitted and completely we that the in have would very say that -- so for a will barking our our if I is little since forward quarters X performance the not, news, is bids, that. barking as than a we so. and has still is here, our I about we good our on that, line, have that No, me this good question. critical that

less assume to deferred sort continuing go continue but we're the to continue our forecasting in continue that. that Certainly i.e. XXXX, would utilization this to see to and anticipate this edge business, We in normal. over to by than did quarter, we normal back bulk care time going and some of that away of that is

sound this I'm So standpoint, margin very feels think footing. I business is. from it like a

next looking we margin about good it's where good wise In our we when I mentioned, benefits, about of about far. and but think at seen year, feel super so what feel we growth AEP, I think terms we've as early and are, we both in the

And specifically, after Do scores everyone's hopefully, the you've industry, strong 'XX. to positioned year. their just more risk you'd were a one-on-one tough a where think something, rates XXXX, the you like are follow-up, what seen before could absorbed and for a yourselves, are bit and getting Shawn. The so rates than or absorb margin back maybe quick a typical maybe next even more have be of feels a XXX% given issue little trends? in It

now, Yes. that around difficulties wouldn't just forecast think COVID want I to exist interplay. because that sort the utilization I of deferred of this whole mainly kind of

the is my it's and a reimbursement into comfort 'XX able I think You're of again, sort certainly lot a up with going of in to of right. It foundation of, sort design, was part good We're that things, business do benefit on. our that year.

Thanks.

Steven Please, from Wells next Fargo. our ahead. We'll question go with Baxter take

or on here. just the for clarification thanks wanted confirm to color comments XXXX. Hi, I for ask and

or a be when initial was that about is those suggested talking view the also the comments approximately that would you're that that from neutral. your case think your factors? I you COVID Can XXXX not perspective, confirm whether

what is said. Yes, that I

your to you're spite then levels. decreasing and testing on dynamic, Perfect, vaccine Obviously, testing to but it's how of expectations related expectations, vaccines and commentary any XXXX the XX% XX% directional that. about color contribution on of in initial about Okay. thinking or around

They that down both are general in fairly significantly range. same

than and to the volume number, right be XX%, did the a next too subject next we that testing we was want present, of we XX again, for have of some we will to now factor would year. vaccines that could down sort year, assume I margin change said clear more administer. think number be that the it I But I a we a of At little have profile bit same also to today.

Thank you.

Goldwasser our next Ricky please take ahead. with We'll Stanley, question from Morgan go

to XXXX here and on questions capital quarter Hi, the congrats good the Quick morning comments. deployment. and on

target You're on track to down levels. to bring your debt

M&A If you that when think does and of around to capital and order low do innovate well? about it, as guide for provided include you rank of long-term then anticipate what M&A us, consumer, look you role priorities, can deployment maybe will have we your the sort double-digit, you that

it and Shawn. I'll over I'll start to hand

around in of our can lay deployment we the As amount off out we you on. tremendous in think strategy, assets detail. about have much build we'll But portfolio you think greater our as managing consumer, about which capital our a today,

However, need that buy. capabilities there we either will additional think to be or partner we

ask will that Shawn and be on our other So part strategy your comment question. of to overall I'll

form that what because And my capital of take I'll kind get that it's quickly capital is double-digit to answer one some the say terms in of deployment deployment. can That years I'd the to EPS, long-term fairly the in second includes -- low accretive of repurchases. goal share

the way. We're make more some a and mentioned, form think the along good Some timely X X we while can ourselves, there's deleverage capabilities, it's and But to and do look think of capital than X it I of of will years. I think is M&A, the acquire nearing of Karen cycle, of years will and term. years new as end are around of the sort to year the our going a that a last next question require different X long us or development of those some for it can take strategy. more likely and I sense those

my will capital we that first business, While we remain target, leverage to we manage responsibility, investment-grade the committed is priority our strategy require grow to with always mentioned and and always that. our might

a repurchase, I M&A. in M&A deployment But that balanced that level tended share a best, share So between, with that to repurchase. has look aspect, mentioned, like might grows time the dividend from dividend with over can of accretive EPS move as something that some and experience is my year-to-year work

you, Thank you in guys looking forward and seeing to December.

Nephron. go from We will with take question ahead. Eric our Percher next Please

open. Your line is

here: on quarter. profit benefits last Relative think to is cautious the Pharmacy focus commentary is strength development the miserable primarily strategies script, entities what's is in some was in to Services items natural with XXXB in this their and expansion CVS I'd kind that partners after of covered this to GPO growth benefiting I X, two it like then piece? and from of or program, is added driver zinc the X. per new on you. of Thank scale, The serve PBM or

How that you? GPO On Lotvin. Hi on and being is Eric. are are capabilities the this volume brought Alan the principally, CVS, market. It's answer, to

We are things a With growth. that the CVS drive it's the say few partner, respect mostly have I to there would a volume. XXXB but -- it's

third-party So right. services XXXB to is covered provide administrative think One X in we entities. ways, about

grow on We we So covered drugs size number paid contribution. dispensing dispensing behalf of margin. entities. the fee the grow get as of entities, is covered the we Xnd a for fixed the the area of The

of book wins, X grows, our as So to volume book as growing an all example, because new growth. of as and business both grows, our Specialty is those grows from covered contribute as of volume entity business

and I you substantially Sorry, that growth for So the with would I XXXB covered just of the point covered many are dependent the as just their upon for know, financial benefits was their program last entities, health. volume entities add -- would

of and starting [Indiscernible] quick Right, the to maybe then little more bit just a among proposed. may follow-up. We're what a structure see

those point transparency perspective at would your game? of the in mean on requirements provisions. around was increased this is What rebate One transparency what

a of role transparency it done everyone administrative system. version a we've So lot original in creates the the tremendous work for at on of really the burden

rebates, have now you of audit are think rebates. or Many even pass-through I clients large XXX% mid-sized them extensive and this essentially think rights. at point have of about transparency all when a clients

been is already this solved some think commercially. that's extent, problem a to frankly quite I So solving

Thank you that. for

question Steven And with Valiquette from we'll take our next ahead. go Please Barclays.

open. Your line is

Good Thanks. morning, everybody.

to Can for or to the business of quarter want just outlook book to MBR and no the Thanks. specifically, like overall sounds direct baseline. government, the between just it COVID confirm in as just remind and non-covered out specifically what for your the us and it you there more, of assumption fourth the confirm your quarter. for that whole utilization. the for pre broke the 'XX Gathered non-COVID, utilization to of new percent non-COVID around Just for It's -COVID comments increase commercial just fourth the is -- fourth-quarter into costs. related want change a also is is

in on. Fairly my been wasn't by the has better and Yeah, some utilization at, Sorry, last couple you're the places consistently even mic non of entirely correct. one, increases Xnd on COVID. driven The COVID than over the MLR - expected. quarters,

So clearly the is underlying increase the business so COVID. that strong continues to from look regard,

utilization do zero think step half utilization. to is today, very this the that about see expect and is, the QX, level of but assuming As we're we are only quarter, similar half stage. that having Xrth where to we in utilization The we I governments taking mentioned, we year. time. that my quarter, towards -- kind will deferred with where right all now as experienced Government the and Xth in back least than a less a next bit of has and you deferred most could the see But little the amount deferred we moving also. those from little in the last Medicare, back of system, at about think has in this normal probably we the commentary Medicaid Commercial

Thanks. Okay, great.

back it And the to of with that, turn we're and going call, to conclude the Q&A portion I'll Karen.

core today. and our you for strong growth all exceeding very joining thank driving quarter, First CVS fluid of, in Health of businesses expectations a reported in us market. another

healthcare an colleagues and helping flu health other York. to We combat on for experience I grateful our executing deliver to Thank very New continue dedicated everyday to all December XXX,XXX every strategy COVID you. in continue demonstrate am look in create who America consumer, the We centered around the integrated to day, and its forward including do challenges. seeing you and variance, progress,

today's webcast. concludes XXXX this Call and Quarter Health Third Earnings you, Thank and CVS

time may your and at a day. wonderful this You lines disconnect have