UnitedHealth (UNH) 15 Jan 192018 Q4 Earnings call transcript

Company Profile

Participants

David Wichmann	Chief Executive Officer
Andrew Witty	Chief Executive Officer, Optum
Steve Nelson	Chief Executive Officer, UnitedHealthcare
John Rex	Chief Financial Officer
Brian Thompson	Chief Executive Officer, Medicare & Retirement
Dan Schumacher	President and Chief Operating Officer, UnitedHealthcare
John Prince	Chief Executive Officer, OptumRx, Inc.
Andrew Hayek	Chief Executive Officer, SCA
Eric Murphy	CEO, OptumInsight, Inc.
Justin Lake	Wolfe Research
Matthew Borsch	BMO Capital Markets
Charles Rhyee	Cowen and Company
Sarah James	Piper Jaffray
Zach Sopcak	Morgan Stanley
Kevin Fischbeck	Bank of America Merrill Lynch
Steve Tanal	Goldman Sachs
Ana Gupte	Leerink Partners
Scott Fidel	Stephens Inc.
A.J. Rice	Credit Suisse
Frank Morgan	RBC Capital Markets
Josh Raskin	Nephron Research
Ralph Jacoby	Citi
Gary Taylor	JPMorgan
Lance Wilkes	Sanford Bernstein
Steve Willoughby	Cleveland Research
Steve Valiquette	Barclays
Michael Newshel	Evercore ISI
David Windley	Jefferies

Call transcript

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Operator

Good morning, and welcome to UnitedHealth Group’s Fourth Quarter and Full Year 2018 Earnings Conference Call. A question-and-answer session will follow UnitedHealth Group’s prepared remarks.

As a reminder, this call is being recorded.

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

David Wichmann

us and and our XXXX we provided everyone, thank At just few review joining positive expectations business and for you of weeks today. a morning, our for an ago, Conference Investor beyond. Good and extensive

remains view. today with outlook that consistent Our

the earnings, the We in enter with $XX earnings our XXXX cash capabilities and invest, XXXX the ahead built and for are growing remains to grow and year per with line a over share. and full than year value flows strongly remain year per confident available or all per were were we across out more consistent innovate and positive to morning ahead forecast lines time of ability ever we you fundamentals of outlook, Overall in healthcare earnings of deliver earnings at unique XXXX. our to line, XXXX, strong results full all and consistent Conference over shareholders. results company virtually Fourth in business of operating to closed and XXXX $XX.XX opportunities to with adjusted we stronger breadth our the with were with costs as well UnitedHealthcare’s we that for Full billion share society our were Revenues, XX% billion have discussed in controlled year the XX% in expectations $XXX growing for out. businesses business. share The quarter and Optum’s bear momentum. our this reported revenues Investor exceeded or earnings that time. medical adjusted across

We continued to as in quarter handful to on for in we both will fourth return a a levels address structural XXXX executed actions performance rate and Medicaid of stronger pressures costs to margin business. the ensure see this recovery markets

in drive we an lead, innovation expect UnitedHealth which one years Group to help Our healthcare nation exciting wave, come. early to will is growth at for

drive transaction analytics by of to and people’s medical ranging distinguished as step innovative, platform million Doctor’s transparency; offer our services and and deeply singly data pharmacy several with platform, benefit traditional improved consumer the and to high with effectiveness introducing both healthcare as services adherence care whole a volumes but multi-payer physicians simpler critical individually affordable approach than and who providers this better care Bind, at This members lower approach improve to difficult with UnitedHealthcare’s supported payor wave sophisticated information for suite cost experience aligned users NexusACO. Colorado all a linking market-leading proprietary improving This X; health more a clinicians personalized such consumer-centric value-based that and is experience Medicaid Polyclinic looks step healthcare us Rally, value consumer different interactions advancing January digital clinical in in today. of digital to XX Plan, people embedded scale, their services; to incentives XXXX; designs health point-of-care Seattle prescriptions clinical high-touch an offering and optimize clinical increasingly on outcomes. and information healthcare Motion, consumer and for ontology our at finances, support multi combined now a again like and tools interactions discounts at medical the consumers team applying expanded supported rapidly the context by participants human registered of and and healthcare care This science. modern and through essential Flowing refreshingly of and digital characteristics. better services growing engaging operate decisions performance; from produces channels make by Our measurable by value system person in leveraging end and by pharmacy and joined will of evolving supported a has management to in align health feels in physical to market-leading designed healthcare

results you heading and momentum and why let the that, Andrew? its position turn With ahead hope market I can So, are Optum’s me discuss energized unique into see to to by us. we of Optum’s CEO, Witty opportunities XXXX. Andrew it

Andrew Witty

Dave. you, Thank

well-being to we with healthcare costs focus control. analytics and and across our better care health better capability the system. affordability is to In the care the and pharmacy of healthcare more improve of local pathways deliver accelerate care services, have unique of data Our whole to access improve to Optum leveraging strengths to integration under while health potential and delivery individual patient the bringing

how breadth growing stream. acceptance, patients. impact PreCheck are market diversifying both services better services understand treatments use as well cost expanding of for Within to Our significant growth the gaining member us and and our per our increasing affect the the for significantly earnings as allows to next ability share the OptumRx, or best MyScript of of the action illustrate and option outcome clients infusion our to our data better

several in momentum Our sponsors. from in health new and was care retained business pharmacy excess employer with excellent in major XXXX plans rate and services of XX% business awards plan

are guidelines decision OptumCare delivery, patients advanced in four Advantage promote and of unnecessary Medicare lower experiences. this health better evidence net our the clinical arrangements right expect for cost Medicare. care to original time signs leaders clinical in In care at significantly of medical the use, up XX% the season in evidence-based XX, this OptumCare’s for selling by score business. keeping relative in hospital and average continue We better, outstanding nearly achieved right cost method. clinical is to We our value ensure are healthier which avoiding total and given patient positive to star the right on or outcomes plans based XX% applying patients lower of Today, that to Medicare translates form and our early year’s XXXX people support promoter

of for commercial for customers well. recognized lower achieving number our Our being are cost as increased groups

groups which high our of recognized our Reliant value of Capability, and like care example, Group all Briova care Surgery healthcare. services the and Massachusetts. complement MedExpress lowest experience ambulatory with For Infusion State HouseCalls, the Medical having the Centers, Neighborhood Clinics, Optum cost, was quality, total We support by SCA our medical Care improving cost of of

will More and people three As out there digital million in segment. we delivery improving physical or through move care be markets, chronic experience market more fully continue we conditions, of be U.S. up through comprehensive XX people data with with services over in value increasingly XXXX, for and with leveraging Medical including engagement and will key to portfolio all build of the reducing the and million Group. our in our the combination patients By XXXX. forward, Davita will this key Optum XX in costs analytics resource-intensive across physicians from to pending

adoption available individual information very of are is and ensuring the the of two. knowledge, provider, that to building next key health support year or Initiatives are be decision. of the Optum rollout and full management record, the convenient over emerging to building most understanding best including We of platforms contemporary manages the genomic data blocks for will each – patient the the key build implications

first portfolio of across businesses to a XXXX us Optum’s billion financial Optum’s overall accelerated with again reflecting earnings from Optum our putting surpassed billion Revenue margins scale of to revenues $X.X billion $XX XX% and growing year likewise over the than year for strong the and results. the XX% operating strengthened time. XXXX. growth once X% entering earnings $X.X leverage billion or Turning our operating position the baseline in more to $XXX XXXX, Full for in

the term XXXX and performance. are our Optum longer and people at about opportunity growth to XXX,XXX a incredibly Looking enthusiastic ahead,

delivery We who at others to will continuously our modernize clients and solutions value the seek an to with and explore costs. patients accountable quality our deliver we serve improve ways care to of lower aligning working, of strive ways way in

alone of global fruits platform the decades opportunities seeing strong United business potential. are of we the mention worth the and not have many pipelines investments strategic to and wins two in We expansion the States with

we when on our beginning and we all diversify, invest more As of realize we that capabilities continue we and Optum’s to the behalf to potential exists just are serve. fully cross-platform of customers, those grow, deploy

UnitedHealthcare’s Steve I Now, will Nelson, CEO. to the turn call over

Steve Nelson

serve and Thank you, and enabling of better these to people November. pursuit Andrew. their than risk translating workers with those with NPS. distinctive assessments provided in innovative and in consumers that of advancing achieved more operations we outset our in We earnings remarkable this services medical community people We by through helped into than a grew a which total Calls and benefit the million consumers, about with care consumer XXXX, by services care clients close with helps and $XX spending cost care, social interactions the growing through with in them services from a remain Collectively, $X.X in-home more linking experience closed the $X.X at capabilities measured provided aim the mission reached the of health well we total In billion partners cost described triple revenues nearly of the predictable value Consumers enterprise. with Optum million in better In expectations. program for as XXX,XXX our through dollars. our Overall, Care health our actions products, and is of and incentives billion. the through billion the more XX outlook expands who through that other the XX UnitedHealthcare outcomes, and services grow. physical UnitedHealthcare quarter million Dave UnitedHealthcare to was we to relentless technologies $XX health features XXXX. XXXX, consistent a provider healthy took and – through consistent breadth in billion innovative and lower us managed, billion of plans. times $XXX.X care capabilities digital with value-based of to earned as nature and billion one gaps Optum quarter trends Contracts X.X value were one XX% an together with needed runrate gaps X.X over million to Health as referred arrangements.

diligently through simplification, automation cost operating efficiency. manage operating a combination We of to continue business and

we duly highest individuals State noted needs the business traditional our of was at Conference, Community performance with mixed. We our saw eligible of health in Medicaid such Investor states. a particularly the As handful & XXXX in business a performance TANF while pressured in in the was serving strength

in focused track XXXX. expectations. XXXX fully operating back deliver improved be season work range to in done for completed half We of medical to performance and on while achieve performance core the are costs. team sound XXX,XXX strong XXX,XXX is and growth The XXXX advantage last advocacy month with rates, a Community of the Medicare will improved and Our enrollment more continued reducing with to State &

even health at information, driving are experience, We advancing real-time artificial and areas thoughtfully therapeutics, cost. distinctive all intelligence in digital lower more like consumer

such early we product for high-quality patient-centric health innovation new resources wave program new benefits the Range local large the of organized commercial at market on-demand launched are care as in around with and on systems Front the employers We fresh health a for Colorado.

our strength plan and have performance in cross-selling at end what UnitedHealthcare’s we in are outlined on the summarize, benefits. expectations of market To focus expect unchanged health association you the with an unprecedented XXXX November. and for specialty for We developing

As we Group. for beyond, we UnitedHealth across look at XXXX, customers UnitedHealthcare capabilities and are our strengthening XXXX and

for structural basis a multi-year effort, dollar, and cost improved medical value on operating customers. to and have a underway We well address multi-billion

and markets at incentives higher are high and complex we into designs the point-of-care record chronic health We they information and supported and are services And consumer-centric and serve conditions. value-based to deploying individual to acuity technologies with benefit the by duals power. Medicare, uniquely to is UnitedHealthcare believe doctors and new rally provide the can like leaning growth, the patients positioned like Optum innovative

will John turn call UnitedHealth I Rex, the Financial Group’s Chief Now over Officer. to

John Rex

for Thank all the year This you, we Steve. revenues billion morning percentage $XXX.X revenues reporting full with segments. reported of quarter business growth fourth double-digit in

billion customer and serve from the faster affiliation This Healthcare. people from customer United quarter. a we including grew reflects affiliated operating their market’s operations performance seen value revenues Group be XXXX earnings can to affiliated year the through the than where as and response we diversification full To of share, XX%, For UnitedHealth earnings put Optum consolidated XX% and even cash offer of our year earnings contributed independent in Optum $XX.XX adjusted quarter in and of that year nearly operating Health ago, XXXX, growth October XX% with $X.X year in payer share position payment Optum greater brought United years consumer the billion revenues. Health X as more Balance of of pace for quarter billion $XX.X $XX.X XXXX. times cap. in full per of about were fourth also Insurance customers’ full flows perspective, five net on portion Treasury earnings or per to the of contributed mix earnings XX% net the our to full Fourth Optum year Full flows quarter income $X.XX U.S. XXXX. earnings. Federal over reflect full cash year only growing Fourth over XX% a X.X

we is discussed. Our parts managed business quarter full year basis our Medical the strength, ratio in pressures of plus XX.X% in or provided of the the million. XX reserves care despite last as $XXX January well consistent of margin favorably just outlook reflects minus Steve cost medical developed with Medicaid by and points XX.X%

ratio and was the people. XXXX offset of basis growth that and minus operating this ratio plus the value to modern cost and of strong management year. develop deploy businesses, we capabilities driven The insurance a expect by impact by or cost XX health technologies effective advance reflects to cost and deliver lower continue investments of the which deferral care points, operating XXXX partially ongoing tax to XX.X% We medical XX.X%

year was last our year dividend $X share. in year XX% sheet, debt placing per annual XX% in return ratio balance of repurchased an billion $X.XX our on billion full end at rate capital stock to of $X.X was and Turning by at to we debt-to-total equity XX.X% June of strong our and our We back raised December. after

we the current In earnings view The this second that One than for which is with estimates continue strong current year would pattern quarter time as expect range sense flexibility to of over net adjusted earnings entered we appears $XX.XX per progression weighted forward, have that, to share. consensus to our described Looking seasonal consensus Street last first to and to Dave? observation we $XX.XX earnings growth strength, XX% a we reflect and momentum half suggest. on quarterly of stronger half, perform roughly spite the first expect in XXXX. to modestly our half. first the

David Wichmann

our in on XXXX character fully the strong to morning’s performance, foundation potential all and Inside done in strongly and initiatives, year looking you, place to this all our and XXXX Thank indicative of healthcare financial the a was in a of to in XXXX for with service growth for ahead. compelling John. U.S. improvements of and and a for the of advance realize those business be ambitious we With we society globally. forward review, continued performance team is and perform to touched benefit decade are in leaning, lay to serve. our in yet this healthcare plans much efforts promoter but advances businesses, scores there the firmly we in net number re-imagine restless

personalized and with and broad diversify continue serve across bring clinical We leadership and base customer and engagement, quality people, healthcare people we technology. in into we and our trust to lean will interactions have significant drive the delivery we to digital to loyalty the strengthen to advance offerings opportunities in and our

your close person questions. now and question please. open me Let up to call the per One

Operator

[Operator question Lake Instructions] Wolfe Justin We will ahead. our go from first take Please with Research.

Justin Lake

scale, whether out HIF ask wanted to wanted medical kind XX% to the that Day the company side. the the or of the a HIF. I It of to ask is out size, of trend first long-term year-over-year probably about we look hit Thanks. its indicative is cost about diversification to whether on XXXX you either Good as the as color able beyond. now HIF you didn’t negative. at positive the or this just years Appreciate I without moving being back spike to in Thanks. time the go the morning. XX% coming going or worrying part you and flat all five all was Investor and to

David Wichmann

Justin. you, Thank Great.

to growth we long-term know, do and you and committed there you the average company a the rate, comment? of you us is John maybe to little reconciliations growth to past. in the think on of the I caused size are fact what bit an scale it, As would time that have merit XX% seen is those to would spend XX% maybe less Rex, rate and in like

John Rex

be It’s our thanks, saying a insurance a That’s $X.X paid customers’ for I health still I been customers. the remiss to for company, Yes, for of say, would having Yes, burden start John. have I’d any just to tax. significant diminish very Justin. billion and our by number funds

the volatility you but, in a remiss of mix. pace, very enterprise still mix to our diminish earnings thinking the that the in continues the at a components out again, shift, that a are earnings it’s continues of burden and to non-insurance to starts significant the coming grow and correct of a reasonable particular HIF terms as in But that Americans. percentage for any say to of pacing So – our as mix as in increases that percentage and

David Wichmann

the healthcare to XXXX it score, million I increase on and this, that will of XXX back I’ll think $XX their couple recognize average so billion is for year. causes raised That but by to per in $XXX the coverage the amount, the per tax for cost $XXX And same around by health expected by year small with come and senior business or Americans. premiums families insurance see about

is get and on there and would or actions going Congress to we Senate also are healthcare this the but bipartisan comment past deferral of House of unnecessary or outcome, for view off pretty take speculate can’t is tax. to we We occurred our taken hopefully unacceptable appeal, cost we applaud will so - both already across the our the this backs that to because So, much, too so, outcome advocate continue the consumers opportunity soon. that and the this in have year this our

Next question please?

Operator

comes Matthew Borsch Capital Our Please next question BMO Markets. ahead. from with go

Matthew Borsch

is Yes, I of Street I was that noticed to quarter? than result The ratio care what purely bit trend MCR, I the modeled. release press had Medicaid, medical you of mean terms that impact that but talk analysts the factors be little about and hoping the talked and this that in notable particularly I a seemed it had moderating, you in on the could think drove about that higher we

David Wichmann

states first that’s year, as with business, particular, both and The this the our corrected you quarter our then those both handful LTSS on you, but as The course, impact well well balance to as script, Medicare up to we we the the rest the costs, states. operating – you our as in of I’ll did portion could well, the also probably just which to the as business, quite tell, at make almost are We we – in our better recognize in our We a Matthew. the performing the are have Those in of the response touched XXXX, and tell thank businesses, the Healthcare Medicaid as the some of performance. and of it costs throughout performing to I a half of issues the in really question, Yes, around the handful substantially duly both United populations And a in Medicaid as employer performance considerable were due than of but is seen respect through some performance Medicaid par of MCR markets. Medicaid was remainder half, nicely. businesses recognize in well look part it states. our progress in exclusively funding particular in pullback last you Investor the yet QX. Conference. quite and eligible Optum in medical is TANF isn’t into throughout throughout were it of handful of described of XXXX. both a

balance We of we range of X% show we have seen, additional target to and as to move expect business XXXX the again nice that its X%. progress considerable to back margin improvement the year, throughout

Matthew Borsch

Thank you.

Operator

next our take Please Charles with from will We question Cowen. Rhyee ahead. go

Charles Rhyee

large I that. be that be about of Optum believe and helpful. you contract, Health you that earlier, don’t Yes. recall very around guys Optum the headline I VA would can – just Can think would maybe earlier ramp us that, be some – numbers on any details booking can’t mean, you. think how to if in but all up, be you you give you and look it that about may that won thinking Health, I that be would that that, on kind guys and some necessarily us color to color discussed I in you I give give how could I you’d referred us Thank sense had would it’s we imagine maybe around if some a the should but big,

David Wichmann

awarded at you end of the Care are the contract Community What referring was Network Hayek?. last which to is Andrew year. VA

Andrew Hayek

Thanks, Charles and Dave.

really we award the So, were that OptumServe which out and with which the ready to way an talented on in this go three regions. serve It’s Network were to deliver in and dedicated to the recognize team honor program contract. OptumServe I pleased yes, did to our would my Care of we Community the veterans, is regions VA

veterans XX of VA’s administer these healthcare veterans Optum and the contracts provide VA providers are the award, will high services states to to local healthcare work and center. now can medical the pharmacy VA U.S. their quality the to networks to who timely territories serve Columbia in with together With who District to medical, million to dental unable more of and capability six care provide regional receive licensed and at performing than

it’s effect be could government they not partnership indicated VA we of as remised also forward they just to as the the is them. tension this case, honored process the with and another to is that work particularly our another ultimately healthcare, completing of to there partnership, course process serving to in and awards really than underway a have look underscored and military when provide seek that step private you example that public win care which and it’s in important So, that normal so sector these is review getting government veterans with has important Think this the breadth able step armed the be which veterans potential we serve an current OptumServe, to and the the members to forward in sought for the and are Optum former private of to to government. depth full really better or and services pleased both a so capabilities bring a to

David Wichmann

Next question.

Charles Rhyee

that Is in the included guidance?

David Wichmann

a implementation it actually year so in The and contract of a a earnings begins seven contract. it Yes, it to is. XXXX, is is its drag bit

returns that investments seven So through on it will that year provide its timeframe.

Charles Rhyee

you. Okay. Thank

David Wichmann

Thank you.

Operator

ahead. question from Piper Sarah Jaffray. comes Our next go with Please James

Sarah James

on that’s the more how in things the double on and commercial so Investor revenue. far the tracking potential some an Day, Thank drivers? update that details Can to was about specialty talked of you. provide you give you one the XXXX us At

David Wichmann

please. Schumacher, Dan Sure.

Dan Schumacher

medical, focused and the specialty approach but the made Sarah. it, morning, of some But are particular contributions dental, more vision, Yes, do doubling hearing nice innings we deeper from outcomes. cycle would are Appreciate better of that, drive move We tell nicer assets, when going we penetration the Good we you X/X that broader hearing and penetration. forward the our deepening question. progress our holistic together, in you expect as we and our parts bring of dental health take I in the are in person because a on very other well. to in blocks within selling overall context foundational and Thanks. be early vision to the drive we we as to of think

David Wichmann

you. Thank

please? question Next

Operator

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

Zach Sopcak

Hi, the appreciate XXXX. morning. PBM for selling for I the comments for good Thanks early season the question.

as Just wanted plan selling especially seeing you had particular are I think that year to won a in of XXXX pockets strength get clients mentioned there color you. health little Thank XQ last your about are more on the you three if you season, call?

David Wichmann

Yes, strong I excess getting the softer momentum really John? it’s noted on considerable more response, think market top-line and

John Rex

is this market. in really is overall, more story differentiated Zach, our excess value John. Plenty today Thanks, of the about

We have had good this uptake season. in past selling

employers. We are very of new large a successful dozen in selling relationships plans, mixture a had large that and couple health unions over a states, both

have we the We about. retention Again which good a row are had very pleased also retention. had we’ve of XX% for third year in

our strong our score as I consumers. scores think back net for as to clients promoter our well around links that

the sold as couple In couple for pipeline very healthy terms large a into already we relationships we season. X/X/XXXX, and large of have selling new we’ve a some deals XXXX, added go

that focused more we on season, are focused XXXX the well so as know, the state you year of this the just are then XXXX on is process. large and plans health the and as employers of As in bids time for their for the selling middle the

and So value that end-markets. and also pleased is very optimistic about our are really we story are of that stability we the –

David Wichmann

Thank you.

question please? Next

Operator

to go go ahead. America Please next with Fischbeck Lynch. And Bank Merrill we’ll of Kevin

David Wichmann

may you mute. be Kevin, on

Kevin Fischbeck

now? hear me Sorry, you can

David Wichmann

can. we Yes,

Kevin Fischbeck

Great.

as incrementally gotten variance or strength that is you costs? on anything just given there Medicaid activity highlight you things else I MLR then talked the relative mathematically, worse would to don’t this quarter in MLR MLR on understand one Medicaid it that question, two the is wanted to the the guess, about the And still highlighting I back side, its if from two, so just today, the to was the are just is at specifically the medical I go two So, size, is, Medicaid that better things, know back want is as same in being there? and commentary November there your or

David Wichmann

Street And talking variance expectations to are or? you about

Kevin Fischbeck

exactly. Yes,

David Wichmann

Okay. just in comment to I’ll we comment Well, add are response is what then and our to that. I’ll sure maybe Medicaid that in MLR fulsome make to John on may case Rex the do you on on

it it We believe same believe position discussed to was with Medicaid were asked position what are to me in actually we with exactly asked pretty compelled you fact I close or that this or I the same was the we in commentary, – bring November, you when question the was… in the out

Kevin Fischbeck

Yes.

David Wichmann

anything plan XX fullest progress to you continued further in XXXX respect being Really this to over markets isolated the around have isolated do nice see teams with There but, potential progress business have relates these it the make to last it to what on The a as I to markets. it fact only look to do to thing days leading performing pretty XX to where and is we it pretty nice days you that John, how and gave we is contributor were those. add? suggest XXXX. we TANF, I and five may on is few compelling as our one much view, very in And issues not our remediating and would five these is our be improved to results to a examples is for MLR is performing

John Rex

Sure, morning. Good Kevin, is John. this

kind fully that - up just maybe teed question here. to of response as the, start the with you the So,

with the what of consistent we highly end results, the November. out characterize laid I’d So, at

year is up $X.X billion. earnings operating UnitedHealthcare’s So full

approximate time full cited of point that slightly also. we we at and provided year time XX.X% kind just XX.X% the I’d estimate are ahead put with that at consistent the the of the that We

had outlook as at of would that we the consistent So with as we visit November. got it with say you the to end I

line. that in So

So businesses beyond least with well the in developments as line favorable of $XXX discuss well and as XQ would suggest benefits, the that million CNS performing contained a expectations, in in their indicator that. also I reasonable we overall are the at costs medical

Kevin Fischbeck

Great. Thanks.

David Wichmann

Kevin. Thanks, Great.

please. question Next

Operator

Sachs. go we’ll go to next And ahead. Goldman with Steve Tanal Please

Steve Tanal

Thanks a the or all lot guys. I the color answer. appreciate

range the know with could the MCR puts XXXX those then we maybe you and to expectations if squeeze track sort as question maybe right to specifically could full of worth takes here Medicare love this are But commercial of year is And I out the trend side. a fourth the if the quarter or line in as on well great. then would – anything sort to and guidance really there medical into as cost Sorry commercial and in one. if I comment on beat could be your far specifically Medicare anything trends and my is follow-up there, calling maybe

David Wichmann

you in Schumacher? are Dan If commercial.

Dan Schumacher

a the squarely have conference we you With Yes, year that that. November regard morning, narrowed on we landed I a to would and year the ago the X.X% range good investor at guided we trends, commercial cost to in which tell Steve. to to X% within

commercial So, obviously that’s in. And then as earnings came commercial translated in expectations. our within cost perspective, the deductibles From and with very I year where well and which just as quarter increasing through type towards to as point block, are pleased our at in products we year out. bias market shift with out would pace how that the another as our our buying line of that, that the fourth that’s by really seasonal is driven well a the have

how you also course the that its at to and year. contributes so, progression performance the the over of look And

David Wichmann

quarter Medicare expectations, with something a in very And the strong came had in line that’s and fourth a it’s ahead. bit it new. little not And quarter

Steve Tanal

Thank Okay. you.

Operator

next And Please to Gupte go go Partners. ahead. with we Ana Leerink

Ana Gupte

thanks. Hey, morning. Good

their Cigna deals question the my consolidation the moving to is closing, was Express’. vertical book about So, with

You $XXX are margins a and PBM on loss commercial per forward ratios to the – possibly thousand. while gains competitive savings and looking in talk OptumRx OptumCare you going bundled landscape care forward environment? How maintaining in are to days and with preparing for into the about $XXX new

David Wichmann

We collaboration it in offerings part continue beyond and are see and strong the performance is it business. just think and running running and as last you leaning if well to because, as our PBM and we John XXXX, business XXXX and leaning a goes long United Ana growth well Healthcare and well track I are into seeing response two between pharmacy out now the you OptumRx into and services then care to nice years back established. pointed it very The operates traditional

two that work very new So wide range on collaboratively opportunities. of them of meaning together it’s not the a

we respect care We our business underestimate manage capacities emerging and competitive not on pharmacy the to a own to our that also remain compete with we a course, and But competition strong going Of available offering. continue are and and services deeply grow work is the have business. as well. multi-pair we to basis new but confident and it highly in

Ana Gupte

Thank you.

Operator

Stephens. ahead. with to next Please go go Fidel we’ll Scott And

Scott Fidel

Hi, thanks.

got the that lot and said as XXXX – points of debate the Do continues both economy as terms the market Optum in economy businesses. progressing trajectory the the exiting is sort its on of overall XXXX. have how and the you a in of UnitedHealthcare to few of overall Just in you

So the quarter in related quarter? just areas the economically what fourth some in seeing the relative quarter, of to maybe particularly terms trends third the in you fourth in sensitive interested are more of

David Wichmann

in at needs our reported about – if Good at sentiment find been billion XX revenue about questions, this way lot just was bit we in nearing $XXX least of of $XX course background grown years I What from timeframe over this that here by have so, time sentiment I a are business last, evaluating which base which the And political has just you economic billion Scott. is, will, that And my to of we I morning seeing VA think partnership to the shifts in or what products have we the to healthcare. little both but public have thing economic healthcare with then that and advantage. and Medicaid, tends that changes as with D, how to we managed sentiment healthcare, these is discussed well we’ve particularly Part of also that this our economic always and through drive to We private is the cycles see through respond in Duals, are sector in the the respect of they shifts true introduction demand. political expansion that ACA that, private Medicaid seen sought veterans. that’s expansion One broadly Medicare a the on also and today.

We whether liberal they economic diverse conservative of and diverse it’s UnitedHealth and whether to a large manage and tends Group’s a or or and a economic be recession regarded. portfolio we administration. serve to there tend an end-markets businesses healthcare or of well administration, or So cycle positioning very grow unique expansion regardless is

value of to been services and which positioned capability just line consumers. portfolio is clients, society, as our business have insights actually business. We And data clinical in competencies to that and well continues produce manage unique have across for clinical advance as technology never our our reinforcing interactions for greater ability to this

really signifies. You cite can then triple the company talking is us return around of hear a and in more also oriented lot which more what MPS of becoming aim consumer

continuity. just team So, has is strong up, It wrap maybe a this improving a largely management XX% domestic. model. very with scaled deep to It’s

don’t So Brexit or in global for a well-defined XXXX. and global tariff, is in long performing that to growth. other runway we going pillars are have trillion really growth high It has $XX meet concerns it the market five

provide will sentiment, So opportunity distinctive for UnitedHealth society Group that that this it’s our and believe well results political both we shareholders. to like a presented economic as continue as returns whether we and the or sentiment is

Scott Fidel

thanks. Okay,

David Wichmann

please? question Next

Operator

Please go And Suisse. with next we’ll to Credit ahead. go A.J. Rice

A.J. Rice

rolling would over where into for you out? or of I I community centers. a And know as as are everybody. update was initiative in next timeframe guys around ask, that all year where at specialty prime your quite how what of sort you does in look pharmacy And – sort you putting just to Investor might the so? financially? you acquisitions – going the about talked of Day you mean on at in you infusion well some today Can that bit and us in a and just the Hi MedExpress

David Wichmann

Andrew Witty?

Andrew Witty

of a more expect Prince care pharmacy I within Make quality make of progression that and think thanks going rollout embraced the I networks detail. really of as a well John little just John the marketplace. the been A.J., Hi, OptumHealth very to type point to you these ambulatory services to thrilled give am I extend question. with you’ve high as runs bit much strongly within comments businesses would that would facilities years. the ask those I’ve couple further for in business described the the the Andrew a being runs to and continue within though. I several over you next care that described

really really about think of to think it’s I a as important provider networks. portfolio Optum

of over such service bring deliver next now think a of what the it’s not in just are years think we an in to about markets, important you that infusion value the me to cost, that, to are like MedExpress. we specificity just really convenience, bit John. we plan network, if establish as let substantial things well by strong provider about you the U.S. key is and to really SPA, comprehensive the across like we medical centers, the a But to quality, presence life ambulatory hand if that those that beginning more going series the So sponsors that patients a it, like serve With over network for see care few better aiming can as lower services markets serve. complemented

John Prince

and thanks, John Andrew Prince. thanks, the It’s question. for Great, A.J.

especially we space. businesses, that those really of terms infusion, In like

provider that differentiated clinically improving whole through consumer cost a done care programs We’ve total you by the treatment. focused between their of offering transforming a close got and of on great handle experience very We’ve as as course course health. consumer job have of market the provider well patients treatment. and in partnerships on experiences manage the We decreasing the the consumer the as the focus also our

We external are continuing continuing the sponsors taking business both but in in market. open the extensively to market also plan grow with directly

because services added business of from over of those our quarter – now their comes businesses. clinical preferred XX open as of terms are We outcomes. this and selecting we our a sites offering our our market. than MPS People in more So,

expansion. States significant United we have a Within the

coming in this the looking a our pharmacy of at dozen year are dozen are a and portfolio from We in that in more services. of care all future

sites We as in deployments. and general XXX have we over other add

strong and performance opportunity. So, strong

David Wichmann

J. A. you, Thank

Sorry. Thank J. A. question? Next you,

question Next please?

Operator

And we’ll with Frank Markets. Capital go RBC go ahead. next to Please Morgan

Frank Morgan

Good morning.

think that hit business, you Day the operational of Cigna it revenue on lost deleveraging regard actually I assume not Thanks. really is of profit you hit also a but with any that that loss additional does why just at a book would and think commented the type any revenue? with color I and that of to bit Investor commented a the be about this little

David Wichmann

John Rex?

John Rex

Frank, good morning. It’s John Rex here.

in Investor So, at that the potential years transition over business that’s I and clearly of expectation terms commented are here. you yes, did Conference to at indeed that couple of absolutely for next the the correct. is the

customer on and really that impact yet certain counts that work depends timing have would commented, terms with of outlook. did that outlook and that any timing in isn’t pacing transitions needs and I on going the are I impact their to piece. wouldn’t meeting XXXX any as also to our terms commented it revenue for doesn’t on of we earnings As in it the that of be that case the have on that completely have that a on script and our earnings impact and our continues

customer we on as how it revenue our our impacts So, be that’s determined this. of to with terms script in and count Cigna work

David Wichmann

Thank you, Frank.

Next please? question

Operator

And Please we’ll go next go ahead. Nephron to Raskin Research. Josh with

Josh Raskin

Hi, thanks. morning. Good

those. the showing you a about of multi-year targets Summer on big what Texas And those and years question point ago, and two Optum. employees, years on couple wins, data in of There a lot that really targets this is am to were data with CalPERS as X/X/XXXX cetera. Here guys – Rewind I so curious kicked at But et 'XX of of X.X all all terms synchronization. on you got impact some with financial well. GE, it that know within and had I of on Eric And probably deals close off of contracts.

here is you the here is to – of kind look of more with the looking come impact are And like on in little world is a under prior a study bit So, you what those? contract? to what market the think when how accounts on synchronization do like OptumRx you and the these tracking definitive

David Wichmann

John Prince?

John Prince

of Prince we which a are Thanks, This with on synchronization market our around years That and our say to execute just of very I’d say with sold overall, for part was broader John OptumRx. to the – our the we details would customers customers, couple not I today. customers. story again specific continuing is ago Josh. well – those story few

So, we about about today we cost lower when of we going market, negotiating how talk are care. to talk

of well care, our We improving of $XX business of that health customers. we value serve the total part transforming we lowering experience. value for cost to that talk about in of as the focused story. consumer our book deliver $XX is we When clients, overall core the outcomes is as terms our That highest are the on our of performing how

That a So to is market lot the data. have of then the we actually our leveraging today. story in

confidence now with with we by and we are strong can in coming drug actually are execute drug our the things ability trend. So market to reduce and and actually we around trend how

care total out of story are in and study. and actually the done of well executing cost definitive the market same with years the We’ve been we’ve a with next market because we generation and are guarantees in the we are on that’s to for it. We there five

are confident we how we are So performing.

David Wichmann

Thank question, you the for Josh.

please? question Next

Operator

Jacoby to ahead. Please next with Citi. go Ralph We’ll go

Ralph Jacoby

Thanks. Good morning.

the normalizing for seen of space. that's pretty magnitude HIF. are year-over-year size Medicaid, XX basis all in MLR massive and points it for by a We the the higher calculating fourth pressure this quarter we from your is If haven’t just in the uptick company a others

in are this puts it’s like to sense a others if am unique risk and I you in to you markets us within guess, of I get So, terms just adverse trying it’s if than those are populations. unique

that sort Medicaid reconcile with pretax point help what can to and in expect this trying you XXXX? and a within on are Thanks. do just you your maybe if at and kind where of margins sense get of improvement Just

David Wichmann

am that you the not MLR Thanks, on Ralph. seeing are I the – we same calc. are

point not separately we say the solidly population can period the It’s as of all mid-XXs that effectively. the that of into of case, number well the for want on like Medicaid to It terms states. cost just that functions don’t a know circle upon initiatives that advocacy in It’s in referenceable relates have bottom-end we’ve the we based margin the that’s traditional you the quality markets. XXXX see the when within Also operating this into clinical that actions we will scores local and engagements NPS taken range get range let in great time would why X%. one and the that in that be you to XXXX, us in you has get scoring range our to the to it’s with far, confidence duals, times So, target as back its so is I by business with very business put often that number it X% into place. Medicaid at It’s XXs. profitable. as of

So, I don’t want to here. overplay Medicaid

little bit Became a really Again, of seen half, flow out working probably actions in to have of through. of XXXX. on we’ve our on first this you’ve and We working us issue rate time the more way been work a short-term we’ve most some hard in acute it second that take been of. since those but the quarter,

around. our improvements in is and see can of they probably than able You are probably think in of it able as and where isolated capacity some turn be you’ve recognize filings, of a these states that the be that company and some how I some to to to the statutory

through fantastic where good by you, here which So, at in – will Ralph. a lot leader progress on will is continue She are we to team XXXX. is and have led confidence we what Thank Cianfrocco. a Heather of we this make

Next question please?

Operator

we’ll Taylor Please ahead. with next Gary And go JPMorgan. go to

Gary Taylor

quarter quarter XXXX, you if was the give like day. we good your this third little the Maybe a I fourth pretty theme BPS MLR that's will apologize. So XX prior to at it XXX, XXXX, in could year MLR up help more and thinking just look I in but changed? quarter, MLR of and when be up us Hi, was guess, the seasonality morning. XXX flat; development. you and about if in exclude

come it you've an the So seem a does been of as the like where even years more trend there XQ in line. has in seen increase

is years? contributing the of the that attribute seasonality co-pays to some of and else you've in just commercial there business that mix line talked deductibles over the you Or higher XQ? be MLRs in with in might the the to to of would the business most that higher So something

David Wichmann

Dan?

Dan Schumacher

Gary. This Schumacher. Thanks, is Dan

seasonality. the of bit around maybe context little a So, provide commercial

first consumption point towards the you to versus deductibles. shift our two well as As quarter somewhere the last look the you somewhere fourth you look that greater if to increases first you has in fourth that as And increases average XXXX XXXX, if years quarter. that of in as from one generally I the care as X%, at is X%, change medical quarter, average so been concentration the probably sort zone move X%, inside offering zone. deductible around X% you ratio you the fourth X% tell that is in the would in drive over a quarter, look in of in there look or been

and that inside consumption the to quarter what realization the So, fourth push it. those of factors the that that’s are think you the are and towards contributing of seeing going are I

David Wichmann

you, Thank Gary.

please? question Next

Operator

next Sanford ahead. with go Lance We’ll Wilkes Please go to Bernstein.

Lance Wilkes

cross-sales dental, have. focus coverage loss to how wanted And I focus. that, stop vision other specialized operations guys and Want to PBM, area you the Yes, and care of about on of much ask was cross-sales and spoke just focus as just or related benefits to question you additional the being a management as kind a well? of understand an

David Wichmann

you take that? Dan, Okay. to do want

Dan Schumacher

OptumInsight to contribute navigation well that our and competencies offerings third-party on our results full and performing have well-being a is bring and our combine outcomes. in OptumHealth, the needs of from the our our opportunity with the as of ambition advocacy we knowledge the the as then our chance knowhow to serve have offering capabilities Lance. by when we enterprise clients take health that both Obviously, person you, knowhow intelligence Thank to our from and Sure. OptumCare that of high best and assets overall know to and we respect and to a delivery care medical underpinned really taking have really ancillary

pharmacy, navigation support doubt no are trying we stop both our adding medical with nice in and making on on to of management very combine our we and people loss, care the advocacy, focused are some So, got serve take ancillary way. pharmacy coverage and a regard rates you frankly of got penetration be we’ve a as that lot more fulsome room particularly in of in progress to look we’ve our lot up a in to able upside our clients along market

David Wichmann

Lance. Thank you,

please? question Next

Operator

Going next Please Research. to Willoughby Cleveland Steve with ahead. go

Steve Willoughby

my Thanks Hi, good morning. taking for question.

just off NexusACO, you’ve in talked a could MLR revolves potential bit, such us the initiatives wondering for Colorado just from commercial and question or around either give my if to any perspective these the XXXX? membership as of Moving programs buying you XXXX about on Doctors gains new some

David Wichmann

Dan?

Dan Schumacher

Sure. bit, to back Thank you step caught little just glad are our you, from Steve. Maybe perspective, it. a we

XXXX We contributions innovation as some from XXXX and nicely deliver people more we will been in that XX,XXX for are on of that and value in in greater to and expect modest around little and and evolved. a about wave increase named those. XXXX we you beyond. than efforts of the and year Dave think our into Nexus are some more by the forefront mentioned, I efforts that. excited increasing year, think double We had see longer we has the about we of as turn of end really those the a We we efforts folks to

example, the and as Doctors are they Colorado Bind would to relates an say end early on Plan it it. As I of

to contributions again, But and the that to market our as the the bringing perspective. XXXX well in like from we again, interest contributions So, growing of clients enrollment as in are XXXX. table offerings suite smaller

David Wichmann

Great. Thank you, Steve.

Next question please?

Operator

Please Valiquette go Barclays. with ahead. Going Steve to next

Steve Valiquette

taking for questions. Thanks Great. the

United individual MA total at know So, know membership it’s least I that from the at Medicare early, just I came membership look XX%. December, that growth advantage data versus these some almost Medicare but out calculating of and XXXX up January year-over-year will XX% trends we at trends. membership almost grew XXXX, the January investors are the advantage look was its others sequential versus that overnight,

of could one slightly which is suggest positive. key the in guess, that the obviously kind the I So, back that, above is trending hypothetically suggest of of growth, XXXX November this midpoint is you

your I to guess, curious be in to temperature, MA am a XXXX. Thanks. is there think I bias just So growth going your upside for take to I the membership just

David Wichmann

Brian Thompson, address that.

Brian Thompson

year Thompson. Brian question. our performance with in expected, had Hi, XXXX we line start full strong is suggests start Steve. from say a and is real the Thanks Sure, to what off I range. AEP the advantage for that certainly our point would

share the with consecutively of are some share growth which again, for with. Our suggest would fifth certainly very our be year does we us pleased

I opportunity meaningfully. opportunistic talked the think to in grow really environment XXXX provided past, an as we about really

would cognizant I and positioning in cautious an suggest took our for but in of think eye the improving health insurance benefits, our our we we also that XXXX. disciplined and capabilities XXXX very very potential for of stability established I regard, advantage with that of certainly and return were tax the benefit long-term

what So, really pleased with had nicely our positioning and with again I think we it aligns really expected.

strong XXXX. to a really So start

Steve Valiquette

great. Okay,

David Wichmann

Okay. Steve. Thank you,

please. Next question

Operator

Evercore go ahead. Please with Michael to ISI. next Going Newshel

Michael Newshel

year past intra-year lower versus and negative I down the prior favorable year prior Thanks. was break John, you reserve just anything development can than quarters. think

that pattern all is this and quarter's So, is performance? development underlying consistent, XXXX

John Rex

and here. John $XXX spend containment current overall billion how that I million XQ, $XXX in our objective million Michael. total Yes, development, the context continues well development material efforts manage indicative the favorable I to businesses medical across Sure accuracy. improve in be across year, to $XXX million to it enterprise. $XXX it's cost it prior really breaks our I'd of of had the put and we don’t that know Rex down year. of call that favorable

accuracy really cost they those have data some and detection and a of our But should to more of early bit them achieve. exchange We relates some with kind increasing longer in of increasing we level of take intervene. little different efforts, forms, to containment that hotspots it will of them across have as of to very ability electronic some near-term,

see you of sometimes mix current year. a year little in So, prior different terms and

Michael Newshel

Thank you.

David Wichmann

Michael. Thanks

please. question Next

Operator

with we Jefferies. to next go go Windley David ahead. Please will And

David Windley

John in I say the past has would squeezing me more the the Rex’s question first in. Hi, XX%, as in quarter. thanks EPS you been commentary. A but for understood, on cadence

in So but Is – that comments? I than in the you us just guiding comfortable the to wanted are interpret first you XX% first to more are quarter. clarify that or half, are the how to your Thanks. we

David Wichmann

question. Dave, the thanks for

we is it. Here view how

year-to-year, by pacing quarters So, that out factors. holidays or cannot as call impacted individual from be those fall. simple I’d as such of weekends when

is As we fairly know all stable. the yearly calendar

So most those it’s quarters just realize to benefits as are the UHC differences businesses. matter you variations a in would of and typically impactful

quarter in fewer days the quarter slightly XXXX. the So XXXX, has work first first than

also the generally compensation have impacts tax In of year. given the timing addition, that rate awards expect our the share-based we first quarter how of effective tax rate, to the and lowest

terms without full all So, of we more would prescriptive prescriptive the about in quarter. you your the recognized kind and without models, the are outlook of out first be overly and and getting your mix range still appropriately the knowing perhaps first year playing without roughly X% of in earnings in shift of consistent, that half is overly a how right I’d something XX% see but of getting suggest

David Windley

Thank you.

David Wichmann

you, Thank Are right. other questions? All any David. there

Operator

Wichmann for It no questions. you further final appears to Mr. we comments. return floor have the I’ll

David Wichmann

I appreciate value people. company the year in full today. fourth the and Okay. XXXX contributing strong to performance questions delivered the up, Well, the thank quarter sum To all genuine you.

society large. and the thank of I’d to Optum take are people privileged work. UnitedHealth good their XXX,XXX the to at to this for serve UnitedHealthcare to and We Group, opportunity like

and results are opportunity exciting. our We fundamentals The every you. in beyond are is is and to shareholders. growing potential the our a consistent remarkable earnings solid you XXXX. the confident in of to expect more operating in in our and for reliable continuing us businesses provide more worldwide U.S. and XXXX Thank day, ahead performance for and people deliver businesses in ways to There serve

Operator

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

may You now disconnect.

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