UnitedHealth (UNH) 17 Oct 172017 Q3 Earnings call transcript

Good morning. I will be your conference operator today. Welcome to the UnitedHealth Group Third Quarter 2017 Earnings Conference Call. A question-and-answer session will follow UnitedHealth Group’s prepared remarks.

As a reminder, this call is being recorded.

introductory important some is information. Here forward-looking This U.S. under call contains statements Federal Securities laws. present subject are materially uncertainties or to that statements from could experience differ and to risks These results cause historical expectations. actual the current risks description in reports and cautionary Exchange periodic we that statements some and A with Securities including and filings. the the of file Commission, can be uncertainties included found of the in our will amounts. also call This reference non-GAAP filings financial section non-GAAP the GAAP is reports to page, and the www.unitedhealthgroup.com. SEC the A reconciliation of at of available amounts Investors Company’s on Information the maybe presented X-K this in contained investors’ on dated this call the from Form accessed earnings morning is in of our which issued release website. page we XXXX, the October XX, company’s and over UnitedHealth Officer to the now would I Chief Group, conference of like to the Mr. Executive turn David Wichmann. sir. ahead, go Please

you. thank morning for us. and joining Good Thank you

minded both drives quarter, XXX,XXX opportunity up growth broad-based make quarter, enterprise. our across report to everyone. for to to close men and clinical sessions we and with of diverse day, service witness system it our the the technologies I help the I insights, work advanced particularly lives the people people dedication, health to privilege and mission healthier us. who of help energy data with as culture represent live its efforts and forward is our and is work work and a witnessing to are Having impact people and leverage have each healthcare and This live company globe for our inspiring. Each the all and from this today. this better this In humbling information, the of continued their you comprised chair women an honor pleased momentum it

it grown to serve see getting ever Over in people serve grow we feels the more expanded next few opportunities but we have than we to to XX and decades, more just started. have and the We our to often years as capabilities, like us evolved past are further before.

business advanced information and businesses better system. applying use our are effectiveness the on We broad analytics our ultimately of to improve the and improve health technology diversifying and and the engage to people focused of

promoter quality loyalty. trust greater our through raising to rigorous net are disciplines leading We and

make the are healthcare and for The by quarter X% the advancing how our and cash more and performance to that in affordable reducing per perform We last we We by revenues The and with, year. costs total pace simplifying $XX.X we be down to ratio third full of adjusted over now full from true adjusted XXX and effectively grew we will will and To We shareholders’ that serve leading market’s our leading is share. this billion return earnings in equity to of debt XX.X% more healthcare reported of annualized care capital healthcare others. we basis per reported innovations of XXXX growth we realize to of end, share. approach billion potential flows strong market operations to providers. a expect year consumers in experience needs, XX.X%, by and nearly achieved $XX $X.XX $X.X to value. points and the for organization well on And cash enterprise revenues, XX% grew morning work more XXXX. earnings serve predictable flows earnings, the healthcare growth consistent determined

with Vice more Executive of by service In UnitedHealth XXXX Renfro, and this expect growth trends Officer Chief detail to Larry beyond business Chairman We business through recent our will customers. driven our strong and light, performance we Group to into and Optum. walk continue in momentum beginning XXXX, and you

strong margin Dave. quarter you, third strategic continued growth, advantage. Optum’s earnings further included Thank than and

outstanding approach XX% quarter in third percentage to a were will to active families, year. and X-year chat. to agreed billion in producing a $X long triage over of advice, X,XXX their healthcare million Beginning Optum’s health double-digit nearly past distinctive phone military The videoconference has web care advance general expanded operations and serve their our and grew and leveraging across well-balanced segment Advisory can Triple-S multiyear strengthened year’s and independent X OptumRx increased Shield was Puerto the end and revenue OptumInsight. agreement the supporting work operating than in believe operating growth, Per combination were OptumInsight. quarter. $X.X capabilities year-over-year Defense Earlier healthcare margin systems was XX% earnings into again million of both broadest August, an $XX sciences In to their has of the billion Optum’s serving XXXX. infrastructure. Board Blue XX secure services, arenas forward provider nation. each capita versus members a margin last revenues via as approximately is the a U.S. analytics of driven reaches X.X% to basis increased rising growth joining directly or over Board leading OptumHealth XX%. growth for and pleased the of to revenue and merge XX% System’s Chief as serving Plan Executive, expansion close Health to managing team consumers. transaction the Veteran quarter from last from consulting healthcare and XX/X the look of with business Blue from offerings We XX Defense points Health service. the margins by of this operational OptumHealth billion, steady health of and earnings been payer operating sequentially quarter about points Advisory year. combined We expect earnings. Optum OptumHealth by third X% data last the global product Affairs Musslewhite operations year hospitals we receive over OptumInsight grew research, providing by advice their in Overall, Third operating this and to strong strong services more awarded Cross life technology nursing nearly more Departments serve client Optum’s Optum’s revenues experts support increase consumers the Rico OptumHealth healthcare in services, its and March extend Optum’s Military administrative the by in Health of basis our it staff coordination XX breadth XXXX, for expertise. Agency to provide team registered led advice at their X.X% year, Robert a We and earnings self-care base. other among and award again A

operations. $X and quarter. far nearly Transaction year revenues XX.X% market quality, Earnings connectivity we last We quarter, XX.X% million million XXX the technology year’s will billion above over over over grew more and while grew XXXX. operations at satisfaction in last achieve with And rate cost this third adjusted OptumRx, fulfilled OptumInsight’s ambitions. grown grew operations its our our year in growth third Triple-S reaching and consistent $XX help so end. expect has core year growth scripts than revenue At and in XX scripts from X.X%. over quarter’s last of from third processing capabilities billion backlog earnings

OptumRx market substantial we and compete to our supply retail, specialty a to We delivery and itself as has brands of served customers, chain economics leader. and home the pharmacy consumers positioned value infused delivered needs in As generic mail models.

mid a contracts, care high have this awarded service retention including the state pharmacy leading meaningful new been and well program We New as Jersey employers beginning carve-out from and as market. health Medicaid in we customer course the medium-sized State of commercial have January of beginning pharmacy to complement plan These large ramping our and year. partners XXXX and from the up the growth

to pharmacy, into strong last have expect we to momentum year growth revenues increase over We XXXX. XXXX in and momentum specialty full year but continue XX%

Our the capabilities recently execution ways, synchronized IQ sharpens experience and and customers. rich narrative analytics IQ name Overall, use. distinctive our we other by drive insights the and growth, personalizing at delivering and systems relationship. data under innovating choose Optum, patient’s make and to specialty data help embedded brings data we in pharmacy present Optum satisfaction We strong delivered formalized Optum and they the in analytic perform We relentless channels breadth by to products services the these organic distinctive our of brand. deep The strong customer Through pharmacy capturing we remain better. the feeding the medical growing across way raising capabilities integrates and Optum service pursuing and NPS, health then to approach engagement. information to driven

Nelson, Now, over Steve CEO let turn the it me of UnitedHealthcare. Steve? to

we UnitedHealthcare, to pleased across critical the a quarter. priorities. team, performance Like At on continue this Optum is Larry. the you, to Thank report few business strong focus UnitedHealthcare

quality providers quality, and and clinical experience the have which The first is includes consumers with both us. care

core to NPS our across with see with product consumers providers. and We our is and are gratified advancing lines clients

our is relentless costs. on focus Next managing

good expect inpatient be people. fewer, one As X,XXX tracking will hospital us customers stewards customers XXXX the be per of year ninth consecutive resources, to example, their to is experience financial UnitedHealthcare’s admissions

Third is our partnership with Optum.

The of includes higher their in age, private partners compelling customers distinctive to there capabilities it lower final aimed past combines benefits this leads taking the our into through care unmanaged OptumCare’s It strengthened is quarter in leveraging benefit XXX% innovative needs we insights practices substantial digital and with growth and spending today, system. remarkable and of XX providers, innovate by the experience. in practices. about do discuss four than authorities. internally Rally, plan quality, coordinated leading are progressive customer XX by market higher family rated for nowhere points healthcare X clinical things background describe care, all majority all and The through status, people people these additional needs Medicaid Advantage clinical people support OptumCare NPS to we across better are these served for to serving at progressive of where more state simplicity quality sectors. cost annual will and selection long-term everyday. senior stars This treatment cost a market and and local tools their driving Seniors improve care account insurance offerings. where We plans programs clinical trillion and for are we higher. consumers. for opportunities at we for help priority representing delivery to with considerable Consumers to the and relationships truly have economics. practices added Nationally, is improved see will and effectively consistency we patient growth, operated care to models who fee-for-service benefit is costs are in plan and time best UnitedHealthcare Medicare Together, care people value. In health have creating and people with ambulatory These clinical public a capabilities benefit our scores from priority, and lower Doing delivery grown performed we improve one does the are system not the with million health beneficiaries our growth, distinction. care our that patients of federal platform our what performance dimensions. higher experience the pick managed On commercial across from patients access will the consumer innovation the engagement further of well served better the the capabilities OptumCare I we serve the turn, in Optum’s fourth be better give variety able range XXXX, how for or XX refer creating insights regularly

to than last offered over of as years outdated steady its grew continues market year. like more We billion expect by to for UnitedHealthcare. Medicare, come the $XX.X our costly programs those shift In the approaches from growth innovative revenues XX%

Over the them million split Supplement. between nearly people, Medicare added we months XXX,XXX last X in year, Advantage of evenly the X Medicare just past and

payment and experience and In XXXX Approximately XX% higher consistently serve offer both market of our XXXX be plans a scores enrolled value for are distinctive we strong growing once rated and XXXX, at products, The based expect show on the year Medicare the improvement, stars again. again stars four We proposition, MA advance growth or more which a organic simple unique in Star seniors our culture. will our higher. levels. underlying quality plans stable because performing initial personal data in

community in and in health our over XXXX ratings business growth levels exceed In supporting We market. final expect or high star grew approximate serve our value year XXXX state, year. revenues benefit important this performing outcomes the to of for XX.X% seniors and payment third for we the last and better quarter

XXX,XXX favorable a stable programs, people mix Third of strength. toward with is quarter complex more which continuing nearly conditions representing shift year-over-year and acuity health the remain our higher advance levels membership

in quarter, the Californians under Medi-Cal live we First in contracts programs with new went counties. UnitedHealthcare two joined October, in During Virginia and the

and addition, and In are of pipeline active opportunities through they diversify managed the new we populations expand excited business renewal as by Medicaid. states serve our

to Employer UnitedHealthcare people offering competitive sustained consumers a These business insurance XX growing strong driven the locally the all full trend health risk Individual, by X.X in designs second payer this XX,XXX of results commercial including for which to months We to enter consistently beginning XXXX. the experiences group to networks, recently retention more past quarter management new decided than half improved and lead and Turning environment the Minnesota cost combination markets, and more predictable X.X in million Plain’s years. employers for of and past benefit reflect a innovative generation. X & Northern our of million over rising serve momentum in

Our team is Minnesota in looking forward neighbors more serving coming fully our to years. in

quarter billion $XX.X as growth $X.X to year-over-year. grew grew by in billion operations the revenues and XX% of $X.X quarter whole, XX% from nearly earnings over Taken a UnitedHealthcare this billion

Now, call a Rex review. financial I over to will turn John the for

ACA we grew year you, revenue at of the with Steve. growth most well-balanced higher. revenues the last Group third despite again billion UnitedHealth or Consolidated up performance, XX% UnitedHealthcare. the principal $XX.X delivered effects in over Thank rate, quarter, quarter Across for X.X% businesses posting strong,

earnings from $X.X and net nearly operations shareholders billion $X consolidated earnings billion of rose our XX% Our exceeded year-over-year. to

established trending EPS modestly range, have XX% per adjusted quarter our Medical outlook nearly been lower. rose share. Third to $X.XX managed costs while well within

outlook up typical operating third cost points due the would of seasonally to XX.X% ratio XX% suggest year-to-date XX.X% the closer quarter sequentially to XX The we basis our care minus of medical XXXX ratio basis quarter in plus XX.X% side full will ticked ratio The higher to net or of be to this income. third brought net of levels lower expectations the year-to-date the meaningful year points. to for in operating from we new range as Cash figure were within operating bringing see $X.X billion costs third flows on-boarding opportunities to or expense improve we income in even of January. operations growth remain the our adjusted the in as area. prepare X.Xx our the Overall, quarter performance X.Xx XX

driven in Third of CMS strong quarter, annual medical by to quarter flow was business member’s underlying payments conditions. management, rates of working receipt that performance, capital the the cash the an absence insurance from adjust payment annual tax reflect and

performance OptumCare ago, as to of market Since reduce platform to we acquired percentage at urgent business care, we on our value. XX. practices, shareholder $X continue repurchasing reduced even total us surgical a local business, capital time, points by billion ratio portfolio our build XX nearly have ratio our to stock. in years enabled $X.X we debt that the physician September strong care Our Over this in we expand enhance XX.X% distributed continue through and and and Catamaran dividends X billion capable and ambulatory diverse pharmacy service created to unique, fully acquisition to

the as original full We $XX have $X.XX our a range strongly we per outlook per earnings at adjusted conference. share. expect be for ahead XX% to would now last year’s increased of This and $X.XX growth XXXX of approach year to and Dave? of investor share net communicated

you, Thank John.

from federal a executive last Before at week. let touch the briefly me give look XXXX, on I first order

and in deal association We short-term the experience plans order, of of the expanded use great policies, HRAs. in covered have a area

in we CSR that engaging and to be as and both presence, are about without sharing submitted these policymakers the XX are states over days developed XX,XXX people CSR and to four reductions, has cost the XXX the we recall with limited next regulatory any to very to eligible areas frameworks extremely the have will XXXX a expect process hope we once regard Thus, small. in impact who for plans We elaborate payments. will concluded. with be With you exchange

you year, the as capacities quarters, mind, to increasingly NPS XXXX last been manage customer our momentum growth, continued particularly effective you headwinds look investors at funding consistent programs, keep remain we themes, have medical and of modern retention and operating costs, capital and with taxes. and disciplines of performance, and several to around and is data important front the over several our tailwinds to operating to both have Now, next efforts analytics it to the improving externalities and contain as improve, about entrusted the performance headwinds, be and stewards these capabilities centering strategic technology on us. of to government trends With largely regard and infrastructure ongoing thoughtful

and itself, and XX% to us That long-term On the of would health cost the repeal figure gains per the or tax market insurance businesses. the commercial longstanding Medicare It the for this increase latter, range. others Advantage benefit increased our strongly or is squarely applies most earnings to in reinstatement, share the return continued of the and advocated tax our comparative meaningful. roughly our recipients. small in to composed of earnings see deferral the represent policyholders, convention We individual as of is it have businesses effect for XXXX affects tax timing accounting the Medicaid tax. either XX% insurance creates increases in and consumers growth large a Absent headwinds. tax since rate the the XXXX, per of we Medicare premiums insurance and commercial that ultimately $X.XX through share year-over-year beneficiaries, XXXX, and reductions thus gap share In

we consensus enterprise an XXXX XXXX, that of and range to to sized see a highest with in the toward typically look the current we see XXXX momentum beyond. line our adjusted with commitment range within for strong side with and So potential a and market its in per performing earnings as top we share

Before things a you we there would hope today’s opening up report. couple of from away are for questions, take

our serve. businesses levels we performing at First, particularly are and those well for all

distinctive to to in We do That continues continue produce growth. so to performance expect XXXX.

at The Second, ambitious we serving consumer analytics, determined have data NPS a person advancing make these as to focused initiatives in time. innovation, restless initiatives custodianship, artificial areas in our of and record and health, intelligence, culture. one individual a health numerous team, healthcare such reflects digital difference one a breadth

healthcare are delivered company Finally, competencies information. a offer clinical Together, data competencies we in services. and and technology Optum distinctive UnitedHealthcare in benefits and and core in rooted our insight, and

these As we key strong bring serve long more privileged people we growth for to time. expect distinctive capabilities are to clients, a and value continue and to we

Our of service our potential with remarkable detail this today. conference all in interest realizing goal and you We remains this to at you investor forward enterprise. November. social more your in discussing the growth, look of more for Thank

questions, your question please. We now per person one the to open will floor

[Operator Fargo. take our Costa Instructions] Peter Wells Please We question will ahead. with first go from

ask seen earnings XXXX, into I looks growth Medicare little over as morning. about like last good growing we you is Good your would Advantage It lot competitively as from more years. there in going have like a to geographically. for well XXXX plans more few the Medicare pricing plans a

what a in seen you Can You else’s little now had you specifically XXXX? great thinking growth are XXXX. plans in everybody having growth talk for about more

the growth, our of in job commenting think continued this you and will I things. stage done I success of not specifics we really that some but the for our give very you Thank acknowledging Obviously, a has Peter. in past on area. XXXX, team sense general are we building you, our nice appreciate setting And business

it Nelson. give Steve will I So, to

about Sure. I is XXXX. assume that question

probably. plan benefits Yes,

Peter, XXXX. you said

that. XXXX, sorry about

benefit selling and to are do Making about lot we now days between the tremendous Advantage A Medicare sure, and growth. because ‘XX season yes, okay. into for work plan two of

and leveraging managing capabilities, our substantial have really through more nowhere some advance shine with Medicare around Optum UnitedHealthcare at fundamental my that, clinical on both to idea We the than mentioned and focus very has growth, advances quality our Advantage. think, businesses administrative in in been and earlier our distinction focused areas, that the brightly across all really I costs key I comments

think shed of see kind great Thompson, ‘XX outlook XXXX of for things as on up. it’s have shaping light to I CEO our kind So, you Brian Medicare some and of

Sure. Steve. good Thanks, Peter, morning.

goes, strong, XXXX to our as far to our aligns very what expectation. continues be seeing we performance As are

robust So well our outlook as optimistic that at foundation large XXXX. both industry really sets the for performance the for inside as a

few for are we great I closures, stable seeing as we team exits, is very XXXX for think here. look marketplace few what the very at benefits this very broadly, really

popularity will our landscape, seeing what changes, generally at large. I continued penetration well aligns the speaking Advantage respect the think both Medicare to that Competitively, are as it with in enable as for no we large, competitive advances big with expectations.

in growth XXXX Our well-positioned we and very stable, remain XXXX. the to expect offerings inside do continued and particular industry outpace very in strong, for growth

business was little as the you health the on give how well you as hoping a fee? business versus group I insurance color past retail getting the are

Sure. group, one XXXX obviously our growth. terms strong Peter, in and of of retention with ever strongest was to respect both years

be can great want to in terms but up retention. it as bit don’t a as well inside is a anomaly, of setting be what customers strong very to diminish XXXX as of well, year strong think certainly again new growth I an considered

Thank Okay. Peter. you,

please. question Next

Thanks.

ahead. Lake Wolfe will with from go next Justin our we Research. Please take question And

Thanks. morning. Good

the on congrats role. Dave, new First,

Secondly, helpful. just appreciate XXXX the very commentary on

margins is than there? ‘XX back I about think they for to just a bit it what kind delineate color in am that it, the flush it and net out a like if this for coming talking a can have one talked year would is I versus $X.XX income XXXX here businesses, of through tailwind, I in Investor it way any your us in of as was take headwind. you to to Thanks. came if there you your are little think you ‘XX. you when background away you And lower change about instance, being I target did, little passed back try $X.XX curious Day,

the new on Rex guidance role question, John question. acknowledgment to respond I of the will for XXXX. and appreciate your Justin to your Thanks ask our and

me give little Maybe morning, Good let a more color on that. Justin.

So, that’s the of earnings that. tax explicit of the talk remainder that’s impact the first XXXX over that is say when back I’d from feel the year-over-year earnings we created really it’s we in, reduction coming two-thirds that, somewhat that from $X.XX the the headwind sizing about while of growth

from than the are about XXXX of somewhat saw half one-third Advantage under the they XXXX I side that I part breaks how of composition tailwind. would mentioned derives that products. other that the of year $X.XX the and the from of that impact earnings. you and Medicare really other derives commercial So tail risk restroom from then we and XXXX really tail non-deductibility down is kind the And of think on of end the the If the as of our that say fee that just the more

it So, really think about the breaks as way and we the down overview that’s impact. ‘XX

that’s hopefully, helpful. So,

components. get recognize its Justin, we’ll like would visibility to but conference, break did upcoming investor our this we on down you some greater at

Thanks.

Next question, please.

Please the question go Jefferies. We will ahead. take next Windley Dave from with

sustainable that’s back that Are OptumInsight good year there. or think why different you Hi, running range? we my for range? of a over target end you higher of revising very at to wondered target margins had down taking On Optum. need Thanks. might $XX $XX kind backlog way? attractive Is or been asked to view if nicely, then I billion a into for there target. maybe the the also looking that moderate to XX% the long-term Thanks reason some morning. is to fourth XX% flip the there to billion range will wanted above to strong Are I a up previously range in has kind the the and get OptumInsight, the pretty been still grew quarter question. I

Renfro? Dave. Thanks, Larry

the as it Larry. Tim about and on sees to bit financial Dave, this OptumInsight, it’s to to know of as and Couple it will OptumInsight terms in lead is talk perform going and they for am quarter but little ask from how this and third finished line and would in business in with we expectation. the will about our talk the a I Wicks I standpoint Murphy slightly I they of role how you quarter are expect in Eric into what us the know to say a historical right ahead I fourth CFO ask then comments fourth the quarter actually going he

will talk the a a we Tim end probably year the a little at have about quarter came bit large that in that had pretty that account I may of third think feel in little number on the strong bit I are expectations. but at and is you momentum looking of impact the very that would it, way that overall say the we confident our last

So, Tim?

know by important Great. sale that’s of Thank, very had million Larry. The that revenue was Tim implementation. end-to-end just to late to and it’s noting of great, management, also that as really Dave It’s quarter we in thanks cycle of $XXX a year-to-date. I for sequential Good XXXX, would to I $XX.X that number businesses. And that we billion I growth note you. really this large to government talk Wicks. to it’s am was important backlog, think the has and led also questions. hit $X.X BPL around strong question billion a year, understand QX now in want grown it

about So, as talk up added XX% number it $X.X that a have portion pipeline. and of is now Eric year-over-year. to the that’s time off, but we I into earlier, turn I rolled sales will mentioned backlog the of new to that And billion number since also

OptumInsight. Murphy Eric Good Tim. Dave. morning, thanks, Yes, with

our QX of I absolutely pipeline with relative a expectations asked We specific our – was with will in active backlog question of come and contribution strong pursuits. In regarding you start to line expectations QX terms about QX year, first the our with to very backlog. our and into the for

XX% year-on-year. as our cycle where We acute around stated objective So, up backlog and on $XX billion be for in bullish our you a pipeline are to management, revenue to of our billion contributions being our to total XXXX. backlog we concentrated that achieve $XX inventory very QX the ability able anticipate of is

anticipate we into a to So, QX XXXX. strong finish

take it’s Larry, want don’t I to this because answered margin to he Dave, question. Tim, back believe So, the I

Great. Dave, mentioned for XX.X% you to at had QX. first just note, the margin

important expansion XX incentive has we we XXXX, the from margin basis years, year-over-year payments you the that sales it’s as and OptumXXX of Sequential note, continued points in but same that’s as it’s that in whether expect margin September just seasonality technology other think and at expansion expansion think anticipate about as year-to-date. perpetual I amount to margin last over XXX by basis been see being QX prior driven well consistent data the QX a end the points, quarter business than it’s sales. and with content to so the basis fee software up performance expansion point sales just margin additional and and sequential of year really or XX

we expect anything would and as QX it each overall seasonality this see real what but it and previously, have expect our we had is So, than year the to outlook now. kind roll not right change seasonality of year the that to we we higher a through expectation

Okay, thank you.

you. Thank

question, Next please.

with next question Lynch. of Kevin The Fischbeck Bank Please America/Merrill comes from go ahead.

Great. Thanks.

there end hurricanes coming in coming think around far for in in comments it’s your potentially any QX? and been looking what what’s towards share this lower to of if that you year, impact the so wanted trend are the and how maybe it’s QX you Just of in is

Thank you, Kevin.

within conference strong. we provided XX remarks, X% that basis lower the than our we at expect end of to said be As X%, that range had in last point trend so it’s minus looking plus is year. Overall, less our or investor prepared the the

and some ask on healthcare add Financial of I a hurricanes. team will then Putnam, nice me costs, maybe comments Chief containing Our does job few a UnitedHealthcare let to our make the very Jeff details of Officer but

Thanks, our Dave. at our that right trend right start efforts are morning, everyday we on our of I’d costs clinical ways the in on behalf to like cost of place customers Good cost the and through do service. and driving management getting we focus at medical several quality care traditional Kevin. improve level of medical this reflects manage to initiatives,

and partnerships need alignment additional with increasing the to care. We also of provider those them clinical the our aligning focus on the getting connected data are with right leveraging increasing and our are we of incentives. greatest And effectiveness the model

X%, our ago original range you mentioned, cost about at and Dave to seeing of a to overall the a lower be It’s below we our look are color XXXX it that’s broad-based. are still trend and really driver from by on within half talking category. As defer little unit it, we be year looking we but where our – have at to continues the primary

call isn’t trend that. We out downward categories are and around that slightly all specific across then seeing I shift there anything

aftermath We customers for then of on to for relief Puerto inspiring heavily invested and pulled and been obviously together as organization financial of it’s unprecedented to provided that back our a period their an well their Florida to to it’s in and assistance hurricanes, just And our gave to opportunity communities Texas, and serve feet. time relief been really our we how we countless financial employees have services that Kevin, as the we the helped all with in-kind men We and frankly worked this so the selflessly see employees time powerful kinds and provided so take wanted fellow employees. efforts timeframe these thank state storms people the leadership help We during in Rico. and and I of this get for broadly. today. do the continue women in

of lost business also So, financial as you effects for to efforts. significant our of in amount is well the there these fair from level businesses of direct damage are of case reduced all and the offset, is as want markets course had some but utilization. of typically a utilization revenue relief OptumCare there I to then that Optum, we remind our These

we end, up lot because overall financial So but pay in the important at our the but will, of that it not really didn’t impact most if in performance. the you the ended what end time, to a being material whole was wasn’t to attention

that in the are far mean, is I pointing create any implications, feel that an that, might as going a I costs like to be into of did for stronger trend seasonally are QX other? way or good a just you every like lot I to and or disruption guess, visibility you you got QX that you anything there accelerate processing year. plan issue that QX lot on to expecting Do instructions as of if claims the potential people volumes how regarding one have think

business have we to believe visibility our good We see affecting is our and we disruption don’t QX results.

thanks. Okay,

Thank you, Kevin.

Next question please.

Borsch ahead. We will Matt BMO go with Markets. to next Please Capital go

from necessarily regarding Justin you. on the looking thank more you here to for Could Yes, earlier the… question not numbers talk just

difficult very to you. hear it’s Matt,

up, you You are breaking are on…?

that how sorry, Is that? about am I better?

you very Much, much, much. thank

Thank you.

fee am where respect pricing more change of it is So, I you the the tax few way the been was the $X.XX, on presumably you a insurer side. looking it done that health have to small more of handling picking sort commercial in to sorry in the you getting MA about rest last commercial the group perhaps to market and more just resumption. health pass-through insurer any fact that up the from my the that not half entirely has in than fee in with but for two-thirds years? question the that of necessarily the environment so was the numbers, not and at there up reflecting – talked the than on qualitatively what are you or relative least are the Is grows

let I’ll respond. to John

collects the business just the Yes. that convention with on that, periods and the period the that and side that recognizes has commercial commercial the accounting Matt, tax do one terms on that expenses one of the of in it. to

renewal gap is date, be than there for business other the timing piece in going that X the of So to some occur. any January that’s

was in that called that. had we the XXXX So, of tailwinds the of out result one

Right.

headwind That we the for us expense XXXX, full in recognition into XXXX. because in flips get a

over a out it variability. smoothes that So, few the the years, thing or but creates X-year

Thank or can and of loss just any anything one could anything self-funded the the question in talk in the that for other the If here, environment to circumstances competitive into sneak is business? around does reflect to I maybe that account you Got just there – you. a read it. XXX,XXX public sector

was this one nothing it unfortunately I particularly to about and to it. than will is for, Alter touch Jeff other happen No, Jeff. a lose so account. on There unique ask single we It

good morning Matt. Yes,

I this I large account as said, account. renewal. healthcare see a very compete well puts work to be with honored say we really think run-out members in renewals. Dave of out pricing on client. As circumstances focused costs remain next projection during their the serve period have think this very hope position for time to this We again And chosen unfortunately, client unique through in bid. in to them extremely would both client you to during the were weren’t that and that We that and we continue of that disciplined and admin to their client’s serving business well to we a of our number

you. Thank Alright.

Thank you, Matt.

please. Next question

next Baker The Please James. from question with comes Michael go ahead. Raymond

Yes, thanks.

to Just get Medicaid waiver opportunity the the on Massachusetts in of filed? light management of some active want potential that your perspective for state more formularies was

Prince to John I comment. ask will

in overall. Medicaid Prince, terms CEO This formularies, of plan to Michael, of detail is OptumRx. going Medicaid question into around John state Good get am specific morning. the probably I the

fee-for-service We It’s support and involved to very be plan. us. Dave’s. actually large Medicaid for terms pleased a their very in from design We business with state are very of

a in of Medicaid We design. their care support variety also plans managed

for most are create think looking I to their customers. states affordability more at different strategies

very with become as out going experience. overall, successful around affordability into on where people ongoing very very market, further to state, We get consumer-oriented. in trying a on that have working to given not are been well I am of specifics a value more beneficiaries states but market focused it’s plans solid get that as designs and

you. Michael. Thank question, Good

please. Next question

Please comes go question next The from JPMorgan. ahead. Gary Taylor with

have my answered. questions point, been important this at Actually,

proceed. will let I just Thanks. So, you

Gary. you, Thank

please. question Next

And go with Deutsche go to we Rigg ahead. Chris next Please Bank. can

Good get then in commercial, business Medicaid? on us the in increase morning. more color just give lines, And Thanks. performance year-to-year? reserve a the and be I development relative could hoping on great. favorable will you the to was little That any the if Medicare color

enterprise components. development ask Well, – Jeff indicative our I to containment of the we think across efforts will have and Putnam our its cost on is comment I

claims and and working our development Dave as as question, mature quarter the Yes, processing reserving claims take and And time get and Chris. costs these, controlled way process. this into medical very both change our as we tightly for thanks mentioned, their timelines consistent a to that we modest some to data at up medical are reserving in improve control quality. we look they as maintain step with this, a when reflects Yes, our And $XXX well look are this, especially recorded billion and that I development consistency at with and you this pleased spend in $XXX time, accuracy break the and when don’t year. know By overall but you of as business favorable over both this billion you that year quarter. government our specifically, out approaching last commercial would offer we and businesses and

on can performance. Nelson Steve overall maybe then touch And

Sure. Hi, Chris.

my in all the performance really of comments our earlier mentioned businesses. I across about excited as So,

are a We well-positioned we of lot and opportunity. really see

just the little we Dan the in – just maybe share is to have Pittman particularly note be perspective could continues Medicaid insured will ask strong growth opportunity Medicaid then to and fully I opportunity So, maybe Schumacher performance managed strong on, us. think a had of comment broadly a I Austin for on

Sure. perspective around would Steve better of your probably point, our that, businesses, on Chris, growth Thanks, standing to a our expectations. performing performance that highlight or question line in in built strong really I are earnings is our with than commercial foundations. from to is within little Steve. business bit. very each Nelson’s we out And an And

fully doing side. So, well on we are insured the

inside by we X the as got the the doing over had we million years investor better lives together mentioned X.X at conference. ago when what than we are prepared expected year, that a and last remarks in grown we the year have We

made lot both is the not performing down digital phone of advances our model years points around is strong as is way the on underpinning growth of really broaden pair our a then clients the partnership could to can some broader over And we portfolio also create in our spectrum really mentioning so in last think our and I but experiences to advocates clients. a to efforts that So, largest that well several and some have we positions our that and and appeal worth Optum. offering that price with highest from we that with the be in clinical very have management, that innovations made strong all our our able the potential only consumer smaller medical partnership our to as in with product

are to the So, performance. those contributing the some that are strong things of commercial

be continues Yes, just market comment overall. to on Medicaid It the thanks, very very a active. Dan. I marketplace, will strong

market We well Missouri. wins in as new as in are honored with Virginia recent

really XX forward, in-house. pipeline which of towards That pretty Louisiana state are LTSS, so turn shaping I We the complex Optum we pipeline very is have of recognition value recently across we in to Because board and RFPs populations over with Arizona strength a heavily a UnitedHealthcare. Colorado, very bringing and to partners. again strong we with have think the performance strong that important had renewals our look needs, got the of really up plays

distinctive a We have serving carved out capability populations. in very those

again, So, strong it’s a marketplace.

the states to value we individuals as continue to cost as the that in predictability importantly Medicaid manage and serve. quality well deliver think increasing that look I to

we the So, future marketplace. very, that bullish are of about very

in hopefully, as international business, down our of might performed to referring a particular our in sense progression across nicely that, well. getting the year-over-year remarks. of Nice that that in prepared consistency of good from our board the add to business performance our meal. global you the has are are I the So, colleagues business the coming we

Thanks a lot.

thanks. Yes,

Next please. question

go James go Please Piper will we Sarah And Jaffray. next with to ahead.

plans most terms has understanding work dynamics…. cost of in United the industry an you. think has here deductible the having Thank impact high consumers The I theme increasing the on on and been

question hear are as we struggling your Sarah, well. to

Sorry.

most plans deductibles understanding the the dynamics the the on has of deductible United industry in So, the in balances. behavior, impact And I consumers high been an having has theme done on work terms. HFA consumer cost of and increasing think

a picture the headwind a growth talk can give a or traditional differential to cost initial of market, and plans moves can you see So, cost what’s idea from deductible commercial big do there going an us to as commercial when of consumer deductible the the plan? plans percent profile you high where you high experience trend trends

HSA heavily and an part plan these So, growth in of them ability our offer like well. been sought have to a are been because alongside contributor key in account designs HRA our have an after as to

So, expected individuals it’s and to needs greater modern us become for growth products been a and with on the in to rise, but continue whether tailoring additional focus Dan it’s they consumer on to color policies, category and more some provide considerable evolve networks of or those Alter a the inside individual case group policies will be individual or groups, Schumacher. have maybe A’s but I Jeff

Sarah. morning, Good Dave. Thanks, Sure.

Just context self-funded our so little offerings our self-funded just little a and XX% offerings, you clients for a inside is fully less our consumer-directed shade in more of a and look as portfolio insured so our across offerings. our base fully in at insured under of enrollment

we as benefits very a look to over that vehicle help to as so reasonable more at to employers up have offer a take And high-value continue seen some increasingly in time nice price. that

time relatively depending structure speaking needless is to very, varies you performance there if in as it on where year meaningful attachment that high into that obviously into it a we directed people considerably deductibles, sizing basis does time, then our very In offerings. points based what on terms and those say how step over of a delta on benefit trend people first and initially I set think the deductible improved and consumer but seen have over

you for questions, Thank your Sarah.

Next question please.

go ahead. go next Sheryl with to Please Mizuho. will we And Skolnick

very you much. Thank

reason brilliant to on, it guidance growth in first only is results of note out going don’t consistency debut, an must that and say be capital the and all the not observation is the question to positive in is on easy look but going I the the other here in presentation good and the comforting very where across and than here. but which the is both questions enterprise, remarkable way forgive of and in front commentary a that and So, for come company your of deployment I to my important make of both any and at this certainly strong am a of consistency start, the also but terms not a me, and us the terms de-leveraging way to asking call I is earnings the in way David

I David involved returned year next XX% are the what’s see capital it and a has now presumably have many keeper of today? next the from you’ve about take sitting where to you terms that has you or of but ROE the and needs more the multitude of now the have basic and externally growth and that stellar you internally under the of room deployment. XX% talking XX% keys on the got kind I go the your year the the what top things formula, organization know of performance is in of direction So, beyond acquisitions so you total there interesting in company is plus, do opportunities, whether capital to are at are made debt to to strategic United it’s is this been company where with

Thank I you remarks, for kind that. appreciate Sheryl. your

full to All acknowledgment are guess it of that this slight in has a nicely. by and should that as was tilt in with the better they for is as continue you organization improve a serve the I grow capital to ways organically It in in the advance there that we our our potential to and And job of overall. to thank done maybe this well performance performing transition business. for architected at to Steve board and might your said, of surprise not continue suspect deploy does to lot past quite fantastic people direction no yet opportunity Hemsley a anyone. you have be As

nearly to in some into a As there years. some haven’t health enter here more in to and/or significant we small kind do, allows nationally. better the gain and that purpose X you us a do competency people We for serve market and to largely know, acquisitions of plan invested plug-in new

continues we the on then up. to when day growth terms be felt climates you globally. look us the fact we has will out category the – climate entered think And nice to drive of evolve We what push a to seen forward about class and market. So, to into to the and vast when UnitedHealthcare an economic regulatory Brazil, result turning Brazil that, to been and in focus in as a growth middle good growth that, globally business. and I was it that good nice from more in will that organic the of our for as be mean to talk market I front is and globally, a of agenda It majority selectively have lead shape political a we

is You acquisition into Peru the and that That initial the probably through saw with we Medica. two underway that in the activities of some extended pre-announced give Chile, those that’s Colombia – way not recognizing fully a markets believe type people of are that serve the leverage presence and us South of broader can the South America American we that to all investible. they in we combination

So, we significant forward be of more the but front growth we would have global as make The measured the part will going will global that investments. on in say investments through Optum it, past. I will be particularly

believe greater there we formed We also overall. the capacities, and meaning frankly add if in from innovative to synchronization articulated pharmacy issues which transparency market exists technological to have John business, reinvent considerable that story foundation us which addressing bringing the we bringing well as some that. as value to of a remarks, that business As prepared can will in services capacities our the you care that evolving have allowed

in delivery is are lot United States. our particularly major the that across a really certain in investments really Second healthcare the would of are context in the today ambulatory be where of space, markets

excuse You have their the we that from me have out care care, capacities much, but also and our move urgent us then show the dating to they as is capacities. obviously the of back grown ‘XX our leverage addition on business up through local continuing recent which acquisition establishing practices I XXXX and nurse acquisitions, XLHealth those surgical smaller in nicely home a to seen may believe not foundation Optumcare came one at

the And continuing as build business will organic well you pre-revenue vast his the that has this move a with de and team taking years company and data technology through have distinctly I around an think, Hayek see deployment are heavily of in in information like was to advantage capital. then more Andrew assets that seen us which So, leveraging company area of novo on us also X and that as you Rally, this ago.

distinctive digital capacity consumer health it’s in the Now, a industry.

on communities broadly. will find healthcare of create the continue We well greater serve the same the to as as healthcare value ways to better front to delivery do data out assets

So, with liquidity I’d in so will but the are in say those and you returns strong philosophies are that we past. just directions consistent investing our I what the our deployment Optum, biased important underscore for us be that It’s seen with, headed shareholders. to would for like drive to towards have capital

well. to We debt balanced be our as move we we how dividend a about to manage and see will our continue will rate positions market

so you Perfect. Thank much.

you Thank for questions. your

Next question, please.

We go Partners. with to will ahead. next Leerink go Please Ana Gupte

you Amazon to seeing in which is the ask squeezing same-store up-sale model response being the thoughts you synchronization your wanted clinical you about relative potential margins what and me thanks Yes, expressed speculated? that your OptumRx in. with to pressure and retail standalone now and are entry tied about have to and having for coming maybe I sales down providers to medical like membership

end. will is give you Amazon the I there, a respond and a comments there Ana. on few maybe Prince ask at I Okay, John lot will to

couple parts. you, cover a Thank I will Prince, It’s OptumRx. Sure. Ana. of John CEO of

others. sync sort So, the just second broader entrance was I and of think one first Amazon lastly market and part the the around and to then is is

of our strategy changed. terms in sync, So, hasn’t

is fundamental cost cost the is Our and in and pharmacy that’s healthcare, driving around best customers. focus our for how solve net issues you one

think that are Optum, how earlier in cost market, where are last at that healthcare. market the is to we differentiated healthcare. total We improve in total I capabilities that with the The we second the of the X is we cost able our a where solve of version one And years. in had actually

with from in done the other with have health great We It’s actually a markets. value plans direct UnitedHealthcare market. created

broader a to pivoting We solution. are now that

prescribing the the happens influence you of doctor’s the the So, the not It are of and we have call, we leverages focused physicians, healthcare, touch actually the phone sync that. on in a with only actually what are out new but saw which how happens version we point it office market what borders in very in selling. how actually can

on healthcare. lot focused retail very focused digital in which assets, on retail setting. are have happens We where in of in of lot we happen are And our setting is transactions that and a a partnerships what

to next So, we things are taking level. the

at broader In pressure, the I is level, active. very think market terms on of is which a the second question, market

solution. I think it is interested very in the

a around good what as very in value drives And are selling story had really actually the wins new a well actually of experience. season. interested We people as a have good have We that what had lot market. drives that to I think shows

very out. very actually that’s robust, market say value to I’d so And and is the working in interested

end So, strong we with as as the season. are very retention in a selling season XXs going a well the to high

I at the context. looking will last frame we of in that discussion position terms cover let very broader market. So, good are piece a in think The And terms in of I is me Amazon from market. broader

our on on leverage healthcare standpoint, generations total So, member’s health are from of next before, goal achieving care is we a also And pharmacy focused and that we are an as focused part OptumRx on focused we mentioned I look creating of at cost as behalf of as wellness are models. and focused very on model you what that on clients. the

us really heart market. the So, a clinical at differentiates it’s it’s leverages and different expertise of very the what model in that

market, As it in to relates are agonistic. partners channel we the

So, our meet want perspective will served. they is how that we consumer to a where be and

partners. retail you partners, as are various distribution at we look new to So, open

We are to that the experience. value, consumer also willing decrease with partner improves drives anybody and cost

partner that. out any So that are to there actually addressed open we

history been effective. very Our has

have Walgreens and we continue those market we relationships partnerships. deep will are types with with the So to partners – other today, in open we with and CVS, of

job the I that done the important I marketplace no think nice than partnerships. of I to you going The talk say, might as well. and really business about become partnering addressed a the with any commentary. was has more will just broadly broadly past in future time in

continue thought serve to will for helping we and better in their leading make So, better engage everyone. with consumers health innovative systems managing organizations needs work and seek to healthcare

question Next please.

comes Citigroup. ahead. question from Ralph with next Giacobbe go The Please

for into that year MA. that year and between you do rapid two, about I when mature Thanks. help improvement, at about to to wanted historically then full of have margin think think Can us Thanks. you seen get back profile difference help versus any MA in typical us sort of group? ramp margins you versus individual go kind one to

Brian?

come is impact this Hi, Brian are I then from serve point, is advance, that I those clinical engagement and that fruition we that really own year our scale us of is with see the that tax biggest that we year biggest helping strong us the the to perhaps is news in XXXX, And good and won’t headwind. share tailwind one reduce your obviously Ralph. return the specifics. us get Yes, get the for we in first to foremost for growth. internal tax advancements can Thompson. that you approach we our is that the to secondarily is meaningfully What quality two. The did into is as we productivity

momentum driver the it’s of So, the in the for return us certainly XXXX. we prepare tax for biggest as

group individual? what about versus And

It’s very comparable.

Okay. Thank you.

Thank you, Ralph.

please. Next question

And we’ll next Stanley. with go Morgan ahead. go Sopcak Zack to Please

the question. for Thanks

was a your typically historically just those it’s capital were to could those they those, point, in with in experience covered if of hard accustomed on order. the and may been you comments, the you meaningful touched Dave wondering but color were had have versus this maybe to? say you little bit executive plans give margins briefly on in opening how I at So, businesses the

experience I Yes, to going going Dan ask thank plans. comment. with – question. have considerable short-term we to am Schumacher you good to Zack, ask am I do

Sure, thanks, morning. Good Zack.

as plans duration on the on XXX,XXX our associations business association plan, told, have and founded likewise in we the individual long so we our today. in decades the is about association association that. we short addressed group reality association business. probably an All So, experience got have well Actually, as front, got was support members the in

of I say have in we lot with a So experience, keeping is performance portfolio. our strong got and would generally the broader

to will could And the look engaging so they how forward shape we around going dialogue forward.

regulation the the of challenging been links reduced April has came that duration the plans X of for obviously, On the the policies, amount on marketplace. short that in

it full see access for value is and reality of very been cost people. to are a as in the the regulation a before increase it’s coverage. that extended bridge the that It growth because grown lot a reality consumers. year, we saw we And It’s so in have strong provides affordable exchange incredible to the And for offerings and option. more the is excited to between bridge people provides

gets duration of we look as those to plans hopefully the So, continue to support people extended.

Thank Zack. for question, you your

for time question. more have one We

And that Please Christine take ahead. question from we’ll Arnold with go Cowen.

is line Your open.

Good for morning. me in. Thanks putting

should think OptumHealth detail well XX% over we delved business things are of the your the a and that as How top as in to assumption years to aside? investing in tailwind line target other the and recognizing target. of much margin margin think as XX% lot X% couple SCA context next your of I you business. XX% performing to really in about a that line top I that haven’t as that as some still as putting we that know

should that X% something Thanks. that as we longer target? term thinking or think was should near-term to about we about So, be a margin XX%

provide maybe the headed Maybe then where we business. margin Andrew I the ask to can and with Tim will on comment comments some about are

Sure, Christine. Thanks, great.

So, about driven basis XXX by points today, FDA. year-over-year and basis margin reported points the year grew XX we as sequentially think

services HouseCalls businesses, and our expansion investments grew the overall there represented. was strategic as margin and delivery from while earnings addition, well platform in OptumHealth XX% care In we you much financial make as

the Andrew about period reporting an XX% for further in talk ability I we think the to grow making areas investments platforms. grow revenue and those that investments designed we market of to even are turn those that’s and in and this that we about third improve it really investments evidenced across think businesses to to as you to areas, year-over-year at are most our investment where investments, really I of OptumHealth look specifically that recent make at those growth have important around quarter. those over to intent

thanks question, Thanks, Tim Christine. and for the

balance of the are to XX% profitability period. an are and groups our future margin at we continue examples to range investments which transition in current in from quarter. investing pleased end contracts, higher investment of mentioned, those the with physician making as we Tim third to growth fee-for-service So, does of to value-based to be some help And X% require

would to prepared our ramps you an for thirdly investing segment up And contracts is remarks, Larry as opening veterans in an as in that his MedExpress requires Second mentioned new locations. and commencing new And investment location up as XXXX. imagine is contracts ramp and each as military to profitability. example in

and we to So expect to XX%. that range in X% of our given time continue fluctuate over be this, margin to

profitability quarter. strong local growth behavioral, in continue financial with consumer across HouseCalls, the of is delivery, performance our XX% most care pleased current year-over-year balance investing We to engagement. with were and the There we will businesses, services,

we And continue balance will profitability. the on and investing so with we current bullish were business to

Great. And Larry?

and commercial that a So, second to OptumHealth couple new we senior Larry the Renfro. ask leading of ago are a months couple her us of military X might here She comments comment military effort that on make have in to through is Patty side. General leader a just the has a joined of the here – on programs is side about a and of just on Christine, side, the in programs the kind ask I Horoho. coming it’s she name military the I executive by want one of the

programs, other that do East organizations with as is on Coast The we that that piece I our Coast. that well utilizes do, have part OptumHealth this when especially worked have OptumXXX the the major West OptumInsight we is add we would in lot with a and programs organization its of that into

centers forth. in tying as that’s so surgery and when the and get you So to well physician groups

little would it to short, a you about everybody talking mind on Patty, and are what so little So, [indiscernible]. bit working you just a keep give

we the join of been what X and our Thank that promotes find do as you, ago leverage Army after that I ways honor system XXrd culminating transform General. one XX able months have really the health. and to treats Optum to have from about morning. to to Larry years good U.S. good diseases Surgeon healthcare one experience And is

And the And of in disability September XX medical we contracts kept Administration. began for military District year, contract, Veterans Columbia. states on behalf Benefit X-year in event two our performing in this this veterans newest the so of the through of the exams of provide we

will a TRICARE line frontline starting Global second operate The utilizing telehealth the where is advice Line offered day coordination Advice we and XXXX care X-year XX Line, would you. is nurse is the in our contract Global their members, Nurse this Advice Nurse Health veterans families are the serve Thank to what Military hours System’s to worldwide. beginning that our families just and started. and capability of we military is service just just their our getting military, And say retirees this ability and I our

Great.

get and your thank our Horoho Christine could General to that you continues from for that bench and deeper. take is So, I think comments. you deep Welcome,

briefly Optum and with So, I UnitedHealthcare of will wrap we people the needs Group, and this. are on serve. the fulfilling intently UnitedHealth focused customers healthcare

As we had a market distinct sustainable pace. tangible to we grow value leading at to continue healthcare,

into for in and continued at of and you New XXXX November for decade the forward to sharing you on in more We XXXX We look trajectory interest investor XX. our continue detail through expect joining York with this remainder us our to Thank the for conference your ahead. enterprise.

Thanks this for And program. conclude today’s your will participation.

a may now day. Have You disconnect. great