CI - Earnings call 3 2023 | Cigna Corporation

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Operator

Ladies and gentlemen, thank you for standing by for the Cigna Group's Third Quarter 2023 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 conference over to Ralph Giacobbe. Please go ahead.

Ralph Giacobbe

Great. Thanks. everyone. morning, Good joining for Thank today's you call. Giacobbe, Relations. Investor Ralph President of Vice I'm Senior With are Evanko, this Cigna line Health and me the on of Officer morning and Palmer, and Evernorth Executive Chief Executive Officer; Group's Chief David Officer; Financial Brian Chief Services. Eric President Chairman the Cordani, for Brian . In quarter our and financial and a XXXX. of will outlook remarks our David topics, number results updated cover today, including third financial our

their be Q&A. Following remarks, available and David, will Eric prepared Brian for

describing revenues, when accepted financial accordance release, financial not earnings results, income known certain our in principles in noted in use our measures, otherwise States, from as we As generally determined United accounting with operations which GAAP. adjusted the including and adjusted are

GAAP contained net respectively, financial basis use adjusted the cignagroup.com. A principal operations total performance. revenues, the today's and in Investor same measures, the labeled our shareholders share on is reconciliation measures Relations directly of these posted of is income We measures the term as release, to and per earnings which the of in adjusted earnings from section comparable income most

earnings to SEC. risks In could regarding outlook release risks the XXXX will some future today's A be our subject and the are and These cause that our actual differ recent and our performance. filed statements expectations. note materially results with and for these including statements, uncertainties cautionary remarks in to from today, description uncertainties to of our forward-looking current in we is contained reports statements most making

special primarily litigation with results. we for financial cover $X.XX over $XXX items the to few recorded item In settlement. associated our charges million of third turning share I or the Medicare will quarter, per charge our a Before call, an after-tax pertaining

$X.XX of supplemental per or costs. an or share and integration charge life after-tax special and $X.XX We transaction-related charge item also with $XX of sale international an item associated accidental $X to per our Chubb business the after-tax million share of million for special recorded and

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

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

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

David Cordani

Thanks, Ralph. Good of and quarter for we We strong remain in another you morning, on momentum performance, and everyone, a for today's joining thank pace of had sustained XXXX. year call.

serve our of our platforms, and those for the we capabilities continue to are grow company. our mission across services health as benefits deliver to we With we on strength continuing

Today, I'll continue highlight and of XXXX, key to and headwinds. our for performance our including expanding the our during drivers and opportunities expected growth and quarter our our impact of supporting advance tailwinds view some the priorities

as our about outlook rest additional perspective for performance as Brian will well the the of share our quarter third year.

So with that, let's get started.

innovation. we're quarter, of performance. in billion fund to $XX across third per strong, show sustained ongoing revenue, delivered of These strong franchise, continuing in total the our track continuing we In reinvest generation flow results strong, growth, expansion $X.XX, they earnings continued our record while are our and back to cash business and how all adjusted share

and capabilities. Cigna well Benefits solutions are dynamic our platform, Evernorth a and clinical in growth Healthcare innovative and Health our breadth we expertise, period with market-leading With Services executing customer deep fueling of

deliver we're our and on during customers for results as our the our as our clients quarter continuing demonstrate shareholders. to commitments Our how patients well

growth, customer EPS, year and are as raising flow operations. We for XXXX outlook revenue from well cash full as our

ratio With XXXX. for improved our guiding continued an initiatives, affordability we also to now care are medical

adjusted we XXXX. of full for expect to year and Our earnings businesses share deliver are $XX.XX per at now well, performing least

framework, and capabilities we growth turn Group. working strategic growth from to the are across impact. our we harness I'll to our complementary sustain how durable Now Cigna With

We growth. businesses have contribute in and market faster-growing that segments foundational accelerated that to scale mature drive growth, businesses

growth innovation from as relationships, our together leverage client through across company. We our and fuel cross we additional enterprise bring the capabilities of differentiated power talent,

we that today's are businesses deliberately Next, how positioned shaped our I'll needs. portfolio have market share of for well

I'll ways continue success look Additionally, to sustained the as drive the our highlight we some of to future. we

actively Evernorth for differentiated a the had selling engaged Health to and season. XXXX, XXXX ability are continues to with and benefit care capabilities. Services value our demonstrate pharmacy season We a create proven strong teams pharmacy benefits already in

to are choice expanded as continuing well market-leading provide with innovate clients We our as and value.

the before, of and relationship effectively customers support needs unique solutions to have suite our approximately of as well the prepare serve beginning XX Centene of we Centene clients which Evernorth's one is on customers. been work, going teams implementation leverage January. their to million is new very Many we discussed serve we in collaborating

Many market leadership expanded health a is market of coming to that have treatments in pharmacological We affordability high from wave that the with with opportunity are position drug landscape. list reshaping the a addressing the pressuring substantial innovation prices are care of manufacturers.

and Evernorth, with clients, well patients expertise, manufacturers, are At pharmaceutical driving deep clinical given for as experience, as physicians. with our better clinical affordability we outcome and relationships strong

The surge value. of class for demand offers for a good provide of drug example the how management weight GLP-X we

cardio data of costs and addresses effective the and known program care conditions of and Our cardiovascular combination insights, Rx that is depth also affordability Growing an guides breadth Evernorth's disease, InCircle and Rx to a with for prevalent analytical patients the complexity most improve associated clinical InCircle and diabesity. helps expertise, as that's at diabetes innovative obesity, clients. solution

forth drugs, many gene cancer as new treatments additional Alzheimer's for different expect of therapies, we including for well GLP-X as others and other a conditions. the Beyond class, manufacturers bringing see drug number growing to

positioned our continue for to medicine to serve make accessible, affordable are to uniquely well as coordinated growth clinically We we and well for company. drive as more those

business, international portfolio. a within Now business another in our foundational health

We are solutions. markets continued expanding of portfolio supporting and target growth in our

seniors health the new specifically mobile customized plan, introduced During a the affordable quarter, globally for example, we for population.

leverage business cross-enterprise benefit their harness our Additionally, the of foundational continues capabilities to U.S. clients. for commercial in the portfolio,

priorities we look many programs for additional forward solutions. XXXX, -- access, know is and the and health As expanding to effectiveness of employers that behavioral to addition overall top affordability, in of we coordination one

benefit commercial to in The leveraging and customers, accelerated that we businesses. innovations clients exist of our are capabilities our

mental solutions stress, and health create anxiety, a to [indiscernible], employers example, expand Care Evernorth workforce, businesses. offer For for continue challenges other we health through engaged conditions who the need behavioral healthy, we

targeted clients, is behavioral helping solutions level, by business. navigator. Confide engagement. proactive, high-touch newer the Confide of model more both and proven a and guided It's us win service well of retain effective resonating One with is new health a follow-up monitoring

next convenience digital matching that patients tools to them personalized provide accelerated the opportunities. launch and additional right needs of enhancements year the are also will individual scheduling greater and with to therapists offer We that improve

for as reinforces multiple focus our health, we XXx that health to have adults mental of including dimensions, significant significant continue to more is capacity on that the our vitality, individuals likely high without across Additionally, addressing are know drivers. most challenges it latest one advance research of example, mental the We vitality.

an higher costs. lower Now employer, medical means as lower as turnover well productivity, you're if higher engagement, this

access and a Evernorth as behavior are care a digital perspective. In addressing acting and from Care, with of expand needs making delivery disruptor clinical patient's capabilities, experience, investments, sure also are outcomes and innovative in care in management sites they positive and models health care addition to care. physical improve growing we while coordinated and We're programs continued virtually-led with for developing connected our example, to to

XXXX. capabilities to For innovate in to and platform on continue accelerate example, new leading we and further MD ] Live's [ plan build care virtual

Accredo's Turning clinical accelerated our continues in this you be extensive assets an quarter, to source another growth growth that expertise Last with I'll the market, in to important on touch fast-growing of pharmacy with provide competitive us about specialty business. pharmacy. specialty a for company. we talked which advantage

also patients Accredo in and to additional contributing We home. space. who drugs specialty this on in our focuses their opportunities have receive supporting predominantly capabilities growth leadership

these complex medications or need Sometimes, settings. offices physician's to hospital be administered in also outpatient

support systems this growth to we specialty continue our see we our pharmacy of specialty services. Today, and distribution CuraScript capability and providers meaningful with in aspect health

our is portfolio U.S. government Finally, services. accelerated an additional business

our is stars in of value showing high-quality as care. over well we pleased we have access our supporting seniors X-star to members provide are that in quality Medicare recognition We X/X of as the or This plans. recent with rating again higher

both market expansion With targeted Advantage benefit and now and activity. individual Medicare open the underway for exchange offerings, pricing balancing competitive enrollment discipline are business, we

continuing So to in to broaden reinforce guides performing and we reach. highlights And expanding well are summarize, across diverse these our our framework how strategic relationships client innovation, accelerating enterprise. our us

we always cash you look fourth we Cigna Group as to of revenue another build as our EPS, with share XXXX, more expect flow Now call momentum detailed strong performance quarter earnings growth. as We'll on year with we the on for and guidance do. we

and and the remain adjusted be our $XX at in consistent conversation, continue XXXX. we EPS tailwinds per deliver largely least ahead with to expect we The in share in confident headwinds to of prior our ability year

Notable starts tailwinds the biosimilar business. impact exchange and contributions, an full in a launch January our of contributions, margin which include improved of on Centene, individual including growth-related growing positive X, profile

make as for In position of continue portfolio to as sustained terms well will of headwinds, investments we strategic to long-term ourselves innovation growth. drive businesses across our

adjusted the flow throughout as and Now customer, quarter, our EPS of well growth. the had the builds I'll and momentum strong just cash as quarter. $X.XX, briefly course on for We delivered good We performance summarize strong revenue it another of year.

continues at $XX.XX to adjusted past is company our to for we we $XX year deliver serve, been EPS we expect outlook discussions. least and to for in able at Our EPS for of full those with XXXX, of to benefit which and XXXX, the consistent adjusted increase our deliver have least

and framework our power a services positioned well services are with benefits portfolio the We strategic of leverages our differentiated that portfolio. durable within clear

Brian the of our share Brian? quarter now the and performance our for will And perspective in outlook the rest about year. additional

Brian Evanko

for David. full XXXX review everyone. Cigna discuss you, updated the year. third Group's morning, and our I'll outlook results Today, Thank the Good quarter

proud are per to least all earnings With are increasing our another performance, $XX.XX quarterly including of to expectations. this XXXX deliver we full to performance, running favorable most in year share. We metrics our or critical line strong outlook at adjusted

adjusted operations billion. at key and of consolidated $XX quarter the XX% X% include $X to growth from to of share adjusted $X.XX, billion, looking after-tax financial revenue billion, some per earnings flow highlights growth specifically, $X.X X% of Now cash earnings to of growth

well, perform bottom to platforms Our rate Evernorth delivering results continue sequentially growth ahead of with and expected, Cigna X as Healthcare posting improved line that growth a expectations.

comment third X% line I'll earnings X% $X.X with platforms, first to on growth and billion, with to billion in Evernorth. strong deliver continues growing expectations. adjusted our Evernorth quarter pretax growing revenues $XX.X XXXX results, Regarding to

our revenue growth. year-over-year in double-digit to strong driven quarter Evernorth's see by Specialty results performance the Pharmacy in were which continues business,

our clients, provide drive of also enterprise affordability We continue value Cigna solutions and growth our enhancing variety and cross to while Evernorth that our a Healthcare services and customers across and for leverage platforms. differentiated

we all outcomes addition, investments existing provide solutions In affordability. care strategic of options of relationships, new their clients our digital experiences of expansion support quality while achieve access, advancing goals continue to and and to and to greater to onboarding customer capabilities with enhance make critical clients client and

Overall, we quarter the well Evernorth as delivered third to with year. consistent remainder of expectations, look remain and results, we the strong positioned

Turning to Cigna Healthcare.

XX% revenues $XX.X Third ratio $X.X earnings grew and XX.X%. care grew was Pretax to quarter billion, adjusted to XX% the XXXX medical billion. adjusted

Specialty, yet More program was was better initiatives, settings. and ratio pricing high-cost reflection ensuring specifically, cost-effective a Pathwell care is by patients driven quality care business. disciplined aligns have our appropriate commercial affordability care of with medical who An performance site high conditions example in ongoing get our MCR care than favorable quality, of continued our this U.S. that Our specialty expectations, settings. patients of

with basis, which customers, Healthcare ahead expectations. XX.X all Moving businesses million customers. million approximately total of year-to-date. we to Cigna the delivered customer X.X represents medical Healthcare, growth Cigna a within sequential customers medical quarter We Medical On growth across of ended

Healthcare our value continues affordability in and and provide the differentiated results the quarter to for clients, strong drive underlying our Cigna Overall, customers demonstrate and fundamentals.

Now turning for year XXXX. full outlook our to

are we year to $XX.XX year $XXX at for revenues share. to across least billion, our businesses. XXXX driven growth expectations full least by our increased consolidated at XXXX adjusted increasing have our outlook strong adjusted earnings per full And We

Evernorth, high continue consistent adjusted XXXX expect In at we commentary. fourth growth least earnings quarter, to of in our $X.X to the prior billion. implies with mid- year single-digit full This

full despite outlook growth at our our consecutive Healthcare, the prior Healthcare from of XX.X% $X.XXX an focus quarter medical This to we least outlook of growth we range expectation businesses. and our raising care within We XX In year at updated high we least across expect billion. X.X of execution expect third have economic our to backdrop. the continued medical continue end customers. XX%, our reflects basis Cigna Cigna adjusted customer now This million represents the XXXX to range. of improvement increased ratio be to dynamic points And customer the a are earnings

XXXX year increase enterprise Evernorth expected we approximately accelerate further ratio compared and is full prior across our our to to Healthcare SG&A now investments be Cigna X.X%, Additionally, platforms. as our both adjusted guidance an

And finally, XX%. be full the year is to XXXX rate in our now tax XX.X% of to expected adjusted range

continued XXXX weighted our management year to $XX.X be the and X, for cash to expected at full Year-to-date shares. year full And repurchased approximately year million shares capital to billion position outstanding XXX generation by Turning billion to our outlook. of now the XXX November we XXXX shares to stock full updated XXXX strength operations us cash $X.X through of range flow million X.X have least XXXX. common of our approximately increase in million our billion. The our XXXX, assumes from average gives for guidance $X confidence

sheet healthy from benefit returns balance capital. cash drives that strong flow on Our our and and service-based attractive outlook margins strategic flexibility, efficient model

to Now recap.

execution diverse adjusted XXXX of deliver least our us EPS guidance portfolio of our across businesses, Third confidence at were strong, increased results to quarter giving $XX.XX. on reflecting

$XX. formal provide fourth While expect XXXX at adjusted we of quarter will we call, to on least XXXX guidance EPS our continue

That I'd and expand tailwinds David said, to upon the spoke headwinds earlier. to like

our of of clients. savings revenue patients Centene launch opportunity starting include our benefit the drive January of tailwinds and biosimilar Our growth, full more and inclusive continued to to X, momentum the relationship

improvement also in next driven We taken pricing exchange margins in our actions targeted geographies. by year anticipate individual our

Given we exchange XXXX. customers where individual have to to are these fewer likely actions, are relative in the in business we

partially across by investments and be will of offset strategic to long-term portfolio tailwinds innovation our continued growth. drive businesses These sustained

call. I'll operator We detailed our Q&A quarter the it fourth to over of for guidance turn look the the with call. providing portion that, on forward to And

Operator

Lisa with JPMorgan. Instructions] Gill [Operator Our first comes question from

Lisa Gill

bill. a on really One wanted be an just year would about to think I potential potentially as things. PBM legislation focus couple of of we end

could side? your What thoughts PBM are be on what on included the

And then about talked about David, and Rx you GLP-X. InCircle talked secondly,

the this for real when your PBM I think business is self-insured especially about I think a market. benefit,

cetera? opportunities this Can that up that And seeing you in 'XX, the maybe just talk there? you see how we more see forward? going for about Are you sign people et

David Cordani

to the the I'll haven't in legislation, to and legislative tee question, I'll a continued to program. Specific marketplace, InCircle David. the little legislative It's expand environment. the relative active operate take to in up GLP-X a as Eric on regulatory Rx broader ask question and we to you very expect know,

environments. variety will As a potential by company believe capture our dialogue. the of otherwise, that ongoing of active framing, and get we in activities, capabilities, be modular I and both And under the of value remain legislative to specific, and a engaged and grow result, before thrive positioned we with value constructively a and configured breadth we creation way able capabilities

an activity well the benefit plans passion, any market that where amplify comprehensive fact of the remove that that sophisticated from the should we large highlight especially area choice, the and legislative ensure as to that commercial is and of are lot given regulatory majority and they organizations vast I'd fund costs. employers for have as not health a

actions and targeted and drive it Having transparency a intensified said on of level activity are highly requisite we around basis. constructive, is supportive there so could it transparency, long is that, go-forward meaning of

seeing future very et today's cetera. our by positioned. believe are cancer as toward around commercial et ongoing Express specialty noted plans. remarks, X years health oriented capabilities, launching support the GLP-Xs, that innovation therapies, X my years well class to additional relates our ago positioning Evernorth, of continued Alzheimer's, be both believe we're drugs all We like it for are cetera, And as by we but innovations, actions the clients acquiring well positioned we're taking prepared As they investment we both well Scripts, therapies, gene ago as place, to that's we I in deliberate took exceptionally in

clients. It's InCircle supportive Rx its the in new is marketplace highly of wonderful a the innovation. kind and of first

expand Eric, you on ask can I that? to

Eric Palmer

David. It's Sure, Eric. Lisa,

As more them and you with with is affordability managing from treatments. outcomes Rx program clients interest our our the on broadly. help get GLP-Xs significant there helping the can good They're ensuring and looking from the need InCircle that imagine, for and spending these on they

clinical As David we clinical Evernorth. that the target collective the population, teed I and a our expertise, support this waste Rx up, engage in last or management, of power makes as pharmacy working our additional markers, use first and capabilities of system, patients patient network right the the need within great have and the outcomes such with program it supply along wrap brings the make It's I'm relevant about, year. solution with to all the that to really chain for example with clients of targets they of excited to guarantee think that help the a clinical that kind, together impact InCircle eliminate and comprehensive capabilities we well. And to procurement our works it any changes its is the

we're about and brings opportunity for growth really optimistic beyond. as self-funded -- excited short, look this would and into product we and expect in XXXX markets So additional to we're the

Operator

Justin Research. with this comes Lake from And question Wolfe

Justin Lake

into get margins are That and talked to helpful. be . And year, expect Do kind expecting for would members improving XXX,XXX target to what's members. a wanted quarter. focus there, year? you second. in another guidance -- then can you Curious remind of slug target fourth big the those this about I you individual member significantly margins to your us XXX,XXX on You're next up that's Membership if pretty where driving relative you of where you on the market that? was almost increase?

Brian Evanko

Brian. it's Justin,

individual specifically the correct, the question Just in of on your margin profile? clarify, second to terms exchanges, was

Justin Lake

Exactly.

Brian Evanko

Yes. Yes.

increasing customers really added strong business, in business. off, with nearly X by strong running expectations. across a first builds as care had commercial million in really we're with customer the XXX,XXX year off So in we I'd U.S. the to ahead relates it that we pleased book Healthcare And Cigna momentum XXXX, our primarily health where the start Healthcare customers by of guide Cigna year-to-date saying our customers, the

in we've U.S. point, exchanges. we we continued in quarter, into show To sequential as outlook. seen disenrollment the seen growth had also our favorability not in we your levels the But incorporated commercial particularly U.S. businesses have membership, third have our to individual government our prior

You some anticipating may had this recall but has that volumes. any been we not yet our materialized XXXX, impact notable customer weakness economic in on late in

pleased the X% year So but portion strength individual the to portion all which U.S. is really a related which projected Cigna to with in, is in customer of Healthcare, related growth a commercial in we're full of business. our exchanges,

a for to we exchange relates anticipate long-term our it us X%. business we target can run second of margins quarter XXXX, context, X% to this just billion margin As shared individual approximately a for and our being book as in the in bit you little the target call, exchange XXXX. And for individual $X to our below think profile, business as of of this in block is

owe, the payable this Georgia. majority that risk primary states, of is the Texas notably A our and of adjustment largest driven X driver by with expect that impact we increased to

margin in that and outlook. large we of margin expansion individual increases for these about individual the will likely as think of Now where of and some XXXX be products degree But in mix the geographic the of price in and fewer XXXX, overall. the you our states, customers both improvement The function duration in book 'XX exact how sizable our mix taken would in we to a we've X expect amount Healthcare we're helps a model Cigna in are XXXX. to bit, hopefully, exchange to compared have XXXX,

Operator

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

Kevin Fischbeck

side the tailwind In things. Great. of

growth, talked You Centene revenue the launch. about including

exchanges one-time of the other well as as about of kind far so kind items. talked You've

would is rest year? Does growth that the line tailwind those to of growth business or highlight about targets? other there Or where you any the in less should a generally specific businesses revenue long-term more or the mean that think outlook headwind we with next for growing

David Cordani

year several at Kevin, of with CAGR, years it's look David. we've XX% even outlook over I'd ask the back investments you algorithm our onboard the consistently average downtick to relative And performance consistency our you this the we because our and the years, X horizon. first years, years at to CAGR last made we've a to as of EPS XX-year look time and if for that portfolio. to the within the -- slight the remain Centene over EPS growth XXXX, XX% over delivered and X our of step past on

suggest the That called to the to tailwinds We view end in the high a few the low that us standpoint given range specifically offset one more pushes growth as can and headwinds contribution, growth, the and component, from XXXX, the amplify of versus Centene I additive. the out of of you to outsized that the the first directionally try EPS an some range. of the components. would end

The other we'll of contemplated both our go-forward basis. detailed we largely items call, talked the parts we've business as are core quarter our typically you on parts on as of guidance and give operations I And a Brian the more noted, and fourth our do. about core in that

Operator

Rice Our AJ from next UBS. with comes question

Albert Rice

potential focus of Just to maybe some year. tailwinds for continue next on to those

million think contract pretax. running that Centene the and get investment about I year up $XXX drag large to $X.XX for roughly was this

think that drag contracts typically than assume Or profit know swing When there potential year, ramp about that, so next some away? is should up level we I $X.XX? goes just the contribution, of you is greater over time. for that PBM

that from HUMIRA of in a this we Should that know what biosimilar from that? half the think annualizing or conversion? -- just as some other annualizing about having I the are you'd second the half, thinking beyond the of included year, And go benefit Or benefit then conversion on HUMIRA opportunities just you're some second tailwind biosimilar there comment. competition.

David Cordani

AJ, it's David.

Brian by our the going framing there. relationship, the lot start Centene You've et performance, ask cetera. packed economics on in investment, year-over-year year-over-year to a to the I'm

ask to going and Asking to latter this we're seeing how relative the to a the talk part of And importantly. bit about Eric, that could the next he biosimilar year. to Eric in I'll transition over little into relationship amplify is year impact Brian?

Brian Evanko

is Centene right. to it As your economics, math the broadly relates

expect continue million $XXX spend process in about the to preparing this year to We for the of onboarding.

expect or be year approximately next breakeven We slightly to positive.

that's at the it think to So we of run expect, be way modeling 'XX, to will the profitability. about rate that, continue

As a to the it it to relates story. be biosimilars component, for 'XX, we largely biosimilar driven expect HUMIRA

'XX, thereafter biosimilars will of related So is that in but going be driven Evernorth benefit. to 'XX the further be the the biosimilar really time, and by to primarily HUMIRA accretive annualization

to pick Eric, want do you up?

Eric Palmer

said consistent throughout savings process. Sure. that ongoing. of and the with and expectations. market slower We've date And to adoption be see we've extended for the going the opportunity to as year, the driven benefit the from this is of meaningful and our the of biosimilars more clients been year, has experience we part continue ramp course to this next our customers and far of so beginning

up competition, something [indiscernible] meaningful talked only XX% over specialty in XX% biosimilars, of we'll opportunity other there settings for other more expect about competition to to spend compared than the time not XX% We've to and less have in today. for for or like be the conditions, but market, the where

the the we're years. for short, And and with unfolding expectations. coming the an positioned consistent we to seen meaningful positioned of is course clients this drive benefit in our we're our customers area of So lead have that that through value well over to

Operator

Fargo. next Our comes question Stephen with Baxter Wells from

Stephen Baxter

in a more on I how I expand normal third was you did quarter saw the a I seasonal on guess, and the quarter. MLR guess, pre-COVID what environment? bit hoping to talk about you you little could a bit the patterns utilization? outperformance could the more compared

then, it consistent utilization? talk on there step-up little of years. assumptions couple you with assumed seen the bit you've you Can in a QX, decent in a what the past looks like about And pretty

Brian Evanko

It's Brian.

and have Cigna the are in reiterating another saw of just to in Healthcare again, outperformance segment. which quarter that start delivered income I'll we pleased performance strong really was to the we expectations Cigna So favorable MCR Healthcare, how drove

here, consistent a a in utilization experience normalized more as the into Just claims with largely coming our clock rewind reminder, planned levels we that XXXX. bit And you expectation. price is if for

Now government in think line commercial in product while you the lines medical our ratio. individual with U.S. specifically, our favorability lines within business Medicare lines, the drove and quarter expectations, ran largely exchange the the care can of

As it our fourth compared outlook, improved to in by expectations. no expectation relates points experience, change significant the we MCR reflecting MCR basis full our quarter XX midpoint, year third the the favorable at the but have outlook to quarter prior

So that's to the versus XQ you way think dynamics. about I'd XQ the encourage

it quarter, amount on inpatient to outperformance. MCR did favorability and any cost favorability. call As of I in modest particularly relates the to wouldn't out and of contribute patterns unit higher procedures, utilization that such, in specific specific categories some third which categories terms actually see driving outsized We did

care well. inpatient we the orthopedics. note talk other produce strategies many have A also tangible our advanced continue shifting to about I'd care that really often strategies on as areas of for in site strong procedures But outpatient, results. example, example But to site of is

that For introduced the outpatient which specialty drugs. in earlier, Pathwell Specialty, example, infusions optimizes hospital program for about CytoCare have I of we Historically, setting. been talked high-cost these administered

by the their patients having at can better or certain home. cost a equal infusion However, in lower clinical experience quality

in has saw So example the the favorable of MCR to that performance continued quarter. and that's just something to contributed build we time over an

very of the drove commercial our MCL we're performance, quarter. pleased majority with to quarter in fourth with the prior consistent the summarize, just expectations. U.S. the third And favorability So as is the noted,

Operator

Research. Our Nephron Raskin comes next question from with Josh

Joshua Raskin

remarks prepared in to membership year. anything I start hear group the the commercial, didn't about large

large from for if look arrangements employers. appetite markets Medicare on my VillageMD you you're the curious are when versus presenting getting But of what traction pull And the could those in is, markets, the in there's like? traction sort interested I'm be the contrast any that. can specifically Or compare demand? commercial question I'd and real you're getting more if So around you

David Cordani

David. it's Josh,

to describe work ask Let your And to and bit then me broadly continue the market, with Eric specific the more we Village. to speak going question early relationship to I'm Village. just strategic and traction evolving frame relative the then little commercial to large advance with a

First, specific season. selling to the marketplace commercial the and

miss the didn't any detail. profile did of in outlook You we XXXX it, level

Stepping his half lives. our XXXX lives now in X off prior of yet portfolio, Brian comment, the our results, lives, pleased noted we're coming again, million number, million the care in increasing approaching with and excess for for as X Cigna Healthcare really XXXX outlook back, of overall a

you this give some point indicators in directional I time. XXXX, For at

big picture First, the for enterprise.

aggregate, it year our for expect within strong another led combination market new good services by to retention and are to our attractive business sustained middle portfolio, commercial be our of We Cigna our proposition in products our growth continue we the marketplace expect the well. segment commercial marketplace, specific resonating Group the and performance. to results value where adds our segment of within and The portfolio. that select and quite Strong be

segment Currently, relative the XXXX some more benefit a that side for shrinking is specific for look And a aggregate equation, market normalized we've that XXXX, landscape. segment of employer prior to within flat the Accounts. outsized to you, on growth in will segment, then strategically slightly in to expected our be bit the outlook And after years. National see the to remind to XXXX in little

portfolio our our strategy us with maintaining specialty has deepening further services. our share through clients relationship of Our and expanding

the around the the led of in Cigna market and circle middle by strong it Group aggregate, select a XXXX portfolio the be be year put to in will strength it, of the sustained for commercial and will growth another business. So

quick to a tee Specific to up your comment. Villages,

with from today benefit that then in we've Summit our acquisition relationship Our in a the relationship. and nature step already which Village the structured to Village commercial function seeing employers are

a were of So step we able to shared already, self-funded, to clients value be our cost deliver from function commercial they be they they standpoint. guarantee returns, that be

the the at there. to then And aggressively team further work value enhance proposition is

care way a to color working in terms And to I'll the in just which the value-based little together Eric, you the ask provide advance are traction. teams of

Eric Palmer

with relationship component and financial strategic know, a Village, ownership have back for think our of Stepping Sure. we stake a you bit as got minority both Village, now. about you the the of

performing that's our with consistent so And expectations.

with some data is think perspective, can ramp work clinical highest us they care with our operations alignment they quality, ensure specialists together. an where high-performing and et and committed being to the the best of one organizations a partners We're to the strategic both working need, of work Village cetera. raft insights Summit's ecosystem providers help assets, need, with and support build from of the to Village an and our best From patients can to we Village get to of

as think really plans. across I commercial applicable ultimately or government of And that

an focuses Our to skewed for available the it commercial been, highest across more all care because best term getting an markets. the here, payer that any it's towards has near I'll on works focus transcends the that but individual. right, in And quality, say, market, approach the across

partnership we're we'll with time, continue off date, But a this. progress momentum and the Village. with building our Over to start good work with to to that and pleased the to expand

Operator

with Our Scott Stephens. Fidel next question comes from

Scott Fidel

of was just over us margin long-term baseline maybe just how target X% pretax MA could framing give on MLR 'XX? for versus and sort toggle X% sort I hoping the second, to a uppers for government to of of of a sort was maybe performing, and we

how seems growth. us next you, industry the and if MA you some let's want then, to developing forecast observations year growth about feel on be call you And the versus, initial give how to it, around for X% AEP

David Cordani

it's Scott, David.

of and Just Brian specific your ask couple of points. to couple a a comments, I'll back peel

in our First, ask on I'll of little strong position, as a we terms to to traction footprint. expand prepared our Brian then And position our of as geographic Stars ongoing have, my Stars focus noted the significantly, bit as continued more capabilities. expand well set our I in ongoing with stable, the and we're of broad pleased remarks, investments

a and good for was of very expansion XXXX. of XXXX are in for this terms our business market plans track us growth on portfolio, year

Brian, could that little a bit? I ask you to on expand

Brian Evanko

to a in AEP of the order, and Sure, little reverse the growth Scott, margin questions get profile. David. a take I'll I'll bit start and with expectations, then maybe your

since now And XXXX, just expanded footprint of XX% this year-to-date. we're in in about from you of up for some XXXX. offerings eligibles know, XX% in the and MA growth And gradually year-to-date business, over Customers David we'll in our addressable with Advantage further we XX% really pleased covering referenced, just to have geographic today. XX% XXXX the Medicare have market. transpiring, we've XXXX, As are as the expansion book

As and areas we this few had approach in funding we where do, employed targeted benefits of a the micro environment. XXXX we a and and stable in most in benefits cycle, bid pullbacks light market as always posture resulted the geographies we

AEP, would XXXX. all really But to early to we as the what still and net in customer know appreciate, we can several taken on in there's today, it's go. based you together, again see growth weeks Now expect

to this XXXX profile, long-term As business. to X% the be margin we range, is on margin our relates book as below continue it our target expected, margins which X% to of

of investment expenses geographic primarily and spend administrative we You driven as outsized this expansion and product can by as new expansion, think have capabilities.

growth as embedded think a should contribute margins the toward over our basis. power of multiyear Healthcare you that long-term a segment representing earnings So future MA in source income Cigna will of

duration to XXXX, across target depending a mix will how in be this expect and of The our AEP of margin customer mix, the we in For long-term geographic product below also shakes on margin mix, balance projected the final running range that and function here the out continue business. year.

out. helps quarter give during that So you fourth turn detailed but guidance prepared hopefully, we'll certainly be to call, more the

Operator

Taylor Our Cowen. next question comes from Gary with

Gary Taylor

more expectations I back to next and for and the ask one business go year. just question about wanted exchange

versus looks When at industry we did. markets, the across guys very, about look of rest the what it the you very outsized pricing took actions

a the it's that's positive terms expectation. think I huge of margin in So

seen that really enrollment. But have that done significant deterioration historically, of companies have

question exchange come to So we at earnings? that, about should $XX how guidance? see was is, how to in? XXXX where like care we margin of the in much is getting by guess upon Like is something decline the yet dependent that better, XX% saw I least much XX%, impactful XX%, the enrollment the the we numbers If the enrollment

Brian Evanko

Gary, it's Brian.

point on price well customer in terms disproportionate volumes So increases of have certainly, ways. your is the large can in impacts taken

the this growth actions. elasticity to customer of to of cycle in We relative the out have see how pricing terms those plays

tailwinds, on have. David's our this several of is one tailwinds we earlier comments To that

volumes encourage in not So share. the of I against terms per $XX earnings you over-index deliver to would of our the ability to customer on

think Just of the if to Target business. that's X% block $X million midpoint the margins, range. of you profit. about context The of a this, it's X% of $XXX billion

income the year-over-year, about talking level. delta millions So the at enterprise the relative there, if $XXX of we're about you think growth to

we'll income So encourage to confident factor. quarter specific expansion. just fourth updated confident I we'll and -- overindex more you would see call. tailwind, I this to we're you the guidance not margin give we're We're one see the going on But on the

Operator

Our next question Sachs. comes Goldman Rich with from Nathan

Nathan Rich

I on the comments GLP-X Evernorth potential there. obesity, wanted the value can around of up follow to deliver for through and clients

you now I go the guess, more nature bit with to discussions could manufacturers could getting on you're and on that the a drug that a of little level detail into access? having right expand pricing

populations? of their of those the to outcomes play potentially terms your their expand in -- maybe, to access role, will for commercial discussions trials in therapies from these what kind And desire customers,

David Cordani

David. It's

class, had. portfolio, our XX% an buy-up for Just of To a to for with the our you consistent or clients benefits think formulary we've adopted conversations prior date, positioning of diabetes within management number framing. weight could for optional already coverage outside And XX% currently about drug one. having little the

as why of about On difference percentage within and before, Evernorth difference. is can is the the you the Evernorth the the discussed think equation, commercial portfolio, the employer The we've side higher, Cigna landscape within side. on the And health from diversity access. portfolio, average plan is care some an exists it of size the larger then on versus the employer Healthcare that enabling aspect

of of environment. little stage the you So fluidity that current the setting gives

to relationship fair the just with to manufacturers where and clinical broad the of our care. thrive as data capabilities get is clinical discussed the importantly, Evernorth comes practicing more broadly, Eric we amount of area remarks, physicians terms prepared working to in to and question detail best coordination, an of this coordinated relative pricing ask Your significantly a I'll talk aspects, manufacturers. where, in our relationship pharmaceutical with portfolio with down

that a you expand I on ask could little bit? to Eric, So

Eric Palmer

Great.

here to this, Stepping be So will that will would with to I have you respect need unfold, about back, improving affordability. the think around impact

affordability element. said to As bring down. effective, the to important expect and We to therapies of also of over a variety these the cost has the different power well very channels, expensive. reported that harness time, are be That's positioned would but they're across been competition we'll an improve

ensure positioned here. the to support and right addition the services, to we're in the services, that, to then effectiveness approach, these with additional But patients targeting clinical right maximum wrap

access So pharma are about rest dialogue kind manufacturers. expand with don't space, a variety and ways to is of talk we'll as market and the Express leader new the come But doing, to like and we have engaged to I the very constructive know space, in with a long that Scripts assured, any ongoing affordability, it's this to continue of looking improve just manufacturers of history that pharmacy at be innovations there. the of

Operator

with Dave comes Windley from next Jefferies. Our question

David Windley

Mostly a clarification.

like by others in that wondered outpatient in utilization, seeing you elevated in could are called But government particularly expectations. with was again, gets it out that -- and comment was the I elevated expectations. the Advantage, it line you line if sounds maybe space, On the just, Medicare with your in if your

in utilization then service. inside of of managing terms And

good the management? by mentioned of side which utilization doing kind vehicle Pathwell. of in the the Pathwell that? I your surface in of what managing customer You success adoption Is Pathwell is side And penetration, service you're and or primary guess, of

Brian Evanko

it's Dave, Brian.

our as normalized question across the expected patterns, experience the earlier, when broadly I in that. utilization your line product different first mentioned levels and we into all is more utilization of we stepped MA claims lines, on So XXXX, on with

in elevated year, in for. But both And particular. forecasted context we've we specifically, throughout services of the within planned utilization and within entire again, seen the the book had and professional outpatient MA what

as ran So I lines third in broadly we quarter, them U.S. with our to. earlier, expected business where drove commercial the line government the really said And favorability. our

anticipate XXXX continue what the XXXX that the again, any occurs. the were and assuming patterns cost MA opposed So first will year, bids these and in abatement guidance our to meaningful dynamics a as we of broadly amount half saw of of continuation

many service, site as arrows that that of But should call the on the On your quiver, we the Pathwell specialty you question I example. have out second of of did if in you one think will.

has the work outpatient. moving things emergency things the rooms several offices from to from moving inpatient been doing We've years been we've past physician largely been over moving urgent care, So to virtual. to

of the So evolution Pathwell another Specialty our of CytoCare example is program.

it's for incremental wouldn't I now. several bullet we view So an means, to had the but contributor years place silver any strategy here by in that as the

Operator

comes last Lance Our Bernstein. from with question Wilkes

Lance Wilkes

Yes.

the just X of to to the kind D, And was, of if question. little elements to Evernorth. One you could strategic a turn about wanted talk within role the Part PBM Just going of the how both for changes some PBM MA program. And forward? for of health and see going for forward, given Part D the you business in the kind care driving that

the interested on if some drivers were that's move in-sourcing on that Or that. driver was? driven then of was other home drops was sort of question specialty scripts. and prime the going -- And there? relationship in was adjusted specific There and that a the delivery was any just by I what that

David Cordani

Lance, it's part your of first ask address the your part Brian David. the to of second . I'll take question. question. I'll

it's call it societal you when significant at stretch would of scope from of as not First, as specific enterprise, portfolio. $XXX this of not overall broadly, any shape a importance to to our part would a That's it the D size, enterprise I call revenue the our today, our enterprise a Part standpoint, year, it look and not by component. imagination. of I a but of significant with the our billion of of dismiss But portion scope approaching

convert we've effectively level your today of underrealized portfolio relative underleveraged lives to our exists that would PDP or within Secondly, submit in initiation. untapped our opportunity to or into potential question, MA. and I PDP an lives the enroll That's activity inferred that

the effectively to landscape And Lastly, we be that within to recognize have portfolio based PDP manage in we have legislative obviously, transpired. tools to policy disrupted, that position the of your our the comment, do our will to totality. be activities some portfolio, responsive that disruption. in we But is and on able

of piece volume to I'll just script the this question, ask past quarter. and takes and the the up Brian relative pick the to in portfolio puts your second

Brian Evanko

relates Yes, rates, a at the drivers in adjusted by in But single-digit-type as to happens there. of relatively think high small couple can so attractive specialty the of different unit think you home scripts, grow continue mid- given growth. outweighed delivery. it delivery scripts what Specialty and I there, to home to numbers they're

you item, revenue think home drive delivery, to business can is So attractive the plus specialty in scripts, than X% but growth that line in that that growth in the double-digit we've of less XX% of specialty, is and volume which all year. continues seen

see with home the we'll for coming a of decrease, but outsized volumes, driver had in. improvement known [indiscernible] client additional basis clients a that delivery some go-forward years, put it, specific had The some that home delivery to we've in about transitioning is just finer on a several we point on

Operator

now the call over Cordani remarks. Thank I'll turn you. David for to back closing

David Cordani

thank you for call conversation. foremost, our joining the and First today again for and ongoing

able our been and for of year. very to And to we highlight dialogue momentum today, the X XXXX. to deliver remain the we've now through and our for quarter summarize carry the we our with track Just commitments overall performance pleased are on quarters

have committed overall on And the outlook our least for cash adjusted to well our least for $XX. objective based full our outlook EPS year and XXXX, to strong XXXX at We EPS performance. increasing of as lives at customer remain revenue, increased flow $XX.XX as for we

moment with pause every making world. our have to and a well to difference and landscape clients, the as we the working the benefit thank make we in continues and I work, the in day. And customers, for in, our positive team orientation we difference, positive our change, those leads communities care to partner serve have around out, a in The our for health serve, as around those with, partners. each play to our and day impacting day forces patients to accelerated colleagues my a do want our benefit

to each and want such that continue our I in day. So difference a marketplace to the call out colleagues thank positive and make every

and up. well fourth dialogues, a future as look events in quarter to conversation With Have conversation our forward our that, as investor person ongoing both coming day. we and our great

Operator

gentlemen, and Ladies XXXX concludes Review. Results Quarter Cigna Group's this Third the

will shortly. XX Relations questions to Investor A to recording days respond will this additional Group's this conference of Cigna be business available following for be available call.

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

participating. for you Thank

disconnect. now will We

Cigna (CI) 2 Nov 232023 Q3 Earnings call transcript