Q4 2021 UnitedHealth Group Inc Earnings Call

Speaker 1: And.

Good morning, and welcome to the Unitedhealth group fourth quarter and full year 2021 earnings conference call. A question and answer session will follow Unitedhealth group prepared remarks as a reminder, this call is being recorded.

Speaker 2: Good morning and welcome to the UnitedHealth Group fourth quarter and full year 2021 earnings conference call. A question and answer session will follow UnitedHealth Group prepared remarks. As a reminder, this call is being recorded. Here are some important introductory information.

Here are some important introductory information. This call contains forward looking statements under U S Federal Securities laws.

Speaker 2: This call contains forward-looking statements under US federal security law.

These statements are subject to risks and uncertainties that could cause actual results to differ materially from historical experience or present expectations a bit.

Speaker 2: statements are subject to risk and uncertainties that could cause actual results to differ materially from historical experience or present expectations. A description of some of the risks and uncertainties can be found in the reports that we file with the Securities and Exchange Commission, including the cautionary statements included in our current and periodic filings.

Description of some of the risks and uncertainties can be found in the reports that we file with the Securities and Exchange Commission, including the cautionary statements included in our current M. P erratic filings.

Speaker 2: This call will also reference non-GAAP amounts. A reconciliation of the non-GAAP to GAAP amounts is available on the financial and earnings reports section of the company's investor relations page at www.unitedhealthgroup.com.

This call will also reference non-GAAP amounts a reconciliation of the non-GAAP to GAAP amounts is available on the financial and earnings reports section of the company's Investor Relations page at Www Dot Unitedhealth group Dotcom infer.

Speaker 2: information presented on this call is contained in the earnings release we issued this morning and in our Form 8K dated January 19, 2022, which may be accessed from the Investor Relations page of the company's website. I will now turn the conference over to the Chief Executive Officer of UnitedHealth Group, Andrew Whitty.

Information presented on this call is contained in the earnings release, we issued this morning and in our form 8-K dated January 19th 'twenty, 'twenty, two which may be accessed from the Investor Relations page of the company's website I will now turn the conference over to the Chief Executive Officer of Unitedhealth Group Andrew witty.

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Thank you good morning, and thank you all for joining us today.

Speaker 3: Thank you. Good morning and thank you all for joining us today. I'd like to start by recognizing our colleagues, the people of Optum and United Healthcare, for delivering strong results throughout 2021 and creating the momentum that is carrying us through as we enter into this year.

I'd like to start by recognizing all colleagues the people at Optum and United Health care for delivering strong results throughout 2021.

And creating the momentum that has carried us through as we enter into this year.

Speaker 3: For example, performance in two key elements of our growth strategy, accelerating the transition of patients to optimum-led value-based care, and strong UnitedHealthcare growth in serving Medicare Advantage consumers, are both tracking well with the expectations we shared with you at our recent investing...

For example performance into key elements of our growth strategy accelerating the transition of patients to Optum led value based care and strong United healthcare growth in serving Medicare advantage consumers are both tracking well with the expectations. We shared with you at our recent Investor Conference.

Speaker 3: These and the broader performance across the enterprise confirm our confidence in our ability to advance our stated growth strategy.

These on the broader performance across the enterprise confirm our confidence in our ability to advance our stated growth strategies and to support our long term, 13% to 16% EPS growth rate.

Speaker 3: and to support our long-term 13 to 16 percent EPS growth rate.

When you look back at the prevailing themes for 2021, you see a story of accelerating growth strong collaboration between Optum and United Health care and without many external partners helped us grow in serving both commercial and government markets.

Speaker 3: When you look back at the prevailing themes for 2021, you see a story of accelerating growth. Strong collaboration between Optimum United Healthcare and with our many external partners helped us grow in serving both commercial and government markets, unlock new innovation, introduce integrated products and services to the marketplace, and significantly increase the number of people benefiting from value-based models of care.

Walk new innovation introduced integrated products and services to the marketplace and significantly increase the number of people benefiting from value based models of care.

Speaker 3: Last year, we leveraged our technology capabilities to help physician and hospital systems better serve their patients and communities. And we sharpened our focus on the consumer, working to elevate and improve the end-to-end experience.

Last year, we leveraged our technology capabilities to help physician and hospital systems better serve their patients and communities and we sharpened our focus on the consumer working to elevate and improve the end to end experience taken.

Speaker 3: Taken together, these efforts helped us add more than $30 billion in revenue for the year, about $10 billion above our initial outlook.

Taken together these efforts helped us add more than $30 billion in revenue for the year about 10 billion above our initial outlook.

And you should expect similar growth in the year ahead, we see an even greater demand for integration to bring together the fragmented pieces of the health system.

Speaker 3: And you should expect similar growth in the year ahead. We see an even greater demand for integration to bring together the fragmented pieces of the health system.

Speaker 3: to harness the tremendous innovation occurring in the marketplace, to help better align the incentives for providers, payers and consumers and to organize the system around value.

This is a tremendous innovation occurring in the marketplace to help better align the incentives for providers payers and consumers and to organize the system around value.

Speaker 3: A healthcare system that is more connected, more informed, more human, and more responsive to every person's unique needs.

Our health care system that is more connected more than for more human and more responsive to every person's unique needs.

Speaker 3: At our investor conference we shared five key areas for growth and for differentiated experiences across our portfolio.

At our Investor Conference, we shared five key areas for growth and for differentiated experiences across our portfolio.

Speaker 3: These growth opportunities will guide our strategy this year and for many years to come.

These growth opportunities will guide our strategy this year and for many years to come.

First is cat delivery.

Speaker 3: More specifically, value-based care. For UnitedHealth Group, this is more than a primary carenestra.

More specifically value based care.

Good Health group, which is more than a primary care strategy.

Speaker 3: It's a comprehensive clinical strategy encompassing our growing behavioural, home, ambulatory and virtual care capabilities.

It's a comprehensive clinical strategy encompassing all growing behavioral home ambulatory and virtual care capabilities.

Our second growth areas health benefits advancing the quality innovation and consumer appeal of our benefit offerings and bringing our value based strategy to life.

Speaker 3: Our second growth area is health benefits, advancing the quality, innovation and consumer appeal of our benefit offerings and bringing our value-based strategy to life.

We enter 'twenty, two having generated strong consumer growth in Medicare advantage and so further progress in Medicaid and growing momentum in our commercial business.

Speaker 3: We enter 22 having generated strong consumer growth in Medicare Advantage and saw further progress in Medicaid and growing momentum in our commercial business.

Speaker 3: Next, health technology. Our major partnerships across the country help health systems improve their performance and returns, all to better support their mission.

Next health technology, all major partnerships across the country help health systems improve their performance and returns all to better support their admissions were.

Speaker 3: We're energized by the potential to bring these comprehensive, tailored solutions to a greater number of system partners in 2022 and beyond.

We're energized by the potential to bring these comprehensive tailored solutions to a greater number of system partners in 2022 and beyond.

Both health financial services vastly improving the health payments sector, streamlining and simplifying payments for providers payers and consumers, while reducing friction and increasing speed and convenience.

Speaker 3: Fourth, health financial services, vastly improving the health payment sector, streamlining and simplifying payments for providers, payers and consumers, while reducing friction and increasing speed and convenience. And finally, pharmacy services, where people

And finally pharmacy services, where people interact and most often with the health care system.

We can better use the significant Brett volume and value of our foundational pharmacy services and data capabilities and integrate our medical pharmacy and behavioral capabilities.

Speaker 3: We can better use the significant breadth, volume, and value of our foundational pharmacy services and data capabilities and integrate our medical, pharmacy, and behavioral capabilities.

Speaker 3: All of this to provide whole person care, support the discovery of new drugs and treatments, and support value-based models of care.

All of this to provide whole person care support the discovery of new drugs and treatments and support value based multiples of cat.

In sum, we enter 2022 with heightened confidence in our ability to execute upon the objectives, we set forth in late November .

Speaker 4: In sum, we enter 2022 with heightened confidence in our ability to execute upon the objectives we set forth in late November . And with that, I'll turn it over to President and Chief Operating Officer Dirk McMahon. Thank you, Andrew. I thought it would take a few minutes providing you with some additional details on our first growth priority, value-based care, how we have prepared for it, the investments we have made, and how we see it working in the near future.

And with that I'll turn it over to President and Chief operating Officer, Doug Mcmahon.

Thank you Andrew.

Thought I would take a few minutes, providing you with some additional details on our first growth priority value based care, how we have prepared for it the investments we have made and how we see it working in the near future. This has been something we had been working on and building over the course of a decade for.

Speaker 4: This has been something we have been working on and building over the course of a decade.

Speaker 4: For example, there was significant operational groundwork and investment that went into supporting the half million new patients for whom Optum Health will become accountable in 2020.

For example, there was significant operational groundwork and investment that went into supporting the half million new patients for whom Optum health will become accountable in 2022.

Speaker 4: Successful execution requires a lot of detailed planning, investing in the

Successful execution requires a lot of detailed planning investing and building.

It has become a distinctive competency of our enterprise, which we can now increasingly apply at scale.

Speaker 4: It has become a distinctive competency of our enterprise, which we can now increasingly apply.

So what does it take to prepare for moving to a fully accountable arrangement.

Speaker 4: Investments can be significant. As an example, in 2021, we incurred over $100 million in preparation expense. Within this, there are three major

The investments can be significant as an example in 'twenty, one we incurred over $100 million in preparation expense.

Within this.

There are three major work streams involved.

Clinical training and staff preparation.

Speaker 4: Technology and Data Enhancement, and third is Network Coordination.

Technology and data enhancement and third is network coordination.

Speaker 4: The first workstream focuses on physician education. It begins well more than a year prior.

The first work stream focuses on physician education, it begins well more than a year prior.

It is important to provide the resources and knowledge for physicians to begin approaching their patients differently.

Speaker 4: It's important to provide the resources and knowledge for physicians to begin approaching their patients differently.

Speaker 4: They engage in their patients' whole health well ahead of taking on greater accountability.

They engage in their patients whole health well ahead of taking on greater accountability.

Speaker 4: We find it to be an essential and sometimes complex shift in what our long-held fee-for-service practice.

We find it to be an essential and sometimes complex shift and what our long held fee for service practices.

Beyond education, we ramp up our capacity in the form of physicians nurses and other clinicians to meet the requirements of our business.

Speaker 4: Beyond education, we ramp up our capacity in the form of physicians, nurses, and other clinicians to meet the requirements of our program.

The second area focus is on the technology systems and information needed to support patient care and effective clinical management.

Speaker 4: The second area focuses on the technology systems and information needed to support patient care and effective clinical management. This includes things like patient portals and utilization management systems, as well as report

This includes things like patient portal and utilization management systems as well as reporting systems for teams to effectively manage.

Speaker 4: Finally, is the planning and network coordination work to support clinical oversight beyond primary care and ensure true continuity of care? This planning and coordination includes initiatives such as identifying the patients most in need and ensuring a seamless transition to high-touch clinical care services that improve health, freedom and equality of life.

Finally.

As the planning and network coordination work to support clinical oversight beyond primary care and ensure true continuity of care.

Was planning and coordination includes initiatives such as <unk>.

Identifying the patients most in need in ensuring a seamless transition to high touch clinical care services that improve health.

And.

Speaker 4: Quickly pairing patients with a personal care navigator to assist in supporting complex health needs, appointment scheduling, and timely medication support on day one.

Quickly pairing patients with a personal care navigator to assist and supporting complex health needs appointment scheduling and timely medication support on day one.

These foundational preparations and investments have been critical in creating strong results across the variety of geographies and practices we have transition.

Speaker 4: These foundational preparations and investments have been critical in creating strong results across the variety of geographies and practices we have trained.

We expect this expertise will serve us well as we transition either larger groups of patients in the years to come.

Before handing over to John I'd like to update you on how Covid has impacted our operations.

Speaker 4: Before handing it over to John , I'd like to update you on how COVID has impacted our operation.

Like other businesses, we have experienced moderately higher levels of attrition and more unplanned absences.

Speaker 4: Like other businesses, we have experienced moderately higher levels of attrition and more on Play Death.

We had prepared for this situation through increased recruiting capacity as well as meaningfully upgraded digital capabilities to improve customer experience and reduce call volumes.

As a result in the first two weeks of 22 traditionally are most demanding period, we were able to service the needs of our patients and customers.

Speaker 4: At the same time, we responded swiftly to the federal mandate for cash free COVID tests for consumers, a highly complex undertaking.

At the same time, we responded swiftly to the federal mandate for cash free Covid test for consumers a highly complex undertaking.

With four days' notice unitedhealthcare created a customer digital experience for ease of reimbursements.

<unk> reimbursement and established a partnership with Walmart and now Rite aid that eliminates cash outlays by consumers at point of purchase.

We expect more partnerships in the days ahead.

Speaker 4: As we look forward, we believe we have the right capacity in place to execute our business priorities and meet our customers' expectations.

As we look forward, we believe we have the right capacity in place to execute our business priorities and meet our customers expectations with that now I'll turn it over to Chief Financial Officer, John Rex.

Speaker 4: With that, now I'll turn it over to Chief Financial Officer John green

Speaker 5: Thank you, Dirk, and Happy New Year, everyone. I'll start by expanding a bit upon Dirk's comments on the COVID impacts we're seeing.

Derek and happy new year, everyone I'll start by expanding a bit upon <unk> comments on the Covid impacts we are seeing.

Speaker 5: In the most recent weeks, inpatient hospitalization levels for our members are similar to the January 2021 levels, even with national COVID case rates about four times higher.

In the most recent weeks inpatient hospitalization levels for our members are similar to the January 2021 levels, even with National Covid case rates about four times higher for.

Speaker 5: For those people needing inpatient care, severity is seemingly lower as we are seeing shorter lengths of stay compared to that earlier period.

For those people needing inpatient care severity seemingly lower as we are seeing shorter length of stay compared to that earlier period.

Speaker 5: At the same time, we are observing familiar correlations of care activity patterns to other periods of elevated infection rates experienced over the past two years. For example, in these early weeks of January , we are seeing slowing in primary care, elective visit, and procedural volume.

At the same time, we are observing familiar correlations of care activity patterns to other periods of elevated infection rates experienced over the past two years. For example in these early weeks of January were seeing slowing in primary care elective visits and procedural volumes Act.

Speaker 5: Activity over the past several weeks shows primary care visits having declined about 10% and an even higher rate of decline in specialist visits.

Activity over the past several weeks shows primary care visits having declined about 10% and an even higher rate of decline in specialist visits.

As always our prime focus is on helping people get the care they need.

Speaker 5: As always, our prime focus is on helping people get the care they need, when they need it.

When they need it.

Moving now to our specific business performance.

Optum helps revenue per consumer grew by over 30% in 'twenty one.

Speaker 5: OptumHealth's revenue per consumer grew by over 30 percent in 2021, driven by the increasing number of our patients served under value-based arrangements.

Driven by the increasing number of our patients served under value based arrangements.

Speaker 5: Consistent with the expectations we shared in late November , we had a strong start to the year and continue to expect to add 500,000 new patients in accountable, value-based relationships.

Consistent with the expectations. We shared in late November we had a strong start to the year and continue to expect to add 500000, new patients and accountable value based relationships.

Benefiting from the groundwork laid over the past many years.

Speaker 5: benefiting from the groundwork laid over the past many years.

Optum insights earnings grew 25% in 'twenty, one with operating margins approaching 28% for the year.

Speaker 5: OptumInsight's earnings grew 25% in 2021, with operating margins approaching 28% for the year.

We ended the year with a revenue backlog of $22 4 billion, an increase of $2 $2 billion over the prior year.

Our expanding relationship serving health systems has been a key factor driving this growth.

Speaker 5: Our expanding relationship serving health systems has been a key factor driving this growth. And we expect these partnerships to continue to grow in 2022 and beyond.

And we expect these partnerships to continue to grow in 'twenty two and beyond.

Optum Rx earnings grew 6% for the year.

Speaker 5: Driven by the continued expansion of our pharmacy services businesses, supply chain initiatives, and strong cost management activities, and benefiting from strong

Driven by the continued expansion of our pharmacy services businesses.

Supply chain initiatives and strong cost management activities.

And benefiting from strong customer retention.

In addition, we continue to see the impact of optimize <unk> movement to a higher value pharmacy care and specialty specialty services orientation.

Speaker 5: In addition, we continue to see the impact of OptumRx's movement to a higher value pharmacy care and specialty services orientation.

Turning to United Healthcare full.

Speaker 5: Full year revenues of $223 billion grew 11%.

Full year revenues of $223 billion grew 11%.

Speaker 5: As noted, our 2022 Medicare Advantage Member Growth Outlook is very positive.

As noted our 2022 Medicare advantage member growth outlook is very positive and.

Speaker 5: and consistent with the objectives we established at our November investor conference.

And consistent with the objectives, we established at our November Investor Conference.

Within the up to 800000, new members, we will serve in 'twenty two.

Speaker 5: Within the up to 800,000 new members, we will serve in 22. About 3 quarters will be an individual and group Medicare advantage, and the remainder in dual special needs plans.

Three quarters will be in individual and group Medicare advantage and the remainder in dual special needs plans.

Speaker 5: And given the steady strides we've made in quality performance, we have the opportunity to enroll people in our newly rated five-star plans throughout the entirety of this year.

And given the steady strides we've made in quality performance, we have the opportunity to enroll people in our newly rated five star plans throughout the entirety of this year.

Our Medicaid membership outlook for 'twenty two continues to incorporate an expectation that states resume eligibility redetermination, resulting in modest net attrition.

Speaker 5: Our Medicaid Membership Outlook for 2022 continues to incorporate an expectation that states resume eligibility redeterminations, resulting in modest net attrition.

In January we began serving the citizens of Minnesota and continue to support the Missouri expansion this year as well as renewed relationships with Ohio, Tennessee and Nevada.

Speaker 5: In January , we began serving the citizens of Minnesota and continue to support the Missouri expansion this year, as well as renewed relationships with Ohio, Tennessee, and Nevada.

Speaker 5: Over the course of the year, we will look to continue to expand upon the nearly 8 million individuals we serve across 31 states.

Over the course of the year, we will look to continue to expand upon the nearly 8 million individuals we serve across 31 states.

We concluded 2001 with commercial membership about 200000 people ahead of the original outlook provided.

Speaker 5: We conclude at 21 with commercial membership about 200,000 people ahead of the original outlook provided.

Speaker 5: Creating this momentum is the strong response we are seeing to the new, innovative products you have heard us discuss.

Creating this momentum is the strong response, we are seeing to the new innovative products you have heard us discuss.

Speaker 5: Products such as NavigateNow, which use the Optum virtual network as a first option.

Products, such as navigate now which use the optum virtual network as a first option.

Our capital capacity remains strong.

Speaker 5: Full year 21 cash flow from operations was $22.3 billion, or 1.3 times net income, about $2 billion above the initial outlook we shared a year ago.

Full year 'twenty, one cash flow from operations was $22 3 billion or one three times net income about 2 billion above the initial outlook, we shared a year ago.

Speaker 5: We continue to expect our 2022 cash flow to approach $24 billion, about 1.2 times net income.

We continue to expect our 2022 cash flow to approach 24 billion about one two times net income.

Speaker 5: And we ended 21 with a debt-to-total capital ratio of 38%.

And we ended 21 with a debt to total capital ratio up 38%.

These ample capital capacity allow us to continue to accelerate our investments, while remaining committed to and advancing shareholder dividend and supporting our expected repurchase of between five and $6 billion of stock in 'twenty two.

Speaker 5: These ample capital capacities allow us to continue to accelerate our investments while remaining committed to an advancing shareholder dividend and supporting our expected repurchase of between $5 and $6 billion of stock in 2022.

Our 2022 adjusted earnings per share outlook of $21 10 to $21 60 is consistent with the view, we offered seven weeks ago.

Speaker 4: From this distance, in contrast to the past two years, we expect the seasonal pattern to be more consistent with our historical experience, with just under 50% of full-year earnings in the first half and the first two quarters comparably even.

From this distance in contrast to the past two years, we expect the seasonal pattern to be more consistent with our historical experience with.

Just under 50% of full year earnings in the first half and the first two quarters comparable EBIT.

Now I'll turn it back to Andrew.

Before we transition to the Q&A portion of the call I hope you've already taken away the strong sense of confidence John Dirk and I shared in the growth potential of this company.

Speaker 3: Before we transition to the Q&A portion of the call, I hope you've already taken away the strong sense of confidence John , Dirk, and I share in the growth potential of this LEARN MORE obvious articles on children and animals at cube debt.org

Speaker 3: Rooted in the growing number of people we're serving in value-based models, the depth of relationships we're building with local health systems, our pharmacy capabilities, and the innovation and consumer focus that's driving growth across our government programs, individual and commercial businesses.

Rooted in the growing number of people, we're serving and value based models the depth of relationships. We're building with local health systems, all pharmacy capabilities, the capabilities and the innovation and consumer focus that's driving growth across our government programs individual and commercial businesses.

Speaker 3: As demand for innovation and integrated solutions, products, and services only continues to grow, we've never been in a better position to help bring together the fragmented pieces of healthcare and create more value for the people we try to serve.

As demand for innovation on integrated solutions products and services only continues to grow we've never been in a better position to help bring together the fragmented pieces of healthcare and create more value for the people we tried to serve.

Speaker 3: With that operator, let's open it up for questions. One per caller, please.

With that operator, let's open it up for questions one per caller. Please.

Thank you the floor is now open for questions. At this time, if you have a question or comment. Please press star one on your Touchtone phone you may remove yourself from the queue by pressing the pound key.

Speaker 2: Thank you. The floor is now open for questions. At this time, if you have a question or comment, please press star 1 on your touchtone phone. You may remove yourself from the queue by pressing the pound

Speaker 2: We ask that you limit yourself to one question. If you ask multiple questions, we will only be answering the first question so we can respond to everyone in the queue this morning. And we'll go first to Scott.

That you limit yourself to one question. If you ask multiple questions will only be answering the first question. So we can respond to everyone in the queue. This morning.

And we will go first to Scott Fidel with Stephens.

Hi, Thanks, Hey, Scott go ahead.

Speaker 6: Good morning. Thank you. My question was just a little follow up just on the Medicare Advantage environment. And if you could just talk about, you know, from your perspective, whether you've seen any material change in the level of competition in the market for twenty twenty two relative to 2021 .

Good morning, Thank you.

My question was just a little follow up just on the Medicare advantage environment and if you could just talk about from your perspective, whether you've seen any material change in the level of competition in the market for 2022 relative to 2021.

Speaker 6: Then we just would also be interested in if for United, whether there's been any types of shifts in the distribution channels through which you're driving your MA growth, just as we think about some of the evolving trends in Medicare. Thanks.

This would also be interested in it for United whether theres been any types of shifts and.

Distribution channels through which youre driving your NII growth.

Just as we think about some of the evolving trends in Medicare. Thanks.

Speaker 3: Yes, Scott, listen, thanks so much for the question. Before I hand it over to Tim Knoll, who runs that part of our organization, let me just reiterate how pleased we are with the overall performance through the selling cycle, the number of folks who have chosen UnitedHealthcare continues to grow super well, ahead of market, growing market share once again.

Yes, Scott listen thanks, so much for the question before I hand over to Tim know, who runs that part of our organization. Let me just reiterate how pleased we are with the overall performance through the selling cycle. The number of folks who have chosen unitedhealthcare continues to grow Super well ahead of market growing market share once again.

And as we said a couple of times in your opening commentary very much in line with the expectations that we set out for the year. So.

Speaker 7: And as we said a couple of times in our opening commentary, very much in line with the expectations that we set out for the year. So really a big picture, super positive. I'll hand over to Tim to give you a little bit more background to all of that. Tim? Good. Great. Hey, thanks, Scott, for the question. This is Tim Nowell. Yeah, you know, the way I see the MA market is it's been highly competitive for a number of years, and I don't see 2022 as a step function increase in that level of competitiveness.

Really a big picture Super positive I'll hand over to Tim to give you a little bit more background. So all of that to great Hey, guys. Thanks, Scott for the question. This is Tim at all.

Yes, the way I see the M&A market as it's been highly competitive for a number of years and I don't see 2022 is a step function increase in that level of competitiveness.

<unk> trend of more entrants better benefits as relate that our multiyear one and we see this trend as being one that's very good for seniors and also one that is very good for the overall growth of the Medicare advantage industry.

Seniors are shopping for more value as they should be and for our part we're really focused on differentiating our offerings in the marketplace and what we're doing is we're driving things not only around benefits, but also around capabilities that are digital tools ease of payment product innovation.

Speaker 7: Seniors are shopping for more value as they should be. And for our part, we're really focused on differentiating our offerings in the marketplace. And what we're doing is we're driving things not only around benefits, but also around capability.

Better and more personalized service experiences better clinical quality more value based and aligned care provider relationships are all part of that and our approach continues to resonate in the marketplace. So we really like our performance and our positioning inside a very strong and growing marketplace.

Thanks, So much and Scott just to your secondary on distribution I think it's fair to say nothing has changed in terms of our approach to distribution. In fact, I think we've never had more distributors agents working on our behalf across the country.

So no change there whatsoever, and we're super Grateful for all of the support we get from agents and brokers and others will help us get the message across well to seniors who are looking for M&A is an option. So a really very positive about our environment.

Let's go to next question.

We will go next to Josh Raskin with Nephron research.

Hi, Thanks. Good morning, My question relates to Optum health and the disclosures around the top line growth have been really helpful. But I'm curious more on the margin side and specifically how margins trend over time, when you take 100% global capitation and maybe specifically if you are making money on the totality of that business.

Speaker 6: Hi, thanks. Good morning. My question relates to OptumHealth and the disclosures around the top line growth have been really helpful, but I'm curious more on the margin side and specifically how margins trend over time when you take 100% global capitation and maybe specifically if you're making money on the totality of that business today and maybe how that migrates over time.

Today, and maybe have that migrates overtime.

Hi, Josh. Thanks, So much let me pass over to adopt to Wyatt Decker, who looks after Optum health what.

Speaker 3: Josh, thanks so much. Let me pass that over to Dr. Wyatt Decker who looks after OptumHealth.

Speaker 8: Yeah, Josh, thanks for the question. Absolutely. We are positioned the Optum Health as a growth platform, and we're investing in new markets and deeper penetration into established markets. As we do that and expand the capabilities, you'll continue to see us delivering on an 8% to 10% margin range. So you can anticipate us to continue to

Yes, Josh Thanks for the question absolutely we are positioned the Optum health as a growth platform and we are investing in new markets and deeper penetration into established markets as we do that and expand the capabilities Youll continue to see us delivering on an 8% to 10%.

Margin range. So you can anticipate us to continue to generate strong performance, while investing in what will be multi year growth platform.

Speaker 8: generate strong performance while investing in what will be a multi-year growth platform.

Speaker 5: John Rex, I think, maybe add a little. Sure. And just, Josh, getting at your point of how does that progress over time. And Dirk did offer some nice commentary on the call in terms of the investments that we make as we're looking to move to capitation.

John Rex I think maybe add a little sure.

Josh getting at your point of how does that progress over time.

And Dr. Alfred some nice commentary on the call in terms of the investments that we make as we're as we're looking to move to capitation and.

Speaker 5: And that does tell a kind of a multi-year story of investments as we get ready to move to capitation. So that's even before any revenue comes into the picture we're making those investments.

That does tell us kind of a multiyear story of investments as we get ready to move to capitation. So thats, even before any revenue comes into the picture, we're making we're making those investments and significant very significant.

Speaker 5: significant, very significant ahead in the couple of years ahead, especially in the year ahead of those transistors before there's any kind of revenue view. So that is creating kind of that impact.

And a couple of years ahead, especially in the year ahead of those trends just as before there is any kind of revenue view, so that is creating kind of.

That impact and what doctors accurately describing there so as we as we seek to do that and those movements occur we're always bearing within that fairly significant investment loads. This year was obviously fairly significant with the half million members that were transitioned and we continue to accelerate.

Speaker 5: What Dr. Decker was describing there, so as we seek to do that and those movements occur, we're always bearing within that fairly significant investment loads. This year was obviously fairly significant with the half million members that were transitioned, and we continue to accelerate.

Speaker 3: Those investments continue also, while we start getting leverage on those as we do more of it. So, we're kind of burying that within the 8 to 10 percent that Wyatt was describing there. Thank you. Absolutely. I think both sets of comments really point to what's happening, Josh.

Those investments continue also while we start getting leverage on those.

We as we do more of it so we're kind of bearing that within the 8% to 10% that that why it was describing there. Thank you.

Absolutely I think I think both sets of comments really point to to what's happening Josh at Huawei that helps me think this through a little bit as to think about vintages. So every year. There is a different number of folks who transitioned into the <unk> environment of course that number grows every time. So this year will be almost double what we did last year last year was almost double what we.

Speaker 3: One way that helps me think this through a little bit is to think about vintages. So every year there's a different number of folks who transition into the capitated environment. Of course, that number grows every time. So this year will be almost double what we did last year. Last year was almost double what we did the year before. As you think about it, the margin associated or the economics associated with each vintage changes year by year as those populations of folks...

Did the year before but as you think about the margin associated with the economics associated with each vintage changes year by year as those.

Those populations of folks stay in Optum care for sustained periods of time. So as you think about the longer term evolution of the economics of Optum care I'd encourage you to think about it reflects on how those vintages are aging in to that stabilization within the value based environment.

Speaker 3: stay in OptumCare for sustained periods of time. So, you know, as you think about the longer-term evolution of the economics of OptumCare, I'd encourage you to think about it, reflect on how those vintages are aging in to their stabilization within the value-based environment. Next question.

Next question.

We will go next to Justin Lake with Wolfe Research.

Speaker 9: Thanks. Good morning. Appreciate your comments on how trend is kind of starting the year with COVID. Can you give us a view of how you ended the fourth quarter and into the first quarter of five business segments? Remember correctly, commercial was running a little bit hotter than Medicare and Medicaid in the third quarter. And then anything you could tell us in terms of what you think maybe a rough number might be on the cost of the new home testing requirements. Thanks.

Thanks, Good morning, I appreciate your comments on how it trended kind of starting the year with Covid can you give us a view.

How you ended the fourth quarter and into the first quarter of five business segment remember correctly commercial was running a little bit hotter than Medicare and Medicaid in the third quarter and then anything you could tell us in terms of what you think maybe a rough number might be on the cost.

The new home testing requirements.

So.

Speaker 3: So, thanks so much, Justin. I'll ask Brian Thompson, President of UHC, to comment in a second. I think, overall, those trends we saw segment by segment didn't get too different as we rolled through the year. I would just say, as we got into the last part of the year, the last couple of weeks, as Omicron really started to show its face,

Thanks, so much Justin.

Brian Thompson President of UHC to comment in a second I think overall those trends. We saw segment by segment didn't didn't get two different as we roll through yeah. I would just say as we go into the last part of the year. The last couple of weeks has only grown really started to show its face.

Speaker 3: You know, that still, we're still kind of learning exactly what the impacts of that are. As you can imagine, we can see some things very quickly, like physician visits, a little harder to know exactly what kind of complexity of claims might look like in hospitals, that will become clearer.

That's still we're still kind of learned and exactly what the impacts of that as you can imagine we can see some things very quickly like physician visit a little harder to know exactly what kind of complexity of claims might look like in hospitals that will become clearer in the next few weeks, but let me ask Brian to go a little deeper on all of that sure Andrew Thanks for the question Justin Brian here.

Speaker 4: next few weeks. But let me ask Brian to go a little deeper on all of that. Sure, Andrew. Thanks for the question, Justin. Brian here. As Andrew alluded to, I would say our results for COVID in the fourth quarter were in line with our expectations. As you said, similar to the dialogue we had for the third quarter, as well as at the investor conference with commercial largely at baseline performance in both CARE and CAID modestly below.

As Andrew alluded to I would say our results for Covid in the fourth quarter were in line with our expectations. As you said similar to the dialogue, we had for the third quarter as well as at the Investor Conference with commercial largely at baseline performance involve care and Cade modestly below still at that same dynamic of Medicaid being slightly below Medicare so not much change there.

Speaker 5: still with that same dynamic of Medicaid being slightly below Medicare, so not much change there. As you suggested and as we had reiterated in our opening comments, Omicron obviously emerging here in December , and I think John Rex said it well, while there's certainly some differences in contagiousness and severity, the impact of abatement

<unk> as.

You suggested and as we reiterated in our opening comments omicron, obviously emerging here in December and I think John Rex said, it well, while there is certainly some differences and can changes in severity.

Impact of abatement. Following these wells and infections is consistent with what we've seen in delta and other strains prior double digit declines in both physician visits as well as specialists visit so we're continuing to see that dynamic play out what we may not have anticipated an increased testing and costs are offset with beneficial.

Speaker 10: Following these swells and infections is consistent with what we've seen in Delta and other strains prior double-digit declines in both physician visits as well as Specialist visits, so we're continuing to see that dynamic play out what we may not have anticipated in increased testing and costs

Speaker 10: are offset with beneficial unanticipated levels of abatement, so that seems to be holding here in the early stages of Omicron.

You'll unanticipated levels of abatements, so that seems to be holding here in the early stages of <unk>.

Speaker 10: To your point with respect to at-home testing, you know, our focus right now is really the consumer experience. As you know, these rules came out just a week ago. Our goal has been how can we ensure that our members know where they can go and get access to those at-home tests without a cash outlay.

To your point with respect to at home testing our focus right now is really the consumer experience as you know these rules came out just a week ago. Our goal has been how can we ensure that our members know where they can go and get access to those at home test without a cash outlay, we've really been pleased with the various retailers that we've been working with Walmart and rite aid and parts.

Speaker 10: We've really been pleased with the various retailers that we've been working with, Walmart and Rite Aid in particular, but many to follow, of getting this capability stood up in a matter of four days. We're encouraged by that.

<unk>, but many to follow of getting this capability stood up in a matter of four days, we're encouraged by that and at the same time, creating a really easy digital experience for those that do shop and need reimbursement when they go to United Healthcare and my UHC Theyre able to easily understand how to get that reimbursement that's been our focus I think isolate in the cost of the Covid test from this.

Distance isn't really instructive I think if and when it remains durable as a function of not only supply and demand, but how this plays out over the course of the year and again Im comforted by this offsetting dynamic health care deferral that has followed any of these unanticipated ways. Thanks, Justin Brian . Thanks, So much.

Speaker 3: Thanks, Justin. Brian , thanks so much. And, you know, I also just want to express thanks to the folks at Walmart and Rite Aid and others who will join shortly in helping get this Preferred Network up so quickly. The fact that we were in a position with our partners to be able to respond to patient need from Saturday, the very first day that this was...

I also just want to express our thanks to the folks at Walmart and Rite aid on others, who will join shortly and helping get this preferred network up so quickly. The fact that we were in a position with our partners to be able to respond to patient need from Saturday. The very first day that this was requested from the federal government I think speaks.

Speaker 3: requested from the federal government I think speaks well to the capabilities of the private sector, the participants within the healthcare sector to respond and solve problems on behalf of the country. And I think that's an example which we see repeated across the landscape and we're very, very proud of being able to work with Walmart and Right Data in this particular case. Our next question is from

Well to the capabilities of the private sector. The participants within the health care sector to respond and solve problems on behalf of the country and I think Thats. An example, which we see repeated across the landscape and we are very very <unk>.

Prior to being able to work with Walmart and Rite aid in this particular case our next question.

Speaker 2: We'll go next to Kevin Fischbeck with Banks America.

We'll go next to Kevin Fischbeck with Bank of America.

Great. Thanks.

Speaker 6: Great, thanks. I just really want to go back to the MA conversation for a second. Can you talk a little bit about how you're thinking about the margins in that business and whether you think any differently about the appropriate margin or acceptable margin in that business now that we've got an ability to earn additional earning streams through the capitation, the value-based care arrangements that you have?

I'll go back to the M&A conversation for a second.

Talk a little about how you're thinking about the margins in that business and whether you think any differently about the appropriate margin are acceptable margin that business now that we've got and the ability to earn.

Additional earning streams through the application of value based care arrangements that you have thanks.

Speaker 3: Thanks so much, Kevin. Let me ask John Rex just to reflect on that.

Thanks, So much Kevin let me ask John Rex just to reflect on that thanks.

Speaker 5: Yeah, Kevin, good morning, it's John here. So yeah, when we think about kind of the our business structure, right, we have separate businesses across the company, across the, the company. And as you know, well,

Yeah, Kevin Good morning, it's John here, So, yes, when we think about kind of the our business structure.

Have a separate businesses across the company across the.

The company and as you know well.

Extremely important to us is remaining as retaining bright lines across those businesses, we serve over 100 payers and Optum care we serve.

Speaker 5: extremely important to us is retaining bright lines across those businesses. We serve over 100 payers in OptumCare. We serve many payers across the OptumInsight businesses. And so when we think about our business, they stand alone from a margin perspective, all of our businesses. And that's very important to how we operate the company, how we serve others, and how we approach the market.

Many payers that.

Payers across the Optum insight businesses and so when we think about our business. They stand alone from a margin perspective.

All of our businesses and that's very important.

To how we operate the company how we serve others.

And how we approach the marketplace absolutely John Thanks, So much and Kevin. Thanks for the question. It's also really important to remember that every single one of our service lines business lines is literally tested and challenged at $27 365 days a year through all of its multi payer relationships the competitive competitive environment. We're in I don't think theres really any.

Speaker 3: Absolutely John , thanks so much and Kevin thanks for the question. It's also really important to remember that every single one of our service lines business lines

Speaker 3: is literally tested and challenged 24-7, 365 days a year through all of its multi-payer relationships, the competitive environment we're in.

Speaker 3: I don't think there's really any space where we don't have multiple competitors at some level and of course with all of the variety of payers that we service.

Space, where we don't have multiple competitors at some level and of course with all of the variety of payers that we service.

Speaker 3: You know, we are constantly being tested in terms of our ability to serve, making sure that we are priced competitively and the like. So, you know, I think it's well, it's a well-established and highly successful separation between the two businesses, which has performed extremely well and most importantly, consistently delivers great value to patients, consumers, system partners who we are privileged to work with.

We are constantly being tested in terms of our ability to serve making sure that we are priced competitively and the like so I think it's well, it's a well established and highly successful separation between the two businesses, which performed extremely well and most importantly consistently delivers great value to patients consumers system.

Partners, who we are privileged to work with and increasingly is scoring well in areas like NPS and other measures of consumer experience and service experience.

Speaker 3: and increasingly is scoring well in areas like MPS and other measures of consumer experience and service experience.

Next question.

We will go next to Stephen Baxter with Wells Fargo.

Speaker 4: Yeah, hi, thanks. I wanted to come back to the rapid testing question. I guess, are you guys thinking about this as a definite net cost? Are you thinking there are potential offsets from, you know, less expensive other testing? And then there does seem to be a push and pull between the supply and the market of rapid tests today, and then the Biden administration distributing a billion of these tests for free. I guess, how are you thinking about the supply that your partners are going to have access to as you have these discussions? Thanks.

Yeah, Hi, Thanks, I wanted to come back to the rapid testing question. I guess are you guys thinking about this as a definite that cost are you thinking there potential offsets from.

There are other testing and then there does seem to be a push and pull between the supply in the market of rapid test today, and then the <unk> administration distribute and 1 billion of these tests for free I guess, how are you thinking about the supply that your partners are going to have access to that you have these discussions thanks.

Speaker 3: Stephen, thanks so much for the question. As Brian alluded to earlier on, at this point...

Hey, Steven Thanks, so much for the question.

As Brian alluded to earlier on I mean at this point.

Speaker 3: You know, a little hard to know exactly, obviously, partly because of the demand and supply dynamic, exactly what the kind of scale of the testing program could be. But, you know, given you would logically expect that if there was a high sustained demand, there's probably a lot of Omicron or some kind of variant in the system that would probably lead to what Brian was talking about earlier with abatement elsewhere in the system.

Little hard to know exactly obviously, partly because of the demand and supply dynamic exactly what the kind of scale of the testing program could be but given you would logically expect that if there was a high sustained demand that's probably a lot of them are chrome or some kind of varied in the system that would probably lead to what Brian was talking.

About earlier with abatement elsewhere in the system. So this level I think we kind of expect these two things to somewhat offset obviously, we don't know but at this level I think it kind of makes sense the demand and supply obviously that has been a challenge across the system. Historically, we're very fortunate to have very.

Speaker 3: So, you know, at this level, I think we kind of expect these two things to somewhat offset, you know, obviously we don't know, but, you know, at this level, I think it kind of makes sense.

Speaker 3: But demand and supply, obviously that has been a challenge across the system historically. We're very fortunate to have very, very established, experienced supply chain partners in this, in the shape already of companies like Walmart.

Very established experienced supply chain partners in this in the shape already have companies like Walmart and Rite aid and I'm sure that very much focused on ensuring as much supply they can get up.

Speaker 3: and Rite Aid and I'm sure they're very much focused on ensuring as much supply they can get.

Speaker 3: I think it's inevitable that we're going to continue to see outages as you go through these geographic kind of surges that we've characterized this pandemic from the get-go. Last question.

It's inevitable that we're going to continue to see outages as you go through these geographic kind of surges that we've characterized this pandemic from the get go next question.

We will go next to Ricky Goldwasser with Morgan Stanley .

Speaker 11: Yeah, hi, good morning. So, as we think about the MA environment, you're growing above market. Can you talk a little bit about the role that OptumCare plays in the ability to gain share? Maybe if you have any data points that compare the stickiness or attrition among United MA members that are within the OptumCare network.

Yeah, Hi, good morning.

So as we think about the any environment youre growing above market.

Can you talk a little bit about the role that often can please cindy ability to gain share maybe you have any data points that compare the stickiness or attrition among united in a non periods dinner with E&P Optum care network.

Speaker 3: Ricky, thanks so much. Before I hand that to Brian to maybe reflect on a little bit, you know, one of the things that I think we really are pleased about is the way in which OptumCare has developed a whole set of capabilities to deliver really enhanced

Ricky Thanks, so much before I hand that to Brian to maybe reflect on a little bit.

One of the things that I.

I think we really are pleased about is the way in which Optum care has developed a whole set of capabilities to deliver really enhanced.

Speaker 3: focus on MA patients. Obviously these patients have high medical need very often. They need high touch.

Focus on MA patients. Obviously these patients have a high medical need very often they need high touch I've been super impressed with the development not just in the clinic, but also through the at home programs, where we're able to continue to make sure folks are looked after properly and actually particularly as we've gone through the pandemic.

Speaker 3: I've been super impressed with the development, not just in the clinic, but also through the at-home programs where we're able to continue to make sure folks are looked after properly. And actually, particularly as we've gone through the pandemic environment, people's preference to have care delivered in the home has become clearer and clearer. But Brian , maybe you could reflect a little more on how that plays through in terms of the attractiveness of what you're able to offer. Sure, I appreciate that. I think

<unk> environment People's preference to have care delivered in the home has become clearer and clearer Brian maybe you could reflect a little more on how that plays through in terms of the attractiveness of what you're able to offer sure I appreciate that I think.

Speaker 10: I think Tim really laid out a long list of things that we focused on to make sure that we remain competitive in this space and as I think about OptumCare.

Thank Tim really laid out a long list of things that we focus on to make sure that we remain competitive in this space and as I think about Optum care spin.

Specifically first and foremost for us, it's predictability, but beyond that where we have our best satisfaction, which in turn leads to our best persistency. Our members stay with US the longest is with our Optum care partners and I think first and foremost that's a benefit for us I think beyond that our journey on quality from as you might remember just a short decade ago are under 10% of <unk>.

Speaker 10: Specifically, first and foremost for us, it's predictability. But beyond that, where we have our best satisfaction, which in turn leads to our best persistency, our members that stay with us the longest is with our OptumCare partners.

Speaker 10: And I think first and foremost, that's a benefit for us. I think beyond that, our journey on quality from, as you might remember, just a short decade ago of under 10% to almost nearly 100%.

Almost nearly 100% was certainly at the at the support and help.

Speaker 10: was certainly at the support and help from OptumCare, not only in our relationship with them, but how we establish incentives with providers outside of OptumCare. So the list is pretty long, and I would say, if I was to point to one differentiation for UnitedHealthcare, it's certainly.

From op of care not only in our relationship with them, but how we establish incentives with providers outside of Optum care. So the list is pretty long and I would say if I was to point to one differentiation for United Healthcare It certainly optum care.

Speaker 8: Why? Would you like to maybe add from your perspective? Yeah, well, B.T., you touched on it, but our focus on the consumer and patient experience is relentless. And we are continuing to deploy new capabilities all the time. And, Andrew, you mentioned home and community. When you look at the quality of the care that we provide, as Brian mentioned, it's now 99 percent of UHC members with OptumCare are in 4SAR or higher level plans.

Why would you like to maybe add from your perspective, yes.

BT you touched on it but our focus on the consumer and patient experiences relentless and we are continuing to deploy new capabilities. All the time and Andrew you mentioned home and community. When you look at the quality of the care that we provide as Brian mentioned is now 99%.

UHC members with Optum care or enforce our or higher level plans and and we don't stop there and so now we have unveiled our virtual care platform that brings behavioral care to the forefront brings virtual care and physical care and connect people to their own trusted providers. So youll see.

Speaker 3: And we don't stop there. And so now we have unveiled our virtual care platform that brings behavioral care to the forefront, brings virtual care and physical care, and connects people to their own trusted providers. So you'll see us continuing to focus on how do we meet the needs of our members and how do we reduce friction for our patients. Great, thanks, Wyatt. Thanks so much for the question, Ricky. Next question.

He is continuing to focus on how do we meet the needs of.

Our members and how do we reduce friction for our patients great things right. Thanks, So much for the question Ricky next question.

We'll go next to a J rice with credit Suisse.

Thanks, Hi, everybody.

Speaker 12: Thanks. Hi, everybody. Obviously, labor pressures across the healthcare industry is a big topic. You have

Obviously labor pressures across the health care industry.

Industry.

Big topic.

<unk>.

Speaker 12: involvement in that in OptumHealth as well as in UHC in your discussions with your non-affiliated providers. I wondered how that's impacting your business, perhaps the shift of people from

Enrolment in that and Optum health as well as the UHC in your discussions with your <unk>.

Non affiliated providers I wondered how what how thats impacting your business, perhaps the shift of people from.

Speaker 12: to OptumHealth from UHC, maybe a mitigating factor, but.

Too often helps them UHC may be a mitigating factor but.

Speaker 12: Any comments about what you're saying as you try to add your...

Any comments about what youre seeing as you try to add your clinicians and Optum health and then also what Youre hearing from your provider networks and how that might.

Speaker 12: Clinicians in OptumHealth and then also what you're hearing from your provider networks and how that might impact your outlook in UHC.

Impact your outlook and UHC.

Speaker 4: Thanks, A.J. Let me ask Dirk to start that one off. Yeah, thanks, A.J. You know, look, let me just take this a little bit more broad. As we look across our labor markets, it's a hot market for things like clinical talent, technology, and customer service. And, you know, one of the things we in Optum did really early in the process is we scaled up our recruiting capacity. We got, we retained, we set up retention for some key staff. And, you know, one of the other things is we've had pretty decent retention because we were a pretty good mission along those.

Thanks, a J, let me ask Doug to start that one I'll yeah. Thanks, a J look let.

Let me just take this a little bit more broad.

As we look across our our labor markets, it's a hot market for things like clinical talent technology and customer service and one of the things we in and often did really early in the process as we scaled up our recruiting capacity.

We got we retained we set up retention for some key staff and you know one of the other.

Other things is we've had pretty decent retention because we were pretty good mission along those lines. So.

A lot of additional staffing a lot of sort of getting ahead of this proactively as has been our major our major action.

Speaker 4: As it relates to other providers in UnitedHealthcare, we talked about this in the last earnings call. You know, our contracts are negotiated, you know, every three years, so it's sort of from our perspective, yeah, we're hearing that there's shortages.

As it relates to other providers and hate United Healthcare, we talked about this in the last earnings call.

Our contracts are negotiated every three years. So is sorted from our perspective, yes, we're hearing that there's shortages, but where we're working with those folks and the shortages and theres a little bit of inflation, but we ultimately price for that and like it.

Speaker 4: But, you know, we're working with those folks on the shortages, and, you know, there's a little bit of inflation, but we ultimately price for that. And you know, like anything else in the market, the market will settle that out, and, you know, we're just being very aware of what the implications on a little bit tight labor market are. And, you know, hopefully it'll loosen up.

Like anything else in the market the market will settle that out and we're just being very aware of what the implications on a little bit tight labor market are and hopefully it'll loosen up as we as we pace forward great. Thanks, so much to eight and a J. Thanks. So much for your question next question.

Speaker 3: As as we pie forward. Greg, Thanks so much to eight and A. J Thanks so much for your question. Next question.

We'll go next to Matt Borsch with BMO capital markets.

Speaker 2: We'll go next to Matt Borsch with BMO Capital Markets.

Speaker 13: Yes, thank you. I think I was hoping that you could maybe just talk a little bit more about the Medicaid Redetermination than what you're expecting In terms of the timing and the impact because I know you touched on modest. I'm just Yeah, wondering how you see

Yes. Thank you.

Was hoping you could maybe just talk a little bit more about the Medicaid redetermination, but what youre expecting.

In terms of the timing and impact because I know you touched on modest <unk> Scott.

Wondering how you're seeing mitigating factors here.

Speaker 3: Yeah, Matt, thanks so much. I'm going to ask Tim Spilker who leads our CNS organization to respond to that. Tim, could I pass over to you?

Yes, Matt. Thanks, so much I'm going to ask Tim Spilker, who leads our CNS organization to respond to the timken pass over to you.

Speaker 14: Yeah. Hey, thank you for the question. And, you know, at the investor conference, we indicated that we thought states would resume redeterminations in mid 22. I think based on what we're seeing at this point, that assumption seems even more likely than we thought at that point. Important to note, though, that we're also working closely with our state customers to better understand the timing and the approach that they will take once they do resume.

Hey, Thank you for the question.

At the Investor Conference, we indicated that we thought states would resume redetermination in mid 'twenty two I think based on what we're seeing at this point that assumption seems even more likely than we thought at that point.

Important to note, though that we're also working closely with our state customers to better understand the timing and the approach that they will take once they do resume.

Speaker 14: And probably most importantly, you know, based on the breadth of UH's products, you know, across commercial coverage exchange.

And probably most importantly, based on the breadth of UHT products across commercial coverage exchange as well as Medicaid we're confident that we'll pick up our fair share as folks transition for Medicare to other types of coverage. So.

Speaker 3: as well as Medicaid, we're confident that we'll pick up our fair share as folks transition from Medicaid to other types of coverage. So, thanks for the question. Tim, thanks so much. And Matt, also, thank you. Next question.

So thanks for the question.

Tim Thanks, so much and Matt also thank you next question.

We will go next to Nathan Rich with Goldman Sachs.

Hi, good morning, Thanks for the questions just following up on some of the comments on Medicare advantage. A couple of your peers are talking about changing how they go to market next year, both from a benefit design as well as a distribution standpoint.

Speaker 15: Hi, good morning. Thanks for the questions. Just following up on some of the comments on Medicare Advantage, a couple of your peers are talking about changing, you know, how they go to market next year, both from a benefit design as well as a distribution standpoint. You know, I know it's early to talk about 2023, but I'd just be curious, you know, how this, you know, informs your approach as you strive to maintain that value differential that your plans provide.

I know, it's early to talk about 2023, but I'd just be curious how this informs your approach as you strive to maintain that.

That value differential that youre plans provide.

Speaker 3: Thanks so much, Nathan, for the question. Let me ask Tim Knoll to make a couple of comments.

Thanks, so much Nathan for the question.

Let me ask Tim no to make a couple of comments on that yes.

Speaker 7: Yeah. Thanks, Nathan, for the question. You know, as we think about 2023, certainly a little bit too early to get into a lot of depth there given as we haven't even seen an indication of rates from CMS yet. However, you know, when I think about broad strategic goals around distribution and product, I'm not seeing any, you know, shift in the

Yes, thanks for the question.

<unk>.

As we think about 2023 is certainly a little bit too early to get into a lot of depth. There given as we havent even seen indication of rates from CMS, yet, however, I think about <unk> strategic goals around distribution and product.

Not seeing any shift in the <unk>.

Speaker 7: stands that we've gone to market with in 2022 and even 2021 and years prior. We are very comfortable with our multi-channel distribution approach and as I indicated earlier our approach around differentiating our products in a very robust industry continue to resonate so no deviation from what's been a successful formula for us in providing really great.

Dan.

We've gone to market with in 2022, and even in 2021 and years. Prior we are very comfortable with our multichannel distribution approach.

As I indicated earlier, our approach on differentiating our products in a very robust industry continuing to resonate. So no deviation from what's been a successful formula for us and providing really great value to consumers.

Speaker 3: Yeah, I think that's exactly it, Tim and Nathan, the focus on.

Yes, I think that's exactly it.

Nathan the focus on sustained delivery of value.

Speaker 3: sustained delivery of value is incredibly important, I think, for the underpinning of how UnitedHealthcare have done so well in this environment. It's really important from a distribution broker perspective. People understand what we're offering, but it's not volatile. It's even more important after people sign up. People get what they expect. And that is really, you know, that served us super well. We believe the way in which

Is incredibly important and I think from the.

Underpinning of how Unitedhealthcare have done so well in this environment, it's really important from a distribution broker perspective people understand what we're offering but it's not volatile it's even more important after people sign up people get what they expect and that is really that served a super well, we believe the way in which.

We put together this benefit package really serves the needs of the members in.

Speaker 3: We've put together this benefit package, really serves the needs of the members, and it really speaks to why it's so popular, and it's why at United we've been able to grow market share consistently year after year after year. We'll do so again this year. We'll deliver our objectives in MA growth, and we're extremely positive about this part of our performance. Next question.

And it really speaks to why it's so popular and it's why we've been able to grow market share consistently year. After year. After year, we will do so again this year, we'll deliver our objectives in MA growth and we're extremely positive about this Paul.

Performance next question.

We will go next to Gary Taylor with Cowen.

Speaker 8: Hi, good morning. I just wanted to return to OptumHealth for a minute around the fourth quarter. You know, if we look here to date, OI was growing, you know, 35 percent almost every quarter. It was up about 17 percent this quarter, and then I think for next year you have it, you know, growing almost.

Hi, Good morning, just wanted to return to Optum health for a minute around the fourth quarter.

If we look year to date.

It was growing 35% almost every quarter. It was up about 17% this quarter and then I think for next year you have it growing almost.

Speaker 8: 30. So was there anything else in the quarter? I know Wyatt talked about some of those incremental investments. I guess it makes sense a little more of those could have been in the fourth quarter, but anything else on the on the cost side at OptumCare or anything at the MedSurge or the ASC business to call out impacting 4Q?

30, so was there anything else in the quarter I know why it talked about some of those incremental investments I guess it makes sense a little more of those could have been in the fourth quarter, but anything else on the on the cost side at Optum care or anything at the med surge or the ASC business to call out impacting <unk>.

Speaker 8: I think overall, no, but let me ask Wyatt just to give you a little bit more detail. Yeah, thanks, Gary, for the question. And by far, the biggest component that you're referring to is what we've touched on, which is the investment in future growth and the platforms for managing...

I think overall no, but let me ask why it just to give you a little more detail yes.

Thanks, Gary for the question.

By far the biggest component that Youre youre, referring to is what we've touched on which is the investment in future growth and the platforms for managing 500000, new risk lives in 'twenty two.

Speaker 8: 500,000 new risk lives in 22. We saw some modest uptick in our labor costs that were not really material to our performance, but just because I know that's on people's minds. So as we continue to address that.

We saw some modest uptick in our labor costs that were not really material to our performance, but just because I know that's on People's minds. So as we continue to address that.

Speaker 3: And you'll see us continue to invest in technologies like our virtual care delivery platform, behavioral health care, and home and community. So it isn't just the risk lives in a senior clinic model. It's this comprehensive care delivery model that has multiple components of investment that will yield fruit, not only in 22, but in following years. So thank you. Thanks, Wyatt. Next question. We'll go to the next two.

And Youll see us continue to invest in technologies like our virtual care delivery platform behavioral health care and home and community. So so it isn't just the risk lives in a senior clinic model. It's this comprehensive care delivery model that has multiple components of investment that will yield fruit not only in 'twenty two but.

In following years. So thank you. Thanks next question.

We'll go next to Lance Wilkes with Bernstein.

Yeah. Thanks, I wanted to talk a little bit about Optum Rx and just wanted to get a sense as to the rate of growth, especially.

Speaker 9: Yeah, thanks. I wanted to talk a little bit about OptumRx and just wanted to get a sense as to, you know, the rate of growth of specialty home delivery and what the margin profile is looking like there and maybe what the outlook is for specialty generics and biosimilars and impacts on margin. Thanks.

Delivery and what the margin profile is looking like there and maybe what the outlook is for specialty generics and biosimilars and impacts on margin.

Speaker 3: Lance, thanks so much for the question. Let me ask Heather Sanfranco, who looks after OptumRx, for us to respond. Heather?

Lance Thanks, so much for the question, let me ask had the same frankly, who looks after optum Rx for us to respond Heather.

Thanks.

Speaker 16: Yeah, so I would definitely say that the specialty and home delivery business are contributing to earnings and our margins.

Yes.

It definitely say that the specialty and home delivery business are contributing to earnings on our margin.

Speaker 16: We've seen growth and specialty from a few things. First of all, it's been rate of capture. Second, we've seen, you know, growth with our PBM clients, which of course drives growth.

We've seen growth in specialty from a few things first of all it's been rate of capture second we've seen.

With our PVM clients, which of course drives growth.

Speaker 16: when they use our specialty services, as well as we've really been investing in automation.

These are specialty services as well as we've really been investing in automation. So I'll give you. An example of that our home delivery and our and our specialty businesses today are really benefiting from our investment in digital and a better consumer experience in fact today, 50% more of our specialty consumers are using our <unk>.

Speaker 16: So I'll give you an example of that. You know, our home delivery and our specialty businesses today are really benefiting from our investment in digital and a better consumer experience. In fact, today, 50% more of our specialty consumers are using our online and digital experience to fill their meds and refill their meds. So we're glad to see that it's resulting in a better consumer experience, but it's also contributing to

Online and digital experience.

To fill their meds and refill there Matt So we're glad to see that it resulting in a better consumer experience, but it is also contributing to.

Speaker 16: the earnings of the business. I guess I'd tell you as I look forward on that business, I think about two things. The first one is, you know, continued automation and improvement in experience integrated with the rest of our pharmacies. Think about, you know, investing it with our multi-dose, our investment in regional integrated pharmacies closer to members' homes.

The earnings of the business I guess I would tell you as I look forward on that business I think about two things. The first one is continued automation and improvement and experience integrated with the rest of our pharmacy is think about <unk>.

With our multi dose our investment regional integrated pharmacy is closer to members' homes.

Speaker 16: so that we can get medication to them faster. We're processing and filling over 80% of prescriptions same day today. So we'll continue to see that cost.

We can get medication to them faster where we're.

We're processing and filling over 80% of prescriptions same day today. So we'll continue to see that cost per script and refill cost per script.

Speaker 16: per script and refill cost per script and improve quarter after quarter like we've seen over the last quarter. But to your point, I think the other really exciting part about our specialty business is that in 22 we're going to see, you know, a robust pipeline of generic specialty come to market mostly in the oncology space.

Improve quarter after quarter like we've seen over the last quarter, but to your point I think the other really exciting part about our specialty business is that in 'twenty, two we're going to see.

A robust pipeline of generic specialty coming to market, mostly in the oncology space and then we know in 'twenty three we will see additional opportunities and not just specialty generic but additional brands in specialty classes and biosimilar, so together with the.

Speaker 16: And then we know in 23, we'll see additional opportunities and not just specialty generic, but additional brands and specialty classes and biosimilar. So together, you know, with the automation, the consumer service and the clinical programs that we offer in specialty business together with just more options affordably to our consumers, you know, we'll continue to see that contribute meaningfully to OptumRx growth and earnings and margins.

The automation the consumer service and the clinical programs that we offer and special dividends together with just more options affordably to our consumers.

We will continue to see that contribute meaningfully to <unk> growth.

Earnings and margin. Thanks, so much.

Speaker 3: Heather, thanks so much. You know, I've just added to that. I think the work that's going on inside the OptumRx team, particularly around some of the specialty areas...

Just add to that I think the work that's going on inside the optimal Rx team, particularly around some of the specialty areas as well as the development of our new GPO and readiness for what is likely to be a very interesting period of loss of exclusivity on a lot of very significant pharmaceutical products. Some of which are in categories, which are really not had competition for many years.

Speaker 3: As well as the development of our new GPO and readiness for what is likely to be a very interesting period of loss of exclusivity on a lot of very significant pharmaceutical products, some of which are in categories which have really not had competition for many years. I think it sets up the next 24, 36 months a very interesting period. We're super committed to delivering medicines at the lowest possible net cost to our members and their clients.

I think it sets up the next 24 36 months, a very interesting period, we're super committed to delivering medicines at the lowest possible net cost to our members and their clients.

Speaker 3: And it's an area where we expect significant potential as we roll through over the next two or three years. So I think Heather's organization is doing some great foundational work for a next wave of opportunity in the pharmaceutical space. We have time for one last question, operator, so if we could maybe go to the last question.

And it's an area, where we expect a significant potential as we roll through it through over the next two or three years. So.

I think this organization is doing some great foundational work for our next wave of opportunity in the pharmaceutical space.

For one last question operator, so if we could maybe go to the last question.

Speaker 2: We'll take our last question from Stephen Veloquette with Barkley.

We will take our last question from Steven Valiquette with Barclays.

Speaker 17: Thanks. Good morning. So there was so much focus over the past year on the $1.80 EPS headwind for the company related to COVID-19 in 2021. Is the $1.80 essentially where that final number shook out for last year? Or was there any deviation in either direction on any key components as we think about the reversal of roughly half of that total headwind in 2022? Thanks. Stephen, thanks so much.

Thanks, Good morning so.

There was so much focus over the past year on the dollars 80, EPS headwind for the company related to Covid in 'twenty. One is $1 80, essentially where that final number shook out for last year and was there any deviation in either direction on any key components as we think about the reversal of roughly half of that total headwind in 'twenty two.

David Thanks, very much for letting me ask.

Got him to respond to that.

Speaker 5: Good morning, Stephen. Yeah, it was materially in that zone of $1.80 is where it fell out. Look, if I were to tell you where we thought it was going to be back in November , we set it and the components that would comprise that $1.80 and how they actually fell and they went through all those components. Yeah, certainly a number of them played out a little bit differently than we would have thought back at that period.

Yes, good morning, Steven Yeah, It was materially in that in that zone of <unk>.

<unk>, where it fell out.

Look if I can tell you where we thought it was going to be back in November we set it in the components that would comprise that dollars 80, and how they actually fell and they went through all of those components, yes certainly.

Number of them played out a little bit differently than we would've thought back at that period.

Speaker 5: Perhaps the important learning we got over that period though were just the various correlations that we see across the components.

Perhaps the important learning, we got over that period, though where just the various.

The correlations that we see across the components.

Speaker 10: as different case rate volumes would occur over the course of the period and such, and the impacts on care activity levels and other areas. So it definitely probably didn't step into the year, a year ago, predicting there would be a summer wave actually even, but the correlations held very true over that period, it was the important factor for us. So, yeah.

As those as different and has different case rate volumes would would occur over the course of the period and such and the impacts on care activity levels and other and other areas. So definitely.

Probably didn't step into the year, a year ago predicting there would be a summer wave actually even.

But the correlations held very.

True over that period. It was the important factor for us so yes.

Speaker 5: within that zone of the $1.80 and the components that they played out certainly were instructive and are instructing how we even think about 2022 and the impact that we've talked about for that.

And within that within that zone of $1 80.

And but in the components as they played out certainly anywhere instructor then are instructing how we even think about 2022 and the impacts that we've talked about for that also.

Speaker 3: Yeah, great. Thanks so much, John . And Stephen, thanks very much for that last question. I'd like to thank everybody for taking the time to participate in the call this morning. And we certainly appreciate your time and attention. And I hope that what you've heard from John , Dirk, and our colleagues on the call today helps you see why we're so confident in our ability to continue to deliver high-quality growth while helping to improve the lives of the people we serve.

Thanks, So much John and Stephen Thanks, very much for that last question I'd like to thank everybody for taking the time to participate in the call. This morning, and we certainly appreciate your time and attention and I hope that what you've heard from John <unk> and our colleagues on the call. Today helps you see why we're so confident in our ability to continue to deliver high quality growth.

While helping to improve the lives of the people we serve and we look forward to sharing our progress with you again in April in the meantime, thanks, so much for your attention and Jennifer Thanks for hosting the call Goodbye.

Speaker 3: we look forward to sharing our progress with you again in April in the meantime thanks so much for your attention and jennifer thanks for hosting the call

Thank you. This does conclude today's conference we thank you for your participation.

Speaker 2: Thank you. This does conclude today's conference. We thank you for your participation.