Q3 2020 Cigna Corp Earnings Call

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Good morning.

Ladies and gentlemen, thank you for standing by.

Third quarter 2020 results review at this time all callers are in a listen only mode. We will conduct a question and answer session later during the conference.

[music] procedures on how to enter the queue to ask questions at that time.

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A reminder, ladies and gentlemen, this conference, including the Q and a session is being recorded.

We'll begin by turning the conference over to Ms. Elecsys Jones. Please go ahead Mr. Jones.

Good morning, everyone and thank you for joining today's call I'm Elecsys Jones lead principal for Investor Relations with me on the line. This morning are David Cordani, Our President and Chief Executive Officer, and Eric Tolmar Cigna's, Chief Financial Officer in our remarks today, David and Eric will cover a number of topics, including Cigna's third quarter 2020 financial.

Plus our portfolio the.

The segment previously reported as health services is now reported as ever noise and the segment. Previously reported is integrated medical is now reported is U S medical.

There are no changes to the underlying businesses reported in either segment.

Regarding our results in the third quarter, we recorded and after tax special item charge of $83 million or 23 cents per share for integration and transaction related costs. We also recorded a special item benefit of $89 million after tax or 24 cents per share for contractual adjustments for a former client.

Finally re recorded a special item benefit of $76 million after tax or 21 per share for the receipt of payments related to our risk corridor claim.

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

Additionally, please note that when we make prospective comments regarding financial performance, including our full year 2020 outlook. We will do so on a basis that excludes the impact of any future share repurchases.

Finally, our outlook for 2020 assumes a full year of earnings from sickness group disability in life business. We continue to expect our divestiture of that business to be completed in the fourth quarter of 2020.

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

Thanks, Alexis good morning, everyone, but thank you for joining a call today.

Begin by providing a few brief comments on tuesday's election results with you shortly top of mind for all of us that will speak to how Cygnus strategy accelerated by our recent launch of ever nodes physicians us to continue building on our history of delivering strong performance and dynamic and rapidly evolving environments.

We will provide comments on a strong third quarter results. It'll concludes a few brief overview comments relative to 2021 before turning the call over to Eric.

First relative to the election.

Certainly, we all over everybody else away to see a clear and orderly conclusion.

Regardless of the final outcome, our mission to improve the health wellbeing and peace of mind of those we serve around the world has not changed is more critical than ever.

We are ready to continue engaging in critical discussions on healthcare with members of both sides of the aisle a federal state and local levels and we look forward to working constructively with the current administration or new administration as we have been privileged to do so in the past.

Looking forward the long term health needs of individuals and society at large transcends the results of any particular election or political climate.

There was no question that simply continuing with the status quo for healthcare is not sufficient under any circumstances.

For example that today's children are likely to be the first generation in American history to live shorter lives and their parents clearly this is unacceptable and the COVID-19 crisis is only reinforced are unsustainable healthcare challenges, including eroding individual health status.

Increase mental health impacts from heightened stress anxiety and loneliness.

Health disparity from social determinants of health and gaps in our health care delivery infrastructure.

Many usda's are seeing their healthcare systems overwhelmed they'll only exacerbated by the underlying chronic conditions, such as diabetes that increase the risk of severe complications from COVID-19.

The bottom line is that there is no one healthcare system that is perfectly positioned.

Interview, the conversation regarding health care must focus less on who pays the cost of an unsustainable system in fact systems around the world continued struggle with Unsustainability and rising costs, including nationalized systems. What is important is that we work together to find solutions to meet the diverse underlying needs that are unique to a population in the most effective way.

Possible.

Regrows, the political climate more than ever people governments and employers as well as health plans are looking for healthcare systems that focus on keeping people healthy and not just treating them under shake carrying for the whole person, both mind body and ensuring the most affordable high value delivery of health care services.

Cigna, we are delivering on this promise and our strategies designed to answer the call for healthcare system that is more affordable predictable simple.

Our strategy guides us to customized solutions to meet the diverse needs of our clients or customers on our patients and looked at every decision annex should we take to ensure is addressing the demands for more value.

We have a massive targeted portfolio of capabilities to accelerate this direction and when combined with our partnership orientation.

Our focus on data driven innovation.

Andrew capital flexibility we.

We are positioned to deliver differentiated value for those we serve and sustainable attractive growth.

As you know, we recently introduced every noise and evolution of our high performing health service portfolio and another important milestone and delivering on our strategy.

With <unk>, we have a distinct and dedicated platform of services and innovative healthcare solutions for health plans employers government organizations and health care providers.

The launch of this new branded September was met with overwhelming support and excitement from the fire groups through.

Through this dedicated platform, we're demonstrating our commitment to meet their unique needs and invest in their success.

Additionally, the platform further reinforces our position as the partner of choice to create more assured value for our clients and ultimate our customers.

A recent example of this is our growing partnership with Prime Therapeutics.

Through our prime relationship, we expand our retail pharmacy network and rebate administration services.

More Americans through their twenty-three Blue Cross Blue Shield plans, we achieved this by enhancing the retail pharmacy network and increasingly affordability from pharmaceutical manufacturers.

With ever North our relationship with Prime will be further expanded this includes the option for primes plans to access the Accredo specialty pharmacy and express scripts home delivery in network pharmacies, beginning on January one 2021.

Every north reinforces are deep commitment to leverage our broad capabilities to serve health plans employers government entities and healthcare professionals and pursue mutually beneficial partnerships.

From our express scripts combination and further administrative synergies.

We expect year over year headwinds from increased medical costs, largely driven by the ongoing impact of COVID-19.

Diving a bit more deeply into our growth momentum, we expect to drive continued organic growth across each of our well positioned platforms.

Specifically highlight strong growth within our pharmacy service portfolio, including specialty and underlying script growth aided by projected 98% client retention level.

You don't want you've ever north will for the fuel our strategy and expand our ability to serve more individuals.

Finally, as we usually do we look forward to providing more detailed and complete guidance for 2021 on our fourth quarter earnings call.

With that I'll turn it over to Eric.

Thanks, David Good morning, everyone. Today, I will review key aspects of sickness third quarter results, including the ongoing impact of COVID-19 on our business and discuss our outlook for the full year.

Key consolidated financial highlights for the third quarter of 2020 include adjusted revenues a $48 billion.

Adjusted earnings at $1.6 billion after tax and adjusted earnings per share of $4 41.

Our results this quarter and year to date reflect focused execution across our businesses in a dynamic rapidly evolving environment.

Regarding our segments I'll first comment on over north.

Third quarter adjusted revenues grew to $30 billion and adjusted pretax earnings grew to $1.4 billion.

As previously discussed and everhart the cadence of quarterly earnings is more typical in 2020 that in 2019, where earnings were more waited to the second half of the year due to the timing of certain supply chain initiatives.

Our providers, we've implemented a variety of financial assistance programs.

I'm proud of the way that we had segment continued to respond to the pandemic in support of our stakeholders.

Turning to membership we ended the quarter with 17 million global medical customers less than a 1% decline sequentially.

Well you know what businesses, we expect medical utilization to remain at more typical levels with continued direct costs of COVID-19 testing and treatment and we expect some increase in commercial disenrollment due to continued dislocation in the broader labor market.

In the fourth quarter, we will also continue to make investments to support our clients customers and employees in this disrupted environment.

I've taken as a whole we now expect full year 2000, Twentys consolidated adjusted revenues of approximately $158 billion and we now expect full year consolidated adjusted earnings per share in the range of $18.30 to $18.60.

I would remind you that our financial outlook excludes the impact of future share repurchases and assumes a full year of contributions from our group disability and life business. Although we continue to expect our divestiture of that business to close in the fourth quarter.

Overall these expected results are driven by strong underlying fundamentals disciplined expense management and the effective deployment of capital.

Now moving to our 2000, Twentys capital and liquidity position and outlook third quarter cash flows from operations of $895 million reflects the additional third quarter tax payment of approximately $826 million that was delayed from the second quarter as permitted under the cares act as well as the payment.

A $445 million for the health insurance tax for the full year.

Through the end of the third quarter cash flows from operations were $6 billion and for 2020, we now expect cash flows from operations of greater than $8 billion.

Our businesses generate a substantial amount of cash flow and in combination with $5.3 billion in net proceeds expected from the sale of our group disability and life business, we have significant capital and financial flexibility.

Through the end of the third quarter, we deployed $1.7 billion to debt repayment and our debt to capitalization ratio of 42.8% as of September Thirtyth is improved from 45.2% at December 30, Onest of 2019.

And as we closed out the second quarter, we had to make estimates around the claims associated with the month of June now with the benefit of hindsight.

Utilization in the month of June came back a little bit faster than we previously estimated it so the way I'd have to think about this just in is we recorded about one point in the loss ratio in the third quarter that really should have been back in the second quarter. So again think about 100 basis points on the loss ratio in this third quarter results really.

Needing to in year Reserve development.

Associated with the second quarter.

The the headlines in terms of the reserve development.

As you think about the pieces that would point that primarily to the the commercial business in terms of the the line of business et cetera.

The utilization, we accrue for that in the period. So I would not think about there being any future headwinds here any kind of the dynamics associated with lower utilization are already reflected in the results and then the.

And the current period, so I would not think about that as a headwind in the future.

Thank you.

Thank you for your question Mr. Taylor. Our next question comes from Steve Ballmer with Barclays. Your line is open.

Hi, Good morning, Mrs. Andrew Mark on for Steve wanted to revisit the Medicare advantage growth targets when you're on Delta New M. A strategy last year, you laid out 10% to 15% membership growth targets with 2020, serving as a steppingstone year, you're now on track to outperform the high end of that targeting your one and it looks like you'll have a very attractive product offering for 2021.

So is it fair to say that your formal growth targets, even at the high end might be a bit conservative when we think about 2021 membership growth.

Thanks, Andrew Good morning, it's David Thanks for the frame you. The question. So stepping that we're delighted with our performance in 2020 for starters and as we laid out that multiyear 10% to 15% growth objective. We also underscored. The fact that we were going to systematically expand our positioning in the market from less than two.

20% of the addressable market in 2019% to 50% of the addressable market in 2024, So we're systematically expanding our geography's and we've added a new platform in terms of individual PPO in 2020, so that continues to carry forward as it relates to 2021.

Our view of our strategic are positioning of our offerings in the marketplace. We feel quite good about that and as I noted my prepared remarks, and we have a strong base to jump off of relative to 80% star rating in a net promoter score of 74, we remain committed to that 10% to 15% range of we look forward to providing you updates as we go forward always strive to.

Perform in our best and I appreciate your optimism and make sure that the the senior team knows.

Your optimism as well relative to this but we are excited and 2020 with a strong gear and seven to 2021 with some great growth momentum and look forward to continuing that beyond 21.

Got it and if I could just have a quick follow up how are you thinking about potential inorganic opportunities related to the senior platform. Thanks.

So specific to inorganic opportunities. We've continued to have a portfolio of inorganic priorities. We've historically had five priorities are so that we'd walk through and we previously refresh them about a year ago at our Investor day from that standpoint, and use seniors remains on that list.

The underpinning growth chassis for this business as an organic growth chassis to be clear.

So we will be opportunistic open.

Open minded relative to inorganic opportunities, but the growth chassis here is an organic growth chassis aided by her and market growth our platform expansion individual PPO are new market entry, which I referenced before as well as overtime additional employer ranked whip growth from that standpoint. So.

It's organic first and opportunistic on inorganic as appropriate in the future.

Got it thanks for the color.

Thank you for your question Mister Battle plan as a reminder, we ask that you. Please limit yourself to one question.

Sufficient time for questions from no remaining in the queue.

Our next question is from a J right, Let's credit Suisse. Your line is open Sir.

Hi, everybody.

Maybe just about.

About I think this is the first quarterly call you've done since you establish the average or business.

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Maybe just give us a little bit of your thinking behind.

Vision to move that into the separate entity begin to have its own brand identification.

What does it say about.

Where the company's goal in terms of incremental business lines that that might pursue accurate.

Acquisitions service capabilities.

And just give us a little bit more you think thinking about where you're going with the ever north business.

AJ good morning, if David.

So specifically relative to have her north as I noted we're quite excited.

To have launch out in September we.

We view it as a further reinforcement of an an acceleration of our health service strategy we've.

We've talked for quite some time as a business and evolving business portfolio of services and a health service portfolio specific ever Northway I'd ask you to think about it as one it's a further reinforcement of the dedication we have resources for supporting Lar.

Large complex employer needs.

Health plan needs governmental entity needs, both federal as well as the state agency needs as well as healthcare integrated systems healthcare Provider's, who were taking performance based risk revalue based programs around that within our portfolio today, we have a large well performing pharmacy services portfolio of solutions.

Benefit management solutions, driven forward to the marketplace with care management solutions, and a growing portfolio of data and analytics solutions from that standpoint, and lastly to your comment we see this is not only unattractive organic growth platform and our performance reinforces that we're building from strength.

It also an opportunity for tucking or expansion capabilities as we go forward.

Illustrative Lee from that standpoint.

We continue to see the opportunity to expand services that we offer to individuals.

Dish and in terms of furthering the affordability dimension of it but also bringing some more sales.

Stemming flexibility for solution design.

That we can bring toward middle market and larger clients from that standpoint, and I would say that that continues continued traction relative to the integrated proposition in addition to that.

Our results show the underlying strength of the pharmacy services from a point solution as we think about it or a specific either PBM PBM in specialty or broader suite of services around that and then to revenue as we see the opportunity to further expand that by coordinating say.

So Kevin good morning, it's David.

First as we get into the commercial conversation I do want to pause for a second.

And recognized from what we see is just a tremendous contribution that employers are making right now in the disruptive times facing coded we're seeing employers of all sizes work stretch innovate.

While we expect to see some continued this enrollment pressure.

Our outlook relative to growth is quite positive with some noon traction 2021, we expect to see some slight growth going forward. So all in all.

Highly disrupted environment, we're very pleased with the results were able to deliver and we're fortunate to be partnered with so many commercial clients that are putting their customers or employees first front and center.

Okay, great. Thanks.

Keeping your question Mister Pinchbeck. Our next question is from Rob could tell me what city, you're lying to happen sorry.

Great. Thanks. Good morning, I was hoping you could talk a little bit more about how the onboarding a prime is gone and the opportunity not just on the retail but on the specialty side and how the option or I guess option, perhaps works for each of the blues and then what impact that could have either in 2021.

Or if we have to consider a certain costs and whether it's more of a 2022 at that.

Good morning.

So first and foremost.

Relative to prime as I noted in the prepared remarks.

We work everyday.

Ask about the level of medical trend, particularly in your commercial book, but but Medicare too that you're seeing now and I'm trying to understand if if we put aside the actions that you've taken to grant relief to patients and providers and just look at it from the standpoint of the recovery in Utah.

Elevation, plus the direct costs of Covid R U below trend above trend rat trend and where do you expect that to go as we get into next year.

Good morning.

With with respect to the the puppy touched on it a little bit my prepared remarks, but.

I would have you think about putting covid aside utilization.

Slightly below kind of what we would have said what to be normal so call at 95.

Uh-huh percent for the third quarter in terms of kind of normal levels of utilization when you add on top of that the impact of testing and treatment for covid.

And on top of that the additional actions that we've taken to reduce barriers or reduced cost sharing in touch the jerk our customers have access to the care that puts you all together a little bit above the normal and you might remember the second quarter, we had an expectation that the loss ratio.

For the second half of this year would be elevated relative to what otherwise might call me a normal loss ratio. So they put those pieces together those are the big building block. The only other thing I would note is it really does vary by geography, So as we've had the covid play.

In and out of different geographies that kind of move things up and down and such that but again when you roll. It all up together an aggregate would be consistent with with what I've just described.

Thank you.

Thank you for your question Mister Barnes. Our next question is from Dave Windley with Jeffries. Your line is open Sir.

Mr. When they are you on mute.

Mister <unk>.

To hear you've what's your question.

[noise] move onto the next question, who is Scott Fidel with Stevens your I'm sorry.

Double and Triple CVI. Thanks.

Joe It's David let me take in reverse order so when.

When we stepped forward and put forth the CP.

CPI goal and objective I think caused the market to.

Question, whether or not that was a theoretical on possible or otherwise.

It was a conversation that needs to be had because we established it around an orientation that it it was a symbol of sustainability not that it was perfect, but as a symbol of sustainability said otherwise.

If total basket of goods cost from a societal standpoint are increasing by X. whatever X is 2%.

The way I hear your first point, though more broadly is it's another example of pressing for sustained affordability.

240, B was designed with a specific purpose and intent in mind.

There are many hospitals and delivery system infrastructures that need 340 be to make them work. It's an interesting time to have that conversation whereby delivery system infrastructures are strained in ways, we haven't seen in the past.

Due to Covid.

Causing massive revenue ramifications of which governmental intervention and someplace by herself and others in our space or providing support from that standpoint. So it's an interesting time to have that theoretical conversation, but unlike most programs that will most likely evolve and our broader service portfolio positioned to evolve with it.

Thanks, so much.

Question. Thank you for your questions from our next question comes from Robert Counts with Goldman Sachs. Your line is open Sir.

Great. Thanks for the question I guess, just a couple of clarification on ever North first just to follow up on Justice question on the integrated medical pharmacy offering I'm. Just curious if you are actually seeing less desire or less TBM carve outs in the market today or is it still something more of a discussion point with with your customers and then just on the quarter every.

North did see a fairly meaningful step up and Opex you touched on some of these items. Just just curious is that kind of more one time in nature. This year versus next year is this probably or potentially a more permanent level of spend as we think about the ever north business.

Good morning, Robert David I'll take the first question and I'll ask Eric to adjust your second question.

The simple answer is no we don't see a sea change in terms of buyer behavior relative to wanting more or less up it's one client at a time.

We have a very much of a consultative orientation trying to find the right configuration of benefits and funding mechanisms that work for clients now within that.

Select segment is an integrated offering full.

Full stop period, the end designed to be an integrated offering whether it's on an asshole platform or a guarantee cost platform as you move upmarket in the commercial employer space with a middle market National accounts you.

You see different buying behaviors and it ebbs and flows and I think the important message here is that as an entity. We are extremely well positioned to deliver what a client wants whether they want to fully integrated offering.

Whether they want a solution a best in class PVM or best in class specialty pharmacy or both from that standpoint, or increasingly you are looking to get some additional value off of coordination of services via care management services, behavioral et cetera relative to that but I wouldn't say there is a sea change I would say think about ever north and Cigna.

Together as being extremely well positioned to deliver on the value that buyers want be integrated point solutions. If you will stand alone pharmacy services in this case or allowing some coordination of services to get another step function, Nevada to come along with that Eric.

G&A ratio particular, just a couple of things that come out here at the most macro level. We do continue to spend and continue to invest in building additional capabilities in this business and you'll see that in the in the Jna there are a couple of other.

Impacts I'd call out as well Ah one as you might remember we talked a bit in the past after the close of the acquisition kind.

Rebuilding of amortization, so so the amortization on the atmosphere acquire gets reset and then we have to rebuild that expense into that is built over the.

Overtime offsetting that is continuing to work to find synergies and find additional efficiencies. So it's again those would be the biggest buckets that play into that ratio in any given quarter, but we will be looking to continue to spend to build additional capabilities. There as we go forward.

Great. Thank you thank.

Thank you for your question Mister Jones. Our next question comes from Charles where you with talent.

Alright.

Mystery. Your line is open on mute.

Moving onto our next question is from Lance well Sweat Bernstein. Your line is open sorry.

Yes, good morning.

Just had a question on the prime therapeutics opportunity and maybe if you could help us to frame that as far as like what what's the further penetration into the existing relationship how could penetration improve as you kind of do direct relationships or subsequent relationships with other blues and then.

They are sold through so that you get carved out less how does that improve ruiz.

Prime penetration opportunity and then maybe just as a clarification you mentioned decreased specialty contribution in.

In the prepared remarks, if you could just maybe clarify what that meant as.

As well thanks.

Lance Good morning, it's David I'll take the first part of your question to ask Eric to take the second part of your question.

I think to add frame. The first part of your question broadly is first and foremost, but we need to earn the right to serve clients each and every day.

We were fortunate to be selected to be a partner with prime as we sit up the opportunity earlier. This year began servicing them in April and those service offerings are working quite well that positioned us.

And was reinforced with a commitment would have in order to expand those services and we will have the ability to grow in a choice based on the prime participant prime participants as they so choose relative to our specialty pharmacy in the lake It allows us to have.

An opportunity to mutually grow together your point relative to the cell through and otherwise our team is focused on strengthening the value proposition of prime and of the crime members remember plans tap more value to offer to their customers and grow their portfolio businesses full-stop that as the commit.

<unk> of the team supporting the prime relationship and therefore, it should allow for us to continue to grow off of the existing platform. It should allow for us to continue to grow as the prime.

Representation gross and it should allow for us to continue to grow as to your point, they're sell through has more traction on a go forward basis and our business model is designed to do so so stay tuned for more but the positioning that we have today you love because now I won't be able to leverage our high performing specialty portfolio as well as our very strong and while performing a male.

Pharmacy services operation for their benefit Eric got the specialty contribution last so.

To the comments that I made of around specialty contributions here refers to the portfolio a specialty capabilities. We have is benefits overall, so things like that adult behavioral disease management care management et cetera, et cetera et cetera. This has been a core part of our our go to market approach for some time and a high performing business because you know we did.

Caller.

Lower contribution from these products and the quarter I would have you think about a couple of items here. One as an example, we've seen significant increases in behavioral costs in 2020, and the third quarter in particular utilization there above our prior expectation as we proceed stresses of anxiety take a.

All just on the mental health of the nation writ large one and then to Doug impact of volumes right. So as we have.

A little bit of a lower volume that comes through this business as well, but those will be the items at.

I would refer to in terms of.

Specialty contributions.

Okay, great. Thanks.

Thank you for your question Mr. Welsh. Our next question is from Sarah James with Piper Sandler Your line is open ma'am.

Thank you.

Hello.

Looking back at the transcript to the second quarter and I know at that time, we talked about.

Not seeing a slowdown in clean 60.

July 30, but then today, you're talking about 100 basis points.

Q MLR being related to June and so it sounds like there's a slow down and cleans your seat in gene that maybe wasn't there in April or May.

I'm wondering as a result of that did you change your assumptions in completion factor for how you reported three Q and so what percent of cleans 60.

60 days out at greater and was there any impact on how you think about is there is there a DCP.

Results with that.

Hi, Sarah it's Eric so on the.

Do you have a good memory remember your question from the last call as well on that front and I would still say, we haven't seen a change in speed of submission or anything along those lines from a.

From from our claims perspective of the month of June as I noted in response to one of the other questions and then my prepared remarks.

The most recent months, we estimate really based more off of our estimation of activity not so much extrapolating from kind of a claims that had been received yet or anything along those lines. So so as I noted all else equal we would have picked for the month of June now a bit higher than what we did a quarter ago, but but think of that is.

Is pretty isolated in terms of the impact as we now have looked at the development of June I looked at our experienced in July August September or even the emerging experience from October.

Steve quite consistent in terms of the return to normal.

The levels of utilization level of the speed of processing et cetera, and if you look at our days claims payable metric while at metrics not perfect. So you actually a pretty good degree of consistency in terms of.

Basically available metric for where we sit here at the end of the third quarter of 2020, compared with prior third quarters or things along those lines. So so at a macro level quite comfortable that we've got the the right estimates and such here.

In the estimation of claims and the.

The overall speed of utilization et cetera.

Okay, I guess just to be more specific when you put it through Q Emma lie.

Did you have seen.

Whatever.

Factor in Jean.

<unk> continued TQM, a lifestyle and whether that's a slowdown.

Ends up being conservatism instincts either way.

Positive development that did you did you call back consistent.

Yeah, I think so.

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Yes. So we played through the assumptions consistently by months of took I've just to unpack that a bit further we had estimated the month of June I made some comments a quarter ago about.

June being closer back to normal levels of utilization with the benefit of hindsight it was much.

A much closer to normal so previously think about that as having been.

The single single digits closer to kind of a zero level of a variation from utilization and we've played those types of assumptions all the way through in terms of each of our estimates for the month since then so.

Again, we would think the June impact was isolated to the month of June.

Thank you for your question MS. James Our next question is from Stephen 10, all with acid VB, leaving your line is open.

Good morning gains. Thanks for the question will stay with that and I hope the follow up on your comments on the commercial market and clarify the point of that enrollment of 2021 and EBITA went back installing season for group accounts I think I hold national accounts enrollment will be down thunderstorm form along but offset by selected mental Margaret shrimp.

Just wanted to clarify wall and I'm also wondering which you can elaborate on your comment on a more options and planes are taking response to the palm lawmakers. It relates to this business have you seen benefit by bond with what kind of innovation that you mentioned the resonating with employers into 21, maybe just give us a sense for our pricing is going in the.

Vehicles insured side as well that would be helpful.

Good morning, let me take in reverse order so of specific to employer actions.

Odyssey unique to each employer, but if we step back and talk about a few of the general trends.

First and foremost the press for improved affordability and value transcends buyers of all shapes and sizes and through both prepared remarks inner dialogue today, we continue to reinforce the actions, we're taking relative to further improvement of affordability and value.

Trend deflection and the like from that standpoint, and a results remained quite strong relative to that beyond that employers are both reaching so expanding services over self funded employer determines are they going to waive that cost responsibility for individuals around testing around treatment from that standpoint example, one too.

Are they can expand services for telehealth or virtual service fulfillment at little to no cost from that standpoint, many employers have expanded those services third pressing as Eric articulated before to recognize that the behavior health challenges that have been ramping from a societal standpoint, as we've been oriented around <unk>.

<unk> have stepped up to another threshold level, so reaching for identifying additional will call behavioral health and wellbeing services to help to deal with beyond the core of what mental health services are dealing with around stress around anxiety around resiliency around loneliness from that standpoint, So we're seeing employers.

Step into a whole variety of actions impressed from an innovation standpoint pressed themselves from our care delivery standpoint, et cetera, before we get to the decisions. They make when they decided to furlough somebody versus lay them off to try to have continuity of benefits for the benefit of those individuals back to the comments relative to the selling season amongst trying to prove.

Had a little bit of direction. There. So let me punch that up a little bit, but we'll go through the.

The appropriate detail on the fourth quarter call. What I indicated is as we look at the overall commercial medical customer environment first and foremost our results through three quarters of this year are strong given the dislocations happened in the environment.

And our overall portfolio continues to perform well from that standpoint second I indicated that as we sit here today, we would expect that the medical membership that will end the year with and we expect to see continued issue enrollment pressure throughout the course of of this year. The medical membership that will end this year with will be about the same medical membership will have on January one plus.

Minus this puts and takes there there's always some loss accounts, although our retention outlook is quite strong there's always some one accounts for that come through from that standpoint. Additional moment will continue net of all that in the month of January or estimation is that will be about stable and that will see some membership growth throughout the course of the year.

And part what you heard with that is the select segment sales every month every month is the most important month for that segment. So we will see continued growth contributions come along relative to that we have visibility relative to some additional growth in the mid part of the year and then ultimate we're expecting that that just a moment pressuring 21 will continue.

M-hm throughout the first.

First half plus of 2020 months hope that color helps you kind of shape, both what we're seeing in terms of the buying environment as well as what we're seeing relative to outlook.

Thank you. Thank you for your question Mister <unk> All our next question is from George Hell with Deutsche Bank. Your line is helping Mister Hill.

Yeah. Good morning, guys Miss is actually a bit of a follow up on Steve's question, which is kind of given the rapid growth of telemedicine and all the digitally enabled two solutions that we've seen come to market over the last year or so can you talk about the demand selling season for the digital formulary solution in the inbox specialty insurance products and I guess, how how far away do we think they are from being meaningful.

Computers to the <unk> segment.

Good morning, it's David so.

As we step back to think about there's two different examples use the digital formulary and embark but embedded in the first part of your comment.

If we look at what the Covid environment has done.

It's probably jumped multiple years of adoption relative to additional services from that standpoint, not unique to our industry, but specific to our industry.

As we take telehealth and knows we take the kind of re envisioning what can be fulfilled in the home both safely and highly personalised way in a more affordable way leveraging technology in a different way so we see.

Virtual care, so taking telehealth, a little bit more broadly in a more comprehensive way as a market trend that will not reverse itself.

We will see some both tremendous adoption growth and importantly value for individuals not just from an affordability standpoint, but from a personalization standpoint through that lens and there are a variety of initiatives. We have both through partner relationships. We have organic initiatives, we have in the lake specific to digital formulary and embark.

Not ask you to think about any one launch within our portfolio as the lunch or the silver bullet rather we're really proud of the fact that even over the first two years as a combined corporation. We've had a consistent drumbeat of new innovations and new offerings that we've been able to bring to market for the benefit of our existing.

And prospective clients that we're able to serve through that through the Avenue a framework and there is a dedicated innovation infrastructure and body of resources. There. So the digital formulary has had very good receptivity.

Embark embark is a little bit of a different value proposition, where it's client by client opportunities, but it also is indicative of us changing the narrative trying to take a problem statement that society. You said is unsolvable relative to the high cost game changing super specialty drugs from that standpoint.

Trying to turn it into a more affordable predictable simplified offering and you should expect us to bring more offerings that came to that to the marketplace. So we see those as positive contributors.

Indications of also our conviction relative to innovation and conviction relative devalue delivery and it's contributing to our avenue of growth growth Cassie.

Thank you for your question. Our next question is Ricky go walking with Morgan Stanley.

I'm Your line is open.

Yeah, Hi, good morning, Biosimilars was highlighted is.

Gross driver this quarter and some of the supply chain calls.

When you think about the impact of Biosimilars unexpressed into quarter have you seen any any outside Tennessee and also just how do you think.

Biosimilars positioning.

Scene formularies versus.

Their products.

Get Briquettes, Eric I'll start.

In terms of calling anything out in the quarter I really wouldn't note any particular impact I think.

The potential here is meaningful in the future. So quite excited about the future opportunity is is there are more therapies and treatments in the market and things along those lines, but I wouldn't call. It anything related to the third quarter in terms of notable impact imbricate picking up on Eric's point.

Agree with his statements inspect picking up on the opportunity as we think about Ah biosimilars from a U S. Societal dimension it represents a tremendous opportunity.

Well it is grounded in supply chain, it's by no means limited to supply chain, because the biosimilar dimension you need to have.

Deep and broad clinical acumen, both in the pharmaceutical arena, but then the additional reached within the practicing physicians to ensure that the decisions made one patient at a time are grounded in the appropriate clinical orientation and is it combined corporation now we not only have the supply.

Hi chain infrastructure, and the deep and well performing pharmacy clinical infrastructure, but we have deep medical relationships, we value based care of in the line relationships that position is quite well and we're excited to get on with Biosimilar adoption right, where the us if we're honest with ourselves flags some other countries relative to.

The approval rate and from an affordability and value standpoint, we need to get on with it and we are well positioned to combine corporation to deliver great value there.

Thank you for your question I missed a couple of Gloucester. Our last question is from Charles re with calling your line is open Sir.

Hi can you guys hear me.

Yes, we can okay, great. Okay. Thanks.

Thanks for squeeze me in here and just.

Maybe a two part question here first on on vaccines.

Potential covid vaccine coming can you talk about sort of the how.

How that kind of impacts the company both positive from our I guess, a revenue standpoint, and a cost standpoint.

And talk about sort of what.

How.

Pricing and reimbursement as as you understand it maybe at this point I know it's very early.

Could happen because I understand that the government has has bought our first big tranche of a vaccine.

How do you understand the distribution of that to work.

Particularly as we think maybe more from the <unk> side, and then secondly related to that I think yesterday Biogen had a very positive AD com meeting for then you're all Simers truck.

Yeah and maybe.

If you could take Walters.

Or Eric how are we should think about that impacting maybe the every month business.

Is that something you'd expect to.

Just repeat to the Accredo brand and is this something that would fall into the embark program as well. Thanks.

Good morning, it's David so.

And your first point, there's multiple dimensions within that that's the stepping back on the vaccine.

In the current configuration, we don't step step into this viewing that the vaccine presents a unique revenue generation opportunity at the service opportunity it'll be facilitated through ever north for sure.

Reising, the reimbursement structure et cetera that will evolve will be very based on the specific vaccines that manifest themselves as you know.

Our political leadership team is highly embedded in the national dialogue relative to this including the the distribution complexity that comes along with these vaccines that our society is starting to get their arms around relative to more than one dose the continuity needs to transpire, how society will be kind of <unk>.

<unk> from medical professionals through first responders to high risk individuals et cetera, and we are well configured as a a large service provider to be in support of an in service to that initiative and we look forward relative to that our team is taking prudent estimates relative to what we think the cost of the vaccines would be relative to.

2021 outlook as well through that lens I am as it relates to.

The Alzheimer drunk I think it's a another good example of ongoing innovation, whereas we hit the pause button for a moment.

And recognize the vast majority of innovation in the present environment and as we travel a forward.

Around healthcare innovation is and will continue to transpire pharmaceuticals.

Right. The chapter is evolving on an accelerated basis that clinical integrate.

Innovation globally will be heavily pharmaceutical oriented from that standpoint, and the alzheimer drug which is quite exciting from a societal standpoint is also extremely complex.

And costly, hence having market, leading specialty pharmacy capability pure accredo position does quite well and to your last point presents additional opportunities to potentially expand the embark program, which we would suggest would transpire over time. So I think it's a good concrete example of what the future has in store relative.

We have two very exciting and life changing drugs, but also highly complex and costly and having the capability to be able to serve and support that whether through the alzheimer drug you just questioned or previously Ricky question relative to Biosimilars going the other way or ever north portfolio, and it's really well positioned to be able to create great value for society here.

Thank you for your question Mystery I will now turn the conference over to Mister David Court any for closing remarks.

Thank you so as we wrap up here I would like to first and foremost acknowledged sickness more than 70000 colleagues around the globe, who again it worked tirelessly and with great empathy throughout this pandemic in support of those were able to serve around the world customers patients and clients are mission signet to improve the health wellbeing peace of mind of those we serve has.

Has never been more important and continues to guide all the actions specific Avenue. It represents an exciting new chapter for a company and along with our other growth platforms, we seek to leverage our broad suite of capabilities to create innovative and flexible solutions to tackle some of society's toughest healthcare issues and.

Drive sustained growth.

From a results perspective, we once again delivered strong results this quarter and remain on track to complete the integration of Sigmate Express scripts by the end of this calendar year.

We're also well positioned to deliver very strong revenue in ETS outlook for 2020, as well as our 2021 EPS target of $2021 per share with that we thank you for joining our call hope everybody remains healthy and safe in these trying times. Thanks.

Ladies and gentlemen. This concludes taking this third quarter of 2020 results review segment Investor Relations will be available to respond to additional questions. Shortly.

Recording of this conference will be available for 10 business days. Following this call you may access to be quoted conference by dialing one 808 398789.

Two O 33693 037.

There was no pass code required for this replay. Thank you for participating we will know disconnect.

[music].

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Ladies and gentlemen, thank you for standing by.

Third quarter 2020 results.

At this time all college.

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The question and answer session later during the call.

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Reminder, ladies and gentlemen, this conference.

The <unk> session is being recorded.

Begin by turning the conference over to Ms. Elecsys Jones. Please go ahead Mr. Jones.

Good morning, everyone and thank you for joining today's call I'm Alexis just lead principal for Investor Relations with me on the line. This morning are David Cordani, Our President and Chief Executive Officer, and Eric Palmer Cigna's, Chief Financial Officer.

In our remarks today, David and Eric will cover a number of topics, including Cigna's third quarter 2020 financial results as well as an update on our financial outlook for 2020.

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

A reconciliation of these measures to the most directly comparable GAAP measures shareholders' net income and total revenues respectively is contained in todays earnings release, which is posted in the Investor Relations section of Cigna Dot com.

We use the term labeled adjusted income from operations and adjusted earnings per share on the same basis as our principal measures of financial performance.

In our remarks today, we will be making some forward looking statements, including statements regarding our outlook for 2020 and future performance.

These statements are subject to risks and uncertainties that could cause actual results to differ materially from our current expectations.

A description of these risks and uncertainties is contained in the cautionary note to today's earnings release and in our most recent reports filed with the FCC.

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

First with our reporting for third quarter 2020, we have updated our segment names to align with our launch of ever north and to better reflect the suite of services offered across our portfolio.

The segment previously reported as health services is now reported as ever North and the segment previously reported as integrated medical is now reported as U.S. medical.

There are no changes to the underlying businesses reported in either segment rugs.

Regarding our results in the third quarter, we recorded an after tax special item charge of $83 million or 23 cents per share for integration and transaction related costs. We.

We also recorded a special items benefit of $89 million after tax or 24 cents per share for contractual adjustment for a former client.

Finally, we recorded a special item benefit of $76 million after tax or 21 cents per share for the receipt of payments related to our risk corridor claim.

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

Additionally, please note that when we make prospective comments regarding financial performance, including our full year 2020 outlook. We will do so on a basis that excludes the impact of any future share repurchases fine.

Finally, our outlook for 2020 assumes a full year of earnings from Cigna's group disability and life business. We continue to expect our divestiture of that business to be completed in the fourth quarter of 2020.

With that I will turn the call over to David.

Thanks, Alexis good morning, everyone. Thank you for joining our call today.

Begin by providing a few brief comments on tuesday's election results, which are certainly top of mind for all of us.

Then ill speak to how cigna's strategy accelerated by our recent launch of Evernote positions us to continue building out our history of delivering strong performance in dynamic and rapidly evolving apartments.

Also provide comments on our strong third quarter results and I'll conclude a few brief overview comments relative to 2021 before turning the call over to Eric.

First relative to the election.

Certainly, we along with everybody else await to see a clear and orderly conclusion.

Regardless of the final outcome, our mission to improve the health well being and peace of mind. Those we serve around the world has not changed and is more critical than ever.

We are ready to continue engaging and critical discussions on health care with members of both sides of the aisle federal state and local levels and we look forward to working constructively with the current administration or New administration as we had the privilege to do so in the past.

Looking forward the long term health needs of individuals and society at large transcends the results of any particular election or political climate.

There is no question that simply continuing with the status quo for health care is not sufficient under any circumstances.

Take for example that today's children are likely to be the first generation in American history to live shorter lives and the parents clearly this is unacceptable and the Carbonite in crisis has only reinforced our unsustainable health care challenges, including eroding individual health status increased mental health impacts from heightened stress anxiety loneliness.

Health disparities and social determinants of health.

And gaps in our health care delivery infrastructure.

Many states are seeing their healthcare system global oil then only exacerbated by the underlying chronic conditions such as diabetes. The increase the risk of severe complications from COVID-19.

The bottom line is that there is no one healthcare system that is perfectly positioned.

Or an excitement from the viral groups.

Through this dedicated platform, we're demonstrating our commitment to meet their unique needs and invest in their success.

Additionally, the platform further reinforces our position as the the partner of choice to create more assured value for our clients and ultimate our customers.

A recent example of this is our growing partnership with Prime Therapeutics.

Through our prime relationship, we expand our retail pharmacy network and rebate administration services.

Two more Americans through their twenty-three Blue Cross Blue Shield plans.

We achieved this by enhancing the retail pharmacy network and increasing affordability from pharmaceutical manufacturers.

With ever North our relationship with Prime will be further expanded this includes the option for primes plans to access the Accredo specialty pharmacy and express scripts home delivery in network pharmacies, beginning on January one 2021.

Ever North reinforces are deep commitment to leverage our broad capabilities to serve health plans employers government entities and healthcare professionals and pursue mutually beneficial partnerships at.

At the same time, we are continuing to further investment Signet brand under which are use commercial use government and international businesses go to market.

We will continue to be known for a customer and client focused approach.

And for delivering industry, leading trends and I'll Tammy customer service for example, I am pleased to announce that our Medicare advantage business achieved an annual customer net promoter score of plus 70 for the fourth consecutive year. We've shown an increase in addition in 2021, 88% of our customers will be enforced or.

Plus rated plans and we are the only major plan to achieve an increase year over year.

This is just one example, an important one of how our signet rated companies will continue to deliver differentiated value in the marketplace.

With Cigna and the recent addition of ever North platform. We now have two powerful brands from which to drive sustained growth today and well into the future.

Now turning to the third quarter performance, we delivered strong results that were in line with our expectations as a result, and as expected we experienced the return of elevated utilization to more typical levels and ongoing impact of COVID-19.

We also continue to take actions to support our customers or clients or co workers are healthcare professionals and our communities in these exceptionally challenging times.

Additionally, we remain on track to complete the integration of Sigma Express scripts by the end of this year.

Our consolidated revenue was $48 billion with after tax earnings of $1.6 billion.

And our every north segment, we continued to deliver strong performance demonstrating the value we bring to health plans employers and governmental clients.

Within a used medical segment, we saw an increase in cost as expected as utilization return to more typical levels.

And our international business continues to deliver revenue and earnings growth as we meet the needs of our global customers as they navigate the disrupted environment due to COVID-19.

With our strong third quarter results. We are confident that we will achieve our updated 2020 revenue and EPS outlook.

Looking forward to 2021, we have a number of tailwind including continued growth momentum.

Favorable impacts from synergies from our express scripts combination and further administrative synergies.

We expect year over year headwinds from increased medical costs, largely driven by the ongoing impact of COVID-19.

Diving a bit more deeply into a growth momentum, we expect to drive continue to organic growth across each of our wall position platforms.

Specifically highlight strong growth within a pharmacy service portfolio, including specialty in underlying script growth aided by projected 98% client retention level.

And continued expansion of a U S government business, including Medicare advantage.

Where we continue to drive both strong market and product expansion as well as in market growth, putting us on track for customer growth and are targeted range of 10% to 15% in 2021.

And an individual exchanges, where we've increased our addressable market footprint by over 50%.

All in we our position for both very strong revenue and continue earnings growth in 2021, and we remain on track to retrieve our strategic goal of $2021 of EPS.

We expect a strong operating momentum and capitalized framework to drive attracted operating cash flows of greater than $8 billion.

This significant cash flow generation combined with our ongoing deleveraging will give us significant strategic and financial flexibility for 2021 and beyond.

Now to summarize before turning it over to Eric <unk>.

Sigma has a long history of delivering strong performance and dynamic rapidly evolving environments.

I never north.

Third quarter of adjusted revenues grew to $30 billion and adjusted pretax earnings grew to $1.4 billion.

As previously discussed and everhart the cadence of quarterly earnings is more typical in 2020 that in 2019 or earnings were more waited to the second half of the year due to the timing of certain supply chain initiatives.

Every north strong results in the quarter were driven by organic growth in customers and script volumes the effective execution of supply chain initiatives and continued performance an expansion of specialty pharmacy services through Accredo, our industry, leading specialty pharmacy.

We fulfilled $381 million adjusted pharmacy scripts of 22% increase over the third quarter of 2019.

Overall ever North continued it's positive momentum and delivered another strong quarter financial results.

Turning to our U S Medical segment third quarter, adjusted revenues were nine $6 billion, and adjusted pretax earnings or $757 million.

These results reflect unfavorable prior period development, primarily related to the second quarter of 2020.

COVID-19 related impacts and the return of the health insurance tax.

COVID-19 related impacts include the return of medical utilization to more typical levels. The direct costs of COVID-19 testing and treatment decreased specialty contributions and lower net investment income.

It also reflects the actions we have taken throughout the year to support our stakeholders in this disrupted environment.

For all customers, we continue to wave cost sharing for COVID-19 testing and treatment.

For our Medicare advantage, an individual and family plans customers. We continue to wave cost sharing for an office in telehealth visits for primary care specialty care and behavioral health.

For clients, we've provided premium relief programs and for.

For providers, we've implemented a variety of financial assistance programs.

I am proud of the way that we had sigma continue to respond to the pandemic in support of our stakeholders.

Turning to membership we ended the quarter with 17 million global medical customers less than 1% decline sequentially.

R U S. Commercial book of business remains resilient due to the industry mix of our clients and continued commitment that employers are making to the health and wellbeing of their employees through Carlos.

We also continue to see growth in Medicare advantage, where we've grown membership 18% through the end of the third quarter and we also continue to grow in the select segments.

Overall with the exception of the unfavorable prior period development results in R. U S. Medical segment are in line with our expectations.

Turning to our international markets business third quarter adjusted revenues were one $4 billion and adjusted pretax earnings were $208 million, reflecting continued operational efficiency lower claims due to COVID-19, and ongoing business growth.

For a group disability and other operations segment third quarter adjusted revenues were $1.3 billion.

Third quarter adjusted pretax earnings for the segment or $70 million, reflecting elevated life claims due to the pandemic.

For our corporate segment, the third quarter of 2020 loss of $366 million reflects lower interest expenses due to the lower levels of outstanding debt.

Overall as a result of focused execution and a dynamic environment, we continue to deliver value for all of our stakeholders and strong financial results.

Now looking forward to our outlook for full year 2020.

As we look to the balance of the year. We expect continued strong execution across our portfolio of businesses. We expect medical utilization to remain up more typical levels with continued direct costs of COVID-19 testing and treatment.

And we expect some increase in commercial this enrollment due to continued dislocation and the broader labor market.

In the fourth quarter, we will also continue to make investments to support our clients customers and employees in this disrupted environment.

Taken as a whole we now expect full year 2020 consolidated adjusted revenues of approximately $158 billion and we now expect full year consolidated adjusted earnings per share in the range of $18 30 to $18.60.

I would remind you that our financial outlook excludes the impact of future share repurchases and assumes a full year of contributions from our group disability in life business. Although we continue to expect our divestiture of that business to close in the fourth quarter.

Overall these expected results are driven by strong underlying fundamentals disciplined expense management and the effective deployment of capital.

Now moving to our 2020 capital and liquidity position and outlook third quarter cash flow from operations of $895 million.

Reflect the additional third quarter tax payment of approximately $826 million that was delayed from the second quarter is permitted under the cares act as well as the payment of $445 million for the health insurance tax for the full year.

Through the end of the third quarter cash flow from operations, where $6 billion and for 2020, we now expect cash flow from operations of greater than $8 billion.

Our businesses generate a substantial amount of cash flow and in combination with five $3 billion in net proceeds expected from the sale of our group disability in life business, we have significant capital and financial flexibility.

Through the end of the third quarter, we deployed one $7 billion to debt repayment and are desperate capitalization ratio of 42, 8% as of September 30th has improved from 45, 2% at December 31 of 2019.

We had $1.2 billion of cash available at the parents at the end of the third quarter and on a year to date basis, we have repurchased 16 million shares of stock for $2.9 billion.

Following the clothes or the group transaction free cash available to the parent is expected to be at least $7 billion and we expect to deploy 4 billion to $5 billion to return or that the capitalization ratio below 40%.

Our balance sheet and cash flow outlook remains strong benefiting from our highly efficient service based orientation, the drive strategic flexibility strong margins and returns on capital.

Now to recap our third quarter consolidated results reflect focused execution across our businesses and our dynamic rapidly involving environment with particular strength and momentum in our evernote segment.

We are well positioned to meet the financial targets. We've established for 2020, all while continuing to support our clients customers and employees and as such we now expect 2020 full year adjusted EPS of $18 30, $18 60 per share and remain on track to deliver on our target of 20% to $21 of adjusted earnings.

Per share in 2021.

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

Thank you.

Ladies and gentlemen at this time, if you do have a question. Please press star.

Why not and you catch downtown if someone asks you. A question ahead of you you can be yourself in the queue by pressing start.

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A moment please for the first question.

Our first question is from Justin language Wolf Research Sir your line is opening.

Thanks, Good morning.

I want to ask first can you give us a little more color on.

The negative development.

That you treated to the sight quarter in terms of the driver's meeting with picking up the game and then secondly can you give us any update on the on the deal clothes, what state's or what needs to happen to get those clothes and what you might give us some more pull some kind of thought process around capital deployment.

Giving post at the old clothes over the next 12 14 months, you'll have somewhere by my map $8 billion to $10 billion to deploy with thoughts on dividends things like that.

Thanks.

Thanks, Justin.

Good morning, So I'll start with the reserve development piece first so stepping back here a bit just to remind you as we look back to the second quarter, we had significantly lower utilization in April and May and as we closed out the second quarter, we had to make estimates around the claims associated with the month of gym now with the benefit of <unk>.

Site.

Utilization in the month of June came back a little bit faster than we previously estimated that so the way I'd have to think about this just in is we recorded about one point in the loss ratio in the third quarter that really should have been back in the second quarter. So again think about 100 basis points on the loss ratio in this third quarter results.

Relating to in year Reserve development.

Associated with the second quarter, that's the headlines in terms of the reserve development.

As you think about the pieces that would point that primarily to the the commercial business in terms of the the line of business et cetera.

In terms of the deal close to go to to go to that part of your question. We're on track for closing in the fourth quarter.

We have put out a release a couple of I've been September so a handful of weeks ago now, noting that we had 55 out of the 65 required regulatory approvals and we now have 63 of the 65 required regulatory approval. So we're.

Right at the cusp of getting that transaction closed in and.

David take the kind of forward looking comments in terms of capital deployment and like just and good morning I. Appreciate your question and.

Embedded in your question is acknowledgement of the strategic positioning of our portfolio. As you noted will be producing a significant you to produce a significant amount of cash flow that is deployable from that standpoint.

From our point of view stepping back is noted in Eric's prepared remarks, you saw that we were pretty active in the share repurchase domain over the third quarter.

And saw some tremendous opportunity there specific to your question is I noted, we're going to look forward to providing 2021 guidance on a fourth quarter call in.

You might expect that as we complete our group closure as Eric articulated in the fourth quarter and stepping into the first quarter, we have an opportunity not just to refresh our 2021 outlet, but also to refresh our capital deployment priorities and the like off of that very strong base. So we look forward to that conversation.

Great. Thanks.

For your question Mister like our next question comes from Gary Taylor would J P. Morgan.

I'm sorry.

Hi, good morning.

First the clarification than than a question.

In the slide deck you do.

Explicitly still point to the 20 to $21 in 2021, so I just wanted to confirm your explicitly.

Affirming that the day that it just wasn't featured.

Real prominently in the release I'd want to make sure on that.

And then my question is on your experience raided commercial business are they're gonna be premium or.

MLR headwinds because of the lower utilization as you move into 21 or has there been enough customer.

Relief so.

Speak.

You know that.

That dynamic.

Hi, various Eric so on the first one just to be clear guests. We are reaffirming the 20th 21 dollar target and.

And I don't think there's any ambiguity on that that's been a target we've had for some time and we continued to be on track for that sits again.

Answer to that question is yes.

The.

Experienced rated business so customers as our clients have different levels of <unk>.

Utilization and if there are favorable utilization, we accrue for that in the period. So I would not think about there being any future headwinds here any kind of the dynamics associated with lower utilization are already reflected in the results and and the.

In the current period, so I would not think about that as a headwind in the future.

Thank you.

Thank you for your question Mr. Tayler. Our next question comes from Steve Ballmer Clamp with Barclays. Your line is open.

Hi, Good morning, Mrs. Andrew Mark on for Steve wanted to revisit the Medicare advantage growth targets when you're on Delta New M. A strategy last year, you laid out 10% to 15% membership growth targets with 2020, serving up a steppingstone year. You are now on track to outperform the high end of that targeting year, one and it looks like you'll have a very attractive product offering for 2021.

So is it fair to say that your formal growth targets, even at the high end might be a bit conservative when we think about 2021 membership growth.

Thanks, Andrew Good morning, it's David.

Thanks for the frame you. The question so stepping back we're delighted with our performance in 2020 for starters and as we laid out that multiyear 10% to 15% growth objective. We also underscored. The fact that we were going to systematically expand our positioning in the market from less than 20% of the addressable market in 2019.

250% of the addressable market in 2024, so we're systematically expanding our geography's and we've added a new platform in terms of individual PPO in 2020. So that continues to carry forward as it relates to 2021, our view of our our positioning of our offerings in the marketplace.

We feel quite good about that and as I noted in my prepared remarks, and we have a strong base to jump off of relative to 80% star rating in a net promoter score of 74, we remain committed to that 10% to 15% range of we look forward to providing you updates as we go forward always strive to perform at our best and I appreciate your optimism and make sure that the the seed.

Your team knows.

Your optimism as well relative to this but we're excited and 2020 with a strong gear and seven of 2021 with some great growth momentum and look forward to continuing that beyond 21.

Got it and if I could just have a quick follow up how are you thinking about potential inorganic opportunities related to the senior platform. Thanks.

So specific to inorganic opportunities we've continue to have a portfolio of inorganic priorities. We've historically had five priorities are so that we have walk through and we previously refresh them about a year ago at our Investor day from that standpoint, and use seniors remains on that list the.

Underpinning growth chassis for this business as an organic growth chassis to be clear so.

So we will be opportunistic and always open minded relative to inorganic opportunities, but the growth chassis here is an organic growth chassis 80 buyer and market growth our platform expansion individual PPO are new market entry of which I referenced before as well as overtime additional <unk>.

Lawyers are ranked web growth from that standpoint, so it's organic first and opportunistic on inorganic as appropriate in the future.

Got it thanks for the color.

Thank you for your question Mister <unk> as a reminder, we ask that you. Please limit yourself to one question he'll allow sufficient time for questions from no remaining in the queue. Our next question is from a J rice with credit Suisse. Your line is open Sir.

Thanks, not everybody maybe.

Maybe just ads about I think this is the first quarterly call you've done since you establish the average or business as a separate entity uhm, maybe just give us a little bit of your thinking behind that decision to move that into the separate entity begin to have its own brand identification.

What does it say about.

Where the company's goal in terms of incremental business lines that that might pursue accurate.

Acquisitions service capabilities and.

And just give us a little bit more of you think thinking about where you're going with the ever north business.

A J good morning, David.

So specifically relative to have her north as I noted we're quite excited.

To have launch out in September.

We view it as a further reinforcement of an an acceleration of our health service strategy we've.

We've talked for quite some time as a business and evolving business portfolio of services and a health service portfolio specific ever Northway I'd ask you to think about it as one it's a further reinforcement of the dedication we have resources for supporting Lodge.

Large complex employer needs.

Health plan needs governmental entity needs, both federal as well as the state agency needs as well as healthcare integrated systems, a health care providers, who were taking performance based risk revalue based programs around that within our portfolio today, we have a large well performing pharmacy services portfolio solutions.

Benefit management solutions, driven forward it to the marketplace with care management solutions and growing portfolio of data and analytics solutions from that standpoint, and lastly to your comment we see this is not only unattractive organic growth platform and our performance reinforces that we're building from strength.

But also an opportunity for tucking or expansion capabilities as we go forward.

A western at least from that standpoint.

We continue to see the opportunity to expand services that we offer to individuals.

Around care delivery and care coordination from that standpoint, embracing technology embracing virtual services, expanding our home healthcare capabilities et cetera.

Readily building some of those capabilities organically today, and we will be opportunistic from an inorganic standpoint so.

And acceleration of our service portfolio dedication of resources reinforcing our partner of choice orientation, and a very broad portfolio of services today that will continue to expand for the benefit of those we conserve.

Okay. Thanks, a lot.

Thank you for your question Mister Rice. Our next question comes from Josh Raskin with Nephron Research. Your line is open parents.

Good morning.

Can you just give us some feedback on the integrated PVM and medical offering as you guys for a year past year further past the integration with express scripts and kind of how that's going into 2021, and then our employers looking at that integration is for the table Stakes and sort of if that's the case what are the key differentiators, you're going to market with.

Just the morning, it's David.

So first as a as a backdrop as you know we have had a long history within the signet portfolio of integrated offerings for employers.

With a deep conviction relative to integrating those offerings with medical.

Off of the then Signet PVM.

A haverhill health and care management services and that continues.

The combination helps us further strengthened that value proposition in terms of furthering the affordability dimension of it but also bringing some more <unk>.

Systemic flexibility for solution design that.

That we can bring towards middle market and and larger clients from that standpoint, and I would say that that continues continued traction relative to the integrated proposition in addition to that.

Ah results show the underlying strength of the pharmacy services from a solution as we think about it or a specific either PVM PVM and specialty or broader suite of services around that and then to revenue as we see the opportunity to further expand that by coordinating say behavioral health with pharmacy services going forward. So.

The core of your question.

Strengthen momentum continues the strong clinical outcomes. We're delivering continues many employer buyers value that integrated proposition and we're oriented around that within the signet brand, but some larger corporate buyers orient still around either in a cart or point solution and increasingly opening for some additional leverage around that area.

About coordinated benefits by bringing safe pharmacy, and behavioral together and coordinate those services and as a combined corporation with the Signet brand and the brand, we're really well positioned to deliver for either by your orientation.

Thanks.

Thank you for your question Mister asking the next question is from Kevin Fishback with Bank of America. Your line is open sorry.

Alright, great. Thanks, I wanted to ask about the commercial membership trend in the quarter you mentioned that.

Things are getting better and Barbara.

Both also in part because of your your customer segments that you're targeting.

It sounds like you are assuming that.

And will will accelerate in the future, but I guess have your thoughts changed at all about the size of the decline that you might be during this recession and how resilient here are some membership might be over the next few quarters even like.

Unemployment that these levels.

So Kevin good morning, it's David.

First as we get into commercial conversation I do want to pause for a second.

And recognized from what we see is just a tremendous contribution that employers are making right now.

Disrupt the time chasing Covid, we're seeing employers of all sizes work stretch innovate to do everything possible to support their employees and their family members, whether those are expanded services additional coverage is relative to testing and treatment cost.

And then working tirelessly to either minimize layoffs or when they need to transpire doing them through furloughs and having coordination. So I do think it's important to pause there and recognize the.

The power of that system, right now and corporations of all shapes and sizes working really hard to support individuals as it relates to membership is Eric noted.

In the Big picture of a disrupted environment, we're pleased with our performance our portfolio tends to be well positioned by industry subsegment and our transparency of our programs has is highly align with employers.

For example, through the third quarter, our employer clients because of our transferring funding mechanisms have about $3 billion less spell.

Spending than they otherwise would it projected to have given the environment and the continuity of cash flow of that takes place around that is quite helpful above and beyond that we've taken some additional steps as we look forward, we know what to disrupted environment.

We expect right now as we look at the environment.

We will continue to see employer customer disruption throughout the residual part of this year and into 2021 factored into our outlook. When we talk about 2021 in detail next quarter, we'll try to give you more insight relative to that.

We're expecting net net with our new growth.

As well as the retention as well as this enrollment we would go from the end of this calendar year number two the beginning of 2021 with approximately stable.

Commercial membership as we continue to sell them to select segment continue to have some retention losses.

All within our strategic range and then throughout the course of the year, while we expect to see some continued dish enrollment pressure.

Our outlook relative to growth is quite positive with some new attraction to 2021, we expect to see some slight growth going forward. So all in all highly disrupted environment. We're very pleased with the results are able to deliver and we're fortunate to be partnered with so many commercial clients that are putting their customers or employees were front and center.

Okay. Thanks. Thank you for your question Mister Fischbeck. Our next question is from Ralph to tell me what city, you're lying to happen sorry.

Alright. Thanks. Good morning, I was hoping you could talk a little bit more about how the onboarding a prime is gone and the opportunity not just on the retail but on the specialty side and how the option or I guess heartburn, perhaps looks for each of the blues.

And then what impact that can have either in 2021 or if we have to consider certain costs and whether it's more of a 2022 at that thanks.

Good morning.

So first and foremost.

Relative to prime as I noted in the prepared remarks.

We work everyday to try to earn that right to be as we call. It an undisputed partner choice, it's a strategic imperative guides our actions.

And underlying that we need to have the products programs and services to deliver value, but we also have to add the orientation.

Two partner and to seek mutual I met we're.

We're pleased with.

The early configuration with prime we established that and stood it up in April of this calendar year, when it's performing well.

The further dedication we had around ever north and our performance relative to that first expansion services.

<unk> to write as we noted too.

<unk> and the opportunity to be able to serve prime in a more expansive basis, we will see that growth continue systematically throughout 2021 as I noted in my prepared remarks. The plans have choices were choice based framework, but the for example, the accretive value proposition is a tremendous value proposition.

And we're excited to expand that starting in January 1st for many of the Prime plans.

There is investments there's ongoing investments, we're making that's factored into our.

Our outlook for this year there'll be further investments, we're making in the fourth quarter of this year for the tremendous underpinning of growth around that we're well positioned to be able to make that happen and achieve our goals and objectives for 2000.

And 20 that Eric noted in terms of our refreshed objective and as we get into the details of 2021 guidance next quarter, we'll try to give you a little bit more color, but we just see this as an ongoing expansion of a mutually beneficial relationship where we were able to create together some tremendous value the individual's will benefit from as we expand those.

We were able to serve.

Okay. Thank you.

Thank you for your question Mister Jacobi. Our next question is from Matthew Barney BMO capital markets.

Your line is happening Sir.

Yes, I was hoping to just.

Ask about the level of medical trend, particularly in your commercial book, but the Medicare too that you're seeing now and I'm trying to understand if.

If we put aside the actions that you take into grant relief to patients and providers and just look at it from the standpoint of the recovery and utilization plus the direct costs Covid R. U below trend above trend rat trend and where do you expect that to go as we get into next year.

Mandatary good morning, so too with with respect to the component pieces touched on it a little bit in my prepared remarks, but.

Contact the components I would have you think about putting covid aside utilization being slightly below kind of what we would have said to be normal so call at 95.

It's percent for the third quarter in terms of kind of normal levels of utilization when you add on top of that the impact of testing and treatment for covid.

And on top of that the additional actions that we've taken to reduce barriers or reduced cost sharing in touch the cusp.

Customers have access to the care that puts you all together a little bit above the normal and you might remember the second quarter, we had certain expectations that the loss ratio for the second half of this year would be elevated relative to what otherwise might.

Call me a normal loss ratio. So they put those pieces together those are the big building block. The only other thing I know is it really does vary by geography. So as we've had the covid play in and out of different geographies that kind of move things up and down and touched it but again when you roll it all up to.

They're an aggregate would be consistent with with what I just described.

Thank you.

Thank you for your question Mister <unk>. Our next question is from Dave Windley with Jeffries. Your line is open Sir.

Mr. When we have you on mute.

Mister Windler, we are unable to hear you with your question.

Move onto the next question, who is Scott Fidel with Stevens. Your line is open sorry.

Okay.

Good morning.

Just interested if you can just drill and a bit more on I know David had mentioned as one of the tailwind for 2021 being some opportunities for administrative savings and just interested if you've established store can identify specific cost savings target, yet or and if not maybe just talk about some of the key buckets up.

Have been savings opportunity that you see for 2021.

Yes, Scott Eric Good morning, So I would not call out any particular initiative a program I think about the opportunity here is really being much more in our continued ongoing.

Drive for improving the affordability of our services overall.

I think about things like leveraging technology, improving the efficiency automation et cetera of of all of the different processes throughout the organization, but but I think of that again, it's just part of the culture of us continuing to create efficiencies versus any particular program.

Okay. Thanks.

Thank you for your question Hello next question is from John Ransom with Raymond James Your line is open Sir.

Hi, good morning too.

Two part question if you what number one how.

How do you think about the materiality if at all if likely.

Likely event happens, but there's a wholesale pareve manufacture revolt against 340 be discounts that contract pharmacies and.

And then secondly, we are seeing an acceleration of the rise of these new models that promise.

2030, 40% savings all medical trend by integrating primary care doctors and data.

Are you still committed to your.

Goal and you think that the market can just continue to sustain mid single digit transfer evermore or do you think the industry as vulnerable as the trend continues to kind of double and triple CBI. Thanks.

Jonas David Let me take in reverse order, so when we step forward and put forth the.

CPI goal and objective I think cause the market to quest.

Question, whether or not that was theoretical possible or otherwise.

But it was a conversation that needs to be had because we established it around and orientation that it was a symbol of sustainability not that it was perfect, but it is a symbol of sustainability said otherwise.

If total basket of goods costs from a societal standpoint are increasing by X whatever X is 2%.

Businesses need to find a way to approximate that to create a level of sustainability or better it from that standpoint, and we're proud of the fact that we've delivered the lowest medical cost trends and by the way the lowest pharmacy trend in our space.

As best anybody could tell apples apples year in year out.

So that continuation is mission critical this is a unique year as everybody knows relative to covid in terms of disrupting the trend, but we continue to drive toward that second within the context of your question. We see many if two year term disruptive or innovative models to drive step function improvements and we.

Many clients today.

Free Covid that are benefiting from CPI or well better than CPI trend, who are on the highly innovative dimension of consumer engagement incentive alignment heavy leveraging utilization of value based care provider.

Provider groups and center of excellence leverage from that standpoint, et cetera, et cetera. So you use the word disruption I'll use the word innovation, we see the need for relentless drive relative to that because as I noted in my prepared remarks, we can't continue to ever forward and no society can continue to afford paying at the levels that are being driven last point I may care is are open framed park.

Orientation has us embrace if you will innovators or disrupters be they care delivery systems or the like from that standpoint, so more to follow here I. Appreciate you highlighting it and we remain.

Extremely committed to driving optimal value here as it relates to your first point, there's a bunch of I'd say hypotheticals and theoretical within that the way I hear your first point, though more broadly is it's another example of pressing for sustained affordability 340, <unk> was designed with a specific purpose and intent in mind.

There are many hospitals and delivery system infrastructures that need 340 be to make them work. It's an interesting time to have that conversation whereby delivery system infrastructures are strained in ways, we haven't seen in the past.

Due to Covid.

Causing massive revenue ramifications of which governmental intervention and someplace by ourself and others in our space or providing support from that standpoint. So it's an interesting time to have that theoretical conversation, but unlike most programs that will most likely evolve and are brought our service portfolios position to evolve with it.

Thanks, so much.

Question. Thank you for your questions from our next question comes from Robert Counts with Goldman Sachs. Your line is open Sir.

Great. Thanks for the question I guess, just a couple of clarifications on ever North I mean, so let's just to follow up on Josh. This question on the integrated medical pharmacy offering I was just curious if you are actually seeing less desire or less PVM carve outs in the market today or is it still something more of a discussion point with with your customers and then just on the quarter every.

Did see a fairly meaningful step up and Opex you touched on some of these items. Just just curious is that kind of more one time in nature. This year versus next year is this probably.

Potentially a more permanent level of spend as we think about the ever north business.

Good morning, Robert save it I'll take the first question and they'll ask Eric to adjust your second question.

The simple answer is no we don't see a sea change in terms of buyer behavior relative to wanting more or less up it's one client at a time.

We have a very much of a consultative orientation trying to find the right configuration of benefits and funding mechanisms that work for clients now within that.

Select segment is an integrated offering full stop period. The ended designed to be an integrated offering whether it's on an asshole platformer guarantee cost platform as you move upmarket in the commercial employer space with a middle market National accounts.

See different buying behaviors ended ebbs and flows and I think the important message here is that as an entity. We are extremely well positioned to deliver what a client wants whether they want to fully integrated offering.

Whether they want a solution a best in class PVM or best in class specialty pharmacy, or both from that standpoint, or increasingly you're looking to get some additional value off of coordination of services via care management services behavior else, etc relative to that but I wouldn't say, there's a sea change I would say think about ever north and Cigna.

Together as being extremely well positioned to deliver on the value that buyers want integrated solutions. If you will stand alone pharmacy services in this case or allowing some coordination of services to get another step function, Nevada to come along with that Eric.

G&A ratio particular, just a couple of things that come out here at the most macro level. We do continue to spend and continue to invest in building additional capabilities in this business and you see that in the in the Jna there are a couple of other.

Impacted call out as well Ah one as you might remember we've talked a bit in the past.

After the closer to the acquisition.

Kind of rebuilding of amortization. So so the amortization on the atmosphere acquire gets reset and then we have to rebuild that expense into that is built over the.

Overtime offsetting that is is continuing to work to find synergies and find additional efficiencies. It's again those would be the biggest buckets that play into that ratio in any given quarter, but we will be looking to continue to to spend to build additional capabilities. There as we go forward.

Great. Thank you thank.

Thank you for your question Mister Jones. Our next question comes from Charles re with talent Green itself and Sir.

Just to read your line is open are you on mute.

Moving onto our next question is from Lance Whelks with Bernstein. Your line is open sorry.

Yes, good morning.

Just had a question on the prime therapeutics opportunity and maybe if you could help us to frame that as far as like what's the further penetration into the existing relationship how could penetration improves as you kind of do direct relationships or subsequent relationships with other blues and then.

They are sold through so that you get carved out less how does that improve ruiz.

Penetration opportunity and then maybe just as a clarification you mentioned decreased specially contribution in.

In the prepared remarks, if you could just maybe clarify what that meant.

As well thanks.

Lance Good morning, it's David I'll take the first part of your question to ask Eric to take the second part of your question.

I think to add frame. The first part of your question broadly is first and foremost, but we need to earn the right to serve clients each and every day.

We were fortunate to be selected to be a partner with prime as we stood up the opportunity earlier. This year began servicing them in April and those service offerings.

Wow that position to us.

Reports of a commitment to have in order to expand those services and we will have the ability to grow toy.

<unk> based on the prime participant.

Prime participants as they so choose relative to our specialty pharmacy in the lake. It allows us to have an opportunity to neutrally grow together your point relative to the cell through and otherwise our team is focused on strengthening the value proposition of prime and of the crime members remember <unk>.

Lance tap more value to offer to their customers and grow their portfolio businesses Full-stop that is the commitment of the team supporting the prime relationship and therefore, it should allow for us to continue to grow off of the existing platform. It should allow for us to continue to grow as the prime.

Representation gross and it should allow for us to continue to grow as to your point, they're sell through has more traction on a go forward basis and our business model is designed to do so so stay tuned for more but the positioning that we have today, we love because now we will be able to leverage our high performing specialty portfolio as well as our very strong and while performing a mail order.

Pharmacy services operation for their benefit Eric got the specialty contribution to.

The comment that I made around specialty contributions here refers to the portfolio, especially capabilities. We have it's benefits overall, so things like that those behavioral disease management care management et cetera, et cetera et cetera. This has been a core part of our our go to market approach for some time and a high performing business does you know we did.

A bit lower contribution from these products and the quarter I'd have to think about a couple of items. Here. One is an example, we've seen significant increases in behavioral costs in 2020, and the third quarter in particular utilization there above our prior expectation as we proceed stresses of anxiety.

Take a toll just on the mental health of the nation writ large one and then two does impact of volumes right. So as we have.

A little bit of lower volume that comes through this business as well, but those will be the items.

I would refer to in terms of.

Specialty contributions.

Okay, great. Thanks.

Thank you for your question Mr. Welsh. Our next question is from Sarah James with Piper Sandler Your line is open ma'am.

Thank you.

I was.

Looking back at the transcript to the second quarter and I know at that time, we talked about.

Not seeing a slowdown and cleans your seat.

July 30, but then today, you're talking about 100 basis points.

Squeaky MLR being related to June.

So it sounds like there's a slowdown in queens or seat in June that maybe wasn't there in April or May and I'm wondering as a result of that did you change your assumptions in completion factor for How're you reported three Q and.

So what percent of claims.

60 days out at greater and was there any impact on how you think about is there is there a D C T.

Okay the results of that.

Hi, Sarah it's Eric so on the.

You have a good memory remember your question from the last call as well on that front and I would still say, we haven't seen a change in speed of submission or anything along those lines from a from a claims perspective.

Of June as I noted in response to one of the other questions and then my prepared remarks.

The most recent months, we estimate really based more off of our estimation of activity not so much extrapolating from kind of the claims that had been received yet or anything along those lines. So so as I noted all else equal we would affect the month of June now a bit higher than what we did a quarter ago, but but think of that is.

Is pretty isolated in terms of the impact as we now have looked at the development of June and looked at our experienced in July August September or even the emerging experience from October.

Quite consistent in terms of the return to normal.

The levels of utilization level of the speed of processing et cetera, and if you look at our days Clinton available metric metrics not perfect. So you actually a pretty good degree of consistency in terms of.

Basically available metric for where we sit here at the end of the third quarter of 2020, compared with prior third quarters or things along those lines. So so at a macro level quite comfortable that we've got the right estimates and such here and the estimation of claims and the.

The the overall speed of utilization et cetera.

Hey, I guess just to be more specific when you put it too cute Emma lie.

Did you have seen.

Whatevers.

Factor in Jean.

<unk> continued to TQM, a lifestyle and whether that just put on a.

That being conservatism instincts either way.

With positive development that did you did you call back consistent.

Yeah, I think so.

<unk>.

So we played through the assumptions consistently by months of took I've just unpack that a bit further we had estimated the month of June I made some comments a quarter ago about June being closer back to normal levels of utilization, but the benefit of hindsight. It was.

Much closer to normal so previously think about that as having been.

The single single digits closer to kind of a zero level of a variation from utilization and we've played those types of assumptions all the way through in terms of each of our estimates for the month since then so.

Again, we would think the June impact was isolated to the month of June.

Thank you for your question Mccain's. Our next question is from Stephen 10, all with acid VB, leaving your line is open.

Good morning gains. Thanks for the question Miss David I Hope the follow up on your comments on the commercial market and clarify the point of that enrollment of 2021, maybe talent back installing season for group accounts I think I hold national account enrolment might be down to understand porn, along the offset by selecting mineral Margaret shrimp.

Just wanted to clarify wall and I'm also wondering if you can elaborate on your comment on more options and planes are taking response to the palm wall, maybe as it relates to this business are you seeing benefit by down with what kind of innovation that you mentioned the resonating with employers into 21, maybe he'd give us a sense from our pricing.

Vehicles insured side as well that would be helpful.

Good morning, let me take in reverse order so of specific to employer actions.

Obviously unique to each employer, but if we step back and talk about a few of the general trends.

First and foremost the press for improved affordability and value transcends buyers of all shapes and sizes and through both prepared remarks inner dialogue today, we continue to reinforce the actions, we're taking relative to further improvement of affordability and value trend.

Trend deflection and the light from that standpoint, and a results remained quite strong relative to that beyond that employers are both reaching so expanding services over self funded employer determines are they going to waive that cost responsibility for individuals around testing around treatment from that standpoint example, one too.

Are they can expand services for telehealth or virtual service fulfillment at little to no cost from that standpoint, many employers have expanded those services third pressing as Eric articulated before to recognize that the behavior health challenges that have been ramping from a societal standpoint, as we've been oriented around <unk>.

<unk> have stepped up to another threshold levels, so reaching for identifying additional will call behavioral health and wellbeing services to help to deal with beyond the core of what mental.