Q4 2024 CVS Health Corp Earnings Call
Prika: Good morning and thank you all for attending the CVS Health Q4 2024 Earnings Conference Call. My name is Prika and I will be your moderator for today's call.
Speaker Change: All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. I would now like to pass the conference over to your host, Larry McGrath, Chief Strategy Officer. Thank you. You may proceed, Larry.
Speaker Change: Good morning and welcome to the CVS Health fourth quarter and full year 2024 earnings call and webcast. I'm Larry McGrath, Chief Strategy Officer. I'm joined this morning by David Joyner, President and Chief Executive Officer, and Tom Cowhey, Chief Financial Officer.
Speaker Change: Following our prepared remarks, we'll host a question and answer session that will include additional members of the leadership team.
Speaker Change: Our press releases and slide presentations have been posted to our website, along with our Form 10-K, filed this morning with the SEC. Today's call has also been broadcast on our website, where it will be archived for one year.
During this call, we'll make certain forward-looking statements.
Speaker Change: Our forward-looking statements are subject to significant risks and uncertainties that could cause actual results to differ materially from currently projected results.
Speaker Change: We strongly encourage you to review the reports we filed with the SEC regarding these risks and uncertainties, in particular those that are described in the cautionary statement concerning forward-looking statements and risk factors in our annual report on Form 10-K filed this morning.
Speaker Change: and on our recent filings on Form 8K, including this morning's earnings press release.
Speaker Change: During this call, we'll use non-GOP measures when talking about the company's financial performance and financial condition.
Speaker Change: and you can find a reconciliation of these non-GAAP measures in this morning's press release and in the reconciliation document posted to the investor relations portion of our website.
Speaker Change: With that, I'd like to turn the call over to David. David?
Thank you, Larry, and good morning, everyone.
Speaker Change: This morning we reported fourth quarter adjusted earnings per share of $1.19 and adjusted operating income of $2.7 billion.
Speaker Change: We also provided our initial full year 2025 guidance for adjusted EPS in the range of $5.75 to $6.00.
Speaker Change: Our initial expectations reflect meaningful recovery in our Aetna business, particularly in Medicare Advantage.
as well as continued growth in health services.
Speaker Change: Tom will provide a more detailed overview of the components of this guidance as well as a breakdown by segment.
Speaker Change: I'd like to spend some time taking a step back and sharing with you my observations during my first 100 days as CEO.
Speaker Change: During this time, I have connected with shareholders, customers, and clients.
Speaker Change: I have met with and heard from elected officials, and importantly, I have spent a great deal of time listening to our consumers and colleagues. I've come away inspired from these conversations and with a clear and strengthened understanding of what we need to do to realize the tremendous promise of CVS Health.
We can be America's leading and most trusted healthcare company.
Speaker Change: The company that measures itself by its ability to improve outcomes, increase access, and lower the cost of care, while ensuring a consumer experience that we can be proud of. The combination of these measures will ultimately deliver greater shareholder value.
Speaker Change: What makes me confident that we can deliver on this promise? One,
Speaker Change: CVS Health's collection of assets, its reach, its connection with 185 million Americans whether in our stores or clinics.
Speaker Change: through our health plan or by managing their pharmacy benefits. CVS Health is unlike any other company in the United States and with that comes opportunity and a responsibility to make a difference.
Speaker Change: We take this responsibility seriously and have shown that throughout our history.
Speaker Change: We did this 10 years ago when we removed tobacco from our stores. We did this with urgency when the country needed us during the pandemic.
Speaker Change: And we do this today as we fight rising drug prices, as we create a viable biosimilar market, and as we innovate the pharmacy model to reduce frictions in the healthcare system, to name a few.
Speaker Change: We will continue to deliver on this responsibility by being innovative and bold to do what's right for our consumers and customers.
Speaker Change: Two, our over 300,000 colleagues who reflect the backgrounds and experiences of all Americans and the communities we serve.
Speaker Change: I can say every day that our colleagues come to work dedicated to making health care in America better for those we serve.
Speaker Change: and my conversations with our colleagues, I'm proud to say that there are many thousands of inspiring stories for everyone where we could have done better.
Speaker Change: Three, while there are external factors that pose near-term challenges, there are also many reasons to be excited.
Speaker Change: The broader demographic trends of an aging population, advances in AI and technology, the need for more personalized care, and the expectations of the American public to create an improved consumer experience for opportunities where we are best positioned to lead.
Speaker Change: How will we realize this over the short and long term?
Speaker Change: My leadership team and I have spent our time together developing a clear set of priorities.
Speaker Change: Collectively, we are committed to delivering on the promise of CVS Health.
Speaker Change: We believe that aligning the power of our employees and the CBS Health Enterprise behind four specific priorities will deliver on our potential and ultimately the results and experiences that we can all be proud of.
Speaker Change: First, ensuring that each one of our business is best in class through strong execution. Most importantly, we need to deliver on our turnaround at Aetna and restore this business to target margins.
Speaker Change: Second, continuing to develop our integrated capabilities where it matters in order to make healthcare better, more affordable, and more accessible.
Speaker Change: Third, advancing our leading digital strategy and investing in emerging technologies that drive simplicity and efficiency while delivering better experiences for the people we serve.
Speaker Change: And finally, ensuring that we are disciplined stewards of capital as we continue to strengthen our balance sheet, manage our portfolio of businesses, and deploy capital to create value for our shareholders.
Speaker Change: I'm working closely with my team to ensure we have the right talent, structures, and collaboration across our enterprise to execute and deliver on these important priorities.
Speaker Change: CVS Health operates in some of the most critical areas of healthcare and our connections to the people we serve across the country has never been more important because of the challenges we see throughout the U.S. healthcare system.
Speaker Change: Rising healthcare costs put pressure on consumers as they see increasing challenges with affordability.
Speaker Change: and Karen Lynch. These rising health care costs also put pressure on employers and the government, who largely pay the bill for health care. To be clear, health care costs are increasing because of the combination of greater utilization, rising provider costs, and rising health insurance costs. The health care costs are increasing because of the combination of greater utilization,
labor shortages, and dramatic price hikes for branded pharmaceuticals.
Speaker Change: Our teams are focused on delivering on our mission, and we are working hard to directly address the challenges in the healthcare system.
Speaker Change: We are using tools across our enterprise to deliver exceptional value and differentiated experiences to our customers and clients.
Speaker Change: One of the most powerful forces helping to offset rising health care costs are PBMs like Caremark. These entities remain the only part of the drug supply chain entirely focused on lower end costs.
but have erroneously been subject to deceptive rhetoric and misinformation.
Speaker Change: For more than three decades, EVMs have been a proven, unequivocal mechanism to negotiate down the price of drugs for payers and consumers while promoting better adherence and better health.
Speaker Change: In drugs that have no rebates, where PBM tools are limited, we've seen egregious price hikes, with prices for those drugs increasing more than twice as fast as drugs where we can secure rebates.
Speaker Change: In the first three weeks of January alone, branded drug manufacturers added $21 billion of annual gross drug spend to their price actions.
Speaker Change: Our work is a critical counterbalance to the monopolistic tendencies of drug manufacturers. This is why PBMs are needed and why manufacturers fight so hard to limit our capabilities.
Speaker Change: Multiple well-known economists have estimated that PVMs generate net value for the U.S. healthcare system of over $100 billion per year.
Speaker Change: No one has demonstrated more success than the PBMs at driving down drug prices. A perfect example is the prior administration's negotiated maximum fair price, or MFP.
Speaker Change: for the first 10 drugs selected as part of the Inflation Reduction Act.
Speaker Change: Not only have PBMs kept the rate of drug inflation in Medicare Part D at 1.3% per annum over the last 18 years,
Speaker Change: CVS Caremark specifically negotiated rates that contributed to a billion dollar improvement better than MFP.
Speaker Change: More importantly, if we don't continue to negotiate further discounts beyond MFP, the loss savings will go directly into the pockets of drug manufacturers.
Speaker Change: When you look at all the data, not cherry-picked data points like those specifically referenced in the FTC interim reports, the conclusion is clear.
PBMs deliver savings to their clients.
Speaker Change: Fairmark has been and continues to be a critical solution to help ensure Americans pay less for drugs.
Speaker Change: We will continue to play our unique role in the drug supply chain, bringing the full breadth of our capabilities and market expertise to reduce drug prices for all customers.
throughout our history.
Speaker Change: We've led our industry in innovating to solve the issues most important to our clients and customers, whether it's cost,
Transparency, access to care, or experiences.
Speaker Change: A recent example of how we're using our enterprise assets to solve important issues for our clients and help offset the rising healthcare costs is through actions we've taken in the biosimilar market.
Speaker Change: In 2024, through the combination of Cordovus, Teramark, and CVS specialty, we converted more than 90% of eligible Humira patients to a biosimilar at a list price.
Speaker Change: That was more than 80% below the price of branded Humira.
Speaker Change: This enabled us to offer zero dollar out-of-pocket costs for individual members and generated almost a billion dollars of savings for our clients.
Speaker Change: We are the only company that meaningfully drove biosimilar adoption amongst our clients, and we'll continue to do so through the grow-on pipeline of additional biosimilars.
Speaker Change: In our pharmacy businesses, we delivered exceptional experiences with record high levels of NPS in our retail business and PBM retention rates consistently in the high 90s. However, we also recognize that in order to continue improving our customers' experiences,
Healthcare needs to be more transparent. So in late 2023.
Speaker Change: We took a leadership role to create a pathway for increased transparency and simplicity across the pharmacy marketplace. We addressed this with the introduction of two important transparent price models.
The first is Caremark's true cost model.
Speaker Change: As a reminder, today we pass through 99% of replays to our clients.
Speaker Change: When fully implemented, true cost enables patients to see those lower costs at the pharmacy counter, including the full pass-through of the rebates we generated from our negotiations with the manufacturers.
Speaker Change: True Cost continues to resonate in the commercial marketplace. We now have more than 75 percent.
Speaker Change: of Tremor's commercial members with two or more elements of the model in their pharmacy benefit.
The second is CVS Pharmacy's cost advantage.
Speaker Change: Effective January 1, all of our commercial scripts dispensed through CVS Pharmacy are contracted through our innovative and transparent
Speaker Change: CVS Cost Vantage Model. Under this new framework, we have tied reimbursement to our acquisition costs and will deliver savings to our payer partners as we continue to relentlessly drive down prices.
Speaker Change: Our team is now working to deliver a cost-based solution for Medicare and Medicaid markets.
Speaker Change: These models remove the market basket approach and the unintended consequences that existed in the pharmacy reimbursement, ensuring that patients continue to have access to the most durable and frequent interaction in their healthcare journey.
Speaker Change: We are also focused on expanding access to high-quality care to help address some of the provider shortages facing the U.S. with our healthcare delivery businesses, continuing to see meaningful growth.
Speaker Change: Signify had a record volume year supported by growth and at the members.
which nearly doubled compared to last year.
We've also seen accelerated patient growth at Oak Street.
supported by our enterprise connections.
Speaker Change: We continue to expand access to this leading care model and are identifying opportunities to utilize market-leading capabilities more broadly across the enterprise.
Speaker Change: We are advancing technology to reduce frictions that tarnish the experience Americans have when they utilize their benefits and make it difficult to navigate the complex US health care system.
Speaker Change: We're also leveraging AI to create a more intuitive workflow and faster turnaround times to reduce frustrations for our members and provider partners.
Speaker Change: While we are working to address the issues across the U.S. healthcare system, we are also focused on addressing the performance challenges within our own business.
Speaker Change: At Aetna, we drove meaningful progress, improving and strengthening our operations.
Speaker Change: We have significant opportunities to unlock embedded earnings that is most pronounced in our Medicare Advantage business.
Speaker Change: Our focus remains on delivering on our commitments to our Medicare Advantage members while creating a viable path to appropriate margins.
Speaker Change: In line with our prior commentary, we expect that we will shrink the Medicare Advantage membership by a high single-digit percentage.
Speaker Change: from year-end 2024. Our deliberate approach to our 2025 Medicare Advantage Bids, combined with our improved star ratings,
Speaker Change: will improve margins this year and are part of our ongoing commitment to restore this business to target margins of three to five percent.
Speaker Change: Last month, CMS released the proposed 2026 Medicare Advantage Advance Rate Notice. This update does not address the unprecedented utilization trend experienced across the industry over the past two years.
Speaker Change: Our team is advocating for a more appropriate rate update, including adjustments for the industry-wide cost trend seen in 2024.
Speaker Change: We are encouraged by the constructive dialogue with the new administration to help ensure that American seniors will not continue to see significant disruption to their benefits driven by drastic changes to the Medicare Advantage program.
Speaker Change: Beyond Medicare, we are also encouraged by Progress and our other Aetna lines of business.
We are advancing our rate advocacy efforts in Medicaid.
Speaker Change: We've seen high retention and strong welcome season in our national accounts book and have made meaningful progress in the right-sizing our individual exchange footprint.
Speaker Change: Every day we work hard to improve the health of all the people we serve. This is always a top priority at CBS Health. While we have made progress addressing some of the frictions that exist in the U.S. healthcare system, including leading the industry and increasing transparency and simplicity, we know the healthcare system must be better.
Our unique collection of assets.
Speaker Change: and our deep connections with our consumers, members, and patients position us to deliver a better and differentiated experience to everyone we serve.
Speaker Change: We have strong momentum heading into 2025. We have the right assets, the right leadership, and the right strategy in place.
Speaker Change: Our dedicated employees put our members, patients, and consumers at the center of everything we do. We have worked hard to stabilize our business and have made meaningful progress to address the issues that led to the underperformance in 2024.
Speaker Change: We are well positioned to be the leader in driving change in the healthcare system.
Speaker Change: As I hand the call over to Tom, I want to reiterate the importance of delivering on our commitments to our shareholders. We are focused on building trust.
Tom Cowhey: and establishing credibility as we work hard to deliver on our financial promises in 2025 and beyond.
Speaker Change: Thank you, David, and thanks to everyone for joining us this morning.
I'll start with a few highlights on total company performance.
Speaker Change: Fourth quarter revenues of nearly $98 billion increased more than 4% over the prior year quarter, primarily driven by growth in our healthcare benefits and pharmacy and consumer wellness segments.
Speaker Change: We delivered adjusted operating income of over $2.7 billion and adjusted EPS of $1.19, as we saw strong performance across multiple lines of business and favorable prior period reserve development in our Aetna business.
Speaker Change: Full year cash flow from operations was approximately $9.1 billion, benefiting from early receipt of cash, particularly in our pharmacy services business.
Speaker Change: Turning to our segments, in health care benefits we grew revenues to approximately 33 billion dollars, an increase of over 23 percent over the prior year quarter, reflecting growth in all lines of business.
Speaker Change: Medical membership of approximately 27.1 million was roughly flat sequentially as membership in our individual exchange business started to modestly decline in advance of the 2025 rate increases we took in that book.
Speaker Change: During the quarter, the segment generated an adjusted operating loss of $439 million.
Speaker Change: This result was lower than the prior year quarter, primarily driven by a higher medical benefit ratio, partially offset by the release of the premium deficiency reserve we recorded in the third quarter, higher levels of favorable prior period reserve development, and increased net investment income.
Speaker Change: Our medical benefit ratio of 94.8% increased 630 basis points from the prior year quarter.
Speaker Change: the premium impact of lower STARS ratings for payment year 2024 and higher acuity in Medicaid.
Speaker Change: partially upset by a 220 basis point impact from the already mentioned premium deficiency reserves recorded in the third quarter, as well as higher levels of favorable prior period reserve development.
Speaker Change: While medical trends remained elevated, the experience we observed to date was less severe than the trends we assumed in the downside scenario we discussed last quarter.
Speaker Change: Importantly, during the quarter we experienced positive prior period reserve development across all lines of business, primarily related to second and third quarter dates of service.
Speaker Change: In our Medicare book, continued elevated trend levels were attributable to the same categories we discussed last quarter, including inpatient, outpatient, supplemental benefits, and pharmacy.
Speaker Change: Relative to our downside scenario discussed in the third quarter call, we did see some moderation of inpatient trends, while supplemental benefit costs remained stubbornly high.
Speaker Change: We are cautiously optimistic that our benefit design changes in 2025 will help alleviate some of this supplemental benefit structure.
Speaker Change: In our Medicaid business, acuity remained consistent with the latter part of the third quarter, as redeterminations have largely concluded across our state footprint.
Speaker Change: We continue to work closely with our state partners to align rates with the changes in ACUITY.
Speaker Change: During the quarter, we made additional progress on rate updates, and with over 40% of our books having repriced in early January 2025, we have a line of sight to a mid-4 percentage point rate increase.
Our overall rate advocacy efforts are currently on track.
Speaker Change: In our group commercial risk book, fourth quarter trends remained elevated, and similar to others in the industry, we experienced some pressure on our stop-loss business.
which represents less than 3% of our 2024 premiums.
Speaker Change: We continue to take a cautious outlook on medical cost trends in this block, and combined with lower membership, we expect lower contributions from this business in 2020.
and Kari Byrne. Thank you. Thank you.
Speaker Change: Finally, in our Individual Exchange Book of Business, we saw continued acceleration of medical cost trends driven by the specialist, inpatient, and ambulatory categories.
Speaker Change: As we discussed on prior calls, we made meaningful price adjustments at our offerings for this product in 2025, which will lead to a significant rationalization of our membership, while also shifting mix towards bronze plants.
Speaker Change: Taken together, these actions shouldn't prove results in our individual exchange offerings in 2025.
Speaker Change: These claims payable at the end of the quarter was 44 days, down 0.6 days sequentially, primarily reflective of seasonality.
Speaker Change: DCP was down 1.9 days from the prior year quarter, primarily driven by growth in our Medicare business and the impact of the increased pharmacy trends.
We remain confident in the adequacy of our reserves.
Speaker Change: Our health services segment generated revenues of approximately $47 billion during the quarter.
Speaker Change: A decrease of approximately 4% year-over-year, and primarily driven by the previously announced loss of a large client and continued pharmacy client price improvements.
Speaker Change: These decreases were partially offset by pharmacy drug mix, increased contributions from our healthcare delivery assets.
and growth in specialty pharmacy.
Speaker Change: Fourth quarter adjusted operating income of nearly 1.8 billion dollars for a full year result of 7.24 billion dollars, just shy of the high end of the previous guidance range we reiterated for investors last quarter.
Speaker Change: On a year-over-year basis, adjusted operating income decreased 5% from the prior year quarter, primarily driven by continued pharmacy client price improvements,
Speaker Change: the previously announced loss of a large client, and the impact of higher health care costs on our health care delivery assets that are tied to Medicare, including CVS Accountable Care and Oak Street Health.
Speaker Change: The decreases were largely offset by improved purchasing economics and increased volume at Signify.
Go to www.FEMA.gov to learn more.
Speaker Change: Total pharmacy claims processed in the quarter were nearly 500 million, and total pharmacy services membership as of the end of the quarter was approximately 90 million.
Speaker Change: We ended the year with another strong quarter of growth in our healthcare delivery business.
Speaker Change: As David mentioned, Signify achieved a record volume year, completing over 3 million in-home health evaluations.
Speaker Change: This performance contributed to revenue growth in the quarter of approximately 32% as compared to the prior year.
Speaker Change: We continue to experience strong top-line growth at Oak Street, supported by our enterprise connections.
Speaker Change: During the quarter, Oak Street revenue increased approximately 39% over the prior year, driven by patient growth.
Speaker Change: Total at-risk members increased approximately 35% compared to the same quarter last year.
Speaker Change: While the Medicare Advantage industry experienced elevated utilization throughout 2024, Oak Street's care model achieved trends lower than the broader industry.
Speaker Change: Our Pharmacy and Consumer Wellness segment delivered another strong quarter. We generated revenues of over $33 billion, an increase of approximately 7% versus the prior year quarter, and over 10% on a same-store basis.
Speaker Change: Adjusted operating income of nearly $1.8 billion declined to approximately 13% from the prior year quarter, primarily driven by continued pharmacy reimbursement pressure and lowered front store volumes, partially offset by improved drug purchasing.
Speaker Change: Results in the fourth quarter were also lower due to a pull forward of the immunizations into the third quarter.
Speaker Change: Same-store pharmacy sales in the quarter increased 13% versus the prior year and same-store prescription volumes increased nearly 6%.
Speaker Change: same store front store sales were down approximately 1% versus the same quarter last year
Speaker Change: We successfully completed our three-year store closure plan and are progressing further footprint optimization in 2025.
Speaker Change: Despite the reduction in our store count, we continue to maintain a retail pharmacy script share position of over 27%.
Speaker Change: This highlights our strong execution, robust omni-channel capabilities, and our ability to deliver superior customer experiences while maintaining a deep community presence.
Speaker Change: with 85% of Americans within 10 miles of a CVS location.
Speaker Change: Shifting now to cash flow and the balance sheet. We generated cash flows from operations of approximately 9.1 billion dollars for the full year. This result was higher than our expectations due to early payments in our pharmacy services business.
which will correspondingly lower our expected cash flows in 2025.
Speaker Change: During the quarter, we returned $838 million to our shareholders through our quarterly dividend, bringing total shareholder dividend payments in 2024 to over $3.3 billion.
Speaker Change: We ended the quarter with approximately $3.8 billion of cash apparent in unrestricted subsidiaries.
Speaker Change: Our leverage ratio at the end of the quarter was approximately 4.7 times, which remains above our long-term target.
Speaker Change: During the quarter, we executed a liability management transaction that included the issuance of $3 billion of subordinated debt securities and the retirement of approximately $2.6 billion of outstanding debt principal.
Speaker Change: The net result of these transactions modestly reduced our leverage ratio.
We are committed to prudent financial policies.
Speaker Change: including maintenance of our current dividend as we work to maintain and improve our investment grade rating and expect our leverage to return to more normalized levels as we continue to execute on margin recovery in the equity business.
Shifting now to our Outlook for 2025.
Speaker Change: As David mentioned, we are establishing our initial full year 2025 guidance for adjusted EPS in a range of $5.75 to $6.
Speaker Change: Consistent with past practice, this range does not assume the recurrence of prior year reserve developments.
which contributed approximately $0.18 to our 2024 Adjusted EPS Results.
Speaker Change: After excluding the favorable impact of prior year reserve development, our initial 2025 adjusted EPS guidance represents year-over-year growth of approximately 10% at the low end of the range.
Speaker Change: We believe this represents an appropriately achievable baseline with opportunities for outperformance.
Speaker Change: Incorporated across our guidance elements is the initial down payment on our multi-year two billion dollar cost efficiency effort.
Speaker Change: Based on our work to date, we were successful in identifying actions that, at a minimum, will offset the return of certain variable expenses in 2025 as we work to drive further efficiencies across the enterprise over the coming years.
Now let's turn to some of the segment details.
I'll start with our health care benefits segment.
Speaker Change: We expect aggregate membership to decline by over 1 million members, primarily driven by reductions in our individual exchange and Medicare products.
Speaker Change: We estimate that membership in our individual exchange block could contract by over 800,000 lives and will have greater visibility when all effectuated members have paid their premiums by the end of March.
Speaker Change: We also expect our Medicare Advantage membership to end the year down a high single-digit percentage from year-end 2024.
Speaker Change: This is consistent with the guidance we have been giving investors since last summer, and reflects strong execution by our teams as they lead the difficult choices necessary to improve Medicare Advantage profitability in 2025.
Speaker Change: These membership claims are expected to be partially offset by growth in our commercial self-insured business.
Speaker Change: We expect to generate health care benefits revenue of approximately $132 billion as membership declines in Medicare Advantage and individual exchange are offset by Medicare program changes and growth in other products.
Speaker Change: At the low end of our health care benefits adjusted operating income guidance range.
Speaker Change: We project our medical benefit ratio will improve by 100 basis points over 2024, yielding an MBR of approximately 91.5%.
Speaker Change: Our performance on this ratio is one of the largest potential factors that could drive us higher in our adjusted EPS guidance range.
Speaker Change: The largest driver of the reduction in our medical benefit ratio is projected improvement in our government businesses.
particularly in Medicare Advantage.
Speaker Change: We also project year-over-year improvement in our combined commercial line business.
Speaker Change: Driven by margin recovery in individual exchange, offset by pressures in group commercial, from membership declines and elevated levels of medical cost.
Speaker Change: We also expect that the contribution from net investment income will decline.
Speaker Change: Overall, we expect health care benefits to deliver adjusted operating income of at least $1.5 billion.
Speaker Change: This projection reflects a respectful view of trends in light of the continued elevated medical cost trends that we experienced in the fourth quarter.
Speaker Change: As a reminder, every point of trend is worth approximately $800 million to healthcare benefits adjusted operating income results.
Shifting now to our health services segment.
Speaker Change: We expect revenue of approximately $185 billion, primarily driven by growth at Caremark as we continue to deliver value to our clients.
Speaker Change: Adjusted operating income for this segment is expected to grow approximately 4% to $7.54 billion dollars.
While our 2025 guidance reflects continued core pharmacy services growth.
Speaker Change: The overall health services segment growth rate is diluted by headwinds in our healthcare delivery business.
Speaker Change: As you know, results in our healthcare delivery business are highly correlated to Medicare Advantage medical cost trends and regulations.
Speaker Change: And at this stage, we have taken a prudent outlook on how these will develop throughout 2025.
Speaker Change: This initial guidance is consistent with the preview we presented last quarter, where we noted that our initial outlook for this segment would be below our long-term growth framework, but would prudently reflect opportunities for upside over the course of the year.
Speaker Change: We expect healthcare delivery performance to improve starting in 2026 as the current medical cost trends experienced across the industry are more appropriately reflected in rates and plan bids and our continued investments in this business mature.
Now for our Pharmacy and Consumer Wellness segment.
Speaker Change: We project script growth of approximately 3.5% and revenue of approximately $134 billion.
Speaker Change: We expect adjusted operating income to decline approximately 5% in line with our long-term guidance framework at $5.48 billion.
Speaker Change: As we have discussed previously, 2025 is the transition year for CVS Cost Vantage.
Speaker Change: And we believe the implementation of this model positions us to bend the trajectory of the PCW business over time.
Speaker Change: We expect interest expense to increase approximately $300 million as we annualize the expense associated with our debt offerings in May and December of 2024.
We project our tax rate to be approximately 25.5%.
Speaker Change: We also expect our share count to increase modestly to approximately 1.271 billion shares. We are not contemplating any share repurchases in 2025.
Speaker Change: Finally, we expect cash flow from operations to be approximately $6.5 billion.
Speaker Change: The operating cash flow decline versus 2024 is primarily driven by late year timing items that were pulled forward into 2024 cash flow.
Speaker Change: as well as the impact of lower risk membership on health care costs payable, reserves, and risk-adjusted revenue accruals, partially offset by improved operating performance in our health care benefits business.
Speaker Change: Over the 24 and 2025 calendar years, we expect that our business will generate operating cash flows of $15.6 billion, which, when combined with improving operating performance, will help put us back on the path to our target leverage.
and Karen Lynch.
Speaker Change: As you think about the cadence of earnings in 2025, we expect earnings to be more weighted to the first half than the second half, likely a 55-45 split.
Speaker Change: Seasonal patterns in most of our segments should remain largely unchanged compared to 2024, with the notable exception of our healthcare benefits segment.
Speaker Change: where the Part D changes due to the Inflation Reduction Act.
Speaker Change: and the timing of premium deficiency reserves recorded in 2024 will significantly change the progression of earnings.
Speaker Change: You can find additional details on the components of our 2025 guidance on our Investor Relations website.
Speaker Change: We are encouraged by our opportunities in 2025 and are excited to demonstrate the enormous potential that we see across CVS Health to unlock embedded earnings.
Speaker Change: We are working tirelessly to restore Aetna to target margins, which, over time, should represent meaningful upside above the high end of our 2025 guidance reach.
Speaker Change: With that, we will now open the call to your questions. Operator?
Speaker Change: Thank you, Tony. We will now begin the question and answer session.
Speaker Change: If you would like to ask a question, please press star 5 by 1 on your telephone keypad.
Thank you very much. Thank you.
Speaker Change: We do ask that you please limit yourselves to one question and one follow-up and if you have any further to please rejoin in the queue again and again it's star one and we'll pause here briefly whilst questions are registered.
Thank you. Thank you.
Speaker Change: We have the first question on the phone lines from Lisa Gill with J.P. Morgan. Please go ahead.
Bye.
Speaker Change: starting point, Tom made the comment of an opportunity for outperformance. Last year, you gave a better than number this year, you're giving a range $575 to $6. Maybe just talk about the confidence in that number and, you know, the potential outperformance around the guidance for 2025. Thanks very much.
Speaker Change: Thank you, Lisa, and I appreciate the question. Let me give you a little bit of perspective on the first 100 days and then the things I believe that we're focusing on and can deliver into 2025. So, as I mentioned, the first quarter, or the very first earnings call,
Speaker Change: I needed to focus on the most pressing and urgent issues of the company, which at this point I'm happy to report, we've...
Speaker Change: spent a lot of time focusing on on Aetna and we've actually delivered material progress.
Speaker Change: in terms of stabilizing Aetna's operation and also bringing the financial discipline back to the organization. So I think as you look towards the open enrollment as well as the progress made, I'm very confident, very bullish on the continued recovery of that business.
Speaker Change: I think that the second piece, and this speaks to where I've spent the last two years, it's critically important that we continue on this pharmacy transformation journey.
Speaker Change: We recognize that there are kind of headlines around the role that PBMs and pharmacies play and the fact that we've made significant progress in both changing the pricing models, whether it be on CVS.
Speaker Change: Pharmacy's Cost Vantage, which we had 100% adoption in the commercial space or
Speaker Change: within Caremark's TrueCost model, which we now have more than 70% of our clients adopting more than two of the features or attributes of that model.
Speaker Change: These are really important elements, I believe, that continue to drive change and or transformation in the market. And the last thing I'll say is that the success that we had in the Biosimilar launch
Speaker Change: with Cordobas was unprecedented. We created what I believe is a durable biosimilar market. We led the market in terms of the volume and the conversion change, leading this with both technology and an opportunity to lower costs for our customers.
Speaker Change: So those are the two big headlines on the business front and I think you know as I look at The role that I'm playing is making sure that I'm surrounded with the right leadership. So this
Speaker Change: Right Leadership Team. I mentioned Steve Nelson coming in from the outside. He's been on the job now 90 days leading Aetna, both stabilizing Net Leadership Team and the operations and the financial organization, and then we've also
Speaker Change: announced Prem Shah in a new group president role during the last last quarterly earnings.
Speaker Change: And that's allowed for us to both promote and elevate talent within the organization. So we have Lynn Shankman now running.
Speaker Change: CVS Pharmacy, which is a 20-plus year veteran of the business. We have Dr. Shree now running our health care delivery assets, which again is a
Speaker Change: is a long-tenured leader here in our business, and then Ed Devaney running CVS Caremark, which is another 20-year.
Speaker Change: veteran of the business. So I think it shows the strength of the leadership team and the bench that we've built in the organization, which is going to continue to allow us.
Speaker Change: I believe, to lead from the front. So as I look at specifically your question about the role that I'm playing, I believe we have the right assets.
Speaker Change: I think we've established the right priorities for the business and the right strategy and hopefully at this point we're going to continue to, at least in the listening tour, be able to earn the right to become America's leading and most trusted health care company.
Speaker Change: So with that, I'd say my first hundred days was a leadership transition and now the focus will be a leadership transition becoming a transition to leadership. So let me spend a second talking about the second question on guidance.
It is...
Speaker Change: Without question, it's important for me to establish both trust and credibility in terms of being able to deliver on the promises and commitments that we've made.
Speaker Change: While we're going to talk about the overperformance and some of the drivers there, I also want to make sure that I'm in a position to make sure that we're delivering on the commitments and promises that we're making to the investment community. So with that, Tom, if you could share a couple of thoughts on the 25-year.
Speaker Change: Absolutely. So, Lisa, thanks for the question. And thanks, David, you.
Speaker Change: We set this out to be an achievable target with opportunities for upside. I think there, and hope that there are opportunities across all of our businesses, but the one that, you know, I think investors are rightfully most focused on is healthcare benefits.
Speaker Change: And, as you think about that, you think about what I said in the prepared remarks, every point of trend is an $800 million swing.
Speaker Change: on that business. And we have taken a very prudent outlook on what our medical cost trends are in our forward guidance.
Speaker Change: specifically because of how 2024 developed and we have respectfully looked at those trends and our guidance assumes that they persist into 2025.
So whether that's in our Medicare business
Speaker Change: or our group commercial block as we exited the year in 2024, those trends are consistent with what is in our guidance for 2025. And so I think that would be the place where you could see the most potential upside would be inside that health care benefits business. And this isn't necessarily
Speaker Change: you know a 2025 opportunity but as you think a little bit longer term.
Speaker Change: you know, the healthcare benefits business, even at the top end of the guidance range.
It's a point and a half of margin.
Speaker Change: compared to 2023, which was over 5%, and 2022, which was 7%. And you look at some of our underlying businesses, government has improved, driven by Medicare in particular.
Speaker Change: but it's still projected to be a negative margin. Group commercial is a profitable business, but it's seeing signs of pressure. You know, IFP, our individual exchange product, is expected to still lose money in our current outlook.
Speaker Change: And so, if you do the math and you say, with the current share count and revenue base, each point of margin improvement is 75 cents of adjusted EPO.
Speaker Change: And so that implies we could have another three, four more dollars of embedded adjusted EPS if we can get our Aetna business back to its target margins and that's what we're committed to doing over time.
Thank you.
Speaker Change: Thanks, good morning. I want to follow up on some of your comments there, Tom. First, on your Medicare Advantage trend. Maybe you can give us a little bit more detail there in terms of
Speaker Change: What did the trend look like coming out of the year for 2024?
Speaker Change: And specifically, what are you assuming for trend in 2025? I know you said it's kind of you're, you're assuming it to keep that pace. So what was the 24 trend and the 25 assumption and maybe, you know, any detail you could share with us on kind of, you know, the cost you take out of the business just via the bids, for instance.
Speaker Change: and how you're seeing your membership mix kind of play out for 2025.
Speaker Change: Thanks, Justin. Let me let me answer what I can for you on that. So I noted this in the prepared remarks. So medical trends remained elevated, although what we experienced in the fourth quarter was less severe than what we assumed in our downside scenario.
Speaker Change: I'd also note, during the quarter, we experienced positive prior period reserve development across all of our lines of business, and that was primarily related to the second and third quarter dates of service. So that was also a nice positive tailwind there.
Speaker Change: But as you look at the major businesses, starting with government, I'd say and maybe specifically Medicare, we saw some modest improvement. It was mostly driven by our group Medicare and our dual lines of business, and specifically we saw some relief on inpatient earlier in the quarter.
Our general enrollment population continued to see elevated trends.
Speaker Change: But a lot of where that pressure was was actually in the specialist lines, and we think that that might be more consistent with what we talked about as a rush to care as people looked at some of the changing benefit patterns and their supplemental benefits for 2025. And so we're waiting to see how that's going to play out on those changed benefits in early 2025.
Speaker Change: On Medicaid, we did start to see some favorability in that book. Our redeterminations, you know, came to a close in our state footprint.
Speaker Change: And that was the primary driver of the year-to-date trend was those redeterminations. So as that started to stabilize, we also saw a little bit of improvement there and some modest rate improvements versus what we had forecast. So generally a good end to the year on the Medicaid business relative to the trends of the first three quarters.
Speaker Change: In the commercial block, trends in core commercial remained elevated and we saw some modest underlying improvement, but that was offset by stop-loss.
Speaker Change: and also within our commercial block then on IFP, we really continue to see trends accelerate into the fourth quarter. And a lot of that was actually driven by inpatient claims.
Speaker Change: We also took a little bit of an enhancement on our risk-adjusted revenue accruals after we got the most recent weekly data, although that was a little bit less than what we had previously talked about in that downside scenario.
Speaker Change: I'd say as you think about that book in particular, the most important factor there in 25 is going to be the significant pricing changes we took.
Speaker Change: And we're under in the process of understanding how that mix change
Speaker Change: because that book could easily shrink in half, how that's going to yield the performance this year. And so we've taken a cautious outlook relative to that book overall.
Thank you.
Speaker Change: Respective 25, it's a little too early to confidence with any comp, you know, comp
Speaker Change: Excuse me, it's a little too early to comment with any confidence.
particularly given how much our membership mix has changed.
Speaker Change: I'd say, overall, our outlook remains respectful with respect to trends.
because they were so high almost all of last year.
Speaker Change: Thankfully, things like the impact of the two-midnight rule are now incorporated into the baseline, which should help to normalize some of our trends this year.
Speaker Change: I guess I could also say we feel good about how our reserves as of 1231 are developing at this stage, but it's really early. And so we'd like to have a better understanding of how that baseline is gonna perform in 25 before we get too far ahead of ourselves.
Thank you. Thank you.
Thank you. We now have Stephen Baxter with Wells Fargo.
Stephen Baxter: Yeah, hi, thank you. I was hoping you could update us on where the Medicare Advantage margins ended the full year 2024 and what's assumed in the guidance for 2025.
Stephen Baxter: That's basically, the pacing of this obviously is gonna be a huge area of focus for the investment community. Any kind of general comments, you can talk about progression of MA recovery over the next couple of years beyond 2025 would also be appreciated. Thank you.
Stephen Baxter: Yes, Steve, maybe I'll start and then I'll turn it over to Steve, because I think, you know, it'd be good for you to hear from him about how he's been thinking about this business and, you know, how he's been moving the business along, the Aetna business.
Speaker Change: The business itself ended the year with margins consistent with what we last said. They were in the negative four and a half to five range. We're improving that margin in the current outlook. It's not getting back to break even. So it will be loss making. And I think that's one of the biggest swing factors is performance of that business this year between the high and the low end. A lot of that I think is ultimately gonna be driven by how Medicare performs over the remainder of the year. How some of those changes and benefits
Speaker Change: changing membership mix and how those new members perform. And so I think there's still a lot of opportunity there over time to get that back to the three to five percent target margins we've talked about.
Speaker Change: Well, thanks, Tom. Good morning. Actually, I'm happy to make a few comments, just kind of perspective generally about it, and then I'll go into the Medicare Advantage business.
Speaker Change: First of all, thrilled to be part of the CVS Health Leadership Team.
Speaker Change: and honored to lead Aetna. You know, I've competed against Aetna for many years and.
Speaker Change: found it to be a really strong brand and really known for its innovation in both product and clinical.
Speaker Change: And so, you know, my early read is there's a lot to build on. And, you know, I add my commitment, my personal commitment, to David's, Mark's, and Tom's, and the entire CVS Health leadership team and the admin team.
Speaker Change: to return Aetna to its target margins over a multi-year period. So, encouraged in the early days and confident that we can do that. I think we've made some really quick progress in a lot of areas. I'll just highlight a few.
Speaker Change: our capabilities around forecasting and all the levers and capabilities around managing total cost of care, really encouraged by, you know, the early progress and really meaningful progress there.
Also, as you think about
Speaker Change: Our pricing discipline, that's been a topic a lot here, and I'm very encouraged about what we've done there, and that specifically relates to Medicare Advantage, our individual exchange business, and honestly, our commercial business as well.
Speaker Change: And then we've been leaning into member experience with our cutting-edge technology and
and really happy with some of the progress there.
We've stabilized our operations and strengthened them.
Speaker Change: which has led to an evidence by a really well executed welcome season in January.
Speaker Change: And we also welcome one of the largest accounts ever sold in Aetna, a state of North Carolina, and that implementation has gone really, really well.
Speaker Change: Specifically in Medicare Advantage, you know, the combination of the STARS, Pale Wind, you know, best in industry performance there, the discipline that we use when we put together a 2025 benefit plan.
Speaker Change: and then the really well-executed AAP, I think all points to a really strong future for our Medicare Advances business.
Speaker Change: It's positioned well, the momentum we've talked about. And specifically, you know, this was a day-to-day.
Speaker Change: almost, you know, hour by hour kind of decisions that we made through this execution where we looked at our product mix.
Speaker Change: and there were several products that we did not see a path to the target margin and we exited those products and then transitioned our members into new products and that's gone better than expected.
Speaker Change: And so that's just kind of one piece of evidence about how we're executing how we're thinking about the business super committed to being a
Speaker Change: excellent performer and a leader in Medicare Advantage. So, you know, I could go on, but I'll just say my early days here, my first, you know, three months, very encouraged and very confident in our path forward.
Thanks, Dave. Maybe just one other comment.
Speaker Change: The last 90 days with Steve's onboarding, the Aetna team has been incredibly resilient. There's obviously been a lot of pressure and a lot of focus on the turnaround efforts and I think Steve's ability to manage and lead and deliver
Speaker Change: a better and improved culture around that organization has allowed us, I think, to perform and execute, which is really the theme of the day, which is making sure that we deliver and execute.
Speaker Change: against the commitments that we made. And so it started with the open enrollment, which there was a lot of fine-tuning and making sure we had the right mix. And then we couldn't lose sight of the largest account that we onboarded with the state of North Carolina, which was done in the
Thank you.
We now have Andrew Mock with Barclays on the line.
Thank you.
Andrew Mock: Hi. Good morning. We spent a lot of time talking about Medicare margins, but you also took aggressive actions on the individual ACA business, so I was hoping you could elaborate on those actions, including any changes to provider networks and expected impact on margins embedded in guidance. Thanks.
Andrew Mock: Sure, Andrew. I'm happy to take a shot at that. As you think about that business, so it ended the year at about 1.85 million members, and it's going to probably be sub-1 million members this year.
Andrew Mock: and that's, you know, consistent with the actions that we took. This is a business that, you know, had about $10 billion of premiums last year and lost nearly a billion dollars.
and that's just not acceptable performance.
Andrew Mock: So part of that performance last year was, as we've talked about, that we had a risk-adjusted true-up out of 2023.
Andrew Mock: And I think we've spent a lot of time with the team, with the new CFO there, on thinking about how it is that we want to accrue, how we want to understand what the weekly data is telling us and what the potential risks associated with that data are. I feel good about where it is that we are booked at the end of this year, that that should hopefully not be a problem that comes back to bite us in 2025.
Andrew Mock: So then the question becomes, what is the value of the actions that we took, and with a membership mix that has churned so substantially, we think that we will make progress, but we really need to understand a little bit more about who even some of those members are, because they have until the end of March to...
Andrew Mock: to pay their first month's premium and be retroactive. But we feel good that we will make margin improvement in that business, that's embedded in the guidance. It will not get back to break even this year. And it's something that we continue to watch very closely, particularly given the high levels of trend that we experienced and accelerating levels of trend we experienced in that book into the tail end of 2024.
Andrew Mock: Steve, I don't know anything you want to add on that. Yeah, sure. I'll just add a couple points. Similarly to the Medicare Advantage,
Stephen Baxter: AEP execution, I would point to the OEP execution for this business where we made some really positive changes in the geographic and product mix, in addition to the pricing discipline.
Stephen Baxter: So I think that that takes us business into 2025 with improved.
momentum, and
Stephen Baxter: And we are definitely taking a look at all components of what it takes to be successful in this business.
Stephen Baxter: and not just network contracts, but network design, how we think about our capabilities around risk adjustment, managing the total cost of care in this population.
Stephen Baxter: is different than other populations. And so improving our capability and capacity and just overall, I would just say,
Stephen Baxter: and sort of competence in this business has been a priority and really like the position that we have now going into 2025.
Stephen Baxter: But look, the business needs to perform a target margin and we're committed to getting it back to that. It plays a really important role.
Stephen Baxter: for individual consumers, and it doesn't play a role in our portfolio, but it needs to perform at the target margin. So, yeah, I think we've taken good steps, more work to do, but we're committed to getting, returning it to its target margins. Off to a good start.
Thank you.
Erin Wright: Thank you. Your next question comes from Erin Wright with Morgan Stanley.
Thank you very much. Thank you.
Erin Wright: Great. Thanks for taking my question. How should we think about the quarterly progression for MLR? And you gave us some of the detail on your overall assumptions from a utilization perspective for 2025, but any nuances to consider?
Erin Wright: as we model out for the year, for instance, how IRAs should flow through throughout the year and any surprises on that front or elements to think about as we think about that quarterly. Thanks.
Erin Wright: Thanks, Aaron. So, yeah, I did have some comments about seasonality in the prepared remarks. We think it's going to be more of a 55-45 first half-second half split this year.
Erin Wright: And the primary driver of the seasonality change is healthcare benefits, and it's really that IRA impact, but also, don't forget the PDR kind of
Erin Wright: you know messes a little bit with the cadence of earnings in 2024, hopefully something we won't have to deal with again.
but
Erin Wright: and you could see eight points of swing between the first and the fourth quarter as you think about the progression of earnings and the progression of MBRs there. And so, and that's on the total of Aetna.
Erin Wright: And the second and the third quarters will probably be more similar to each other, but there'll be a little bit more pressure in the third quarter than the second.
Erin Wright: But as you think about that changing cadence of earnings, I would highlight that's a good proxy for how to think about re-sloping it given the PDP impacts on our book in particular.
Thank you.
We now have Anne Hines with Nadeo Securities.
Thank you.
Speaker Change: Great, thank you. Can you remind us with cost advantage, what is the headwind to growth the first year of the implementation?
Speaker Change: And when would you expect that to turn positive for you? And also, I know cost advantage is only focused on commercial contracts right now. Do you eventually believe it will impact Medicare contracts? And if so, what's the timing on that? Thanks.
and Karen Lynch. Thank you. Thank you.
Speaker Change: I'll make a couple of comments about cost advantage and true cost, and I'll let Prem speak specifically to how we're thinking about it flowing through for other product lines. I think this is a really important initiative for this enterprise. This has been something we announced in late 23.
Speaker Change: We felt like we needed to take a leadership position in terms of changing the marketplace from a market basket to individual price products. We thought this was important for adding simplicity.
Speaker Change: Transparency and was a major push and initiative within the organization. I'm proud to say
Speaker Change: We've been able to move the market because we've done this collectively as an enterprise both leveraging the work that we've done in CVS pharmacy as Well as the true cost product portfolio that we have within within Caremark. So Prem, maybe I can have you speak
Prem Shah: to how we're thinking about cost advantage from a margin standpoint. Yeah, thanks, David. And Anne, thanks for the question. So if you think about cost advantage, as we reiterated at the end of 23, and we walked through this last year, there's really three things that cost advantage was addressing. First and foremost,
Prem Shah: It was really a shift of our pharmacy reimbursement model to more closely align to our underlying cost of our business and the value that we create as a local community pharmacy for the tens of millions of patients that we serve.
Prem Shah: Secondly, when you think about pharmacy reimbursement, there was a lot of cross-subsidization across brands and generics, and this allows us to ensure more stable pharmacy margins.
Prem Shah: and a more durable kind of process, as you think about what we do inside the pharmacy supply chain, which is essentially serving the patients at the counter for a more predictable margin for every script that we dispense.
And lastly, it creates the path for transparency for PBMs.
to provide that transparency in their drug pricing as well.
Prem Shah: And, you know, in our conversations with payers, I'm excited to say that we got this across the finish line, 100% of our commercial market. Your question relates to Medicare and Medicaid. We're actively working for 1126.
Prem Shah: to move the rest of our book into a cost-advantage like.
model.
Prem Shah: Our initial results is, you know, from CostVantage and the, you know, industry-leading cost of goods that we have, PBMs and payers will benefit from this.
Prem Shah: and we're turning toward delivering more than a hundred million dollars of annualized
Prem Shah: to the PBM and payer customers under CVS Cost Advantage contracts. And as we continue to improve cost of goods, we pass that through Cost Advantage to our customers. And, you know, as we continue to move forward, we're excited about building this with our payers to create more clinical models and clinical solutions at the counter where we can leverage the 30,000 plus pharmacists we have serving patients day in and day out.
Thank you.
Speaker Change: We have our final question on the line from Elizabeth Anderson with Evercore. Please go ahead.
Speaker Change: Hi, guys. Good morning. Thanks so much for the question. Based on the color on the 2025 outlook in particular, I know you said you were looking at four points of Medicaid improvement year over year in terms of the pricing. Can you say in that you had 40% of it was sort of caught up. Can you talk about how that catches up over the course of 2025? Should we think of that as like broadly ratable or are there any other kind of considerations to think about for that? Thank you.
Speaker Change: Go ahead, Steve. Sure, I'll start and then Tom, I'm sure you'll have some thoughts too, but yes, so the team has worked really hard, the local Medicaid teams across, you know, all the all the different states.
Speaker Change: worked hard through the redeterminations and and worked closely with state partners and in combination with our our great government affairs team and yes we are anticipating about a four and a half percent year-over-year increase as we start
2025.
Speaker Change: But we have more work to do as we go through the course of the year, and I think that's just going to play out as we continue to work on actuarial soundness with our state partners to make sure the program is adequately funded, but really like the beginning position and the work that's been done. So more work to do, but Tom, any other comments?
Tom Cowhey: Four and a half percent on the first 40% of renewals in January is a great start. We're cautiously optimistic that there might be opportunity there in the backside, but our current outlook doesn't assume that we get that same level of rate increase when we see the next bolus. I think we've got about another 40% that renews around the third quarter. And so our presumption and our forward outlook is that the rate increases there will not be as robust.
Tom Cowhey: As Steve said, on the advocacy with all of our states, they understand the problem, but the rate timing of when they recognize actuarially sound rates is not always at the pace that we would like them to.
Speaker Change: All right, thank you. Thank you, Tom. I thank you, Elizabeth. So this wraps up the call today, and before I close, I just want to especially thank our over 300,000 dedicated colleagues.
Speaker Change: I'm grateful for you, for your commitment to the communities we serve, and for your tireless dedication to improving health in America person by person. So thank you for joining our call today, and we look forward to providing updates on our progress throughout the year.
Speaker Change: Thank you all for joining today's call with CVS Health. I can confirm today's call has now concluded. Please enjoy the rest of your day and you may now disconnect from the call.
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