Earnings call transcript Q4 2022

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Operator

Ladies and gentlemen, thank you for standing by for Cigna's Fourth Quarter 2022 Results Review. [Operator Instructions] As a reminder, ladies and gentlemen, this conference, including the Q&A session, is being recorded.

We'll begin by turning the call over to Ralph Giacobbe. Please go ahead.

Ralph Giacobbe

Great. Thanks. thank joining and call. everyone, morning, you today's for Good Investor Vice I'm Senior of Relations. Ralph Giacobbe, President With me Brian line and Financial on the Chief Cigna's David Officer. Executive Chairman Cordani, Officer; and Evanko, Chief this Cigna's morning are our financial a of cover outlook and year for topics, Brian as results quarter number XXXX fourth XXXX. remarks financial today, Cigna's well In and full will David including as our

adjusted note filed recent to today's could that today, most are these cautionary SEC. cause and same of contained outlook earnings our materially statements operations XXXX today's per our In measures, uncertainties as these These income accepted labeled and accounting our of is and posted current earnings making performance. performance. measures our in reconciliation revenues, the financial release to our section directly most financial in risks principal in remarks when results, measures adjusted shareholders our income reports the measures regarding known Investor and and on will comparable forward-looking certain uses principles United actual noted basis not cigna.com. from As differ are statements, in term respectively, net revenues, the otherwise share A is describing our for Relations our in We financial adjusted use GAAP operations some in description subject including with be results to which and future release, statements GAAP. determined in earnings Cigna of total we the of accordance adjusted A expectations. as States, from risks with uncertainties which release, in the the contained from income is earnings and generally

a pertaining few Before call our cover results and I over to to disclosures. financial items turning will the David,

quarter, million for or and transaction-related after-tax charges $X.XX we our the special costs. integration Regarding recorded item share per in fourth results, of $XX

special for after-tax or the million $X.XX item charge of businesses. an per also share with associated of costs We recorded $XX sale

items from revenues in our special and release, earnings today's are in income from operations adjusted described excluded financial discussion results. of As adjusted

when make performance, including year potential includes share will on financial Additionally, do a our impact prospective XXXX we comments that basis repurchases so note we outlook, of dividends. the please that anticipated XXXX and future full regarding

over With that, the I'll turn David. call to

David Cordani

us resilience you, market. today's call. was Cigna earnings a Thank our This reach thanks and XXXX and and nature portfolio return and we Together, earnings of expand joining as year dynamic expanded for and service our tremendous momentum impact, shareholders. portfolio health provides we everyone, year services pivotal and breadth and to further of with our of morning, the Ralph. meaningful as enabled Good and we the us company. exceed and growth our capital innovate our another and to for in broad and growth customer begin Evernorth complementary revenue performance its expect demonstrated Healthcare outlook capabilities. XXXX of

Then performance our take about Brian and financial positioned growth our questions. XXXX will 'XX how we're sustained perspective I'll your Today, forward. key through we'll provide for Then about for going our XXXX our details outlook. walk additional drivers discuss and results

jump in. So let's

company full XX% a to approximately and demonstrates benefits reflect year our revenues growth. are Healthcare markets. sharpened for service and and dividends, how our repurchase billion. positioned what we platforms performance of This Cigna seven through businesses I'm accident reflecting Evernorth on $XX.XX year focus rate overall. life attractive full delivered We well growth. international a $X of of billion share of of we XXXX, We to per combination our performance adjusted As sustained share proud the team earnings the through our for supplemental strategically business the grew shareholders Cigna $XXX returned delivered We of health divestiture and and across

enables across strong bottom us In capabilities portfolio partners customers Evernorth several and large delivering highly and Cigna to also cost platform won, along performance valued by expertise also and clients XXXX is health growth relationships for the and medical multiyear customer expanded our Evernorth's deepen differentiated our delivered client entire our had clients. our existing The of renewed and of line businesses. and growth strong and benefits of a beyond. Healthcare, top depth year, XXXX, relationships for and with benefit

we U.S. had growth Commercial reflects outsized consultatively ability while our a This driving sizes all team help their for of with maintaining improvement. discipline the XXXX our of businesses. employers to Overall, our employees of strength achieving work engaged pleased business support manage Commercial customer standout we're of across while our highly to margin affordability, the healthy, Our performance enterprise. pricing all performance and benefit

we deliver capture ways. As to in we look and continue XXXX, to meaningful value multiple

U.S. First, foundational proposition Health. businesses, businesses established mature plans that scaled marketplace. relationships to Commercial these expect governmental and growth value our These clients, continues International businesses The very core with resonate the Services, agencies. corporate we in for sustained are Pharmacy Benefit have health through and well

Services, expect through contributions partnership continued Benefit in and we solutions the orientation. XXXX unique our Pharmacy strength In of

to and affordability portfolio, delivering With continue governmental customers strong selling across greater patients. employer, the we season agency our more and plan health will

and customers affordable resources are and meaningfully accessible to investing prescriptions XXXX. XX approximately in to in starting the for more million make we teams Additionally, place put Centene

all all had market strong risk self-funded selling In our return season Commercial also arrangements. shared a we and the and XXXX business, across segments U.S. funding types, across

and revenue a driving earnings, we anticipate As result, of another year customer growth.

and we meeting attractive growth Health, needs wellbeing globally in revenue health in and our the markets International and mobile. for through continued in the And earnings leadership expect contributions

businesses, outsized Accredo Specialty trends. government. differentiated accelerated our U.S. addressing Pharmacy, secular Second, accelerated businesses we platforms growth Care and and expect capabilities Evernorth Services from have These growth

start a includes for exceptional these our increase lower-cost plans customers. This range opportunity few past biologic for and XXXX while will we HUMIRA, globally the of seen over clients of drugs. trend of work those value mark Accredo, we the This market the lower handful understand drugs benefit preserving benefit cost the of the to that of from expect a and flexibility XXXX able in choice for treatment up inflammatory for for and alternatives conditions growing in to availability With and for decade. a beyond. new were launched deliver drugs patients ramping biosimilars. top-selling biosimilars, We've years a one could includes a continue to who they past the and of and the

we've savings customers. a there's that significant co-preferred Now on for alternative clients national opportunities and formulary creating biosimilar preferred a

of our we more time, clients. in and continue will biosimilars, greater expect drive benefit even over to leadership We advocating which patients savings and for availability for

In expanding accelerating care provide Last with of Services will virtual capabilities continue Evernorth our enhance platform is value-based visits our and Care MDLIVE management expand of through care more for satisfaction we customers. care including Services, Demand delivery. MDLIVE options our we Evernorth our even meaningfully, grew and portfolio a is in and patient visits. increase of with Care virtual and year, substantial these VillageMD. rising in recently benefit are partnership care care also to continuing our to primary capabilities the announced

at help service capabilities with physicians, costs. guide health lower experiences VillageMD's Evernorth overall high-quality will care wrapping more we total of patients to Our network

this rolling course partnership to begin expect out the over of We this year.

and two addressable large we last benefits, network we of introduce expand provider doubled This the business, government, strong U.S. where and over Advantage, geographic accelerated we XXXX services the will includes growing growth years and our as expect enhanced our we into in new nearly services across the In we presence expand a Medicare market. and geographies. size as another

consistent commitment continued dynamic business, XXXX. exchange see participating we marketplace, Additionally, Individual to the customer will growth outsized ACA Family Plan demonstrated as environment, in our have a in in & we

on XXXX than is for their where in The enterprise businesses us and driver more our together This could capture is to own. anyone third value create beyond growth work or leverage. achieve

support long-served look across a client a Cigna Here, think our to large our expand deepen for and client. relationship suite new were service-based relationships able we entire enterprise broaden example of leveraging great A ability about to is Evernorth Healthcare them and by capabilities. our for our where to

depth proposition. Healthcare's success of breadth advancing Evernorth, innovation to all solutions combined in the Additionally, value and help within Cigna improve clinical expertise of further

delivered by range Evernorth's is continues For of deliver be affordability, meaningful option example, Evernorth competitively for to a ability clients. attractive harnessing plans, makes and of in value Cigna a wide exceptional large it of employers partner reason capabilities key to Healthcare programs, what and to all XXXX, employers a other sizes. This choice health

clinical accelerate infusible enables with Cigna with we've well longitudinal millions our helping conditions we better opportunities clients our our or recover as is and we resulting and in data, to Early These create patients and which as leverage, support these examples innovation Pathwell able to years cost equips has costs, of improved ahead and with XXXX integrate digital leverage in benefits portfolio the anticipating continue for to of clients. additional lower injectable our Another new with management customers, connecting accelerate illustrate future feedback benefit already generate positive, developed includes experience, provider the in just while very who the acting we're them their quickly. specifically how to impact and solutions we achieved Healthcare's networks This relationships, and on expand the biologic analytical some with innovation us customers. cross-enterprise where right drugs. and is patients value. support. we'll and quality, our programs way Evernorth's needs take here for musculoskeletal to and expertise clinical throughout patients focus care, Pathwell’s programs been This of Pathwell expect overall personalized more high-performing enterprise patients

Cigna a we we our Now growth our company. clients to strong well and future. the as for I'll partners briefly positioned our Healthcare are summarize. to durable With growth performance platforms, was framework, meet of and needs Evernorth the year and of and customers, XXXX look our

are returning of our delivering on our those change. environment we adjusted are and $XX.XX with to needs years evolving of to commitments and the of Healthcare serve responding EPS XXXX $X we dividends. our shareholders accelerated in in in billion And share coming repurchase also the We

pipeline a create momentum allow growth continue that value, will our to our have build differentiated to strategy. and us We innovation on advance

strong as we expect earnings to We another be our of company for customer year deliver confident growth. are performance will and XXXX

reinforced growth and our Our impact to all EPS our dividend commitment the sustained quarterly of and XX% least for benefit at stakeholders. of $XX.XX our outlook of of increase the

And I'll to the turn over that, with call Brian.

Brian Evanko

and targets. long-term in This or our segment Evernorth positions adjusted growth earnings Healthcare, above well growth XXXX. execution Cigna continued I'll line year provide focused everyone. pleased our performance full morning, Today, strong review Good XXXX. for Cigna's in XXXX, key quarter fourth of I'll very David. aspects XXXX We're with pre-tax and outlook and across us with growth results, and achieving each both Thanks, reflecting for our in

at high year of $XXX Looking of is consolidated total XX% approximately highlights average growth or tax revenues per reflecting specifically, XXXX. target. long-term EPS adjusted billion, key end full This include above after adjusted the XXXX and financial from share, to growth $XX.XX XX% XX% billion our of earnings $X.X

year first another to for resonate in market-leading delivering and clients and as Regarding and marked on our the in record capabilities track of XXXX segments, market. sustained clinical comment continue of growth innovation, I'll Evernorth. our profitability proven Evernorth, customers

billion. Turning focus three pharmacy accelerated specifically Evernorth's net to pre-tax as the fourth quarter $XX.X specialty customers. revenues the by strong solutions of results and first grew while fourth XXXX, our to grew affordability of quarters expansion well continued for and results X% on our Similar earnings led delivering by over $X.X adjusted quarter quarter lowest for cost Evernorth, driven clients growth fourth in our our were billion, as to XXXX businesses, to

to strong our expand to our line growth and strengthen strong relationships, clients continued and our serve digital advance achieving all in client and our Overall, year, also and strategic focusing driving our while services relationships, expanding value make pre-tax targets. delivered customers another capabilities. with revenue on and We investments, meaningful long-term earnings Evernorth portfolio adjusted for partnerships which growth

proposition value large orientation XXXX grow XXXX begins other multiyear clients. driving the long-term we proven recently of in demonstrate lower announced Centene collaboration that well to in renewed as our opportunities as Our for and strength contracts providing partnership the costs market, for while further our with

to Turning Healthcare. Cigna

million XX goals accomplishing the we we we customer of XXXX, of As grew $XXX slightly $XX.X our particularly XX%. elevated adjusted products. base customers, XX earnings entered revenues shared season, of to year X%, of Despite our and year quarter a full our points. pre-tax margins or XXXX billion, year-over-year as I'm care million our stop-loss pleased a XXX,XXX year of medical both expanding our customer with base better adjusted to results report than we by to and improvement of ratio ratio performance basis was of with growing these and both while Fourth RSV X% ended adjusted total flu pre-tax you goals, medical margins. improving our to within an lives care contributed full medical all expectations,

Our improved year clients benefited affordability X% customers, prior full the of range driving our year year growth XX.X% XX%. XXXX XX%, end above fourth partners, XXX the and growth Overall, basis of compared quarter customer programs. and including expansion medical discipline full with year Cigna is long-term for clinical to our target of and pre-tax care from a of which of all margin while high strong our pricing ratio for adjusted full to year. results and Healthcare points delivered Both initiatives, earnings

pre-tax adjusted was $XXX Other Corporate XXXX to loss Turning Operations. million. quarter fourth The and

included this we were Chubb the divested a XXXX. clients segment previously contributions the benefits XXXX X, accident international for businesses As on that execution to focused Overall, life, results customers. benefit strong, from supplemental reflecting earnings our and reminder, of Cigna's July and

As we continuing while Healthcare, to to expect make future XXXX, and in both we to Evernorth investments to underlying drive Cigna growth. continue growth strategic turn

we XXXX the billion. least at consolidated outlook, of revenues year expect adjusted For full $XXX

our income call. adjusted our includes be consolidated year I'd least consistent at $XX.XX you this at remind share, full $X.XX expect prior like or third least outlook operations with We earnings from on quarter per commentary to X, contract EPS we to for a forward their XXXX, we look customers. on as XXXX of partnership headwind prepare many This to we customers. costs years and drive in Centene's January will and collaboration starts from affordability incur to for billion serving

year quarter full above historical patterns, the compared of earnings Additionally, seasonality, this with EPS. would slightly when regards we first to representing a in cadence earnings with to back half expect more different year XX% weighted,

ratio the range expect project of XXXX, XX.X%. And of year X.X%. adjusted XX% adjusted to full approximately we expense an consolidated For SG&A a we rate in tax

I'll our now for outlook discuss segments. our XXXX

Evernorth, of including from adjusted billion. businesses costs our in strategic prior and costs biosimilars, strong call. of earnings selling and and the quarter and expect consistent to associated XXXX in are full Prime to our year These on headwinds season from These include $X.X Tailwinds partly from with largely value highlighted tailwinds For we half additional beyond. of and at increased in with with building support future third XXXX are points growth, the creation Centene the revenue, ramping least investments XXXX headwinds offset growth of and our expansion the implementation earnings second a we by the onboarding Defense accelerated receiving relationships Department of availability Therapeutics.

in single-digit headwinds, the single-digit second Evernorth of growth back earnings be the these half, within growth of expect consideration half year-over-year earnings earnings tailwinds in year, towards half. to adjusted mid-to-high In and by weighted with low more the the followed first we year-over-year

of at For representing growth expect Cigna least at earnings X% adjusted least year billion, Healthcare, $X.X XXXX we of full year-over-year.

earnings and be organic the proposition half XX-XX This half pricing. outlook strength second split closer Healthcare in execution our Cigna of business XXXX focused reflects driven of between value growth the disciplined expect to first and the customer We year. and our by to

each U.S. growth of and segments. primarily Advantage to U.S. assumptions and Commercial, Medicare reflected expect customers. total customers, Key the each growth million of organic our market the individual growth X.X market expect XXXX, across And for we earnings customers, Cigna of reflect our outlook will select customer XXXX Commercial, following: businesses. Within least Healthcare XXXX at in our we middle fee-based similar across with national, regarding growth include medical

least individual geographic of growth business XXX,XXX by geographies. certain least growth expect driven We and expect strong growth in Medicare and customers, at U.S. competitors digits, high single industry exit at our we the customer expansion, of Advantage of from

compared range XXXX and higher care of We expect Commercial Health. to XX.X% ratio business, the medical ratio an care the have in medical XX.X% increased tends in mix a U.S. part to be reflecting of which government to International to

first within the to year expect medical XXXX we guidance the care would ratio range. quarter be Additionally, full

the As a in has of XXXX. first earnings business and of Operations, that it of had positive last year Corporate been the our contributor Other given portion relates evolved a segment divestiture this to international half

the year closely annualized fourth quarter reflect we a pre-tax to As results. expect more adjusted result, XXXX full loss XXXX

buyback, outlook. the to dividends management Specific repurchased billion finished we million share repurchases in from our to Now $X for moving year via shares operations. capital shareholders position and XXXX, share In billion. to delivered We XX.X $X.X and and cash XXXX. returned flow strong we $X.X of billion

an the XXXX. Additionally, our ratio of basis XX points finished improvement year-end at XX.X%, debt-to-cap from year

for outlook capital XXXX. our framing Now,

reflecting billion deployment capital capital our strategy $X cash enterprise. This to continue expect well with least at line accretive We priorities. operations, through of of positions and our strong efficiency value us from flow the in creating

expenditures. deploy specialty billion platforms our Care, approximately include to to U.S. investments substantial expect of to We will These $X.X capital and pharmacy, commitments government. accelerated Evernorth growth

We have to our shares. up $XXX approximately per February million a million. range share share, to of XXX of increased million we from quarterly deploy be XXX shares guidance as X.X average $X.XX to per shareholder of shares our XXXX for XXXX assumes reflecting And $X.XX full in XX% repurchased Year-to-date, dividends, weighted dividend XXXX, to million year the billion expect X, on basis.

framework returns on outlook and balance Our and sheet capital. remains strong, strategic margins asset-light cash that flexibility, from strong flow benefiting drives our attractive

And now to recap.

XXXX and Healthcare. reflect both year from consolidated execution Cigna contributions and strong full Our results Evernorth

we to outlook growth. momentum reflects long-term invest support attractive across XXXX segments continued our as Our

least $XX, year XXXX EPS $XX.XX earnings expect We of of least consistent commentary. adjusted deliver And prior at to with continue are confident our in our we at ability to our to per adjusted share. deliver EPS full XXXX

Q&A to we'll the of portion it operator the over that, call. for the turn With

Operator

with A.J. Credit question first comes Our Instructions] from Suisse. [Operator Rice Mr.

A.J. Rice

you're that? about ramping a it VillageMD Evernorth years. this revenue able the in and VillageMD the the the signed, rollout in you Maybe ask you out was terms bit up see signed give markets operating material look next where at been to over contracts Have value-based to more you I business might with little know be when how folks. but about as to year, contracting the various arrangements. had particularly time. us in largely of that be of contribution over not will few can assume the you do income deal anything I I

David Cordani

Good David. morning, it's A.J.,

whereby X capabilities, the access more plans successfully momentum, a not side, phase for approvals back, stepping physician-directed their or that broader the virtual a the to our foremost, we and to benefit serve behavioral programs Village. a and nice the on capabilities health and and some first through taking to physician has benefit track portfolio with just it's specialists and targeted and a relative innovation of proposition will think relationship There's products of otherwise. first So could whether phases, so second but pleased with about serve for organization Two, of Cigna benefit even or work Healthcare care, the new of and higher-performing leadership proven that a exclusivity Healthcare expansion offered the securing build have proven work, for growth Village, Life put sense to of in codify work Village Cigna with we building enable expand as and and partner targeted phase with have the that value expansion that with ability to we're within the in the coordinate in continue, capabilities some of whereby with place record. underway the of Phase more capabilities place such portfolio working well the collaboratively we contracts we relationships of direct preferred you will

Evernorth wonderful we'll built savings the the lot shared relationship be shared One as parts such, capabilities, of be with from benefit the through way through the is building Village. a together our And to those the able Evernorth of of program. leveraging savings

good already, already, good collaboration momentum already. good recap, progress to So

the us, as to and and as year XXXX the we half market for providing a significant contributor especially will look of we of update driver we you don't an but earnings to in look second XXXX, a progress forward revenue XXXX, right, building You're we in or see XXXX. in more through

Operator

Our next Taylor with Cowen. question Gary comes from Mr.

Gary Taylor

about ask also wanted I to VillageMD.

have asset. keep historically, you it. David, question just we'll -- bit I your guess was track that Cigna ownership delivery on to about are direction, longer. didn't and obviously One So My a moving your couple I know delivery give even some questions little though is, of need a I this assets in peers you increasingly that investment inclination own does of a

has to you has national this understand a just kind just understand And along how lines? little I long Village So thinking secondly, term. but how of growth those plan, payer do your wanting evolved then want large expansion obviously much to better agnostic. --

part and means the a it network? a like several do really think the Cigna Or next about that does we primary So to Evernorth? partner just a become care years, relationship important what how of to preferred and Healthcare

David Cordani

A Gary. in Sure, lot there.

points, try important points, to the appreciate I me and your all Let address question.

foremost, and clear, First remains our strategy be consistent. to

of approach care back to medical fulfillment on come core preferred the is that. partner and enable. I'll to Our

As select before, and discussed ability multiple fulfillment we the very of unique, an delivery to and specialty an equation service way. clear behavioral, to are them that. highly we're care, relative own, be aspects to home in include pharmaceutical parts or over that virtual, efficient geographies leverage there Examples to and we've deem fulfillment differentiated healthcare seek we of

a we'll has care And care relationship. of Our have value-based employer business notion core value-based our care, relationship. a XX% have about MA of continues exchange commercial it, call a partnering relationship. value-based our of customers about of About value-based customers our through, XX% where XX% today, care

Now to relationship. the Village

the to we continuity and high-performing see community their addressable depiction discussed our Investor healthcare We care us. see additional as First also as it's to an coordination, the networks to for curation equation. market it that an clear foremost, system reach, addressable as care of delivery we and overall at help a Day, their services extend bring aspects care, digital of specialty of market including

we as the America payer because we orientation agnostic or set way, but extension positive, see positive the in as that a plans with of broad portfolio as most of So of an see articulated that relationships. relationship, Evernorth Village collectively a ability grow And shape including partnering the of to health you large see through form. and today clients we collaboratively some in partnering a serves Village

there So seek we'll aspects that are to own. to reiterate,

will We continue that deepen the Evernorth, use core of for to coordination alignment our with will select those to incentive for process our care extend Healthcare value-based not And with current services lives provider the to just partners care we offerings. go totality now seek of Cigna panel, and of through. the benefit the

unique be standpoint. may designed there However, some a are programs Healthcare that from Cigna

Gary, So great win-win we additional and an I a hope opportunity Evernorth. helps. growth see this that for as

Operator

Our comes Wright from Stanley. Morgan next Ms. Erin with question

Erin Wright

You bit tailwinds cost. the segment, Evernorth But weighting Or is some And associated largely quantify And there's other attributable changeable benefit exactly? into Or is a of you XXXX. strategic mentioned midyear? and back-end those the to Centene obviously, little those? implementation across costs? for is headwinds the available comes And also some mentioned what or that can of HUMIRA in the that investments. the you that been has

Brian Evanko

Erin, it's Brian.

it you're strategic investments. call to right as the and the tailwinds relates to headwinds So out

attractive VillageMD enable we areas platform rates. business, pharmacy such outsized continue Evernorth David an discussed alongside very to amount that money specialty invest So to services in at just things like our which our continues to of Care grow as

been the X.X% pressure introduce have Evernorth that we at on our implementation to importantly, alongside in Centene segment, the for allow costs. tailwinds But guide so, all us of the least spending that's related growth today And points side. income those inclusive factored with

also expense over cadence. primarily weighting back which the of But the more the back in the difference effect be the a the cadence should the contributions, we of As by half you earnings, the effect entirely, weighted, do year it I biosimilar to ramp timing. the of there's that course not is of relates some Evernorth biosimilar driver that described, is I to expect that of but referenced key think half cadence driven impacts also the operating spending of

Operator

Kevin question America. of next from Mr. Bank Our comes with Fischbeck

Kevin Fischbeck

I wanted strong to growth, about that's there. the little customer number a a pretty ask bit

the first risk thought think new you expectations side, when -- worried And ASOs to I risk impacted growth so your you about there, the around commercial the expect growth I is how understand how process kind guess, less wins? you the just know that far growth, of pricing it's there? it's so but as and growth? And there group how want growth, on ACA type enrollment comfortable your is of Maybe then profile about are on the as much risk about redeterminations customer in that -- of there versus

David Cordani

Kevin, morning, Good it's David.

Let me a your Brian bit. then broadly a little and back frame start ask it bit just more to peel question

well. the in is three portfolio us. intense focus. in highlight continues our Cigna outlook. especially the Commercial platform, enablers we performance of in very continues underlying reinforce commercial First, terms portfolio the And into just to Healthcare we're quickly strong the attractive very being with our to including and One, that pleased perform XXXX growth continued delivered now able employer of or step for areas employer to a it XXXX drivers a with consistent I'd

We we have as see continue we on as we it to segment. consistent a are, have, will this and intense Hence, segment a its focus innovate benefit. we for growth focus

of very all track site team affordability. excellent programs optimization total they or programs of resulting that medical work from and clinical and returns care costs. good clinical to That good our total from service growing Second overall a suite deliver contribute network the and our of quality is is our cost record management

orientation and then putting solutions sometimes And forgotten, in finally, what we've around our talked but before, consultation place. maybe it's about

take outlook, our asterisk we or to on employer Brian suite one XX,XXX, of have So whether to place the the working an going will right I consultatively peel it. solution put of it's an I'm them. of employer for XXX drivers orientation an back of in put

a have But We us, uptake in redeterminations for don't that currently. very given of for of not an into an year. the we this recognize protect us that the factored their because outlook. to have to relative contributor in present it's not that in as still we risk a and state adjudicate rate redeterminations redeterminations, factored opportunity outlook activity terms have don't We for our pace to business uncertain attractive

Of to go unfolds process. course, as we'll through the present updates redetermination states as year the you

to drivers growth unpack a further. I'll ask little the membership of our Brian

Brian Evanko

Good Kevin. David. Sure, morning,

So a then the the million terms hit growth. profitability customer bit of as maybe well. to I'll detail about here question more how And just your net exchange in think on ACA plus little X.X

XXXX. another strong earlier, in here at be expect of XXX,XXX of pleased remiss And I'd in exchange we almost net customers and major if in we million mentioned didn't So with following growth all first U.S. XXXX off, least individual that with segments growing year I net expecting our or business business across customer we're we say growth XXXX growth. really X the X% net as expect

Our MA net growth has started strong.

single-digit least U.S. rates. core growth portfolio. least line high across for Commercial XXXX, we industry in growth expect by than We And generated at our a customers or rate growth better percentage expect net at new XXX,XXX

of of mentioned including good in volume on have point, are the X.X the million the expected net And effect we into that take million amount Medicaid plus you meaningful you I of we growth balance they some to of together, full David's banking net year customer can So remarks. David think half our client for plus components this XXXX customers. larger represent relationship of those any about if prepared moving three of then expansion not growth, pieces, of the redeterminations. his sight X.X as mean line

customer we're certain As and/or business we outlook combination industry competitors it well the participate the our as adding, a XXXX growth own new of pool growth being to exiting few entry a geographies relates market IFP business reflects of that things or risk that individual morbidity as our in.

where profile about long-term think are you the As this our in stands, our margins on XXXX, below margin book goal.

and we're depressed income long-term a our is long-term in from reflects on remind X%. 'XX, step Our is long-term took book were margins will our below of in guidance 'XX we year. continue was X% we given Healthcare in expect this goal 'XX margin goal a that MCR our 'XX, where for to But to the X% to goal. still run purposes And X% you We this. forward below to Cigna

long-term amount the Just is to be it But this book does for contribute income was of margins Cigna represent earnings power Healthcare that that calendar in embedded assume will growth of added, of a thought business customers we've a to given future source long-term the the this our we substantial will segment toward new below target help year. prudent

Operator

question with next Fidel comes Scott Stephens. from Our Mr.

Scott Fidel

max? we crack the the and I final on in guess XX% on just guys enrollment that XXXX long-term rates target those. observations Obviously, the XX% interested rates and on to thoughts all, whether ahead Advantage your get growth your you first at initial influences your sell MA preliminary Medicare to comment

David Cordani

we'll anemic Clearly, relative like compete reinforce seniors XXXX letter create the looks the does like. the the that. I relationships a rate may serving the bit think outlook on growth what you little growth early continued it a initial as that, and on well some and of that, what by in letter for rate that as Medicare It comes U.S. represented rate clinical to receive it's XX back seniors growth Having letter continuing relative revenue, quality presuppose initial Good a if quality it's Having and/or said market opportunity the comment dislocation. or has value, range both rate await Advantage stepping out look preliminary the just said they basis. to lower morning, opportunity out. to will MA. a represent moment, this for in have I renew stays expand the service letter will that Scott. came a revenue significant because and before to create, million final But somewhat or that The continues that, forward about today came clear

So come The market play. care the of market. lives into will value-based noted value-based necessary a be I sophistication XX% as our all of management relationships, earlier, that's leverage about going to of care benefit by in are relationship MA which,

you the time good the this We're to customer of for fact that X% growth while XX% already on this And portfolio. today, growth reinforce as our XX% opportunity XX% less we growth I an represents would or attractive than is good I with the have a note, about. that represents over stepping feel year to us, a into long-term that final XX% outlook customer to enterprise average. objective MA remind very

strong have us. XXXX, front deem the with in we that dislocation any be So of in manageable we to performing portfolio

Operator

Our next question comes from Mr.

Justin Lake with Wolfe Research.

Justin Lake

want Just on first membership follow the to up guide.

in Just certainly lot versus a better any of how been margins comes XXXX. there much color the year? in the healthcare on the And rest pricing membership, of QX then that

what Just in to you're expecting wondering your guidance? relative there long-term be to XXXX ballpark

David Cordani

to a your Justin, to more I'll and talk Brian pacing about relative then little question. to second ask color

As have the funding think service-based our volume. lion's customer. large ASO is relationship business, what when the good growth the membership the it the And of Still into all exchange seen share we've we a individual -- noted, Brian visibility types. across outside of you with including of about

throughout updates realized portion So and meaningful We'll first quarter XXXX, and in you then providing the year. volume will puts look to in essence, that the they'll of on. a be takes of be forward the course of

look lines additional will the Now then and the that in impact disenrollment first relative as about throughout of and course and course the additional maybe U.S. the we year at a year some takes by economy. an if performance the with fragility outlook that in individual good large, bit of uptick throughout as think disenrollment our to expectation of you have the the we'll and But of some our factored of some for the of on we growth year. current some puts quarter business -- move is in

around Brian margin. for talk to visibility I'll more a good ask the bit QX. So

Brian Evanko

Justin. morning, Good

finished X% to have range our XX%. relates with target of XX X% XXXX Cigna low we're margin, as pleased the first to So margin which off, margin expansion it allowed basis year-over-year the of Healthcare which Healthcare Cigna to to the of end profile, points is to really return us

goals. certainly increases this our stronger-than-expected against executing 'XX in confidence our margin performance So XXXX

U.S. some earlier, As comments XXXX, Cigna a products lower in profit mix larger we prepared will within product lines in profile noted and margin becoming the Health and percent Commercial of premium a see to shift slightly products. these International I tend my than carry specifically government Healthcare, with the

Healthcare this investments at our margins we'd in expect continued accelerated X% So of range, land to low MA, Cigna our target our when as all platforms but growth and consider our to the such within XX% you XXXX end.

Operator

Our next question comes JPMorgan. from Ms. with Lisa Gill

Lisa Gill

comment I the come and a just parity back to be PBM. with you on biosimilar. to David, the formulary would that HUMIRA the wanted made

it think increasing product? around better to benefit secondly, that a shifts the matter. the rebates you're PBM we doesn't set in really potentially it of share as note are curious think for to think design, anything where plan if going And pharmacy XXXX? the way the that cost we about about Or when Just it now in then Is AbbVie we contracts savings about biosimilar? up overall for when

David Cordani

good Lisa, morning.

So and that of co-preferred customers I'd to national benefit the have transition, mechanism the back your expand and taken preferred patients. first I'd a on largest that formulary multiple fluid. that is flex are position our and our clients single avail to that's from National question, economics and over aligned with that which we our aid suggest will support administer to formularies the our Preferred preserve this for time. clients and that formulary. will note standpoint It be for is also individual choice. also customized Formulary, our We choice

incentives we to choice we've way. within to and back Meaningful is we when and align retained that clients, aligns by us pharmacy sustainable the value. as value portion patients that whereby portion of our and Third, passed broad the have the demonstrated tools services, portfolio and taken of have PBM we create the enable in are current and position a customers value that our

the drug to brand incentives. and to the to flexibility additional choice, have have align we a not the have So -- mechanisms additional we biosimilar, it's afford reason of versus our

solutions. As it give buyers, corporate by change, way we space, us. to individual cetera, health your plan seeking configuration would second just an to they as all question, and design relates of to time, be opposed the coordination or of trend you very part the That services more I point et plays buyers what are to of benefit about in well continue talk internally for challenge the buyers, for push

capabilities, biosimilars, when you So have and capabilities. you to or an Pathwell more the to digital is of a the Pathwell coordinate of data, harness with that, value harness from patients have services around to have injectables about you Pathwell programs program to subset biologics, further think clinical illustration standpoint, the you way a deliver programs around precision around that harness

the capabilities. is benefit positioned again, management for You well have and network combined harness And to organization that.

coordination, positioned that programs illustration say would I harnessing an we specific and on more basis benefit go-forward is for harnessing that targeted more direction. well Pathwell that in again, So a and precision And of data are bring sub-segments.

Operator

Research. next Our with from question comes Raskin Mr. Josh Nephron

Joshua Raskin

trying you that relationships? actually to their full sort care. said may I Cigna sort want Village Healthcare how the of strategies and in you How some growth And and to XX% on of is to partnership And impact that And stronger be Village think in there think say, I strategy? your are just capitation much back targeted and then, how go about full Advantage Dave, markets risk value-based book? together of have MA there. I'm work of or is than, the business Medicare

David Cordani

you chat with good this Josh, to good morning, morning.

first. aggregate, let your in So small cap. question take a second is proportion In me full

relationship. a As we've discussed has risk before, our preferred approach shared typically

cap Some new but of be majority PXP of in longstanding it global pay-for-performance. minority sure, global then risk, an relationship is minority only terms upside shared a is risk it a program. cap, it a shared in is another in of And for of would in

preferred alignment is terms we of suite global So some shared about our cap of a but program, our capabilities, cap. a have spot in you it sweet think program, approach not a if global and

first equation. of part of the your the question, Village To and the CHE back side came you to

Village about, come was a and out think to take even away you your an their to with relationship. in then question relationship That's ask an as I'd performing the and subspecialty of and previous that with broaden precise is is not So the And helping target and foremost, around to reach, built reach services in then already I I'll coordinate discussed and first more core moment. around proposition. to CHE, that relationship, expanded from target way of highly the precision broaden with off question, value a Evernorth the

broadly Village's lands over and other to Now patient benefited Healthcare, that Cigna time. will speaking, but be also panel health

positive Now specific in to product relationship. because closer certain or relationship. of that is alternatives that's benefit manifesting Cigna and our time, with And building That presents positive Healthcare, there will off conversations the themselves Village already to an design over the of collaboration unique are alternatives already. this relationship those opportunity evolve

course main to strong will of performance benefit already precision the panel. to here opportunity of the the is back and Cigna So reach, Healthcare It that. and from all Village. benefit is right the benefit geographies bring targeted about the presents of the partnership further breadth That's relationship their we're co-collaboration in alternatives now. terms forward for Cigna an that Evernorth’s why evolving with for in relative specific and so the to on Healthcare docket excited

Operator

Stephen comes with Our Mr. next Baxter from Fargo. question Wells

Unidentified Analyst

between of headlines manifest out to select, employers said national? in in spoke starting to guys Commercial, wanted if some that I the and of the was you're were about is anything on market. still on in-group you case wanted were I feel different still Steve. This ask we're was net hiring to the about that it, see the I labor generally time seeing data number Nick if last points call you know middle and for mode. the trends the given while getting you to market there

David Cordani

give just here. a Good morning, I'll indicator David. Nick, it's you little directional

So of XXXX, playing the in still effect throughout of the we terms saw of broadly kind through. dimension net hiring speaking, lead

we Although in the throughout was as we've XXXX, of softening course the economy. there quarter-to-quarter talked recognized a

year, part off. pretty the and get muted itself approximates the canceling of latter through we of that down year the and much the end As

a So slight to hiring disenrollment the net moved negative. the net versus

relationship by for some economy, think and as don't As -- we look our for in we to of I the XXXX projection we in the a plan within and or factored don't we softening it's course that's fully throughout but prudent further as dislocations, to further our we disenrollment case go by the case a at assumes softening uptick book mentioned relationship, further see our year, comment, of large prior projection. a

that say I levels continuing wouldn't fight to National individual of employment. terms call are in out employers get The to Press full to one small sub-segment. hire of would

see about can outlook year year, we've you approach. taken of throughout to But think a we and enrollment we dampening -- membership by relative indicators we that. believe the I some So full in the the would course appropriate to suggest outlook prudent speaking, that's further our broadly additional think an

Operator

Mr. Our comes with Barclays. from Valiquette Steven next question

Steven Valiquette

that back context of So just the again, growth weighted back and within growth half. in the Evernorth half on earnings more faster being back

remind if between again that's stone fluid set for the first thinking Just half? is second the that the onboarding the us you Centene PBM kind costs flow guys still half the far the how in half? if is Or can half you versus first of you're about versus weighting the recognition second cadence kind that expense of I'm year? might wondering as of of that as the of in during how

Brian Evanko

Good it's morning, Steve, Brian.

over as it relates costs course year do Centene expect related that to in of XXXX, an to there the So in the be uptick we spending. implementation the

fourth through quarter So think first can the the modestly. it of quarter as growing you from

you the about So total as think spend.

of as the emerge the and should a fraction small that But for contribution course over course the the costs of half the the income referenced a concept factors think mathematically, the magnitude by expect of which course fraction that you I to the if total that outweighed other that year. spent. the that related of already back The But against So ramping incurred we've far in back importantly, from half Centene small we of spend you year. full of biosimilars about of of will terms in goes think is the other over of it patterns as weighting. the earlier the the year SG&A well

Operator

Our next Goldman Sachs. Nathan question comes Rich with from Mr.

Nathan Rich

should and that how negotiations on annual formulary specifically basis wanted about per you think Is And thinking something to happening going an patients savings? I extent clients versus back to all lowest-cost and up of follow therapies? go you're does about then the and that additional additional talk are on guess to want give choice different maintaining the opportunity to and also how you biosimilars we changes year kind about to this access the the I of and approaching product drive ramp manufacturers. year to negotiate you the manufacturers once forward. to your biosimilar entry of you the could kind

David Cordani

it's Good David. morning, Nate,

have QX the deep year You given the of calendar in throughout year, speaking, made with for that the there's course drug of about, themselves the two, a to decisions always year insights; latter are year. the into In fluidity launches next the should the some of part think broadly manifest best relative so formulated the XXXX, biosimilars, we've of fashion. in launches clients, factored we there QX on this formularies that health individual in case a to drug obviously, year we year, ability individual course of the flex timeframe and the contemplated in. of the know of And et plans, the are expected consultative fully with cetera,

made So the year. view in the of decisions are largely advance

However, the through back adjustments you contracts my go around not have to specific your question make manufacturer-specific comments to are that specific and flexibility lens.

large, To the et cetera, latter efficacy on your comparative by effectiveness. and and clinical employers, focused of part health are question, plans,

the the any pharmaceutical at a may relative the that's best crossed. comes equivalent foremost it the properly in alternative and use some or but low available that, or equation. then care best make when of is to fixation is efficacy, first total economics effectiveness, there's efficacy And best of total to comparative the of trade-offs sure be evaluated terms as getting down equation it hurdle cost clinical ultimately, of once want health turning making a levers validation achieve to in they the to clinical which looking employer to then external and cost value line of the impact then and should So the clinical

And health plan the net employer decisions plan to question, tools, right and that we the by health by But outcomes have conversations preferred to and the are health flexibility net avail plans. employer, get the low standpoint equation ultimately, have the by that services, employers balance the that the with we to to they the by as the them cost able it's want. I prior drive mentioned in clinical have from we total be that

Operator

Our Mr. next question comes from Wilkes with Lance Bernstein.

Lance Wilkes

it either Just would relationship, the what PBM I side, wanted was comments is which made to wherever to frame distribution kind David, the trying understand you And to et helping or was that. follow a Evernorth providing from Evernorth the to manage on seem on VillageMD really helpful up, be through Evernorth better Village partner itself could services, MD that be or enable live cetera. to networks could costs, Evernorth of

that maybe Evernorth is is important So in you then MCO, for the source of new your just and for how what care to primary color more And sort value-based addition in ASO of what secondarily, VillageMD opportunity the of to a playing sort little the design block, role product there? the for is on cross-sell services?

David Cordani

morning, Good Lance.

is helpful. I your quite So think framework

work to Job with one for little in further strong is quality. you think product. just would It's partnership, to a to us nicely. you out blocks clinical avail right? affordability the It's off push If capabilities play not about bit. them I the with building in partnership articulated, you a quite platforms additional Village to order already or their a work performing improve laid

an an curate submarket oncology certain individual take the providers let's highest-performing markets, or tumor certain So example. the larger Take opportunity to in diagnoses. for for or types market

differentiated result very best that. value. a getting higher we've and of The that. obviously Evernorth evidence-based precision. to bring a that. then patient, that a way, which is coordinated probability therefore, overall patient possible able in care enablement a of the bit benefits what from that Of therefore, the designed for care Village more and Village enable datasets from be longitudinal The best from benefits benefits Our net is, And

well-performing Evernorth their back subset volume in that, of these distribution. clients this we addition have services through our to seek a distribution way the creating bringing you will ability to the We the precision bring of your here. so. around absolutely And through then in for case, care where a even enable be ASO we to There's third, back in coordination through their for that more to more rewarded would we no by to the the yet exist portfolio do flow to, you to is collaboration capabilities back, But and two of benefit. with value is we access want opportunities which will help Village, be came large Point in could high-performing doubt benefit. and

here, So building which why we're quite there's is blocks multiple excited.

clinical a Village some it will At well, that put all is around bring Village the the one end mechanism circle Lance, that coordination and day, how the clinical that both then is time that the then data creating and comes have with we conjunction with even do to sharing And for. work harness coordination you patient and do more platform more of we big how a with service comes greater if performing quality extenders to through we it. along it, care overall built mechanism down in and Evernorth, at harness affordability, a

Operator

Jefferies. comes question from with last Our Dave Windley

David Windley

I'd navigating the tighter RADV thought questions. for environment couple addition that a been of Scott the I year? David, provide on a in thoughts days rate It's rule. to next more since through to rates your ask and asked RADV you,

David Cordani

Dave. morning, Sure. Good

So clinical obviously of value the for first risk some And program has as program. service. worked noted for for relative and to came that out, important an RADV that and adjusters and quite I and and are the a seniors excellent quality, time the we tool deem foremost, benefit new information before, delivering that remain

we fashion. committed obviously, Additionally, a Cigna program in to from remain executing, perspective, highly a this compliant

that We're we're continue to the not a XXXX. extrapolate that decisions. to actions actions, their specific couple they're of concerned going CMS pleased, question to to we concluded the Now RADV prior

closely past we to the the the in clarity and methodology to to items some specifics to CMS we as open we relative the further work extrapolation to used will, foundational going that we here. are with the adjuster And is elimination example, to seek will always fee-for-service of For of await be as in deemed the and that we to relative aspects the work have that program. be get

more to open beyond with still industry visibility XXXX, over we So get fluid we a the large remain, collaborate for but environment CMS bit of term. see questions relative that will and at to that near extrapolation some the progress and a lack of the on we see

Operator

closing call I David will now for turn Cordani remarks. back to the

David Cordani

Thank you.

Have serving of we another was demonstrated Just and to ultimately strong positive and expect of customers, to around as their their deliver commitment the that want and current we the building we've thank good we to growth the our we vitality look and continued of to today, to a delivered to Cigna strive leadership on Healthcare, the that briefly as momentum go year more look than clients a our health that we our larger XXXX to brought allows partners, continued recognize in us and future of in day. that those needs we you difference earnings defining and customer forward to performance, have as and we Evernorth the recap, demonstrated our I make for co-workers and dedication year to to and call a are forward. impact thank we growth With forward. that, impact XXXX. It's we're importantly, world. privileged XX,XXX and conversations With joining improve more healthcare a serve. company

Operator

available this Ladies of for Cigna's concludes to Relations A and Investor questions additional be gentlemen, XX conference call. Cigna will days following this business to be Review. will Quarter Fourth available shortly. recording this Results XXXX respond

recorded replay. conference required dialing the XXX-XXX-XXXX. access this for There for may or by passcode participating. Thank XXX-XXX-XXXX no You is you

disconnect. We will now

Cigna (CI) 3 Feb 232022 Q4 Earnings call transcript