CNC - Earnings call transcript Q4 2021

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, and welcome to the Centene Fourth Quarter and Fiscal Year 2021 Earnings Conference Call. [Operator Instructions] Please note, today's event is being recorded. I would now like to turn the conference over to Jennifer Gilligan, Senior Vice President, Investor Relations. Please go ahead, ma'am.

Jennifer Gilligan

Thank you, Rocco, and good morning, everyone. us Fourth joining Results XXXX for Call. Conference you on Quarter our Earnings Thank and Officer; also and Chief Chairman; Chairman this at Financial Neidorff, Michael Executive centene.com. will Centene, accessed President Vice and host Chief through Officer Executive website of Brent call, Sarah and Operating be Asher, Officer; which Drew morning's President Chief can Layton, Vice London, our safe and harbor Centene may under XXXX. purpose make prospects plans constitute that expectations, the of forward-looking remarks Securities Any of Private future the provision the Act Litigation for statements about Reform Actual filings, with forward-looking on Centene's filed results may of the including to differ most important materially of respect in from uncertainties results operations. impacts potential the XX-Q SEC those Form October on indicated risks and XX, statements of by a factors, those COVID-XX recent discussed XXXX, as including and described and our those various public result business other events anticipates and developments subsequent its change. cause may Centene that estimates to

may also XXXX comparable Investors our company's Chairman found these disclaim our GAAP the press any to over I CEO, turn to company measures. the on specifically call do The so. most With in measures While update to measures these would to we directly at will available and release, Neidorff. certain that, of website fourth can call is forward-looking some section. in A non-GAAP quarter future, which obligation the the Michael? be the under like with Michael elect refer point the reconciliation statements to

Michael Neidorff

hear me now? you Can

Operator

sir. Yes,

Michael Neidorff

hear you Can now? me

Operator

sir. clear, and Loud

Michael Neidorff

Drew We joined Call. through ending Brent Fourth Good had Quarter I'll London, a to Earnings Asher. welcome strong and Sarah by over. our start Okay. Layton today I'm morning, and XXXX. XXXX

strong product executed health and well across foundation care. government-sponsored building performing lines extending our on as major is portfolio the market-leading our in fourth Our position quarter, during X our we

Marketplace business. to Medicare grew good driven our XX.X by in growth million and in performance Medicaid, membership strong in individuals, X% Our increases

welcome the announced also last exactly the month, with after We Centene transaction. we to the closing earlier successfully year acquisition Magellan team X

We and this is welcome of to will in dire expand health Magellan access and X are allow it, into led the team There mental need Murray. care acquisition our Ken for to Fasola pleased Magellan years a pandemic the this us provide behavioral to by reach to health. country. Jim increased

capabilities significant from Board of our reflection leadership Board. and who to addition, Also, the all to Tommy for behavioral members part Board health our their in Thompson and Bob process, new Board John the have bring innovate mental Centene. ability X our as experience. to reimagine of to to significantly provide want In enhancing health, retired will thank give integrated members. physical January, welcomed Magellan and to contributions them our and I industry us Ditmore, many care years And and service various Roberts we

look the business onset health pandemic, I grow grew we uncertainty, on served the members pleased and as -- and back with I enterprise. care how As navigated am the diversified we a our of the

billion. $XX Just added this year, we have

our for to deliver plans have growth. our our value accelerated and clear pathway ahead have margins We expand creation a earnings multiyear strong and

the We ahead. with opportunities the strategy team right right have significant and

the as manage Sarah? in a I'll care, little period probably hear, during so who to. frog serve role stay -- couldn't be to who that I of to I Omicron. question-and-answer to our ensuring surge I the over this our And and Sarah have us highest quality pandemic. thank that continue strong step during good with healthy London, and in turn participate and I'm help want I throat, played all my we Finally, going the the have you'll employees to through up members particularly of prouder the want our a will

Sarah London

morning, Great. Michael, Thank and everyone. you, good

for Michael noted, we including introduction executed quarter delivered key new the and value a in Medicare evolving of provide constantly successfully the repositioning another the enrollment the positive operational as As Advantage, delivery annual period of on open in fourth performance business creating that start a we year as strong we objectives, landscape, XXXX new for momentum strong enrollment success period, the products Marketplace for QX outlook. how on including our beneficiaries priority creation details advancing forward will and our will resonate comment performance our Then and refining initiatives. in Brent are continued fourth progress we value On on financial of XXXX. into including momentum our expansion continues to today's the execution core highest opportunities on and market provide businesses, carrying the call, our Drew plan, quarter margin

it to value talent structural value office. let important provide a turn creation added perspective, progress. I update and over a the From our have creation to we leadership brief me them, Before on

management As accountability operating of creation in experience Magellan's take early to a program. the of track adding brings the transitioned and our we Jim announced layer record Jim execution, January, in day-to-day on the value who VCO. discipline served leading for role important Murray, to has as COO, of Chief Officer, President successful and Transformation another new

to are We thrilled have him on board.

details. the to Now

though are Day, with of into have while already we we provide we QX, journey largely of the some only key plan the a progress month Investor we our on some offering us view execution, into foundational and work guideposts. at XXXX may a a on those operational of seem, mentioned underway. X to made And you bringing on our year way is progress, guideposts and as As December incremental

First, our pharmacy project. platform consolidation

successfully platforms clinical, the member another our differentiating January the us planned. the that to is drive X to a that most are an X February technology remaining thereby We investment to and experience. important migrated that on and platform. provider member SG&A XXXX, in will on into PBM As X and savings strategy X footprint not efficient reminder, consolidated to administrative automation. This as PBM to programs allow we X outsource been our had the on across focus external functions more on capabilities PBM yet for here engagement and process these overall external of down to state-specific reduce Coming partner, had technology allowing X

outlined fourth We X against remaining to in for migration to pleased value our our including for that call is for PBM track well maximizing QX. we core $XX full the fully look to this to on to work spend. mapping standardization, RFP underway the made are as Since process the X transition X to we process. progress operations. we Overall, the infrastructure enterprise formal We planned and standardizing and and center beginning have later of consolidated our the March good summer, of prepare forward issue the December, rationalizing cloud. are am efforts as RFP Phase be I that in through we around initiated the scheduled of on are our enterprise targeting time billion pharmacy also for telephony say release well

offer before, mentioned convenient our we members to information and will this need. us As more for with interact the ways they get

Medicare We products starting QX. work this in with are expect completed early to Marketplace and our be and

the in completed with building We transition off function also the all kicked serve enhancing management have quality productivity. and We enterprise our product involves and major utilization motion. on to X Phase work, primary Marketplace transition Medicare focus now a lines an X services shared of which

something to October, to workplace a flexibility productivity and same mentioned our to and real to enhanced and we during our our on recruit back talent, also deliver at impact flexible level reevaluate ability the updated means Drew have home environment. need more service as will footprint, learned shift work-at-home Lastly, in in members how estate formally but meaningful of have work our to December policies, a it Day. the Investor retain The we we

We that of work the footprint, have see opportunities full as and updates estate on XX% approximately locations already facility we of get evaluated material expect real portfolio. for downsizing our our through

the value in I to and used allocation million Finally, that $XXX story portfolio to pillar share December. majority plan proceeds our the we of out repurchases the review in on on Closing divestiture USMM, capital want creation from execute the process. particularly touch

and through process. We a portfolio working way rigorous are noncore aggressively consistent, evaluation our strategic the with

on updates progresses. as this work We it to will continue provide

creation While the complex. work critically also important, is is value it

teams Let to thank size frontline and leveraging our well. creation and differently But to our me this assure leaders agility enthusiasm, throughout for stakeholders. take and our we value staff that on objectives our operational our the and are and scale value think of laser-focused our organization also Centene's performing local full experts businesses leaders our opportunity market to CEOs in clinical their you willingness service significant members. organizational me to commitment Overall, unlock to let for and from have work and are differently

partners, to line to while employees are business progress our performance to and margin lines, on turn delivering Brent all our on shareholders. members, for for QX. on call state we commitment some over expansion, now of the business core I'd our We the insights strength during core are like meaningful and making building our

Brent Layton

Thank you, morning, happy to core everyone. to be our talk our of Sarah. about performance lines. today Good business here I'm

our the this grow positioned utilization. we've pandemic continues of Government-sponsored nimble a has our across well through more gain scale to to quality pandemic. U.S., to to and in Over how and to size remain environment product a ability care years, in Centene's services momentum continues lines. return health Centene us and past manage be X to allowed discussed We provide normalized or all the

This increasing still was $XX to more as is a by growth suspension closed redeterminations, the membership Our XXXX. aided in of will Medicaid which business million growing ongoing out moment. with about talk I we

business, contract X.X In see than ended in We success continue to our we members new across Medicare, our in with as XX Nevada. the states. more year million such Medicaid

WellCare's remain to as XXXX XXXX, as experienced last mentioned footprint. product offers plans from of the period and track combination meet open we enrollment the As in expertise provider counties benefited XXX states. We new well network and geographic In growth and expectations. our strong Centene month, new X we strong during Centene's on

see expanding Centene's as than more eligible to continue beneficiaries. makes footprint of significant to product country's Medicare available XX% the opportunity our offering within We

at than Finally, was and the in are million of year, pleased enrollment more we end with results. open the Marketplace, membership X.X our

product lines. are evolved open our returning never Marketplace expansion excited states. all U.S. have solid the which demands of period. margins with undertook the affordability. is think to of members of impactful growth offerings, goals For X% time, XXXX, makes during new evidence in we our same further At to flexibility, long-term that And clear is in This the Ambetter our the This X.X%. offering in the all showed the to to discipline in the race of greater more year, we pricing XX% our X of our in enrollment reach, in in committed I business and sustained margin our what the meet Marketplace expanding rates. geographic to about accessibility a target we're counties our initiatives product product And and back translated Ambetter we on and Marketplace pretax to ability momentum with XXXX fact remain execute across We participated their to bottom the

the want I on handing to of redeterminations. to our quick thinking call Before update over provide Drew, a

with the best partners state We to transition. closely the continue our to understand how support and to work timing

continues again, a Our this to timing The top be will redeterminations not care current of will But reflect May. of a in members off the Medicaid continuity outlook that return roll remains vary and by state-by-state. priority. universal

XX at great provide this currently Medicaid to of me into products products of opportunity offer care Drew. low With Our Overall, exchange in are let of that, breadth turn XXXX. we cost call and competitive heading our We Marketplace through pleased our portfolio the to our states. capabilities. continuity over a Centene our XX position services with deliver of a

Andrew Asher

full results fourth in per XX% earnings provided morning, of increase our in $X.XX This of revenue, and Day. top fourth are the guidance of we at reported end Brent. and at the an you, quarter compared These the for billion diluted $X.XX the quarter earnings December including XXXX quarter XXXX $XX.X our Thank adjusted adjusted to of share results, XXXX year. Investor

membership Medicare to Total grew compared primarily Total compared the a strong million, quarter during Let's Medicaid membership to year start the revenue quarter. $X.X X% revenue of billion up by with XXXX, growth organic fourth $XX.X XXXX. increased ago. to to due and for

Our XX.X%, was QX consistent consolidated our with expectations. HBR

of driven forward, and commercial, consolidated promised, can HBRs HBRs. XXs with you As the third the see going the in risk Investor beginning and earnings X absolute high each the Delta covered in Medicaid of posted QX June we and the at and you has PDP our XXXX discussed Day in Medicaid that by able the drive QX high on will HBR mid- to And we see overall today's the frame, the the to businesses, release variant call. HBR Medicare, be Structurally, In quarter, in highest Medicare adjustment QX the HBR, the Medicare business quarter the HBR commercial, inclusive the as Advantage high our lines. components items XXs. time and

said we've an variant XXXX in to before, investor As look of we year, inpatient COVID lower Omicron authorizations XX At there's insights and to the opportunity half an as rising provided conference on we believe December. related January the the and HBR Medicare this about back beyond. we

lowest. Delta seeing per fortunately, lower As was for low the severity are January, the admit highest of variants. far, item was and resulting to and average Delta compared for national mid-January. year. But cases, least therefore, like lowest. continue consistent and the of prior length authorizations and and highest and the continue at acuity, lower very variant, the than Omicron peak Omicron, Medicare an in in update we variant, business seen are was be lines inpatient climb This with Marketplace Marketplace data. typical so the to our COVID trend, influenza the a Medicare measures lower than the cost acuity with peak more Interestingly, With X to now, on with the stay One was seems during is peaked,

sheet P&L other and items. balance to Moving

because Our in enrollment of adjusted line reflects year. revenues. Marketplace. of leveraged fourth was the compared SG&A with This in expenses quarter was the improvement expense would the X.X% be open our our that highest rate year and both in fourth to expectation higher Medicare over spending quarter last SG&A the Year-over-year X.X% ratio in

have SG&A you of Some rate businesses. mix asked and about of our our

the guidance SG&A So midpoint let to me adjusted of give X.XX%. XXXX you of relative some perspective

metrics continue a forecasted of of and reporting First at SG&A separate service the SG&A important covered breaking on margin and premium and calculate our revenue, off Day, And statement Investor excludes our to $X all, from and that it's depreciation out of remember have to we income pass-through we revenue. XXXX which line. will we're as billion in it rate

to our expect basis, little approximately XX points. for run under rate absolute an XXXX. depreciation by SG&A $XXX We Magellan On a basis million increases

points our for on increased our and increased businesses little in XX primarily lower international Our by businesses those excluding be provided creation that was enterprise a points, by midpoint health Cash of other adjusted operations basis businesses value flow focused SG&A over the net would the our by it million about care over rate XXXX, basis and mid-Xs, the XX plan $XXX driving is earnings. time. in quarter, driven by meaning

closed We continue $X.X right transaction quarter cash used domestic billion position Furthermore, our on we our unregulated to $X.X available maintain sheet unregulated a at year-end, of strong of our Magellan after end. balance cash. which billion liquidity

we fourth in the and approximately half repurchased be majority during to Our $XX.X Sarah of debt buybacks for quarter stock goal continues from in of the at end paydown. parent sale of quarter, our mentioned, proceeds our was Management. that Medical build using at the Debt share as additional stake U.S. million topic, to cash back beginning On XXXX billion. $XXX

our XX.X%, was ratio debt-to-cap debt. excluding Our nonrecourse

claims represents liability medical claims at days end and totaled Our payable XX to XX billion quarter in $XX.X QX. compared in

Our improve balance and even strengthen and we cash it margins generate we sheet strong, further expect to flow. remains as

quarter fourth as plan. results organizational creation building from As to on our the value commitment as momentum we positive our we're XXXX, the begin well

share XXXX We $X.XX. expectations are $X.XX including reiterating financial our earnings full adjusted for year guidance, of to per

from proxy in our about EPS of pleased a As Overall, the half periods XX% performance like for achieve you year our the our expectations. agility are Medicare we our for and and to of it enrollment annual positioned with Brent, as heard and pretty And the in XX% good about half, in consensus you looks adjusted and estimates. the well our and execution Marketplace the organization. strength demonstrates are the earnings, of that's XXXX of membership back seasonality is XXXX think XXXX first

have you drive open progress Operator, year. updating our to motion financial for line the on, We of you through value lot your please can As our plan. commitments forward on we Thank creation work Sarah questions? we in for move you in as a to the look interest. touched the multiyear Rocco,

Operator

first comes Nephron [Operator at Today's Raskin Josh from question Instructions] Research.

Josh Raskin

noncore follow potential the wanted up and Sarah, and I complexities, I just to divestitures on assets, around understand process the you mentioned. that

I'm you and PBM think process specifically us that then just there's international to as thoughts as I on interested opportunity RFP starting, an well? if part of remind if certain could this include you're on assets

Sarah London

absolutely. Yes,

independent no really to clear-eyed codify phase be as of I'm exceptions appreciate assets, those most which the why very going We process. So been noncore updates we've and for about are international. of And process. of said, are that update incrementally. USMM to as being to the all We're is prioritizing always portfolio to shared you then on review And sure heard you we've specific there an can used able be sort largest execution assets. on not

you we them. So we'll updates definitely that share we as with have can

the front, overall not has there strategy On PBM our changed.

the the the think are process all I be various assets, criteria inbound the other portfolio including review as PBM assets. through Magellan and so And assets, that to same subject will going

on stay that. tuned more for So updates

Josh Raskin

follow-up. incumbent? you next And RFPs remind are quick year any just us the just coming a is where that Centene Can or up Great. X in the

Brent Layton

all, award of waiting we're Louisiana. first our to hear in Well,

don't award. no on or we timetable update Louisiana's still have So but waiting

month, we've anticipating that. RFP the preparing and been for to are released California be this We

Operator

Fargo. at And our next question today comes Baxter from Stephen Wells

Stephen Baxter

quite MLR versus disclosures new improved the So and QX. the commercial meaningfully

revenue about you hoping QX could up were kind flagged. PMPMs since from into levels impact then against impact on guess that utilization I development talk it I in here. consider a appreciate like typical obviously, you also, QX? So seasonality baseline And whether from the bit looks a like any little versus was Omicron. how then And runs there's to trended I little bit? of favorable commentary stuff the any

first trying Just moving utilization understand the quarter in parts the to quarter.

Andrew Asher

hit sort I that's Yes, got majority December. the vast terms Omicron half And the the the peaks it of Thanks. line Delta that the of, my commercial is with which relative remarks, the variant of when compared sort largely, of in in in variants. QX, to at we sure. was as said with took And hardest of August. in peaking prior started that opposite which of item, variant, the back Marketplace,

largely QX terms QX you're to the consistent that think in notable seek So I the reserve at in methodology. nothing table, that's development. prior reestablish progression -- We based observing to upon similar levels else that period of

was driver that. I that that the So think caused

Operator

Sir, question of of from Kevin comes our today Bank next Fischbeck America.

Kevin Fischbeck

Just wondering kind pretty of of bit back your the of competitors, could pricing scaling little highlighting about a talk irrational the you one if exchanges. significantly on exchange environment

to upon year. So of to help you kind based being Can year some target that have if that -- to I about us think speaking, that are much how or is people rational, of is what control improve kind talked that you us And returning based getting -- this whether a that you where rate? of your upon normalized pricing, long-term margin broadly is versus target? in just margins you remind able some agree target this of long-term for

Andrew Asher

Yes. Good Marketplace. they're all questions and around

respond to conference our open I'll from that January with bids a competition we're Day XXXX. on to of bid for thinking back we hone and frame, meaningful you movement about walk to product our approach, financial at in expect Coupling at As to the time with were still more we that XX. of that disciplined the that new and how continuing to marketplace. portfolio we sat development, HBR over sort XXXX XXXX, Investor in those least for here summer going were that

We expect improvement basis our in year-to-year about commercial. XXX point

to we for still to that for us destination, commercial to Marketplace. pretax a and on execute So price that line, get meaningful X.X% that's zone improvement, our which expect X% -- final pretty won't

be were things is decisions X of part out will some reoccur. it coming XXXX it, why -- we And That on pricing, pleased open it's in be we with the enrollment we're to won't movement. course, terms in So a of period. hit will which got conscious there but be million-plus make that that of meaningful so of membership

Operator

question Our today next at Suisse. Crédit A.J. comes from Rice

A.J. Rice

Yes.

I about that to mentioned the think of will levers allow expectation seen that by California and some the improvement would potentially in that STARS some out some deal little more And I you've in the just us flavor for improving improve and about you guess give 'XX on? the how expectation visibility I perspective if there's flesh was like or maybe could highlight happen. mentioned my to And of would rapid you'd about that, the of of it. think, flesh different follow-up ratings? preemptive prepared I just discussion recently, or Medicare the beyond out, in are the remarks, what press those any Kaiser. wonder you margins, you RFP, in with a process? just RFP an it Give a it HBR, to 'XX us maturing? out it assessment in members growth know have Is beyond. be Is Anything call Brent been to

Brent Layton

I not about is in In I'll the over we do talking Drew. then Permanente, announcement think, kick California. A.J., and subcontract you're it Kaiser I'll Kaiser regards Permanente start, to to, with

any RP turn I'll not strategy approach it So our Drew. does forthcoming. to change or over that procurement it be in our will the of you,

Andrew Asher

comprehensive project which areas touches plan, Medicare, yes, of a number Yes. sort mentioned. of A.J., a Then the it's on you

frankly, we've a a coming be of XX, business and is initiatives, and dozens and pulling got XXXX X-X the a and process, it's higher brought more period. what not XX% experiences, other of open other having at of also pleased trade-off margin. base of between growth in work I'm that So XXXX places. from and will -- And is a of off discipline clinical enrollment bit our we initiatives the quite little It's those slate seen just bid and we've

base a approach margin slow the considerably that's then in of a Medicare, to expansion growth opportunity. but heck to expect So

to will a And process, pushing in we've products. bid try all the margin got towards of to to the effort. it We're not going balance get our because attractiveness year so multiyear go be X

right mention that XXXX will year rating little were in STARS s more volatility years. released STARS. which next the 'XX, looked to The 'XX in revenue, good. bit the result You're few over a scores be called

Now on we operational to rating those expect, provisions. the disaster our And some the rating what to were work year we've in are to as the for STARS lot XXXX, a drop. third scores, call, year today are other aided in can that XX impact the quarter execution October by between And relief got are that 'XX revenue which 'XX. at in improve STAR STARS essentially resulted scores do challenges, we and as of stars the called I released of we we around XXXX revenue, look mentioned

have and combined as those number the excellent clinical in we'll a harnessing to continue of So manage and earlier, of initiatives mentioned to the through cycles, just, levers to execution. operational that company Brent there -- for pull are assets push but

Operator

Stephens. our And Scott question with from today next Fidel comes

Scott Fidel

question. just to Actually, tack on to A.J.'s wanted quickly

Just on the Medicare margin side.

for as get commercial. Just just for you've us in thoughts that given year-over-year XXXX, MA? color interested the that follow-up, just on from that advanced that But appreciate margin your And out reinforces pretty in expected improvement getting just perspective. solid sort MLR came on change then of my notice a the seemed on confidence how your in wanted to initial just the

Medicaid out us now to be about XXXX. providing you're you'd if them. MLRs in metrics for going versus closely those call Obviously, interested there's anything that XXXX we're tracking now all to Medicare Just in want thinking and

well. time, ahead would you that out that to call helpful -- as just So want of be

Brent Layton

Yes, absolutely.

the slide XXXX where major Day of In gave progression by line HBR a we to fact, pointing bridge you Investor to XXXX. specific back of business from

so the entire you if HBR. shows the on do impact math, that And the

didn't for that So to again, divide that talking 'XX basis in we Medicare. Medicaid, Once about percentage it which will the more business a if price you utilization forums returning flat. sort expect around in few normalized points that that, year-to-year. a beyond last be in an to about commercial. would improve the degradate we represents, Medicare, then opportunity nor and reversion XXXX, think in you basis of HBR And in points up times, in mean do and XXX the to about get the and XXX we we public to we creates talked Medicaid, were by

represented that our Investor applies XXX if the that from HBR. just entire basis It's Medicaid at Day see that You waterfall And slides in but to isolate XX then points, itself. with notice, those and the for year. expect does what to support is demonstrate it bipartisan I and workable advanced program for the think agree Medicare next so rates be elements you far we

Operator

comes next Justin Research. our Lee And question Wolfe at from today

Justin Lee

Can you us where follow point through to significant want Medicaid. actually where I off? give to basis start of around XXX normalization, move is an were 'XX 'XX expect you normalize idea your them pretty you on up comments in in in those kind Medicaid and specifically. When margins talked about to margin

Andrew Asher

and forget, in have a pharmacy to orient don't And of manner. states. think that you'll also carve-outs our track HBRs I sort the yourself in we had to couple of

was emergent a the that, of PCPs and side, The progression, impact see to insignificant. that mathematical some that non-emergent, still suppressed a of that on off of like things in that returning an Medicaid keep especially So we not The was least estimates -- then, California, the sort progression making so at yes, forward top. we're right we to that for physicians. access members are their opportunity has of so and redirect room returned. emerging, emergency think there's truly And

right view sort forward of it's rate into estimates the and for So environment a culmination a of Medicaid.

Justin Lee

down X%. Maybe on want others peers I of normal you of for But of of your is. margin about us to midpoint a you pin about instance, the orient kind just to -- points. don't you to Maybe one in Okay. help closer again, XX Most think of X%. that target the terms can making what closer talked talk basis to kind

Andrew Asher

Yes.

X.X% of can't first over Investor that Day, our our where of to our tax North goal going a that, is to far bit back margin it's pretax. below of after but be because explained it XX% we Going business. too X.X% that little below out laid June and sort Medicaid Star be

helps X% highest long-term that different far then be maybe the to you above would So frame Marketplace, average. of at models X as in the targets. your businesses. pretax X.X% the as the And the Medicare

Operator

Matt from And our BMO. next today question comes of Borsch

Matt Borsch

to bidding Yes. your just plan Maybe the Medicare for be associated be of I competition to about Medicare saying and as that continue the talk Advantage going conservative you a Medicare from in if approach we in Advantage seeing intensity that, take if then product. -- you're today. Advantage you're you level that you're XXXX? what as could on with Should just more on And or could follow-up,

Andrew Asher

the follow Brent tackle is and on piece, daily and competition this really can to I'll basis, up. a close first then

I margin, think, Matt, to seeking be expand by definition, there's trade-off obviously, if we're a there. to going

of You now did result. convert membership, deliver shouldn't just phenomenal, expect to to in on this line margins. which last top we some year like that But a got XX% to grow terms we've of was

of and and we So in that of we be 'XX stands margin the bids will in us. the 'XX in that's than yes, harder pushing bids, and definition, just 'XX sort by front 'XX, did opportunity 'XX

Brent Layton

or and always growth. a But and impact results over Medicare -- whether feel Advantage to competition, and regards that we Advantage positioning about did Medicare in in going the 'XX good be ongoing. Marketplace. to I would though, meaningful it's players whether our have There's really not our our smaller say, it's

Operator

Stanley. comes today Ricky from question next with Our Morgan Goldwasser

Ricky Goldwasser

benefits. we XXXX, meaningfully as MA saw, what we think about So you very invested into rich from in

comment we of you how of that if versus is core just in Medicare then and and should how some utilization -- margin sort can of seeing of in baseline about can think in give levels? just of opportunity you we're you're factored use ER us guidance on can acuity And 'XX acuity So thinking terms 'XX beyond? as expansion margins baseline that what Maybe we and for into that XXXX? think

Brent Layton

'XX rescheduled explained you And we the on it's guidance I'd our HBR the less COVID -- expectation are we pieces every It flat, the every that predicated providers less I are being but are terms -- mean Day, wave yes, of then, utilization, checks and are have manage that there able Ricky, Medicare for to Omicron of deferrable Yes, the as wave, think -- sort that of since services think January, and February the tell in and impacted. of otherwise XXXX, beginning, Investor doesn't for us That's getting resilient done at one there that the a 'XX. in been more orient we both. consistent channel more our that or there's every disclosed zone in being on. would don't is that of to ask being to to are surgeries

over to normal a call there's the X it, utilization past months. continuing return So been to, X

the all is that's progressions Some that's areas emergency mentioned, We're nonemergent of members to I room, physicians our get engage for a aren't laid to factored and the try services. fully HBRs which change good, Day. into with we physicians there. our that and But at nonemergent Like for out industry. our hopefully, Investor of the members certainly structural to their with working directly

Operator

comes Stephen our question today Valiquette from with Barclays. And next

Stephen Valiquette

Great.

given So looks question AEP. early around CMS MA the just 'XX. data Medicare But the in Medicare, for for Obviously, year's average industry than this volatility membership growth Centene, the Advantage. greater promising

profile mix given other going And much that by the is growth membership you on Just just marketing of MA some you trends sales notable how do external changes internal us expect your MA seeing can that reliance across any the volatility curious in on forward, if versus efforts. just and maybe typical remind efforts on of driven Centene's we're channels.

Andrew Asher

channels. has really not or the the you're few our back to. ago past developed team X in years, multiple X the last -- workforce -- got years probably proprietary a WX Medicare We've or next capability. We've channel. we that got mean own volatility recently, The We're a which after multiple actually Universal are years direct-to-consumer the acquisition. Yes. then channel, internal channels, the another brokerage we've long over referring we Teledigital. X And American That's ways I back. more created honed seeing X got going

built quite had So with us, a broader this to and And Brent we've complement merger footprint, WellCare network much to as then number mentioned, of way. frankly, a Centene for been years. along access what just working the gave the on

at of think give to channel was just is about half So point, distribution getting Teledigital of you our one year, but -- sales, about It's sort that you're last what our of it and sales I data our telemarketing. half of too.

So growth where the from. getting of distribution our not a real in change we're

Operator

at next Jefferies. today our Dave And question Windley from comes

Dave Windley

or would are to on, whole? on were able which wondering can that you versus that or you Medicaid, do people subgroup hints relative members off in explicitly you turns that tell either if as the you're what HBR that those redetermined patterns to be if of give back claims the to analytics see and I likely when the was

Andrew Asher

Yes. may that. have There's since rolled for employment certain characteristics, while originally thinking in we've such some might cohorts have a And don't they about gotten obviously, post otherwise qualified we on that employment data those have eligibility they state there are delivery that No, some point off some good postpartum. Medicaid. at as been moms depending rules on states

you the can and look think over being that, with But is for so getting well can be think of the May it's I And can not And FPL some XX up guidance topic. we engagement cohort redetermined that our sell when states we've time not in on says, time, teams but our there's that. we're out a you've that Brent that on. "to with some on that built color, we impact interesting scale. estimates probably for we're future", are which X So pushes see prepared. We'll of XX we if prepared it comes. assumption, really guys add color, of going it -- got make seen, a states the past at And our on of some down out rate the focused like eligibility

Brent Layton

both Drew And have our Medicaid. Yes. government, well communication whether to partners. And state and been obviously, we're that for in exchange constant from between as this. a contact platform federal year the I network starting with we preparing last and it's our mean and said, planning, standpoint, we've through built really

have been that have want we've health really people to as believe working want be solution a we the and citizens wherever it. make to we -- obviously, for that them to date preparing with we're So insurance and is, coverage, states sure ability their

Operator

On our next question today Sachs. comes from Nathan Goldman Rich of

Nathan Rich

the expected Drew, the leverage whether wasn't December just think any the SG&A could going remind anything Analyst of us value core XX specifically the points you program. of well a against about And guideposts to I'd then the back basis bridge guidance creation I that Day, business, if balance just those of savings around laid had the guess maybe we 'XX be plan? there I I is the pharmacy. as early it on is savings that sure from from out, year. think to potential sounds like you actions see includes but from included some curious, company over especially the tracking this the progression the year

Andrew Asher

the of we get a a really for of bucket, on levers point at $X.XX $X $XXX of also upon that opportunity, million Investor SG&A laid to it's we're Day. of we the SG&A internally is Yes, the will because that out bucket sort clear jump-off XXXX which jump-off midpoint pull question the including good point, crystal

give should be of the update an largely of activities. $X.XX on jump-off up incremental to showing 'XX those the but guidance. And incremental some to So $X.XX point those 'XX, and you in Sarah can

Sarah London

Yes.

noted, are we you As good making progress.

EPS But hitting upside. on way and touchdown look we'll 'XX, it, think we look the 'XX. focused 'XX always very score are don't point I the don't for for extra those get you at to first. the kick you targets if We And

really our staying year. first goals, on we're and So in focused foremost,

Operator

at And today from Taylor our Gary Cowen. comes next question

Gary Taylor

outside another well, and that see for search wish if you X can want any we'll updates was Well, on January. did provide. announcement? any half timing likely a half I day and new members first, the I in Wondering just up first just see want and Board to to any there or process there X who investors And can wake say but But CEO if is you update him we'll hello to -- visibility CEO there's provide Michael is? is second of

Michael Neidorff

We're is there's spoke much the desire to as process a We're Board more step There's various place. process that. I to over too was they this the -- in my that governance. start we're And down CEO, candidates, and when going publicized, than following I and ago, of time SKUs. think that. beginning our through. them. I'd talked looking recognize me Let about We're good some at earlier

the I a results hope And at clear and So see process. over between it's now -- midyear to latest.

Operator

Sternick question with JPMorgan. gentlemen, Calvin and today our Ladies from comes next

Calvin Sternick

and sense Just there update any done on there get something to exchanges wanted and the done the any get will to legislation something for in ask and timing likelihood and subsidies on the for that XXXX. enhanced just

Michael Neidorff

and Jon, do you then Brent want that, pick up? start let with

Brent Layton

of do future we and Biden that Jon, sir. standpoint. I'll that, But Michael, clearly clearly let has anticipate it's then impact. there. enrollments I from priority had from Jon let legislation. and an I'll efforts, administration. clearly many I'll a This large that led add We start will that you to It's anticipate Dinesman to the speak be mean there

Jonathan Dinesman

coming that is The the to Senate. it thing in important house, also support strong Yes. had of one that's out maintain strong the support

the strengthening especially by recognition, Democrats and the this ACA proposal this. to the was clear mansion a included there's So critical even that

really included. will So passes a feel confident that anybody a that but is that doing guess, who there still like this is we guesses on timing if bill be

Operator

And George Deutsche our Bank. comes next from Hill question today at

George Hill

Yes.

of the feel feel are you like outsourced? you you press do which more to feel parts Do on want give like to on versus I guess, project, the Just color as project along, you maybe like PBM continues able in-source us project? what any outsourcing to of and you management? projects like this the Just goes? kind is scope the project, stays formulary on RFP and the a network higher-value we complete the what guys kind about of just Or hold think as outsourcing

Sarah London

I sure hypothesis that a make of lens say to to value And capabilities us question. the allow have pieces like we're with a to work we for at strong balance, I pretty holds. RFP but think keeping great that priority. operating process. of be conversations want we our quite through that informed, pass going want I always partners the that it's RFP for have what potential on through to would will is still by going the a But differentiated providers, and into those create be say, to that hypothesis about we some creation keep we partner frankly, and that in-house, a what the the also feel members Yes, would doing we also experience

Operator

conference over Thank you. this for question-and-answer gentlemen, turn back the any and session. the remarks. to Ladies to team like I'd final our concludes management

Michael Neidorff

the for those right has margin have team what I I right want course forward to of year is most organization these today. the things importantly, in program The to to product results. knows look for products. have and the we all. thank you, to report Clearly, we continue to done. the on working bring mix, be right our we really the strategy expansion clear, you believe us health. over everybody joining everybody Thank good And the And

forward results it's to So a about looking for year. really I'm the participating. the you -- Thank

Operator

and conference. concluded. Thank on Today's now call you thank has today's you, all for participation your sir,

wonderful day. You lines, and your disconnect may a have

Centene (CNC) 9 Feb 222021 Q4 Earnings call transcript