Humana Inc. (HUM) Earnings Call Transcript & Summary

Good afternoon, everyone, and welcome to the Humana session. I'm Bob Jones here at Goldman Sachs. I cover healthcare services and managed care. I'm very excited to have President and CEO, Bruce Broussard from Humana with us as well as Amy Smith, VP of Investor Relations. So a Happy New Year, and welcome to you both. We're going to obviously ask a series of questions here.

A lot of things are very topical. But I thought, Bruce, maybe just given how top of mind it is right now for everyone? Wanted to just start with the vaccine and the rollout specifically. I know it's very early days, but there's some debate on how the rollout has progressed. Just curious for Humana's perspective on how they've seen the vaccine rollout began. And then more specifically, are there specific things you managed doing to encourage members or educate members around getting back to date?

Well, obviously, we're early, but it is top of mind. And I think getting just the frontline workers with vaccines is a top priority here. And obviously, for our providers, we've been active with that. But in general, I think that the care coordination platform of Humana and frankly, the industry offers a great opportunity for us to be a very helpful hand in the vaccines, and we see it in a few areas. One is around the ability to help educate and raise the awareness of the vaccine for our members. The second is to be more specific in identifying at the appropriate time which cohorts are to receive the vaccine to identify them. And then to be able to help them find the best place for them to get the vaccine, whether it's a provider or one of the reach retail outlets that will be providing it. Third, to be able to offer a reminder and continue to encourage them to get the booster, because if they don't get the booster then it's really for none. And then the fourth is to be a resource to understand if there are any complications from the vaccine and then be able to utilize that both as to provide interventions for our members. But in addition, for us to also offer the opportunity for follow-on research and other areas there. So really to be a resource for the pharma companies to make the vaccine better and to respond accordingly. Each vaccine response is customized to the state is what we're finding, and we're even finding to the county. I just got a text from our vaccine leader, and he's indicated that we have a county that now is asking for our assistance. Within the counties that we have providers, we then also can be a resource to actually administer the vaccine. But I think the -- really the ability for the industry in Humana to be our resource to help educate, to help identify, to help remind and then in addition to be a resource for any kind of complications is really where we're focused on.

No. That's helpful. And given that a large majority of your members, obviously, would be considered higher on the list or higher risk. And it varies, I think we've already learned, it's going to vary pretty widely state by state. But is there a general sense that you've told members as they've asked or if they've gotten those questions starting to come in more? Is there a general time frame as you think about 2021 that your leading members to potentially expect to get a vaccine?

Yes. I would say that the senior population, we believe that it will be sometime beginning in the first quarter. I think for the general population overall, we were reading the same statistics, probably everyone's reading that we're probably going to be going into the summer before we see individuals like myself or yourself or others that are less -- that risk for the implications from COVID. But we do believe that we'll begin to start to see a rollout sometime in the first quarter.

No. That's helpful. And I think fairly consistent, too. Yes, I guess maybe thinking about 2021, in general, just one of the biggest factors heading into the year is clearly this, just the vaccine approvals and what that could mean. And again, I know you mentioned it's early days, but just wanted to get your latest thoughts on how you see a return of general utilization over the course of the year? And I know it's not informed yet by much as far as the timing of the vaccine. But just your latest thoughts on how you see the balance of the year playing out from general health care utilization would be helpful.

And obviously, this is an interesting time for any company participating in conferences as a result of it being a quiet time. So we are limited into what we want to say. Now we are going to be helpful over the coming week or so and being able to provide more details through an 8-K. The timing is always difficult because you're coming off the year-end and you're scrambling to do all the analysis that provides some glimpse with the future period too. But we'll be able to provide more details. I think in general, on the utilization side, just as we look at just 2 slides, and I'll answer your specific question, but really around there's 2 scenarios that we really studied hard. One is around a vaccine that got delayed and the impact of the vaccine being delayed, would be more testing, more treatment with the down -- with the reduced utilization, and we continue to see that be the case. The level of utilization in the down is something that's -- and depending on the market conditions there. And then the other side is that when a vaccine does come out, and obviously, it is out. It will eliminate the need for testing and treatment will go down from COVID, and there will be a reassumption of the utilization in the marketplace as some normal level. What that normal level looks like? I think there's a lot of speculation of this -- some of the structural changes from COVID, telehealth, primary care, home, value-based to have an impact on longer-term structural side. We really haven't reflected that. But we do believe that there will be structural changes over a period of time. But that being said, we do see some getting back to normalized levels. We -- our history has indicated that getting above the pre-COVID levels at a sustained rate is very difficult because the supply side of the health care system gives that sort of limitation. There's only so many hours a doctor can work. There's so many -- only so many nurses that are there and obviously, fixed assets and those kind of things have more capacity. But just the supply providers in the marketplace, I think, gives a limitation into just how much utilization can exceed the pre-COVID level. And I will tell you, I know and our observation is there's a number of providers, especially on the nurses side that have -- there's been a reduced capacity as a result of both the children and caregiving along with just it's been taxing of time for that.

Yes. No, I think that all makes sense actually and is very helpful in thinking about deferred costs coming back. One of the questions we got, just as probably thinking from the last quarter to now, it's just been around the impact from the spike that we've seen in COVID. I think for a lot of folks out there, it probably exceeded the resurgence that people thought. Any qualitative thoughts around what you saw across your member base as far as increased COVID utilization, either folks getting sick from it, hospitalization, things like -- things of that nature? Or did it -- did this last wave, if you will, kind of play out as Humana had thought it would?

Yes. I would say it's obviously public knowledge that the COVID spikes are going to increase the COVID hospitalizations that we saw, especially in certain geographic markets, much more than what you would expect. The impact on to the company on the financial side, we'll be able to give more detail on a prospective basis. Obviously, this morning, we reconfirmed our earnings for 2020. So we feel good about the earnings. But there was an increase in hospitalizations of COVID-related members.

No, makes sense. I guess maybe moving on to open enrollment. Now that the period is finished. Last time we spoke, obviously, we were still kind of in the later stages of it. But you had talked about on the individual side, growth of about 9% to 10%. Just wondering if you could just give any context of how things trended at the -- into the end of open enrollment relative to what your expectations were?

I'll give you a few general comments. And I think on the membership side, we'll be able to give you more detail as we progress into the end of the week. But in general, we feel really comfortable. We're content with the way the open enrollment performed. I think all our channels, whether it was our internal channels, performed like we expected. Our retention was where we expected, our sales were where we expected. Our sales channel externally performed well. We continued to see increasing use of the external phone sales side, both because of the virtual nature of what we're in. And secondarily, I think that channel has become more sophisticated, both in marketing, education, creating awareness in the marketplace along with the fact that you have many more of them. So I would say, in general, we didn't have a lot of surprises. But I would say that I'm impressed with how both the industry, but to be honest with you, our organization responded to the virtual nature of what we needed to do and our preparations years before this and being much more oriented to being digitally prepared us for this, but our response as we moved into the spring and summer to prepare for this, I think, really showed its -- showed some really great outcomes during this period of time. So overall, content with no great surprises on many different fronts.

Would that include on the competitive front, anything that you noticed that was different than a normal year or kind of same business as usual?

I would say, again, this is a market-by-market basis. In some markets, we outperformed that we thought we were going to outperform what our thoughts were there. And then some markets we underperformed. But nothing that I would say would be materially changing in the -- in our view of the business. I would say it's a competitive market, but I think organizations like Humana compete well in the markets. And as I said, we're content with our performance trends over a period of time.

Got it. Got it. And I know, Bruce, you mentioned that we'll get official guidance in due time. But maybe just at a higher level, could you talk about some of the major pushes and pulls? I know they've come up throughout the year. But as you sit here today and you just think of some of the major factors on both sides of the ledger that we should be considering, it'd be helpful just to get your thoughts there.

Yes. Again, I don't want to get into details. I think the obvious one that we get questions on is MRA and is that a headwind for the organization, I would say, in the fourth and third quarter, we made some great strides in being able to help in that, but it still is going to be a headwind for us, as we mentioned in the -- in our third quarter earnings call in November. But again, we'll give you the ebbs and flows of that in both in the 8-K as best as we can, but also in the fourth quarter earnings release in early February.

Great. Great. No, that's helpful. And I think most of the building blocks, I think people at least have a sense of qualitatively. I guess one of the other topics that I'm sure we'll get more detail on, but was a question we get quite often, given the nuances of 2020 was risk coding and just the challenges there. Again, more qualitatively because it sounds like we'll get more of the quantitative side of it later. But I guess, how different was 2020 relative to a normal year for the industry?

Yes. Again, quantitatively, I'm not going to be able to give you those details. But I think qualitatively, every year, you have to reconfirm individuals risk orders. And so -- and that reconfirmation is usually done. This year one was added is done via in-home assessments. People going and utilizing the health care system, specifically doctor's offices. And then the third this year is utilizing telehealth. Obviously, telehealth was a new add to it. So you asked what was different, that was a different channel we could use. Getting people into the doctor's office as a result of COVID created some difficulties and then getting in-home assessments completed as a result of social distancing and all the complexity of COVID was created some difficulties there. So I would say that it's getting people to utilize the health care system. But on the other side, because you have to do this every year, when the system gets back to a normalized level, those dollars are -- will come back. It's just this period of time and sort of this stub period that we have to work through and be able to get people back to utilizing the health care system is the most important thing. You're both for their health and, obviously, the byproduct of that is risk adjustment.

Makes sense. I guess one more on the longer-term outlook around margins. I know the company has a goal of getting back to 4.5% to 5% margins in MA over time. Any sense you can give us on how long a timeline that is? And then more importantly, what are the major pushes and pulls that could kind of accelerate or delay you getting to that range over time?

Yes. So a few things there. We do get there and then all of a sudden, things get changed in the real estate and the income statement changes our pretax margin this year. Obviously, the release of the -- for the elimination of the HIF moves after tax dollars down below the margin, and it shows up for the investors, but it doesn't show up in the margin itself. So there is some real estate issues there. But we continue to price to really focus on increasing our margin and be disciplined around that. And at the same time, be competitive. And then in addition, a lot of effort on productivity, productivity and eliminating non-value-added activities, specifically how much friction we can remove for our customers and make it much more efficient and a lot of investment in technology to be able to achieve that. And so I would say that we get there, probably it will take us a few years to get there again, but you see really deep pricing discipline and then you see a great increase in productivity there. And so I would just say investors should continue to keep us accountable for that increase in margin. But at the same time, the earnings growth continues to be in the range of the 11% to 15% that we're targeting. And we continue to demonstrate that even though, the margin targets are come and go. But it's not a lack of commitment, it's more around just geographic placing on the income statement along with the fact that some years, you're going to have a -- we might put -- bring a little bit to pricing.

Got it. Yes. Maybe switching gears a little bit, Bruce, over to the primary care strategies. It's definitely an area that seems to continue to get a lot of focus. It seems like different participants within the industry have approached this in different ways. Just wanted to get your sense on the Humana approach, which is, I think, encompasses a few different approaches. But I wanted to get your sense on the success in the way that you've approached leveraging primary care in MA, maybe versus the way others in the industry have.

I think primary care is a very broad definition. And we believe for primary care in the Medicare space really oriented to value-based payment models is best or the most successful model we've seen is building clinics that are senior based, that are oriented to value-based payment. And so you see us doing it. Obviously, a few companies have come to market that have been partners of ours in this area for many years, and we've seen some really great results from that. We traditionally haven't been acquiring primary care clinics or primary care physician practices that are fee-for-service just because we find the conversion to Medicare value-based payment models to be much more difficult, and it's a very, very difficult task to make that conversion. In addition, there are not a lot of scaled assets. Obviously, the DaVita asset that traded number of years ago with United was probably the largest asset in the marketplace, but there's not a lot of scaled assets that are out there today. And so that's why you see a lot of the start-ups, both in the public part and the private market organically going about doing this. Our approach is to utilize our proprietary assets and markets where we feel it's appropriate. We also find that partnerships with other companies and alliance models that are -- that we work with is very helpful and gives us the capacity to do that. And then the third on the primary care side is that we do find in certain hospital systems that we can create a relationship with their primary care groups to be able to create a value-based payment horizon. But the clinic model has been our traditional approach and will continue to be our traditional approach. And we feel building a primary care platform that is sizable as a goal of ours. Actually, today, we probably have the largest primary care clinic dedicated to senior's platform -- it's hidden within the organization just because as a relative basis, it's small for the company overall, but from an industry point of view, is actually quite large.

Yes. No, I guess along those lines, the company has talked about doubling the number of individual MA members in a primary care model. Any sense you can give us on where we are relative to that goal? And then I guess, if you think about what played out over the past year, how has the pandemic impacted the ability to make progress against that metric?

We continue to add clinics in our Welsh, Carson model. We'll add 15 to 20 clinics a year. And then in our Alliance model, we'll add probably another 25 or so to that. So we continue to build clinics that are sizable in nature on a base of close to 200 or so. So we continue to add that, and that's material. The challenge, which is a first-class problem is that our gross membership is growing quick. And so that even though we might be staying the same in our value-based relationships as a percentage of total and in our clinics, as a total, we're not making progress on the percentage. The number of members that are going through is increasing because of the size and scale of our membership base is growing. So you might -- if you just focus on percentages, you -- like I say, whether you're not making any progress. If you focus on the number of clinics that are especially organically oriented and then the number of clinics that are alliance and the members in those clinics. And absolutely, you're seeing great progress.

I think one of the clear necessary resources in being successful in this model is the actual primary care physician. And I would imagine those who are in fee-for-service models this past year clearly didn't fare as well as those that were more levered to capitated models. Has that accelerated at all the ability? And again, I know we're still in the midst of this. But have you sensed any more willingness from PCP partners to want to participate more aggressively in these value-based arrangements?

I mean very much greater awareness of that and interest and desire to do it. But as I mentioned before, this is not an easy task. I mean if you think about a primary care doctor in one of our clinics, they have a panel size of maybe 500 members. And when a traditional primary care might have 2,000 or 3,000 members. And going from whether it's going from cutting your practice down to that amount or the operating model that it takes to manage and really operate as a different model. So we see the conversion taking years to make. But we are seeing the awareness and the benefits of that. And I think programs like you were -- like direct contracting are going to give another an ability for people to participate in that from -- and raise awareness over a period of time. So we look at it as a really great opportunity for the health care system overall, a great opportunity for Humana with a lot of running room in the future. But it will take time. This isn't going to be a 1-year event here.

Yes. No, for sure. And you mentioned direct contracting some of these other value-based arrangements. I know Humana announced recently, it's launching the primary care first model, which is a separate value-based program, I think, in early July. Any thoughts on that model? I mean I know they're all kind of unique to the end market, a little bit nuanced. But any thoughts around how big an opportunity that particular model could be for Humana?

Let me just maybe provide a little details around that. First, on the primary care first model, that is more we are replicating as a plan within MA, the primary care first payment mechanisms that are there. So it makes it easier for providers that are in that program to have value-based payment models that are consistent with Medicare. So as opposed to having a United, a Humana and the kind of plan that are different, really CMS is encouraging us to utilize one payment mechanism for primary care, and this gives us the opportunity to do that. So it's really an ability for us to be more consistent with Medicare fee-for-service. So our participation is more on the payment side. On the direct contracting side, we will participate in that. And one of the elements of us building the health care service business, specifically our primary care area and our home area is really to open up the aperture of our care coordination and clinical capabilities to be -- have a broader market. Today, it is very successful in the Medicare Advantage platform, which is an insurance platform. But our ability today to offer it to other payers, which we do in the -- in our partners in primary care area, it gives us an avenue to grow it in a non-Humana Medicare Advantage platform and then programs like direct contracting allow us to grow it also. So this health care service business is really has been developed and was really looked upon us being a servicing to our existing members but also agnostic. So that -- getting to your question on direct contract and Humana will participate in direct contracts. We will participate in a few different levels. One is around our provider base business, specifically partners in primary care will participate as a provider and specifically in the global participation. The plan, the Humana plan, we've set up a direct contracting entity. We'll participate in it with providers that we have value-based relationships with us. So we will participate in that. And then the third, when the details are appropriately provided, we will participate in the geographic side of that. There is a request for application that we will participate in, and we'll get the details. And if it's appropriate and it makes sense, we'll definitely go forward with that. We will be in the first cohort that comes out in April for the global approach. And so we are prepared to start. Our approach is really around a test and learn. It's not going to be financially accretive from a shareholder point of view, but it will allow us to participate deeply and understand it to then make the decision, do we -- is it a program that we carry on forward to that. And in addition, it allows us to be a partner with CMMI specifically, which we have been a partner with. Our team that has been assigned to this. Both -- some of our team members came out of CMS and specifically, CMI and CMMI and so are actively involved in helping to develop it. And then we will also be a company that provides comments back to continue to evolve in going forward. So to answer your question, we feel it's a great opportunity for the health care system. We feel it's a great opportunity for us to expand our model going forward to address a different market. But using the core capabilities of care coordination, risk-taking and all the managed care capabilities that we've developed over the years that have made us so successful on Medicare Advantage.

Yes. No, that's all super helpful. I mean I think when we saw some of the details on the geographic track, in particular, in December, I mean, like, you can start to count drops on some pretty big numbers. And so it's probably early days. But any thoughts just about the size of that opportunity as it relates to Humana or is there still probably TBD at this point?

I would put the TBD. I think -- about this conversation. But as you know, Bob, we're fairly conservative on the boldest of our statements there and away to our disadvantage. But I know others have become much more bolder in their discussion about it. But I do think if it is successful, and there are so many details to work out. And listen, we've been participating in many demo projects over the years and some work. But there's many that are tried. And so the uptake of this will be -- will sort of be over a period of time. It is a 5-year period of time. I think it's going to take a few years, no different than what we saw on ACOs or bundled payments or other programs like that, that there's a lot of tweaking, and sometimes those programs don't get off the ground. And so I'd rather just sort of take your suggestion on TBD.

No, I think that makes sense. Maybe one, just more philosophical as it relates to some of these new programs. I think in a lot of ways, it shows that clearly, CMS and CMMI, in particular, are very supportive of these value-based programs as it relates to Medicare. But then the [indiscernible] is does it detract from MA if these programs are successful. How are you thinking about just theoretically, the balance between those 2 things, if these direct contracting programs are ultimately encouraging fee-for-service Medicare recipients to participate?

Yes. A, there are 2 different programs. And what I mean by 2 different programs, one is very consumer oriented and then one is more programmatic and governmental side. So when you think about designing the benefits on the -- whether it's over the counter or whether it's social determinants of health and those, all those matter items that we have really developed a consumer-oriented fashion. You're able to construct something that is much more customized for the consumer. So I would say, first, I am much bigger believer that when you design something for the customer, you're going to get better at health outcomes, and you're going to get better uptake on that. So that's a bias of mind and could be right or wrong, and that this is much more of how do I get savings in Medicare fee-for-service quickly. And so I'm going to cut the rates 2%, and I'm going to give to allow people to take the risk and see what goes on. That could affect it. Obviously, over time, if it is effective, it'll affect the benchmark, but I still believe the benefits of MA being a consumer-based model and being able to construct it in a way that gives us some freedom to how do you address certain markets, whether it's the dual market, whether it's the market that is looking for things like silver sneakers or a market that is looking for social determinants of health, those particular things, being able to customize those, I'm still a believer in the MA side. But from the benchmark point of view and other things like that, it will impact it. But listen, we're growing, we're going to be 40% of the beneficiary market today, MA. So we're affecting it anyway. And so we'll continue to see that. But that's, in essence, the element of the program. The better you do, the better you got to do next year. So -- but we're well-prepared.

Yes. Yes. No, it makes sense. I guess maybe moving on to the policy front. As we sit here in the midst of the Georgia runoff. So still not totally sure how the configuration of Congress will look for the next couple of years. But just thinking about the new administration in general, are there major things that are at the top of the list as far as potential concerns or potential areas of opportunities. I mean we get questions a lot around MA rate setting, how could that look in the Biden administration. On the plus side, we get things around Medicare eligibility age. Just wanted to get your thoughts if top 2 or 3 things that are on the top of your mind from the policy front.

Just to put some context around that, I continue to see really strong support on both sides of the aisle on MA. I think MAs, whether you look at our quality scores, whether you look at the growth from a point of view of number of beneficiaries that are in MA today and as a percentage of total beneficiaries continue to be an in there, which also puts another voting block into it. And in addition, just the innovation and the brands that have demonstrated really great, great programs that have impacted individual's health, but also the communities that we serve. So I just feel really good where the positioning of the organizations within MA are today. That being said, there's details in the program that need to be modified, that need to be addressed. I think probably the capital risk will be risk adjustment. I think there's probably some areas in stars that probably could be there. I think setting the benchmark is always a question as Democrats is going to be less generous than Republicans, there very well could be the case. I think they're all manageable. I don't think there's any material going to put the program in a tailspin like the threats were in 2010. And in addition, I think the ability for organizations like Humana to navigate through those are many, whether they're in more clinical programs to overcome these challenges that, again, I think are very manageable or for that matter, the unique thing about MA is you can price for. So if there are certain changes that are there and you price for it, then you try to keep your benefits stable. But if they become unstable, that also creates a political ramification. So there's the opportunity for us to manage through this, whether they're operating the way we operate it, operate and navigate through it to political kind of engagement that we have. And you've seen the organizations, Humana being one of them. I mean there are some tough times in 2012, '13, '14 and '15, and the organization, I feel, came out really strong during that period of time and navigated through it. So I just -- I'm a big believer that it's manageable. And I'm not saying there won't be changes. But I would say that it's going to be what we can handle and navigate through.

That's fair. I guess, a couple of other topics I wanted to jump into. One was around Medicaid. Clearly, obviously, not as big a portion of the company as Medicare. But we do get a couple of different questions around this as it relates to the Medicaid program and Humana specifically. I'd be interested in any thoughts you have -- updated thoughts you have around the rate-setting environment. Just curious how that's played out so far? And again, I know it's not fully fleshed out yet, but that would be the first question around Medicaid.

Just in general, our strategy has been to be more selective in the markets that we enter into. And that was one of the fears, frankly, I had is in a downturn, budget deficits increase in especially highly leveraged states with pension problems and other areas. The Medicaid platform isn't -- Medicaid constituency isn't a voting constituency there. So grabbing to take dollars from one area to another. It's hard to get dollars to Medicaid over a period of time. So our strategy has been selective, and we've tried to pick markets that are healthy and respectful to the Medicaid plans. Listen, I probably have less information than you have in this. But I would say that budget deficits are going to put a hamper on the capacity of states and whether it's because of the increase unemployment, because of the circumstances of COVID to other pressures that they're facing in the marketplace. And I just think that health care being a large part of that is going to create pressure for both plans providers that participate in that. We, again, feel good in the states that we're in, but I'm sure that we'll have to deal with some headwinds in those marketplaces.

It might be a similar answer, Bruce. But I guess the other question we get is redetermination, just any thoughts on timing around when you think redeterminations within the Medicaid states you participate in could occur?

That varies. And so some are longer, some are shorter. So again, I think you have more detail. I don't have anything insightful that would offer than what the investors and you now.

And I guess the other area I wanted to touch on in some of the time we have left. It was actually around the PBM within the pharmacy. Scripts would suggest that we kind of got back to almost flattish and then we're kind of back in the mid -- down mid- single-digit range now. I guess, a, is that kind of similar to what you're seeing within the PBM? And then how are you thinking about things progressing within the PBM as you look forward, given just the unevenness of prescription consumption?

Again, for us, it shows up on the PBM, but then we pick it up on the plan. So it's sort of a push one way to the other. And it's a Peter or Paul kind of thing. I would say, as you articulated, we've seen some ups and downs, not so much about the health care system, but more around ordering of the drug and drugs as a result of individuals, the social distancing. I think it's been a benefit for mail order to be completely honest with you. I think the convenience of mail order is shown -- showing itself. And I think it continues to demonstrate that in this -- both in this time of social distancing and concerns about being out in the public. But in addition, I think it also is shine that there is a longer-term convenience as a result of the digital benefits that come about that. So I think overall, the PBM will flourish longer term as it is from a convenience plan there. I think there will continue to be the ups and downs from the volume point of view, but I think for us as an organization, getting people their prescriptions is really important because it prevents downstream complications, and we feel servicing our members appropriately is, a, number one, not so much about the script volume as -- versus what it does for downstream costs on that. So -- but we're very bullish about the PBM when merged with the health care side and when incorporated in a full risk model.

Yes. I guess that kind of leads to the other question I had around the PBM. We've seen some more activity on the specialty pharmacy front from some of your competitors with some assets being rolled up. Do you feel like you have the right footprint there? If you think about that kind of a holistic model, is there more you need to do on the specialty pharmacy front?

I mean we had been in the marketplace strongly around for some capabilities, mostly not so much on the drug side, although getting further our relationships with the pharmaceutical side is always a benefit, but really around the sales component of the specialty pharmacy for the physician office side, especially in cancer, that's probably the biggest area. But what we've had a really successful year this year in building a sales force, getting it out into the marketplace and being able to grow our specialty side. So we have more confidence that we do that from a capital utilization point of view, we might not need to do that. But it's always an area that we're trolling and looking for. I think out of all our assets within the pharmacy area, that's an area that we probably could build a little more capability for. But again, I think one of the things that you've noticed in the organization over the years is that we are very thoughtful on how we deploy capital, where we deploy capital, the priorities that we set, the returns that we set, and in addition, can we build it on our own. Because if you look at our overall return on capital for the company, it's almost industry-leading, and it's a result of the ability to build organically. And I think a lot of what you see in the -- and the company's deployment of capital is really the input to that higher return on capital.

I guess, maybe that's just the last question I had, Bruce, that you started touching on there was, in fact, around capital deployment. I know kind of the priorities in general, you've talked about the home, you've talked about primary care. You just mentioned specialty. I'm sure Medicaid, again, targeted Medicaid, seems like it's something that is on the table, accelerated share repurchase dividends. Year-to-year, I'm sure those priorities shift around. Is there any updated thoughts as you think about where the company is, where the markets are right now as you look out into 2021?

Well, a few things there. I think, first, just we are opportunistic with sensibility. In this market, being opportunistic with sensibility might be out of favor, considering the pricing of the assets that are out there today, but we do -- we are thoughtful in deploying capital and how we do it. And I think our teams have been fairly resourceful and the joint ventures we've done, the investments we've made, not only in how we've deployed capital, where we've deployed capital. But in addition, the ability to risk adjust that. And I continue to see us being able to do that and to use capital where there's a high tolerance for risk, like private equities and use the governance structure that comes there to derisk it a little bit has been sort of a modest operand there for us to continue to do. And I think you'll see that happen. I think any -- our deployment will be in areas where you talked about, they will be capabilities built. There will be modest size and deployment of capital and continue to be oriented to our strategy. The one thing that we've committed to is that we just don't want to do deals to get big. We feel that our scale and size in the markets that we're in and our capabilities in competing, we don't just need to be big. I think it gives us the opportunity to be much more thoughtful on how we approach it. So I think our approach in deploying capital is more on capabilities, modest size. We do take responsibility and continue to give dollars back to the shareholders. And so we -- but we do that on a consistent basis. I think you see the organization not taking, while the stock is down, taken in the March time frame, the stock was down to $250, so automated sense to do an accelerated buyback then. But we were more concerned about capacity and capital there, so we didn't want to deploy that. So you see us consistently giving back to the shareholders. Our preference is more stock buybacks so that if there is a deal that we need to do, we have the capacity to do it versus just a high dividend.

No, I think that all makes sense. And we're right up against time. So that was a good place to stop. But I do want to thank you, Bruce, for your time. Amy, thanks for helping with this as well. Thanks, everybody, for joining. Happy New Year, and be well. Thanks, again.

Happy New Year. Thank you very much.

Thank you.

Bye-bye.