Q4 2023 Cigna Corp Earnings Call
Ladies and gentlemen, thank you for standing by for the sector groups fourth quarter 2023 results review at this time all callers are in a listen only mode.
Operator: Ladies and gentlemen, thank you for standing by. Fourth quarter 2023 results. This time, all callers are on a listen-only, I'll conduct a question and answer session later during,... should require assistance during the call, star zero on your touch pad All in minor, ladies and gentlemen. Thank you, again, by turning the, Go ahead.
We will conduct a question and answer session later during the conference.
Procedures on how to enter queue to ask questions at that time, if you should require assistance during the call you May press Star zero on your touch on town.
As a reminder, ladies and gentlemen, this conference, including the Q&A session is being recorded.
Begin by turning the conference over to Ralph Jacobi. Please go ahead.
Ralph Giacobbe: Great, thanks, operator. Good morning everyone. Thank you for joining today's call. I'm Ralph Giacobbe, Senior Vice President of Investor Relations. With me on the line this morning are David Cordani, the Cigna Group's Chairman and Chief Executive Officer, Brian Ivanko, Chief Financial Officer of the Cigna Group and President and Chief Executive Officer of Cigna Healthcare, and Eric Palmer, President and Chief Executive Officer of Evernorth Health Services.
Great. Thanks, operator, good morning, everyone and thank you for joining today's call I'm, Ralph Jacobi Senior Vice President of Investor Relations with me on the line. This morning are David Cort, Danny the Sickening group's chairman and Chief Executive Officer, Brian <unk>, Chief Financial Officer of the Cigna Group, and President and Chief Executive Officer of Cigna Health care and air.
Palmer, President and Chief Executive officer of ever North Health services.
Ralph Giacobbe: In our remarks today, David and Brian will cover a number of topics, including our fourth quarter and full year 2023 financial results and our financial outlook for 2024. Following their prepared remarks, David, Brian, and Eric will be available for Q&A. As noted in our earnings release, when describing our financial results, we use certain financial measures, including adjusted income from operations and adjusted revenues, which are not determined in accordance with accounting principles generally accepted in the United States, otherwise known as GAAP.
In our remarks today, David and Brian will cover a number of topics, including our fourth quarter and full year 2023 financial results and our financial outlook for 2020 for.
Following their prepared remarks, David Brian and Eric will be available for Q&A.
As noted in our earnings release, when describing our financial results, we use certain financial measures, including adjusted income from operations and adjusted revenues, which are not determined in accordance with accounting principles generally accepted in the United States, otherwise known as GAAP a.
Ralph Giacobbe: A reconciliation of these measures to the most directly comparable GAAP measures, shareholders' net income and total revenues, respectively, is contained in today's earnings release, which is posted in the investor relations section of CignaGroup.com. We use the terms Adjusted Income from Operations and Adjusted Earnings per Share on the same basis as our principal measures of financial performance. In our remarks today, we will be making some forward-looking statements, including statements regarding our outlook for 2024 and future performance. These statements are subject to risk and uncertainties that could cause actual results to differ materially from our current expectations. A description of these risks and uncertainties is contained in the cautionary note to today's earnings release and in our most recent reports filed with the SEC. Regarding our financial results, in the fourth quarter, we recorded a net after-tax special item charge of $552 million, or $1.88 per share. Details of the special items are included in our quarterly financial supplement. As described in today's release, special items are excluded from adjusted income from operations and adjusted revenues in our discussion of financial results.
A reconciliation of these measures to the most directly comparable GAAP measures shareholders' net income and total revenues respectively is contained in today's earnings release, which is posted in the Investor Relations section of the Cigna Group Dotcom.
We use the term labeled adjusted income from operations and adjusted earnings per share on the same basis as our principal measures of financial performance.
In our remarks today, we will be making some forward looking statements, including statements regarding our outlook for 'twenty 'twenty four and future performance.
These statements are subject to risks and uncertainties that could cause actual results to differ materially from our current expectations. A description of these risks and uncertainties is contained in the cautionary note to today's earnings release and in our most recent reports filed with the SEC.
Pertaining to our financial results in the fourth quarter, we recorded a net after tax special item charge of $552 million or $1 88 per share details of the special items are included in our quarterly financial supplement.
As described in today's release special items are excluded from adjusted income from operations and adjusted revenues in our discussion of financial results.
Ralph Giacobbe: Additionally, please note that when we make prospective comments regarding financial performance, including our full year 2024 outlook, we will do so on a basis that includes the potential impact of future share repurchases and anticipated 2024 dividends. With that, I'll turn the call over to David. Thanks, Ralph.
Additionally, please note that when we make prospective comments regarding financial performance, including our full year 'twenty 'twenty four outlook, we will do so on a basis that includes the potential impact of future share repurchases and anticipated 2024 dividends with that I'll turn the call over to David.
Yeah.
David Michael Cordani: Good morning, everyone, and thanks for joining our call today. 2023 was a very strong year for our company, with consistent performance and sustained growth. We execute it with discipline across our business. We deliver for our customers and patients, our employer clients, our health plan partners, and the others we serve. And with our expertise and diverse practice capabilities, we continue to improve affordability and clinical outcomes, as well as continue our work to expand access and choice. As we look forward, we're carrying momentum into 2024, and we expect another strong year of performance and growth. Today, I'll focus my comments on the key strategic drivers of our performance last year and how we continue to evolve and advance our business to sustain our impact and growth.
Thanks, Ralph good morning, everyone and thanks for joining our call today.
David Howard Windley: 2023 was a very strong year for our company with consistent performance and sustained growth.
David Howard Windley: We executed with discipline across our businesses, we delivered for our customers and patients our employer clients, our health plan partners and the others we serve.
David Howard Windley: Their expertise and diverse breadth of capabilities, we continue to improve affordability and clinical outcomes as well as continuing our work to expand access and choice.
David Howard Windley: As we look forward, we're carrying momentum into 2024, and we expect another strong year of performance and growth.
David Howard Windley: Today I'll focus my comments on key strategic drivers of our performance last year and how we continue to evolve and advance our business to sustain are impacting growth.
David Howard Windley: Bryan will then walk through additional details about our performance for 2023 as well as our outlook for 2024.
David Michael Cordani: Brian will then walk through additional details about our performance for 2023, as well as our outlook for 2024, and we'll take your questions. Now, before I go into our results, I want to comment on the announcement we made earlier this year. We reached a definitive agreement to sell our Medicare businesses to HCS. We expect this transaction to close in early 2025 following customary legal and regulatory approval.
Bryan: That will take your questions.
Speaker Change: Now before I go into our results I want to comment on the announcement. We made earlier. This week, we reached a definitive agreement to sell our Medicare businesses HCC. We expect this transaction to close in early 2025, following customary legal and regulatory approvals.
David Michael Cordani: And while we continue to see the senior market as an attractive growth market, we concluded that our Medicare businesses, while large at about $12 billion in revenue, would require sustained investments and focus and capital as well as dedicated resources that were disproportionate to their size within the Cigna Group's portfolio. Additionally, with Evernote's broad, high-performing service portfolio, we will continue to serve the needs of seniors and grow our business. I would note that as part of our agreement, HGSE will be served by Evernorth for continued services for the customers we're selling.
Speaker Change: And while we continue to see the seniors market as an attractive growth market. We concluded that our Medicare businesses, while large at about $12 billion in revenue would.
Speaker Change: It would require sustained investments and focus and capital as well as dedicated resources that were disproportionate with their size within the same groups portfolio.
Speaker Change: Additionally, with Evercore, it's broad high performing service portfolio, we will continue to serve the needs of seniors and grow our business I would note that as part of our agreement.
Speaker Change: <unk> will be served by Evercore.
Speaker Change: Four continued services for the customers we are selling <unk>.
David Michael Cordani: Additionally, we're expanding the reach of Evernote's portfolio and see significant continued growth opportunities in government services, including Medicaid. Now, as we consider the performance of our Medicare Advantage business in 2023, in the fourth quarter, results were in line with our expectations, and for the year, we balanced high-quality and competitive benefits offerings, continued target market expansion, and disciplined pricing activities. Now with that, let's move into our 2023 headline. Broadly, for 2023, we exceeded our financial commitment. For the full year, total revenue was $195.3 billion. Full year adjusted earnings per share was $25.09, and cash flow from operations was $11.8 billion.
Speaker Change: Additionally, we're expanding the reach of everybody's portfolio and see significant continued growth opportunities in government services, including Medicare.
Speaker Change: Now as we considered the performance of our Medicare advantage business in 2023 in the fourth quarter results were in line with our expectations and for the year, we balanced high quality and competitive benefits offerings continued target market expansion and disciplined pricing activity.
Speaker Change: Now with that let's move into our 2023 headlines.
Speaker Change: Broadly for 2023, we exceeded our financial commitments.
Speaker Change: Our total revenues, we delivered $195 $3 billion.
Speaker Change: Full year adjusted earnings per share was $25 nine and cash flow from operations of $11 8 billion.
Speaker Change: This performance extends our track record of delivering consistent positive results in the face of dynamic market conditions.
David Michael Cordani: This performance extends our track record of delivering consistent and positive results in the face of dynamic market conditions. It speaks to the power of our franchise and the purposeful way we've constructed our company, continuing to build on the strength of Cigna Healthcare while also shaping and expanding our Evernorth Health Services platform to lead the way in addressing evolving needs in the marketplace. As a result of our focus, discipline, and sustained execution, over the past decade, we've delivered adjusted EPS growth of more than 13% on an annualized basis. In the five years since our acquisition of Express Scripts, we've achieved or surpassed every goal we established for the combined company. Through 2023, we've grown revenue by over $50 billion and met or exceeded our adjusted EPS objectives each year. And we've returned $27 billion to shareholders through share repurchase, as well as attractive dividend payments.
Speaker Change: It speaks to the power of our franchise and the purposeful way we've constructed a company continuing to build on the strength of Cigna health care, while also shaping and expanding our ex North health services platform to lead the way in addressing evolving needs in the marketplace.
Speaker Change: As a result of our focus discipline and sustained execution over the past decade, we've delivered adjusted EPS growth of more than 13% on an annualized basis.
Speaker Change: In the five years since our acquisition of express scripts, we've achieved or surpassed every goal we established for the combined company.
Speaker Change: Through 2023, we've grown revenue by over $50 billion and met or exceeded our adjusted EPS objectives, each year, and we've returned $27 billion to shareholders through share repurchase as well as attractive dividend payments.
David Michael Cordani: And in 2023, after increasing our outlook for adjusted EPS twice over the course of the year, we had a strong finish and delivered full-year adjusted EPS that was better than expectations. In short, we've demonstrated the ability to profitably evolve our business and services that we provide over many years, which enables us to continue to deliver on our commitments and grow. Now I'll discuss our performance in greater detail. I'll start with Evernote.
Speaker Change: And in 2023 after increasing our outlook for adjusted EPS twice over the course of the year, we had a strong finish and delivered full year adjusted EPS it was better than expectations.
Speaker Change: In short we've demonstrated the ability to properly profitably evolve our business and services that we provide over many years, which enable us to continue to deliver on our commitments and growth.
Speaker Change: Now I'll discuss our performance in greater detail I'll start with Avenova.
David Michael Cordani: In our Express Scripts business, we successfully implemented the single largest contract ever in the pharmacy benefits industry. Throughout 2023, thousands of coworkers collaborated and worked with dedication so we'd be ready to begin fulfilling well over 400 million annual prescriptions for 20 million Centene customers starting at the beginning of this year. Additionally, Centene was among hundreds of additional clients that we're ready to serve in 2024, and I'm proud to say we're off to a strong start. The good work of our team has helped us meet the needs of our customers and reinforce the trust that Centene and other clients place in our company. Another revenue highlight for 2023 is that we once again advanced industry-leading innovation. Last spring, we launched a series of innovations, including ClearCare Rx to support affordability, additional transparency, and broader choice, as well as Independent Rx to partner and work more closely with independent pharmacies. Then, in November, we went further in expanding Choice for Clients to funding their pharmacy benefits with Express Scripts Clear Network. We were the first to launch a scaled pharmacy network model offering cost-based pricing.
Speaker Change: And our express scripts business, we successfully implemented the single largest contract ever in the pharmacy benefits industry.
Speaker Change: Throughout 2023, thousands of coworkers collaborated and worked with dedication so we'd be ready to begin fulfilling well over 400 million annual prescriptions or 20 million centene customers starting at the beginning of this year.
Speaker Change: Additionally, centene was amongst hundreds of additional clients that we are ready to serve in 2024 and I'm proud to say we're off to a strong start.
Speaker Change: The good work of our team has helped us meet the needs of our customers and reinforced the trusted centene and other clients place in our company.
Speaker Change: Another highlight for 2023 does that mean once again advanced industry, leading innovation.
Speaker Change: Last spring, we launched a series of innovations, including clear care Rx to support affordability additional transparency and broader choice.
Speaker Change: As well as independent Rx to partner and enable more closely with independent pharmacies.
Then in November with further and expanding choice for clients funding their pharmacy benefits with express scripts clear network. We were the first to launch a scaled pharmacy network model offering cost based pricing.
David Michael Cordani: In addition, our accelerated growth businesses with Evernorth fueled our momentum as well; accelerated growth in Acredo Specialty Pharmacy and Curescript SD businesses, and in our care services businesses, contributed to EverNorth's strong top and bottom line results. With Credo and PureScript SD, we are supporting patients and providers with safe and effective use of a growing volume of high-cost, clinically-complex specialty drugs. We also continue building other care service platforms to ensure patients can access care when and how they need it, while also remaining connected to physical sites of care. Our MDLive virtual platform, for example, is now available to over 60 million individuals as part of their benefits offering, and it's supporting a growing volume of care, including over 2.2 million virtual visits in 2023. Our results clearly demonstrate that, with Evernote's leading capabilities, we are a valued and flexible partner for health plans, employers, governmental organizations, and health care providers. At Cigna Healthcare, we drive revenue and customer growth through disciplined pricing and medical cost management. We serve employers and individuals who trust us to guide them through the health care system.
Speaker Change: In addition, our accelerated growth businesses without ever north fueled our momentum as well.
Speaker Change: Celebrated growth and Accredo specialty pharmacy is pure script S D businesses and in our carrier services businesses contributed to Avalon strong top and bottom line results.
Speaker Change: With Accredo concur scrip SD, we are supporting patients and providers with safe and effective use of your growing volume of high cost clinically complex specialty drugs.
We also continue building out our care service platforms to ensure patients can access care when and how they need it while also remaining connected with physical sites of care.
Speaker Change: N D live virtual platform. For example is now available to over 60 million individuals as part of their benefits offering and its supporting a growing volume of care, including over $2 2 million virtual visits in 2023.
Speaker Change: Our results clearly demonstrate that would ever north leading capabilities, we valued and flexible partner for health plans employers governmental organizations and health care providers.
It took in health care, we drove revenue and customer growth through disciplined pricing and medical cost management.
Speaker Change: We serve employers and individuals who trust us to guide them through the health care system.
David Michael Cordani: Our leading clinical care programs can help our customers and patients, equipping them with the right information and insights they need to make the best choices for their health and vitality. Our ongoing pricing and continued progress in affordability initiatives in 2023 resulted in a medical care ratio that was better than expectations. Our U.S. commercial employer business had an outstanding year with continued strong growth.
Speaker Change: Our leading clinical care programs continue to support our customers and patients equipping them with the right information and insights they need to make the best choices for their health and vitality.
Speaker Change: Our ongoing pricing and continued progress in our affordability initiatives in 2023, resulting in a medical care ratio that was better than expectations.
Speaker Change: Our U S commercial employer business had an outstanding year with continued strong growth.
Speaker Change: This was driven by our team's continued success in strengthening our competitive positioning through improved affordability.
David Michael Cordani: This was driven by our team's continued success in strengthening our competitive position through improved affordability and leveraging our high-performance networks and digitally-enabled services as we expand care access, coordination of care, and overall value. Our individual exchange business performed broadly in line with our expectations for the fourth quarter, and with the actions we've taken, we are on track to deliver improved profitability in 2021. And in international health, we achieved another positive top and bottom line result; our high quality and localized health solution, supported by our global provider network, continues to resonate very well with the globally mobile population and employees of multinational corporations as well as intergovernmental organizations. Now, we are turning to 2024.
Speaker Change: Leveraging our high performance networks and digitally enabled services as we expand care access coordination of care and overall volume.
Our individual exchange business performed broadly in line with our expectations for the fourth quarter and with the actions. We've taken we are on track to deliver improved profitability in 2024.
Speaker Change: And international Health, we achieved another positive top and bottom line result.
Speaker Change: Our high quality and localized health solutions supported by our global provider networks continue to resonate very well with the globally mobile population and employees of multinational corporations as well as inter governmental organizations.
Speaker Change: Now turning to 2024.
David Michael Cordani: We will sustain our growth and high performance by sharply focusing on the greatest opportunities with a well-balanced portfolio of complementary businesses and a clear, durable, strategic growth framework. First, we will drive continued steady, predictable growth from our high-performing foundational growth business. RBC Benefit, U.S. Commercial Employer, and our international health business. Our clients depend on pharmacy services, for example, and our expertise, as well as our leadership in lowering costs for prescription drugs and addressing growing needs, such as the high demand for the GLP-1 class of drugs for weight loss and diabetes.
Speaker Change: We will sustain our growth in high performance by sharply focusing on the greatest opportunities with a well balanced portfolio of complementary businesses any clear durable strategic growth framework.
Speaker Change: First we will drive continued steady predictable growth from our high performing foundational growth businesses.
Speaker Change: Pharmacy benefit U S commercial employer and our international health business.
Speaker Change: Our clients depend on pharmacy services for example, and our expertise as well as our leadership and lowering cost per prescription drugs and addressing growing needs such as the high demand for the <unk>, one class of drugs for weight loss and diabetes.
Speaker Change: We have a long history of guiding appropriate access to medications and providing specialized clinical support and we will continue to build on these efforts with new programs such as our <unk> Rx program.
David Michael Cordani: We have a long history of guiding appropriate access to medications and providing specialized clinical support, and we will continue to build on these efforts with new programs, such as our EncircleRx program. We're also supporting customers in additional ways, including by offering enhanced digital tools to help them better understand the value of their pharmacy benefits. We've been successful in growing our U.S. commercial employer business for more than a decade and continue to view this as a growth market for the Cigna Group. We continue to leverage our strength in coordinating a growing number of point solutions for our clients and improving clinical outcomes for our clients. Additionally, we continue to act as a disruptive innovator for small and middle-sized client needs.
Speaker Change: We're also supporting customers in additional ways, including by offering enhanced digital tools to help them better understand the value of their pharmacy benefits.
Speaker Change: We've been successful in growing our U S commercial employer business for more than a decade and continue to view this as a growth market for the second group.
Speaker Change: We continue to leverage the strength and are coordinating a growing number of point solutions for our clients and improving clinical outcomes for our clients. Additionally, we continue to act as a disruptive innovator for small and middle sized client needs.
David Michael Cordani: Secondly, we will build on further momentum for our accelerated growth portfolio, our fast-growing scaled specialty pharmacy business, and our care service business. We have tremendous opportunities in these large and expanding markets with our differentiated specialty capabilities, supporting patients with high cost and clinically inappropriate products. And within care services, we're advancing our capabilities in behavioral health, virtual, and home care, as well as coordinated care programs for specific conditions. In summary, for 2024, we will grow our customer and revenue base again, and our earnings and operating cash flow will be at the higher end of our long-term strategic target. We've increased our expectations for full-year 2024 adjusted EPS to at least $28.25.
Speaker Change: Second we will build on Furthermore, let them for accelerated growth portfolio, our fast growing skilled specialty pharmacy business in our care service businesses.
Speaker Change: We have tremendous opportunities in these large and expanding market with our differentiated specialty capabilities supporting patients with high cost and clinically such treatments.
And within care services, we are advancing our capabilities in behavioral health.
Speaker Change: Actual a homecare as well it's coordinated care programs for specific conditions.
Speaker Change: In summary for 2024, we will grow our customer and revenue base again, and our earnings and operating cash flow at the higher end of our long term strategic targets.
Speaker Change: We've increased our expectations for full year 2020 for adjusted EPS to at least $28 25.
David Michael Cordani: We expect our consolidated adjusted revenues to grow by at least 20%, and we expect to generate at least $11 billion of operating cash. And we will continue to return capital to our shareholders, including a 14% increase in our quarterly dividends. Now, before I wrap it up and turn it over to Brian, I also wanted to mention the announcements we made last month about expanding roles for Brian and Eric. Brian's been a chief financial officer for the past three years and will continue in that role.
Speaker Change: We expect our consolidated adjusted revenues to grow at least 20% and we expect to generate at least $11 billion of operating cash flow.
Speaker Change: And we will continue to return capital to our shareholders, including a 14% increase in our quarterly dividend.
Speaker Change: Now before I wrap it up and turn it over to Brian and I also wanted to mention the announcements we made last month about expanding roles for Brian and Eric.
Brian has been the Chief financial Officer for the past three years and we'll continue in that role. He will also expand his responsibilities as president and CEO of Cigna health care.
David Michael Cordani: He will also expand his responsibilities as president and CEO of Cigna Healthcare. Eric is expanding his responsibilities as Executive Vice President of Enterprise Strategy for the Cigna Group while also continuing as President and CEO of Evernote Services. Brian and Eric's expanded positions, as well as other leadership changes we announced, provide further clarity on our priorities and strategy, as well as the extent of our reach and impact we continue to have. Importantly, it also reinforces the depth of our management team. At our investor day on March 7th in New York City, you'll hear more from me, Brian, and Eric, as well as other key leaders from across our company. We look forward to sharing with you our views of the expanded addressable markets we see and how we position the Cigna Group to advance our next chapters of attractive growth. And I'll briefly summarize.
Brian: Eric is expanding his responsibilities as executive Vice President of Enterprise strategy for the Cigna group, while also continuing as president and CEO of Avnet services.
Brian: Brian and Eric expanded positions as well as other leadership changes, we announced to provide further clarity of our priorities and strategy as well as the extent of reaching their packages that you'd have importantly, it also reinforces the depth of our management bench at our Investor Day on March 7th in New York City, You'll hear more from me, Brian and Eric.
As well as other key leaders from across our company. We look forward to sharing with you our views of the expanded addressable markets, we see and how we positioned Cigna group to advance our next chapters of attractive growth.
Brian: Now I'll briefly summarize.
David Michael Cordani: With the momentum we carried out in 2023, we are raising our guidance for EPS in 2024. We are building on a strong year of disciplined execution, performance, and growth across our company. We deliver for our customers, clients, and partners. We kept our commitments to our shareholders, including delivering adjusted EPS for 2023 of twenty-five dollars and nine cents, which was above our outlook, and we generated $11.8 billion cash flow from operations.
Brian: With the momentum we carried out of 2023, we are raising our guidance for EPS in 2024, we're building on a strong year of disciplined execution performance and growth across our company.
Brian: We delivered for our customers and clients and partners, we kept our commitments to our shareholders, including delivering adjusted EPS for 2023 of $25 nine.
Brian: Which was above our outlook.
Brian: And we generated $11 $8 billion of cash flow from operations.
Brian: We have sharpened the focus of our portfolio further to ensure that we are positioned to drive another strong year for our company.
David Michael Cordani: We've sharpened the focus of our portfolio further to ensure that we are positioned to drive another strong year for our company. We're building on a consistent track record of disciplined execution, innovation, and differentiated partnership. We've increased our outlook for 2024 and now expect EPS of at least $28.25. And we will continue to advance the strategic deployment of capital, including using the majority of our discretionary cash flow for share repurchases in 2024, will have another strong year of performance, and will continue our track record for more than a decade of delivering against our 10 to 13% long-term adjusted EPS growth target while maintaining an attractive dividend. And with that, I'll turn it over to Brian. Thank you, David. Good morning, everyone.
Brian: We're building on our consistent track record of disciplined execution innovation and differentiated partnerships.
We've increased our outlook for 2024, and now expect EPS of at least $28 25.
Brian: We will continue to advance the strategic deployment of capital, including using the majority of our discretionary cash flow for share repurchase in 2024.
Speaker Change: Well have another strong year performance, continuing our track record for more than a decade of delivering against our 10% to 13% long term adjusted EPS growth target, while maintaining an attractive dividend and with that I'll turn it over to Brian.
Brian: Thank you David good morning, everyone.
Brian Ivanko: Today I'll review the Cigna Group's fourth quarter and full year 2023 results and provide our outlook for full year 2024. We're proud to deliver another strong year for the Cigna Group, reflecting focused execution and growth across Evernorth and Cigna Healthcare. Looking at full year 2023, some key consolidated financial highlights include revenue of $195.3 billion, adjusted earnings per share of $25.09, and cash flow from operations of $11.8
Brian: Today I'll review, the Cigna group's fourth quarter and full year 2023 results and provide our outlook for full year 2024.
Brian: We're proud to deliver another strong year for the city group, reflecting focused execution and growth across all of our north of Cigna health care.
Brian: Looking at full year 2023, some key consolidated financial highlights include revenue of $195 3 billion.
Brian: Adjusted earnings per share of $25 nine.
Brian: And cash flow from operations of $11 8 billion.
Brian Ivanko: All well exceeding our initial expectations for the year. Fourth quarter enterprise results were particularly strong, with revenue growing 12% to $51.1 billion. After-tax Adjusted Earnings growing to $2 Billion and Adjusted Earnings Per Share growing to $6.79. These results reflect broad-based strength across the company, and this momentum positions us well for growth in 2024. Regarding our growth platforms, I'll first comment on Evernote. 2023 marked another year of sustained growth and profitability for Evernote. As our market-leading clinical capabilities and innovative solutions continue to create differentiated value for our health plan, employer, and government clients and customers. In fourth quarter 2023, Evernorth revenues grew 12% to $40.5 billion, and Pre-tax Adjusted Earnings grew 10% to $1.9 billion, both of which exceeded expectations. Evernote's results in the quarter were driven by continued strong performance in our specialty pharmacy business, which saw double-digit year-over-year revenue growth to reach $60 billion in revenues for full year 2023, and our unwavering focus on reducing net costs for our clients as new drug innovations come to market, including GLP-1 agonists, biosimilars, specialty generics, and other emerging therapies for clinically complex conditions.
Brian: All well exceeding our initial expectations for the year.
Brian: Fourth quarter Enterprise results were particularly strong with revenue growing 12% to $51 1 billion.
Brian: After tax adjusted earnings growing to $2 billion.
Brian: And adjusted earnings per share growing to $6 79.
Brian: These results reflect broad based strength across the company and this momentum positions us well for growth in 2024.
Brian: Regarding our growth platforms I'll first comment on <unk>.
Brian: 2023 marked another year of sustained growth and profitability in <unk> as.
Brian: As our market, leading clinical capabilities and innovative solutions continued to create differentiated value for our health plan employer and government clients and customers.
Brian: Fourth quarter 2023 of our North revenues grew 12% to $40 5 billion.
And pre tax adjusted earnings grew 10% to $1 9 billion.
Brian: Both of which exceeded expectations.
Brian: <unk> results in the quarter were driven by continued strong performance in our specialty pharmacy business, which saw double digit year over year revenue growth to reach $60 billion in revenues for full year 2023.
Brian: And our unwavering focus on reducing net costs for our clients as new drug innovations come to market, including <unk>, one agonists Biosimilars special.
Brian: Specialty generics and other emerging therapies for clinically complex conditions.
Brian Ivanko: The fourth quarter capped a strong 2023 for Evernorth, with pre-tax adjusted earnings growing 5% for the year, above expectations. We achieved this even while incurring meaningful spending related to the implementation of our CENTENE relationship. Evernote's favorable revenue and adjusted earnings growth in full year 2023 reflected strong execution and expansion across our foundational business express scripts and our scaled accelerated growth business Acredo Specialty Pharmacy. Now turning to Cigna Healthcare, we outperformed expectations with full year 2023 pre-tax adjusted earnings growing 9%, reflecting another year of highly effective execution. Fourth quarter 2023 adjusted revenues were $13 billion, and pre-tax adjusted earnings were $969 million, representing a strong year-ahead group. The medical care ratio is 82.2%, favorable to expectations. Our medical care ratio favorability was primarily driven by our U.S. commercial employer business, particularly within our stop-loss product, which outperformed expectations due to lower cost trends on high-dollar claims. Additionally, we saw lower-than-expected viral costs in the quarter, with the combination of flu, COVID, and RSV running below projections.
Brian: The fourth quarter capped a strong 2023 forever with.
Brian: With pre tax adjusted earnings growing 5% for the year above expectations.
Brian: We achieved this even while incurring meaningful spending related to the implementation of our <unk> relationship.
Brian: Our remarks favorable revenue and adjusted earnings growth and full year 2023 reflected strong execution and expansion across our foundational business Express scripts and.
Brian: And our scaled accelerated growth business Accredo specialty pharmacy.
Brian: Now turning to Cigna healthcare, we outperformed expectations with full year 2023 pre tax adjusted earnings growing 9%.
Brian: Collecting another year of highly effective execution.
Brian: Fourth quarter 2023, adjusted revenues were $13 billion.
Brian: And pre tax adjusted earnings were $969 million.
Brian: Representing strong year over year growth.
Brian: The medical care ratio was 82, 2% favorable to expectations.
Our medical care ratio favorability was primarily driven by our U S commercial employer business.
Brian: Particularly within our stop loss products, which outperformed expectations due to lower cost trends on high dollar claimants.
Brian: Additionally, we saw lower than expected viral costs in the quarter with the combination of flu COVID-19 and RSV running below projections.
Brian: As David noted in his comments, we have entered a definitive agreement with HCS seek to sell our Medicare businesses.
Brian Ivanko: As David noted in his comments, we have entered a definitive agreement with HCFC to sell our Medicare business. We expect to close this transaction in early 2025 following regulatory approval, and our full year 2024 outlook assumes full year contributions from our Medicare business. For the fourth quarter specifically, our Medicare Advantage business generated performance broadly in line with expectations. Across Cigna Healthcare, our full year 2023 medical care ratio is 81.3%.
Brian: We expect to close this transaction in early 2025 following regulatory approvals.
Brian: And our full year 2024 outlook assumes full year contributions from our Medicare businesses.
Brian: For fourth quarter, specifically, our Medicare advantage business generated performance broadly in line with expectations.
Brian: Across Signet healthcare, our full year 2023 medical care ratio was 81, 3% better than expectations benefiting from our disciplined pricing execution continued affordability initiatives and the favorability in our stop loss products.
Brian Ivanko: Better Than Estimates, benefiting from our disciplined pricing execution, continued affordability initiatives, and the favorableability of our stop-loss products. The full year MCR of 81.3% was 70 basis points better than the midpoint of our initial 2023 guidance and is an improvement of 40 basis points from full year 2022. Moving to Cigna Healthcare Medical Customers, we ended 2023 with 19.8 million total medical customers, growth of approximately 1.8 million, or 10%, from year end 2022, ahead of our initial guidance.
Brian: The full year MCR of 81, 3% with 70 basis points better than the midpoint of our initial 2023 guidance.
Brian: And is an improvement of 40 basis points from full year 2022.
Brian: Moving to Sigma healthcare medical customers. We ended 2023 with $19 8 million total medical customers growth of approximately $1 8 million or 10% from year end 2022 ahead of our initial guidance.
Brian Ivanko: This growth was driven by U.S. health care, primarily from U.S. commercial employer fee-based customers, as well as growth in individual exchange and Medicare Advantage. Cigna Healthcare continues to perform well with strong underlying fundamentals. Our results reflect the strength of our differentiated value proposition and focused execution across the business, as well as the stability and consistency of the U.S. commercial employer market. Overall, we're very proud of our strong 2023 results in a disrupted market environment, reflecting the intentional design of the company's growth platforms and our ongoing disciplined execution. This provides us with considerable momentum for 2024 and beyond.
Brian: This growth was driven by U S healthcare, primarily from U S commercial employer fee based customers.
As well as growth in individual exchange and Medicare advantage.
Brian: Speaking of healthcare continues to perform well with strong underlying fundamentals our results.
Brian: Reflect the strength of our differentiated value proposition and focused execution across the business.
Brian: As well as the stability and consistency of the U S commercial employer market.
Brian: Overall, we're very proud of our strong 2023 results in a disrupted market environment.
Reflecting the intentional design of the company's growth platforms, and our ongoing disciplined execution.
Brian: This provides us with considerable momentum for 2024 and beyond.
Brian: Now turning to our to our outlook for full year 2024, specifically.
Brian Ivanko: Now turning to our outlook for full year 2024 specifically, we continue to expect strong underlying growth in Evernorth and Cigna Healthcare. We expect full year 2024 consolidated adjusted revenues of at least $235 billion, and we expect full year 2024 consolidated adjusted income from operations to be at least 8.025 billion dollars, or at least $28.25 per share, an increase from our prior outlook. When considering earnings seasonality, we would expect the adjusted earnings per share pattern to be similar to 2023.
Brian: We continue to expect strong underlying growth in <unk> and Cigna health care.
Brian: We expect full year 2024, consolidated adjusted revenues of at least $235 billion.
Brian: And we expect full year 2020 for consolidated adjusted income from operations to be at least $8.0 billion to $5 billion.
Brian: Or at least $28 25 per share an increase from our prior outlook.
When considering earning seasonality we would expect the adjusted earnings per share pattern to be similar to 2023.
Now turning to our 2020 for outlook for each of our growth platforms.
Brian Ivanko: Now turning to our 2024 outlook for each of our growth platforms. For Evernorth, we expect full year 2024 adjusted earnings of at least $7 billion. We expect adjusted earnings within Evernote to ramp as we move throughout the year, with first quarter adjusted earnings contributing slightly below 20% of full year EverNorth adjusted earnings. The earnings ramp reflects the effect of early-year, client-specific onboarding spend. These investments are more concentrated in the first half of the year and taper off over the course of the year.
Brian: <unk>, we expect full year 2024, adjusted earnings of at least $7 billion.
Brian: We expect adjusted earnings within ever North to ramp as we move throughout the year with.
With first quarter adjusted earnings contributing slightly below 20% of full year adjusted earnings.
Brian: The earnings ramp reflects the effect of early year client specific onboarding spent these.
Brian: These investments are more concentrated in the first half of the year and taper off over the course of the year.
Brian: For Cigna healthcare, we expect full year 2024, adjusted earnings of at least $4 $75 billion.
Brian Ivanko: For Cigna Healthcare, we expect full year 2024 adjusted earnings of at least $4.75 billion. Assumptions in our Cigna Healthcare Outlook for 2024 include approximately 19.3 million total medical customers at year-end, and we expect our medical care ratio to be in the range of 81.7% to 82.7%, with the first quarter 2024 medical care ratio expected to be below the low end of the full year guidance range to reflect typical seasonal patterns. Additionally, for the enterprise, we project an adjusted SG&A ratio of approximately 6.1 percent for 2024, reflecting a higher proportion of enterprise revenue from Evernorth, which carries a lower SG&A ratio. And we expect the consolidated adjusted tax rate to be in the range of 20.5% to 21%.
Brian: Assumptions in our Cigna health care outlook for 2024 include approximately $19 3 million total medical customers at year end.
Brian: And we expect our medical care ratio to be in the range of 81, 7% to 82, 7%.
Brian: With the first quarter of 2020 for medical care ratio expected to be below the low end of the full year guidance range to reflect typical seasonal patterns.
Brian: Additionally for the enterprise, we project, an adjusted SG&A ratio of approximately six 1% for 2024, reflecting a higher proportion of enterprise revenue from Evercore.
Which carries lower SG&A ratio.
Brian: And we expect the consolidated adjusted tax rate to be in the range of 25% to 21%.
Brian: Turning to our 2023 capital management position and 2024 capital outlook.
Brian Ivanko: Thanks to our 2023 Capital Management position and 2024 Capital Outlook. We finished 2023 strong and delivered $11.8 billion of cash flow from operations. In 2023, we repurchased 7.8 million shares of common stock for approximately $2.3 billion.
Brian: We finished 2023 strong and delivered $11 8 billion of cash flow from operations.
Brian: In 2023, we repurchased seven 8 million shares of common stock for approximately $2 3 billion.
Brian Ivanko: And we returned $1.5 billion to shareholders via dividends. Additionally, our debt-to-capital ratio finished the year at 40.1%, an improvement of approximately 100 basis points from year-end 2022. Now, framing our 2024 Capital Outlook. We expect to deliver at least $11 billion of cash flow from operations through our efficient, service-based business model. We expect to deploy approximately $1.5 billion to capital expenditures, and we expect to deploy approximately $1.6 billion to shareholder dividends. Reflecting our quarterly dividend of $1.40 per share, a 14% increase on a per share basis.
And we returned $1 $5 billion to shareholders via dividends.
Brian: Additionally, our debt to capital ratio finished the year at 41% an improvement of approximately 100 basis points from year end 2022.
Now framing our 2024 capital outlook.
Brian: We expect to deliver at least $11 billion of cash flow from operations through our efficient service based business model.
Brian: We expect to deploy approximately $1 $5 billion to capital expenditures and.
Brian: And we expect to deploy approximately $1 $6 billion to shareholder dividends.
Brian: Reflecting our quarterly dividend of $1 40 per share a 14% increase on a per share basis.
Brian: In 2024, we intend to use a majority of our discretionary cash flow per share repurchase.
Brian Ivanko: In 2024, we intend to use a majority of our discretionary cash flow for share repurchase. As we've previously shared, we anticipate repurchasing at least $5 billion within the first half of 2024. Finally, we expect full-year weighted average shares outstanding to be in the range of 282 million to 286 million shares.
As we've previously shared we anticipate to repurchase at least $5 billion within the first half of 2024.
Brian: Finally, we expect full year weighted average shares outstanding to be in the range of 282 million to 286 million shares.
Operator: Now to recap. Our full-year 2023 consolidated results exceeded expectations, reflecting continued focused execution and discipline across Evernote and Cigna Healthcare, and our 2024 outlook reflects continued strength and momentum across our two growth platforms, Evernorth and Cigna Healthcare. We are confident in our ability to deliver full-year 2024 adjusted earnings of at least $28.25 per share. With that said, we'll turn it over to the operator for the Q&A portion of the call. Ladies and gentlemen, at this time, if you do have a question, please press star 1 on your touch-tone phone. If someone asks your question ahead of you, you can remove yourself from the queue by pressing star 2.
Brian: Now to recap.
Brian: Our full year 2023 consolidated results exceeded expectations.
Brian: Reflecting continued focused execution and discipline across every node and Cigna health care.
Brian: And our 2024 outlook reflects continued strength and momentum across our two growth platforms ever Northern Cigna health care.
Brian: We are confident in our ability to deliver full year 2024 adjusted earnings of at least $28 25 per share.
Speaker Change: With that I will turn it over to the operator for the Q&A portion of the call.
Speaker Change: Ladies and gentlemen at this time if you do have a question. Please press star one on your Touchtone phone. If someone asked a question ahead of you you can remove yourself from the queue by pressing star two.
David Michael Cordani: Also, if you're using a speakerphone, please pick up the handset before pressing. One moment, please, for our first question. This question comes from A.J. Rice with UBS.
Speaker Change: Sir if you're using a speakerphone please pick up the handset before pressing the button.
Speaker Change: One moment please for our first question.
Speaker Change: Our first question comes from AJ Rice with UBS you May ask your question.
AJ Rice: Hi, everybody. Thanks for the question.
David Michael Cordani: Hi everybody, thanks for the question. Obviously, we have the announcement about your sale of the Medicare Advantage business, and yet, you're saying you still view the business as attractive. Obviously, there's been some volatility in some of the performance of some of the other players in this space already announced. Is this a time, in your mind, to sort of step back from the market and give some time for the dust to settle? Or how should we interpret the comments that you still, I think that segment is attractive?
AJ Rice: Obviously.
AJ Rice: We have the announcement on your sale of the Medicare advantage business and yet you're saying you still view the business as attractive.
AJ Rice: Obviously theres been some volatility in some of the performance of some of the other players in this space already announced is this a time in your mind.
Just sort of step back from the market and you have some time for the dust to settle or how should we interpret the comments that you're still.
Speaker Change: Thank you.
Speaker Change: Segment as is attractive and then also on that obviously as there was speculation at least in the crass about deal discussions.
David Michael Cordani: And then also on that, obviously, there was speculation, at least in the press, about deal discussions. Your stock was quite volatile. I wonder if you could give us a little bit on how you approach large transactions, some of the financial parameters that people should keep in mind that would be, hopefully, reassuring for them. AJ, good morning. It's David.
Speaker Change: The stock was quite volatile I wonder if you could give us.
Speaker Change: Little bit on how you approach large transactions some of the financial parameters that people should keep in mind that would be hopefully reassuring for them.
Speaker Change: A J good morning, it's David you have a lot in.
David Michael Cordani: You have a lot in that question, and I appreciate it. Let me try to address some of the high points. But, first and foremost, we are really pleased with the nature of the transaction we were able to structure with HTSA. We see it as a win-win.
David Howard Windley: That question.
David Howard Windley: Let me try to address some of the high points.
David Howard Windley: First and foremost we are really pleased with the.
The nature of the transaction were able to structure with HSA, we see it as a win win.
David Michael Cordani: And it's a clarification of our strategy within our portfolio. As I noted in my prepared remarks, what we view the market as an attractive growth market, the required capital, investment, and resources focus relative to its size within our portfolio, coupled with the continued elevated regulatory environment, our decision was that it was best to enter this transaction. Point two is very important; we've been quite deliberate for several years, working to expand the service portfolio and the value proposition within Evernorth for our health plan partners as it relates to their government services, be it Medicare, be it duals, be it Medicaid, etc. We're demonstrating a very attractive proven track record of growing our government reach, but through the services franchise, and we will continue to fuel that on a go forward basis and see that As it relates to the latter part of your question, I'll reframe our M&A criteria. I want to make sure I put that in the context of our capital deployment criteria. We continue to view our first capital deployment priority is investing in our business. Brian referenced the CapEx deployment of about a billion and a half dollars.
David Howard Windley: And it's a clarification to our strategy within our portfolio as I noted.
In my prepared remarks, while we view the market as a protracted growth market.
David Howard Windley: The required capital investment resources focus relative to its size within our portfolio coupled with the continued elevated regulatory environment. Our decision was it was best to enter this transaction. Two is very importantly, we've been quite deliberate now for several years.
David Howard Windley: Working to expand the service portfolio and the value proposition with <unk>.
David Howard Windley: For our health plan partners as it relates to their government services be it Medicare duals, Medicaid et cetera, and we're demonstrating a very attractive proven track record of growing our government of reach but through the services franchise and we will continue to fuel that on a go forward basis and see that as a unattractive.
David Howard Windley: Trajectory for us as it relates to your latter part of your question.
David Howard Windley: Reframe or M&A prayer criteria I want to make sure I put that in the context of our capital deployment criteria. We continue to view first capital deployment priority is investing in our business, Brian referenced the capex deployment of about 1 billion and $5.
David Michael Cordani: Second, we always evaluate M&A for its appropriate attributes, which I'll come back to in a moment. And third, returning capital to shareholders. And as Brian noted in 2024, in addition to raising our dividend by 14%, we expect to return the majority of our excess capital to shareholders through share repurchases of at least $5 billion in the first half of the year. Lastly, in your action pack question, as we think about the criteria for transactions, we think about three criteria. First, strategic attraction.
David Howard Windley: Second we always evaluate M&A.
David Howard Windley: For its appropriate attributes, which I'll come back to in a moment and then third returning capital to shareholders and as Brian noted in 2024. In addition to raising our dividend by 14%. We expect to return the majority of our excess capital to shareholders through share repurchase with at least $5 billion in the first half of the year.
David Howard Windley: Lastly, and you're asking that question as we think about the criteria for transactions. We think about three criteria first strategic attraction second financial attraction and then third overall path to clarity. So is it strategically aligned as a financially attractive and as a final note when we think about.
David Michael Cordani: Second, financial attraction. And then third, the overall path to clarity. So is it strategically aligned? Is it financially attractive?
David Michael Cordani: And as a final note, when we think about the financial piece of the equation, you evaluate each deal on its own respective merits, but seeking to get high visibility in terms of your value creation for your organization if you're going to enter into a transaction. So to repeat, we're pleased with the decision and the transaction design. We will continue in a long-term service relationship with HCSV, and that further expands our proven track record within Evernorth. We see the Evernorth service portfolio as an attractive capital light, high visibility way to grow this portfolio. And, as we have in the past, we will maintain very strong discipline for capital deployment.
David Howard Windley: The financial piece of the equation you evaluate each deal on its own respective merits, but seeking to get high visibility in terms of your value creation for your organization, if youre going to enter into the transaction. So to repeat we're pleased with the decision and the transaction design. We will continue in a long term service really.
David Howard Windley: <unk> shipped with HSA that further expands our proven track record with <unk>, we see the <unk> service portfolio as an attractive capital light.
David Howard Windley: High visibility way to grow this portfolio and as we have in the past we will maintain very strong discipline for capital deployment, our 2024 capital deployment priorities are quite clear.
David Michael Cordani: And our 2024 capital deployment priorities are quite clear. Thanks.
Thanks.
David Howard Windley: Thank you. Our next question comes from Stephen Baxter with Wells Fargo, You May ask your question.
David Michael Cordani: Thank you. Our next question comes from Stephen Baxter with Wells Fargo. You may ask a question. Yeah, hi, thanks.
Stephen C. Baxter: Yeah, Hi, Thanks, I just wanted to ask another quick follow up on the Medicare advantage. So I would be curious if you'd be willing to share maybe five or 10 year view of the market totally appreciate that it's a small part of your business before the sale, but you are still the largest plan in the country do you think market share and concentration is ultimately.
David Michael Cordani: I just wanted to ask another kind of quick follow-up on Medicare Advantage. So I would be curious if you'd be willing to share maybe your five or 10 year view of the market. So I totally appreciate that, you know, it's a small part of your business before the sale, but you are still the eighth largest plan in the country. Do you think market share and concentration are ultimately going to look much more like the commercial markets that it does today? I would love any kind of medium-term thoughts you could offer. Steven, good morning. It's David.
Stephen C. Baxter: <unk> gone to look much more like the commercial market than it does today with low any kind of medium term thoughts you could offer on the market.
Stephen C. Baxter: Stephen Good morning, it's David.
David Howard Windley: Youre asking for a 10 year Crystal ball I think in the dynamism of the marketplace. Most people come back to in terms of rolling three year views of a given market, but stepping back first and foremost the.
David Michael Cordani: You're asking for a 10-year crystal ball. I think in the dynamism of the marketplace, most people come back to in terms of rolling three-year views of a given market. But stepping back, first and foremost, the Medicare Advantage offering, broadly speaking, in the marketplace is a very attractive offering for seniors, and it has a long-term proven track record of delivering attractive benefits and, importantly, clinical coordination. And when you get to Medicare beneficiaries, they typically deal with a higher level of clinical burden that's necessary for coordination. And the care outcomes, the quality outcomes, and the overall value outcomes are positive. So, broadly speaking, from a societal standpoint, we see MA as an important asset for the U.S. to continue to be served, supported financially, and grow. Secondly, the marketplace will see ebbs and flows in terms of the funding mechanism. We see an early look at the rate letter. That's a moment in time.
David Howard Windley: Medicare advantage offering broadly speaking in the marketplace is a very attractive offering for seniors and it is a long term proven track record of delivering attractive benefits and importantly, clinical coordination when when you get to the Medicare beneficiaries of typically dealing with a higher level of clinical burden.
David Howard Windley: That's necessary for coordination and the care outcomes the quality outcomes. The overall value outcomes are positive. So broadly speaking from a societal standpoint, we see M&A as an important asset for.
David Howard Windley: For the U S to continue to be served supported financially.
David Howard Windley: And grow secondly, the marketplace will see ebbs and flows in terms of the funding mechanism. We see the early look at the rate letter that's a moment in time.
David Michael Cordani: That's a moment in time of either acceleration or potentially deceleration for that marketplace. Third, if you look at the senior satisfaction level, NPS, broadly, the Net Promoter Score broadly, is attractive for Medicare Advantage. Therefore, as I noted previously to AJ's point, we've worked really aggressively to ensure that we have a broad, and we will continue to broaden the portfolio of services in support of health plans and integrated value-based care providers to be in support of value-based care, be it for Medicare Advantage tools or the commercial population. So, we see the marketplace as a growth market. Its respective growth will ebb and flow depending on reimbursement to some level from the government, lending toward benefit richness. And then, ultimately, as you know, the last comment I would make is that the primary wave of the baby boomer aging has reached a peak and is slowing. It's still attractive, but the primary wave has reached its peak and is slowing somewhat.
David Howard Windley: A moment in time, either acceleration or potentially deceleration for that marketplace. Third is if you look at the senior satisfaction level NPS broadly net promoter score broadly is attractive for Medicare advantage. Therefore.
David Howard Windley: As I noted previously to Jay's point, we've worked really aggressively to ensure that we have a broad and we will continue to broaden the portfolio of services in support of health plans and integrated Valley.
David Howard Windley: Value based care providers to be in support of value based care for Medicare advantage tools or the commercial population. So we see the marketplace as a growth market.
David Howard Windley: With respect to have growth will ebb and flow depending on reimbursement to some level from the government.
David Howard Windley: Lending towards benefit richness and then ultimately as you know the last comment I would make is the primary a wave of the baby Boomer Aegean has reached a peak and is slowing its still attractive but that primary wave has reached its peak and is slowing somewhat taken as a whole we see this as an expansion opportunity for <unk>.
David Michael Cordani: Taking as a whole, we see this as an expansion opportunity for Evernote. Thank you. Our next question comes from Lisa Gill with J.P. Morgan. Thanks very much, and good morning.
David Howard Windley: Thank you. Our next question comes from Lisa Gill with Jpmorgan you May ask your question.
Lisa Christine Gill: Thanks, very much and good morning, I want to focus on and really just understand kind of the key drivers as we think about 2024. So first off you talked about specialty in 'twenty. Three can you talk about what your expectations are above growth in specialty in 'twenty for what you're doing around services, you touched a little bit on <unk>.
Eric P. Palmer: I want to focus on Evernote and really just understand some of the key drivers as we think about 2024. So, first off, you talked about specialty in 23. Can you talk about what your expectations are around growth in specialty in 24? What you're doing around services? You touched a little bit on DLP1, but you know, you have a really big contract with CNC coming on board, but you also had an overall good 2024 selling season. So, any key elements you can help us to understand as to what the drivers are for that strong AOI growth in Evernote? Thanks, Lisa. Good morning, it's Eric. There are a couple of different pieces in there.
You had a really big contract with PNC coming on board, but you also had an overall 2020 for selling season. So any of the key elements you can help us to understand what the drivers are for that strong NOI growth and that Bernard.
Lisa Christine Gill: Yes, Thanks, Lisa good morning, its Eric.
Eric P. Palmer: But first, let me just talk a bit about the portfolio of services that we're focused on in terms of Evernote, and then I'll transition that into some of the drivers of growth specifically for 2024. David noted in his prepared remarks a couple of highlights on capabilities we're growing. But I would call out that we are seeing significant interest from the market around themes helping to better coordinate individual point solutions and alleviate some of the burden that comes along with the fragmentation of how care is administered and how employers and plans are assembling care. So us working to improve navigation and reduce point solution fatigue is a key item. Second of all, I would note behavioral care continues to be an area of focus, and there's meaningful opportunity for behavioral care to be better coordinated as there are significant comorbidities among individuals with mental health care needs along with other care needs.
Eric: A couple of different pieces in there, but first let me just talk a bit about the portfolio of services that we're focused on in terms of us ever north now transition that into some of the drivers of growth specifically for for 2024, David noted in his prepared remarks, a couple of highlights on our capabilities, we're growing but I would I would call out.
Eric: We are seeing significant interest from the market around themes, helping to better coordinate individual point solutions.
Eric: Alleviate some of the burden that comes along with the fragmentation of how care is administered and how employers and plans are assembling care. So us working to improve navigation and reduce point solutions fatigue is a key item second of all I would note.
Zero care continues to be an area of focus and there's meaningful opportunity for behavioral care to be better coordinated.
Eric: Comorbidities with individuals with mental health care needs, along with other attorneys and we're in a position to help us address.
Eric P. Palmer: And we're in a position to help address those challenges. The third item I'd note would be around specialty, and in particular, the opportunity for us to continue to grow as there are more therapies, more choices in the specialty market, as well as navigating through biosimilars. Overall, we're positioned really well to continue to drive affordability and choice in biosimilars, and as we've talked about previously, that's an important long-term, multi-year tailwind for the economics and growth of EverNorth overall. And then, certainly, the continued growth in therapies like GLP-1s is an area that's a factor in our proposition overall. So you put together that kind of – I touched on a number of different capabilities.
Eric: Those challenges.
Third item no.
Eric: No it would be around specialty and in particular the opportunity for us to continue to grow.
Eric: There are more therapies more choices in the specialty market as well as navigating through Biosimilars overall, we're positioned really well to continue to drive affordability and choice.
Eric: Biosimilars and as we've talked about previously that's an important.
Eric: Long term multiyear tailwind and the economics and the growth of I've ever North overall, and then certainly the continued growth and therapies like <unk> or <unk>.
Eric: It is an area that <unk>.
Eric: Actor in our proposition overall, so when you put together that kind of touched on a number of the different capabilities, we've put together that suite of capabilities.
Eric P. Palmer: When you put together that suite of capabilities, that ends up being a really attractive portfolio that we've had continued growth in the number of lives we're serving, growth in our clients' lives that enable us to deliver the numbers that we're talking about. Overall, really excited about the momentum we've got going into 2024 and see ourselves as well-positioned to deliver there and continue the trajectory beyond. Thank you. The next question comes from George Hill with Deutsche Bank. Your line is open.
That ends up being a really attractive portfolio that we've had continued growth in the number of lives, we're serving growth in our clients' lives that enable us to.
Eric: To deliver the numbers that we're talking about overall.
Eric: Excited about the momentum, we've got going into 2024, and see ourselves as well positioned to deliver.
Eric: Deliver there and continue the trajectory beyond.
Eric: Thank you. Our next question comes from George Hill with Deutsche Bank. Your line is open you may ask your question.
Brian Ivanko: You may ask your question. Yeah, good morning, guys. And I guess just a couple of clarifying questions for me as it relates to MLR and the guide for 24. You guys have kind of bumped up the medical cost expectations. Can you kind of disaggregate what you're seeing by line of business there?
Eric: Yes.
George Hill: Good morning, guys I guess, just a couple of clarifying questions for me as it relates to MLR.
George Hill: And the guide for 'twenty for you guys that kind of bumped up the medical cost expectations can you kind of disaggregate, what youre seeing by line of business, there and I just want to confirm that the MA business is still kind of included in the continuing ops in the MLR guidance for.
Brian Ivanko: And I just want to confirm that the MA business is still kind of included in the continuing operations and the MLR guidance for 24 because I saw in the footnotes that it's kind of being carried as an asset held for sale. So it's just kind of like a disaggregation of medical cost expectations and trends for 24. Morning George, it's Brian.
George Hill: 24, because I saw in the footnotes it as kind of being carried as an asset held for sale. So we're just kind of like a disaggregation of kind of medical cost expectations and <unk> expectations for 2004.
George Hill: Yes.
George Hill: Good morning, George It's Brian So let me just take the M&A question first then I'll get into the MCR. So.
Brian Ivanko: So let me just take the MA question first, and I'll get into the MCR later. As noted in my comments earlier, the Medicare Advantage business will continue to be reported through Cigna Healthcare through 2024. All of our guidance, whether that be the revenue guidance, the customer volume guidance, the earnings guidance, all assumes that the Medicare business will continue to be reported through Cigna Healthcare on an asset held for sale basis. So just to clarify that, all the metrics that you see line up with that basis. Within the MCR specifically, the midpoint of our guide obviously has a slight uptick from where we were in 2023. Now, it's important to step back and think about how the 2023 MCR performance was favorable to expectations and the primary driver of the Cigna Healthcare income outperformance. We're just really pleased with both the quarter and full year coming in favorable to expectations. And as I mentioned earlier, the 81.3% full year MCR was 70 basis points better than the midpoint of where we had started the guidance early in 2023.
Brian: As noted in my comments earlier, the Medicare advantage business will continue to be reported through Sigma healthcare through 2024, So all of our guidance whether that be the revenue guidance the customer volume guidance. The earnings guidance all assumes that the Medicare business will continue to be reported through six health care on an asset held for sale basis. So.
Brian: Just to clarify that all the metrics that you see all lineup with that basis within the MCR specifically.
Brian: The midpoint of our guide, obviously has and a slight uptick from where we were in 2023 now important to step back in the 2023 MCR performance was favorable to expectations and the primary driver of the Sigma healthcare income outperformance.
Brian: We're just really pleased with fourth quarter and full year coming in favorable to expectations as I mentioned earlier, the 81, 3% full year MTR was 70 basis points better than the midpoint of where we had started the guidance.
Brian: Early in 2023, so you can think of the primary driver of the.
Brian Ivanko: So you can think of the primary driver of the slightly higher projected 2024 MCR as being our stop loss products within the U.S. commercial employer business. As I mentioned earlier, these ran favorable to our target profit margins in 2023 due to lower than expected cost trends and high dollar claimants. For 2024, our planning assumptions are for the stop loss products to normalize back into their typical target profit margin range. Additionally, there is some product mix shift within the Cigna Healthcare portfolio between 2023 and 2024 that will impact the overall Cigna Healthcare MCR. I would note that we expect the overall Cigna Healthcare profit margin percentage to be higher in 2024 compared to 2023, and we'd expect that to land near the low end of our targeted 9 to 10% range in 2024. And then, when you think about our MCR guidance, as always, our guidance does have an appropriate level of prudence to start off the year. Thank you. Thank you. Our next question comes from Josh Raskin with Neffron Research. Hi, thanks. Good morning.
Slightly higher projected 2024, MCR is being our stop loss products within the U S commercial employer business.
Brian: As I mentioned earlier these rent favorable to our target profit margins in 2023 due to lower than expected cost trends and high dollar claims for 2024, our planning assumptions are for the stop loss products to normalize back into their typical target profit margin range.
Brian: Generally there is some product mix shift within the Cigna health care portfolio between 2023, and 2024 that will impact the overall cigna healthcare MCR, Although I would note that we expect the overall cigna healthcare profit margin percentage to be higher in 2024, compared to 2023, and we'd expect that to land.
Brian: And near the low end of our targeted 9% to 10% range in 2024, and then finally, when you think about our MCR guidance as always our guidance does have an appropriate level of prudence to start off the year.
Thank you.
Brian: Thank you. Our next question comes from Josh Raskin with Nephron Research you May ask your question.
Joshua Raskin: Hi, Thanks, Good morning, I wanted to get back to the health care Services Corp.
David Michael Cordani: I wanted to get back to the Healthcare Services Corp. divestiture. Why was the PDP asset included in that sale? I would have thought that that would have had strategic value on the Evernord side and that you'd have an advantage in the cost structure. And then, similarly, including care allies as well. Was that more a tie into the Medicare Advantage business? And what does that mean for the broad sort of value-based care network development? Good morning, Josh. It's David.
Joshua Raskin: The divestiture.
Joshua Raskin: I was the PDP asset included in that sale I would've thought that that would add strategic value on the <unk> side and that you would have an advantage on the cost structure and then similarly, including care allies as well was that more of a tie in to the Medicare advantage business and what does that mean for broad sort of value based care network development at Cigna.
Joshua Raskin: Yes.
Joshua Raskin: Good morning, Josh its David Let me take a portion of your question and then ask Eric to expand.
David Michael Cordani: Let me take a portion of your question and then ask Eric to expand. And I'm going to come at the latter piece of it in terms of Care Allies and VBC, etc. First, your statement is correct. Think about Care Allies as specifically focused on the MA portion of value-based care. So, therefore, there's an alignment there.
I'm going to kind of at the latter piece of it in terms of <unk> and BBC et cetera.
Eric: Your statement is correct the think about the care allies is specifically focused on.
Eric: A portion of value based care. So therefore, there is alignment there stepping back.
David Michael Cordani: Stepping back on value-based care, we have a long history and, again, a proven track record of delivering very strong, positive results for the benefit of our clients and our customers and patients through our value-based care orientation for commercial, individual exchange, as well as for Medicare Advantage. As you know from our prior conversations, that's been a partner and enabled model as opposed to an owned model, broadly speaking, in terms of owning the care delivery versus partnering and enabling. Additionally, I'd ask you to think about the commitment around that continuing.
Eric: Salary based care.
Eric: Long history, and again proven track record of delivering very strong positive results for the benefit of our clients and our customers are patients off of our value based care orientation or commercial for individual exchange as well as for Medicare advantage as you know from our prior conversations that's been a partner and enabled model as opposed to an owned model broadly.
Eric: Speaking of.
<unk> the care delivery versus partnering enabling Additionally, I'd ask you to think about the commitment around that continuing so our collaborative accountable care relationships for our commercial business and our exchange business continues on and our <unk>.
David Michael Cordani: So, our collaborative accountable care relationships for our commercial business and our exchange business continue, and our investment in and expansion of our Evernorth Accountable Care capabilities as we support health care delivery system partners around their value-based care. That continues, including our strategic partnership with Village. So, on the value-based care side of the equation, there was no change in strategy for us. This specific subset of our assets was solely aligned to the Medicare Advantage business. I'll ask Eric to talk about the direction relative to PDP and our multidimensional services relationship there.
Eric: Investment in an expansion of our ever north of accountable care of capabilities as we support health care delivery system partners around their value based care that continues including our strategic partnership with village. So on the value based care side of equation no change in strategy for US. This specific subset of our assets was solely aligned to them.
Eric: Medicare advantage business I'll ask Eric to talk about the direction relative to PDP and our multi dimensional services relationship there Eric Thanks, David and good morning, Josh.
Eric P. Palmer: Thanks, David, and good morning, Josh. So, there are two things I would note for you, Josh. First of all, as David and Brian mentioned in their prepared remarks, we will have a multiyear services relationship between Evernorth and HCSC building on a relationship that already exists there. So, Evernorth will have the opportunity to continue to provide services associated not only with the prescription drug element of this business but some of the other clinical coordination and related capabilities. So, we're excited about that opportunity to work to grow together. Specifically, to the employer PDP item, you should think of here as Express Scripts continuing to be the face of the employer offerings and this being seamless with all of our clients and services with the role that will be played here around the insurance dynamics going to HCSC.
Eric: Two things I would note for you Josh here first of all as I said.
Eric: David Bryan ahead in their prepared remarks, we will have a multiyear services relationship between ever notice NHTSA building on our relationship that already exists there. So so ever north will have the opportunity to continue to provide services associated not only with the prescription drug.
Elements of this business, but some of the other clinical coordination related capabilities. So we're excited about that opportunity and working to grow together specifically to the employer Pvp.
You should think of here is express scripts continuing to be the base of the employer offerings add this being seamless with the with all of our clients and services with the role that that will be played here around the insurance dynamics going to ICSC, but again.
Eric P. Palmer: But, again, this will be a set of relationships that Express Scripts and Evernorth will continue to manage from a relationship and account management perspective and will continue to be very involved in an area of focus for us. So, overall, very excited about the opportunity to continue to grow with another partner here. Thank you. Our next question comes from Scott Fidel. Stephen, see you after.
Eric: This will be.
Eric: Set of relationships that express scripts had ever north will continue to.
Eric: Vantage from.
Eric: Relationship an account management perspective will be continue to be very involved in the area of focus for us. So overall are very excited about the opportunity to continue to grow with another partner here.
Eric: Thank you. Our next question comes from Scott Fidel with Stephens you May ask your question.
David Michael Cordani: Thank you. Our next question comes from Scott Fidel. Hi, thanks, good morning.
Scott J. Fidel: Alright, Thanks, Scott good morning.
Scott J. Fidel: First is just now with the sale of the <unk> business.
David Michael Cordani: I'm interested in, just now, with the sale of the MA business, how your priorities for investment and for growth in Cigna Healthcare may change from that. And, you know, obviously, you talked about how you've invested a lot in Medicare. So that should free up capital to invest in other businesses.
How your priorities for investment and for growth and extending our health care may change from that end.
Scott J. Fidel: Obviously, you talked about how you've invested a lot in Medicare.
Scott J. Fidel: So that should free up capital to invest in other business units. So curious in terms of how youre thinking about where you can increase investment for growth in Sigma healthcare that also just.
David Michael Cordani: So curious, in terms of how you're thinking about where you can increase investment for growth in Cigna Healthcare, but also just, you know, how you're thinking about the exchange business now against the exit from MA, just around your overall, you know, risk business in Cigna Healthcare will now probably be more weighted towards HICS, which is a pretty volatile business. So, you know, curious just about your thinking about the exchange business and sort of how you, how now you're going to sort of view that business post the sale of the MA. Thanks. Scott, good morning. It's David.
Scott J. Fidel: How youre thinking about the exchange business now against the exit from M&A just around your overall risk business.
Health care will now be probably more weighted towards <unk>, which is a pretty volatile business. So curious on your thinking about the exchange business and sort of how you how now youre going to sort of view that business post the sale of the EMEA next.
Scott J. Fidel: Scott Good morning, it's David.
David: I think your umbrella.
David Michael Cordani: I think your umbrella tenet is right. As I noted in my prepared remarks, the decision allows for a sharpening of focus as we lean into our portfolio going forward. As you think about the investments, though, we have a long track record of making multi-year investments within our portfolio. So, think about investments in a digital-first orientation and data-driven capabilities, continuing to invest in the development of new programs and capabilities, be it what we talked about before with ClearCare or PathWall capabilities, expanding the infrastructure and scale for a broader addressable market expansion, and our proven CuraScript SD expansion as we face off And I mentioned to Josh the Evernote Accountable Care capability.
David: <unk> is right. So as I noted in my prepared remarks.
David: The decision allows for sharpening of focus.
David: As we lean into our portfolio going forward as you think about the investments. So we've had we have a long track record of making multi year investments within our portfolio. So think about investments in a digital first orientation and data led capabilities continuing to invest in development of new programs and capabilities.
What we talked about before with clear care or pass wall capabilities, expanding the infrastructure and scale for a broader addressable market expansion and our proven <unk> script SD expansion as we face off in support of broadening array of health care professionals and integrated delivery systems and I met.
David: And Josh the Avenue with accountable care capability. So so think about broadly speaking our investment strategy continuing to fuel a variety of items and finally sustained affordability be it on the medical class pharmacy cost or administrative leverage that we get out of machine learning and AI through that lens.
David Michael Cordani: So, think about, broadly speaking, our investment strategy, continuing to fuel a variety of items, and finally, sustained affordability, be it for medical costs, pharmacy costs, or administrative leverage that we get out of machine learning and AI through that lens. As it relates to the question around exchange or otherwise, we've always viewed the exchange business as sitting between commercial as well as the government.
David: As it relates to the question around exchange or otherwise, we've always viewed the exchange business is sitting between commercial as well as the government obviously the government influences a meaningful portion of that through.
David Michael Cordani: Obviously, the government influences a meaningful portion of that through the benefit design and otherwise, yet we are able to successfully leverage our collaborative accountable care relationships. And as we've demonstrated now for about a decade with the exchange business, by taking a very targeted focus within that market from its inception in 2014 to today, we continue to see that as a complementary aspect of our business. We will take very targeted positions, market by market, so long as we have the right collaborative accountable care relationships in place and have them be a complementary part of our portfolio. So, I don't see the exchange posture as changing as a result of this, and broadly speaking, I don't think the investment strategy and the corporation will change as a result of it. It does create more capacity, though, as you articulated, to accelerate some of the categories I made reference to. Hope that helps, Scott. Thank you. Your next question comes from Kevin Fischbeck. America.
David: The benefit design and otherwise, yes, we are able to successfully leverage our collaborative accountable care relationships and as we've demonstrated now for about a decade with the exchange business by taking a very targeted focus within that market from its inception in 2014 to today.
David: We continue to see that as a complimentary aspect to our business.
David: We will take very targeted positions market by market. So long as we have the right collaborative accountable care relationships in place and have it be a complementary part of our portfolio. So I don't see the exchange posture is changing as a result of this and broadly speaking I don't think the investment strategy in the corporation changes as a result of it it does create more capacity that was short.
<unk> to accelerate some of the categories I made reference to hope that helps Scott.
Thank you.
David: Thank you. Our next question comes from Kevin Fischbeck with Bank of America, You May ask your question.
Brian Ivanko: You may ask your, Great, thanks. I was wondering if you could give a little more color about the membership guidance for 2024 by product. I know you're repricing exchanges. How is commercial going within commercial to subsegments? And then a little more color on the Medicare Advantage volume expectations. I guess that's in the guidance as well. Morning, Kevin, it's Brian.
Kevin Mark Fischbeck: Great. Thanks, I was wondering if you could give a little more color about the membership guidance for 2024 by product I know you're repricing exchanges, how its commercial growing within commercial the sub segments and then and then one more color on the Medicare advantage, our volume expectations. That's I guess, that's in the guidance as well.
Kevin Fischbeck: Yeah.
Kevin Fischbeck: Good morning, Kevin It's Brian.
Brian Ivanko: So as it relates to the net decline we have projected for the 2024 Cigna healthcare customers, you can think of the primary driver of this being the individual exchange business. So, as we discussed late last year, we took some needed pricing actions in certain geographies in the individual exchange portfolio, and this will result in net customer declines for this business in 2024. Within the US commercial employer business, we expect customer volumes to be up modestly, but you should think of this by subsegment being split a bit.
Brian: So as it relates to the net decline we have projected into 2020 for Sigma healthcare customers. You can think of the primary driver of this being the individual exchange business.
Brian: Discussed late last year, we took some needed pricing actions in certain geographies and the individual exchange portfolio and this will result in net customer declines for this business in 2024.
Brian: Within the U S commercial employer business, we expect customer volumes to be up modestly, but you should think of this by sub segment being split a bit. So we expect to see a net decline in our national accounts business, but this will be more than offset by the continued strong growth within our select segment.
Brian Ivanko: So we expect to see a net decline in our national accounts business, but this will be more than offset by the continued strong growth within our select segment. And as a reminder, we continue to see opportunities for above-market growth in the select segment where our market share is still just 7%. When you think about the MA customer volume specifically, as we approach the 2024 bid cycle, as we always do, we apply a local market, county-level approach relative to how we price and set benefits. And so, for most geographies, this resulted in stable benefits.
As a reminder, we continue to see opportunities for above market growth in the select segment, where our market share is still just 7%.
When you think about the EMEA customer volume specifically.
Brian: We approach the 2020 for bid cycle as we always do we apply our local market county level approach relative to how we price and set benefits and so for most geographies. This resulted in stable benefits a few areas. We had some targeted pullbacks just in light of the funding environment in 2024, and what we saw was in some of our local geographies.
Brian Ivanko: In a few areas, we had some targeted pullbacks just in light of the funding environment in 2024. And what we saw was, in some of our local geographies, there was some very aggressive competitor behavior, which resulted in less net growth than what we had originally expected for the Medicare Advantage business. So, taken all together, we would expect to see net customer volumes down slightly for year-end 2024 in comparison to year-end 2023 within the Medicare Advantage space specifically. But when you put all these pieces together, we're pleased with the overall balance in the Cigna healthcare business right now, as we expect to see profit margins expand year over year, as I mentioned earlier, while we're serving a meaningful volume of customers that's grown markedly over the last 2 years. Thank you. Our next question comes from Erin Wright with Morgan Stanley. You may ask her, " Great, thanks."
Brian: There was some very aggressive competitor behavior, which resulted in less net growth than what we had originally expected for the Medicare advantage business taken all together, we would expect to see net customer volumes down slightly for year end 2024 in comparison to year end 2023 within the Medicare advantage space specifically, but.
Brian: When you put all these pieces together, we're pleased with the overall balance of the Sigma healthcare business right. Now is we expect to see profit margins expand year over year as I mentioned earlier, while we are serving a meaningful volume of customers thats grown markedly over the last two years.
Brian: Thank you. Our next question comes from Erin Wright with Morgan Stanley You May ask your question.
Speaker Change: Great. Thanks.
Eric P. Palmer: On EverNorris, how are you thinking about the implications of cost-plus models and what that means at the PBM level? And how does that influence your discussions with customers or just around your pharmacy network relationships? And, more broadly, just around transparency?
Erin Wilson Wright: How are you thinking about the implications of cost plus models and what that means at the PVM level and how does that influence your discussions with customers are just around your pharmacy network relationships and just more broadly just around transparency and obviously you talked about that in your prepared remarks and in more transparent operations at the PBF.
Eric P. Palmer: And obviously, you talked about that in your prepared remarks and about more transparent offerings at the PBM level. And how do you think those offerings are gaining or not gaining traction across your customer base? Thanks. Hi Aaron. It's Eric. First of all, I would just note that fundamentally, we start with a portfolio and an approach that's equipped to offer choice and flexibility in how we work to support our clients. And so that's the lens I ground myself back to.
Erin Wilson Wright: Level and how do you think the doctor either gaining or not getting traction across your customer base. Thanks.
Eric: Hi, Aaron it's Eric.
Eric: First of all just but with no fundamentally we start with the portfolio and approach that is equipped to offer choice and flexibility in how we work to.
Eric: Support our clients and so that's the lens grown back to you.
Eric P. Palmer: We're always open to looking at new ways and approaches that drive increased affordability and meet the needs of our buyers. And I'm really proud of the range of different financing solutions we offer and the number of innovations that we delivered in 2023 and already in 2024 in terms of the types of options that we bring to our clients. And, in fact, as David mentioned, in the fourth quarter, we launched our clear network solution, which was the first of its kind, comprehensive, and simple solution to providing a cost index based pharmacy network. Our solution is unique in that it provides access to all the drugs at prices that's based off of independent, externally created cost indices, a simple margin that's shared between us and the dispensing pharmacy. So, use that as an example.
Eric: We're always open to looking at new ways and approaches and such that drive increased affordability and meets the needs of our buyers and I'm really proud of the range of different financing solutions, we offer in a number of innovations that we've delivered in 2023.
Eric: In 2024 in terms of the types of options that we bring to.
Eric: So our clients and in fact as David mentioned in the fourth quarter, we launched our clear network solution, which was its first of its kind with comprehensive and simple solution to providing a cost index based pharmacy network and our solution is unique in that it provides access to all of the drugs and pricing that's based off of independent.
Eric: Externally created cost indices.
Eric: Simple margin that's shared between us and the dispensing pharmacy, so use that as an example.
Eric P. Palmer: We had a lot of good conversations about that as a program and as an offering, but I would note that the selling seasons for these types of things tend to be long in duration, so a long lead time in terms of implementation and such. So some good conversation with our clients on solutions like that. Looking at other changes in the ecosystem, overall, I would note our clients are demanding more for their healthcare dollars and are looking for ways to improve affordability overall, and they are not interested in paying more for the same services that they receive today. We've got a wide variety of networks and solutions that exist already in the market and the flexibility to adapt and adjust the configuration of our networks to trade off costs relative to the value and access profiles that exist. So overall, we've got good flexibility, good capabilities, and modularity to be able to approach and line up our capabilities best with what our clients need. Thank you. Our next question comes from Justin Lake with Wolf Research. You may ask your question now. Thanks. Good morning.
Eric: A lot of good conversations about that as a.
Eric: As a program that has an offering but would note that the selling seasons for these these types of things tend to be.
Eric: A long time, there's a long lead time in terms of in terms of the implementation of such so some good conversation with our clients on solutions like that.
Eric: Looking at other changes in the.
Eric: The ecosystem overall with note our clients are demanding more for their health care dollars and are looking for ways to improve affordability overall broadly are not interested in paying more for the same services that they received today, we've got a wide variety of networks and solutions that <unk>.
Eric: <unk> already in the market and the flexibility to adapt and adjust the configuration of our networks the trade off costs relative to.
Eric: The value and access profiles.
Eric: So overall, we've got good flexibility good capabilities in modularity to be able to approach and lineup our capabilities best with what our clients' needs.
Eric: Yeah.
Eric: Thank you. Our next question comes from Justin Lake with Wolfe Research you May ask your question.
Justin Lake: Thanks, Good morning, I wanted to ask a broader strategic question beyond most of your peers have set up their business models over the last five to 10 years to manage a significant amount of their internal health care spend right drive additional profitability or revenue from those services businesses.
David Michael Cordani: I wanted to ask a broader strategic question beyond MA. Most of your peers have set up their business models over the last five to 10 years to manage a significant amount of their internal health care, right, and drive additional profitability and revenue from those services. So with the sale of MA, you're repricing your exchanges, which makes sense, but your risk membership and the amount of medical costs you control, right, and are able to run through your services business just declines. How do you think about the value there, those individual synergies of controlling medical costs and being able to provide services there, the natural growth that provides each and every year versus having to go out into the market and win each and And how should investors expect this to impact their capital deployment strategy going forward? Thanks. Justin, good morning. It's David.
So with the sale of M. A repricing euro exchanges, which makes sense, but your risk membership and the amount of medical cost you control.
Justin Lake: And are able to run through your services business just the clients. How do you think about the value. They are those individuals' synergies of controlling medical costs and being able to provide services. There. The natural growth that provides each and every year versus having to go out into the market.
Justin Lake: Every piece of business, a growth, which obviously you've done pretty well over the last few years, but just you know the.
Justin Lake: The stability of kind of having data hurdle membership and how should investors expect this to impact your capital deployment strategy going forward. Thanks.
Justin Lake: Justin Good morning, It's David there is a lot in your question.
David Michael Cordani: There's a lot in your question. Let me try to frame our thought process today and as we go forward. First, to date, we have a very clear, proven track record of delivering a total cost, total quality, including clinical quality and service quality, solution that resonates really well in the marketplace, whether it's on the benefits side of the equation or on the services side of the equation, and our results reinforce that. Point two is we've successfully executed an approach to delivery and fulfillment, a mix of partnered and owned. We continue to evolve our portfolio, but philosophically, we do not believe, have not, do not, and continue not to believe that you have to own everything to be able to fulfill your dreams.
We try to frame.
David: Our thought process today and as we go forward.
David: First.
David: To date, we have a very clear proven track record of delivering a total cost total quality, including clinical quality and service quality solution that resonates really well in the marketplace, whether it's in the benefit side of the equation or the services side of the equation and our results reinforce that 0.2 ways.
David: Successfully executed an approach that is on the delivery and fulfillment mix of partnered and owned.
David: Need to evolve our portfolio, but philosophically, we do not believe have not do not and continue to believe that you have to own everything to be able to fulfill as you might recall if you reflect back on prior conversations within our portfolio at Investor days, we framed actually amount of services that ever north for.
David Michael Cordani: As you might recall, if you reflect back on prior conversations within our portfolio at Investor Days, we framed the amount of services that Evernorth, for example, was fulfilling at a point in time for the Cigna healthcare portfolio, and we framed the expansion opportunity to the point of your question that existed in front of us, and we continue to expand those services. Our model, though, is also importantly not predicated on only having economic alignment for guaranteed cost.
David: Paul was fulfilling.
David: Point in time for the sake of the health care portfolio, and we frame the expansion opportunity to the point of your question that existed in front of us and we continue to expand those services. Our model. Though is also importantly, not predicated on only having economic alignment for guaranteed cost.
David Michael Cordani: We're able to do it successfully for self-funded or shared funding mechanisms as well. So point two is we see the ability to continue to grow that over time with our Evernorth services portfolio. Point three is, as it relates to services to continue to invest in, we've been very clear that certain services we see additional step function opportunities to invest in and continue to grow. Most importantly, these are proven, scaled, specialty capabilities. The rate of spending growth and clinical complexity around that is off the charts.
David: We're able to do it successfully for self funded or shared funding mechanisms as well. So 0.2 is we see the ability to continue to grow that over time with our <unk> services portfolio.
David: He is as it relates to services to continue to invest in we've been very clear that certain services, we see additional step function opportunities to invest and continue to grow most importantly, our proven scaled specialty capabilities the rate of spending growth in clinical complexity around that.
David: Is off the charts, we have a leadership position there that will continue to grow and we will continue to be the market leader in that space through our assets secondly, the need statements around behavioral health and the most comprehensive way.
David Michael Cordani: We have a leadership position there that will continue to grow, and we will continue to be the market leader in that space through our assets. Secondly, we address the need statements around behavioral health in the most comprehensive way. The market now expects much more coordination of behavioral and physical health, and we will continue to expand services that we have within our leading capabilities. And third, just to stop at three for illustration, is the breadth of virtual services, the ability to connect and coordinate and expand services as we go forward. So we agree with your point.
David: <unk> expects now are much more coordination of behavioral and physical health and we will continue to expand services that we have within our leading capabilities.
David: And third just to stop at three for illustration is the breadth of virtual services, the ability to connect and coordinate and expand services as we go forward. So we agree with your point I'll add with agreement with your point of continuing to invest in our services capabilities to be able to support the right services, but we do not believe you have to <unk>.
David Michael Cordani: I'll end by agreeing with your point of continuing to invest in our services capabilities to be able to support the right services. But we do not believe you have to own all aspects of the care delivery equation to be able to deliver that on a going forward basis. So hopefully that gives you a framework.
David: On all aspects of the care delivery equation to be able to deliver that on a go forward basis. So hopefully that gives you a framing.
David Michael Cordani: As you might expect, we'll spend time on this at our investor day on the 7th because it's an important part of our strategy today, and an important part of our growth strategy going forward. Thank you. Our next question comes from Lance Wilkes with Burns. Thank you for your questions. Great. Thanks a lot. Could you talk a little bit about, over on the Cigna Healthcare side of the business, employer, how penetration rates are going with especially products and self-insured, and if there are any interesting trends as you go into 24 here, as you look at the selling season in 25 with respect to that, and then as you've gone through the selling season, any changes in employer priorities, and then also just a quick clarification on, The other one's the real question.
David: As you might expect will spend time on this at our Investor day on the seventh because it's an important part of our strategy today and important part of our growth strategy going forward.
David: Thank you. Our next question comes from Lance Wilkes with Bernstein, you May ask your question.
Great. Thanks, a lot.
Lance Arthur Wilkes: Could you talk a little bit about over in the Cigna health care side of the business employer.
Penetration rates are going with our specialty products and self insured and if there are any interesting trends as you go into 'twenty four here as you look at the selling season and twenty-five with respect to that and then as you've gone through the selling season and any changes in employer priorities and then also just a quick clarification on if you could just explain them theres a little drop in <unk>.
Lance Arthur Wilkes: Fees and the Pbms.
So that's that one just clarification. The other one is the real question. Thanks.
Brian Ivanko: Thanks. Morning Lance, it's Brian. So I'll take the majority of your question. I think there are a number of bits and pieces in there. As it relates to the specialty products and the attachment, if you will, to the medical in the Cigna Healthcare book of business, as you know, it's been a long-standing part of the company's strategy because we see the value of clinical integration being much greater when we have multiple components of a relationship with an employer. So that's been for many years part of the company's strategy and important to bifurcate that by subse Certainly, in the down market, we call the select segment under 500.
Lance Arthur Wilkes: Good morning, Lance it's Brian So I'll take the majority of your question I think there's a number of different pieces in there.
Brian: As it relates to the specialty products and the attachment if you will to the medical and the Sigma healthcare book of business. As you know has been a longstanding part of the company's strategy.
Brian: Because we see the value of clinical integration.
Brian: Being much greater when we have multiple components of a relationship with an employer. So thats been for many years part of the company's strategy and important to bifurcate that by sub segment certainly in the down market, we call the select segment under 500.
Brian Ivanko: Most of those employers tend to buy the entirety of our offerings at once, so we have very high user work penetration rates in the under 500 and then comparatively lower when you get to the national account space, where there tends to be a little bit more a la carte purchasing of the different services. So, broadly speaking, I would say those patterns haven't changed too much over the last few years.
Brian: Most of those employers tend to buy the entirety of our offerings at once so we have very high penetration rates in the under 500, and then comparatively lower when you get to the <unk>.
Brian: National accounts space, where there tends to be a little bit more ala carte purchasing of the different services. So.
Brian: Broadly speaking I would say those patterns haven't changed too much over the last few years on your question on the selling season in particular in some of the employer preferences on the 2020 for selling season is largely over with the exception of the select segment as I mentioned earlier, that's an area for us that continues to grow at above market rates and we're really pleased with.
Brian Ivanko: On your question about the selling season in particular and some of the employer preferences, the 2024 selling season, you know, is largely over with the exception of the select segment. As I mentioned earlier, that's an area for us that continues to grow at above market rates and we're really pleased with. As we look forward to the 25 selling season, we do have some national account RFPs in-house for both some existing clients and new business prospects.
Brian: As we look forward to the 25 selling season, we do have some national account Rfps in house for both from existing clients and new business prospects and Directionally RFP.
Brian Ivanko: And directionally, RFP volumes are up a bit from prior years. Now, each of these large clients, as you can appreciate, tend to have unique needs. That said, there are a few areas that I would highlight for purposes of a kind of theme. So one would be some of our larger employers are seeking to consolidate vendors or point solutions with those who can supply more integrated offerings. So we tend to call that point solution fatigue.
Brian: RFP volumes are up a bit from prior years now each of these large clients as you can appreciate tend to have unique needs.
Brian: That said there are a few areas that I would highlight for purposes of kind of themes. So one would be.
Brian: Some of our larger employers are seeking to consolidate vendors are point solutions with those who can supply more integrated offerings. So we tend to call that point solutions fatigue here, Eric I talked about.
Brian Ivanko: You may hear Eric or I talk about them. Secondly, a theme has been around mental health and substance abuse benefits. These programs have become more and more important to employers from the standpoint of managing productivity, absences, and the overall health of their employee base. And thirdly, many larger employers are interested in digitally enabled care navigation capabilities to further power things like sighted care optimization and consumer empowerment at the time that care is delivered. So we continue to see interest in those areas as well as various provider network configurations that may optimize cost quality and or incentive alignment between the provider and the financier. So our significant health care offerings are really well-positioned to address these themes. And the demands from large employers will simultaneously continue to grow the share in the under 500 select segment.
Brian: Secondly, a theme has been around mental health and substance abuse benefits as these programs have become more and more important to employers from the standpoint of managing productivity absences and overall health of their employee base and thirdly. Many of the larger employers are interested in digitally enabled care navigation capabilities to further.
Brian: Power things like site of care optimization and consumer empowerment at the time that that care is delivered so we continue to see interest in those areas as well as various provider network configurations, and the optimized cost quality and incentive alignment between the provider and the financier. So our sigma healthcare offerings are really well positioned to us.
Speaker Change: Dress these themes and the demand from large employers level simultaneously continue to grow share in the under 500 select segment I think David wants to add a few comments here sure. Thanks. Good morning, just to amplify and add one point. The amplification is that point solution fatigue that plays through in terms of opportunities for our <unk> team as well as our Cigna.
David Michael Cordani: I think David wants to add a few comments here. Sure. Lance, good morning. Just to amplify and add one point.
David Michael Cordani: The amplification is that point solution fatigue that plays through in terms of opportunities for our Evernord team as well as our significant healthcare team. So around that, think about the ability to leverage solutions to get more value, better service, better clinical outcomes, overall value, and affordability. Second, I just wanted to reinforce a critical point. When we think about penetration or cross-selling, sometimes it's not thought through. And you didn't state this, but sometimes it's thought through under the notion that you're just cross-selling products.
Health care team.
David: Around that think about the ability to leverage solutions to get more value better service better clinical outcomes overall value and affordability second I just wanted to reinforce a critical point when we think about penetration or cross selling sometimes it's thought through it you didn't state this but sometimes its sell through under the notion of Youre just cross selling products.
David: <unk>.
David Michael Cordani: The integration of the products to deliver more value to clients and customers is mission critical, so that shows up in better service quality, better clinical quality, and improved affordability. And I would highlight that our sustained differentiated MLR performance is, in many cases, aided by our proven ability to integrate certain services. They come together for the benefit of the clients, which enables us to generate a high level of cross-selling and a high level of penetration. Thanks, Lance.
David: The integration of the products to deliver more value to the clients and customers is mission critical so that shows up in better service quality clinical quality improves affordability and I would I would highlight that our sustained differentiated MLR performance is in many cases aided by our proven ability to integrate.
David: Certain services.
David: Come together with benefit the clients that enables us to generate the high level of cross selling at a high level of penetration. Thanks Lance.
Brian Ivanko: Thanks. Your next question comes from Gary Taylor. Callan, you may ask your ques- Hi, good morning. David, I was hoping to ask an action-packed question like AJ did, but I'm afraid I'm going to be too in the Thank you for that. I just want to go back to stop loss because it looks like a pretty substantial benefit to the 4Q and headwind.
David: Thanks.
David: Thank you. Our next question comes from Gary Taylor with T J Count T.
Gary Taylor: TD Cowen you May ask your question.
Hey, good morning.
Gary Taylor: David I was hoping to ask an action packed question like a J, but I'm afraid I'm going to be too.
Gary Taylor: Weitz for that I, just wanted to go back to stop loss, because it looks like a pretty substantial.
TD Cowen: Two the <unk> and headwind when I just look at.
Brian Ivanko: When I just look at how much your fourth quarter MLR outperformed your typical seasonal pattern, particularly in a quarter where there was broad trend acceleration, and then I try to square how much ACA enrollment and margin improvement should drive a tailwind. That's a 24 MLR, which should actually decline year over year, but you're guiding it up. I mean, it gets me to hundreds and hundreds of basis points, you know, of variance around the stop loss. So could you quantify how much that helped for Q and how much of a headwind that is for 24? And then the second part would just be.
TD Cowen: How much your fourth quarter your MLR outperform your typical seasonal pattern, particularly in a quarter, where there was broad trend.
TD Cowen: Trend acceleration and then I try to square how much.
TD Cowen: Enrollment in margin improvement should drive a tailwind.
TD Cowen: That said 24, MLR should actually decline year over year, but you are guiding it up again.
TD Cowen: To me, the hundreds and hundreds of basis points.
TD Cowen: The variance around stop loss, so could you quantify how much that helped <unk> and how much of a headwind and that is for 24 and then the second part would just be.
Brian Ivanko: Walk us through again why you had such a favorable performance in that line. Good morning, Gary. It's Brian.
TD Cowen: Walk us through again why.
TD Cowen: You had such a favorable performance in that line.
TD Cowen: Good morning, Gary It's Brian So as it relates to the stop loss book as you know this is a really important part of the Cigna health care portfolio and we finished 2023 was $6 billion of premium in that in that product line, which to the earlier question on SaaS attaches itself to our self funded offerings in many off.
Brian Ivanko: So as it relates to the stop-loss book, as you know, this is a really important part of the Cigna healthcare portfolio, and we finished 2023 with $6 billion of premium in that product line, which, to the earlier question Lance asked, attaches itself to our self-funded offerings in many instances. This book will naturally have some variability to it, so I wouldn't get overly fixated on one quarter's performance. There tends to be a little bit more settlement activity that transpires in the fourth quarter, so we had a little bit more of the favorable working its way through in the quarter, whereas if you smooth that over the course of the year, you don't have quite the same dynamic, which is one of the reasons why when you do the bridge from 23 to 24, you shouldn't run rate the fourth quarter experience from that standpoint.
Many instances.
TD Cowen: This book will naturally have some variability to it so I wouldn't get overly fixated on on.
TD Cowen: On one quarter's performance there tends to be a little bit more settlement activity that transpires in the fourth quarter. So we had a little bit more of a favorability work its way through in the quarter, whereas if you smooth that over the course of the year.
TD Cowen: You don't have quite the same dynamic which is one of the reasons why when you do the bridge from 'twenty to 'twenty four you Shouldnt run rate the fourth quarter experience.
TD Cowen: From from that standpoint so.
Brian Ivanko: So I mentioned earlier some of the moving pieces in the year-over-year MCR reconciliation. The 90 basis points increased from where we landed at the end of 23 to the midpoint of the 24 guide. A key component of that 90 basis points is an uptick that was anticipated in the stop-loss product MCRs, which, to the point earlier, is a function of our assumption that it will normalize back to more traditional levels of profitability on the stop-loss products. So I think that's broadly the way I would encourage you to think about the dynamics at play here with that product line. Thank you. My last question comes from Dave Windley with Jeffrey, for me.
TD Cowen: I mentioned earlier some of the moving pieces in the year over year MCR reconciliation, the 90 basis points increase from where we landed at the end of 'twenty three to the midpoint of the 24 guide.
TD Cowen: Key component of that 90 basis points is an uptick that we anticipated in the stop loss product mcr's, which to the point earlier as a function of our assumption that that will normalize back to more traditional levels of profitability on the on the stop loss products. So I think thats broadly the way I would encourage you to think about the dynamic.
TD Cowen: At play here with that product line.
TD Cowen: Thank you our last question comes from Dave Windley with Jefferies. You May ask your question.
David Michael Cordani: Ever North, The questions underneath that are... One that you had guided, ramping biosimilar. We expect that to continue, should that continue to ramp and magnify. The second part was... and onboarding costs for the Centene contract. 23.
David Howard Windley: Hi, Thanks for sneaking me in I appreciate that the premise of my question here is that.
You're ever North profit guidance for 'twenty, four looks pretty highly visible to us. So my questions underneath that are.
David Howard Windley: One that you had guided 23 to include a ramping contribution from Biosimilar how should we.
David Howard Windley: <unk> got to continue should that continue to ramp in magnitude.
David Howard Windley: On the second part was the significant onboarding costs for Centene contract.
Brian Ivanko: For more information, visit www.fema.gov, past those are those, Brian, you mentioned some EverNorth onboarding, maybe unrelated, but it was mentioned in your remarks, and I just wanted to kind of understand the relative size of that. Good morning, it's David. Let me ask Brian to give you a framing in terms of, because you have a question relative to the whole, the trajectory of the year over year, and then ask Brian to hand it across to Eric to give you a little bit more color on your question, the onboarding costs that were really intense during 2023, and then some of what we're calling onboarding costs that bleeds into the early part of 20 Yeah, thanks, David. Good morning, Dave.
And 23 are you are you fully passed those are those completely gone Brian you mentioned, some ever north onboarding, maybe unrelated but ever north Onboarding in your remarks, I just wanted to kind of understand the relative size of those so those two things. Please.
Good morning, It's David Let me ask Brian to give you a framing in terms of could you have a question relative to the halt the trajectory in the year over year, and then ask Brian Hanson across Eric can give you a little bit more color of your question the onboarding cost that were.
David Howard Windley: Really intense during 2023 and then some of what we're calling on boarding costs that bleeds into the early part of 2024 give you a little color of what those services look like but I'll ask Brian to frame the financials first yes. Thanks, David Good morning, Dave.
Brian Ivanko: So overall, our AOI growth in Evernote is expected to be about 9%, as implied by the $7 billion or more of income that we expect in the year. And you can think of that as having the benefit of centene-related costs now essentially normalizing back to a point where the profitability of that relationship will be in the range of breakeven. And then on top of that, we will have income performance that's more in line with our traditional algorithm of 5 to 7% average annual income growth. And that reflects the benefit of all the multi-year trends that Eric talked about earlier, whether those be biosimilars, GLP-1 drugs, specialty generics, etc. So we certainly are seeing continued benefit from the biosimilar wave in 2024. But as I mentioned earlier, there's a bit of a specific and unique effect on the large amount of additional volume we're getting with the new client relationships in 2024. So Eric, maybe you can expand on that dynamic a bit.
Brian: So overall, our NOI growth is expected to be about 9% as implied by the $7 billion or more of income that we expect in the year and you could think of that as having the benefit of centene related costs.
Brian: Now essentially normalizing back to a point, where the profitability of that relationship will be in the range of breakeven and then on top of that we will have income performance. That's more in line with our traditional algorithm of 5% to 7%.
Brian: Average annual income growth and that reflects the benefit of all the multiyear trends that Eric talked about earlier, whether those be biosimilars G. L. P. One drug specialty generics et cetera. So we certainly are seeing continued benefit from the biosimilar wave in 2024.
Brian: But as I mentioned earlier theres a bit of a.
Brian: Specific and unique effect of the large amount of additional volume, we're getting with the new client relationships in 2024, So maybe you can expand.
Speaker Change: And on that dynamic of it great. Thanks, Brian.
Eric P. Palmer: Great. Thanks, Brian. Good morning, Dave.
Eric P. Palmer: So with Centene, first, I would just start by actually noting how proud I am of how our team has delivered here and how we've worked collaboratively across and with the Centene team. It's really been a great effort and one that's come together really nicely for the benefit of our now shared customers. Implementation's gone really well, and our first month has been quite successful. Now, consistent with what we've said before, and as Brian just noted, in 2023, we had meaningful implementation spending with no associated revenue, and generated a loss. In 2024, we have results that will be approximately break-even. In 2025, we'd expect to achieve our run rate margin for this contract, which will be lower than the overall book of business. With respect to the in-year 2024 timing that Brian alluded to before, you should just think about there's a lot more activity that has to happen at the beginning of a contract like this. There's more client outreach. There's work to get individuals into their therapies, et cetera.
Eric: So with the century and first I would just start by actually noting how proud I am of how our team has delivered here and how we've worked collaboratively across and with the Centene team, that's really been a great effort.
Eric: One that.
Eric: Together really nicely for the benefit of our now shared customers implementation has gone really well in our first month has been quite quite successful now consistent.
Eric: Consistent with what we've said before and as Brian just noted in 2023, we had meaningful implementation spending no associated revenue generated a loss 2024 results that will be approximately breakeven in 2025, we would expect to achieve our run rate margin for this contract, which will be lower than the overall book of business.
Eric: With respect to the year 2024 timing that Brian alluded to before you should just think about this there's a lot more activity that has to happen at the beginning of a contract like this theres more client outreach there is work to get individuals.
Eric: Into the therapy et cetera, so there's that.
Eric P. Palmer: So there's a normal effect here of just additional work and activity that has to take place in the first part of the year, and our expenses will reflect that. So that's a bit of that in-year shaping, but it's all consistent with what we had shared before. The final thing I'd note is consistent with our kind of normal practice; now that Centene is a live client of ours, we won't be commenting going forward on specific profitability of a specific client or things along those lines, but know that the trajectory here is off to the same start we expected and consistent with what we had talked about previously. Thank you. I will now turn the call back over to David Cordani for his closing remarks. Thanks. Just a couple messages to reiterate.
Eric: That's a normal effect here of just additional work and activity that has to take place in the first part of the year our expenses will reflect that.
Eric: That's a bit of that in your shaping but it's all consistent with what we had shared before the final thing I'd note is consistent with.
Eric: Our kind of normal practice now that Centene has.
Speaker Change: And live client of ours, we won't be commenting going forward on specific.
Profitability of a specific client or things along those lines, but know that the trajectory here I'll start us off to after the same start we expected and consistent with what we had talked about previously.
Speaker Change: Thank you I will now turn the call back over to David <unk> for closing remarks.
David: Thanks, just a couple of messages to reiterate.
David Michael Cordani: First and foremost, 2023 was clearly a strong year of performance across our company as we executed quite well. And that's reinforced by more than a decade where we've executed consistently as we've evolved our company and continued to grow our business portfolio and those we serve. We have confidence that we're going to sustain that momentum and leverage our well-balanced portfolio across our franchise and continue to deliver within our 10 to 13% long-term EPS growth range, as well as pay an attractive dividend.
David: First and foremost 2023 was clearly a strong year performance across our company as we executed quite well and it's reinforced by more than a decade, where we've executed consistently as we've evolved our company and continue to grow our business portfolio and those we serve we have confidence that we're going to sustain that momentum.
David: And leverage our well balanced portfolio across our franchise and continue to deliver within our 10% to 13% long term EPS growth range as well as pay an attractive dividend.
David Michael Cordani: Finally, I want to thank my co-workers around the world for their continued discipline execution, their passion, and, importantly, and their caring orientation as well as dedication to those we serve. It shows up in our results. I'm really pleased and proud of what we delivered in 2023. And importantly, I'm even more excited for our expansion of our reach and impact in 2024. As a final note for you all, we look forward to seeing many of you at our investor day, which is a month away. So, in early March, we'll look forward to seeing you in New York City, and our team will be excited to talk about the market expansion we see in front of us, our capabilities, and our opportunity to create additional value on a going forward basis.
Speaker Change: Finally, I want to thank my coworkers around the world.
Speaker Change: Further continued disciplined execution their passion importantly, and they're carrying orientation as well as dedication for those we serve it shows up in our results I'm really pleased and proud of what we delivered in 2023, and importantly, I'm, even more excited for our expansion of our reach and impact in 2024.
Speaker Change: As a final note for you all we look forward to seeing many of you at our Investor Day, which is a month away. So in early March we look forward to seeing in New York City and our team will be excited to talk about the market expansion, we see in front of us our capabilities and our opportunity to create additional value on a go forward basis have a great day.
David Michael Cordani: Have a great day. Thanks. Ladies and gentlemen, this concludes the Statement Group's fourth quarter 2023 results review. Cigna Investor Relations will be available to respond to additional questions. A recording of this conference will be available for 10 business days following this call. You may access the recorded conference by dialing 800-839-9317 or 203-369-3605. There is no passcode required for this replay. Thank you for participating.
Speaker Change: Ladies and gentlemen, this concludes the state and the group's fourth quarter 2023 results review Cigna Investor Relations will be available to respond to additional questions. Shortly.
Speaker Change: Recording of this conference will be available for 10 business days. Following this call you may access the recorded conference by dialing 80083993172033693605 years.
Speaker Change: There is no pass code required for this replay. Thank you for participating we will now disconnect.