UnitedHealth Group Incorporated (UNH) Earnings Call Transcript & Summary

We see the 2020s as a decade credited for fundamentally changing health care, delivering a high-performing technology and information-enabled system of care, a system built on personalized human connections, a system founded on early interception and treatment of disease and conditions, a system that's universal, affordable, simple and effective, a system that works for everyone. Welcome to UnitedHealth Group's 2020 Investor Conference. We're coming to you today from our corporate headquarters in Minneapolis, Minnesota, where we are excited to have you join us for a tour deep into our organization. You'll see our people, our culture and mission and action and the depth of applied data, technology and science driving performance across our business. As our team engages with you today, listen for numbers like 40, 80 and 90 and the story they tell about the advances we are making in improving health care quality, experiences and costs. But mostly, I'd ask you to witness the experiences of people like Candice and Annabel and the impact to their families. These examples reflect the potential of a modern health care system while demonstrating our role in bringing it to life. Last year, we talked about a future view, the potential for our diversified capabilities to lead in the development of the next-generation health system. Today, we are going to provide you with a behind-the-scenes view of the how, culture, capabilities, market positions and execution through the hands of our exceptional people and millions of critical strategic relationships. You should feel the restless mindset that compels us to adapt, innovate and evolve, transforming challenges into opportunities. This drive and decades of development of purpose-built capabilities and market positions provides an optimal opportunity to help develop a more modern health care platform, one that lowers costs, creates better experiences and outcomes for consumers and physicians and expands affordable access for people all around the world. Health systems have been tested these past 9 months. We've seen intense demand for knowledge, unprecedented levels of collaboration, strong movement by consumers to the home and ambulatory care settings, a powerful multidimensional private sector response to support patients, physicians and health systems and stronger alignment by physicians to physician-led fee-for-value systems of care. These trends are expediting pacing to a new, more modern health care platform, and it's quickly emerging right here today. In the next-generation health system, your entire health history lives securely protected in the cloud. For people with severe chronic conditions, it's updated dynamically hundreds of times per day with real-time sensors providing real-time actionable feedback, continuously monitored by an AI-enabled care team ready to intervene, intercepting early to enable faster identification, treatment and prevention of disease. Your care team meets you proactively in convenient and safe sites of service both physically and virtually. They practice medicine based on the latest evidence drawn from millions of bits of randomized information, research and observed best practices translated into clinical insights with artificial intelligence and proprietary medical ontologies, recommending next best actions in care. They guide and administer optimal care pathways tailored to your unique needs and health circumstances, actively coordinating your care, delivering superior outcomes and a seamless experience at the lowest total cost. They are aligned and empowered to keep you healthy in a frictionless technology and insight-enabled high-performing system of care. In the next-generation health system, everything is on-demand, at the moment you need it, be it Tamiflu dispensed from a lockbox at early onset of the flu or an infusion delivered in the safety of your home or a few minutes with a live or digital therapist to relieve stress and anxiety in the middle of the night. Access is simplified by universal identification and appointment scheduling systems. Your benefits are designed to fit within your financial means while meeting your unique needs. You don't get bills in the mail, let alone surprise ones. Your doctor is paid in real-time using value-based methods tied to best-known science, while you get rewarded for healthy behaviors. These approaches are making health care more connected, more human and deeply personal, a modern platform, a high-performing system of care. That's the future of health care, and it's emerging right here today at UnitedHealth Group. We've spent years assembling an unmatched set of distinctive capabilities, market positions and capacities. And you'll realize in a moment, 2020 has been anything but a shelter-in-place year for us. We've methodically extended and seamlessly connected each of these elements while broadening our reach and bringing them to scale in more local communities. And we hope after today you'll agree no one is better positioned to contribute to this ambition at scale than us. Standing here today, we're more confident in our strategic direction than ever. The only thing that has changed in the past year is the sense of urgency we feel and the realization we need to pace even faster. For nearly 5 decades, we helped develop the leading health care financing infrastructure. Two decades ago, we embarked on making the health system work better for everyone through services, leveraging innovation at considerably higher scale. And within the last decade, we began to engage firsthand in modern care delivery, recognizing even more is needed to be done to meet the health needs of people and the needs of their doctors and care teams. We started with a vision of helping build high-performing systems of care capable of intercepting, treating and preventing disease, operating with a full range of value-based arrangements, driving aligned accountabilities in local markets. This vision anchors our first growth strategy. We call it what we aim to accomplish: reinventing health care delivery. We start with high-performing primary and multispecialty care practices. We surround these deeply local foundations with our best-in-class national capabilities unified in local markets, including: modern behavioral care, early intervention and advocacy, treating the whole person brain first; digital clinical home, direct-to-your-own-doctor telemedicine supported by data analytics and best-in-class consumer and clinical technologies; house calls, advanced practice clinicians performing home services for seniors; urgent care, eliminating unnecessary ER use; ambulatory surgery, alleviating high-cost, facility-based surgery; hospital physician services, hospitalists overseeing our patient's care in the acute care setting; post-acute services, aligning care to patient-specific needs and preventing readmissions; skilled home care, care services to allow the nation's most vulnerable to live their lives to the fullest in their own homes; and palliative care, navigating dignified home and end-of-life care. These are aligned with a broad range of local pharmacy care services, home and office infusion, retail pharmacy dispensaries, digital pharmacy and others, powered by advanced analytics and technologies, redefined administration and payment through modern health fintech and sophisticated capacities to underwrite risk at every level. These are the key components of a modern, next-generation health system, and we are methodically advancing it at scale just as we help advance modern health care financing through managed care. New additions to this anchor pillar in 2020 include: extensions in Southern California, the Pacific Northwest, Massachusetts, Ohio and New York; addition to modern national care platforms in palliative, skilled home, post-acute and behavioral health; organic addition of more physicians, surgeons and advanced practice clinicians as they sought more effective and durable models of care; design and deployment of broad digital clinical services and meaningful advances in delegated risk arrangements. This modern health system is heavily aided by our second growth pillar, pharmacy care services, where we're evolving high-frequency touch points to synchronized whole person care with a particular focus on high-cost specialty medication management and direct-to-consumer offerings. New additions in 2020 include: multidose packaging; an expanded home and office-based infusion capacities; an organic build of extensive services platforms and capabilities, including the Optum Store; release of our upgraded digital pharmacy; opening of 60 new high-efficiency retail pharmacy dispensing sites and initial deployments of our new in-region, high-response dispensing strategy. We provide affordable access to these modern health care solutions through benefits and financing strategies responsive to the unique needs and financial means of those we serve through consumer-centric benefits, our third growth pillar. New additions in 2020 include: expanded specialty and modern medical coverages in more geographies; organic development of hybrid, on-demand, aligned high-performing health system options and new individual coverage choices; release of Level2, the first of our modern longitudinal condition risk management offerings applying digital therapeutics and coaching to support patients with type 2 diabetes; and meaningful progress improving our cost, quality and consumer NPS positions. All of these require our fourth growth pillar, accelerating insights and advanced technologies to enable more intelligent and more connected systems of care. New additions in 2020 include digital scheduling, scaling of the individual health record, development of proprietary telemedicine, architected unification of local care technology and advances in practical AI use. And we've now made nearly 30 investments in promising start-up companies, mostly technology-based. And last, we more recently introduced our fifth growth pillar, health fintech, providing simplified and modernized health banking and payment services for consumers and physicians. New additions in 2020 include expanded consumer account administration to more than 2.6 million people, an extended bank charter to serve a wider array of consumer accounts and support physicians and their group practices and progress advancing digital pay and authentication capabilities to better manage reward systems for consumers and better serve high-performing physician practices. Each pillar alone is instrumental in advancing health care, but united is how we will deliver the future of health. If you only take away one thing today, I hope it's this: The modern, next-generation health care platform is emerging quickly, and it works. It's simple, intelligent and built on enabled and compassionate human connections. UnitedHealth Group is leading the way, working with others with ambition to someday serve hundreds of millions of more people around the world, and none of it would be possible without your support. So we thank you. Before we turn to a deeper visualization of these strategic pillars, I want to welcome back UnitedHealth Group President and Optum CEO, Andrew Witty. Andrew took a leave in April to assist the World Health Organization's efforts to coordinate global vaccine discovery, development and distribution. Today, almost a dozen vaccines are in third-stage clinical trials with a few already demonstrating promising rates of effectiveness, and efforts to advance scaled manufacturing and safe and equitable deployment of vaccines are well understood, leading Andrew back to us. Hey, Andrew.

Dave, how are you doing?

I'm well. How are you doing?

I'm doing great. It's an unusual first day back.

Yes. Well, you picked our investor conference to join us again, and we really appreciate you being here.

No. Well, it's great to be here, albeit I wish I was in the U.S. Obviously, I'm speaking to you from the U.K. at the moment. So looking forward to some of these quarantine restrictions lifted and getting back there in person as soon as I can.

Well, you'll be back soon enough. You're highly effective from there and have been from the first day we started working together. So it's a pleasure to have you back. Hey, I just wanted to personally thank you for the tremendous work you've conducted over the course of the last 8 months. It's not lost on us that the success that we've achieved is, in part, due to your efforts and the efforts of the WHO. So we couldn't be more pleased with the work and to have you be a part of our company and to have you back with us here today.

Well, thanks, Dave. That's incredibly kind and way too generous, but it's been a super privilege to be a very small molecule of oil in a giant global engine. And hopefully, this engine is kicking into life and it's going to help us bring this pandemic under control and to an end just as quickly as we can.

Hopefully, it will. Anyway, I'm sure our investors are anxiously awaiting to hear from you, so I'll turn it over to you. We'll see you at Q&A.

Great. Thanks so much, Dave. Yes, see you then. And hello, everybody. It's really a simple pleasure to have the opportunity to talk to you briefly today. And in advance, you'll hear a lot more detail and depth of all of the work that's going on across UHG, especially within, obviously, the Optum and UHC business units. It's been 8 months since I went off to work with the World Health Organization. And just in the last couple of days as I've begun to really reacclimatize to UHG, it's remarkable the progress that's been made in that time. I really want to compliment the teams, the leaders, but really all of our colleagues who work up and down this organization for really 2 enormously impactful things they've achieved during that period. Number one is the way they've responded in so many different ways to the COVID challenge. But number two is keeping the focus on their core agendas, their agendas of service and delivery and their agendas to innovate. And that work and progress has been quite remarkable. And a couple of examples as we see further progression into our value-based care delivery, we see the way in which Optum has really taken opportunities around virtual care development, making sure that as we've seen customers and patients want to move, not surprisingly, to a more telehealth environment, Optum has been very much a leader in helping to facilitate the creation of enhanced channels. And we've seen that reflected in the kind of service levels that we can provide. Just 2 examples, but many, many others, and you'll hear a bunch of that as we go through the rest of these sessions. For me, the last 8 months has been really a fascinating learning experience. To go to the World Health Organization gives you a chance to work with almost 200 countries across the world. It's a particularly dramatic moment in history in terms of all of these countries facing very similar challenges because of the pandemic. But it's been an incredible privilege to be a small part of the team that's been working to try and ensure a multilateral response to this global crisis. And I think as we have worked on that, it's been an opportunity to, for me at least, to meet with representatives of many countries, many health systems and have the chance to see once again some of the challenges that those countries and systems are facing and how they choose to deal with them. One of the things that, that has really reemphasized for me is that I look at UnitedHealth Group, I look at Optum, I look at UnitedHealthcare and I really cannot think of a better organization, either a government or a private sector company, better placed, better equipped and frankly, well-motivated to make the kinds of investments and changes that I believe health care really needs in the 21st century. And having seen the way in which a pandemic, a virus, has brought this extra challenge to our legacy health care systems where no country in the world has escaped and no country's health care system has ultimately been sufficiently robust to be able to withstand and react, it really says to us the time is now for us to continue to put our energies behind developing the best, the most modern, the highest quality and the best value for money health care system we can. And we're fortunate, all of us, to be in positions of responsibility at a time where technology, where information and data and where systems are at levels of sophistication, which truly give us a chance to look into the future and start to reimagine how health care could be modernized, made better, made more value for money. And that's really what we're all trying to do within Optum and within UHC and across the whole of UnitedHealth Group. This is an enormously motivating mission for all of our colleagues up and down the company. Every single individual has an opportunity to contribute. And I believe that the vast majority, I think maybe everybody at UHG, is truly lifted by the way in which they can help, in their own way, improve patients and individuals and families lives. Last 8 months through COVID has given many of them a very direct experience of how they've been able to step in and make that kind of difference. So I'm delighted to be back here at UHG, I'm looking forward to the kind of innovation that I believe this company can uniquely deliver into the United States and internationally. And I hope you will enjoy over the next few minutes, a couple of hours, the kind of updates we're going to give you so that you can see a little bit more in depth and in breadth the qualities of the company, the way -- the places in which we are focusing and the ways in which we aim to bring innovation to our customers, our patients and their families here in the United States and globally. Thank you very much. [Presentation]

Good morning, and welcome. I'm Caitlin Zulla. You just saw a few of my physician colleagues who every day deliver high-quality outcomes and better patient experiences at lower costs. They're part of a growing physician network at the heart of the most comprehensive, value-based care delivery organization in the U.S., encompassing primary and specialty care, ambulatory surgery, behavioral health, post-acute and in-home care. These assets are increasingly connected as we continue to grow and expand our services in key markets nationwide. The physicians you just heard from and all of our 74,000 OptumCare-aligned clinicians are helping expand access to care in communities across the country. Today, you will hear how physicians across our enterprise are reinventing health care delivery, care that is patient-centered, informed by clinical expertise, driven by data and enabled by technology, all to deliver higher-quality outcomes and better experiences at lower cost. One such technology is Optum Data Exchange, or ODX. This powerful interoperability engine gathers and standardizes clinical data to develop deeper insights on disease and patient health trends. It helps our providers make more informed decisions and close gaps in care. This year, it's been the hub of our COVID-19 case tracking, analytics and reporting. Today, approximately 85% of OptumCare patient clinical data is available in ODX, and we're on track to reach 100% in 2021. More broadly, we bring the full capabilities of our enterprise into the doctor's office by embedding enhanced care protocols into the clinical workflow with our clinical decision support solution, Optimal Care. Developed by our physician experts, it guides both doctor and patient along the most effective clinical pathways for specific health conditions. I'll turn it over to my friend and colleague, Dr. Omar Baker, to share more. Dr. Baker?

Thank you, Caitlin. I'm here at one of our OptumCare senior clinics in Northwest San Antonio. WellMed is our largest care delivery organization with over 1 million patients across 16 markets in Texas, Florida and New Mexico. We have been delivering value-based care here for decades with more and more patients covered on their full risk arrangements. And we are applying what we have learned here and investing to accelerate the transition of other care delivery organizations to full financial accountability for the patients and members we serve. We built Optimal Care because of 1/4 of the health care delivered in this country does not improve outcomes or quality of life. And low-value, inefficient care costs more with the potential for adverse effects. This is because many providers don't have good data to inform their decisions. The issue is the constant flow of the new medical information. New medical articles are appearing at a rate of at least 1 every 26 seconds. If I had to read every medical journal published, I would need to read 5,000 articles per day. Doctors simply can't keep up. It gives doctors up-to-date clinical information from the latest medical and scientific literature on a patient's condition right at their fingertips in the examination room. We do this through teams of expert physicians who stay on top of research and create evidence-based approaches which can be embedded seamlessly into a physician's workflow and becoming increasingly embedded into their EMRs. Optimal Care is evidence-based, data-driven with advanced analytics and at the point of care. It helps our physicians to focus on what matters most to them, the patients they serve, and we are scaling it across the country.

Dr. Baker is right. Optimal Care has now been deployed in over half of our care delivery organizations and continues to be rolled out across our network. We develop technologies like Optimal Care with the goal of advancing value-based care. And our focus is not solely on our care delivery organizations. We look for opportunities across the entire care continuum. Here's how. During the pandemic, we rapidly enabled over 17,500 doctors to provide over 1 million patient telehealth visits since March and are expanding the use of remote patient monitoring and digital behavioral health. I'm proud to say our outpatient surgery business continues to grow rapidly. The more than 1,000 physicians that we have added this year have helped us nearly double the growth rate of our centers, providing new, complex surgeries. By aligning with specialists, we're maximizing our opportunity to deliver surgical care in the right setting. And we're partnering with more health systems more comprehensively. This includes our innovative partnerships with John Muir Health in the Bay Area of California and now Boulder Community Health in Colorado. Here, we bring together enterprise capabilities in revenue cycle management, advanced analytics and care coordination to support better patient care and long-term sustainability for local health systems. We're now actively engaged with a number of other interested health systems in our growing pipeline. And with our expanding post-acute care capabilities, we're helping hospitals efficiently transition patients to appropriate skilled nursing facilities where they spend 40% fewer days on average compared to traditional fee-for-service Medicare. UnitedHealthcare now works with more than 137,000 physicians and over 1,100 hospitals in value-based arrangements. In recent years, we've been accelerating the path to provider risk sharing, addressing cash flow needs and building payment predictability for smaller independent primary care practices. The special part of our organization is that together, we're even better. Optum and UnitedHealthcare are bringing innovative benefit offerings to more markets. And of course, OptumCare is integral to our strategy. We started our journey 12 years ago. Today, we operate in 44 states. We continue to expand our services even during the pandemic when many fee-for-service practices have struggled with drops in patient volume. We now provide value-based care at varying levels in all of our local markets, serving 3.6 million people in value-based arrangements, more than twice as many as 4 years ago. It's even better to see how it works for real patients. Pamela Craig lives in San Antonio and is a patient at WellMed where we currently serve over 1 million patients. Pamela survived several near-death experiences, beginning with an episode of severe respiratory failure. While a tracheotomy tube saved her life, it also forever changed the way she lives. I would like to introduce you now to Pamela, her brother, Mike, and her physician, Dr. Liliana Oakes, to see our model in action. [Presentation]

And it doesn't stop at Pamela. Across OptumCare, physicians and nurses are meeting patients every day with the same level of compassion and personalized care. In fact, when we talk to patients, 90% of them said they would send their friends to an Optum doctor. This kind of trust is important, especially for the seniors we serve. People ask us, what's different about OptumCare's support for seniors? Here to help answer that question is one of WellMed's leaders, Jimmie Keenan. Jimmie joins us from San Antonio at one of our senior centers in front of a beautiful mural that was painted by the seniors. What makes OptumCare's approach to senior care unique and effective for taking care of this important and growing population?

What we do is we put the patient at the center of everything we do with the physician or the advanced practice clinician. And as a nurse, I appreciate that because so many times, people focus on the chronic condition. We focus on the whole patient, and we take every aspect of their care to ensure that we are keeping them as well and optimally healthy as we can. And we use the full breadth and depth of Optum when you think about the technology we have, when you think about the specialty services we have. We are able to wrap all of that around our patients and help them achieve a healthier life.

And I know you provide more than medical services. What other senior-focused services do you provide at WellMed?

Well, as I'm here at my senior center, what I'd like to tell about our senior centers, when you walk in, you just get that feeling of joy. We have tremendous senior centers across Texas and Florida. And when you enter one of our senior centers, you don't see people playing bingo. You see people that are engaged and active and socializing. We have personal fitness trainers that work with them on their health. We have art classes. We have Zumba classes. We offer classes on nutrition and healthy eating. And all of these things mean so much to the senior who might be isolated otherwise.

The pandemic has been hard for all of us, and I imagine more so for your seniors. How have you flexed to support seniors during this pandemic?

One of the most important things that we did immediately was to outreach to our seniors and let them know that we were going to be there for them throughout the pandemic. We ask them not only do you have enough medication, but we ask them do you have enough food. And through that, we found that many of our seniors were afraid to go out and purchase groceries and were down to literally their last can of soup to eat. We were able to quickly work together to go out and shop for their groceries and deliver those to them. It meant the world to them.

Jimmie, thank you. What incredible, inspiring and important work. That's our patient-centric care model at work, and its success is driving strong growth. Through both organic growth and adding new practices over the last year, we've increased the number of patients we serve through value-based contracts by 300,000. And as we expand our presence and integrate our broad capabilities across our primary care markets, this progress is accelerating. Let's start on the West Coast. We continue to develop and connect our practices in Southern California where we serve 30 different payers and over the past 2 years, have nearly doubled the number of people we serve through value-based arrangements. This momentum is also playing out on the East Coast. 5 years ago, we had no presence. Today, over 3,200 OptumCare physicians serve 3.5 million patients up and down the Northeastern corridor where our connected care approach is driving strong results. Since we first introduced you to our Riverside practice in New Jersey, we have linked the primary care team with our ambulatory surgery, urgent care and behavioral health capabilities. The results are inspiring. Among Medicaid members in New Jersey, we see 15% lower emergency department visits with significantly fewer hospital admissions and lower pharmacy costs than local market averages. We have more than tripled the number of patients we serve in this market over the past 3 years, and we continue to expand our presence across New Jersey, New York, Connecticut and Massachusetts. For more on how our enterprise is uniquely positioned to drive differentiated value and growth, here's Erin Satterwhite to talk about pharmacy care services. Erin?

Thanks, Caitlin. Today, Americans take more medications, manage more chronic illness and often struggle to afford the drugs they need. They need an advocate focused on meeting their needs, and we are that advocate. Our pharmacy care services model goes far beyond managing supply chain logistics. It's a comprehensive platform that distinctly provides care through the most frequent consumer touch point in health care, the pharmacy. Data and analytics combined with the expertise of 120,000 UnitedHealth Group clinicians power deeper insights that help us to care for people more holistically. Embedded technologies connect the pharmacy, physician and consumer and make it easier for people to access the therapies that they need affordably. We make costs more transparent with advanced digital capabilities in a convenient, seamless consumer experience. Today, we'll show how this comprehensive approach works in real life, how we uniquely manage high-cost specialty drugs and help the growing number of people with complex conditions, including challenges with behavioral health. We meet the people we serve where they are in communities across the country.

I'm Reena Neumann with Optum Pharmacy Operations. I'm here in Bend, Oregon, at one of our community pharmacies. Pharmacies like this one are on site within community mental health centers. They support the unique and growing needs of people with mental illness, substance use disorders and other complex conditions. What makes this model different is the hands-on personal approach of our integrated team. This works because it brings together the whole care team: the pharmacy team, the clinical care team and the patient. The reality is that 1 in 5 Americans has a mental illness. In fact, 1 in 25 suffers from a severe and persistent mental illness like schizophrenia, bipolar disorder or major depression. These individuals are often insured through Medicaid, Medicare or both. And unfortunately, people with severe mental illness, on average, have a life expectancy of 25 years less than those without the illness. To help them, we will end 2020 with more than 560 pharmacies after opening 60 over the course of this year. Together, these pharmacies serve nearly 1 million of our society's most vulnerable people, people like Candice. Candice started coming to our pharmacy 2 years ago. She lives with bipolar and borderline personality disorder as well as post-traumatic stress disorder. At the age of 28, she was living with her parents because she wasn't able to live independently. [Presentation]

As Candice proves, when people take their medications as prescribed, their health and their lives can improve. We see this happen every day with our patients. Our hands-on, personalized approach drives a more than 90% medication adherence rate. To put that in perspective, the medication adherence rate for chronic medication is around 50%. Our high adherence rate produces 40% fewer hospitalizations, 18% fewer emergency room visits and meaningful reductions in total cost of care. Most important, patients are healthier, and they love the experience. Our Net Promoter Score is in the 90s. So we're expanding this unique integrated care pharmacy model to even more high-risk individuals in a number of ways through value-based contracting with mental health centers across the country, by proactively reaching out and serving more high-risk UHC members in their local geography and by bringing this high-touch, scalable model to other complex populations like seniors managing multiple chronic conditions and HIV patients who need help coordinating their therapies. This is how we're advancing our societal mission, one person at a time.

Thank you, Reena, and thank you to the rest of our community pharmacy team who ensures some of the most vulnerable people in our society are getting the support that they need. In addition to helping people like Candice live healthier lives, we also serve the growing number of people who need specialty drugs. These therapies offer tremendous help for patients but are very expensive. Our innovative specialty solutions improve outcomes for patients and better manage the total cost of care for plan sponsors. To do this, we tightly coordinate the pharmacy care with the medical treatment, bringing effective care to complex patients who are often seeing multiple providers and have multiple prescriptions. We create a 360-degree view of a patient's utilization and costs, using data across pharmacy and medical benefits. This helps us to support better care decisions to meet the specific needs of each patient. Through clinical decision support tools, we help clinicians better understand a patient's benefit to identify the best drug, the best price and the best site of care, which increasingly is a patient's own home. In fact, home-based care can save as much as $37,000 per patient per year. That is direct savings to the patient and the benefit sponsor versus what it would cost for the same treatment in a less appropriate setting. This year, as the number of home infusion patients we serve has grown by double digits, we've had 1,000 infusion nurses making 20,000 visits per month to patient homes. Let's see how it works for one patient.

Thanks, Erin. I'm Aricka Knox. I'm a nurse practitioner and lead operations for infusion services at Optum. We provide care and infusion suites all across the country. They are convenient for patients and offer effective treatment at lower cost. In addition, as Erin said, we now treat most patients in their home. For patients with acute needs being discharged from the hospital, we can have a nurse in the home in 4 hours or less. So far this year, our nurses have spent 400,000 hours serving patients in this way, using drugs carefully prepared and shipped from our pharmacies across the country, patients like 9-year-old Annabel. Annabel became one of our home infusion patients earlier this year. She had been receiving infusions in an inpatient setting. But when COVID hit, her family and care providers became concerned about her potential exposure to COVID. You see, Annabel had received a donated kidney from her mother and had a compromised immune system. Let's hear from the family how we eased their concerns, quickly transitioned Annabel to home care and made sure Annabel's treatment didn't miss a beat. [Presentation]

We help thousands of people like Annabel start home infusions every year, and the experience is so much better for our patients. This helps to drive our consistent, strong results and makes us work harder to expand our capabilities. So this year, when the pandemic sparked greater demand for home infusions, we were ready. We expect this demand to grow going forward, as more people benefit from the convenience, comfort and value that we deliver. Now let's talk about how 2020 has brought the broader value of pharmacy care services into a sharper focus. Joining me is Dr. Sumit Dutta, Chief Medical Officer for OptumRx. Hi, Dr. Dutta.

Hi Erin, how are you?

Doing great. I was hoping you could share with us how the pandemic has put a spotlight on home delivery services.

Yes, the pandemic has changed the way that people prefer to obtain their medications. The advantages of home delivery have become even more clear. Home delivery is convenient. It's safe. It's fast. Our expansive footprint focuses on that important last mile to the patient's home. We achieved 20% better adherence. Customer satisfaction has improved. In fact, our Net Promoter Score improved 7 points over 2019. Innovations like multidose packaging help patients who take more than 1 drug a day stay adherent on their medications.

And we know that's really important because we serve a lot of folks who happen to have polychronic disease.

And they take a lot of medicines.

Yes, unfortunately. Could you also highlight some of the things that we're doing around digital innovation and how that's helped people this year?

Absolutely, Erin. Let me give you 2 examples. The pandemic has brought increasing acceptance of the use of virtual care. I recently had a virtual dermatology visit, and I loved it. I didn't need to take time off work. I didn't have to drive to the clinic, and I didn't have to pay for parking. That's what we have offered for many years through our virtual consults with pharmacists, where members can ask questions about drug interactions, dosing, side effects. Also, we have developed Optum Perks' cash card, which is available digitally to all Americans, whether they have a pharmacy benefit or not. We deliver savings of up to 80% off retail prices. The solution is free, easy to use and available at 67,000 pharmacies across the country.

And we also do things at the point of prescribing when people are getting new prescriptions.

Yes. Another solution that delivers consumer value is MyScript Finder. This is a digital tool available in mobile and web applications. It helps members and providers find the best medication based on their benefits at the best price. This leads to an average savings of $40 per prescription.

Thank you, Sumit. I hope this glimpse into our pharmacy model has given you good insight into how we are adapting and innovating to meet evolving consumer needs. We connect with people over 700,000 times a day, and use each interaction as an opportunity to care for the whole person. We will continue to grow our distinctive pharmacy care services to advocate for more people like Candace, Anabelle and our more than 59 million members and for everyone else we serve. And if anything, 2020 has shown us more than ever before, caring for people means meeting them where they are through digital and home-based care. In pharmacy, we saw the number of digital users rise nearly 10% because we are reaching people the way they want to be engaged. Next, you'll learn more about our expanding digital capabilities across the enterprise and how these capabilities are helping improve experiences, outcomes and affordability. Phil?

We're entering a new era of health care. As you just saw, people can now receive much of the care they need in the comfort and safety of their home. Therapies can now be accessed digitally and data-driven insights help us intercept disease and personalize clinical care. You've heard us talk for years about our technology investments. Our individual health record brings data together from literally thousands of sources. Personalized tools and rewards help people maintain and improve their health. Connected devices are expanding remote monitoring. The nerve center helps people better manage chronic conditions. And advanced data analytics tools drive more informed care decisions and can even predict disease. We're going to share today how we are harnessing and bringing together our investments in technology and digital capabilities to build a more connected intelligent health system. Let's jump in. Advancing virtual and home care has always been an important piece of our strategy, and it accelerated this year as patients and doctors quickly move to virtual visits. COVID tested us and we were ready. At UnitedHealthcare alone, we facilitated over 22 million telehealth visits this year compared to less than 1 million in 2019. I'd like to ask my colleagues, Dr. Kristi Henderson and Dr. Saurabha Bhatnagar, to share more about UnitedHealthcare's digital health-at-home strategy.

Thanks, Phil. Dr. Henderson, we've been infusing leading technologies at this company for many years, and that really prepared us for this year. And in 2019, what we had seen was only 0.1% of our Medicare members use telehealth services. This year alone, we've seen that number skyrocket to 40%. And while you and I both know as clinicians that telehealth alone doesn't change the way that the member interacts with the physician, what we're doing is really complementing it in new and futuristic ways to advance the health care ecosystem.

Yes. It's so exciting, Dr. Bhatnagar. In response to this demand, we expanded telehealth access from 6.5 million Medicare Advantage and dual special needs plan numbers within a matter of days at the onset of the pandemic. And now we're refining that experience to make it better for our members. In this spring, we are launching UnitedHealthcare's new digital health-at-home experience to about 4 million of our Medicare Advantage members. I know you're excited to share more about that. You've been a pioneer in shaping that vision of what the digital health at home can be. Could you tell us about what that would look like for a member?

Absolutely. So what digital health at home does is on my UHC, it brings together data streams into one location, including the individual health record and nerve center. And what it starts to do is really build that personalized and complete member health profile in this one location. And what it also does is it makes that data interoperable so that it can connect to our large provider network that we have. And on top of that, it puts other additional tools into the hands of those providers, such as point-of-care assist. And then we're also taking the same data and then sharing it with our clinical care teams, such as an advocate or a nurse or a care management team. So that regardless, whichever door, whether it's physical or digital, that a member knocks on, they get that same best care.

It's amazing and so powerful for our members. What I'm most excited about is that, that connects resources that we have across our entire system and put them in the hands of our members. And so what that would look like is a member could log into myUHC, they could check their health history, they could enter health data using biometric devices that they may have at home to manage their chronic disease. They can also schedule an appointment for a telehealth visit, or they can even now shop online for over-the-counter medications. It's pretty amazing how far we've come. And during COVID, we leaned in and accelerated this work for this end-to-end experience, and now we're including health-related services. So this is what it looks like. That same log-in that we talked about, we can now have the member go in and they can order a preventive health kit. So tests like colon cancer screening or a hemoglobin A1c for their diabetes can send a kit to their home. The results are right there online on their dashboard. And if those results happen to show something where they need to take an action, they can go online, schedule an appointment, even have a telehealth visit. So it's that easy. We're super excited about where this is going to go to be able to serve our members.

And let's talk a little bit more about those numbers with complex conditions that you also talked about. And what we're doing is really infusing our high-touch care management services that we have with the same technology so that a member in their home can get cloud connected devices whether it's a biometric scale, a blood pressure cuff, glucometer, a pulse oximeter. And what it does is, for a member like William, who's answering some of these daily care management pathway questions, it takes this data from this -- from a smart device, whether it's a smart tablet or a phone. And it takes these questions plus those same data streams, infuses it all into nerve center and then puts it into the hands of our nurses and care teams. And what Nerve Center really is, and you're seeing some of it here is, it's a knowledge engine. So what it does, it starts to gather and analyze all these various data streams whether it's claims data, utilization data, gaps in care data, preventative services data, puts it in one location so that William's nurse can proactively reach out to William before an issue escalates. And just this past year, what we saw was over 4.6 million alerts were driving smarter and more personalized health through Nerve Center. And what we're really excited about is what digital health at home does is it takes those same data streams along with much more, and it puts that into the hands of our members like never before. So whether a member is interacting with at-home services such as a house call or intelligent routing services, the member get that same great care.

It sounds exactly like what Phil was talking about. It's truly an intelligent connected health ecosystem. I'm looking forward to scaling the digital health at home over this next year to really be able to serve our members better and enable our providers to drive digitally based value-based care. Thank you.

Thanks, Kristi and Saurab. That's a great picture of how our home health approach goes beyond telehealth to creating a complete picture of the patient's needs and providing personalized recommendations. Our solutions go beyond physical health. 1 in 5 adults suffer from mental illness each year. And as that number has grown during the pandemic, the system has struggled to keep up. Optum Behavioral Health is one of the nation's largest mental and behavioral health provider networks, now with over 235,000 providers and growing. We have expanded virtual care and app-based solutions for depression and anxiety as well as telepsychiatry and pharmacy behavioral services. Dr. Reena Pande, our Chief Medical Officer at AbleTo, will share more on how our platform helps connect people to the support they need.

Thanks so much, Phil. You are absolutely right. Mental health is such a serious issue, and far too many people today are unable to get the care they need. At AbleTo, we are delivering structured high-impact mental health care to people when and where they need it most. We're leveraging data and analytics to align each person's unique needs with a personalized behavioral health program that offers the right blend of human and digital support. That care is delivered by our very own nationwide community of license clinicians trained to deliver our evidence-based protocols through the AbleTo technology platform. So how does it work? Let's take the example of Sue, a UnitedHealthcare member with type 2 diabetes, who is also dealing with depression. AbleTo might proactively identify Sue as someone at increased risk for a behavioral health challenge and might reach out to her to make her aware of programs covered by her benefits and to help her coordinate an initial visit with one of our clinicians. AbleTo's platform really tries to simplify that experience by assessing patients and guiding them to the right treatment choice based on their clinical needs and their personal preferences. On the one end of the spectrum, that care might be delivered through our digital solution with the support of a coach. Or for more complex cases like Sue's, our care team would build an 8-week program tailored to her needs with care delivered virtually through telehealth sessions. At the core of all AbleTo programs, though, is a foundational protocol based on decades of clinical evidence, incorporating cognitive behavioral therapy and other evidence-based interventions that are really designed to manage both physical and mental health care. The result of AbleTo's programs really speak to the impact we can have on people's lives. Over the last decade, we have consistently been able to demonstrate that our high-quality care reduces depression by nearly 50% to 60% and anxiety symptoms by approximately 45%, while at the same time, improving physical health, like diabetes self-management measures and even medication adherence, and altogether resulting in 45% fewer hospital stays. As you can probably tell, it gives me great pride to know we are able to serve the needs of our mental health patients across the country. Helping them access high-quality, evidence-based care that delivers truly meaningful clinical outcomes.

Thank you, Reena. These technologies are not only transforming the way care is delivered for people. They're also helping advance the practice of medicine by introducing new clinical support, such as digital therapies. Our research and development pipeline is generating innovative treatments with vast potential to prevent delay and avert disease progression. And we've only just begun to scratch the surface. Here's Dr. Deneen Vojta to discuss how we're delivering tomorrow's treatments today for people with type 2 diabetes.

Good morning. I'm here in the query lab, our home for research and development. We know pharmaceuticals can be lifesaving and innovations in many therapeutic classes are accelerating. But they are not the be all and end all, particularly in a disease like diabetes. Even with these advancements, we have not been able to offset the rising incidents and costs of diabetes in this country nor was I able to avoid breaking my finger. Level2 is a special purpose care delivery organization that uniquely applies digital therapeutics, virtual expert care and facilitated self-service to help patients put their diabetes into remission and not just accept the inevitability of more drugs, complications and disability. Digital therapeutics have the potential to radically change diabetes care by creating an ongoing direct connection to patients to ensure that care is optimized at all times, including medications, behavioral habits and daily activities. In Level2, our patients are equipped with a continuous glucose monitor, which is a digital therapeutic that helps them and their Level2 doctors see the impact of certain foods, activity, stress and medications on their lives. And our remote specialists are armed with patient level signals generated from our AI algorithms that are fueled by massive curated data sets, including the individual health record and these continuous glucose monitor readings. And these signals enable our doctors to intercept disease before it progresses and complications develop. These AI algorithms never go to sleep and are continuously screening from changing risk profiles or new care needs. Level2 is committed to delivering this far better care using fewer caregivers. The notion that a patient physician encounter is necessary for every interaction is health care's choke point. AI supports facilitated self-service, allowing the patient themselves to handle most of their needs, but stepping in when higher level of expert care is required. To give you an example of one of these AI-derived micro therapeutic recommendations, a patient could be asked to move the timing of her metformin from the morning to after dinner to allow her to lower her blood glucose levels while she sleeps, and much of the follow-up is automated. So when a medication is changed, a technology-enabled assistant connects with the patient to confirm the new regimen is working and monitors for any side effects. This alleviates the burden on the physicians and their staff. So once again, Level2 is focused on disease remission and not just slowing its progression. To that end, about 1/2 of our patients, thus far, have been able to reduce the number of drugs they take every day. Early results have been so positive we are starting to carve out risk for people living with diabetes and get paid a premium to manage their condition holistically over time. This suggests a potential market opportunity for this type of care, which could ultimately be measured in the tens of billions of dollars. And diabetes is just the first condition in a growing pipeline of UnitedHealth Group's special purpose care delivery organization Level2. We expect to deploy at scale other conditions, including chronic kidney disease and heart disease. We are really just getting started on this broader opportunity to leverage digital therapeutics, virtual expert care and facilitated self-service at scale. Stay tuned.

Thank you, Deneen. We've built the infrastructure needed to deliver a more intelligent health system. And we're making it real through technology that improves the consumer experience, enables clinicians and improves health outcomes. We are a health care company, and our leadership and technology sets us apart. We're the only company that can take massive number of data sources, combined with analytics and deep clinical expertise and directly deliver critical insights to care providers and people at the exact moment they need it. This is how we are helping transform health care through the power of technology. Now let's take a look at how we are doing it through modern benefit designs.

Thanks, Phil. It's great to see how we're using technology to personalize care to help consumers be healthier. We're also deeply committed to simplifying health care and making it more affordable for people through a variety of modern benefit designs. To guide this effort, we always start with listening to consumers to better understand their needs. One thing we hear often is the need for affordable options while maintaining access to high-quality doctors. In response, we've developed commercial products like Primary Advantage, which offers $0 PCP copays and first dollar coverage. In addition, our buying product makes it easier for consumers to know in advance how much their care is going to cost, as they can purchase coverage for certain conditions on demand as they need it. And for seniors, we offer $0 and low premium plans as well as $0 copays along with extras that seniors want most, like renew active and dental, vision and hearing coverage. The strength of our network and clinical capabilities, combined with OptumCare, means we're uniquely positioned to create more provider-led plans that reward for value versus volume. In our SignatureValue, Harmony and Canopy plans, consumers can save up to 20% on premiums compared to traditional PPO offerings as well as get $0 copays for primary and urgent care. This is exactly the type of high-value health care option consumers want. Looking at the individual market, we're growing our products and services to fill gaps in employer-sponsor coverage, provide affordable coverage options in the case of a job loss and offer non-medical coverage for dental, vision and hearing. Finally, in our global business, we're simplifying the experience by digitizing all aspects of our benefit offerings. Our Banmedica insurance businesses in Chile, Colombia and Peru, have deployed our integrated digital platform, which helps resolve members' care and administrative needs while simplifying the experience and eliminating administrative costs. And speaking of digital, we're seeing a monumental shift in how consumers want to receive care, and we're responding by bringing it to them through easy-to-access telehealth options, virtual visits and home health services. We're creating a specific product that allows our members to pick their own virtual care doctor and expanding the use of virtual visits from delivering care to people who are sick to also preventing illness before it starts. Here to show you more about this unique product offering is Jessica Paik from our commercial national accounts business.

Thanks, Krista. Like you said, a significant amount in in-person care is shifted to virtual care. And we believe that trend isn't going away any time soon. We know about 30% of our members do not have a primary care physician, or PCP. Based on our research, these people have, on average, nearly 10% higher health costs, which means we know people aren't getting the care they need, leading to poor health outcomes and missed opportunities to lower costs. So we developed a plan that helps members get connected to a PCP. Our virtual primary care offering provides a faster, more convenient and coordinated health care experience. Patients begin by selecting a virtual PCP from among our top provider panels to establish an ongoing relationship. This is notable because it helps to improve access to care in underserved areas. People can also schedule online appointments on myuhc.com with their virtual PCP and interact with their care team on a 24/7 basis. So think of that 2:00 a.m. fever, that medication that you might have a potential side effect, or just that simple health question that you may not want to go in person to see a physician. But if you can access a physician online that you know and access clear information to understand your costs before starting the visit, this is a natural evolution of getting questions answered. Then if in-person care is truly needed, the virtual PCP can refer the patient to a nearby high-quality, low-cost option for things like labs, imaging, specialists and other services. And then once the member visits with the local care provider, they can share their medical record information with the doctor. So just like traditional primary care, virtual primary care covers everything from basic health screenings to minor urgent care visits like pink eye, to managing chronic health conditions such as asthma, high blood pressure or high cholesterol. We launched virtual primary care earlier this year to about 600,000 members, and we plan to expand this. We expect this offering to meaningfully contribute to our goal of having every member with a designated PCP, improving outcomes and lowering the total cost of care.

Thanks, Jessica. This is a great example of how we're creating affordable and simple products to meet the needs of our members. In addition to our members, we also want to simplify the process for providers. You heard how the IHR brings thousands of unique data elements. And our new platforms like point-of-care assist are taking in that data and integrating it directly into the physician's workflow. This allows physicians to proactively identify gaps in care, suggest lower cost medications and even recommend in-network referrals, all while the patient is sitting in their office. Regan Ristich, from our provider operations team, is here to explain.

We've been working with the largest EMR companies in the nation to integrate actionable intelligence directly into their systems so physicians have seamless access. No one else is doing this in the industry, and it's already making a big difference to the growing number of nearly 570,000 health care professionals who now have access to point-of-care assist. Let's look at how point-of-care assist works for Juan Sanchez, a 68-year old male with a history of congestive heart failure and diabetes. When Juan visits his primary care physician, Dr. Claire Smith, she can review his individual health record, which summarizes Juan's health history. This allows Dr. Smith to view events in his care journey beyond the current visit through data not available in the traditional EMR. Important gaps in care are displayed like preventative screenings or needed prescription fills. Point-of-care assist provides data in the workflow, making it simple for physicians to refer to specialists who are high quality and lower cost. In this case, Dr. Smith knows Juan should be assessed by an endocrinologist, so a referral order is created. Dr. Smith can see information for an endocrinologist she typically refers to and confirms the in-network status that the services do not require prior authorization or referral and sees the estimated cost for Juan for his visit. As she starts the process, she notices that Dr. Padma does not meet UnitedHealthcare's premium criteria. She scrolls down to see another physician, Dr. Ito, who is a Tier 1 premium care physician, is more cost-effective and is 6 miles closer to Juan. The value generated by providing actionable data at the point-of-care is significant. We're helping physicians spend more time delivering care and helping patients focus on their health. Payers see a 30% increase in redirection of care to lower cost sites and consumers benefit from improved care and lower out-of-pocket costs with an enhanced care experience for their doctors. We will continually refine point-of-care assist, and over time, believe it will fundamentally change the way health care decisions get made by doctors and their patients at the point of care.

While technology is essential to achieving our vision for health care, we never lose sight of the human touch. For some, it's meeting the needs beyond the clinical setting by addressing affordable housing and food and security. This year, our total housing investment reached more than $0.5 billion. For other patients, we bring care into the home. That could be a nurse conducting a clinical visit through our house calls program, or providing concierge-like support through our Advocate4Me and Navigate4Me programs. We want to make sure our people are working to improve the care experience, and nowhere is this more relevant than our commercial special needs initiative. Patients with rare or complex conditions often face unique challenges. These families have 13x the normal number of claims. They see 5x as many specialists and they have 10x the number of issues with their claims. These are some of the most clinically complex and expensive cases in the health system. Our special needs initiative focuses on 4 main areas: removing administrative barriers; getting families to the doctors and clinics that truly understand rare and complex conditions; helping families find social services; and supporting the health of the entire family. Here's just one family story. [Presentation]

The Hirano's are just one of the more than 115,000 families we've helped through this program. We've seen our NPS go from negative 5 to above 70 after we engage with these families. And we've saved them over $23 million in out-of-pocket costs. Next year, we're extending this service to adults with complex conditions. So there you have it: affordability, simplicity and quality-supported care. That's UnitedHealthcare's true value and differentiation in the market. Now let's take a quick look at how we're making it simpler and easier for consumers to manage the financial aspects of their health care.

Paying for products and services has never been simpler or more seamless. The click of a button or a wave of our phone sets off a chain reaction. A payment is made and received instantly. Rewards programs are updated. A record of the transaction gets sent. And rich data is used to drive loyalty and deepen relationships between a customer and a vendor. In a moment, it's done, conveniently and transparently. Now imagine the day when the financial side of health care is this easy. Good morning. I'm Norman Wright, Optum's Chief Marketing and Customer Experience Officer. You've learned a lot today about how UnitedHealth Group is building and investing in the next-generation health system. Now I'd like to discuss how we're bringing that strategy to the financial side of health care. Before I came to Optum, I worked in financial services for many years, where I saw fintech really take hold. Now I'm often asked, what can health care learn from that? And can health care ever be as simple and as fast? Well, my answer to that is an emphatic yes. And as the largest health care financial provider in the country, we're working to make it real. Now we haven't talked about our financial services strategy with you in some time. So today, I want to update you on our capabilities and how they're foundational to a high-speed electronic payment network that will reach across health care. Over the last several years, we've built a broad-based health banking and payment business with connections across our enterprise and the entire health system. In 2019, we processed more than $170 billion in health claims through our digital payment gateway. Today, we have payment connections with the vast majority of all providers across the country, 1.8 million of them. And earlier this year, in a time of great need, we used these connections in partnering with the Department of Health and Human Services to quickly deliver more than $100 billion in CARES Act funding. Now we're working to bring everything together, to a single smart payment gateway that provides affordable options that are transparent and fast for both providers and for patients. So joining me this morning is the CEO of Optum Financial, Kurt Adams. Kurt, it's good to see you.

Great to see you as well, Norman.

So tell us more about this vision, and let's start with what it means for providers.

Well, like you, I have a background in payments and banking. And that's why I came to UnitedHealth Group. I was drawn by its capabilities and its vision to transform an entire industry for the better. Health care is the largest industry where payment innovation hasn't reached meaningful scale. And as a result, providers are spending far too much time dealing with cumbersome payment processes, billing and collections, time they would rather be spending with their patients. Today, you've heard a lot about our obsession with improving provider experience. Our strategy is simple: Put new technologies and tools in providers' hands that would reduce administrative burden and deploy technology behind the scenes that pays them quicker, all while making it easier for patients to pay their bills. Imagine that by the end of a workday, a doctor is fully and accurately paid, both by the patient and their health plan. And then imagine the time and resources saved by not having to send out bills and chase down payments. We're in the early stages of building this out. The good news is we are laying the rails to get the high-speed trains running and make this a reality.

So that's exciting stuff, Kurt. And it's great to hear another example of how we're using technology to allow doctors to do what they do best, which is really caring for their patients and to bring back the joy of practicing medicine. Now speaking of patients, we're zeroed in on decreasing complexity and increasing affordability. And we've all heard stories, and we know people who are struggling to navigate the financial side of health care. So Kurt, let's talk about how we're making this real for individuals.

Well, Norman, we have an incredible opportunity to bring our capabilities together to help people pay for care and get rewarded when they make healthy choices, similar to good driver discounts. Our consumer-centric digital platform, Rally, is one great way we connect health and finance. Rally has delivered $1.9 billion in incentive payments back to members for healthy behavior. UnitedHealthcare's Care Cash debit card rewards members when they seek care for high-quality, lower cost providers. And our Sweat Equity Fitness Rewards program reimburses them when they participate in qualified fitness activities. Our opportunity now is to bring it all together: payments, rewards and health coverage for a simple experience that drives loyalty and better health. Imagine today, when people only need one convenient mobile platform for all their health-related transactions connected to any account they choose: credit, debit, checking or any other popular payment channel. That is the future we're working on.

Thanks so much, Kurt. Thank you. Innovation in financial services cuts across every part of our enterprise across UnitedHealthcare's benefits businesses and Optum's growing portfolio. We're going beyond incremental changes and far beyond point solutions to transform a key segment of the health care economy that's in urgent need of change.

What you have heard from us today is the result of years of strategic investments that have enabled us to build a diversified, adaptable company, serving the entire health care value chain. All of our growth priorities are designed to win the loyalty and trust of employers and consumers and reduce the total cost of health care. I'm hopeful that what was clear from this morning's presentations were some recurring themes that cut across the 5 growth priorities: first, our unique digital services are powering connected care, enabling an integrated approach that makes it easier for people to access quality and efficient care; second, we are meeting people where they are in their care journey in their homes or community pharmacies, telehealth are right at the point of care; third, we're focused on making things simpler for providers and patients, delivering information and transparency, so they can get the right care at the right place and for the right price; and lastly, we're addressing some of the most complex issues in health care, from supporting families with special needs to introducing new digital therapies, targeting difficult-to-treat chronic conditions. On their own, each of the 5 growth priorities you heard about this morning has the potential to positively impact entire sectors of the system. But more importantly, taken together and powered by the people of UnitedHealth Group, we are well positioned to help drive transformative change across the health care landscape. And we'll continue investing in the capabilities and resources to develop and fuel our growth. During my time at UnitedHealth Group, I've held roles at both UnitedHealthcare and Optum and know firsthand the impact we could have when we bring the combined talents and capabilities together to tackle challenges and better serve our customers, members and the system as a whole. We're inspired by the opportunities ahead. Now I'd like to turn it over to our Chief Financial Officer, John Rex.

Good morning, and thank you for spending your day with us in this virtual gathering. Of all of the surprises 2020 has brought, large and small, good and bad, the one I least expected is this: I never thought I would miss that Sheraton Hotel, but I do. I'm missing you gathered in the ballroom, the hallway conversations, the dinners, the Q&A, the expos, the seminars, thousands of human connections packed into one day. And as many of you have told me, it's another chance to get a real sense of the people with whom you are entrusting capital to deliver health care innovation and performance. It's not just about the information you pick up, it's more fundamentally about human connectivity. But then came 2020 and we all quickly learned to operate in very different ways. And while this format is less than ideal from my perspective, it's a lot better than it would have been, say, 15 years ago, when this would have been a soul-crushing long conference call. I've thought a lot about why we turned to virtual tools and when, what they mean and what they could mean. For some reason, it brought to mind these. I don't know how many of you had walkie-talkies when you were kids or if your children have them. They never worked quite like I thought they should. My friends and I, for instance, had to shout back and forth across the street to tell each other to listen to them. What I realize now is that we didn't have anything special to stay or do we needed walkie-talkies for. We just thought using them was different and fun. You have seen many innovations and advances in technology on display here today, but the tools should never be the point. For us, and especially those of us in health care, it has to be about the human connection, the human element. If the tool makes something work better for people, we're all over it. So for example, our ambition is not the sheer number of virtual visits we can perform, but how we can use this means of connectivity to make a difference for patients, their doctors, hospital systems and payers. Connectivity is core to what we seek to deliver as a business. From within the flow of the health care system, connecting people with the tools, data and services that are directly relevant and of value to them, in ways that make it easier to understand and interact, continually adapting and modernizing these connections as even more effective means become available. We change to serve people, not the other way around. That approach is at the heart of what has enabled this company to adapt and grow over the years and what supports the growth opportunities we see ahead. We allocate our time, energy and capital to align with these principles and our mission. That is how we orient our decision-making. It is what enables us to serve more people, serve them better. And in so doing, grow our business and the value of your investments. Let me share a few examples of how we connect people and ultimately grow. If ever the phrase "meet people where they are" was apt, it's within our general pharmacies, which you saw earlier. Conventional pharmacy approaches weren't reaching the people now supported by Genoa, patients with mental illness, substance abuse disorders and even more complex conditions. The personal engagement between a Genoa pharmacist and a patient at a community health center, that human connection if you will, drives over 90% medication adherence, which in turn, improves quality of lives, in part by reducing hospitalizations. That explains why it is a growing contributor to OptumRx. Or take our care delivery businesses, already with over 50,000 physicians. By the end of '21, we expect to partner with upwards of an additional 5,000. Now there's a lot of discussion about the evolving role of the physician. But it is clear to us that care delivered by an individual doctor, engaged with an individual patient, will remain central for years to come no matter what support channel is used. The capability to connect people with the right kinds of tools, services and medicines that lead to better outcomes will only grow in value over time. This connectivity stretches beyond primary care. We continue to amplify our focus on post-acute care, where our technology and advanced AI have reduced readmissions by as much as 20% and days in skilled nursing facilities by 40%. We can turn to virtual-only tools or the best surrounding care team we needed in our care settings or in the home. And we are able to customize and provide sophisticated data to identify the best facility for a highly specific and deeply individual circumstances. We bring our full capabilities, direct and indirect, to improve outcomes and costs. I remember shouting into one of these walkie-talkies and getting no response. Nothing but static. It was frustrating, but it passed quickly. But for millions of Americans, the real world they live in is nonresponsive. They feel isolated and stressed, feelings exacerbated over the past 9 months. So we have accelerated the introduction of connectivity capabilities into our behavioral health business. Our self-service apps today are helping millions manage stress and anxiety on demand when they need it. Through digital or telephonic means, whatever, however and whenever, it works for patients. We are connecting nearly 20 million people with behavioral health care providers for live sessions, driving lower cost for patients. But far more than that, it translates to a significant improvement in quality of life for people and their families. Or consider the ways we help employers enhance connections with their employees. That breadth of UnitedHealthcare's innovative benefit designs is connected to the strength of OptumCare's clinical capabilities, allowing us to offer innovative provider-led plans in the commercial market. Beyond creating value for the employer and the employee, these plans create a relationship with a physician, where one may not have existed. And as you heard earlier, we have also introduced health plans, which center first on creating virtual-physician relationships. For a whole segment of the population, this approach creates lasting physician-patient connections that otherwise just simply wouldn't occur. That's where the real value for people comes from. Because laying the pipes isn't enough, it's about creating effective, durable flow. One of the many lessons we learned during the pandemic is how the health system and hospitals, in particular, work better when they can focus on their mission of getting each patient the best care possible, one patient at a time. OptumInsight has been at the core of enabling that focus to occur, one hospital, one health system at a time. OptumInsight can help stand up and improve telehealth service, navigate reimbursement in times of uncertainty. And use analytics and predictive modeling to improve operational performance. All important services, all enabling a hospital to focus on what it does best. You will continue to see us focus on these types of enterprise-wide relationships, supporting the growth of OptumInsight and the strength of hospital patient connectivity. All right. I think you get the point. Assembling the best assets and capabilities is an important foundation. The painstaking part is ensuring they work together and are connected in a way that improves care in an open and inclusive, modern and informed connected system. But that's where the enduring value is created and where we can uniquely contribute and excel, helping to build a better and deeply connected health system. The health system of the future, one which will drive our growth well into the next decade. Now let me connect you with some numbers so you can see how it all adds up. In the beginning month of the pandemic, at a time of high uncertainty, you saw us step forward without hesitation, rapidly providing billions in liquidity to help stabilize care delivery systems and to provide assistance for our customers. And we maintained and delivered on a commitment to address economic imbalances the pandemic would create across the health care system. During this period, we also continued to strategically deploy capital and innovate from within, continuing our efforts to evolve and serve as a modern and informed health care platform. We expect to finish 2020 with adjusted net earnings per share approaching $16.75. Our overall annual earnings performance winds up being largely consistent with the original indications we offered a year ago, even as that quarterly progression was different than one could have imagined, as was the mix of performance across our businesses. We approached 2021 with a strengthened view regarding our underlying growth prospects. Our businesses are performing well. And not only have we learned from and adapt it to this environment, we have strengthened our capacities and advanced new capabilities and services we expect will grow strongly well into the future. That being said, we're anything but complacent. We are mindful of the disruptive environment created by the pandemic and the elements that might play into next year. Among these, the damage to the U.S. economy and overall business activity, testing and treatment costs, people's ease of access to and acceptance of needed care at normal activity levels and the potential for more acute health conditions to emerge from the deferral of care in 2020. Now that's pretty broad, so let me get more specific to give you a sense of how we see our underlying growth. Our initial 2021 outlook for adjusted earnings per share of $17.75 to $18.25 incorporates just over $2 billion or about $1.80 per share at the midpoint in estimated negative impact from COVID-19-related effects. This figure includes our view on several key factors, including: For testing and treatment, our view is for direct COVID-19 care costs to be comparable to 2020. However, we expect there to be considerably less offset than in 2020 from other care services being deferred, as we expect health systems will remain largely able to deliver the care people need. And we do not incorporate widespread usage of a meaningfully less expensive testing standard. Our view is also grounded in the fact that certain populations, particularly seniors, have deferred care this year. Some have not seen a doctor at all in 2020, impacting their health and our ability to close gaps in care and properly document health conditions that surely still exist. This could affect final risk scores and 2021 reimbursement levels, even as these seniors return to more normal care patterns. We assume vaccines only become pervasively distributed and administered among the U.S. population fairly deep into '21. And we expect more people currently furloughed will ultimately lose employer coverage and that states resume Medicaid redeterminations, both of which impact the number of people served. This past year reminded all of us things can turn out differently, but we think it is important to lay out for you the possibilities visible to us today. Fundamentally, what we see is this: taking into account these factors implies a strong underlying growth rate, well supportive of our long-term 13% to 16% adjusted earnings per share growth outlook. One of the opportunities we have each year at this conference is to convey the unique significance of having an Optum and UnitedHealthcare, businesses that are both distinct in their market focus while connected in their impact on meeting human needs across the care system. And most years, we configure much of that morning session with a business unit perspective. This morning, we shared a view going across our enterprise to show how we expect to serve more people more comprehensively in any environment and demonstrate the intersection and commonality that drives enterprise growth across multiple and even more connected businesses. In short, to show the profound impact this organization can have on focusing and linking all of our resources on improving specific elements of the health system, and how our distinct businesses can grow strongly as a result. But we understand the business unit view is still essential for you, so let me go through some key elements now. Since you have the numbers already, I won't read them off, but we'll offer brief perspectives. I'll start with Optum. Growth will be led by OptumHealth and our rapidly expanding care delivery businesses. This growth is largely organic with revenue per OptumHealth consumer served expected to increase about 20% in '21, and we expect to realize strong double-digit growth on this metric for years to come. This momentum is a result of the investments and work we have engaged in for well over a decade. OptumCare continues to become more capable in delivering highly effective care and a better patient experience at meaningfully lower cost. Among factors driving this growth, more accountable care arrangements that actually have substantive accountability. For example, the movement to global capitation and a decisively multi-payer approach, with OptumCare serving over 80 health plans, and addressing more complex conditions such as the higher acuity care we are able to deliver in our surgery centers, deepening the services offered in more established specialties such as orthopedics and broadening into new areas such as cardiovascular. At OptumInsight, strong growth will be the result of building next-generation integrated tools for health plans such as comprehensive payment integrity, expanding relationships with state governments to address service and analytic needs and creating operational performance and scale advantage for health systems through enterprise relationships. Given the volume-driven nature of some of the OptumInsight businesses, 2020 performance was impacted by care deferral and a slower business environment. Our '21 outlook incorporates the view that some of these impacts will persist. We have been gratified in current conditions that OptumInsight's revenue backlog continue to advance. We see the relationships built and fortified this year, translating to a 2021 backlog figure upwards of $23 billion, an increase of $10 billion from just 5 years ago. This expansion demonstrates the significant inroads made by OptumInsight across these businesses that will drive double-digit growth into the future. OptumRx earnings growth of 4% to 6% is driven by its rapidly expanding specialty businesses, many of which you saw highlighted this morning. Adjusted scripts are expected to approach 1.35 billion in '21, growth of about 2% over 2020. Script volume in the established pharmacy benefit management business has been affected by care deferral during 2020, and our '21 outlook carries in that impact. The OptumRx specialty businesses now comprise over 1/3 of the earnings base with a 5-year compounded earnings growth rate of about 20% and will contribute strongly to growth in this business for many years. Turning to UnitedHealthcare. We expect medical member growth of upwards of 1.5 million people in '21, led by our Medicare Advantage offerings. Customer retention continues to be strong, reflecting how seniors value the comprehensive and stable benefits we offer. But retention and expansion don't come from a list of benefits in a brochure. They're earned through the relationships and connections we build, from how we are able to take care of people and not just episodically or in traditional settings. We do this by facilitating trusted care in seniors' homes, standing by their side to help them navigate the complexities of the care system and assisting in potentially difficult transitions for families between sites of care. These are among the valued factors that develop lasting connections and that have allowed us to advance the number of seniors we serve under Medicare Advantage at a 13% compounded annual growth rate over the past 5 years. Within our commercial business, we expect net member growth even as our outlook incorporates continued employment-related attrition. The ultimate magnitude of this growth could be impacted by any extension of federal assistance programs to employers. We see particularly strong growth in our individual products, which are expected to grow double digits again in '21. Within employer-sponsored coverage, our expanding set of new consumer-centric benefits, which you heard described earlier, are expected to grow again at a strong double-digit pace, this after a more than 50% growth in 2020. Medicaid has grown exceptionally well, and we expect that growth to continue. This reflects the intentional work we have discussed with you over the last couple of years to improve the performance of this business. This growth is expected even as our outlook incorporates the probable expiration of the federal health emergency. At which point, we expect states will resume the benefit redetermination activity which was suspended for much of 2020. That will affect membership, yet our 2021 outlook still is to serve a net additional 200,000 to 300,000 people. All in, UnitedHealthcare revenue of $218 billion to $220 billion shows revenue growth approaching $20 billion and operating earnings in a range of $11.3 billion to $11.8 billion. It is an expectation grounded in UnitedHealthcare's deeply rooted commitment to connect people with care that offers better outcomes and a better experience at lower cost. Let me now turn to some of the other key elements that are typically of interest to you. The 2021 medical care ratio at 83%, plus or minus 50 basis points, is impacted by the repeal of the Health Insurance Tax; business mix, as we continue to see strong growth in both Medicare and Medicaid; and the largest impact, the pandemic-driven effects incorporated in our initial outlook. Our focus on affordability extends to our operating costs. In '21, our operating cost ratio will improve by over 200 basis points, a direct result of ongoing productivity efforts to apply modern technology and data-driven efficiencies. The change in our '21 effective tax rate is primarily due to the repeal of the Health Insurance Tax. When you exclude that, our rate is largely consistent with 2020. We continue to have a strong balance sheet and ample capacities with over half of operating cash flow to be generated by the growing services businesses, primarily Optum. Our capital deployment practices remain consistent. We continue to return capital to our shareholders. The dividend has advanced a strong double-digit pace, and we expect to repurchase between $4.5 billion and $5.5 billion of stock during '21. With significant growth capital available, we will continue to evolve our health care platform to serve more people more deeply. Let me leave you with this. A long time ago and in a far different setting, Benjamin Franklin wrote that people are like the separate filaments of flax before the thread is formed, without strength because without connection, without strength because without connection. We are better and stronger as individuals when we are connected with each other. This foundation is equally critical as I hope you have seen today in health care broadly. That's why it remains at the heart of what we do as an evolving health care platform, helping people live healthier lives and making the system work better for all. So I thank you for staying connected with us this past year and look forward to doing so throughout the coming year, whether virtually or we hope more often in person as the year progresses. Or if need be, just try me on the walkie-talkie. And now we'll move to our Q&A session. Dave, Dirk, Andrew and I will be joined virtually by many of our senior leaders, most of whom you've seen this morning.

Hello again. I hope this morning's program deepened your understanding of the distinctive and important ways we serve people in society today and the tremendous growth opportunities that are in front of us. Now we're excited to bring you into the conversation. Joining me in person today are John Rex, who you just heard from; and UnitedHealthcare's CEO, Dirk McMahon. And also joining us once again from his office in the U.K. is Andrew Witty. And joining us live and virtually are more than 30 leaders across every part of our diverse enterprise. While you likely know some of these leaders, we're excited to introduce you to the many new faces from this morning's presentations as well. How are you all doing? Give us a thumbs up. All right. You're ready to go?

Yes.

All ready. Sounds good. So let's get started. I know you've all received instructions on how to ask a question. And to start us off, we have Matthew Borsch. Matt, how are you?

I'm good. Can you hear me?

I sure can. Thank you.

Okay. Fantastic. My question is regarding how much of your at-risk medical spending is currently being provided by your own providers under Optum, what it is today? What percentage is it today? And where do you see that going by, say, 2025?

Okay. Well, I think we'll start with Wyatt Decker. As is the case, Matthew, we're advancing both our UnitedHealthcare risk business as well as third-party risk business as well. And they are advancing at nice paces, each of them. Dr. Decker, can you answer Matthew's question?

Yes. Thank you, Matthew. If I understood the question, because it got a little fuzzy, you were asking about what portion of our patients are in risk-based arrangements. Is that correct?

No. Not quite. I was thinking about your annual at-risk medical spending or, if you like, just all the medical spending that flows through the UnitedHealth Group. How much of that is provided by Optum providers?

Yes. Okay.

And where do you see that going in the next 5 years?

So let me just frame this for you a little bit. At OptumCare, we serve about 20 million patients annually. And of those, they are in 80 different -- approximately 80-plus different health plans. So we are fiercely multi-payer, as you may have heard me or others say before, and actually work closely with UnitedHealthcare, as you would expect, but also work closely with another 80 payers. And so for us, we have 53,000 physicians who are affiliated and employed, about 11,000 of whom are primary care physicians, all of whom are focused on delivering outstanding care with over 3.6 million patients in value-based care arrangements, including fully delegated and capitated arrangements like Medicare Advantage. Thank you.

And Dr. Decker, if you don't mind, I'm going to ask Dirk McMahon to add on to that to answer Matthew's question more directly.

Yes. Matt, I can give it to you this way. Roughly 14% of our Medicare Advantage and D-SNP members are OptumCare members. That's probably the best quantification we can do.

Thanks, Matt. Our next question comes from Justin Lake.

But can you guys hear me okay, anyways?

We sure can. Thank you, Justin.

Sorry about that. So I wanted to ask a question about costs. And obviously, there's a spike in COVID going on right now, a lot of focus on what's going on the cost trend. So the MLR guidance for 2021 of 83% is up about 50 basis points versus where you are in 2019, which is the last -- fifth year. Given most of that could be explained by mix change, I'm just curious if you could give us some color in terms of what you're seeing or thinking for trend next year. It seems to imply that you priced for a lot of this COVID because you're not implying MLR goes up much. And what is that 2021 trend that you're thinking versus the typical 6%?

Great question, Justin. Appreciate it. We'll have John Rex respond.

Yes. I'll start with that, Justin, and then maybe we'll go to Dirk, and we could talk about that segment of trend -- that 6% trend that we've typically referred to as commercial cost trend over time also. So just maybe a little color on kind of what we're seeing right now to give you a flavor. We've tried to update this every quarter in terms of how we're seeing COVID cost progression and what we're seeing and elements. Certainly, there's been a higher level of it in the last few months. I mean, if you get certainly November, seeing that continue to ramp. And so a view of where we're seeing in November, where that's coming, very, very much more in line in terms of just offsetting -- being just offset by the care deferral levels that we're seeing at this point. As we look into the forward year, one of the comments I made in my address was really what we're seeing in -- for full year 2021, we're looking for a COVID cost level that's largely the same as what we have experienced thus far and what we expect to experience really for all of 2020; however, considerably less offset than we experienced in 2020 from care deferral. Of course, there are a lot of other elements going on within that mix. And one of the elements I think you referenced in your comments was also the repeal of the Health Insurance Tax. And in 2021, that has impact also and where that sets fully. Dirk, maybe I'll turn it to you for some color on commercial cost trend. Just to put it in perspective, again, the commercial element is a little less than 20% of our premium book here.

Yes. I think -- no, I think you hit it well to start, John. You're going to have COVID treatment and testing costs, and then you're going to have abatement. But our underlying trend, 6% plus or minus 50 basis points, Justin, I can assure you that our -- all of what we consider around unit costs as well as our clinical programs, those are going to remain intact. We have, in fact, price considering the continuation of those and all of our expenses being well controlled. So again, treatment and testing as well as abatement around the edges, consider that, as well as what I would say the core trend that we manage normally every year.

Great. Thank you, Justin. Nice to have you with us today. Our next question is from A.J. Rice.

I wonder if I might have you drill down a little bit further in your Medicare Advantage outlook. You've got an assumption that you're going to grow enrollment back to 13% to 14%. That's a reacceleration over the last 2 years. It is in keeping with what John said was your 5-year trend, I think. But maybe comment on what you're seeing so far in the open enrollment in the individual market, your group expectations. And then I think this year, your geographic expansion is -- returned to pretty significant growth. What's driving that? And what have you seen in the new markets you're entering?

Great. Thanks for the question, A.J. We'll have Tim Noel respond to that. Our team is -- I have a very nice AEP season that follows a strong group Medicare Advantage season, and AEP is covering both individual MA as well as our D-SNP populations. We're seeing nice growth there, too. So Tim?

Yes. Thanks, A.J., for the question. Yes, we're off to a really good start in AEP. I'm getting a lot of positive feedback from the marketplace and doing a nice job of adapting to a little bit of a different selling season this year. Seen a nice continuation of the momentum that we have established across the board, individual MA looking really good. And then on the group side, we're seeing some nice growth with that selling season largely complete. We've guided to growth in the 750,000 to 800,000 range, with about 175,000 to 200,000 of those growth lives coming from the group business. So that's really terrific to see. Regarding expansions, you're right. It was a little bit of a bigger expansion year. We got into some newer geographies this year and also continued to append counties to our existing footprint, which has been a nice way to grow the business for us historically.

Great. Thank you, Tim. Thank you, A.J., for the question. Our next question comes from Sarah James.

I had a question, follow-up on OptumCare. So I've noticed that this is a big focus today. Also, if I think back to last year, there was a lot of talk around this being a key area of capital deployment. So maybe you could put it all in context for us. How much does OptumCare contribute to UnitedHealth overall today? Where is it going to be in 5 years? And what do you think are the major buckets between capital deployment, taking on more risks or just expansion of your existing programs organically?

Let's start with John. I think you already declared this a couple of years ago, if I remember correctly.

Yes. I did. And indeed, good to see you this morning. And one of the outlooks we provided a few years ago, and we are taking a long-term view in terms of where our company would be out, and I think 10 years from now, we talked about OptumCare being a $100 billion business for us and our next $100 billion business. And the progress we're seeing continues to support that view that we've had in terms of where OptumCare will be and as we look out in the future. A couple of important elements I'd like to point out, and I think you've clearly picked up on some of these here. An important element for us is the focus we have on the revenue per consumer served because that's an element in terms of what we're seeing in terms of the movement to global capitation, more accountable arrangements with physicians and importantly, the growing acuity that we serve in OptumCare. So there are 2 important elements that grow that number, and we talked about that being a 20% growth rate. And we expect that to be a strong double-digit grower over the next many years. Give a little more color on OptumCare. I'd put it in -- if you look at the OptumHealth revenue line, that's roughly in kind of the 2/3 zone of revenue, a little bit north of that these days. But that would be the general sizing. And then maybe go to...

Well, what about capital allocation?

And capital allocation also, capital allocation continues to be an important focus for us. We are very active in terms of our affiliations with high-performing groups and honored to be able to affiliate with high-performing groups. Typically, in terms of the size of these transactions, they're not extremely large transactions for us. But it continues to be one of our primary focus areas in terms of where we'd like to deploy capital over the next 5 to 10 years still. And we're going to go to Wyatt. Wyatt, do you have any further color?

Yes. Yes. Thanks, Sarah. I think, John, you covered it well in terms of the growth potential. What we're seeing is continued excitement and energy by physician groups around the country who want to be part of OptumCare because of our long-term growth perspective as well as our deep commitment to physician leadership and what we call the quadruple aim: About patient experience, provider experience, lowering total cost of care and outstanding outcomes. And as we generate the data and really deliver on that vision, it has become very compelling for physician groups. So we're seeing groups approaching us, asking if they can be part of our team. And we're also seeing continued organic growth, which is strong. So I think you'll see growth through both organic and acquisitions and a continued focus on value-based care and full capitation. Thanks.

Thank you, Sarah. It's nice to have you with us today. Our next question is from Josh Raskin.

Can you guys hear me okay?

We sure can.

Perfect. I'll apologize upfront for sort of a multi-parter here. But really, ultimately, I'm trying to figure out what is the goal for OptumHealth? Are you looking to be a leader in the delivery of health care in the U.S.? Is this just a better way to manage costs for UnitedHealthcare and other insurers, a way to grow membership? And then I guess the last part would be, based on this aggressive growth, what is that impact on the relationship you're having with your network providers? Do they see you as a competitor at all?

All great questions. I think for the most part, except maybe sans that last piece, Josh, I'd say the answer is yes. The ultimate goal here is to achieve the quadruple aim, which is to improve outcomes and experiences both for doctors and for patients, at the same time, lower the total cost of care. And you can see with our most formed relationships, we reduced the cost of care by somewhere around 40% or so. And that is intensely valuable, in particular, in the Medicare markets where both UnitedHealthcare and the third-party payers that are served by OptumCare are able to reinvest those dollars into competitive benefits into the market. And so it's an essential way to drive additional value. It's also one of the ways in which fee-for-service and MA have -- from a government funding standpoint, have been leveled over time as well. So we just continue to expect that, that progress will continue and, in doing so, should yield a greater penetration of MA across the Medicare landscape. With respect to relationships, I referred to millions of relationships in my commentary. And those millions of relationships are both with networked physicians, which still constitute a good percentage of the numbers of physicians we have as part of OptumCare. They're either employed or highly affiliated from that standpoint. And I think Wyatt addressed that nicely just a moment ago. But also then, there's the relationships that we have with facilities, which are intensely important. And we saw that play out in the earlier part of the year this year, where UnitedHealthcare, Optum -- UnitedHealth Group and large facilities were having to work very dynamically with one another in order to make sure that COVID patients were served and served well. And part of that was really around the procedural changes that were made on the fly in order to ensure that we were able to treat our patients and the hospitals were able to do everything they could to ensure the lowest level of mortality possible. So it was a -- that's just an example of the kind of dynamic and relationship that occurs over time. Then you also see these in our transformational partnerships as well. And those continue to grow in advance, and they're essential. These are probably what I'll call the deepest relationships that we have to date with the health system broadly. So thanks, Josh, for your question. Next question, please. It comes from Robert Jones.

Good. Good. Maybe just one on OptumRx, haven't spent a lot of time there yet in Q&A. You continue to call out specialty as a significant driver. I believe you said it's about 1/3 of the base of OptumRx at this point. How do you expect that market to develop over time? And how could you further penetrate that market? Or how do you see the -- a further penetration of that market being influenced by biosimilars? And then I guess just the last part of it, given it's been a big focus as of late, any updated thoughts on the regulatory front? Specifically, I'm thinking about things like most favored nations and how that might affect specialty.

Sure. Sounds good. I want to send this to John Prince. And John, as you respond, let's respond not only in the specialty, but use this as an opportunity to talk about some of the work that you've done in services as well.

Well, thanks for the question, Robert. And I'm also going to hand it off in a little while to Sumit Dutta, who is our Chief Medical Officer. Overall, we see the specialty market as a huge important market. It's about 2% of the prescriptions but over 50% of the cost. We're approaching it from 2 perspectives. One perspective is as a pharmacy benefit manager. So huge need from a plan sponsor to manage this cost, whether the cost is on the medical benefit or the pharmacy benefit. So a key area for us strategically is to manage it holistically. And thinking about that and in the strategy is to help promote biosimilars, promote competition in the market. If you'll listen to our seminar later today, we're going to actually talk about this in depth. So we'll spend some time on there. In the services, more broadly, we're trying to create a health care system focused on care delivery in the biggest touch point in health care. And specialty is part of it, infusion, community pharmacies, multi-dose packaging, a whole suite of services that are addressing those complex patients, polychronic, with high needs. So I think it has tremendous opportunity in the market. And maybe I'll hand it to Sumit Dutta, who's our Chief Medical Officer, who can talk a little bit more around how we're differentiating ourselves in the market.

Thank you, John, and thank you for the question. I would add, I think there are 2 important things that differentiate us. One is our deep clinical expertise around managing the pharmacy benefit, and the second is the wide range of capabilities that we've put together. When you put the expertise across more than a point solution and across infusion, across specialty, across mail and our other capabilities, that's where you truly create differentiation. I might give one small quick example. If I think about the COVID-19 pandemic that we've all talked about, what we did very quickly is we had fast policy change. We had information to our clients. Over 1,000 people at the peak would call in. We changed our scripting to members to drive value, and we've monitored the supply chain. These are all examples of things that we've done to differentiate ourselves.

Great. Thank you, John and Sumit. Thank you, Robert. We're going to -- next question is from Kevin Fischbeck.

So I guess I wanted to drill down a little bit into that $1.80 that you guys mentioned as far as the COVID cost. I'm just trying to understand what you're trying to communicate by speccing that out. Is that -- are we meant to take that number and add that back when we think about the base for 2022? Is that the right kind of core number to be thinking about? And then just to clarify that $1.80. It seems like you're saying it's mostly on the health plan business. So I just wanted to make sure that, that is the way to think about it or if there's any impact on the Optum side of the house.

Great. We'll have John respond to that. But given that we're just releasing 2021 guidance today, I don't think we're going to flip to 2022 yet, Kevin. So we're not commenting that far ahead at this stage. As you might suspect, there's a lot of dynamics at play right now with respect to the pandemic and the economy and a number of other things. But John, do you want to talk more fully on the $1.80?

Sure. Good to see you, Kevin. A few elements on that, and just let me refresh. So kind of core elements, as you would expect, are the testing and treatment costs that we have embedded in our -- as we look towards 2021, meaningfully less impact from care deferral; and then all of the elements of care deferral that could also have impact; in part, also the fact, as I mentioned, that many seniors haven't even seen a doctor this year. So impacts their health, impacts our ability to close gaps in care. And so we take that into account also. And then just some elements, some economic impacts that we'd have come in there. You're absolutely correct. It is mostly UnitedHealthcare. I'd put that in the zone of, call it, a little greater than 2/3 UnitedHealthcare impact, as I look across the entirety of that. So there is some that pulls into Optum also, but a minority of that amount.

Great. Thank you, Kevin. Good question. Nice to have you with us today. Our next question is from Stephen Tanal.

Actually, just have a follow-up there on Kevin's. And John, I was trying to think about this, too. And really, David, if you could just comment on sort of what impacts are going to go into the base of the business and likely to be sustained? So obviously, the macro impacts and the [ industry ] effects, I think, are in that bucket. But then, there really are the nonrecurring stuff, maybe the direct cost of treating in vaccines, for example, I think you mentioned were some of the bigger swing factors in MLR. Wondering if you could kind of parse those out inside of the $1.80 and help us think about kind of, again, that like core underlying earnings power of the business.

Okay. John?

Sure. Stephen, good to see you. Yes, let me get a little deeper into that. So when I think about elements that are, as you've said, nonrecurring elements that would potentially -- that would carry through, so a few things to think about there. Certainly, I guess at this point, at this distance, we're not sure how long we should think about COVID testing and treatment costs continuing. Certainly, we have a view on 2021, but not moving into 2022 and what elements there might be in that component. Other elements that -- your question of kind of how far do they persist, I'd say largely in line with the economic elements. So to the extent that, for example, in Dirk's business, as we think about employer-sponsored business, and our expectation is that there will be more employees furloughed as we get into 2021. So what does that do to the base that you're stepping out into 2022 also? There's an element of there also in terms of investment income. Again, I would put all these elements in kind of the more -- in terms of impact, probably less material than what we're seeing in terms of the impact from testing and treatment and the impact of care deferral. But those are elements that you would also consider as you think about potential pull-through into other periods.

Yes. Yes, let me add on that. I think there's a key thing that John talked about there in terms of our membership and what we have from an economic impact perspective. So I think about the first quarter is there's going to be people coming off of furlough. We may have a little bit of a dividend in the first quarter associated with that. But we expect that some point next year, we're going to see unemployment subside. That's going to help us from a membership perspective. So as we think about next year, that's kind of the flow of how we'll have the membership and the economic impact. But to John's first point, as we go into this year, we have a run rate down from the membership that we lost this year.

And maybe one more element, Dirk, in your business also that we discussed in our commentary was, we do expect the states will begin Medicaid redeterminations at some point during 2021. So that does have some impact also in Dirk's business.

Yes. Yes. And so we do. We will expect that at some point, the redetermination relief will sort of end. Our -- we guided upwards with respect to membership, and we hope that our organic growth that we have with some of the states we've talked about before will be an offsetting measure on that front.

Great. Thanks, Stephen. Appreciate you being with us today. Our next question comes from Ricky Goldwasser.

So when we think about the key themes throughout this morning, it was really provision of care at lower cost sites. So maybe you can help us quantify the impact of these savings that are associated with better line in sight of care on total medical costs. I know before, you talked about medical care or medical cost of around kind of like 6% on the commercial side. If we think outpatient last year, you did quantify it closer to 8%. So how should we think about the opportunity to lower that, given the fact that we're seeing really an accelerated pace of move toward more digital caring, move to home care and outpatient surgery centers?

Great. Thank you, Ricky. Dirk, do you want to start at UnitedHealthcare maybe? And then I'd like to flip it to Wyatt, who I think probably has the most to offer in this subject.

Yes. I would say, Ricky, you kind of hit on them. I mean, as we think about our outpatient trend, it's 7.5% to 8%, and it's about 35% of our spend. There is an opportunity there. Clearly, we have had a good focus on moving surgeries and the like, and we've talked about movement to SCA for things like hips and knees. And things like that are very important. So we think about that. We also -- across the board, we talk about going to telehealth, for example. There's many different -- we've clearly had 22 million plus visits this year in telehealth. Those visits, at some level, are inexpensive. Our ability to move the -- what I'll call the normal, easy, pink eye type of incidents to that is -- are important. So I would say, moving to surgery centers, moving to telehealth are really 2 things which are -- we're working to try to drive to better sites of service.

Yes. And just -- Ricky, just as a reminder, UnitedHealthcare has worked with the entirety of the health system. So its sites of service initiatives are broader, go well beyond OptumHealth, OptumCare as well. But Dr. Decker, would you like to add on?

You bet. Thanks, Ricky, and thanks, Dave. So we are very excited about the opportunity to drive lower total cost of care by effective treatment sites that are alternative from traditional treatment sites. In a moment, I'm going to ask Caitlin Zulla to speak about SCA and our ambulatory surgical centers. But that's one important aspect is where do people get surgical procedures done. Another is when do they need to even leave their home, as we've touched on. So we have conducted over 1 million virtual visits this year in OptumCare. And over half of the visits, outpatient visits for Optum Behavioral Health, our behavioral health network, are occurring virtually. So there's been a massive shift. And of course, as the pandemic ebbs and flows, you see some fluctuations in how people are digesting or consuming their health care. But as you heard during the conversations already today, there is a massive opportunity for us to serve people on their own terms, in their own ways, in much more convenient fashions and deliver actually higher quality care in lower cost settings. So we're very excited about this. And Caitlin, maybe you can provide a little bit of color around SCA's impact in this space.

Sure. Thank you, Wyatt, and thank you, Ricky. So surgical-related spend is approximately 30% of U.S. health care spend, and the majority of it is still performed in hospitals and hospital outpatient departments, HOPDs, which are reimbursed at 2x the cost of a surgery center for Medicare and often far higher for commercial. And so as we think about how do we reduce the total cost of care, that site of service migration is so meaningful. When you take 2 of the service lines that John mentioned in his remarks, orthopedics and cardiovascular, within UHG alone, moving from HOPD to ASCs, there's over $2 billion site of service savings opportunity. So we are excited by the growth and the opportunity and happy to answer your question. Thank you.

So we could have taken that into any number of zones, so whether it be digital at home to a MedExpress or urgent care center to ambulatory surgical capacities, to the way in which we're managing care in the acute care setting or in the subacute setting as well, all of which have a pretty significant impact on the total cost of care as well as the impact on experiences and outcomes. So thanks for the question, Ricky. Next question, please. It comes from Lance Wilkes.

So my question is on OptumRx, and it's really related to kind of the growth in online pharmacy. And if you could just talk a little bit about your efforts in development and the status in online pharmacy, are you looking at Amazon or others as far as being your network from an online pharmacy standpoint? And then maybe more broadly, thinking about your reinventing care delivery, how does online pharmacy or that touch point fit into the -- your view of what health care looks like in the future?

Yes. We'll have John Prince start with that. But obviously, as you probably could tell from the opening remarks as carried out through this morning, it's an integral part of a next-generation health system broadly. And we should never lose sight of the fact that you need both the digital and physical realm of health care coming together. But also that it is a system, and that system is much more complicated than in any single dimension. And that's part of what we're trying to bring forward for you today. John Prince, you want to respond specifically to Lance's question?

Sure. Lance, good to see you. In terms of the consumer trend, we've been at this for several years. We've actually noticed that trend, and we see it from several perspectives. First of all is consumer affordability. Consumer affordability within pharmacy, the biggest touch point, has been a big issue as well as the experience, as well as having a seamless ability to handle the whole needs of a consumer. And so we've been investing in this from several perspectives. First of all is our tools. We've been investing in how we work with people digitally. We talked to you in the past around PreCheck My Script, MyScript Finder, tools that allow an individual to shop more effectively, make better decisions on their own. We've rolled those out. They've had huge adoption for that. We've also been focused on affordability tools such as discount cards. We've been in this business for more than a decade. We rolled out our own branded card this year called Optum Perks, which is a few steps and you can get your discount. We've added $100 million of value to consumers' pockets because of that. We've been investing in our own e-pharmacy. We've been -- as Dave mentioned earlier today, we've launched Optum Store. We've launched an e-pharmacy in addition to our home delivery. So we have a whole bunch of strategies to serve this key need in the market, and we've gotten great adoption. These are businesses that are growing strong double digits. We see a huge market opportunity, and the pandemic has really allowed these businesses to accelerate because it was fit for our market need. Specifically to your last question, we have a variety of different partners in our network. Some of the ones that are coming new to the market, they are part of our network. We continue to evaluate whether they will be in different networks based on the client and the consumer need, but we continue to see good opportunity. The last piece I'd say that we're also excited about is our multi-dose packaging. We have a now really strong offering in the market there, which augments our home delivery and e-pharmacy. So good opportunity and expect continued strong growth going forward.

And you can get the last year holiday shopping done at the Optum Store with free shipping available to everybody. Thank you, Lance. Nice to have you with us today. Our next question comes from Charles Rhyee.

Yes. Great. Can you guys hear me?

Yes. Yes. Appreciate it.

My question, I want to go back to a lot of the virtual care capabilities that you guys discussed today. And wanted -- 2 things, I guess, really is you talked about the nerve center and unable to generate about, what, 400 million alerts through the collection of information. Trying to understand that when you are providing those devices for patients, is that part of the benefits that they receive so the members get those devices sent to them? And then really more with these alerts, can you talk maybe about how many actions that came out of it where you were able to proactively then intervene with members to maybe avoid unnecessary costs? And then maybe related to that, you talked about point-of-care assist as well here, able to -- I think about -- the number was 30% of members were able to -- sent to a lower cost of care. Is that product being sold to other payers? And maybe talk about how that uptake with payers other than UHC is kind of trending.

Charles great questions, appreciate it. I'm going to ask Brian Thompson to respond. And part of the reason I'm asking Brian to respond is, Brian was really the innovator around the development of the signaling platform and really kind of pushed the organization broadly to more closely monitor seniors while they're in their homes so that we could better serve them. BT?

Yes. Thanks for that. Actually, I just was grateful to lead a lot of people that had a lot of great ideas. I would say kind of yes to all of those things, actually, Charles. It, first and foremost, starts with identifying folks that we know have conditions. We provide specific devices to them based on their condition. It's a variety of them, from continuous glucose monitors for diabetics to things like weights and scales for fluid retention in areas like CHF to a variety of other items as well and have expanded that here recently obviously with the COVID pandemic. We reached out directly to our members that we knew were high risk and tried to help enable them to stay in their home where they were safe. So it starts with devices, but those are only interesting and not instructive if we can't to act upon it. And that's where really, I believe, the value comes into play. And that's largely our support teams inside Optum, and that's where we really make that transition from technology to people. We've invested meaningfully in our navigators. And they have their phone number and their name, not just a number on the back of a card that they can call and engage with our members. So the nurse center includes real-time monitoring. Examples where we've used that to stop an event: low blood sugar is an example. Fluid retention is another example. Dehydration, we can meet that with actual nurses in the home. We can do it via telemedicine. We can see the signals coming through the nerve center on the devices in their home. And of course, what I find to be the most valuable is that personal relationship. When they feel scared or vulnerable, they're calling their navigator to whom most of our seniors at risk have a name and a phone number. So a variety of different interactions certainly coming to life here during the pandemic, and we're certainly pleased with the traction and perhaps even more so with the optimistic view of what we can do with this going forward.

And Charles, if we didn't have those million signals filtered through artificial intelligence, we would just get inundated with a kind of noise. And so what happens on the back end of all this is that what our clinicians receive are filtered signals to assist so that we direct care to the right patient at the right time. Thank you, Charles. Our next question and our last question comes from Whit Mayo.

Really, a 2-part question. Can you maybe give us a sense of what the cadence of the $1.80 looks like in 2021? And really, my real question is following up on Charles' with the help-at-home strategy discussed. As you deploy that nerve center, I think you said, to 4 million MA members, one, is that right? And how did you select those markets to deploy the technology? And three, what does your Optum provider network look like within those markets?

Sure. John, you want to start with the first? And then I'll come back to Brian Thompson as well.

Whit, maybe the best way I can help with that is think about how we would look at seasonality for 2021 versus historical seasonality. And I would say it's generally in line when you look at first half/second half with the historical seasonality we've had in our business, that roughly, say, 48% of our earnings are generated in the first half, a little bit more in the second half. And so that would be the kind of the general move we'd expect. So a similar overall quarterly seasonality within that. As you likely expect, there are kind of elements that are differing and playing across the businesses, given the assumptions we've built in here. But still, a general overall typical seasonality for first half/second half earnings progression.

And Brian?

Yes. I'd say it's all of our markets. Obviously, we have more than 4 million members enrolled -- or across our book, but all of our markets have this option. And where our touch points are, are where our folks are most vulnerable. I would say our most innovative partner is certainly where we have aligned physicians like OptumCare, but we have those capabilities in all of our markets.

Good. Thank you, Whit. Nice to have you with us here today. Unfortunately, that's all we have time for today. I'd like to thank our team for their time and participating with us today and answering your questions. And finally, on behalf of John, Dirk, Andrew and myself, thank you for participating in the morning session of our virtual investor conference. We appreciate your time, and thank you for your thoughtful questions.