Q4 2022 UnitedHealth Group Inc Earnings Call

January 13, 2023

Remarks as a reminder, this call is being recorded here is some important introductory information. This call contains forward looking statements under U S. Federal security laws. These statements are subject to risks and uncertainties that could cause actual results to differ materially from.

Prepared remarks as a reminder, this call is being recorded.

Here is some important introductory information. This call contains forward looking statements under U S. Federal security laws. These statements are subject to risks and uncertainties that could cause actual results to differ materially from historical experience or present expectations.

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 fillings filings. This will also reference non.

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 filings. This will also reference non-GAAP amounts a reconciliation of the non-GAAP to <unk>.

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 Dot com.

GAAP amounts is available on the financial and earnings reports section of the company's Investor Relations page at Www Dot Unitedhealth group Dot com.

Information presented on this call is contained in the earnings release, we issued this morning and in our form 8-K dated January 13th 'twenty, 'twenty, three which may be accessed from the Investor Relations page of the company's website I will now turn the conference over to the chair.

<unk> Executive officer of Unitedhealth group, Andrew witty.

Chief Executive Officer of Unitedhealth Group, Andrew witty.

Speaker 2: Good morning and welcome to the UnitedHealth Group fourth quarter and full year 2022 earnings conference call. A question and answer session will follow UnitedHealth Group's prepared remarks. As a reminder, this call is being recorded. Here is some important introductory information.

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

Over the course of the past year, the extraordinary and dedicated people of Optum and Unitedhealthcare delivered strong well balanced growth.

Progress in developing our consumer orientated capabilities and strengthen the many ways in which we deliver value based care in multiple settings.

Speaker 3: This call contains forward-looking statements under U.S. federal security laws. These statements are subject to risks and uncertainties that could cause actual results to differ materially from historical experience or present expectations.

Each of the five growth pillars, we discussed with you at our November Investor Conference, a powerful sources of opportunities on their own within large and expanding addressable markets.

Speaker 4: 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. This will also reference non-GAAP amounts.

What really unlocks the potential value, we can provide to those we serve as the connectivity of capabilities across our enterprise.

Yeah, what really unlocks the potential value, we can provide to those we serve as the connectivity of capabilities across our enterprise.

For example, this year, we expect full million people will participate and fully accountable value based care provided by Optum health.

For example, this year, we expect 4 million people will participate and fully accountable value based care provided by Optum health.

Speaker 5: A reconciliation of the non-GAAP to GAAP amount is available on the Financial and Earnings Reports section of the company's investor relations page at www.unitedhealthgroup.com.

Almost one 8 million more than we served as we enter 2022.

We're achieving this by connecting benefits care and other services to support our patients.

Many of these patients will have a Medicare advantage plan offered by United Health care or one of the many other payers who are accessing <unk> expertise and capabilities in delivering this kind of comprehensive cat.

Speaker 6: Information presented on this call is contained in the earnings release we issued this morning and in our Form 8K dated January 13, 2023, which may be accessed from the Investor Relations page of the company's website.

We will serve these patients in clinic settings, and their homes integrating behavioral care supported by our data driven clinically.

Speaker 7: I will now turn the conference over to the Chief Executive Officer of United Health Group, Andrew Witte.

Next best actions on all coordinated to provide the right care, when and where they need it.

Speaker 8: Thank you. Good morning and thank you all for joining us today. Over the course of the past year the extraordinary and dedicated people of Optum and United Healthcare delivered strong well-balanced growth, progress in developing our consumer orientated capabilities.

Pharmacy is another area in which we are more deeply connecting consumers with our services.

We engage 1 million people every day.

We engaged 1 million people every day.

In the lowest cost options, managing specialty drugs offering vital inputs and clinical advice at our community pharmacies, providing complex medication treatments right in their homes, all simplifying access through digital solutions in order to make the process uneventful for them.

Speaker 9: and strengthen the many ways in which we deliver value-based care in multiple settings. Each of the five growth pillars we discussed with you at our November Investor Conference are powerful sources of opportunity on their own within large and expanding addressable markets.

We believe this connectivity is a path to better outcomes for people and lower costs.

Speaker 10: Yet what really unlocks the potential value we can provide to those we serve is the connectivity of capabilities across our enterprise.

It is also driving growth.

The end of 2023, we expect to have more than 750 community pharmacies nearly 200 more than we had at the beginning of 2020.

Speaker 11: For example, this year we expect 4 million people will participate in fully accountable value-based care provided by Optum Health.

We continue to see the impact these services have a very local and personal level.

Speaker 12: almost 1.8 million more than we served as we entered 2022.

<unk> can provide us deliver more complete care and better outcomes include.

Helping providers deliver more complete care and better outcomes.

Speaker 13: We're achieving this by connecting benefits, care and other services to support our patients.

Including medication adherence rates, which are about 90% compared to the 50% U S average.

Speaker 14: Many of these patients will have a Medicare Advantage plan offered by United Healthcare, or one of the many other payers who are accessing Optum's expertise and capabilities in delivering this kind of comprehensive care.

All pharmacies are able to take the time to get to know their patients treatment plans and support their medication management collaboration with other care providers.

Pharmacies are able to take the time to get to know their patients treatment plans and support their medication management collaboration with other care providers.

Speaker 15: We will serve these patients in clinic settings, in their homes, integrating behavioral care, supported by our data-driven clinical insights and next best actions.

We're guided in pharmacy by the principle of getting to the lowest cost for patients and clients.

We are guided in pharmacy by the principle of getting to the lowest cost for patients and clients.

A good example.

Speaker 16: and all coordinated to provide the right care when and where they need it.

A good example, as more biosimilars come to market, we are positioned to offer patients their care providers and payers significantly more choices in how to secure the best prices for the therapies they need.

As more biosimilars come to market with physician to offer patients their care providers and payers significantly more choices in how to secure the best prices for the therapies they need.

Speaker 17: Pharmacy is another area in which we are more deeply connecting consumers with our services.

Speaker 18: We engage 1 million people every day finding the lowest cost options, managing their specialty drugs, offering vital in-person clinical advice at our community pharmacies.

In addition to Biosimilars, we're driving affordability and prescription benefits by combining formulary and cash market pricing to ensure consumers will always get the best economics.

In addition to Biosimilars with driving affordability and prescription benefits by combining formulary and cash market pricing to ensure consumers will always get the best economics.

Speaker 19: providing complex medication treatments right in their homes.

Our life saving drugs program has made very significant progress since our announcements last year.

Speaker 20: or simplifying access through digital solutions in order to make the process uneventful for them.

This program offers zero dollar out of pocket costs to consumers for drugs, such as insulin and epinephrine.

Speaker 21: We believe this connectivity is a path to better outcomes for people and lower costs.

Our goal has been to make this available throughout the U S and as of today, we have been approved in 48 states for our fully insured business more.

Our goal has been to make this available throughout the U S and as of today, we've been approved in 48 states for our fully insured business. Moreover, one quarter of our self funded employers have now chosen to add this offering for their employees and we expect that number to rise.

Speaker 22: It's also driving growth.

Speaker 23: By the end of 2023 we expect to have more than 750 community pharmacies, nearly 200 more than we had at the beginning of 2020.

Moreover, one quarter of our self funded employers have now chosen to add this offering for their employees and we expect that number to rise.

Speaker 24: We continue to see the impact these services have at a very local and personal level.

Speaker 25: helping providers deliver more complete care and better outcomes.

Getting to this point in such a short period of time was only possible through the world not just of our teams for the state officials and others in the broader health care community and we are grateful for their support.

Getting to this point in such a short period of time was only possible through the work not just of our teams for the state officials and others in the broader health care community and we're grateful for their support.

Speaker 26: including medication adherence rates, which are about 90% compared to the 50% US average.

Speaker 27: Our pharmacist.

Speaker 28: are able to take the time to get to know their patients treatment plans and support their medication management.

Looking to the year ahead, let me focus you on a couple of themes you can expect to hear from us.

One is continued scaling of our commitment to American consumers.

Speaker 29: collaborating with other care providers.

One is continued scaling of our commitment to American consumers.

Speaker 30: were guided in pharmacy by the principle of getting to the lowest cost for patients and clients.

You should and will have who should and will have an increasing influence over the care experience.

You should and will have who should and will have an increasing influence over their care experience.

Speaker 31: A good example, as more buyers similars come to market, we're positioned to offer patients, their care providers and payers significantly more choices in how to secure the best prices for the therapies they need.

Through our core innovations product design enhanced digital offerings and partnerships such as <unk> health and Walmart you will see us driving this more broadly across the enterprise.

Becoming closer to the consumer helping simplify their experiences and empower in their decision, making with greater transparency speed convenience and support.

Speaker 32: In addition to biosimilars, we're driving affordability and prescription benefits by combining formulary and cash market pricing to ensure consumers will always get the best economics.

Coming closer to the consumer helping simplify their experiences and empower in their decision, making with greater transparency speed convenience and support.

You'll also hear how we are amplifying our technology capabilities.

You will also hear how we are amplifying our technology capabilities.

Our Life Saving Drugs program has made very significant progress since our announcements last year.

2023 will see the emergence of an enhanced optum insight, bringing to life the opportunities that the legacy organizations from Optum and change creates an acceleration of how technology can be used to health care providers and ultimately patients within the overall health system.

'twenty three we will see the emergence of an enhanced optum insight.

This program offers zero dollar out-of-pocket cost to consumers for drugs such as insulin and epinephrine.

Bringing to life the opportunities that the legacy organizations from Optum and change creates an acceleration of how technology can be used to health care providers and ultimately patients within the overall health system.

Our goal has been to make this available throughout the US and as of today we've been approved in 48 states for our fully insured business.

We start this year well prepared to deliver upon the objectives. We shared with you in late November and where they.

We start this year well prepared to deliver upon the objectives. We shared with you in late November and with a deep sense of responsibility to do so on behalf of the people we are privileged to serve.

Moreover, one quarter of our self-funded employers have now chosen to add this offering for their employees, and we expect that number to rise.

A deep sense of responsibility to do so on behalf of the people we are privileged to serve.

Getting to this point in such a short period of time was only possible through the work not just of our teams but of state officials and others in the broader healthcare community and we're grateful for their support.

With that I'll turn it over to President and Chief operating Officer, Doug My math.

Thank you Andrew while the calendar shows we are two weeks into the new year. Our teams 2023 started many months ago and in some cases years ago.

Andrew while the calendar shows we are two weeks into the new year. Our teams 2023 started many months ago and in some cases years ago.

Looking to the year ahead, let me focus you on a couple of themes you can expect to hear from us.

We have been laying the groundwork necessary to execute on our growth strategy and sustained our momentum heading into this year and beyond.

We have been laying the groundwork necessary to execute on our growth strategy and sustain our momentum heading into this year and beyond.

One is continued scaling of our commitment to American consumers.

To give you a sense of how this develops I'll step through some of the work that has been longer way to ready our organization to serve even more patients and customers in this new year and provide greater value for consumers across a broad range of initiatives.

You should and will have, who should and will have an increasing influence over their care experience.

To give you a sense of how this develops I'll step through some of the work that has been long underway to ready our organization to serve even more patients and customers in this new year and provide greater value for consumers across a broad range of initiatives.

Through our core innovations, product design, enhanced digital offerings and partnerships such as RVO Health and Walmart, you will see us driving this more broadly across the enterprise.

Take them any new patients, we will serve under value based care arrangements in 2023.

becoming closer to the consumer, helping simplify their experiences and empowering their decision-making with greater transparency, speed, convenience and support.

Deepening our presence in existing areas and adding new regions.

Our teams preparations are extensive that's because the transition to fully accountable care is not simply a matter of downloading a new app. The preparations include significant investments in clinical training technology network coordination and other activities to make certain we are ready to serve.

You will also hear how we are amplifying our technology capabilities.

2023 will see the emergence of an enhanced Optum Insight, bringing to life the opportunities that the legacy organizations from Optum and Change create.

An acceleration of how technology can be used to health care providers and ultimately patients within the overall health system.

These critical investments help us support both our current year needs and establish foundations for the growth into 2024 and beyond.

We start this year well prepared to deliver upon the objectives we shared with you in late November , and with a deep sense of responsibility to do so on behalf of the people we are privileged to serve.

Our ability to serve people effectively has expanded beyond the four walls of the clinic with the rapid development of our in home clinical capabilities.

These services complement our clinic based and digital offerings and bring high quality care access to some of the most challenged and often underserved patients in this country.

With that, I'll turn it over to President and Chief Operating Officer Dirk McMahon.

Thank you, Andrew. While the calendar shows we are two weeks into the new year, our team's 2023 started many months ago, and in some cases, years ago.

For instance for.

For instance.

We're value based patients are in home services have reduced hospital visits by 15% versus fee for service delivering comparable health outcomes and achieving an NPS of approximately 80.

For value based patients are in home services have reduced hospital visits by 15% versus fee for service delivering comparable health outcomes and achieving an NPS of approximately 80.

We have been laying the groundwork necessary to execute on our growth strategy and sustain our momentum heading into this year and beyond.

To give you the sense of how this develops, I'll step through some of the work that has been long-earned away to ready our organization to serve even more patients and customers in this new year and provide greater value for consumers across a broad range of initiatives.

We then health benefits you have heard us discuss how our innovation and commercial products is adding new growth opportunities.

Within health benefits, you've heard us discuss how our innovation and commercial products is adding new growth opportunities.

One of those is surest.

One of those is surest a unique solution to employers and employees, who are looking for first dollar coverage and high transparency into quality in cost.

<unk> solution to employers and employees, who are looking for first dollar coverage and high transparency into quality and cost.

Take the many new patients we will serve under value-based care arrangements in 2023, deepening our presence in existing areas and adding new regions.

The momentum behind <unk> strong and building just two years ago. One in 25 National accounts offered surest as an option to more traditional plans thus.

The momentum behind <unk> strong and building just two years ago. One in 25 National accounts offered surest has an option to more traditional plans thus.

Our team's preparations are extensive. That's because the transition to fully accountable care is not simply a matter of downloading a new app. The preparations include significant investments in clinical training, technology, network coordination, and other activities to make certain we are ready to serve.

Thus far in 2000 22023. It is one in nine and we expect it will continue to rise.

Our offerings for seniors are another area in which we plan invest and build capabilities to provide new and valuable offerings for an extended period.

These critical investments help us support both our current year needs and establish foundations for the growth into 2024 and beyond.

For example, we continue to expand the range of clinical services, we provide by our house calls initiative.

For example, we continue to expand the range of clinical services, we provide by our house calls initiative and.

Our ability to serve people effectively has expanded beyond the four walls of the clinic with the rapid development of our in-home clinical capabilities.

In 2023, we will increase the types of vaccinations offered expand testing services and deploy even more real time resources to address social determinants of health.

These services complement our clinic-based and digital offerings and bring high-quality care access to some of the most challenged and often underserved patients in this country.

Seniors place high value on being able to get care in their home.

Seniors place high value on being able to get care in their home. It comes with an NPS of 75 and is helping to drive improving retention levels as we head into 2023.

With an NPS of 75% and is helping to drive improving retention levels as we head into 2023.

For instance,

For value-based patients,

In addition, our advocacy advocacy service solutions help members achieve better health.

Our in-home services have reduced hospital visits by 15% versus fee-for-service.

In addition, our advocacy advocacy service solutions help members achieve better health.

Our solutions led to a 42% increase in closing gaps in care.

delivering comparable health outcomes, and achieving an NPS of approximately 80.

Our solutions led to a 42% increase and closing gaps in care.

Up to 15% lower ER visits and over 10% increase in clinical program enrollment compared to customers, who who utilize standard offerings.

Within Health Benefits, you've heard us discuss how our innovation in commercial products is adding new growth opportunities.

Up to 15% lower ER visits and over 10% increase in clinical program enrollment compared to customers, who who utilize standard offerings.

One of those is Surest, a unique solution to employers and employees who are looking for first dollar coverage and high transparency into quality and cost.

Turning to health technology.

Let me offer a few early observations on our progress and long term growth opportunities we see in this area.

The momentum behind surest is strong and building.

With the completed change healthcare combination we are accelerating our investments to bring this vision of a more intelligent and simpler health system to market as rapidly as possible.

Just two years ago, one in 25 national accounts offered surest as an option to more traditional plans.

Thus far in 2023, it is one in nine and we expect it will continue to rise.

We will continue to innovate and deliver the software data analytics technology enabled services revenue cycle management and advisory services, our customers expect.

Our offerings for seniors are another area in which we plan, invest, and build capabilities to provide new and valuable offerings for an extended period.

And we are executing on the synergies of this combination with most of the financial benefit coming from complementary growth.

For example, we continue to expand the range of clinical services we provide via our House Calls initiative.

Optimists site is uniquely positioned to offer integrated end to end technology analytics and services across the entire health care value chain.

Optimum site is uniquely positioned to offer integrated end to end technology analytics and services across the entire health care value chain.

In 2023, we will increase the types of vaccinations offered, expand testing services, and deploy even more real-time resources to address social determinants of health.

Along these lines. We recently reached two new comprehensive health system partnerships with Northern light health in Maine, and with Owensboro health in Kentucky. The services, we provide typically feature a full breadth of our advanced solutions, including information technology revenue cycle management and analytics and supply.

Along these lines. We recently reached two new comprehensive health system partnerships with Northern light health in Maine, and with Owensboro health in Kentucky.

Seniors place high value on being able to get care in their home. It comes with an NPS of 75, and is helping to drive improving retention levels as we head into 2023.

Services, we provide typically feature a full breadth of our advanced solutions, including information technology revenue cycle management.

In addition, our Advocacy Service Solutions help members achieve better health.

Analytics and supply chain tools.

Chain tools.

Key here is that our comprehensive technology solutions are resonating in the market and we expect to see increasing momentum across all of Optum insight as we invest in and finalize our integration activities.

The key here is that our comprehensive technology solutions are resonating in the market.

Our solutions led to a 42% increase in closing gaps in care.

Up to 15% lower ER visits.

Expect to see increasing momentum across all of Optum and site as we invest in and finalize our integration activities with that now I will turn it over to Chief Financial Officer, John Rex.

and an over 10% increase in clinical program enrollment compared to customers who utilize standard offerings.

With that now I'll turn it over to Chief Financial Officer, John Rex.

Thank you Dirk the investments in innovations Andrew described and that we shared with you in November speak to a company that has tremendous growth potential as we head into 'twenty, three and well beyond.

Turning to health technology.

Thank you Derek the investments in innovations Andrew described and that we shared with you in November speak to a company that has tremendous growth potential as we head into 'twenty, three and well beyond.

Let me offer a few early observations on our progress and long-term growth opportunities we see in this area.

With the completed Change Healthcare combination, we are accelerating our investments to bring this vision of a more intelligent and simpler health system to market as rapidly as possible.

The opportunity to serve people more deeply are tangible and accelerating building upon a foundation of strong growth in recent years, including our 2022 performance.

We will continue to innovate in and deliver the software, data analytics, technology-enabled services, revenue cycle management, and advisory services our customers expect.

Revenue in 'twenty two of 324 billion grew by more than 36 billion or 13% over the prior year with well balanced double digit growth at both Optum and Unitedhealthcare.

And we are executing on the synergies of this combination, with most of the financial benefit coming from complementary growth.

Fourth quarter adjusted earnings per share of $5.34 grew 19% and brought full year adjusted earnings per share to $22 19 growth up 17%.

Fourth quarter adjusted earnings per share of $5 30, <unk> grew 19% and brought full year adjusted earnings per share to $22 19 growth up 17%.

OptiMinsight is uniquely positioned to offer integrated end-to-end technology analytics and services across the entire healthcare value chain.

Our capital capacity remained strong.

Along these lines, we recently reached two new comprehensive health system partnerships.

Cash flow from operations, and 22 with $26 2 billion or one three times net income.

with Northern Light Health in Maine and with Owensboro Health in Kentucky.

We returned $13 billion to shareholders through share repurchase and dividends and deployed over $20 billion in growth capital to expand our capabilities for years to come.

We returned 13 billion to shareholders through share repurchase and dividends and deployed over $20 billion in growth capital to expand our capabilities for years to come.

The services we provide typically feature a full breadth of our advanced solutions, including information technology, revenue cycle management, analytics, and supply chain tools.

Turning to the performance of our businesses.

The key here is that our comprehensive technology solutions are resonating in the market, and we expect to see increasing momentum across all of OptumInsight as we invest in and finalize our integration activities.

Optum health revenues grew by 32% and 22 71 billion as we expanded the number of patients served under value based care arrangements by about $1 million revenue per consumer grew by 29% driven by the increase in value based care patients and in the levels of care, we are able to offer.

With that, now we'll turn it over to Chief Financial Officer John Rex.

Thank you Dirk. The investments and innovations Andrew and Dirk described, and that we shared with you in November , speak to a company that has tremendous growth potential as we head into 23 and well beyond.

<unk>.

Sure.

Consistent with our comments in November Optum health is off to a strong start in 'twenty, three and we will organically grow to serve an additional 750000 value based patients this year.

The opportunities to serve people more deeply are tangible and accelerating, building upon a foundation of strong growth in recent years, including our 2022 performance.

Optum insights revenues grew 20% to $14 6 billion in 2002.

Optum insights revenues grew 20% to $14 6 billion in 'twenty two.

We concluded the year with a revenue backlog of $30 billion, an increase of $7 6 billion over last year.

Revenue in 22 of $324 billion grew by more than 36 billion, or 13%, over the prior year, with well-balanced double-digit growth at both Optum and UnitedHealthcare.

As Derek noted we are advancing our investments to more rapidly unlock the positive impact optum insight can have for care providers and patients.

Fourth quarter adjusted earnings per share of $5.34 grew 19% and brought full year adjusted earnings per share to $22.19, growth of 17%.

We expect to make a significant portion of these important investments in the first half of the year.

<unk> revenues grew 9% approaching 100 billion for the year driven by continued strong sales and the expansion of our pharmacy services businesses.

Our capital capacities remain strong.

Cash flow from operations in 22 was $26.2 billion or 1.3 times net income.

Both customer retention and new customer wins were among the highest optimum exit ever delivered laying a strong foundation for continued market leading growth.

We returned $13 billion to shareholders through share repurchase and dividends, and deployed over $20 billion in growth capital to expand our capabilities for years to come.

At United Healthcare full year revenues of nearly 250 billion grew 12%.

At United Healthcare full year revenues of nearly $250 billion grew 12%.

Turning to the performance of our businesses.

Optum Health's revenues grew by 32% in 2022 to $71 billion as we expanded the number of patients served under value-based care arrangements by about $1 million.

Our strong 2023 Medicare advantage member outlook is consistent with the objectives, we shared with you in November.

We expect to serve up to 900000 more people in 'twenty three across our individual group and dual special needs offerings, our eighth consecutive year of above market growth.

Revenue for consumer grew by 29%.

driven by the increase in value-based care patients and in the levels of care we are able to offer.

Consistent with our comments in November , Optum Health has offed a strong start in 23 and will organically grow to serve an additional 750,000 value-based patients this year.

This consistent performance underscores the product innovation benefits stability and high value seniors have come to rely on from us.

This consistent performance underscores the product innovation benefit stability and high value seniors have come to rely on from us.

Our Medicaid growth outlook for 'twenty three incorporates an expectation that states will resume eligibility redetermination early in the second quarter.

Our Medicaid growth outlook for 'twenty three incorporates an expectation that states will resume eligibility redetermination as early in the second quarter.

OptumInsight's revenues grew 20% to $14.6 billion in 2022.

We concluded the year with a revenue backlog of 30 billion, an increase of 7.6 billion over last year.

Our objective is to ensure that people will have continuous access to benefits.

As Dirk noted, we are advancing our investments to more rapidly unlock the positive impact Optimum Insight can have for care providers and patients.

And when all Redetermination activities are eventually completed.

And when all Redetermination activities are eventually completed we expect to serve even more people than we do today across our state based commercial and exchange based offerings.

We expect to serve even more people than we do today across our state based commercial and exchange based offerings.

We expect to make a significant portion of these important investments in the first half of the year.

Within our commercial offerings, we expect to serve about 1 million additional people in 2023.

OptimaRx revenues grew 9%, approaching $100 billion for the year, driven by continued strong sales and the expansion of our pharmacy services businesses.

Within our commercial offerings, we expect to serve about 1 million additional people in 2023.

Our new and innovative products continue to gain momentum with employers and their employees, which will lead to increasing growth in this market over the next several years.

Both customer retention and new customer wins were among the highest Optima RX has ever delivered.

And some well this year is just getting started.

laying a strong foundation for continued market-leading growth.

The early performance, we're seeing across our businesses further validates our confidence in the 2023 growth and performance objectives. We shared with you just six weeks ago now.

The early performance, we're seeing across our businesses further validates our confidence in the 2023 growth and performance objectives. We shared with you just six weeks ago.

At UnitedHealthcare, full year revenues of nearly $250 billion grew 12%.

Our strong 2023 Medicare Advantage Member Outlook is consistent with the objectives we shared with you in November .

Now I'll turn it back to Andrew Thanks jump as we head into 2023, we're determined to build upon the momentum. We've just described this morning further advancing our mission and delivering sustainable earnings growth of 13% to 16% over the long term.

Now I'll turn it back to Andrew Thanks, Joan as we head into 2023, we're determined to build upon the momentum. We've just described this morning further advancing our mission and delivering sustainable earnings growth of 13% to 16% over the long term and with that operator, let's open it up for questions one per caller. Please.

We expect to serve up to 900,000 more people in 23.

across our individual, group, and dual special needs offerings.

our eighth consecutive year of above-market growth.

That operator lets open it up for questions one per caller. Please.

This consistent performance underscores the product innovation, benefit stability, and high value seniors have come to rely on from us.

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 star two.

Our Medicaid growth outlook for 23 incorporates an expectation that states will resume eligibility redeterminations early in the second quarter.

Ask you to limit yourself to one question if.

We ask you to 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, we will take our first question from the line of a J rice with credit Suisse. Please.

Our objective is to ensure that people will have continuous access to benefits.

And when all redetermination activities are eventually completed, we expect to serve even more people than we do today across our state-based, commercial, and exchange-based offerings.

Hi, Dan happy New year.

Your company seems to be taking a lot of momentum across the board into 'twenty three I wonder when you step back and look at the swing factors that would say would push the company towards the higher end of the range that you've offered in EPS or towards the lower end.

Your company seems to be taking a lot of momentum across the board into 'twenty three I wonder when you step back and look at the swing factors that say would push the company towards the higher end of the range that you've offered in EPS or towards the lower end.

Within our commercial offerings, we expect to serve about 1 million additional people in 2023.

Our new and innovative products continue to gain momentum with employers and their employees, which will lead to increasing growth in this market over the next several years.

What are some of the biggest.

What are some of the biggest swing factors in your mind.

Sweet factors in your mind.

In sum, while this year is just getting started, the early performance we are seeing across our businesses further validates our confidence in the 2023 growth and performance objectives we shared with you just six weeks ago.

Pauses or.

Challenges.

Hey, Jay Thanks, so much and happy new year to you as well I. Appreciate the question. So first off we do feel that we're bringing a ton of momentum into 2023 feel across the board last year very strong performances most of our businesses closed out the year actually a little ahead of where we were anticipating even when we were at the Investor Conference.

Hey, Jay Thanks, so much and happy new year to you as well I. Appreciate the question. So first off we do feel that we are bringing a ton of momentum into 2023 feel across the board last year very strong performances most of our businesses closed out the year actually a little ahead of where we were anticipating even when we were at the Investor Conference.

Now I'll turn it back to Andrew. Thanks John . As we head into 2023, we're determined to build upon the momentum we've just described this morning, further advancing our mission and delivering sustainable earnings growth of 13-16% over the long term.

So strong from that perspective, as we look into this year I think a real standout for me maybe call out just two or three points. One is just the membership rolls and just the scale of growth in our membership and if you look at UHC performance. During 'twenty. Two just talk about that just now we're anticipating frankly, another $1 million.

So strong from that perspective, as we look into this year I think.

And a real standout for me maybe call. It two to three points. One is just the membership rolls and just the scale of growth in our membership and if you look at UHC performance. During 'twenty. Two just talk about that just now we're anticipating frankly another million plus I wouldn't be at all surprised if we didn't exceed 22.

And 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 1 on your touch tone phone. You may remove yourself from the queue by pressing star 2.

Plus.

It's all surprised if we didn't exceed 22.

Numbers by the time, we get to the end of 'twenty three that is a huge plus signals.

Numbers by the time, we get to the end of 'twenty three that is a huge plus and signals.

We ask you to 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.

Tremendous amount of engagement from the marketplace and our products across all lines of business, whether thats in the government books of business in the MA platform, our determination to make sure that we look at the folks in in Medicaid as they go through Redetermination cycle and of course in our commercial books, while <unk> seen tremendously strong growth. So that's that.

Tremendous amount of engagement from the marketplace and our product set across all lines of business, whether that's in the government books of business in the MA platform, our determination to make sure that we look after folks in and Medicaid as they go through Redetermination cycle and of course in our commercial books, while you've seen tremendously strong growth. So that's that.

We'll take our first question from the line of AJ Rice with Credit Suisse.

I did Happy New Year.

Your company seems to be taking a lot of momentum across the board into 23. I wonder when you step back and look at the swing factors that say would push the company toward the higher end of the range that you've offered at EPS or toward the lower end.

It's really really.

Really really.

Area, which I think is building for us a lot of confidence in as we go forward and then you go across to Optum and then let me just call out record selling seasons coming through from our optimal Rx platform. That's building tremendous amount of pipeline growth for us within our business over the next several years Optum health of course.

Area, which I think is building for us a lot of confidence in as we go forward many go across to Optum.

Just call out record selling seasons coming through from our optimal Rx platform. That's building tremendous amount of pipeline growth for us within our business over the next several years Optum health of course.

What are some of the biggest swing factors in your mind, potential positives or challenges?

The really rapid growth of value based fully capitation lives youll see by the end of 'twenty three we will be looking after <unk> will more than double the number of folks we were looking after the end of 'twenty, one and that's an extraordinary expansion and we expect that to continue to grow hub.

Thanks so much and Happy New Year to you as well. I appreciate the question. Yeah, so first off, we do feel that we're bringing a ton of momentum into 2023. We feel across the board last year, very strong performances. Most of our businesses closed out the year actually a little ahead of where we were anticipating even when we were at the investor conference.

Really rapid growth of value based fully capitation lives youll see by the end of 'twenty three we will be looking after <unk>.

More than double the number of folks we were looking after the end of 'twenty walnuts extraordinary expansion and we expect that to continue to grow hub.

Optum insight.

Optima Optum insight.

And this year will be an emergence of a new optum insight that's a business where we are in.

This year will be an emergence of a new optum insight that's a business, where we know we can do better we've known that for a long time, we've been <unk> to get going on the integration of change in Optum insight, which we've now been able to do we really leaned into that in the fourth quarter Youll see that flow through very rapidly in the first couple of quarters of.

No. We can do better we've known that for a long time, we've been <unk> to get going on the integration of change in Optum insight, which we've now been able to do we really leaned into that in the fourth quarter Youll see that.

Flow through very rapidly in the first couple of quarters of this year.

Let us talk about that just now. We're anticipating, you know, frankly another million plus. I wouldn't be at all surprised if we didn't exceed 22 numbers by the time we get to the end of 23. That is a huge plus and signals a tremendous amount of engagement from the marketplace in our product set across all lines of business whether that's in the government books.

This year.

That's going to give us a whole new cycle of product innovation, we expect that to be a big source of its source of lift as we go forward backed up by an increasing momentum of being able to sign up these very large health system partnerships, you've seen us do two since the Investor Conference in November in addition to the ones. We already have I remind you. These are very large.

Scaled very sticky multiyear relationships really substantial sources of energy for the organization. So that really drives all of our momentum I think where we land in the ranges. We've given you is all about our ability to execute and making sure that our organization is focused on every single day, making sure. We get every transaction right we look at.

Oh, very sticky multiyear relationships really substantial sources of energy for the organization. So that really drives all of our momentum I think where we land in the ranges. We've given you is all of our ability to execute and making sure that our organization is focused on every single day, making sure. We get every transaction right. We look after.

as we go forward. Then you go across to Optum and let me just call out record selling seasons coming through from our OptumRx platform that's building tremendous amount of pipeline growth for us within our business over the next several years. Optum Health of course really rapid growth of value-based fully capitated lives. You'll see by the end of 23...

After every patient in the right way, we make sure that we're looking after every consumer approach that we receive in the right way and so execution is going to be what determines where we come out the raw material in terms of the momentum for the company is just extraordinary as we look into 2023 I. Appreciate the question and maybe next question operator. Please.

Every patient in the right way, we make sure that we're looking after every consumer approach that we receive in the right way and so execution is going to be what determines where we come out the raw material in terms of the momentum for the company is just extraordinary as we look into 2023.

I appreciate the question and maybe next question operator please.

<unk>.

Yes. The next question is from the line of Lisa Gill with J P. Morgan. Please go ahead.

Great. Thanks, very much good morning, I was wondering if maybe you could just comment on the rugby expectations for February 1st We just had our conference. This week and there was a lot of talk about this and just what that is curious generally expecting out of that ruling.

That's a business where we know we can do better. We've known that for a long time. We've been itching to get going on the integration of change and Optum Insight, which we've now been able to do. We really leaned into that in the fourth quarter. You'll see that flow through very rapidly in the first couple of quarters of this year.

Yes, Lisa Thanks, so very much for the question I mean, we're not going to get into a ton of speculation because obviously, it's very very potentially imminent and so not sure those tons of value that I would like to ask Tim knows who looks after our <unk> business to maybe share some of his perspective on that Tim.

Yes, Lisa Thanks, so very much for the question I mean, we're not going to get into a ton of speculation because obviously, it's very very potentially imminent and so not sure where those tons of value that I would like to ask Tim knows who looks after our <unk> business to maybe share some of his perspective on that Tim.

That's going to give us a whole new cycle of product innovation. We expect that to be a big source of lift as we go forward. Backed up by an increasing momentum of being able to sign up these very large health system partnerships. You've seen us do two since the investor conference in November .

Great. Thanks for the question Lisa.

Thanks for the question Lisa.

We talked about this a bit at the Investor Conference and don't have a lot of new information to share. This morning, but let me revisit a couple of the key elements that we discussed.

in addition to the ones we already have. I remind you, these are very large scale, very sticky, multi-year relationships, really substantial sources of energy for the organization. So that really drives all of our momentum. I think where we land in the ranges we've given you is all about our ability to execute.

Couple of weeks ago. So first risk adjustment is really critical to providing broad an equitable access inside the Medicare advantage program also really important part of ensuring there is no disincentives for carrying for the most vulnerable.

A couple of weeks ago. So first risk adjustment is really critical to providing broad in that critical access inside the Medicare advantage program also really important part of ensuring there is no disincentives for carrying for the most vulnerable.

and making sure that our organization is focused on every single day making sure we get every transaction right we look after every patient the right way we make sure that we're looking after every consumer approach that we receive in the right way and so execution is going to be what determines where we come out. The raw material in terms of the momentum for the company is just a...

We also continue to remain very supportive of additional transparency and hear that takes the form of more timely and consistent reviews and acute for few of the key elements that we're thinking about with respect to these orders as it's very important for CMS to include a fee for service suggest here to make sure.

Also continue to remain very supportive of additional transparency.

And here that takes the form of more timely and consistent reviews and acute for few of the key elements that we're thinking about with respect to these odd is it's very important for CMS to include a fee for service adjuster to make sure that we're comparing original Medicare and Medicare advantage on the same basis.

That we're comparing original Medicare and Medicare advantage on the same basis.

And also very important that we don't conduct these audits on decades and are heirs.

And also very important that we don't conduct these audits on decades in arrears.

That comes with some challenges of course that said without the final rule set as Andrew alluded too hard to get really narrow and specific but we feel really good about how our results validated some of our sample sets were above some of our sample sets we're below.

It comes with some challenges of course.

maybe you could just comment on the RADB expectations for February 1st. We just had our conference this week and there was a lot of talk about this and just what managed care is generally expecting out of that ruling.

That said without the final rule set as Andrew alluded too hard to get really narrow and specific but we feel really good about how our results validated some of our sample sets for above some of our sample set for below.

Yeah, Lisa, thanks so very much for the question. I mean, you know, we're not going to get into a ton of speculation because obviously it's very, very potentially imminent and so not sure there's tons of value there, but I would like to ask Tim Knoll who looks after our M&R business to maybe share some of his perspective on that. Great, thanks for the question Lisa.

But likely have more specifics to discuss at next quarter's call. Thanks, Tim and thanks, So much and Lisa. Thanks for the question I mean, I think as you've just again, just maybe step up a little bit in the broader position.

But likely a more specifics to discuss at next quarter's call. Thanks, Tim and thanks, So much and Lisa. Thanks for the question I mean, I think as you've just again, just maybe step up a little bit in the broader position.

Obviously, the whole MA program has an unbelievably successful and popular program for seniors across the across the U S and of course, the biggest proof of that is a number of folks who every single year volunteer to sign up to be part of this program and we've seen another record year of enrollment coming through as we as we speak.

Obviously, the whole MA program is an unbelievably successful and popular program for seniors across the across the U S and of course, the biggest proof of that is a number of folks who every single year volunteer to sign up to be part of this program and we've seen another record year of enrollment coming through as we as we speak.

You know, we talked about this a bit at the investor conference and don't have a lot of new information to share this morning But let me revisit a couple of the key elements that we discussed a couple of weeks ago So first, you know risk adjustment is really critical to providing broad and equitable access inside the Medicare Advantage.

It's super important that any changes whether whether it's in this particular circumstance or any other circumstance is super important that folks are thoughtful about collateral consequences, making sure that.

Super important the any changes whether whether it's in this particular circumstance or any other circumstance is super important that folks are thoughtful about collateral consequences, making sure that Walt.

<unk> is a.

Really.

<unk> program in terms of quality of care reassurance provided to seniors ability to deliver good value for the senior good value for society.

<unk> program in terms of quality of care reassurance provided to seniors ability to deliver good value for the seeing a good value for society.

reviews and a few of the key elements that we're thinking about with respect to these audits is it's very important for CMS to include a fee-for-service adjuster to make sure that we're comparing original Medicare and Medicare Advantage on the same basis.

Making sure that any changes are made thoughtfully and holistically is what we would be hoping to see and obviously, we look forward to working with the administration when and if any further updates coming forward.

With that Lisa Thanks, so much for the question and let's go to next question operator.

And also, very important that we don't conduct these audits decades in arrears. That comes with some challenges, of course.

The next question is from the line of Josh Raskin with Nephron Research. Please go ahead.

Thanks, and good morning, I was wondering if you could speak to the progression of earnings when you add physicians or electrification groups and Optum care and how that changes over time, specifically looking for sort of margin range. As you first get started in the first year. When you breakeven how long that takes and then how long it takes gets.

That said, without the final rule set, as Andrew alluded to, hard to get really narrow and specific, but we feel really good about how our results validated. Some of our sample sets were above, some of our sample sets were below.

Thanks. Good morning, I was wondering if you could speak to the progression of earnings when you add physicians or electric physician groups and Optum care and how that changes over time, specifically looking for sort of margin range. As you first get started in the first year. When you breakeven how long that takes and then how long it takes gets.

but likely more specifics to discuss at next quarter's call.

Thanks, Tim. Thanks so much. And Lisa, thanks for the question. I mean, I think as you just, again, just maybe step up a little bit in the broader position.

The ultimate margins and I'm curious if the scale that you've got now half of this book is new in the last three years the scale accelerate some of that opportunity.

Obviously the whole MA program is an unbelievably successful and popular program for seniors across the US and of course the biggest proof of that is the number of folks who every single year volunteer to sign up to be part of this program and we're seeing another record year of enrollment coming through as we speak.

Just listen thanks, so much for the question really is a really a big question.

Let me just give a few thoughts toward that so.

One of the key capabilities you need to be in value based care at scale in these patients patients because it takes three to five years again to know medical practices before they become part of our network and as we go through our expansion pace.

It's super important that any changes whether it's in this particular circumstance or any other circumstance it's super important that folks are thoughtful about collateral consequences, making sure that what is a really really impressive programme in terms of quality of care, reassurance provided to seniors, ability to deliver a good value for the senior, good value for the senior.

Patients then in terms of how you go through the process of building the capabilities and.

And skills within the clinical practice is to move from fee for service to value based care.

Of course that patients is reflected in how long it takes to go through this from an economic and financial perspective.

And of course that patients.

Collected and how long it takes to go through this from an economic and financial perspective.

And that's why.

As we see this rapid development now it's kind of.

Optum care value based care as kind of an overnight success. It took 15 years to build and that's it's really a true.

The next question is from the line of Josh Raskin with Nephron Research. Please go ahead.

We're seeing that scale now come to life in all credit to the teams who are doing that in.

We're seeing that scale now come to life in all credit to the teams who are doing that.

Thanks, good morning. I was wondering if you could speak to the progression of earnings when you add physicians or large physician groups in OptumCare and how that changes over time, specifically looking for sort of margin ranges as you first get started in the first year. When you break even, how long that takes and then how long it takes to get to the ultimate margin.

In terms of in terms of what helps here I think it's really building.

In terms of in terms of what helps you I think it's really building.

Our muscle within your organization to continuously test learn correct Tesla in correct in terms of how we work. This is a very it's a very it's a somewhat delicate system because what youre dealing with obviously highly professional clinical decision makers on the frontline who are who are absolutely ultimately responsible for every decision they.

Muscle within your organization to continuously test learn correct Tesla in correct in terms of how we work. This is a very it's a very it's a somewhat delicate system because what you're dealing with obviously highly professional clinical decision makers on the frontline who are who are absolutely ultimately responsible for every decision that.

Make in front of every patient, but youre also trying to make sure. They have the right information to be able to learn from the whole system. The information. We know about those folks are most likely to happen what could happen what might be the best practice and how can we get the whole of the system to operate at a higher level.

They confronted every patient, but youre also trying to make sure. They have the right information to be able to learn from the whole system. The information. We know about those folks are most likely to happen what could happen what might be the best practice and how can we get the whole of the system to operate at a higher level.

a few thoughts toward that. So.

One of the key capabilities you need to be in value-based care at scale is patients. Patients because it takes three or five years of getting to know medical practices before they become part of our network and as we go through our expansion. Patients then in terms of how you go through the process of building the capabilities and

Those sorts of pieces of progress those areas, where we relentlessly invest it give us opportunity to improve the clinical cure if we can improve the clinical care. The economics forward. So within this whole model get into clinical CAD right getting people.

Those sorts of pieces of progress those areas, where we relentlessly invest it give us opportunity to improve the clinical cure if we can improve the clinical CAD economics fallen so within this whole multiple get into clinical cat right getting people.

and skills within the clinical practices to move from fee-for-service to value-based care. And of course that patience is reflected in how long it takes to go through this from an economic and financial perspective. And that's why, you know, as we see this rapid development now it's kind of optimum care value.

In the right facilities, making sure people don't spend too long in care facilities, when it's unnecessary, making sure the illnesses delayed deferred because that treated well that prevention is the priority. That's what drives all of economics and what we're seeing Josh is that over the last three or four years, we are indeed.

We're seeing Josh is that over the last three or four years, we are indeed being able to bring on more recent cohorts to better economic position more quickly that's allowing US then to continue to invest more aggressively in bringing new patients into the system and that it's really that mechanism, which youll see it come to life at the moment hopefully that.

<unk> been able to bring on more recent cohorts to better economic position more quickly that's allowing US then to continue to invest more aggressively in bringing new patients into the system and that it's really that mechanism, which youll see it come to life on them.

Hopefully that helps a little bit and next question. Please.

muscle within your organization to continuously test, learn, correct, test, learn, correct in terms of how we work. This is a very, it's a very, it's a somewhat delicate system because what you're dealing with obviously highly professional clinical decision makers on the front line who are absolutely ultimately responsible for every decision they make.

Helps a little bit and next question. Please.

We'll take the next question from the line of Justin Lake with Wolfe Research. Please go ahead.

Thanks, Good morning wanted to touch on cost trend MLR was in line with your expectations for the quarter, but wanted to hear there's been questions about the impact of respiratory in the quarter, there's even been some discussion around a pickup and just overall utilization in December so would love some comments on <unk>.

Thanks, Good morning, I wanted to touch on cost trend MLR was in line with your expectations for the quarter, but wanted to hear there's been questions about the impact of respiratory.

In the quarter, there's even been some discussion around a pickup in overall utilization in December but would love some comments on those two and maybe just a little on how trend looked.

Those two and maybe just a little on how trend looked beaten.

Queen the different businesses commercial Medicare or Medicaid.

Between the different businesses commercial Medicare or Medicaid.

Those sorts of pieces of progress, those areas where we relentlessly invest that give us opportunities to improve the clinical care, if we can improve the clinical care, the economics follow. So within this whole model, getting the clinical care right, getting people in the right facilities, making sure people don't spend too long.

Yes, Justin Thanks, so much I'm going ask Brian Thompson to respond to that please yes, thanks, Jeff for that question.

Yes, Justin Thanks, so much I'm going ask Brian Thompson to respond to that please yes. Thanks, Jeff for that question throughout the pandemic, we've been making these references to baselines et cetera, I think now being three years into this pandemic I'd like to just ground and anchor more to our expectations as Covid has waned and what im most incur.

About the pandemic, we've been making these references to baselines et cetera, I think now being three years into this pandemic I'd like to just ground and anchor more to our expectations.

As Covid has waned and what I'm. Most encouraged by is that the fourth quarter played out as we added expected than what we had set out inside of our pricing trends are lining up really nicely as we look forward to 2023.

in care facilities when it's unnecessary, making sure that illnesses are delayed, deferred because they're treated well, that prevention is the priority. That's what drives all of the economics.

<unk> by Us at the fourth quarter played out as we added expected than what we had set out inside of our pricing trends are lining up really nicely as we look forward to 2023.

To your comments around the flu as I had suggested at our Investor Conference. We certainly saw that Spike we have now seen that start to wane for I think five consecutive weeks here as we're moving forward. So played out likelihood expected.

What we're seeing, Josh, is that over the last three or four years we are indeed being able to bring our more recent cohorts to a better economic position more quickly. That's allowing us then to continue to invest more aggressively in bringing new patients into the system and that it's really that mechanism which you're seeing come to life.

Really not a meaningful impact as im looking forward versus what we've planned for so what I'm. Most encouraged by is we're sort of out of that zone of the unknowns around comparing the baselines et cetera, and really managing our book of business with greater predictability back to sort of the expectations that we had well <unk> well pre pandemic and encouraged about how.

As Im looking forward versus what we've planned for so what I'm. Most encouraged by is we're sort of out of that zone of the unknowns around comparing the baselines et cetera, and really managing our book of business with greater predictability back to sort of the expectations that we had well <unk> well pre pandemic and encouraged about how the all of those elements, including fluor lining up as we look for.

at the moment. Hopefully that helps a little bit and next question please. We'll take the next question from the line of Justin Lake with Wolf Research. Please go ahead.

Thanks. Good morning. I wanted to touch on cost trend. MLR was in line with your expectations for the quarter, but wanted to hear, you know, there's been questions about the impact of respiratory in the quarter. There's even been some discussion around a pickup and just overall utilization in December .

All of those elements, including Fluor lining up as we look forward. Thanks Jonathan.

Thanks, Jonathan.

Thanks, So much Brian Justin Thanks for the question next question. Please.

We will take our next question from the line of Lance Wilkes with Bernstein. Please go ahead.

Yeah could you talk a little bit about the employer segment and what I'm interested in is what was pricing like in 2023. If you think of the 6% commercial trend do you see your pre pandemic sort of levels, what was that light and for those employer customers. How are they kind of weighting the need to get employee.

So we'd love to comment on those two and maybe just a little on how trend looks between the different businesses, commercial, Medicare, and Medicaid. Thanks.

Yeah, Justin thanks so much. I'm going to ask Brian Thompson to respond to that please. Yeah, thanks Justin for that question. You know, throughout the pandemic we've been making these references to baselines, etc. I think now being three years into this pandemic, I'd like to just ground and anchor more to our expectations as COVID has waned.

And the war for talent versus focus on maybe higher premium costs and how they are trying to control that.

The war for talent versus.

Focus on maybe higher premium costs and how they are trying to control that.

Thanks, So much so let me ask Bryan to kick off on that yes, maybe I'll start and then I'll hand, it off to Dan <unk> I'll start with a conversation around trend is as you well know we used to share trend information back in the day and stopped doing so simply because it became less instructive as we were pacing through this COVID-19 environment, what I can share and I think once we get.

Thanks, So much let me ask Bryan to kick off on that yes, maybe I'll start and then I'll hand, it off to Dan <unk> I'll start with a conversation around trend is as you well know we used to share trend information back in the day and stop doing so simply because it became less instructive as we were pacing through this COVID-19 environment, what I can share and I think once.

What I'm most encouraged by is that the fourth quarter played out as we had expected and what we had set out inside our pricing trends are lining up really nicely as we look forward to 2023. To your comments around the flu, as I had suggested at our investor conference, we certainly saw that spike.

We have now seen that start to wane for I think five consecutive weeks here as we're moving forward. So it played out like we had expected. Really not a meaningful impact as I'm looking forward versus what we've planned for. So what I'm most encouraged by is

This is one of consistency will return to those metrics. We're certainly encouraged by what we're seeing on the utilization front I think we are seeing some durable shifts we've seen it with respect to ER moving into urgent in inpatient to outpatient but on the flip side as we all know in the labor markets, we're seeing stronger unit cost and as we all know unit costs still comprise.

We get to this is one of consistency will return to those metrics. We're certainly encouraged by what we're seeing on the utilization front I think we are seeing some durable shifts we've seen it with respect to ER moving into urgent in inpatient to outpatient but on the flip side as we all know in the labor markets, we're seeing stronger unit cost and as we all know unit costs still.

We're sort of out of that zone of the unknowns around comparing the baselines, etc. And really managing a book of business with greater predictability back to sort of the expectations that we had well pre-pandemic. And encouraged about how all of those elements including flu are lining up as we look forward. Thanks Justin.

The majority of the overall trend and as I had suggested earlier in the year. We did have a higher trend planning for 2023 and 2022, but in reality that was really a function of the first half of 2022 and again I want to give that thought and belief that we are largely back to normal normal levels that I think once we pace through 2023, we will get to that.

Thanks so much Brian and Justin thanks for the question. Next question please.

We'll take our next question from the line of Lance Wilkes with Bernstein. Please go ahead.

We are largely back to normal normal levels and I think once we pace through 2023, we will get to that zone, where we can share those pricing trends, but with that maybe a little bit more on the competitive dynamics there yes.

Zone, where we can share those pricing trends, but with that maybe a little bit more on the competitive dynamics there.

Yeah, could you talk a little bit about the employer segment? And what I'm interested in is what was pricing like in 2023, you know, if you think of the 6% commercial trend, these to be your pre-pandemic sort of levels. What was that like? And for those employer customers, how are they kind of waiting the need to get employees in the work for talent versus

Thanks, Brian and thanks for the question Lance the competitive dynamics in the commercial market remain the same as they've been always competitive we continue to price to our forward trend and we and we have continued to do that as Brian indicated there has been some modifications to that but all within the range of what we've expected and all within the range of how we price. So we don't see any material.

Yes, Thanks, Brian and thanks for the question Lance the competitive dynamics in the commercial market remain the same as they've been always competitive we continue to price to our forward trend in <unk> and we have continued to do that as Brian indicated there has been some modifications to that but always in the range of what we've expected and all within the range of how we price. So we don't see any material.

focus on maybe higher premium costs and how they're trying to control that. Thanks. Lance, thanks so much. Let me ask Brian to kick off on that. Yeah, maybe I'll start, then I'll hand it off to Dan Keeter. I'll start with the conversation around trend. As you well know, we used to share trend information back in the day and stopped doing so simply because it became less instructive as we were pacing through this COVID environment.

Deviations at all from what we've expected in our plan.

Deviations at all from what we've expected in our plan. So alright. Thanks, so much John Thanks, Lance next question.

Alright, thanks for taking so much time, thanks Lance next question.

Okay.

And we will take our next question from the line of David Windley with Jefferies. Please go ahead.

Hi, Good morning, Thanks for taking my question in Optum Health as you have added or are about to add.

Hi, Good morning, Thanks for taking my question and Optum health as you have added or are about to add.

Haverhill and home more substantial home care opportunities and have talked about those in the context of a value based care I'm wondering what influence.

<unk>.

And home more substantial home care opportunities and have talked about those in the context of a value based care I'm wondering what influence.

Those have on the trajectory of revenue per member served.

That's already rising at a pretty rapid clip due to the to the the full cap that you're you're transitioning lives into so the home and behavioral adds to that.

That's already rising at a pretty rapid clip due to the to the.

markets, we're seeing stronger unit costs. And as we all know, unit costs still comprise the majority of the overall trend. And as I had suggested earlier in the year, we did have a higher trend planning for 2023 than 2022. But in reality, that was really a function of the first half of 2022. And again, I want to give that thought and belief that we are largely back to normal normal levels. And I think once we pace through

Full cap that you're you're transitioning lives into so the home and behavioral adds to that.

Yeah, So I'm going to ask Dr. Wyatt Decker to make a couple of comments in a second on that but maybe just before he does.

Yeah, So I'm going to ask Dr. Wyatt Decker to make a couple of comments in a second on that maybe just before he does.

I think we don't particularly break out.

And I think we don't particularly break out what's driving the elements of that.

Driving the elements of that that kind of consumer served number but you can imagine that.

Consumers served number but you can imagine that.

The move to value based care is a big driver of that.

The move to value based care is a big driver of that one one of the pieces within the home platform just to pick out one of the two areas you you called out David.

One of the pieces within the home platform just to pick out one of the two areas you called out David.

Of course within that you have a substantial amount of decent population right. So that that particular part of the business helps us do a much better job of giving a much better end to end wrap around care for complex folks often found in the D. SNP population and of course, they represent a different.

indicated there has been some modifications to that but all within the range of what we've expected and all within the range of how we've priced so we don't see any material deviations at all from what we've expected in our plan.

Great, thanks so much Dan, thanks Lance, next question.

The type of revenue profile compared to.

Type of revenue profile compared to.

A more of a community patients. So I'll just make that point so within the home piece.

And we'll take our next question from the line of David Windley with Jeffries. Please go ahead.

More of a community patients. So I'll just make that point so within the home piece.

Kind of a derivative phenomenon home creates a capability, which allows us to serve decent it folks better that this is going to be an accelerator to the metric you were focused on maybe maybe ask why to go little deeper though around how you will bring in behavioral along as well as home. Please yes, well. Thank you David for the question.

A derivative phenomena the home creates a capability, which allows us to serve decent it folks better that this is going to be an accelerator to the metric you will focused on maybe maybe ask why to go a little deeper though around how you will bring in behavioral along as well as home. Please yes, well. Thank you David for the question and.

Hi, good morning. Thanks for taking my question. In OptumHealth, as you have added or are about to add behavioral and home, more substantial home care opportunities and have talked about those in the context of value-based care, I'm wondering what influence

And it's very timely we view home health as one of the new frontiers of providing value based healthcare because of the convenience. It provides and the ability to access people like dual special needs patients that often have great difficulty, leaving their home to get care.

those have on the trajectory of revenue per member served, you know, that's already rising at a pretty rapid clip due to the full cap that you're transitioning lives into. So the home and behavioral adds to that.

It's very timely we view home health as one of the new frontiers of providing value based healthcare because of the convenience. It provides and the ability to access people like dual special needs patients that often have great difficulty, leaving their home to get care.

So you will see us both developing if you will the platform of home care increasingly comprehensive fashion as well as integrating home care with our clinic based care model. So it really creates two growth vehicles for us if that makes sense and similarly with behavioral.

Yes So I'm going to ask dol Y decades and make a couple of comments in a second on that there, maybe just before he does, and I think we don't particularly break out what's driving the elements of that, that kind of consumer served number, but you can imagine that.

the move to value-based care is a big driver of that. Now, one of the pieces within the home platform, just to pick out one of the two areas you called out, David, is of course within there you have a substantial amount of DSNIP population, right? So that particular part of the business helps us do a much better job of giving a much better.

As we've seen during the pandemic the need for behavioral care is immense in the U S market and our ability to embed behavioral health care services within our primary care and value based care offerings has been differentiated and will continue to grow as well as our utilization of virtual behavioral care.

<unk> in both the home and clinic environments and so we're pretty excited about how this is coming together and we're creating a differentiated offering that helps accelerate value based care growth and provide that comprehensive care that people make thank you great. Thanks next question. Please.

kind of a derivative phenomena that home creates a capability which allows us to serve these snip folks better that of course is going to be an accelerator to the metric you were focused on. Maybe ask Wyatt to go a little deeper though around how you're bringing behavioral along as well as home please. Yeah well thank you David for the question.

The next question comes from the line of Gary Taylor with Cowen. Please go ahead.

Hi, Good morning, just looking for a couple numbers.

Hi, Good morning, I was just looking for a couple numbers.

One just going back to respiratory our recollection was maybe <unk> for you guys was about.

One just going back to respiratory iron our recollection was maybe <unk> for you guys was about.

And it's very timely. We view home health as one of the new frontiers of providing value-based healthcare because of the convenience it provides and the ability to access people like dual special needs patients that often have great difficulty leaving their home to get care. So you will see us both developing...

About 30 basis points of MLR from respiratory and O'brien said not meaningfully higher so.

About 30 basis points of MLR from respiratory and O'brien said not meaningfully higher so I'm assuming that means there is another <unk>.

Assuming that means there isn't another 50.

15% or 20 bps or something from respiratory this quarter and then just secondly on the investment gain.

About $400 million above the street about a couple hundred million dollars above the 23 guidance run rate. So just wondering was there a <unk>.

if you will, the platform of home care increasingly in a comprehensive fashion, as well as integrating home care with our clinic-based care model. So it really creates two growth vehicles for us, if that makes sense. And similarly with behavioral, as we've seen during the pandemic, the need for behavioral care is immense.

Was there a realized gain in that quarter, that's kind of above.

Was there a realized gain in that quarter, that's kind of above recurring or how we should think about that number.

<unk> or how we should think about that number.

Thanks, So much guys, let me ask John Rex to respond yes.

Yes, Gary good morning.

Hey, Gary good morning.

Go back and order here. So just in terms of B very similar with Brian Thompson commentary in terms of what we're seeing in the quarter and I think.

Go back end in order here. So just in terms of B very similar with Brian Thompson commentary in terms of what we're seeing in the quarter and I think.

So those that incidence was.

For so so those that incidence was.

Modest Lee elevated in the <unk>.

Modest really elevated in the <unk>.

But I would call up modestly elevated and but very much in line with what we would've expected.

But I would call out modestly elevated and but very much in line with what we would've expected.

and clinic environments. And so we're pretty excited about how this is coming together and we're creating a differentiated offering that helps accelerate value-based care growth and provide that comprehensive care that people need. Thank you. Great. Thanks, Wyatt. Thank you. Next question, please.

And when we are in front of you back at the end of November in terms of flu and respiratory let's put those two together in terms of just combining that whole that whole view.

So elevated when you take it into materiality in terms of the $50 billion of medical costs in the quarter.

So elevated when you take it into a materiality in terms of the $50 billion of medical costs in the quarter.

The next question comes from the line of Gary Taylor with Cowan. Please go ahead.

I wouldn't call it immensely material, though in that element.

Very consistent in terms of investment income probably wouldn't be very similar to what we what we reported <unk> <unk> a year ago in terms of the absolute level of investment income in there.

Very consistent in terms of investment income probably wouldnt very similar to what we what we reported <unk> a year ago in terms of the absolute level of investment income in there.

Hi, good morning. I was just looking for a couple numbers. One, just going back to respiratory. Our recollection was maybe 4Q for you guys was...

about 30 basis points of MLR from respiratory and O'Brien said not meaningfully higher. So I'm assuming that means there isn't another 15 or 20 bits or something from respiratory this quarter and then just secondly on the investment gain.

Just kind of like last year, I, probably wouldn't use out of my run rate.

Just kind of like last year, probably wouldn't use that as my run rate.

Stepping out into into next year, though so we're still comfortable with how we how we established and guided for for 2023 from that from that perspective also.

About 400 million above the street, about a couple hundred million above the 23 guidance run rate. So just wondering was there a realized gain in that quarter that's kind of above recurring or how we should think about that number.

So very consistent with that <unk> last year too thanks, John and thank you Gary.

So very consistent with that <unk> last year too thanks, John and thank you Darren.

Question. Please.

The next question comes from the line of Scott Fidel with Stephens. Please go ahead.

Thanks so much Guy, let me ask John Rechts to respond.

Alright. Thanks. Good morning, just interested if you could summarize your key M&A priorities for 2023, and whether there's any sort of shift at all in sort of the key trends that we've seen over the last few years, which have been.

Gary, good morning. I'll go back in order here. So, just in terms of be very similar with Brian Thompson's commentary in terms of what we were seeing the quarter and I think. For so, so those that incidents was. Modesty elevated in the 4 Q.

A big focus on adding the clinical capabilities and the scale at fault opt in health and Optum insight.

A big focus on adding the clinical capabilities and the scale at fault Optum health in Optum insight.

But I call it modestly elevated and but very much in line with what we would have expected. And when we are in front of you back at the end of November , in terms of flu and respiratory, let's put those 2 together in terms of just combining that whole that whole view.

Should we think about that continuing to be the core area of focus or any other additional elements that.

Should we think about that continuing to be the core area of focus or any other additional and thats that.

Our workstyle considering thanks.

Thanks, So much before ask John Rex to make a couple of comments on this and maybe just make a few introductory notions.

Thanks, So much before ask John Rex to make a couple of comments on this and maybe just make a few introductory notion.

I mean, it wouldn't go into a ton of detail about where we're looking but I would continue to say, we fully anticipate continuing to deploy our.

It wouldn't go into a ton of detail about where we're looking but I would continue to say, we fully anticipate continuing to deploy our.

Our capital effectively into the marketplace you know the hallmark of this company has been its ability to effectively and efficiently utilize capital to supplement organic growth and that's been a big part of the success of the organization. We will continue to do that we have a substantial number of transactions in process as we speak.

Well no. We're obviously in the process now bringing to life the change Optum insight integration, which is super important for us.

As we look forward.

It's a very interesting marketplace I mean, I would say the fund John probably confirm this I think I think what we see the pipeline of opportunities. We see is probably bigger deeper more diverse than we've ever seen that's been a trend that kind of picked up probably early last year. Certainly continued we would expect to see this year would be a pretty interesting year for us.

It's a very interesting marketplace I mean, I would say the fund John probably confirm this I think I think what we see the pipeline of opportunities. We see is probably bigger deeper and more diverse than we've ever seen and that's been a trend that kind of picked up probably early last year. Certainly continued we would expect to see this year would be a pretty interesting year for us.

And.

You know our five growth pillars, you wouldn't be a tool surprised to expect us to obviously align our M&A capital investment around our growth pillars beyond that I'm not sure.

It would be necessarily wise for us to go too much more detail, but certainly John I'd Love you to give a bit more perspective on how youll see in the landscape in the environment absolutely. Good morning, Scott, Yes, So I'll start with just echoing what Andrew mentioned there. The way we approach is very much aligned with our five growth pillars in how we evaluate how we look for opportunities.

It would be necessarily wise for us to go too much more detail, but certainly John I'd Love you to give a bit more perspective on how youll see in the landscape and the environment absolutely. Good morning, Scott, Yes, So I'll start with just echoing what Andrew mentioned there. The way we approach is very much aligned with our five growth pillars in how we evaluate how we look for opportunities.

I can say and where are we where we think we should be.

Pursuing investments.

And relationships.

I would point out these RF.

I point out these RF.

Certainly very long lived in terms of the investments that we make in terms of relational investments, we make in terms of understanding markets.

Particularly as we have heard us talk about before within the care delivery businesses and such as value based care that.

These are.

Most of the markets that we want to address arent.

Arent established the way that we would like them to be established so it's very greenfield in terms of our approach to M&A as we look at that we look at marketplaces.

Arent established the way that we would like them to be established still it's very greenfield in terms of our approach to M&A as we look at that we look at marketplaces.

And bringing together the capabilities that we need that we would pursue.

And bringing together the capabilities that we that that we would pursue.

The environment itself.

<unk>, Andrew previewed there certainly strong environment in terms of opportunity set that we are seeing in the broad marketplace in terms of the types of capabilities that are there how they might fit within this enterprise and the potential I think you would expect us to see like where we've been focused is certainly over the last number.

<unk>, what Andrew previewed there certainly a strong environment in terms of opportunity sets that we are seeing in the broad marketplace in terms of the types of capabilities that are there how they might fit within this enterprise and the potential I think you would expect us to see like where we've been focused is certainly over the last number.

Years, you've seen us do a lot of development as it relates to components of value based care and you know we define that very broadly now in terms of how we think about capabilities within value based care, who bring in new new new.

The years, you've seen us do a lot of development as it relates to components of value based care and you know we define that very broadly now in terms of how we think about capabilities within value based care as we bring in new new new.

New capabilities also and across all.

All the other elements, but.

Yeah.

Overall characterize the environment is strong and the opportunities.

Among some of the most interesting I think that we have seen as a company.

Among some of the most interesting I think that we have seen at the company.

I'd agree with that completely Jonathan.

I certainly over the next several USC this policy agenda being a key part of our continued support of our long term growth goals and you should expect to see us be continue to be active in the space. Thanks. So much Scott next question. Please.

I certainly over the next several years see this policy agenda being a key part of our continued support of our long term growth goals and you should expect to see us be continue to be active in this space. Thanks. So much Scott next question. Please.

We will take our next question from the line of Stephen Baxter with Wells Fargo. Please go ahead.

Yes, hi, good morning, I wanted to follow up on the home component of the value based care opportunity I'm wondering if you'd say potential you are further along in the penetration with the whole model inside the UHC book than other payers any color there would be great and then any sense of how the 4 million fully accountable lives breakout by clinic versus.

Yes, hi, good morning, I wanted to follow up on the home component of the value based care opportunity wondering if you'd say potentially you are further along in the penetration with the whole model inside the UHC book than other payers any color there would be great and then any sense of how the 4 million fully accountable lives breakout by clinic versus.

Home model is the primary care setting or also how the 750000 member growth breaks out for 2023 would be great. Thank you.

Hi, Steven Thanks, so much for the question. So first off let me just reiterate how important we see the development of home the home model the homecare platform and we've seen that grow very substantially over the last couple of years in particular super important though to recognize that it kind of typically so of course, sometimes folks can be essentially manage within just the home.

Hi, Steven Thanks, so much for the question. So first off let me just reiterate how important we see the development of home the home model the homecare platform and we've seen that grow very substantially over the last couple of years in particular super and pulled them, though to recognize that it kind of typically so of course, sometimes folks can be essentially manage within just the home.

Environment, all the homecare platform and that certainly happened sometimes.

Environmental the homecare platform and that certainly happened sometimes.

But of course, we'll always happen very often happens is the clinic environment in the home environment connected together, which is really what we're building here. So it's not it's not.

But of course, we'll always happened very often happens is the clinic environment in the home environment connected together, which is really what we're building here. So it's not it's not.

Super Instructive I think to think about folks who are just kind of clinic nominated all home nominated that can happen, but it's not really I think the.

Necessarily the right way to look at it I wouldn't look at it that way I'd see I'd really think about it the way we build our home capabilities as a substantial extension of what we're able to do in the clinical space and it speaks to the reality of care people.

Necessarily the right way to look at it I wouldn't look at it that way I'd see I'd really think about the way we build our home capabilities as a substantial extension of what we're able to do in the clinical space and it speaks to the reality of care people.

The loss a lot.

The loss a lot or not.

Not everything happens in the 20 minutes you are in the clinic a ton of things happen. When you are at home.

Everything happens in 20 minutes you are in the clinic a ton of things happen. When you are at home and making sure that we've got CAD capabilities, especially for folks who find it difficult to get out of the home or for whatever reason find it difficult to engage with the system. That's a super important part of the of the environment.

And making sure that we've got CAD capabilities, especially for folks who find it difficult to guy out of the home or for whatever reason find it difficult to engage with the system.

That's a super important part of the of environment what.

What I'd say is that that is resonating super strongly not just with United healthcare, but with other payers as well and there is no doubt that this side of the agenda has caught the imagination of other payers and we're delighted to see the continued extension of the multi payer.

Dynamic of Optum health and optimal generally and this is one of the drivers of that in fact during Q4, our external growth rate revenue growth rate was analogous to our internal growth of E. Optum was growing just as quickly with non UHC payers as it was with UHC and that's a super important signal for the strength of the company. So.

The dynamic of Optum health and optimal generally and this is one of the drivers of that in fact during Q4, our external growth rate revenue growth rate was analogous to our internal growth of our E. Optum was growing just as quickly with non UHC payers as it was with UHC and that's a super important signal for the strength of the company. So.

Important area, you'll continue to hear more about home as we go forward, but I would look at it more as a strengthening of the whole rather than a kind of separate stream, which we would.

Important area, you'll continue to hear more about home as we go forward, but I would look at it more as a strengthening as a whole rather than a kind of separate stream in which we would.

To be thinking about it that way hopefully that helps a little bit Stephen and let's go to the next question.

Our next question comes from the line of Nathan Rich with Goldman Sachs. Please go ahead.

Good morning, Thanks, very much for the question.

<unk> noticed for 24 will be out in the coming weeks.

Clearly been well noted in the past few years has kind of been above the historical trend and know that at some point, we could see some moderation I'd just be curious what your expectations are around that and how you view its relative importance in the context of your overall outlook for the MA market.

<unk> clearly been well noted in the past few years has kind of been above the historical trend and know that at some point, we could see some moderation I'd just be curious what your expectations are around that and how you view its relative importance in the context of your overall outlook for the MA market.

Nathan Thanks, so much for you guys as you rightly say, obviously, we're getting close to when we would likely here.

Nathan Thanks, so much for you guys as you rightly say, obviously, we're getting close to them, we would likely here.

Right notification and obviously, we don't know what thats going to be I think what we would say is we think.

<unk> is an incredibly important program for seniors.

It's being demonstrated now repeatedly the value that delivers to the individuals that value. It delivers to society and of course, the way in which seniors all essentially voting to become part of this program just signals how effective. It is we believe that one of the key elements of that effectiveness that we certainly focused on is our ability to deliver state.

We'll benefit year on year right. So I mean bottom line for US is we hope year in year out the rate notice essentially facilitates that allows us to continue to deliver that stability and we look forward to seeing what that will be and we will.

We work with.

We will work with that once it's communicated to us not much more we can say on that to be honest until we obviously get the right notice. So thanks for the question.

Next question please.

Our next question comes from the line of Erin Wright with Morgan Stanley. Please go ahead.

Great. Thanks on Ogden Rx near term Optum Rx targets do you imply passing on savings from Biosimilars, but can you detail some of the other levers you have here to drive the strength youre anticipating how should we rank those drivers across pharmacy services versus by a similar benefits over the next let's say.

Great. Thanks on Ogden Rx near term Optum Rx targets do you imply passing on the saving from Biosimilars, but can you detail some of the other levers you have here to drive the strength youre anticipating how should we rank those drivers across pharmacy services versus by a similar benefits over the next two.

12 to 18 months.

<unk>.

Great question, Aaron and thanks, before I ask <unk> to give you a few more details.

Great question, Aaron and thanks, So before asked Heather to give you a few more details.

It was super pleased with the progress we've made particularly on the Biosimilar <unk>.

Innovation Thats coming this year in the next few weeks and the work that's been done within ophthalmology Rx to deliver.

Innovation Thats coming this year in the next few weeks and the work Thats being done within ophthalmology Rx to deliver.

A contracting strategy, which ensures that everybody who wants to use the humira molecule, whether that's the brand or whether it's the biosimilar gets access to lower cost right out of the gates has been a super important innovation in terms of our contracting strategy, so without folks having to be shifted from drugs or dislocated in the market.

A contracting strategy, which which ensures that everybody who wants to use the humira molecule, whether that's the brand or whether it's the biosimilar gets access to lower cost right out of the gates has been a super important innovation in terms of our contracting strategy, so without folks having to be shifted from drugs or dislocated in the market.

We found a way to bring lower cost to everybody in that environment, and I really want to give credit to Heather and her team for the work that she's done to lead on all of that as you rightly say, we're passing those benefits directly back to the payers and the folks themselves with that Heather why don't you pick up and describe what else is driving the Rx growth.

We found a way to bring lower cost to everybody in that environment, and I really want to give credit to Heather and her team for the work. She has done to lead on all of that as you rightly say, we're passing those benefits directly back to the payers and the folks themselves with that Heather why did you pick up and describe what else is driving the Rx growth.

This year I'm sure. So first let me give you another sense of maybe next phase when you think about somewhere in the let's say the strength of the earnings press in 'twenty three so as Andrew said.

We intended to set up the biosimilar strategy to allow the most value to pull through in year. One that we can to clients and we're proud of that but this is a multiyear strategy. So and the market is dynamic we'll continue to watch it what's important here is creating a marketplace for competition of the original originator with a biosimilar in the specific and unique.

We intended to set up the biosimilar strategy to allow the most value to pull through in year, one that we can't clients and we're proud of that but this is a multiyear strategy. So and the market is dynamic we'll continue to watch it what's important here is creating a marketplace for competition of the original originator with a biosimilar in the specific and unique.

Ironman with Humira, and so many manufacturers coming to market, but over a period of maybe say the next 18 months with different attributes.

<unk> with Humira and so many manufacturers coming to market, but over a period of maybe say the next 18 months with different attributes.

Our strategy allows them to compete.

Based on our clinical criteria and product attribute how the manufacturer support the product and then obviously the economics in our pricing. So that's the goal, we'll see that play out over the years.

And the goal was to provide choice not a lot of disruption and be able to extract value without restriction or exclusion. So we'll watch that play out, but when I think about the earnings and the strength of physician ran or what we hope to be in by the end of 'twenty three think of it as some of the story you've heard of and building and what we've been talking about for the last couple of years.

The goal was to provide choice not a lot of disruption and they're looking to extract value without restriction or exclusion and we'll watch that play out, but when I think about the earnings and the strength of physician ran or what we hope to be in by the end of 'twenty three think of it as some of the story you've heard of and building and what we've been talking about for the last couple of years.

And that strengthen our pharmacy services and I'll give you. An example, yes. The community pharmacies are growing theyre expanding quickly, but our specialty pharmacies are frontier therapies, where we serve.

And that strengthen our pharmacy services and I'll give you. An example, yes. The community pharmacies are growing theyre expanding quickly, but our specialty pharmacy or frontier therapies, where we serve.

The more rare disease and orphan drugs are growing as quickly and in many of those are getting scale for instance.

Community pharmacies are scaling to the point, where we're allowed we have central fill supporting because we have the volume of.

Scripts going to the community pharmacies, and we're getting better.

Scripts going to those community pharmacies, and we're getting better.

Negotiations are able to negotiate harder on some of our procurement in those businesses, but also looked at the <unk> you had strong selling season again, we hope to have another strong selling season, the pricing is dynamic.

Negotiations are able to negotiate harder on some of our procurement in those businesses, but also looked at the ppm you heard strong selling season again, we hope to have another strong selling season and pricing is dynamic.

Move quickly with our pricing with our product attribute our product adoption is up 40% year over year, and our PVA products and and then we've got some return on some of the investments we made in the last year or two optum frontier therapies.

Partnership with Rvs, So that I think when you look towards the next year focus on those areas and look for us to drive earnings growth in those particular areas have been well set.

Partnership with ours, so that I think when you look towards the next year focus on those areas and look for us to drive earnings growth in those particular areas.

Well said.

Again, youre seeing a real transformation of the Optum Rx platform. If you look five years ago about a third of the revenues in that business came from non PVM pharmacy services now.

Again, you've seen a real transformation of the Optum Rx platform. If you look five years ago about a third of the revenues in that business came from non PVM pharmacy services now.

<unk>.

As a tremendous shift on the businesses scale really significant.

As a tremendous shift on the businesses scale really significant and I'd say one of the key themes, which is driving a lot of that is a relentless shift towards the consumer and the way in which that business is orientation and build and it's brought a real focus on delivering the best possible deal for consumers.

One of the key themes, which is driving a lot of that is a relentless shift towards the consumer and the way in which that business is orientation and build and it's brought a real focus on delivering the best possible deal for consumers.

Sure they get the lowest net cost and then youll see through as Heather just mentioned partnerships like <unk> health Youll see us to continue to innovate.

<unk> in which we engage with consumers to make that much more modern much more as U S consumers should should get and should expect.

Day in which we engage with consumers to make that much more modern much more U S consumers should should get and should expect at <unk>.

Thank you so much next question please.

The next question comes from the line of Steven Valiquette with Barclays. Please go ahead.

Great. Thanks, good morning, so regarding the acuity level of the elevated flu and respiratory costs in the fourth quarter.

Is there any sense for just how much of the elevated costs for hate to call. It Triple Denmark lets just call it that I guess for the quarter, but how much of that was related to the hospital inpatient setting in particular and then from your data was there any sense that there may have been and a slightly lower elective procedures or a traditional non COVID-19 and non flu related care in the fourth quarter.

In light of the elevated.

Fluid and respiratory costs and utilization.

Hey, Stephen Thanks, so much for.

For asking that.

I think.

Listen of course, it was Q4, there was a bit more flu and respiratory is but really I would say immaterial in the scheme in the grants in the way you asked that quite in the Grand scheme of the health care cost to the U S. Almost not noticeable I mean, almost nothing to see.

Listen of course, it was Q4, there was a bit more flu and respiratory is but really I'd say immaterial in the scheme in the grants in the way you asked that quite in the Grand scheme of the health care costs of the U S. Almost not noticeable I mean, almost nothing to see.

<unk>.

I think.

<unk>.

Much as much as I think there was a lot of anticipation around what could become in this notion of <unk>.

Much as much as I think there was a lot of anticipation around what could be coming in this notion of <unk>.

From viruses or somehow creating this I think you said triple pandemic.

Really not there and.

Really not there.

The little elevation, we saw was somewhat within the ranges of what you typically would expect in a normal Q4.

Early flu season, which as Brian mentioned earlier it looks like it's.

We've seen the last five weeks coming down.

That's pretty much it so so I really wouldn't I really wouldn't guide you to characterize this as a big deal within the overall mix of the total health care costs that we're dealing with it really isn't.

Next question.

Yeah.

Our next question comes from the line of Kevin Fischbeck with Bank of America. Please go ahead.

Great. Thanks, I was wondering if you could talk a little bit about your expectations for re determinations that you can talk a bit about how you see that.

Great. Thanks, I was wondering if you could talk a little bit about your expectations for re determinations that you talked a bit about how you see that.

Membership opportunity based on more focused on the MLR implications I guess, if you think about potentially.

Potentially significant change in the membership of the Medicaid program and the implications for the risk pool. There how are you thinking about.

Central margin compression than how quickly rates might be able to reflect that it does play out. Thanks.

Central margin compression and then how quickly rates might be able to reflect that it does play out. Thanks.

Hey, Kevin Thanks, so much I'm going to ask Tim spoke of who looks after our Medicaid business to talk to that maybe.

Tim as you do that you could also maybe just allude a little bit on the degree of visibility you have full youll book of business as you roll into 2023 that might also be helpful. Yes, absolutely. Thanks, Kevin for the question.

Tim as you do that you could also maybe just allude a little bit on the degree of visibility you have for your book of business as you roll into 2023 that might also be helpful. Yes, absolutely. Thanks, Kevin for the question.

So certainly a number of factors in play as we look ahead.

Certainly the change in membership that will see us redetermination his resume.

And then also acuity utilization all of the factors really as things return to normal. So at this point from where we look we've got visibility to around 75% of our revenue for the year and states as they set that revenue have taken all of those factors into account when setting their rates and that revenue is in line with our expectations and consistent with the outlook.

And then also acuity utilization all of the factors really as things return to normal. So at this point from where we look we've got visibility and around 75% of our revenue for the year and states as they set that revenues have taken all of those factors into account when setting their rates and that revenue is in line with our expectations and consistent with the outlook.

We shared in November so we're appreciative of the balanced rational view that our states have taken as they've looked ahead, knowing that we've got many factors coming forward, maybe one last thing just as we look ahead.

We shared in November so we're appreciative of that.

Balanced rational view that our states have taken as they've looked ahead, knowing that we've got many factors coming forward, maybe one last thing just as we look ahead.

The redetermination process will be extended we know it will take 10 to 12 months, depending on the state and that will give us opportunities to provide data feedback and insights to our customers work with them to adjust as things develop so really no changes from what we communicated in November and with a little bit more certainty now in terms of our revenue alright. Thank you Tim.

I appreciate that Kevin Thanks for the question operator, we just have time for one last question. If we could go ahead. Please.

Thank you. Our next question comes from the line of George Hill with Deutsche Bank. Please go ahead.

Hey, good morning, guys and thanks for squeezing me in at the end I wanted to come back to the specialty drug and pharmacy initiatives and I guess I don't know can you talk about what percent of these drugs are going through the mail channel versus the retail channel now kind of how do you expect the share to shift away from retail till now and then I'd tack on kind of how should we think about what the earnings power of the shifts.

Can look like as you capture more of the specialty drugs in owned channels versus third party channels.

As you capture more of the specialty drugs in owned channels versus third party channels.

Okay.

George Thanks, so much for the question, let me hand straight to Heather. Please sure great question as we continue to see the pipeline in specialty guys. I Hope you can feel the urgency around us driving and you can see it in our growth, but also in our patient care and our clinical program. So are often frontier therapy is I think is actually a good model I know it serves only sort of rare disease, an orphan drug.

George Thanks, so much for the question, let me hand straight to have.

Sure Great question as we continue to see the pipeline in specialty guys. I Hope you can feel the urgency around.

Driving and you can see it in our growth, but also in our patient care and our clinical program. So our Optum frontier therapy is I think it's actually a good model I know it serves only sort of rare disease, an orphan drug, but we talked about at the Investor Conference.

But we talked about at the Investor Conference. It's got a comprehensive clinical model wrapping around that that supports not just patients.

Comprehensive clinical model wrapping around it that supports not just patients.

Caregiver prescribed by the family that also help pharma to deliver the best service in those drug that is the model we are using to inform how we serve clients and how we serve patients and our specialty business as well so think about that holistic support patient advocacy patient support caregiver support prescriber support all while investing in automation.

Caregiver prescribed by the family, but also help pharma to deliver the best service in the drug that is the model we are using to inform how we serve clients and how we serve patients and our specialty business as well so think about that holistic support patient advocacy patient support caregiver support prescriber support all while investing in automation.

So.

Pharmacy, and our specialty pharmacy today, our automation is up we're actually seeing over 30% higher self service in the specialty pharmacy, that's not just mail maintenance that specialty so we're investing in the automation for those that have simple transactions and want to interact with us, but those that need more comprehensive care of complex.

Conditions that need the value of our 24 seven.

Additionally that need the value of our 24 seven.

Pharmacists support our team is there to help them. So we will always continue to work with our retail partners. We are we've got a very strong network of that but we want to be able to serve our consumers and our clients with best in class Specialty service alright. Thanks, George Thank you for the question.

Thanks, Heather and George Thank you for the question.

When it comes to the end of the call I hope very much you leave the call with a sense of optimism and focus on continued growth for the year ahead.

Listen we've come to the end of the call I hope very much you leave the call with a sense of optimism and focus on continued growth for the year ahead.

We remain intent on expanding our ability to help improve health care at the system and individual levels and executing with excellence for all those we serve we look forward to sharing our progress on this journey with you again in April and in the meantime, Thank you. So much for your attention. This morning, we appreciate it.

We remain intent on expanding our ability to help improve health care at the system and individual levels and executing with excellence for all those we serve we look forward to sharing our progress on this journey with you again in April and in the meantime. Thank you. So much of your attention. This morning, we appreciate it.

Okay.

That concludes today's conference. Thank you for your participation and you may now disconnect.

Q4 2022 UnitedHealth Group Inc Earnings Call

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