HUM - Earnings call transcript Q3 2021

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Operator

Good day and thank you for standing by. Welcome to the Humana Incorporated Quarterly Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions] I would now like to hand the conference over to your speaker today, Ms. of please President ahead. Vice Stoner, Investor go Relations, Lisa

Lisa Stoner

Officer, moment, morning. Humana's and Thank outlook third for Financial updated good and a XXXX Susan discuss Bruce results quarter Chief XXXX. Officer, you, and financial Executive In Broussard, our our Chief President Diamond, will and

media Listen the page Relations replay available This being session. and lines to. prepared for be Joe be to remarks encourage Investor for related Following Chief call Ventura, of We both these and the Legal prepared the Humana's recorded joining purposes. management's session question-and-answer Officer, will the will we a analysts. remarks, also That website, Bruce our Susan replay and Q&A humana.com with Q&A up with on will public, today. investing open for industry the analysts. is later

latest Form and Quarter Commission. they of response involve be to detailed could Securities related earnings Before call are the the with discussed I discussed XX-K advised in risks advise this Certain the materially. filings to to and Third Investors pandemic. note as could statements to participants our in are differ spread factors relate of and number we in that other press release, discussion, forward-looking call and forward-looking statements the of begin XXXX to the In cautionary to statement. Exchange particular and in uncertainties. Actual matters a read impacted our conference our results COVID-XX by risk of risks need our forward-looking

explanation Today's SEC and or other update and release, measures financial includes publicly uncertainties that SEC available All are that our on financial non-GAAP also non-GAAP therefore risks note our Investor discussion releases, in these press Relations measures Accounting any no should obligation of in or results. of filings Principles reconciliation today's and with to Generally the accordance and included press the historical in along business are communications these today's with are filings, GAAP. forward-looking should of participants undertake considered use financial additional be Accepted website. statements for Management's statements or our filings with forward-looking release. we Our to measures discussed GAAP news regarding future in not our all address risks our line or

conference to references to any diluted share Finally, With per per to Broussard. I'll EPS call over common earnings this or turn the during made earnings that, call share. Bruce refer

Bruce Broussard

And thank per above us. for third good you, adjusted quarter the Thank and earnings of for share of you XXXX, $X.XX morning joining Lisa. we slightly reported Today estimates. consensus

results reflect year-to-date the operations. Our core our strength of

caused As business, disruption we and across the to continued received focused right the on right fundamentals time our the despite of strong lines the see all ensuring members remained at underlying have care pandemic. continue by

are XXXX which resulted been fundamentals full-year underlying an adjustment have in the strong, adjusted financial results has our guidance. our impacted by EPS While ongoing pandemic, to

As to our detailed have to of release, updated XXXX from guidance press approximately $XX.XX we our previous our XXXX. in earnings guidance

adjusted and our of into share points year costs notably, in reflects this that a basis our XXX remains of the conservative and COVID of final or corresponds update is X.X% more assumption which X% direct of Medicare detail, As grow which for in quarter, reduction $X as the below This total approximately XXXX. of the EPS inclusive fourth run to X,XXX utilization, and baseline COVID baseline Susan going the will Advantage more expectation below baseline. a of less than months result the to previous posture current

many [Indiscernible] COVID headwind had our we in our to a guidance as prior reminder, did. not As this of a XX update, peers guidance recognized

update operational throughout reflective our and expected long-term with turn results the above is guidance growth core strategic point at not growth. This and as the been any range our EPS at [Indiscernible] in our growth of adjusted now the end I update. has lower will to of an importantly, concerns our target adjusted long-term EPS XX% Our year, operations.

above be our in can growth Our individual attributed in and XXXX Medicare quality satisfaction of market industry-leading Advantage, XX% to scores. consumer part

of We are CMS to for having for recognized pleased by be or contracts XXXX. members higher XX% X-star in our rated

rating adjustments XXXX, that We received number also the contracts history. to in most the X make contract increased in of from X to contracts -- a XXXX in our X-star [Indiscernible]

Operator

is stay hold the Operator; conference This conference momentarily. begin until the on will participants. me, Please Excuse the begins.

Bruce Broussard

Well, technical glitch welcome started, there. When for the back. sorry we

our in addition, to as go that in the future back it the reflects re-ensure the and maybe the we investors me at understand Let looked how guidance update year. here and just guidance --

First, the remains conservative notably, baseline final the more going months and the much XXXX. to posture into year the which guidance reflects of a grow of X,XXX for

our the update, to headwind as prior of reminder the we had in peers guidance a did. guidance As many not our XXXX recognized COVID

growth lower importantly, operational has long-term at the our any reflect concern not now long-term Our and results year core does our is This of XX% EPS adjusted -- end and target I throughout at will to strategic guidance EPS growth midpoint range above the adjusted expected update. at turn been with update our growth. our operations. the an as

satisfaction of attributed and consumer in individual to XXXX can be advantage part above-market scores. Medicare our in stores industry-leading Our quality XX% growth

pandemic, XXXX-star due history. are on service, adjustments of focus our for in recognized received the JD best-in-class higher XXXX organizations Power, that as on contract CMS be USAA. ratings. These from to increased rating to Forester, of to in number also XX% And X CMS or having four-star minimal of our members XXXX, in outcomes, while the five-star contracts a impact clinical our enterprise-wide recognized for which contracts by COVID-XX to and X from such We adjustments This and further been we did most possible pleased the contract our in demonstrates the ratings had quality, XXXX, notable has impact make customer the

maintain fee-for-service Medicare. allows plus a Importantly, value our barriers members determinants the stars proposition by addressed of for other provided and and benefits value to strong health not supplemental social address that bonus us

to XXXX, be to enhanced support while the able the us. Medicare ahead majority our deliver health pleased for of we provide from to stable continuing members our that to plans benefits whole care, human Looking offering members or needs, Advantage expect members, to come are have

savings expand Our Medicare. by programs and to to covered drive cost benefits quality and plans those clinical strong clinical improved fee-for-service outcomes Medicare continue allow on Advantage our member that

plans valuable Our an following delivered vision, benefits, hearing, dental, allowance, program meals and hospital stay. over-the-counter memberships, founding medication including home highly an fitness transportation support, extra include in-patient

made meals progress by social addressing health of Advantage those great in across with our demand Giving Care, benefits. expanded Medicare include, a fans equity last sending of wave, and for support equity determinants health areas COVID, and it. the providing health senior’s distributing our the we to we've to impactful COPD during million have Over years, seniors and X.X heat Respite well-being. expanding few impacting aggressively increasing for efforts financial during need, health America, a address Examples

Veterans programs benefits the advance approach that member segmentation leads like This has to This continue an as individual's to coverage entities We through disproportionate needs to to our existing us complement plans allowed populations. growth. consumer enhance Affairs. Medicaid or unique and such that provide efforts, are specific of developing tailored

our seen where cover both various provides in cart, and members, dual eligible membership offerings have expanded our which you've we approximately XXXX chains. nationally. national have security, for members XX% XXXX. grown our a population for our XX% of food As in eligible We've XXXX reduce foods at D-SNP and will food the plans, and nearly in healthy designed D-SNP dual plans to of approved allowance enrolled a To XX% purchase our beverages decent and to monthly

accessing co-pays Part a prescription have result will D-SNP drug better of health medication adherence, the financial members prescriptions, -- needed to an barriers driver leading benefit, help for some drug address New health of as of overall outcomes. many D XXXX, savings face important our members members the which will reduced D-SNP when

more to us benefits the COVID-XX associated As assumption, long-term to our recognizing for continued to and potential bids, claims allowing conservative XXXX previously a took stability members. shared, prioritize premium impacts uncertainty approach our with and we

While Medicare continued and for right selling is the the we positioned balance struck in competitively our believe in it season, early Advantage. growth we are

resonates Our platform, our focus high-level given Susan business experience offerings starting offerings. remarks, through will more including provide with patient human our XXXX EPS care our I service - on our care to highlight would of growing like specific to and with now brand membership and providing centric solutions comprehensive seniors detailed of set in of the a primary guidance. moving healthcare deliver the commentary home our based needs. promise on to then and build-out progress continued strategy their

approximately XXX XX X serving value-based the patients senior-focused, largest country, by in thousand which year-end include care have markets We organization will the across XXX in states. primary clinics

markets performance model organic gain centers center plan. An With performance our mature in accelerating down growth inorganic as in 'XX and senior-focused - faster to stars. and comes to pace mature open stars XXXX, DeNova's in visits centers, continue And XX This metropolitan from XXXX continuing more nationally plan pre in to next in X.X XXXX. are And areas, with COVID XX% panel score conviction exceeding clinical expansion versus improve. major DeNova X hospitalizations, up XX. a Dallas of year-to-date We growth launching in more in ER our will and of NPS include launched new Phoenix XXXX, and centers year. and level. This tracking XX are total our we to

third to centers We patients. We access focused to will expand continue this presence newly continue completing XX to where our growth, provide this markets our acquisitions of the inorganic established through acquisitions also of pace bringing through year, more the high-quality portfolio. to and have we on wholly-owned seven care plan to quarter

of Turning to the completed now acquisition quarter, home the and largest and Home organization home, nation. the health Kindred we in at the third the in hospice

migrating Home brand payer Kindred previously Humana's we to agnostic service shared, CenterWell. care will at As health be

risk-bearing, industry, provision equipment Our outcomes, reduce towards Advantage, progress the value efforts there is choose a health patient home-health We've with goal the for for model scaling services. payers, at a come more opportunity of model needs Advantage improve increasingly in care maturing to infusion home engage on organizations to differently that in share to holistically Medicare time durable this of manages and transform pivotal the substantial appropriately and health seniors creation. health made a plans, value-based a medical address our home-health, patients home total for meaningful of value-based Medicare to cost and

Home With acquisition home. a post-acute One of the earlier the for management delegated services organization XXXX, in

basis capabilities us include services social and Carolina These to gap-in-care, improved risk-based criteria, home contracting including multiple on care and continue We a be are technology and management, have develop expanding primary adjacent have coordinate Texas, closure, in to to Kindred outcomes, to East convener, being services. referral focused other and the value-based enabling emergency providing better with We than support or of XXX we've South models of meals, chosen Humana determinants market positively density, homecare Humana's robust well significantly markets approximately coordination including and emerging care your select for which as footprint. reduce seen currently South services national in the a on on other now XXX,XXX a room North home, members points expense, average. value-based and as in health. We at usage, to transportation, to care Florida we based Home Virginia, opportunity where

under of to Humana of XXXX goal within health the out model value-based the X quarter second Medicare expect this roll begin next XX% years. members, covering in of the with Advantage the nearly We home

believe taking recruiting centric deployed meet retention line. bolster have steps resulting of risk industry. excited seen the some for grow capacity home in nursing continued and are negatively to increased with we national demand Home. the But that health supported adequate the Kindred our XX% - part consistent culture to integration the well-developed and labor peers, among by the Center proactive markets, shortage top patient to efforts markets, our in engagement strategy our Humana's brands the it impacting in nursing ability will XXXX. nurses. our We progress significant recognize voluntary to satisfaction and in we concepts we home. poses nearly of pilot our at And nursing as with process In value-based about improving turnover, home-health We've Well nurse We where nurses a that are address with shortages

a of enhancements, [Indiscernible] while to meet growth operational targeted majority recruiting our capacity investments areas addition divest to to With benefit improvements broader to goals, we portion enhance and implementing are the making this in nurse In retention. constrained capacity hospice, and sufficient our to remains asset. ultimately interest also intent respect in

have As for to to Since from the for on appropriate through or our the have ensuring partnership expected outcomes the trends. do initiated closed moving for August, we additional steps further deliver explore experience has will update demonstrated, transaction and desired but hospice experiences business to continuity business, and standalone care in we for hospice the we the transitioning monitoring models. We and also long-term structure can restorative forward. alternatives a patients ownership reorganize operations, not specific as timing, underlying transaction business updates transaction we structure, have continued provide

the committed to into with these give continued reporting. to XXXX platform, expansion performance our of further service first interest Given the quarter our are healthcare transparency providing disclosure in businesses, additional of we beginning

and legislative want Before landscape. closing, I to current the on touch regulatory

as known to will benchmark. a Medicare which last you Build hearing benefits leaders the in House included week be in includes establishing calendar including congressional Better, year changes proposed XXXX, starting Advantage Back plan, their know, program, the which Medicare White the As several and released

Given million that reductions with to are XX% over and that package enrolled any program. did to today disabilities include the of encouraged Medicare not the more we seniors, beneficiaries, were see than Medicare XX payment Advantage, those in

rate As beneficiaries, These programs, strong be to to Advantage. supporting like ahead and along look and improve reducing innovation, and with this in Biden record total we on of modified, as administration with of a financial notice advance program. with care, further deep areas for and to as attributes, determinants and the the policymakers call Building care. have members CMS the continue of Medicare continues social what to support the are and the progress the health, to popularity will it annual on Advantage, of have work period, as enabled cost consumer significant of likely well Medicare value-based we legislation affordability, Congress protection hundreds letter bipartisan

healthcare public and example expanding I individuals call a successful turn including both on as addressing of to society, equities Susan. and As serving proving Medicare issues a continue outcomes, I lead and Advantage optimistic will important care. to leading can am over private held partnership, that, value-based we and the With health facing

Susan Diamond

morning, the XXXX net of utilization Today, third current our guidance resulting Bruce. for full-year for view adjusted we and you, Thank good $XX.XX of the from And reflect EPS reported unmitigated a $X.XX quarter of the to levels EPS adjusted headwind to everyone. approximately updated COVID balance year.

for higher-than-expected costs. been par point of versus we below you what initially with and were in of results, XXXX, Medicare September of assumptions Therefore, back reminder this the X.X% utilization utilization utilization Before anticipated as Medicare running walk the I And partially press experienced COVID [Indiscernible] in our updated resulted of the the of Medicare the that members variant, quarter earnings of the baseline of COVID XXXX with our hospitalization COVID be is Advantage of for below beginning, Page below Delta assumption COVID on X.X% the quarter. have minimal details, X% costs the in the XX% total driven January details utilization X.X%. the on for second for quarter. third I commentary to the release our as commentary. the surgeon In indicate the of the Medicare guidance than year, you costs guidance XXXX. would seen COVID we've as by non year, previous again would for previous to further now These half the quarter as actual offset we're X of the believed full-year fully current and full-year press develop we to Advantage in due back seen by to will a levels by non-COVID half be projections COVID result variant to previously higher overwhelmingly to X% Advantage anticipated expected period. is total third well baseline quarter costs Advantage through starting the our utilization our utilization our second be fourth run while - Delta in call, was half COVID testing utilization below unvaccinated. assuming we second of has cases same with X.X% being baseline baseline What treatment a year, of a half non in in

As COVID approximate decreased, hospitalizations non-covalent an one-to-one hospitalization or increased we to continue offset see and levels.

occur, continue admission. offsetting of the average cost to also We COVID when a surges non-inpatient significantly reduced utilization see higher

However, in beyond for to previous quarter, costs our in COVID needed saw versus reduction and third X.X% the total, guide. X% a offset we the contemplated level incremental utilization

we now third period that advantage inclusive quarter, than fourth similarly well have with result, Advantage of as to current favorable X% Medicare other utilization street outperformance, the as guide the higher largely what were us slightly experienced depressed below results our report running running Medicare in realized expected a we consistent allowing total in adjusted As utilization, lower estimated We costs, COVID quarter. to than quarter Medicare with positive full-year operating Advantage reflect claims the to anticipated the development mitigating and baseline, the estimates. third

guidance quarter seen the not favorable that the levels current assume period higher will development continue. revised Our third in of does

Taken the final range note, XXXX segments results performance. on posture conservative XXXX. pricing. I takes going operating a baseline the early given EPS together, guidance now XXXX, more our midpoint thoughts full-year our to for of to on months $XX.XX touch adjusted approach year original we of the will correct into And updated shared as across XXXX remains briefly our guidance consistently of sharing before it's throughout our important the

consistent and track with Advantage expectations. Medicare remains previous on Our growth

approximately XXX,XXX XXX,XXX with the members. midpoint with XX.X% of of increase Medicare above-market represents guidance We year-over-year. full year growth have guidance our This of to individual XXX,XXX refined to consistent outlook previous up up membership members Advantage an our

Medicare to to Our emergency. be business higher-than-expected a quarter, extension previous our above July. exceed members. go-live losses continued the particularly our experienced fully remain continue perspective, taken by public actions significant to impacted rating group increased Medicaid expectation for services Specialty reflecting lower now fourth guidance higher anticipated seeing toward to and Utilization not level health our membership insured with due medical back XXX,XXX, increases, in From in business initial our as XXXX. anticipated XXX,XXX exceed of segment, Group we results to And medical XXX,XXX continued a anticipated. utilization half additional XXXX second to Specialty in successful add to offset commercial to Medicaid in expectation from attributable expectations Advantage. favorable We to membership utilization, account implementation of our to working up from of to than in is expected largely same Ohio the the losses the the in COVID that and dental the XXX,XXX team costs were in costs result initial expectations of results In the results COVID quarter COVID XXX,XXX expectations impact the Medicaid have as the of Recall the than members and expect XXX,XXX not trends expected while quarter diligently year. the did of the previously of in is the membership for contemplate

result businesses experience in our from benefiting continued to improvements mail now penetration which Healthcare leadership of than continue and same seeing in provider as campaigns. aligned mature improvements customer Finally, are with provider within Operations, the expected, our centers. better and marketing pharmacy operating And more slightly the under business centers, increased Services perform pharmacy the a our DeNova order

largely at COVID in are remarks, hospice line labor expectations. post Kindred business results operations being with integration mentioned shortages. peers, and and Similar health in As actively have been integrating is Bruce and home by Home to we the his the impacted

For year-over-year, single-digit quarter, year-over-year. low a the third low single-digits home experienced admissions health decline hospice grew while

to trends the improve recruitment continue as make sustainably We investments will we of and monitor targeted retention closely to nurses.

moments few share take XXXX, me for to membership. a let with early an starting Now outlook

more Advantage. as the As continues beneficiaries, including you're eligible more decline dual PDT market to Medicare to and aware, overall

benefits plans we highly as addition, Group to enterprise discipline do XXXX, XXX,XXX capturing a the the in on as for offer not growth. in will become will we a expect XXXX few, large accounts maintain to decline not XXXX, that creating value premium PDT commodity, previously, plans we Advantage. conversions gained driving PDT leader we a competitive be Medicare a we in be by penetration have and a expect In our members plan the low-price result, lost anticipate increased be competitive discussed Advantage, Consistent Medicare PDT with disproportionate market. XXXX.As membership in any for we or net Walmart continue will leader to with to memberships low generally value to focus flat pricing mail-order to respect as continue of With

our to Medicare with individual as took reflecting more conservative a Advantage associated we the to Moving XXXX bids, shared, the previously pandemic. approach continued uncertainty

providing of We Advantage dis-enrollment will have range come data AEP grow Reflective very we at our X% our with in turn membership XXX,XXX competitive took or market. Medicare how the season the approach, is prior selling today we financial years, early members now performance. of consistent for expected our AEP little It in in voluntary and I to we're and the dis-enrollment and pricing the ultimately year-over-year. member XXXX cycle. XXXX this in. could expect prudent to a change And sales XXXX a of depending in nature outlook the to point XXX,XXX on approximately individual

for previously the midpoint to to off-point $XX.XX adjusted the XXXX approach jumping growth, continues our given guidance EPS to be reiterate mentioned, original XXXX pricing. As I want our that appropriate of

estimated pricing are XXXX. XXXX, to period plans to-date XXXX anticipate members our with have as care. XX% are as that in with and the actively addition, completion rate address the time clinical that we will in adjustment In line Provider of appropriate, established feel as and our interactions that are diagnoses we their to and ensure been risk assumptions impact in complete documented care conditions approximately [Indiscernible] for comfortable engaging XXXX same expectations for the providers our both well documentation are revenue fully

it's reflective costs membership historical pricing pre return - would strip perspective, balance conservative approach the to and COVID earnings of also medical We took From in trending. an the we believe earnings appropriate growth. assumed we baseline levels between XXXX

Given with appropriately expect of range enter year conservative EPS an growth our that to the our the we of ongoing the we view initial end financial uncertainty surrounding the low initial pandemic, to outlook. XX%. XX% XXXX will Accordingly, our guidance target of long-term COVID-XX anticipate

COVID that not be non neutral XXXX, as COVID and expect do will We to by the reduction expect Medicare business risk-adjustment to we utilization. offset - a utilization headwinds be in in anticipate COVID

our to will with explicit similar entering year will approach the to our conservative call fourth believe earnings we it prudent February. headwind early our that specific of the question. In tolerate in peers However, up forward Operator, COVID an caller. first more look can quarter open this those initial the is more guide -- first providing success limit in took should for yourselves some queue, emerge on guidance that, We and to Company the waiting please you introduce the fairness approach current questions. in lines environment that we the ask in one XXXX. we With to XXXX. in allow your -related for up the for We sets

Operator

Thank you. participants, Instructions]. [Operator And again,

question first of line comes Kevin Fischbeck the of from Your America. from Bank

Your line is now open.

Kevin Fischbeck

are a into had your quarters, and do to quarter to forecasting wondering. color costs guidance, time the you as that for Company upcoming next the a feel about think visibility the about the all pricing XXXX pandemic. obviously, the about as think few on your on come How be a hard that see has to people you year. trend you. costs the you felt The good I thought for cost of wanted of you just develop But degree where great. next are Thank into costs like how visibility how I in. during you year some understandable last just going Alright, lot appreciate handle

Susan Diamond

is the continued one been of is what we quarter our happy XXXX. confident on that. deliver different your we're saw as anticipating is we was see we explained environment I'm we to has XXXX lockdowns as take category In variation. studied the the were what being we one. we call, than To what Kevin. anticipate might in vaccinated, whether throughout people impact despite to particularly it where the in visibility and normal estimates of is where level comfortable in challenging, in year, like we high in the side non-inpatient to and fourth time, no The of visibility. we quarter, as said the XXXX, based estimating feel the revised be the throughout Medicare continue in surge recognized all as various to environment Sure, taste claims patterns of that XXXX, the and with in acknowledged that, the have on through and COVID obviously quarter have quite third the full level just quarter, decline can saw surge. population see QX were proven point, given percentage as a that back our are of of emerge more to experiencing third one was our we news that vaccinated, it how difficult behavior the in offset and emerge the is, second we large in curve that historical more sufficient Having assumptions feel feel experienced of an largely where it did same good very guide we near-term underlying we've last tend hospitalization our the And XXXX we have the offsets pretty a to consistent we same to see service the offset. don't The against COVID

baseline a more be actually Your this challenging. in question will is XXXX trend explained of our in XXXX, visibility one as getting obviously, to calls, late good where is all surge about given we've running,

appropriate into baseline given we depressed with for and ongoing utilization we anticipating expectation. the However, meaning feel trending levels pre how confident XXXX, that historical not historical assumed that an XXXX, pricing factors, COVID any approach that's we've started -

we'll So, And us approach depression is we XXXX. something if we of continues, emerge, our confidence certainly. contemplating would positive are gives different watch if the about for what any continue that us, it. to Which to but it. be see not

Kevin Fischbeck

Okay. Thanks.

Operator

Your next question comes Capital from from Matt the line of BMO Markets. Borsch

now Your is open. line

Matthew Borsch

number had that maybe years on but, I just in companies geographic in seem so the major how the could of doesn't Yeah, push of I hoping impact market competition margins? products it's margins. almost just availability wondering the Thank and by Medicare the than I know competition few seen guess public competitive it in leading profit comment dynamic, you Advantage. relatively down it's speaking, noticeable over advantage you. a would essence, really necessarily and you the just expanding to said I'm last expansions a of was greater more it's the that new like all Medicare we've you yet actually, entrants is see

Bruce Broussard

I little more with while that players I'll -- to think markets. first The Matt, market little a similar some we others in a are in quest. past, we gain share more a the mean, take being stability And pricing that. try local -- see aggressive to we more the see to the market -- what in the things, Yeah more few and more aligned as intensity see do and

a as see it do them is just make to we strategic approaching people So, pushing in those how decisions. bell curve plan are their

brings that positive but all going that the growth through on more a of I that marketplace more for it members, creates of members create, And marketing the on. a because and for think that sales industry-wide. major result It efforts really are more for live think I competitive receive. the through those seeing going does the the education in is awareness industry as it benefits that's a amount are We

local the more answer beneficiary awareness the so the question, ever have a ability an benefit one reach do we benefited think I of sales a benefited haven't thing more as reach us, in ways, market population we early in in organization, us. we feel have way in and For is past, to the were market and industry, think multiple adopters to tail market, the the in of that, in different that in good from been I our our in the it's But that. to able growth, that I for the that and of I both of industry, telemarket could as your a of it we from a area competitive addition, been

Susan Diamond

and seen One we would it to that is well, designing as well products add duals segmentation needs, that thing you've growth. as direct by or comments that veteran offerings mentioned in addressing consumer our our increase I offerings proportionate more consumer on our specifically efforts focus can any

a that's to us differentiator, see think you'll If on. continue something focus you

Matthew Borsch

you. Thank

Operator

Your next Fargo. line question Baxter from Wells the Stephen of of comes

Your open. line is now

Stephen Baxter

Yeah. Hi, to thanks for the assuming question. XXXX. in Was back commentary on the come utilization hoping baseline to

appreciated. some that so seems into you're to mean can ongoing it Thanks. baseline on below of pretty assume in XXXX? magnitude to be will clear And you that will in does then or just XXXX, baseline be there continuing talking clarify, to Just level costs context costs EPS be COVID that color would you're of non-COVID any relation the about provide this hedge

Susan Diamond

Sure. Great question.

these of to consistent be utilization, we -- would this with that that and clear, That for quarter. favorability all but we our an We're in Just net additional expect offsetting X% to see would degree experienced we the we're experience the other like depression now, XXXX not the right be the COVID we of that what on expecting net fourth seen costs we've year. projecting neutral. non-COVID quarter, would

we costs offset be we comments, my as would are But then that be what shouldn't while if it amount such then how do belief net can COVID our a in our So, guide explicit allow the a mentioned COVID is obviously today, much of is is emerge guidance run though, a that will when it above some assumption, should we about still we we unexplicit say headwind of tolerate specific and for guide emerge. guide. will on giving the And would do call, would would at the we despite fourth within that, emerge, expecting baseline specific headwind intend that we give we a reasonable off-COVID with quarter levels, will contemplate if and allow be should that's that baseline. -- our what we the initial I to for actually that not

will we explicit that So, about that time. be at

Operator

Ricky line of the of Goldwasser comes Your next Stanley. question from Morgan

is open. line now Your

Ricky Goldwasser

Yeah, Hi. Good morning.

So, one longer-term follow-up and question. then

of sort are back if experienced your launch was what in anything it’s happened MA on you're trying really or your to explain members versus for question virtual. you think when peers consider then like longer-term based that reconcile in else the Kindred drove first you that a to about it? just type saying Do you estimate, we XX% what some can sort commercial Medicare for think first on are hospitalization COVID virtual vaccinated capabilities? of around the of you of room Just your Many feel the Susan, population, a January, especially peer’s I your levels that the understand, of to some What geography saying. the virtual ed is offering And XXXX. do see offering specific side

Susan Diamond

great. Okay,

Louisiana of have And a new to was and to point, like you're question, high your high was high a levels our the respect so your vaccination something in Florida, well, States see Texas, that the mix. par represents what surge did a learned, and than surge. and there. of that take despite previous experienced we share to rates. to disproportionate honestly, levels with was and see and some geographic us and what we even did reflection the higher the all-time right we last It So, and with bit we COVID on as surprising this levels

hospitalization was part unvaccinated, vaccinated consistently hospitalization was population. saw XX the the and that driver at we more the vaccinated it. unvaccinated the between So that rate fairly times of if rate But main or is look that

and and the needs. question and primary could rate Delta comments, we take I that support adopt COVID about the [Indiscernible] higher continue so permitted their the with is again, I levels because they mentioned historically. really unvaccinated that the pleased in overwhelming drove And Medicare, And did much ensure saw that variant, telemedicine driver. par could rate, that at a spread to Virtual-first see we what that of -- with your on were second was the as care their hospitalization and specialists what higher to providers To patients of my and through population, that

better appreciation of of I can quality they the really result the think pre they adopting. of that a as and care provide frankly care appreciate range that, of through gained -pandemic providers been a virtual, frankly we're which

we -pandemic. operating we of their pre points touch I patients the and see So, enhance do think more with allow continued some to virtual will technology for model than use

one question are definitely health we particularly home a at, is terms have Your in one about we good shortages. is of with and Virtual something strategy we're looking labor challenges the of how improve see it with efficiency so points to can leveraged at be more create and overall create operating more the just to model we looking the touch patient can capacity. the nursing

we'll of would it appropriate uses outcomes can be high-quality with see that we where so, testing Kindred that, And expect. and implement and still we the

So, we'll I will and hope future. in the you that expansion that be of testing would that be see

Bruce Broussard

side, Doctor on motivate importance was opportunity the if there's Medicare have have see an ago in virtual commercial to care with don't and to care a we would a whole is establish And But a from understand highway interaction. unlike great On replacement more good a few a a the patient the -- and more episodic complementary come management, for interaction Just that know patient and opportunity to host to able the plan. comments setting. the a to ability a be versus find proper the physical physical a of interaction. to the Demand both that. see there's reasons, first being members to other care a a we an of side. that as for years our But us chronic a of a telehealth chronic do care or did launch I have point-of-view a a We for there what to product and that first want for few success physical on would us is it virtual being encouraging both from We

Operator

from LLC. next Nephron question comes Joshua the Your Research from of line Raskin

now line Your open. is

Joshua Raskin

Thank ask shorter about short-term. you, guys. Good to morning. Wanted the

any members with underneath different? then value-based abatement trends currently, to XQ. underlying seeing COVID providers, in cases utilization are So of are authorizations, COVID that with your curious, indicate seeing just be down the or of anything other will an be assumption or level that are specifically, in in just non light capitation any are different would what trends, seems you and centers, that I'm just in the script - trends you that decline, that pure

Operator

music participants I'll me, -- Excuse the moment. is the speakers, the I'm for just turn this Operator. on one

Bruce Broussard

dial and [Indiscernible] there out Go

Susan Diamond

Are Josh. Hi, there? you

Joshua Raskin

Yeah. me okay? guys Can hear you

Susan Diamond

can We begin airing.

Bruce Broussard

the that Your off question line. insightful just it dropped must've been so

Joshua Raskin

I thought ran that you I scary for was it. so

question ask I'll So, my again, sorry.

there that in in with today? decline are non-field very long your My seeing COVID will of in to different assuming is reduction And other Just And are of why very, cases of question quarter? trends, in light the the value-based director especially be fourth as you costs members is you with in sort would in fourth there you're down seeing underlying trends or adjacent in pre COVID short-term. of and big or that level even a quarter, the is, is are the script capitation? the terms seeing we're centers of much X% utilization as the that the -authorizations, providers, then there something indicate trends that that, underneath that what

Susan Diamond

Your questions.

fourth-quarter. just we'll a take So, it

surgeons out As that the come curve, of you recapture to of what you see we the And allows analyzed have COVID utilization. fully all surge. said might fee. really is before, what prior previous a typically cost the recall tale Anytime of you coming you of which commentary understand a a depressed from patterns we is to our

Texas, sort -- take, were utilization high started like Florida kind more decline. of relative where states, levels was in different And surges. is where we interesting have before increase some as saw this seen Michigan, seeing other so, mentioned moderate sharp to of previous and seeing we're with I examples we've states, are I to decline. There peak different actually very a much gradual of peak the further same without a very New and and York rapid

as national offset irrespective -- that basis, states we're in drilled slow we've coming each seeing still what and one-to-one a on in from that total, downturn the what of those in peak quite as We've that seen seeing isn't into of this that consistently of difference regardless. the of level off historically. we've seen seeing as are sharp peak So, we're

it. change so, there's the just and constraint, into in on terms rest some and particularly through they inpatient that as And degree, the is to we as behavior come they play of an manage providers overall just patients capacity think side

on watch activity bounce hold information the non-inpatient, the that consistent. on is And we've down, we'll we've on offset back To everything come continues offset we've believe we've on off to indicators. offset, We whereas the seen but we based emerge point reasonable. that early level assumption. COVID reasonable seen, comes as a good as very and one-to-one what quarter again, in continue So, assuming to your a quarter third that is That inpatient peak to with before, of see third based X% seen about been the suggests we'll -- same real-time predicting continue said that we having non-COVID utilization a really has hospitalization. the everything that do

in your of sort terms Interestingly most MLR our centers the benefit of system neutrality-oriented there is lower the buy-in high-performing as are seeing the some COVID have a out And unnecessary they value same they about [Indiscernible] theory that we they our indicated -- more general, enough, events partners, and own that both question do. the of hospitalization from is providers. In event that of not manage routinely.

to do on a out already utilization surge, because to it -- basis. there's depressed a manage not when rate so, And managed as you more run they've see much be

assess some on analytics use frankly to And trying that. so, still we're and

develop to level benefit do health little that same a think fully take don't that. a they see claims But more is the that we view of of net bit side, on may their have for and generally. belief their plan full I time the they

Joshua Raskin

costs, but be They offset, COVID see not you're saying?

Susan Diamond

Correct.

say saying revenue they not on flip than basis the on It's to of spare document. than way making on conditions a better much their Now, though non-risk But that, side, were that the you tend about are better got patients seeing they're revenue up. in sure on of they a do the XXXX, side would our benefit. utilization got typical their side, the some they make they

Operator

Caliendo next line Your question Kevin UBS. from comes of of the

now is open. Your line

Kevin Caliendo

that and we taking thinking of for for to you just know my the EPS XXXX, impact one-time but comes wanted could Whether should things In is any tailwinds. might call. year. to any about appreciate I investments benefits there about, sort be if or the headwinds thinking it growth thanks be the all Thanks, color, other other making or that

Susan Diamond

So, the emerge. continue to that and were people be that headwind, of we'll to evaluate. of now initial we level there's would all continues an vaccine? introduction monitor. boosters allow the approach obviously been the for it the COVID we say, I as We've think mentioned, again, continue to with compliant for be [Indiscernible] history, we really need that it on to one main increase. initial in will is more things should conservative but reflective and would continue variance so to clear vaccination, a as is a those that, will based and shift and will as fact And But the offset, they take of we the environment the boosters of we

well ability As the have re-infection breakthrough as for cases. people to

with we to -- that capital This to. through in expecting anything right and Care of we ways say before wherever that can and with our obviously in to we we say, to of business. our more tax guidance. our the would that's obviously concern gives we go continue and something sent us would remarks, continue any our concern will I -- have We support administrative point [Indiscernible] that Andrew impact. the to said nothing watch XX for support are we look we But out guide, continue investment, taxes otherwise, so efficient So main that to if that in I out I we his priorities, within obviously that have we'll as certainly the than terms that one. certainly now aren't what there's Primary initial in XXXX watch withstand business. can't manage any there's comes would

Kevin Caliendo

XX% Can inclusive the think sort headwinds this like, maybe low-end guidance or of discussing follow-up, I on a of that. or not? exclusive little net headwind is just how the is incremental here. that confused or I'm should Meaning about you're of the I

Susan Diamond

no it emerge, With then is headwind, Yes. out should it go our that. explicitly net guide, of inclusive impact will beyond we a initial that so net what our guide, contemplate it in

not will throughout guidance. does headwind emerge, So, but you potential then a within year, the see release the would contemplate conservative that if and it it

Kevin Caliendo

really much. Got thanks so helpful, it. That's

Susan Diamond

welcome. You're

Operator

Stephens. question next Scott from Your from of comes the line Fidel

line Your now open. is

Scott Fidel

Hi. Good morning.

talked to about Advantage annual dynamics. wanted the question the Medicare ask on I another competitive and period just know Just you already enrollment

terms seeing the Just not. consumer any for and you're you're it where just occurring types XXXX whether amidst AEP seeing on terms what interested in behaviors was side, in the particular, unusual year COVID. I in of channels obviously, thinking about, of sales out distribution more shifts just and as was are or the of a of playing

and it blended, in consumer-buying should type -- we're pre -pandemic of you're post-pandemic that practices dynamic, Thanks. for XXXX? more whether XXXX whether seeing or more more terms interesting a of So of dynamic seeing of continuation whether

Bruce Broussard

Yeah, thanks and Scott, for the question.

also, competitive external to aggressiveness use side, the their the just of Matt that And partners. education and that telephonic mentioned happening to a bringing external our as asked industry in because think see as had It is is continuing is channel, -- industry their on AEP. significant and are marketing, even increasing seeing about, in a more I the also an continuation the we're the XXXX from of awareness individuals I We channel as marketing AEP. for also that. we pre benefit getting XXXX was it's feel, the But trend,

Susan Diamond

Thank you.

please. question Next

Operator

comes of line Your the Ralph Citi. Giacobbe from from next question

now Your line is open.

Ralph Giacobbe

Thanks. Morning.

I Sorry understand just the represents. the it but than to Thanks. and but at what what X,XXX it guess what with time? utilization of you really this, level normal earned to X,XXX incorporate Is trying I'm this Is it? come back baseline in lower I some to core? normal does no guess, would've COVID COVID

Susan Diamond

headwind. the Yeah, you peers the our original earnings our is guide. remember midpoint COVID that contemplate for net in of that was we way your a [Indiscernible] sense many so And different the of if not we approached and bit did XXXX than a

our and initial was so supported recognizing tailwinds actually pricing And more midpoint the guide typical that XXXX. -- above in range, towards long-term some that of growth the our

reinforces that reaffirming for despite return instances baseline, emerged way however normalized to our the more XXXX, -- occur. levels really returned the XXXX that approached is by levels that cannot results the to normalized So, just if pricing, our acknowledged seen would that COVID, in that we also claims as Medicare more that appropriate XXXX have and risk-adjustment revenue

with again, and trended factors started in -pandemic forward. that so historical for claims And we using levels pre XXXX trend

we're we the And jumping given reinforce, that our conservative approach to ensure more take so than in success which grow from why for a appropriate lower up initial set an is be however, range long-term do that's Recognizing, perspective, X,XXX we XXXX. intend and point, off continue end and would in approach, the of we range. guide to to that to target from expect

Ralph Giacobbe

fair you. All Thank Okay. right, enough.

Operator

Research. question the comes of of Lake from next Justin Wolfe Your line

line now is Your open.

Justin Lake

Thanks.

Medicare single numbers question. yields business. the the had Advantage First be in going to a next We're year; high probably in quick individual digits

to sequestration. think opportunity risk you kind oil of the strong how XX. think to the I you know adding bounce financed also your Just do could of those then a in and business. [Indiscernible] center post tell us where given the number? how rates up to many [Indiscernible] within XXXX. you're positioning bit have said going you've offset, you back a and about scores And you reasonable end about that XXXX is growth the things think Is so Bruce, your Thanks. can add again that you you in going forward, post management And is these do how guess, think by [Indiscernible] know of expiry. the you forward, and finance I how think I that

Susan Diamond

Sure.

first one take the think [Indiscernible] then can the Bruce So, second. and I

typical specific member XXXX, are yet, certainly, so to specifically. detailed the that we obviously normal more the XXXX notice, for there guidance expectation events I think some yield can't than about given points But as fringes mentioned, risk-adjusted tailwinds, as growth. So, premium the well you and rate favorable haven't in return as you the there's as dynamics level the comment

haven't on but given So, to your at point this tailwinds, produce point, they guidance specific we should obviously premium.

Bruce Broussard

questions And of out side. the the the primary two gross care on

been a from a point of think mature. organic earlier reasons we I confidence and the drag our as number creates in number feel view cost year on the so the adding first of the side addition some side, of great increase have we're why X, on opened in cohorts both confident the result year as very of business a the And one in in the that's a in a -- conviction this we cohorts units revenue, seeing of outcome. maturations obviously of years memberships or they that

development, shut While the And of years. we rate you in profitability so J-curve quick to within become we or will see that ones pretty it see earlier we were into the to the us time we a over the longer that call business. if open as the actually give start growth, off will to existing periods start of growth

two they and the by that years to seeing J-curve growth lot. have did that. the great and few area some been in in of really last for being other open the while great operations although existing mature profitability it we're that extending able And show done doesn't businesses improve a centers and and the override a that had turnaround over up because the are a for opportunities is growth. same-store We One

an seeing are the and organization improvement quality and And growth also Kanik really really the experience there from operationally is us area that then in We some great point-of-view. with area. as for third of a NRC

that in And we the we're of with of you many doing right the able we're opportunities especially providers, our we sites. XXXX, standpoint inorganic add are And markets the of advantage densify us mature from we relationships additional and more in those to and first in evolve, to then management in management an have that offers of able to team. that existing it being do anticipate markets, our a As a and that we have into know, that continue very did synergistic refusal, and XXXX. number

our to addition, centers. able to are those in operating bring capabilities of We some

that the and leverage in to the growth So continue really three And mature then of continuing being improve there. what inorganic of have. third, of more J-curve advancement centers The to some that. see the our markets and able we we

a in over of to going to time, think sizable of to time, clinics see business of to fairly period this we're investments organic the clinic or as going your of today is you're inorganic over a think oriented I I business. you're result X X come period seeing making see out a leading and area. both the Really, the size on a today

in that with second maintain haven't think be I And the to we'll will an think we long financing, continue XXXX. to quarter leadership come I conversation that And the to term. active -- structure relative have Justin, of we probably investors yet. don't a

finance have to sheet how off-balance back capital We or of the come XXXX foreseeable cohort discuss to will the financing will future. openings. get enough We on our investors of the the us invest [Indiscernible] today from number and to we clinics to another for through

cost-effective cause the and And for the different future. slowdown most do openings, to so, for doesn't our the about any as shareholders we think are our we looking alternatives at financing -- this we but all and

Operator

Your Steven comes Barclays. next of the from from line question Valiquette

is open. line Your now

Steven Valiquette

on morning. Good Great. questions Advantage. of Thanks. Medicare Lot already

you I else somewhere counties are seem weak 'XX, to of for already. one calculated, county county digits curious but mid-single based double-digits year, for in And guys have around anybody you expansion. in you're County throw expansion your and by next already strategy curious than just out general growing thoughts pace more about that. around on your footprint the pace of your just some maybe peers more Just your another hear maybe more think there, your be thoughts to of about obviously larger of to Even their -- hear

Susan Diamond

Sure.

several us, really we of peers our ahead many same [Indiscernible]. you'll expansion is and expansion, had our within typically as in the additional us terms from you Particularly, geographies. ago, product existing Medicare of as see see years mentioned growth for of our rate years. might That we there's accounting really focus annualized of premium Humana see on for an product What Advantage LPPO of level of an a $X be of example. so the could focused you was from number As instead years on couple perspective, -- we supports ago, when

as expand to when individuals’ both our see of you where veteran that uniquely will product before, in opportunity said an our consumers. SNP segmentation and there as do of offering, You and a that footprint on innovator are county as dual-eligible XXXX well expansion continued and see the we products focused examples designing meet needs And those growth. it's for well, disproportionate and great consumer we we

you'll So, already that. exchange. just I your expansion product with point, broad to versus more because to from to got products. But coverage we'll And we've evaluate Humana see again, continue some think county pretty do opportunities

Operator

the from Credit from Rice Your next AJ comes Suisse. of question line

Your line is open. now

A.J. Rice

saying you're on Thanks. just bids due early trying understand, more, in fair about that and were to Hi everybody. say perspective MA I'm to Two more XXXX. it Again, the one clarifying the is on one summer? what

A.J. Rice

were and then size assumed, would was next that those is interpret you interpret that been Is from way how something a health mind what an home be us the saying do. have constructed right second give lot for half had have half year Is with bids, out Is Obviously, might seems bit. bid maybe worse, that you? of that you so way next your way of said a I year. comfortable that would different you're for to to you outlook? it's least the us, in even still to today business Obviously, were there's any I saying tailwind you XXXX that what across incremental would and you tailwind your the perspective, on when are at help though coming way what the deteriorated the to developments the back a much that conservative still from you're think, is to Kindred? when that than turned going

Susan Diamond

going I'm Sure, that. take to

our had XXXX, headwind I emerged net out we first quarter So, a had that original that XXXX, contemplate that emerged. a question in mentioned second guidance for XXXX. when had we're And commentary, minutes acknowledged as for your with we that not in did few on our called we came explicitly we ago, COVID that

second So, other -- prior through they guide, items. That since a found require we is able continued But below outperformance as back. our fair not amount achieve utilization We as assumed to considering business pricing. to and the our year. development we roll that run that to we other mitigate of bounced explained period in we'd order emerge, quarter, throughout it in the base what in did baseline that were XXXX we're that

less through COVID the seeing achieve we in net utilization we the pricing, that And needed second COVID contemplate vaccination while levels, so, just approach it's below headwind than beyond in that pricing and we are anticipated we really discussed at explicitly or order that costs way didn't net challenges the and reflection are testing. just the Again, overcome our -- guide given a well, baseline XX previously quarter. running XXXX is acknowledging just to had

long-term favorable our headwinds that we've less rate for environment As also Emeril we approach to And stability in uncertainty we recognizing rate and take to contemplated conservative will overall be through. more there a sure we environment. members, need pricing, to said, We that navigate or it had be benefits XXXX. a consistently wasn't did wanted the would to you that can favorable make want maybe maintain recognizing

times. of reason are we've any XXXX. to the continue to So had press a that the this question ongoing we respects pricing couple Kindred, a approached into we did, reasons we not On utilization net again, all anticipate and the those benefit as we confidence because way have did and

headwind sustainable quarter the again, maybe it that that one think Stanley, helped integrating our good targets call both from items contribution XXXX, we've in I of the from addressed we the an of we to our long-term deliver expect was to ability COVID we against We available -- we Morgan deliver that address in our always to be target growth certainly it net in second we leverage tailwind deployment the term expect something was aligned off that the time that Kindred specifically value the but integration. that and target. continue and XXXX, the value-based our in certainly long sustainably is to full to that were so incremental XXXX. for pricing, to capital of so that that would as we'll have said the we create model of for so Kindred, at something XX% in future represent consider our XX%, bids contribute is the use we the We've -- pricing around and knew growth continued contemplated was wouldn't will and one us of to

A.J. Rice

Thanks Okay. lot. a

Lisa Stoner

Thanks, AJ.

please. question, Next

Operator

comes next of Your JP from Lisa from Gill question Morgan. the line

open. now line Your is

Lisa Gill

around comment to retain of going around any have want Susan, talked ability your will PDP to lives. or And Can if you bring any about negotiation to your think on MA. of transparency But go shift XXX,XXX I your side. couple the around pricing then on just drug and I a down in back it's I MA? you know direct and just fluid over what's that impact those secondly, losing to business? curious still them DC talk about you members PBM impact to anticipate of any

Susan Diamond

Surely.

expanded actively I our the key to you. of drive what because low-income [Indiscernible] is on our in Educate focused have recent since Medicare that percentage that we that years to years. our see members team so we first PDP dual M&A, a conversions large of something work increase is offerings as dual are for think advantage. eligible our those members one, peaking In eligible members. we've many SIP been And we ability

that of generate is be And our we to members PDT we choose who what able consistently disproportion of see Advantage. will so, ultimately Medicare share a

we've Humana product, so, Medicare capture share said just having provides MA relative question plan members for we a share better product determine can capture of that the Advantage. enhance to enhance to closely. ultimately point. and overall effective some framework will the there for continue that do of to disproportionately members watching who pleased to and On our We it second to some increased around share PDT And of within that. and you we value a out. see them? what We've really represents to Are MA? you the so plans if identifying ultimately there more continue CDC marketing, all at this would attract And those really with segmentation, members to capture your focus about choose likely on to so a things our do opportunities things those are regions come migrate talked who we are proposition competitor certainly MA drive other are

through. some certainly of We And will see comes -- certainly anything. ultimately of texted have to supportive with the are details and final the proposals

As the prescription drugs members. our of for to reduce we cost done

I comes year. this early, need see contemplate into it's too our at the out certainly consideration pricing think, final and we take SEC. we'll something But each And of to point, what in

Bruce Broussard

that, to pricing. vantage we Just our put on continue our back from point rebates into

the customer. guess, retain I back rebates. directly not those So, do to We

have result of us of it the impact opportunity any as to the So, of directly -- pass we members kind will our cost lower a an on drugs benefit and not just through.

Lisa Gill

you. Thank Great.

Operator

Bernstein. line from Wilkes question the from comes Lance Your next of

now is open. line Your

Lance Wilkes

are or -- much membership then what in Thanks. percent then versus of or maybe employer much opposed centers little MA that? more the stages versus fee-for-service, is And those Great, looking patient the patients, the of contracts at are thanks. Care the Primary many interested surge. them was Humana what And patient Could risk percent provide you what you with full the little about payers? a is the color of describe how as other? a on bit of it membership composition centers? in and of are other Can how and of how Medicare And base

Bruce Broussard

as lot built risk few Okay. built as that the a the are really are has there's full of of That's they me is That's business for. in advantage recruiting They to built. the can out staffing for here. model A That's try I provide I That's much what things, of heard that so out let physicians. question, how members. Medicare constructed. the

leads be you so conclusion to are them going And that to majority of MA the of members. the

They called how platforms, composition there. Advantage we to evolve longer-term of oriented good be a really agnostic. really have reinforce that being than of to as In we members a Humana member are to oriented relationship. more fee-for-service well agnostic the credit, to it's are - medic payers other members. our very Humana that's Medicare's in there's through are why they CenterWell, over so members, in number for some sites, Now, side and time Medicare and can members as They that us there's it's nature a are our agnostic probably Humana non there

-- So, you in opportunity for a Medicare do see much to us broader Advantage. oriented the

direct and that are so fee-for-service to in In do of that, -- Medicare are then result base. we sites members to few value opportunity addition, the a contracting take of a in more we that oriented the have as relationships

part question take will of just full relationship. Your was they the time your risk. over last

to easier to because the the that's the bigger, And the is risk gets they and a just they'll have over earlier path orientation that be risk an will -- of downside and ability take will, size. the bigger part limits might to convert really as the time, full of risk but panel diversification some opening much there upside model. a where and manage Now, they size of panel

Lance Wilkes

to you those in the DeNova sites what's And trend guys? Great. breakeven for

Bruce Broussard

X years fill around Breakeven return is more side. is earlier is and I'd X return on fifth year more year the obtaining say the profitability probably is between capital capital and around X up. contribution margin. to years a on The a

Lance Wilkes

Great. Thanks so much.

Operator

George next Hill line the Deutsche Your from Bank question AG. comes of from

Your is line now open.

George Hill

to that adjustments about care an Good color a granularity kind because morning, as if if I XXX% greater we you've much from number included a And But willing trend for that guys. number And looks question some then what utilization, like could thanks the how an we for -- reversion like COVID little baseline see the squeezing headwind. And a provide XXXX Plus, some continued some retail you're how you'd see to of and seen I of of would than it MLR mix then call moving was the XXXX about grows bit but to thinking I'll virtual love thinking mix? guess asking you cost be is, thinking offset so by perspective? in costs. is you're medical MLR provide growth the I'm as it about Not baseline right utilization in being changing higher pieces just we've about more clinics. on Susan, from how hard me perspective. number, medical Are for relates in. just cost wondering thinking if excess really XXXX. about

Susan Diamond

-COVID maybe to -- was Okay. Great. baseline that last we try factors introduce our I'll Yes, as for much to use roll levels, go forward. pricing, as and Sure. But right can, more said now to before, as statistics, our generally. in to historical I back approach as you trends pre trend 'XX

forward. Now be them into those our granularity account have our we and of will certainly then going be we cited that take lot part what consistent so trends and to we look they would market seeing these service models also jobs of referred They'd what might that that may certainly, a estimate to seen maybe what And we've expect at just process. our that's to we've Healthcare differently pipeline that technologies to coming historically. anything else impact of than any

work that was XXXX done support of all So, to our pricing.

what best how view utilization. not XXXX as has in study is impact trend. COVID can work versus that of as enterprise of baseline be being we and we changed a lot of imagine, what have Depression emerged the XXXX, the can over just you currently, our decipher lower We there across might can, to done course although

our we bit of than forward, not years may would trending certainly forecasting historically little of there. would We've think as trend imply I like. view, you've XX trending more that is is models have seen off seen, core going in that consistently earnings our typically a [Indiscernible] conservatism

that analysis and considering And inform any between would so to the we're -- if tolerate we now, an emerge lot would does year. emerge, we that points above don't for Or view. our would that what perspective there's between be final an not But then information does baseline XXXX represent we be to over you course the we now point, obviously us -- said additional it the going does more baselines. will expect even I unwind occur. that but XXXX that's appropriately see to utilization backwards above if [Indiscernible]. would for baseline able baseline running tailwind If we that headwind is that though contemplate see that additional guide our COVID seeing conservative not of it levels. occur, guidance in your we're do why a To think then Yeah, sorry, should I'm to on

George Hill

I it Okay. go call, a if could -- does And with quick

Susan Diamond

[Indiscernible]

George Hill

earnings can I the on quick do for guys medical feel the is it side deliver you your run where the you like that side, on costs to my cost is levers follow-up guess so your just, ability targets? should pull ahead flexibility

Susan Diamond

I our initiatives would to I to year total say think no on than reduce and we any to trend management other of and different continue general; care. to various utilization work other in cost continue strategies, work

use likely capabilities Some Like with potentially we capabilities are to and how those disproportionately events sites who to see, settings. other focus examples can or or use model, use the of to of of work we're how that outpatient as on home capabilities them our doing and alternative of value-based patients to continue avoidable an home-health work hospitalization well homesteaded redirection we the those as broader to see service.

So, value Medicare we'll things in only mitigation, continue of support to XXXX do proposition our trend to term to broadly. then but all those support also in of longer Advantage not

Bruce Broussard

the management. a the provide managing that investments We about being side to administrative earnings about as they administrative our constantly us cushion and adequate trends think we the costs ensure within said. question asked are Just for

George Hill

you. Thank

Operator

Gary.

from comes line question Whit the Next from of Leerink. Mayo SVB

now is line open. Your

Whit Mayo

you think one that that make in And And fourth that Susan, is than in quarter that the Thanks membership for of plans wanted on. you hope that coming I had just come you growth Thanks. development question I a think expect clarification special of I said less experienced I I the in much I'm how getting you me expect the quarter. would in right. needs the to I midpoint, will from, XXX last heard quick third sure that just reserve the XXXX, duels, at etc.? favorably

Susan Diamond

the to correctly current in while Yes, quarter, see not Sure. To levels. on we heard period that, your you did positive development. question see does period current our third elevated development continue we seem first that guide this

during that that with X quarters detail early growth We can though in see given favor XX% we XXXX year, still Bruce you but guide the you declined see any XXXX. mentioned the favorability continue haven't in in 'XX growth currently exit this it's can we're XXXX. given quarter, in growth, third do strong But we some saw in saw And normal In will assuming already tell quarter AEP, that obviously continue. and I while emerge level Our seems -- is guidance. of CBD. we to not

we we're a [Indiscernible]. bargain specific 'XX better its while expected for is so originally growth coming prepared early, even share So, while not to number, had in actually than

Whit Mayo

Thanks. Okay.

Operator

from Your Coban. next Gary question Taylor comes from the line of

Your line open. is now

Gary Taylor

morning. good Hi,

to Just X billion have In three quick full questions I April, year. your remaining. a headwind MRA you for the upped

spec still of part that offsetting next the baseline to 'XX year return of right come and that is and that's headwind make how most the sure, Just want to you're utilization?

Susan Diamond

That's exactly right.

Their is headwind. estimate not Our been emirate update on changed. previous the

said, line we tracking reimbursement, XXXX we submissions similar we're diagnosis in are our very closely to will support Income expectations and those pre As XXXX -COVID. with thought more that in the what and

headwind and recur do mitigation expect from that trend, bouncing normal provide we not back more So, to does exact to levels. point, to your

Gary Taylor

about When just -- you more talked quick development was -- and Since in one. one mentioning just less XQ.

could Your were outpatient. occur on development -year year, the very correct? recognized you're that that doesn't third quarter from first presume development so not little And is you was us that half or last occurs, a you XQ you where the came from, talking just about prior year color in similar to intra Inpatient assuming that give I

Susan Diamond

the When us? you the to the period you year. would current hear refer that in Can development, to quarter development, refer

Operator

live. are you now Speakers

Susan Diamond

first does you costs quarter, again but of to to me? saw sort sure is, I'm a Hi sorry, COVID, of going last you And restatement and point, did developed year. we can first them we the high that into we in those just there, the we how in and quarter in some I'm XXXX dropped not of your restatement. in turning at see of I exactly development favorable unfortunately, to get what third quarter. XX basis restated Okay. points the say relative saw say, positive we refer half where can the development hear third in period planes the What dropped, as COVID second level the QX net and about we of

Operator

- would the And speakers, call Bruce have to closing remarks. turn don't we on I the like Broussard line. to any Mr. A questions for

Bruce Broussard

[Indiscernible]. Okay we I we the subscribe is that that definitely glitches to technical I there, line services connection. have -- are our keeping for will that ensure to a think and problem work we we to want with that of leader the capable a apologize consistent on

Second, that into look from I conversation XXXX. thoughtful fourth as we hope away today you and we enter and have been take quarter into our we conservative very as the

the not say As commentary, want And you organization. aspects to shareholders return. this such our XX,XXX your also providing but a as we successful can all to to you organization see us From of uncertainty associates the COVID and I reflect that the an of that thank you XXXX. I and support make their for want long-term only all going do for dedication adequate customer, for into do the our thank

you So, thank and great day. have a

Operator

and conference participation. today's you call. Ladies your for this concludes Thank gentlemen,

disconnect. now may You

Humana (HUM) 3 Nov 212021 Q3 Earnings call transcript