UnitedHealth Group Incorporated (UNH) Earnings Call Transcript & Summary

Good morning, and welcome to UnitedHealth Group. Thank you so much for joining us here today, and we look forward to spending the next couple of hours with you taking you through our story here at the company. It's about 45 years since UnitedHealth Group was first incorporated. And as many of you recognize, it's almost unrecognizable today from what it was back in the late 1970s. It's evolved from being a company initiating to look for coverage for folks grew through an year of figuring out how to develop policies to help influence best care delivery, extend it into care delivery itself. Those years of evolution have really been a response to market dynamics to the needs of the environment to the needs of consumers and the needs of payers. And the company has responded repeatedly with an agility and an energy to grow and change. And yet after 45 years, the team you're going to meet today, our team stands fairly more optimistic that our greatest potential still sits in front of us. We still feel complete commitment to our long-term adjusted earnings growth rate of 13% to 16%. We believe that despite all of the achievements of the last 45 years, the scope for further impact is larger going forward than it has been even behind us. And today, we look forward to sharing the reasons why we believe that, why we think those opportunities are real and within our grasp. We're going to do that through the lens we laid out last year, the growth strategy of UnitedHealth Group built on our 5 growth pillars. Those growth pillars are guiding us. They how we run the company, they how we keep score within our own organization. And you're going to hear over the next couple of hours, how we feel that's going, the progress we're making and you're going to -- we're going to share with you some of our scorecard in terms of how we think things are playing out. To recap those 5 growth pillars really quickly, value-based care, how we can build an ambulatory value-based care system comprehensively looking after patients, figuring out a way to deliver more quality at lower cost, better medical outcome. Benefits, how we can continue to develop affordable, high-quality accessible health coverage for people regardless of their status across our country. Health technology, how we can bring the benefits of health technology to payers and providers across the country to be the greatest supporter of the general development and innovation of the health care system. How we can bring to life the opportunity of financial services within health care, a key strand which drives much of the system and represents great opportunity for simplification and streamlining. And last but not least, the relentless modernization of the most common touch point in health care, pharmacy services, how we can develop a pharmacy services platform for the future and 1 which can really respond to technology and innovation, which is coming from the pharmaceutical industry. Those are our 5 core growth pillars for this organization. Each one of those individually represents tremendous scope of opportunity. Each one of the 5 are already very big businesses within UnitedHealth Group. They all represent engines of this organization. You'll see all 5 of those represented to you this morning. You'll see the progress they're making and the growth they're achieving. They all exist within large addressable marketplaces. And in most cases, we're really now, despite our size, only scratching the surface of the opportunity that lay ahead. And you'll see some of that described to you. But in addition, and importantly, in addition to those significant focused engines, they have something else very special. They all help each other. They all play together in ways which make each one stronger than they could possibly be standing alone. That ability to connect the system to find ways in which financial services can support value-based care, find ways in which pharmacy can help our benefits business. Our benefits business can inspire our delivery business. That's where the true energy of this organization lay. Let me bring that to life a little bit by diving into value-based care. Think about what we're building within OptumHealth. Of course, the clinics, the focus on building out clinics, but as you look at the way in which that has grown step back, where did it come from? The inspiration for that entire strategy comes from our benefits business. The benefits business conceived the notion of how we could develop value-based approach, Optum began to build in response to that. That build begins around clinics. It then assembles other capabilities, different types of specialists. About half of our physicians are primary care, about half of specialists. We work with employed and contracting and affiliated clinicians many different models being deployed. You see the pace at which that business is developing. This year already, we've transferred or grown 1 million more lives looked after within our OptumCare value-based platform. Next year, we're expecting to add at least 750,000 more. That pace of growth is becoming -- is coming through because of that growth of capabilities that's been established. But it's not about the clinics. It's now about home and community. And as you think about next year, of the very substantial number of lives, which will be looked after by the home and community risk-bearing entity platform complementary to the clinic platform. About half of those lives looked after by home and community are in geographies where we have no clinics. And so the home and community platform itself gives us yet another opportunity to extend the notion, the idea that we believe in that comprehensive value-based care delivers better medical outcome, better quality for patients, a better role for providers and crucially better value for money for payers. We think it's a truly sustainable way to modernize the health care system for all of the key participants. And as you think about that value-based environment, not only was it originated conceptually from the Benefits business, not only has it assembled these capabilities, it's powered by our data. It's powered by our understanding of the system. It's helped by the way in which our pharmacy capabilities, home infusion can complement our clinical capabilities in OptumHealth. It's a good example of how all 5 of the engines start to work together to help that particular engine continue to work strongly. As we work those ideas, the key then is to figure out how to grow them. And as you look at value-based care, you'll see 2 dimensions on which you could easily imagine that continuing to grow substantively. One is already within sight, and we've [ cloud ] that for well, and we will continue to do so geographic expansion. Not just through M&A, not just through organic expansion of our clinics, but for example, through home and community where we find a new way to bring the good idea to people's homes without necessarily having to wait for the build out of the clinic strategy. It's a great way for us to accelerate the delivery of what we believe to be a highly effective, extremely sustainable approach to more people more quickly. The second area is to conceptualize the way in which we take a great idea, comprehensive value-based care, which, of course, has been pioneered within the senior marketplace and take it to a different part of the marketplace. Commercial, 170 million Americans in the commercial insurance environment, the opportunity to innovate in that space feels right, the timing feels right. The rails that we're build in within OptumHealth creates a set of capabilities and instinct a muscle memory within our health system, which we know works for seniors and we are confident can be developed and built further for the commercial environment. Those 2 dimensions, geographic and moving across into different classes of business represent enormous future potential growth for the organization and are high on our list to move forward. You will hear about all of that in the next couple of hours. What we try and do across the organization is relatively simple, and it repeats and repeats across the company. We try and understand the complex environment. And then we try and translate it and make it simpler for the people who live in it. We want people in America who need health care to be able to access it without needing a PhD in health care to do it. We need people to feel confident that when they come for care, they're going to get great care and they're not going to be bankrupted in the process. Our job is to translate that complexity and make the extraordinary capacity of the U.S. health care environment available for everybody who needs it. We're incredibly focused on making sure that that's true across the spectrum of people in the country, whether they are poor, whether they're rural, whether they're urban, whether they're veterans or whether they're conscientious objectives. We want to create a system which works for everybody, and we're working hard to make that happen. We believe that within that agenda, that commitment to the mission that there is tremendous ongoing growth in this organization. You will see that reflected, and I hope you saw that reflected last night in our confidence for next year. Now to do all of that, we also need to do 2 other really important things to bring some high-octane energy to the future growth of the organization. The first is to become and learn how to be a preeminent consumer organization. The future of health care in no scenario is a future where the American consumer has less influence than they have today. In every scenario, the American consumer, the American patient has more influence in the future than today. We need to build and respond to that. That's why you've seen in the last 12 months, enormous steps forward in the company's stance towards the consumer at every level, our agreements with Walmart, our partnership with Red Ventures Health are both designed to engage us at a level with the American consumer, where we've been nowhere close to before. Whether people want to meet us on their shopping visits to Walmart, whether they meet us through health grades or health lines, those hundreds of millions of people a month who are trafficking through those digital environments or through those stores, those are our customers. They are the customers of the future. Theirs are the voices we have to build and respond to. You will see more and more emphasis in the organization as we lean into that consumer agenda. It's important we do that. Those consumers are, of course, our customers. They either are or they will be our patients. They are or will be the decision makers on how care evolves. And there are scenarios, as you imagine, things like commercial, health insurance, maybe 1 day evolving for being a defined benefit to a defined contribution environment, where you can anticipate the consumer's role becoming even more critical. Building the capabilities ready for those scenarios are no regret moves and help future-proof our long-term growth over the next decades. Second area that we need to make sure that we accelerate at pace is technological capabilities. Our ability to bring value from all of the data and the connectivity that we have across the system is crucial for us to make sure that we bring to customers, consumers, patients and providers and to payers exquisite right first-time advice, exquisite understanding of opportunities to take cost out of the system and figure out where are the no regret places that we can stop care without necessarily impacting outcome and where we should increase care because we know it maximizes benefits to the patient. That's a data challenge. How we bring that data to life again, we're just scratching the surface. But we're at a moment in time where technology and the availability of talent is an extraordinary fertile opportunity for this company to leap forward, both in technology and its application and in the way in which we drive a consumer orientation in the business. None of that takes away from being a hard core organization focused on medicine, health care and, of course, fiscal thoughtfulness. But in addition to all of those things, making sure that we are a strong consumer-led and strongly technologically empowered organization are areas for us to continue to build on. You will hear a lot more about that over the next few hours and I encourage you to engage in the seminars also as we get into that. Now to achieve all of that, we really need to have an extraordinary organization of people. And I'm incredibly privileged to stand here representing 380,000 people across the world who support UnitedHealth Group every day. Those people do an incredible job, whether they are answering calls, whether they're going into a seniors home to help understand that person's health needs, whether they're making sure that our financial strength is there for us to make the next move in our strategy, whether they are simply making sure that the machine of the company turns every day the way it needs to. We depend on all of them. The diversity of that skill set is proliferating fantastically well. You have to have that diversity in every sense because we now need strong consumer capabilities. We now need much more advanced, more modern technology capabilities. We need more physicians, more clinicians, more people who've got empathy with the system. It's an extraordinary statistic for me the most extraordinary statistic of today. So far this year, 3.9 million people have applied to join UnitedHealth Group as an employee. That is an extraordinary signal of how people want to be part of this journey. Why do they want to be part of this journey? Because they can see in this company, an ambition to grow, yes, they see in this company a deep commitment to quality, yes, they see in this company an extraordinary commitment to putting the patient first, yes. A culture which values performance, yes, a culture which holds ourselves accountable for doing the right thing every single day when people are watching and when they're not watching and delivering performance for all of our stakeholders. You're going to see over the next couple of hours and in the seminars later today, 60 of my colleagues. A 1/3 of those 60 have joined us in the last 2 or 3 years from other Fortune 100 companies. There is a mix of experience there. People have been here for decades, people have been here for a much shorter time. People have come from the biggest tech companies in America to the biggest consumer companies from pharmaceutical industry and from government. It's that diversity reflected in the 60 folks you're about to meet reflected down through 380,000 people across this organization, which gives us the confidence to be able to commit to the growth that we're laying out for you today. We believe it's built behind a great mission. We believe it's built on the shoulders of values. It's built on a culture of quality and performance, and it's built on a culture of holding ourselves accountable for delivery. We're going to take you through that. We're going to share that with you, and I hope very much you see at the end of the day why we're so confident our potential is stronger in front of us than it even has been already. Final reason why these 60 people are coming to this company, why these 3.9 million people are applying to this company? Why the 380,000 people turn up every morning to work hard for this company is because they know in this company, they can make an impact on health care and not just in a small pilot example, not just in an experiment, but when their idea works, it can affect millions of people. It can change the lives of millions of families. It's the impact that people are seeking is the opportunity they have to do that at this company that brings them to UnitedHealth Group. It's what brought me to this company. It's what brought the 60 you're about to see from this to this company. I welcome you to this conference today. Please engage. We look forward to sharing everything we have with you. And with that, I'm delighted to hand over to Dirk McMahon, our President and Chief Operating Officer.

Thanks, Andrew. That's certainly true for me and the reason I've stayed with the company for nearly 20 years. During the next hour, we're going to dig deeper into the growth strategy, powering that mission, introducing you to the people bringing it to life, leaders who've grown up in the company and others who've recently joined us. You'll also meet some of our colleagues in the front lines who are carrying out that mission each and every day. 1 patient, 1 member, 1 customer at a time. As you just heard, we're making real progress staying laser-focused in our execution and always looking for ways to innovate, drive better value and serve more people. You'll see over the course of the morning, how each pillar of our growth strategy is delivering results on their own as well as how the interconnectivity between them spurs innovation, creating value that extends well beyond our walls. Each one is an enterprise effort where Optum and UnitedHealthcare leaders are operating across individual lines of business and P&L responsibilities to drive enterprise value and to deliver specific performance and financial targets year-over-year, quarter-by-quarter. So as the session unfolds, I hope you'll hear a few key themes pulling through. One, durability. We're a company whose model is built to perform, respond. And if I have a thing to say about it, relentlessly improve over time. What we're really talking about here is building a consistent, well-balanced growth on the strength of our core market positions. The 46 million Americans enrolled in UnitedHealthcare benefit plans, the 129 million consumers we serve through Optum. Our 200-plus payer relationships, 4 have every 5 in the marketplace and the more than 1.4 billion adjusted scripts we manage each year. Next thing, innovation. Building and refining new capabilities on top of these market positions and strengthening the connectivity between each of them. You saw from Andrew how we're working to expand the number of people benefiting from value-based care, but we're going to show you how we're taking that model to a whole new level. For health benefits, you'll see how we're continuing to elevate our value proposition across our commercial businesses and government programs by further integrating our care delivery, technology, financial services, pharmacy and consumer capabilities and all that we do. How we're moving beyond the traditional PBM model to provide pharmacy services, coordinating care for those with the most complex needs and how we're continuing to commercialize health technology and health financial services to support other payers, care providers and consumers across the system. Finally, a laser focus on the consumer. Today, people are more informed and empowered than ever before, able to get most anything with the touch of a button, the American consumer is in the driver's seat. And it's not a leap to think about how those expectations are carried over to health care, better access to their own data. Simpler means of transiting a system, they once accepted as too complicated to do on their own. There is a recalibration of the expectations people have for health care. And today, you'll see how we're working to bring the system in line with those expectations. Now I promised Andrew and John, I'd stay away from the sports metaphors. So I'll take 1 from my days in the airline industry. Each growth opportunity is at a different level of maturity. Health benefits is the furthest in flight. Health financial services is just getting pushed back from the Jet Bridge, but they all have tremendous potential for future growth. Okay. Throughout the day, I'll come back at the end of each section, and we'll hit on a few important numbers and themes together. So with that, I'd like to bring up Dr. Wyatt Decker to take you through our value-based care delivery strategy. Wyatt?

Good morning. As a practicing emergency physician, I've seen the best and the worst of the health care system. In my 20 years at the Mayo Clinic, I witnessed life-saving interventions by some of the world's best medical teams and I've seen far too many instances or a small gap in care, something as simple as a missed prescription refill, led to a life-threatening condition that could have been easily avoided. That's why UnitedHealth Group's long-held ambition is very inspiring to me to provide high-quality, comprehensive care through a value-based system to millions more people. Connecting every part of a person's health, delivering better outcomes at lower costs. We started this journey well over a decade ago. Today, our physician-led network encompasses more than 2,200 sites of care across 44 states, serving more than 20 million people. As we look to serve even more people more comprehensively, we are further integrating and expanding our capabilities in many ways. First, growing our clinics, reaching more people within the communities we already serve, while growing our presence in other regions. Second, continuing to bring other modalities of care, including virtual and behavioral health, we're integrating behavioral and medical benefits and care, delivering outpatient mental health services in 37 states and offering a growing set of virtual and digital capabilities to patients across the country. We're also expanding our ability to deliver high-quality care in [ norm ], helping more people manage multiple chronic conditions, providing a broader spectrum of clinical services and supporting more people as they manage post-acute transitions. As they manage those transitions into skilled nursing facilities and we're helping them return home even sooner. As we expand how and where we reach more patients, what sets us apart is the growing connectivity within our capabilities that deliver truly differentiated, comprehensive experiences. And while there are different models to align incentives, our experience shows us the most impactful our fully accountable arrangements. Today, our care teams are managing the complete health of more than 3.2 million individuals through these relationships. That's 1 million more people than last year and more than double the number of people just 3 years ago. And in 2023, we expect the total number of people we serve in these relationships to grow to 4 million. One of the most compelling reasons for this continued growth is the outcomes we deliver and the quality of care we provide. Primary care providers working in value-based clinics have more touch points with their patients and offer more coordinated care than fee-for-service. Care teams have more time to focus on addressing their patients complete health needs. Under our value-based care, patients complete annual wellness visits at a 24% higher rate than people in fee-for-service, allowing care teams to address issues earlier. These more frequent touch points and incentives around whole health, paired with advanced clinical technology show up in the quality of our clinical outcomes. Let me give you 4 examples of how Optum's Medicare Advantage patients are experiencing better outcomes than people in MA plans receiving care from other providers. Our patients achieved hypertension control 14% and diabetes control 7% more often. Our patients also have comprehensive medication reviews 7% more often. And after hospital discharge, medication reconciliation occurs 39% more often, which is an incredibly important step in avoiding adverse drug reactions. Now I'm going to turn it over to Caitlin Zulla, who's going to talk about the opportunity we have to drive quality and affordability by optimizing the site of care.

Thank you so much, Dr. Decker. The site of care has a powerful impact on both patient outcomes and costs. Our ambulatory surgery centers deliver better patient outcomes at half the cost of hospitals. And we know effective home-based medical care, can reduce hospital admissions, ER visits and time spent in skilled nursing facilities by 15% to 25%. The ability to guide patients to the right level of care in the right setting and at the right time and bringing together all the right pieces to offer a comprehensive experience that empowers both the care provider and the patient are critical elements to effective value-based care. For us, this usually starts with the primary care physician. Building our physician-led network over the past decade has been anything but a one-size-fits-all approach. But there is a common thread from large-scale local care delivery organizations to individual physician groups. They all share a desire to elevate patient care and deliver better outcomes in the communities they serve. And as we grow our ability to serve more Medicare Advantage patients more effectively, we're continuing to invest in capabilities to expand our value-based care opportunities in new and interesting ways, like exploring other types of strategic partnerships. Similar to the one we recently formed with Walmart and further accelerating the adoption of value-based care to the 170 million people who have coverage in the commercial market to serve far more people than we do today. And that brings me to Kelsey-Seybold Clinic, who's been serving the Houston area for over 70 years from pediatrics to senior care, they deliver high-quality compassionate care in 35 locations, supported by nearly 700 care providers in more than 65 specialties. And they're 1 of only a few organizations in the country with deep experience serving Medicare Advantage and commercial patients through value-based arrangements. Joining me now is Dr. Tony Lin, CEO of Kelsey-Seybold. Tony thanks so much for joining us.

Good morning, Caitlin. Thank you for allowing me to be here. I'm honored to be with all of you today to talk about our future with Optum.

Well, thank you for being here. It's amazing to see you I have so enjoyed going to Houston and getting to learn more about Kelsey-Seybold, I'm sure there's many here who don't know as much. Can you share a little bit about Kelsey?

Of course Caitlin, value-based accountable care, it's the core to our mission at Kelsey. We introduced our first commercial risk plan in 2008. And 15 years later, we're now serving large and small employers, nonprofits as well as municipalities and school districts.

So 15 years' experience in commercial risk. That is truly unheard of. Can you talk a little bit more about what your experience has been?

Yes, patients in our Kelsey care plan are thriving. And the outcomes are measurably better compared to the fee-for-service patients, starting at the very top, Kelsey care plan members comply with their preventive care plans at 13 percentage points higher than their counterparts. About 73% of our diabetic patients are compared to their counterparts at much higher percentages, 73% compared to 51% in better control. It's actually a very similar story for hypertension. Blood pressures are in good control for 73% of those patients compared to a national average of around 49%. So all good.

Those clinical outcomes are incredible, and I know you care as much about cost. Can you talk a little bit about impact on total cost of care?

Yes. We have seen great results on costs as well. Our care coordination on complex patients has allowed us to achieve about 15% to 20% lower total medical costs. And that includes 40% fewer bed days and 30% lower emergency utilization. As the quality goes up, the cost comes down. Caitlin, that's our textbook definition of what we've been all searching for in value-based care.

I could not agree more. That truly is incredible. And one of the many reasons we're so excited to have you part of Optum. Can you talk a little bit about what joining Optum has meant for you in your Kelsey-Seybold team?

Definitely. We know Optum is here for the long-term, helping us to continue to build on our strong foundation. Optum will help physician now to serve even more patients, more seniors and even our diverse communities in our regions. Being part of this organization, Caitlin, means that we could start tapping into the full scope of the UnitedHealth Group capabilities that we'll talk about this morning. Pharmacy services, advanced technologies, and Caitlin, I'm going to tell you that we -- I am especially excited to be able to share what we are learning in Houston, especially on the commercial part of the business.

Well, I know that we cannot wait to learn alongside you. Thank you so much, Tony. We really appreciate you. And with that, I will turn it over to Kristy Duffey to explain how we're expanding our in-home capabilities.

Thank you, Caitlin. And good morning, everyone. As a geriatric nurse practitioner in the ER and ICU, I learned quickly if basic needs aren't met, everything else becomes nearly impossible. I saw so many missed opportunities to prevent our most vulnerable patients from ending up in the hospital because they didn't have access to the care that they needed. So we are expanding the ways we reach people, caring for them and the comfort of their homes to address their medical, behavioral and their social needs, which is especially important for the growing number of Medicare [ dual ] and chronic special needs patients who require a far more individualized approach to care considering the compounding challenges they face in their daily lives. On average, they're managing 9 different chronic conditions. Many are disabled. They lack transportation and they live in remote areas. They're trying to manage multiple medications and about 40% struggle with mental health issues. That's where our team steps in, thousands of dedicated Optum clinicians delivering value-based care in their home, bringing together physicians, nurse practitioners, social workers, pharmacists and other experts. We are bridging home and clinic and coordinating care for the most complex patients. If a patient doesn't have a primary care physician, we connect them with one. And we serve as an extension of that physician helping to coordinate care. Our clinicians and care teams, they get to know their patients, building relationships and earning their trust. Our home care model is centered around our patients' needs. As their health status changes, we adapt our visits and can spend over an hour with them depending on the complexity of their needs. We might see a patient several times a week, a few times a month or multiple times a year. And if a patient has an urgent need, we will see that patient the same day. With this level of support, our patients are highly engaged in their care. More than 90% have a primary care physician and are 8% more likely to visit their doctor each year than patients who are not in our program. This is leading to better outcomes, including a 12% reduction in hospitalizations, high patient satisfaction with an NPS of nearly 80 and 99% of our patients are in a 4-star or higher plan. This is only possible because of our access to the broader capabilities of UnitedHealth Group. This past year, we doubled the number of people we serve with this approach to home-based care across both existing and new payer relationships. Dirk?

Expanding value-based care requires long-term planning and investments in both people and capabilities in each of our markets. For people, we've added 10,000 more physicians to our team this year. For capabilities, we're putting the right building blocks together and taking the traditional model to a whole new level, seamless coordination across all sites of care, integrated pharmacy and behavioral care, delivered increasingly in the home. In fact, you can expect at-home capabilities you just heard Kristy talk about, will generate a significant portion of our value-based care growth next year. So just a couple of numbers to punch this up. In 2022, we added 1 million new patients in these arrangements, 700,000 through organic growth and we hope to add another 750,000 through organic growth in 2023. And as we continue to expand the number of payers we support, there's still a ton of runway ahead. By 2025, 70 million seniors will be eligible for Medicare. Then think about what Dr. Lin and the team at Kelsey-Seybold, think about the 170 million people who have commercial insurance in America. We're not even scratching the surface in terms of what's possible. So with that, let's jump into our health benefit strategy with Brian Thompson.

The health benefits business continues to perform at a high level by delivering value to the diverse customers we serve. And as Andrew noted, we are preparing for an even more consumer-centric future, fueling innovations that better meet the needs of people, communities and employers who rely on this marketplace. In Medicare, we're leading the way, focused on addressing the broad health needs of seniors with more value-added benefits at low or no cost to them. In Medicaid, we continue to win and expand into new states with record growth over the past 18 months and an RFP win rate of over 90%. And in commercial, we're off to a strong start to 2023. Increasing innovation in our consumer offerings while preparing for a future where consumers have more choice in how they get and pay for health care. The diversity of our businesses, products and solutions position us well, well to succeed in the evolving marketplace, including in the near-term, the redeterminations process, and that will require many people to seek new coverage over the next couple of years, and we're ready. We've grown our exchange footprint significantly with plans now available to nearly half the U.S. population, and we have significant distribution capabilities. So we can help individuals find the UnitedHealthcare plan that's right for them. We're confident our vision will enable us to serve even more people as we focus our work in 3 key areas: first, making care more affordable; the second is simplifying and personalizing the consumer experience; and third, providing quality care in the home virtually and the community. And all this work is powered by our ability to bring consumer-centric tech forward Optum-enabled solutions to the market. This year, you've seen us take some steps to lead the industry in novel directions. We're making it easier for customers and consumers to get the most out of their benefits and making it easier for providers to do business with us, from our move to provide access to insulin and other life-saving drugs at no cost to the member to meaningfully reducing prior authorization requirements. So providers can focus on delivering care. We're hungry for change and we are ready to lead. All right, let's get to it. I'd like to welcome Brandon Cuevas to explain how we're making care more affordable and driving growth across our benefits businesses.

Thanks, Brian. Affordability remains the single biggest issue for consumers and customers. We've talked to you in the past about our efforts to bring down total cost of care, and we've made excellent progress improving our network competitiveness over the last few years, but it's more than that. We're investing to drive real value for our clients and our members. We're adding new tools and capabilities as well as innovative benefit and network designs like accountable care organization based health plans, self-funded solutions for small employers and consumer cost estimators. All of these innovations are designed to help people make more informed choices and save money. This is especially important in today's economic environment, where we are helping people maximize their health care benefits and get the most for their health care dollar. Brian mentioned our move to eliminate out-of-pocket cost for life-saving drugs and we are continuing to explore new ways to offer rewards and incentives that enable people to access care without paying out of their pocket. This type of first dollar coverage removes consumer costs while improving access to preventative and chronic care. Take our Surest product, which is unlike anything else in the industry. It provides first dollar coverage by eliminating deductibles. Surest provides cost transparency for consumers, giving them clarity and certainty with a premium designated provider network, allowing us to eliminate high deductibles, coinsurance and other financial barriers to care leading to high satisfaction for members and reducing cost by up to 46% for members and up to fifth percent for employers and customers and their employees are taking notice. In 2021, about 1 in 25 of our national accounts offered Surest in 2023, 1 in 9 will offer it, making sure it's one of the fastest-growing commercial offerings. Now affordability is the first thing customers and members consider when picking a plan, but experience is essential. Qian Qian Tang will discuss how we are making care more personal and easier to use.

Thanks, Brandon. After cost, the next biggest pain point for our customers and consumers is how difficult it is to navigate the entire health care system, including benefits. Our job is to make it simpler. We're doing this through digital and personal solutions designed to anticipate people's needs and provide next best actions. Using a multichannel platform, chat digital text and call, we're engaging people at every step of the way. In Medicare, we are engaging seniors even before their benefits take effect, allowing them to start taking advantage of services like scheduling an appointment or earning an incentive. We're also simplifying their experience with innovative products like our integrated card powered by Optum Financial, consolidating separate member benefits and incentives into a single, easy-to-use card that can be used at tens of thousands of retail locations to buy groceries and OTC products. This integrated card was available to 180,000 people this year. In 2023, we're bringing it to more than 7 million people. This is a great example of how we can quickly test, scale and deliver innovation to market. Once members are signed up and have access to their benefits, they can use provider search and online scheduling to see the right doctor. User cost transparency tools to understand what they will pay and tap a digital wallet to cover the cost of the visit. For example, NPS scores for members who use our cost estimate tools were 20 points higher than those who haven't. We see a huge opportunity to help address fragmentation in the marketplace, addressing the point solutions Andrew referenced earlier, so we can simplify the consumer experience. One way we're doing this is through our programs that advocate for our members. Our advocacy work started by helping members and care providers understand their next best actions. We then developed personalized service solutions for those with special or complex care needs. Our advocacy service solutions help members achieve better health. For example, our solutions led to a 42% increase in closing gaps in care, up to 15% lower ER visits and an over 10% increase in clinical program enrollment compared to customers who utilize our standard service offerings. And our advocacy service solutions also support the affordability work Brandon discussed. Leveraging data points and signals such as diagnosis codes and claims data, our advocates can help people navigate to higher-value options either before they seek care or in real time while they're in the doctor's office potentially saving hundreds or even thousands of dollars in out-of-pocket costs. For employers, these programs mean better health outcomes and a more productive workforce as well as total cost of care savings of up to 4% each year. And we're able to provide a single integrated platform to manage the experience and health of their employees versus a portfolio of disconnected third-party point solutions. Through the combination of digitization and a human touch, we are anticipating people's needs, meeting them at the right time, right place and with the right experiences to guide them on their health care journey. With that, Bobby Hunter will share how we are meeting customer needs in their homes and communities.

Thanks, Qian Qian. Convenient access to health care, whether it's virtual, digital or physical, not only improves health but also helps ensure more equitable care for the people we serve. HealthEquity is built into everything we do and care in the home is no exception. House calls has been the centerpiece of our home care model for government programs for years. We expect to complete 2.2 million house calls this year, bringing personalized care into the home to address both immediate and preventive medical care needs in addition to social needs, including access to healthy food, safe housing, transportation and medical appointments and more. We have been testing people for underdiagnosed conditions such as diabetes, prediabetes, hep C and colon cancer. And what we found is nearly 1 out of every 4 people we screened had a condition, they didn't realize they had and the hep C positivity rates for dual special needs members are nearly double the national average. Based on the program's continued effectiveness, we are expanding house calls to deliver even more clinical services. For example, this year, we began providing flu vaccines and we are adding COVID-19 vaccines and boosters. Additionally, we are committed to identifying even more ways for house calls to make high-quality clinical care more convenient for our members further solidifying the home as a primary setting for clinical care. And while many of our visits represent an opportunity to provide routine care, it's not unusual that we find someone with a dire need. Let's take a look at Margaret's story. [Presentation]

Margaret's story is an incredible testament to how we are bringing clinical care right into the home to help manage it even avoid critical health issues. And while the HouseCalls program is key to addressing social determinants of health, we are also tackling disparities in the communities where our members live and work in other ways. This year, we expect to screen more than 5 million members for social needs, barriers to wellness and other risks that significantly impact health and quality of life with approximately 1 in 4 members wanting help. In addition to member screenings, we are also partnering with federally qualified health centers and community-based organizations to address needs on a larger scale targeting our efforts at what matters most in each community. In Kansas City, we've increased behavioral health and dental care visits for expecting mothers, supporting improvement in full-term birth rates. And we've also increased postnatal care appointment attendance by 90%, helping moms and babies stay healthy and thrive. Given the success of these programs, we are doubling the number of federally qualified health centers implementing these interventions and bringing private sector employers to the table to help accelerate these efforts. For example, we are working with the University of Tennessee, local employers and community organizations to create a health hub where health coaches will provide support for weight loss, blood pressure control, medication adherence and more. The goal is to provide a holistic approach to improving health outcomes and do it at no cost for neighborhood residents. So from the doctor's office to the living room, we are bringing high quality care to people wherever and whenever they need it. Sometimes, even before they know they do. Now let me turn it back to Dirk to wrap things up.

So 2 things I want to put a button on. First, Medicaid. As Brian mentioned, we've seen a record growth rate in the last 18 months. We're expecting the public health emergency to end next year, but there's no chance we're going to get a whole bunch of people lose coverage regardless of where they get it. The other big one, Medicare Advantage, seniors love it. Today, nearly half of seniors are making the choice to join the program, more than double what it was in 2007. There is real tangible value in these offerings, value people experience every day. Seniors who choose Medicare Advantage save 40% on out-of-pocket cost. That's over $2,000 a year on average, which is particularly meaningful when close to half of all Medicare Advantage seniors live on less than $25,000 a year. And the program continues to deliver better outcomes than traditional Medicare, with members experiencing a 43% lower rate of avoidable hospitalizations for any condition. 23% fewer inpatient hospital stays for those clinically complex members, nearly 12% in combined savings for the government and seniors. So with that, I want to invite Dan Schumacher to talk tech. Dan, you're up.

Thank you, Dirk. Every day, millions of people engage with the health system in millions of interactions. And every day, we are working to make those interactions simple, intuitive and connected. We're bringing together processes, people and information to eliminate moments of friction and frustration delivering actionable data to drive insights and create a more connected health system. With the right technology and the best people, we are getting information into the right hands, improving care quality, building trust and preventing mistakes. In our recent combination with Change Healthcare strongly positions Optum to continue to lead the industry in health care technology and services. It means growth in our capabilities, growth in our customer base, and ultimately, growth in our impact, our impact in driving administrative efficiency and reducing friction across billing, claims, eligibility, to make these transactions seamless, accurate and automated. It's about our growing ability to make health care payments faster and more accurate. And it's about expanding our opportunities to give providers critical information at the point of care, so they can make better decisions and ultimately improve the health of patients. So now our team is here to share how we're deploying the most advanced technologies in health care to drive real improvements across administrative transactions, clinical support and payment processing. Let's start with Neil de Cosenza. Neil?

Thanks, Dan. As we expand our efforts to make administrative task simpler and more efficient, we are making platforms truly interoperable. We're providing a multi-payer multi-provider experience, which is creating greater alignment and ultimately reducing rework. A new solution we developed enables faster payment of claims by ensuring these claims get submitted correctly, which, of course, is a big source of friction in the system. When we move payer payment rules into the providers' revenue cycle workflow, the volume of rework drastically declined. Our technology incorporates machine learning and offers recommendations to care providers right at the time they're completing the documentation required for billing. And this gives them the opportunity to correct these claims that would wind up stuck in the system and helps them get it right the first time. The results of this innovation are strong. We're tracking to a 25% improvement in accuracy, which is great as it saves time and reduces costs for providers. And when modeling these savings at scale we can impact the hundreds of billions of dollars, care providers and payers pay each year. And for consumers, like all of us, the value of eliminating one of the biggest pain points is enormous. And this is just 1 example of what we're doing to improve the administrative side of health care. And now Todd Walthall will share what we are doing to improve the patient experience through our revenue cycle management solutions. Todd?

Thanks, Neil. We rely on technology to maximize the power of our revenue cycle management tools. Today, across all customers, we manage over $120 billion in annual billings and around 4,000 facilities, hospitals and health plans covering over 180 million members use our solutions today. One of our partners, Boulder Community Health in Colorado is using our solutions to reimagine how the revenue cycle can raise performance and they're seeing strong results, including double-digit improvement in cash collections as a percentage of revenue build as well as clinical documentation and coding which is key to ensuring appropriate reimbursements for services. These tools, technology and process improvements are also helping reduce employee burnout. Since forming our partnership last year, employee retention has improved significantly. In addition to our work with Boulder Community Health, we're also helping clients improve the patient experience within the revenue cycle. For example, when it comes to digital, consumers expect ease and simplicity. They also want their health care digital experiences to work the same way. Combining the revenue cycle capabilities of Optum and [ Change ] Healthcare enables us to provide real-time digital cost estimates. So patients know what their financial obligation will be for a medical procedure. We can determine eligibility and automate the prior authorization process, so there's no delay. Patients can pay online or through an app. We even offer financial assistance tools. All of this simplifies the patient's financial experience and offers them a peace of mind of knowing what to expect. Now I'm going to turn it over to my colleague, Dr. Dom King, who's going to show us how we are helping enable physicians to achieve better health outcomes.

Thanks, Todd, and good morning. An important component of our value-based care is making sure that clinicians have access to the right technology and tools they need to deliver best practice care. As a doctor, I've experienced how technology can often frustrate us in trying to deliver great care. And as a technologist, leading research and development teams at organizations like DeepMind and Google, I understand how challenging it is to bring innovation into complex health care environments. At UnitedHealth Group, we have an unparalleled opportunity to successfully take cutting-edge technology from the lab right into the clinic and helping our patients. An area we're investing heavily in is clinical decision support. These tools are rigorously researched importantly built hand-in-hand with users and reliably updated as peer-reviewed evidence emerges. Dr. Casey Humanas and his colleagues are using Optum's clinical decision support system in Florida to help him deliver better care for patients with chronic conditions like diabetes and high blood pressure. Let's take a look. [Presentation]

Today, 40% of Americans are managing multiple chronic conditions requiring challenging merging of guidance. As you heard from Dr. Jimenez, this is all about the complexity of health care with the goal of making it easier. Clinicians using the tools that you've just seen followed best practice guidance, 98% of the time compared to 72% without access to this support. There was also a nearly 20% reduction in time spent arriving at those decisions, better decisions leading to better care and better experiences. As we look to the future, we're excited to begin incorporating trusted artificial intelligence insights into our clinical decision support tools, giving them more predictive capabilities and allowing clinicians to make the shift from detecting a problem to preventing it happening in the first place. Take for example, chronic kidney disease, which affects 1 in 7 adults in the U.S. We're building artificial intelligence models that can identify patients that require more proactive support, aiming to head off the need for intensive and costly future interventions, such as dialysis or a kidney transplant. This is just 1 focus of our applied research programs. Other areas we're exploring include how AI can help to identify those patients at greater risk of a hospital admission. Similar approaches are being taken to help clinicians complete administrative tasks faster and smarter. Doug?

Thanks, team. Getting things right the first time, that's what stuck with me. You heard the team discuss how we're really leaning into 3 key areas: expanding point-of-care insights aligned to evidence-based standards inside the physician workflow, making health care payments faster and more accurate, driving administrative efficiency and reducing friction, less rework, faster speed to payment, putting minutes back on the provider schedule. All signs of a health technology and data strategy that's durable and scalable, a strategy that enables high-quality care for everyone. In the benefit of this work and Optum's enhanced capabilities will be exciting. This year, we'll execute 10 billion electronic transactions and with Change, will do more than 22 billion. Together, we will manage provider billings of more than 120 billion which is a 30% increase when Change is added. Altogether, faster speed, better accuracy, greater volume will ultimately drive more standardization and simplicity in the system. With that, I'd like to invite Kurt Adams to take you through our financial services strategy. Kurt?

Thanks, Dirk. Nearly 20 years ago, we formed a bank to offer a seamless solution to help people better manage their health care expenses. It turns out, we created a business that generates steady growth and provides health care financial services to more than 17 million people and 58,000 employers. We also saw another opportunity this time to streamline claims payments for care providers. They were growing increasingly frustrated not only by how long it took to get paid for their services, but the friction created by disparate platforms and workflow applications required to reconcile and settle these claims payments. These challenges ultimately inspired the development of a highly efficient and robust payment platform and network that today delivers payments digitally into the accounts of more than 2 million providers on behalf of more than 150 payers, security, accuracy and scale are cornerstones of our platform and vital to the day-to-day transaction flow of the entire health system. The value of our network was made even more clear at the onset of the pandemic when clinics were closed, cash flows dried up and thousands of practices were worried they might never reopen again. Given the crisis, Congress authorized the distribution of billions and payments to care providers, but the agency didn't have the connected network or the platform to deliver the payments as fast as they were needed. So on Saturday morning in early April of 2020, we got a call. And within days, we began what would become $150 billion of payments over 440,000 care providers, a large percentage of the health system, but well within our capabilities. This infrastructure 2 decades in the making serves as the foundation for our strategy in shaping and transforming the next 2 decades in health financial services. And while there are many payments companies with strong network capabilities and many health care companies with broad-reaching relationships throughout the system no one else brings both capability sets together to create value for consumers, payers and providers quite like we do. My colleague Takumi will now share with you some of the areas where we're driving innovation.

Thanks, Kurt. I lead innovation at Optum Financial. Prior to Optum, I was a part of successful initiatives at PayPal and Apple Pay, where I help build and scale solutions that reach millions of merchants and users because the solutions were intuitive and reliable. I learned the importance of building platforms that could integrate with networks at scale and build trust. The ability for a simple app like Venmo to connect to bank accounts and debit cards turn that solution into a verb, where 83 million people are now [ Venmoing ] one another for everything from concert tickets to piano lessons, a trusted alternative to cash. It's how a platform connected to over 40 global payment networks connected to thousands of card issuers facilitated the safe and secure provisioning of millions of cards on to millions of iPhones every day. I was drawn to Optum because of the same potential for impact and scale with a unique collection of assets and capabilities, a financial services business moving hundreds of billions of dollars between payers, providers and consumers. These building blocks are enabling us to bring scalable innovation to health care payments and to bring new solutions to market. One example is the card technology my colleagues talked about earlier today. Not only are we creating a more convenient experience for seniors in Medicare Advantage and dual special needs plans, linking their health plan information, pharmacy benefits, rewards gym membership to a single ID card, our payments capabilities allow members to easily pay for items covered by their health benefits, like groceries, over-the-counter medications and even utility bills without using cash or worrying about saving a receipt to be reimbursed. We can identify qualified items at the SKU or product level and execute payment at the point of service. The integration with our retail network and ability to adjudicate at single item level precision is what makes this possible. By early next year, this technology will be available to almost 12 million people across multiple health plans. Our retail acceptance network already includes 6 of the 10 largest grocers in America, including Walmart and Kroger as well as leading pharmacies like Walgreens and CVS. Convenience is key as 92% of Americans live no more than 5 miles from a participating store. And our retail network will only continue to grow. But more importantly, what we're uniquely able to do is to offer a service that connects with -- from within the health care system. What's different in our approach is not just connecting the consumer to the retailer, but connecting their health plan as well whomever the payer or plan might be. So the capability and potential impact extends well beyond the core transactional functionality of the retail network. It amplifies the utility. When we connect and integrate to the care providers in our ACH network that Kurt just talked about, we are similarly creating opportunities to amplify and play a deeper role in payments and financing to deliver on the promise of real-time payments in health care. Platforms that connect to networks to deliver better experiences and embedded financial services at scale. Back to you, Kurt.

Thanks, Takumi. We are working on a future where retail purchases and medical claims are processed instantly at the point of service, where payments happen with the same ease and convenience consumers have come to expect in so many other aspects of their daily lives. And with our growing consumer capabilities, enhances our scale and value of our payment networks, and provides an opportunity to improve consumer experiences throughout our combined efforts. This is hard work, no doubt. And while we are still early in our journey, the addressable market revenue opportunity is well north of $100 billion across the health care industry. This type of opportunity isn't available to everyone. We are unique because of our payment platform, network capabilities and the broad relationships we have embedded within the health care industry. We have just the right mix of expertise, innovation and ambition to deliver the next generation of solutions that are easy to use and take out the unnecessary friction that exists in the market today. Thank you.

Thanks, Kurt. Like I mentioned at the top, our financial service capabilities still in the early stages. With the kind of innovation that Kurt and Takumi are talking about is so elemental to our DNA, building products and services for the people we serve that go on to transform the industry. Those seeds we planned in nearly 20 years ago, blossomed into a significant and growing consumer accounts business, the largest provider payment network, 2 million plus and growing and a nationwide retail network that includes 6 of Americas 10 largest grocers and much of the transaction's infrastructure for the health system. Now our story wouldn't be complete without a look at our pharmacy services business. I want to ask Heather Cianfrocco to come up and take us home.

1 million each day. That's how many people we reach through our pharmacy offerings, helping people manage multiple medications and chronic diseases, helping people access and afford the drugs they need and giving them every assurance they're not on their own and navigating the complexities of the health system. We have more than 12,000 clinicians, pharmacists and pharmacy technicians connecting the dots with health care and advocating to make it easier for people to access the medical, pharmacy and behavioral health therapies that they need. We're driving affordability and transparency for our clients, always guiding them towards the lowest net cost approach while remaining grounded in our strong clinical foundation. We're taking a holistic approach to managing specialty drugs and complex cases, and we're providing solutions that reduce drug costs for uninsured patients. We're simplifying access to care through direct-to-consumer digital solutions, home delivery, infusion services and integrated pharmacies and community mental health centers, all while providing full service, personalized pharmacy care and multichannel digital engagement. Let's start with the ongoing evolution of our pharmacy benefits capabilities, our PBM. And the more than 61 million people it serves. And I'd like Tricia Purdy to share more about how we're expanding on this foundation and going so much further.

Our differentiated PBM has long been the engine, powering our consistent durable growth, enabling us to innovate and scale to reduce pharmacy costs whether consumers receive their benefits from UnitedHealthcare or they are the 50% of people we serve who don't. We are building on our cost-based drug pricing model, an alternative to traditional pricing by creating configurability for our clients, allowing even more transparency in how we deliver value and savings to our clients. Our suite of tools gives both people and their doctors real-time information, including if the drug is covered and how best to receive the lowest price. This kind of innovation is leading to client retention of over 98% and material growth. This year, we expect to process more than 1.4 billion adjusted scripts up 5% year-over-year. As we continue serving more clients and more patients, we are focused on the future where care services cap capabilities are increasingly integrated with pharmacy, medical and behavioral health as you've heard throughout the morning, enabling us to care for the whole person. Today, we'd like to highlight 2 examples of where we are bringing this to life. Our community pharmacies and our rare disease pharmacy. Tasha Hennessy is a pharmacist and she's the Chief Operating Officer for our community pharmacies, and she is joining us live from Dallas today. Good morning, Tasha, -- great to see you.

Thanks, Trish, and good morning as well.

Nice to be with you. I would love to jump right in. Speaking of our community pharmacy model, one of the key attributes is the clinical value and how we deliver care. Could you spend just a couple of minutes talking about that and maybe a window into some of the results you and the team are achieving.

Yes, absolutely. So our team takes a really hands-on approach. The connection between our pharmacy and clinical care teams is key. Our community pharmacies serve as a critical bridge helping care providers deliver more complete care and better outcomes, including a 90% adherence rate for medications compared to that of about 50% in the U.S. broadly. And speaking as a pharmacist, that's a total game changer, especially for people with really challenging situations, who need a lot of extra support. Because this model has been so successful, we've expanded the number of community pharmacies by 50% in the last 4 years, including more than 400,000 new patients this year alone, helping to deliver an increase of 2.5 million more prescriptions than we filled in 2021. As a result of this growth, we've identified other areas where we can expand the model to people who need a higher level of support for specific conditions. So compelling. And one of those conditions is HIV. And maybe Tasha, if you could spend a little bit of time just describing how we're evolving the model, tailoring the model to meet the needs of this unique population.

Yes, Tricia, I'd love to. So there are more than 1 million people living with HIV in the U.S. today. As you know, there's been huge advances in treatment over the years. A person diagnosed with this disease can really enjoy a long and healthy life if they get the right treatment and, of course, adhere to that treatment plan. But about 1/3 of people living with HIV struggle with their medication regimen. And not following treatment plans leads to increased morbidity, mortality and risk for HIV transmission. Our pharmacists who are clinically trained in providing HIV pharmacy care really take the time to get to know each patient and their unique treatment plan to provide counseling on those complex medications, help work through side effects they may be experiencing, partnering with their doctors to adjust treatment plans and overall supporting their medication management and this is all to help people with HIV stay on their medication. And most importantly, stay healthy. So that 90% adherence rate I mentioned earlier, we're achieving that same result for patients with HIV.

It's so helpful to hear how you're guiding to specific populations. Also would love to click down into the human side, which you were -- you're starting to talk about Tasha. What are some of the ways in which you and your team are supporting each individual?

Yes, this is a great call out. The human aspect of our model is so important. The culturally competent care is an essential part of building trust in health care, especially for our patients. It means ensuring our pharmacists know how important it is to put a premium on privacy, provide free discrete delivery and make sure we have personal hygiene kits, food and water on hand to help patients who are also struggling with Life's basic needs.

Tasha, thank you so much for being here this morning. Thanks for all you do and your team do to have a big impact. Clearly, we are seeing positive results from this model and so much promise. It's all part of a broader community pharmacy expansion strategy. You may recall last year, we opened our 600th pharmacy, and we will finish this year with our 700th pharmacy, some of which are co-located with OptumCare delivery organizations. So you've heard directly from Tasha how our community pharmacies are delivering outstanding care to our patients. Now [ Aaron Satellite ] will share how our new rare disease pharmacy is helping patients, their families, their providers and payers navigate the world of multimillion dollar therapies.

Thank you, Tricia. In 2021, about half of all new drug approvals had orphan designation. Next year, the rare disease and orphan drug market in the United States will surpass $100 billion. Only one part of the more than $400 million in total direct medical cost to the system attributed to rare disease. While these dynamic therapies are transforming patients' lives, they come with a high price tag and with a number of challenges that the health care system isn't prepared for. Patients and providers not only need a reliable resource to secure medication. They also need our expertise because most providers will see a rare disease only a few times at most in their entire career. Drug procurement, logistics, dosing selection, insurance navigation, drug administration, lifestyle changes and overall medication management are only a handful of examples where rare diseases challenge the system. Many of these patients see multiple doctors over years before they get a diagnosis. And once someone with a rare disease finally has a prescription, they need help with the lifestyle changes that sometimes come with a new medicine so that it works optimally. That is why we built our rare disease pharmacy, which specializes in providing access to therapy, education and support for the whole person. After we opened our doors in 2021, we quickly started winning with pharma, securing access to manage ultra-limited distribution drugs and support the patients who take them. And in 2022, we doubled our win rate, including several exclusive agreements, a testament to the trust pharma manufacturers have in our service and our clinical expertise. We provide value to patients, providers, payers and pharma to support these complex conditions. But what's important about this is that we are creating the foundation for our overall specialty model with expert holistic support. That's why the pharma is coming to us. Key to our success has been going deep in each therapeutic area, including extensive research, training and engagement with patient advocacy organizations. This is how we create custom models that give patients one-on-one support on a first name basis, supported by technology platforms with condition-specific data collection and reporting. A focus on a differentiated clinical model with the pharmacist life care team is central to our strategy across our specialty businesses. And this is really important because sometimes the medication alone is not enough. Let's look at how our distinctive care model made all the difference for the Jamieson family. Two of Marcy Jameson's children Quinn and Rye have a rare condition that affects a person's ability to digest certain sugars. Jameson are among those living with 7,000 classified rare diseases. They saw doctors they even had a prescription, but the children weren't improving. -- until Optum took over support for their drug and our expert pharmacists TAM, help them understand for the first time that in order for the drug to work well, they also needed to make changes to what they eat. Here is their story. [Presentation]

There are a lot of families like the Jamieson who need our health and one-on-one support our pharmacists provide. Erin talked about how we more than doubled the win rates of rare disease drugs in 2022. Next year, we expect to secure even more. And remember, the average rare disease drug is 3 to 4x the cost of other specialty drugs and 25x the cost of traditional drugs, which means growth in this area brings an outsized impact. Pharmacy services like these are the clear future of the pharmacy business. A future we expect will grow substantially over the next several years. In fact, our non-PBM revenue now accounts for about half of our overall pharmacy revenue and will continue to grow. And you should also expect significant growth in our core PBM business with a 98% retention rate. We're deepening relationships with consumers. We're growing our annual adjusted scripts, adding another $50 million in 2023. Okay. But before I pass it on to John Rex, I hope what came through during these sessions is our dual focus, our relentless drive for operational excellence and our long-term vision for what health care can be for people. And now -- and how, we are doing it on behalf of everyone in the health system. Now I'll hand the stage over to John. John?

Good morning, and let me add my thanks to you for joining us today. We know it's a considerable time commitment, and we're grateful you chose to make it. Along with that gratitude, I have to offer an apology at the outset here, a preemptive apology, let's call it, in the event these comments make you feel like you're back in your high school science class. That's because I want to talk about physics for a moment. In particular, 2 basic concepts, velocity and systems. Speed, if I recall correctly, is the rate at which something covers a distance, literally how fast the thing is moving. Velocity, however, is both the rate of change and the direction of change, the velocity with which a baseball travels from a pitcher's hand to the catcher's mitt, for example. It's an important distinction, and you'll see where I'm going with this in a moment. The body can be fast but not go anywhere. So speed alone doesn't say nearly enough to put it in terms more relevant to today, simply stating health care is changing rapidly doesn't tell us much at all about where we are or where we're going. Contrast that to velocity, which is pace with direction. That's what we think is important, not simply how fast we are changing but in what direction of travel we are seeking to shape those changes. We believe there's increasing velocity of opportunity for UnitedHealth Group to create greater value. And this velocity is accelerating towards systems and, importantly, a certain kind of system. To explain, back we go to high school physics. Isolated systems, you'll recall, are collections of objects that do not exchange matter or energy with their surroundings, but only among the objects. To some extent, that's how health care often functions. Point solutions engaging singly with other dedicated point solutions. And it's not that they don't accomplish anything at all. It's more that there's a limit to the ultimate benefit for people and the broader health care system effects. In contrast, what we're aiming for is a connected system where matter and energy are exchanged among the pieces and with the more encompassing external environment. This is how we believe better outcomes and experiences can result both within and from UnitedHealth Group. It is the clearest path to creating more value for our many partners and customers and the health care system as a whole. We set out intentionally with speed in this direction, primarily from a foundation of employer-sponsored benefits. We built upon this foundation, extending and expanding our health benefit capabilities to serve people in Medicare and Medicaid and then connecting the 2 to serve those with dual special needs. Then we brought out our services, pharmacy, for example, and technology and management systems. And we added care delivery, starting first with primary care practices. As we gained experience in each area, we found we could go both deeper within each capability and broader to the adjacent ones. Building systems, which became increasingly more connected, no longer isolated points in nature but helping those within our company and more broadly. Our intention has never been to be the most successful vendor of single-point solutions. The goal has always been to build strong connections across those capabilities because that delivers the better outcomes, experiences and quality of a high-performing health system. It takes substantial time and substantial capital to assemble some of these capabilities. In some respects, that's the easy part. Only when the pieces are assembled does the hard work begin, building the system characteristics and the system effects, the connections that make all this work. A prime example, comprehensive value-based care provided by Optum Health, working with over 100 health plan partners, including UnitedHealthcare, the overall system benefits from the health outcome improvements discussed earlier here. Consider our advances in bringing care to people at home. We started with in-home preventive care assessments for Medicare Advantage patients. We served about 250,000 people that first year. Today, our nurse practitioners engage in an expanding range of highly effective clinical activity such as vaccines and disease screening. In 2022, about 5 million people will benefit from these capabilities. Importantly, what's also different today is that this once isolated point capability complements other capabilities across our organization. And what's also different today is that we can use the expertise and capabilities we have developed in home services to see how else we build greater value for people. Compared to a decade ago, when we look at partnering with an organization like home health care company, LHC, there are many more points across our company to which they can connect. As such, we can expand the impact we can create for patients and for payer customers. Today, when we look at potential strategic partners, it's through a much wider lens than just 5 or 10 years ago. We look for not just one but multiple sets of connection points that solve problems, smooth out experiences and drive better [ outcomes ]. It's part of why we are highly energized about both our near and our long-term prospects. It's the connected system concept come to life, the sharing of energy and value, increasing the velocity of opportunity toward achieving the mission of UnitedHealth Group. All right. That's probably enough about science. Let's head over to math class and see how this translates into the numbers. I'll start with a brief recap of 2022. As we updated with our third quarter earnings report 6 weeks ago, we expect '22 adjusted earnings per share to be in the $21.85 to $22.05 range. The growth comes from across the enterprise with particular strength from Optum Health by serving more people in value-based care arrangements and from UnitedHealthcare by adding more people to its benefit offerings. There's a lot to point to from this year. But we also know it's the end of November, and what you really want to hear about is '23. So that's where I'll turn. Our initial '23 adjusted earnings per share outlook is $24.40 to $24.90, again, with balanced growth from across the enterprise. We expect total revenues to approach $360 billion with double-digit growth at both Optum and UnitedHealthcare. This growth is driven primarily by serving more people and by serving them more comprehensively. Turning to the specific businesses. UnitedHealthcare revenues will approach $276 billion, growth of $27 billion or 11% over 2022. This is driven by ongoing strength from our Medicare Advantage offerings and innovative commercial products, partially offset by the potential that Medicaid members may be affected by eligibility redeterminations. Our Medicaid team is highly engaged in detailed planning for the potential resumption with a strong focus on assisting our members and others who may be impacted. The growth outlook presented today incorporates a view that redeterminations will begin in the first half of the year. We will be working with our state partners and community organizations to ensure that people have continuous access to benefits. And by the time redetermination activities are completed, we expect that between helping people reinstate existing coverage and offering them other options, including commercial and exchange based, we will serve even more people across coverages than we do today. The proportion of people in the United States with health benefits is at the strongest levels we've ever seen. We should not move backwards now. For our Medicare Advantage offerings, the open enrollment season now underway leads us to expect an eighth consecutive year of above-market growth. We do this by listening to seniors, maintaining benefit stability and introducing product innovations, delivering real value to both customers and taxpayers. As a result, in '23, we will serve more people in high-quality, 4- and 5-star plans than any other company. You heard earlier about our new and innovative commercial products gain traction among employer customers and their employees. Our aim is to continue to develop new approaches that meet their ever-evolving needs. You should expect to see this lead to increasing growth rates in this important market over the next several years. We're highly energized about the prospects for Optum, both in '23 and well beyond. Optum's capabilities and connected system orientation make it an invaluable innovator, one that's uniquely positioned at the center of the health system. That's why Optum's revenues will grow upwards of 17% next year. This growth will come from all segments. Optum Health revenues will approach $92 billion, an increase of about $20 billion or 29% driven by continued growth in the number of patients served under value-based care arrangements. You heard the Optum team describe the 4 million value-based patients we expect to serve in '23, an increase of more than 2 million over the past 3 years. It's a start, but still early stage when we consider the potential. For example, when we look at just the regions where OptumCare delivers care today, we currently serve only about 10% of the seniors in those areas with value-based offerings. And that's just seniors. We're also laying the foundations from which we will serve people in commercial and Medicaid plans. Revenue per Optum Health consumer served is expected to grow by more than 25%, driven by the increasing number of people under value-based care arrangements. This growth, though, is also due to the advancing levels of care we offer. For example, in '22, our ambulatory surgical centers [ perform ] 3 times as many complex procedures such as orthopedic and cardiac than just 3 years ago. Moreover, our patients have high-quality clinical outcomes and strong experiences reflected in NPS scores, which consistently run at 90% or higher. Importantly, this is provided at a 50% savings for the health system compared to traditional settings, delivering critical value in a world of scarce health resources. OptumInsight revenues will grow 30%. The revenue backlog will approach $33 billion in '23, growth of $4 billion. The OptumInsight team is sharply focused on the opportunity with Change Healthcare to improve system performance and experiences for patients and providers. With the combination having been completed only recently, the '23 earnings outlook accommodates a view that we will accelerate integration activities and investments so we can more quickly expand upon these capabilities, especially in the first half of the year. Optum Rx continues to evolve its business to extend clinical value beyond medications. These newer services build upon the strong foundation of the PBM whose purpose is to deliver more value for the people we serve. The breadth and value of these offerings lead us to expect Optum Rx revenues for '23 of $106 billion, organic growth of about $6 billion and with multiple pathways to continue this growth for years to come. These growing businesses support and are supported by substantial financial capacity and a strong balance sheet. Cash flow from operations in '23 will approach $28 billion or 1.2x net income. Returning capital to you, our shareholders, remains an enduring commitment. In '22, we will return $13 billion through dividends and share repurchases, about a 25% increase over last year. We will continue to grow the amount of capital we return in '23 and beyond. And even with this level of activity, our growth capital capacities remain strong. For example, in '22, we will deploy over $20 billion in growth capital. Our commitment to building long-term value through strategic combinations into the future. Further accelerating system velocity remains steadfast as well. One of the areas from physics I did not touch on earlier was the idea of limits, the idea that there are various technical or physical law imposed limits on what can be done. As it pertains to advanced physics, I'm not the guy to ask. But as it pertains to UnitedHealth Group, given the markets and the people we serve and the expanding nature of their needs, we are a long way from such theoretical limits. From where we sit, we see substantial opportunities to bring even more value to more people and organizations across the health care system far into the distance and to continue delivering growth at our 13% to 16% long-term rate as we do so. And you have the commitment from all 60 of us gathered with you today and our 380,000 colleagues to deliver that growth to you and to deliver ever-increasing value to the people we are privileged to serve every day. Thank you very much. And now we're going to take a minute to set up the stage for our Q&A session.

Well, hello again, and thank you so much for your attention so far this morning. I'm delighted that we're going to start the Q&A now. So thank you for listening, and we look forward to your engagement. Let me ask my team to come up here and join me on the stage real quick, and we'll get the Q&A underway -- straightaway. We have folks in the room with mics and paddles. So if you do have a question, just raise your hand. One of the team will come to you, and we'll try and get around just as many as we possibly can. In the center, there's Zack. I think I'll see you first.

We're going to start off with Justin Lake from Wolfe Research.

My question is on the financial services opportunity. Post the acquisition of Change, certainly seems like one of the more significant opportunities down the road. Can you flesh that out for us in terms of what are 1, 2, 3 of the bigger opportunities you see in the near term over the next 3 to 5 years to drive growth in that segment?

Yes, it's great. So I'll ask John Rex to make a couple of comments and then Kurt Adams, who I think -- can we get a mic to Kurt in the audience. You heard from him already. I'd like him to comment on this as well. John, why don't you kick off? And then Kurt.

And maybe pitch it up. First and foremost, the opportunity to remove friction from the system. So much of the friction in the system today exists in the -- between the patient and the provider and that relationship. So much of that friction results from something to do with a payment or a collection. And so how do we bring those capabilities together to make that seamless, perhaps even instantaneous? So take out that piece where the friction results. The other opportunity that we see also in this, so there's an enormous opportunity there. You heard opportunities described about the consumer experience that we've developed and are rolling out quite broadly this year in terms of integrated card capabilities. And then our ability to help providers, to help providers expand their practices, make better decisions, quicker decisions and much more efficiently and economically than they're able today. Maybe let's just pitch over to Kurt Adams, who runs the financial services business for him to expand upon that.

Yes. Thank you. And just to add to that, as we were talking about earlier on the stage, platforms connected to networks to deliver experiences. Really, as we think about the platform capabilities now between Optum and Change Healthcare, they're massive. It brings us to a true multi-payer capability that allows us to connect to our retail and provider care networks to deliver payments more efficiently, more effectively and drive a lot more value for both providers and consumers in that value chain and for us to really be able to build experiences on top of all this infrastructure that's been established over the course of the past 20 years or so. And finally, the amount of paper in the system that Change brings. We are talking a lot of paper that is still in the system that we have the opportunity to digitize and make a far more efficient process for all -- for both payers and providers in the system.

Great. Thanks, Kurt. And Justin, I really appreciate the question. And I think if you just boil it into 2 segments, there's a huge provider set of opportunities in terms of taking friction out, taking paper out, waste, speeding things up, accelerating payments to providers, helping their cash flow situation, that kind of thing. That's, I'd say, kind of super imminent, super close, slightly longer term, but not much. Really project forward what a true consumer health care marketplace could look like. So as Optum starts to build a multi-payer marketplace environment, a lot of the work we'll be doing this year is laying the ground for that, having a sophisticated financial service capability able to run through the back of that, recognizing that $1 and $5 spent in the U.S. is spent in health care, super important opportunity for us in terms of the consumer agenda as well. So those 2 areas, I'd say, Justin, and you heard some of the detail beneath that. Okay. Next one, yes, please, in the center there. Julie?

Yes. We have A.J. Rice from Crédit Suisse.

Maybe to just flesh out a little more of the commercial value-based care opportunity. I know Kelsey is a big part of that. But over time, how will that start to contribute? And does that model look differently than the risk model that you have with MA and how that's developed?

A.J., thanks so much. I'm going to ask Brian Thompson to comment in a second. As I mentioned, you heard 2 or 3 times from the stage today, we definitely feel that the skills and the rails we've been developing, particularly in the senior market, has applicability across much broader segments of the marketplace. Clearly, as you think about a clinic in the real world, of course, they see seniors. They see MA seniors. They see Medicaid. Of course, they see commercial lives as well. So once those clinics have developed a way of working, it's not a huge leap to imagine how that can be practically delivered. The question then becomes how you start to evolve the incentives and make sure that the system itself sees the benefit from it. And maybe Brian, you could talk a little bit about how you envision that.

Yes. Thanks for the question, A.J. Having spent so many years in Medicare, I'm perhaps most excited about the opportunity that I do see in commercial. And it's not new to us. We've done value-based care in commercial for some time in California, in Nevada, in particular. But what I think I'm most excited about is what I haven't known in the past and what I've learned from Dr. Lin and others. I think the breadth and scale of what we can do in commercial, we're just scratching at the surface of it. So I absolutely believe that this is the future of commercial care, and driving the same sort of alignment is the same sort of incentive that we see between providers and payers. That's no different. How do we make sure that we get that excess and inefficiency out of the system that we see in fee-for-service is probably what we're most excited about in the business. So yes, I think we're only scratching the surface, and Kelsey-Seybold is certainly helping us understand what perhaps we haven't known in the past.

And I think -- I'd just add to that, A.J. As you think about it, a lot of the progress that's been made so far, even in -- honestly, even in the MA sector, as you think about how we make sure the right resources get allocated to patient. And then we're very focused on things like site of service and increasingly now beginning to address the efficiency of the core medical spend and Dom King when he was talking today about making sure everybody is on that best practice, that cutting-edge evidence-based medicine. But that's really just beginning. The opportunity to take savings out of unnecessary care, not site of service, just care that wasn't necessarily in the first place, that opportunity exists both in the current value-based space, unmined fundamentally and is a huge opportunity in commercial. So in a sense, both the current value-based platform and the potential opportunity in commercial benefit from that focus on that piece of the space. And that's where you're going to see a lot of attention. That's why the systems, the bringing together of clinical expertise with technical expertise, being able to automate this at a level we haven't really seen before becomes a key enabler to both of these. How can we do more for seniors in the classic space? How do we unlock the commercial space? Zack, you have Kevin, I think.

Yes, I've got Kevin from Bank of America.

You've talked a lot about home and value-based care a lot more than, I guess, I'm familiar with you talking about it. You said that that's going to be a big part of the value-based care growth. Is that in the 750,000 that you're talking about growing this year? And if so, can you talk a little bit about the economics? Is that similar to a physician economics where it's 85% of premium? Or is it some component of that? And how do we think about margins?

Yes, great. Kevin, I'm going to ask Dr. Decker to respond to that, please.

Yes. Thanks for the question. And absolutely, I think what you'll see us building out is our care delivery capabilities in the home, and that is included in fully capitated lives in our 750,000 risk life number. So point one. Point two is where we can really unlock value and create remarkable patient experiences with better outcomes at lower cost is when we combine the primary care physician, in particular, but the physician practices with the home care. And so increasingly, you'll see us across Optum Health bringing together our home care capabilities and partnering with both our own primary care physicians as well as community physicians to create a holistic solution for health care. And that's really where we see unlocking the greatest value and the greatest accelerant for growth.

And of course, as you'd expect, in that home and community capability, it really speaks very nicely to the D-SNP population. So one of the areas you know well is a lot of the D-SNP patients actually need to be managed much more in the home. It's much -- it creates a much more accessible health care opportunity for them. You get better outcomes. People get better care. So it allows us to strengthen our capability to be effective for those people with the most complex situations who, in many cases, don't find it so easy to engage with the classic infrastructure of the health care system. Thanks for the question. Julie, you got Josh?

Josh Raskin from Nephron.

All right. I think I'll stick on the same topic. I guess just on the value-based care model, one question I would have is, where are you seeing the most success or most effectiveness in terms of actual care management, setting-wise, through the primary care? Is it sort of MSO based, center based, et cetera? How do you manage the specialist as part of that? And sort of interested in lessons learned. And then on the commercial, just to go back to that. My understanding is value-based care is most effective for chronic care management. I know that's a portion of the commercial population, but probably not to the same extent as Medicare. So how does the care model change relative to what you're doing for seniors?

So maybe I'll ask Brian to address the second part of your question, Josh, and then go back to Wyatt to comment on the first part.

Sure. I'll be brief on the first. I think it's as simple as when you can get engagement and you can get coordination, there's opportunity. And clearly, I think we see that in chronic populations most notably. But I don't think that limits the opportunity to manage care better when you have that primary care engagement model where they're accountable for all the downstream care. And I see that with similar upside in our commercial market as well.

I would say the magic happens, Josh, with the primary care provider and the wraparound solutions, the team and the technology. But as you know well, with chronic disease and with many conditions, specialty input is necessary. So what you'll see us doing is thoughtfully employing, and this -- and Kelsey is a great example of this. It's a multi-specialty practice. Many of our practices Atrius, [indiscernible], et cetera, are multi-specialty. So we thoughtfully employ the right number of specialists who then engage into that value-based specialty consultation, providing just the right expertise, not too much, not too little. And in markets like Colorado, where we have largely an affiliated specialty network, we actually work with SCA again, Caitlin Zulla, to say who are the highest-quality orthopedic providers in that market. And we use data and analytics to identify them and preferentially leverage their expertise. So if you're practicing high-quality, evidence-based medicine, you're going to get Optimum Health referrals. If you're not, you're going to see that number dwindle. And so for us, that's a very powerful motivator for our physician specialty networks who are a critical part of the team.

And it's fascinating, Josh, when you spend time with the advanced value-based care clinics. What they really start to do is they look at their overall population on a very dynamic rolling basis, so every few days a week, and really fixate on literally a handful of patients. I mean -- so if you think about 80-20, when you're really thinking about where the value-based opportunities and risks are in a population, it's probably more like 97-3. I mean it's -- a very, very small number of folks in a given time period are going to be the people that you need to really be focused on, making sure that you have this kind of pooling of expertise. So pivots around the primary care physician. But pools around them and wraps around them all the kind of insights you need to be able to spot people who might be about to go out of control, who maybe just came back from the hospital, you don't want them to ping back again, maybe is at risk of being a repeat visitor to the ER. All of those things which are going to really drive bad performance clinically as well as cost-wise, that's really how this comes to life. So as you see this, it becomes a team sport. Primary care physician is very much the center of it, but it becomes a team sport. And the more competency you can put in that team aligned with the right incentive, the best outcome you get. And then of course, as we start to power that with more and more data, which I'd say is still early days, the work that Dom King shared with you today, the progress we're making in terms of being able to deliver evidence-based care advice to physicians in real time, that's beginning. We have a long way to go with that. But the potential there to really raise the standard across the board is phenomenal. So when you think about how that team can strengthen, that's where we think we can head. Okay. Zack?

I have Ann Hynes from Mizuho.

This is a follow-on to A.J.'s question about commercial opportunity in value-based care. Can you put some numbers around that, maybe timing of goals, how many lives you expect and when? And what do you think the biggest barriers to entry, to penetration for that is? And then secondly, for 2023 guidance, can you just talk about what type of recessionary risk you have in that guidance? That would be great.

So John, why don't you tackle the second part, and then I'll come back on the first.

Yes. In terms of '23 outlook and the potential for recessionary impacts and such, so for a company like ours and such in terms of different impacts we would consider, certainly, what's happening with interest rates broadly. As we've discussed in prior settings here, we are fairly managed in that regard. However, with interest income and interest expense and how we manage that component of our balance sheet, dramatically reducing the volatility that's created by that, typically in a position where we are modestly biased to being net investment income positively biased, however, in terms of any of those types of situations. The other impacts that we see in recession in terms of what impact they can have in other businesses often have to do with business cycles, not so much in our core health plan businesses, but in other businesses such as OptumInsight, what we'd be thinking about business activity all over broadly in terms of relationships that we're entering into. Now I say that realizing that health systems, particularly as they work with OptumInsight and the many offerings they have in their rev cycle business, as they come into periods which are challenging, are often attracted to the ability to do business with a partner like OptumInsight. But checking a view of that and how would that impact elements such as we discussed, what would happen to our revenue backlog growth as we look at that. Considering all those elements is really how we looked at putting together the business in terms of the business plan for '23 and what kind of offsets we might see.

Thanks, John. And to your first question, so already underway. So pockets of commercial risk capitation already in the business. You heard from Tony Lin and Kelsey, several other areas of Optum Health, we already have that. I think in terms of pacing, I think this is something which we'd see accelerate over the next 3, 4, 5 years. It's going to be very much a kind of geographic employer kind of mix. So I think you'll see it pop up in different locations across the country. And one of the things we're working very closely with is how to do that. And we're in a very interesting opportunity in that regard. So if you think about historically, we've tended to meet -- we tended to meet our patients through the insurance business first, and then we've connected them to care in Optum. I think as you think about this model of moving toward commercial value-based care, the model can work both ways. We can, of course, continue to do that. And we have a high probability of meeting people through Optum and then arranging their financing through the health -- through the insurance business. That creates a super interesting way in which you can bring this whole concept to life. So being a little bit more plural about the way in which we evolve this model is something you're going to see. Sometimes, it will be very much UHC-led and, in fact, other payers, and we're in engagement with other payers around this agenda right now. And it can also work the other way. So the clinic sits in the city. It's already looking after lots of people in that employer group. Maybe they want to change the way in which it operates. It's actually a conversation which begins with Optum and then becomes backed up by UHC. So you'll see all of that start to play out. I'd guide you over 3 to 5 years in terms of substantive growth.

Yes. Andrew, let me add. There's -- Andrew hit on the 2 things. You asked about the rate limiting factor. The first one is markets, right? If you go back even to the original days of PacifiCare, they had a fairly big commercially capitated book of business in Southern California. So very market-specific in addition, as we talked about today with Kelsey. But also, as I've sort of been in the national account space, we're hearing more and more are sort of willing to sort of go to OptumCare and say, hey, let's go to OptumCare. Can we take -- can we dedicate part of our population in this ZIP code to OptumCare? I think with -- and there's a little bit more of a lean into some of them being willing to accept a little bit of a narrowing of a network. So those type of things are sort of, what I would say, you could look at market-wise and employer-wise, are 2 things that you would logically look at as the rate limiting factor.

Absolutely. Julie?

I have Lance Wilkes from Bernstein.

So you're [ forecasting ] some really strong growth in the employer membership in UHC, in particular, in ASO. Just interested in what sort of products are driving that and what particular segments that that's expected to come in.

I think Brian has been hoping you would ask that question. I'm going to just let him answer that.

We're really excited about our growth, as you might expect, for 2023. And I'd say it's really balanced. A couple of things that I might point out. Our Surest offering is really resonating in the market, both fully insured and in our ASO. Level Funded products continue to be an alternative for small group plans. As I look forward to 2023, I think this is our strongest growth year that we've seen in almost a decade for our national account. So our value prop of how we organize across our enterprise with Optum is resonating. But you're just seeing strength and balance across [ the ] business. And clearly, that's also benefiting from the expectation that we see redetermination start up here again in 2023. But really pleased with that balance, not only in ASO, as you said, but also growth in our fully insured business.

Great. Thanks so much. Zack?

I've got Lisa Gill from JPMorgan.

So I have 2 questions on the pharmacy side. First, Andrew, I think last year, we talked about value-based programs and shift towards value-based care when we think about the pharmacy. I can understand that for UnitedHealthcare, but how do I think about difference and payment mechanisms for non-UnitedHealthcare when I think about your PBM would maybe be the first question. And then secondly, I look at the margin improvement for 2023, is that biosimilars? And how do I think about the biosimilar opportunity?

Yes. No, 2 great questions, Lisa. Thanks so much. Make a couple of comments, and I'm going to ask Heather to go into more detail on both of those. So just on the biosimilar piece and Heather can describe a little bit more to you on that. From our perspective, we see the PBM as a key mechanism to drive as much cost advantage in the system as possible. So to drive down those prices as fast as possible, driven by the catalyst of the biosimilar. But then we're passing that through to the payers. So the short answer to that question is really no. We see this very much as a moment where the PBM demonstrates its effectiveness as a procurement vehicle on behalf of the clients, the beneficiaries of the savings. Give a little more detail on biosimilars, Heather, and then into the first part as well.

Yes, sure. And so maybe let me take the biosimilar and how to think about '23, and then we can do the value-based care. So when you think about '23, '23 and the strength in '23 is really going to come from a couple of things. I've said it before. But the PBM is really well positioned from just a value proposition standpoint and how we're serving clients. And we've seen really strong growth there. So that's one element. The other element of it is the breadth of the pharmacy services. You saw -- we highlighted a few of those today, but you can fill pharmacies that are integrated into communities. They're integrated into care models. They're integrated into patients' lives. We're leading with pharmacists first, 24/7 access, and we've seen material growth year-over-year as a result of that. In fact, we've seen double-digit growth in the pharmacy segment of our business. And a lot of that growth comes from non-UHC sources, a lot of that volume and growth. So I think that's the strength you're going to see in '23. Biosimilar, to Andrew's point, that's all about the client. And this is the event that offers the opportunity to drive affordability beginning with adalimumab in specialty drugs for clients who use the competition, the selection. And I think when I think about biosimilar, the thing I would take away for what Optum Rx is doing is we're really set on ensuring that we provide affordability with choice. We're not limiting to provide client, patient and prescriber choice. We wanted to provide both, and we're driving affordability with year 1 material savings for our clients while allowing our patients, their prescribers and our clients to make the choice between continuity or new options. And so that's how I think about biosimilar. Value-based constructs. So we're not going to actually impact total cost of care until we get pharmacy into the perimeter. And so those models, you'll see us driving 2 really important aspects. One is those clinical models where we're doing more than just dispensing. We're getting closer to the prescriber. We're getting closer to the pharmacist. We're getting closer to those that bear risk, and we're making sure they have the tools and the supports. We're wrapping around them with the clinical models. We're co-locating with them with OptumCare practices. And so that's how I think when you think about value-based care, think of us as the enabler. We provide the data and the tools on the PBM side. We provide the holistic pharmacy. And then we'll talk about this a little bit more in Optum Rx seminar, but we are building capabilities with our [ pharmaceutical ] manufacturer partners to give them better tools, better data so that they can ensure that they're enabling the value-based care as well. That's how I think about it going into '23.

Great. Thanks so much, Heather. And just going back to biosimilars, just real quick. The work that Heather and her team have done in terms of creating this platform where we believe we get great opportunity to leverage down cost and maintain increased choice so the consumer has choice, we're really laying a template down to how we think future biosimilars need to be managed. So this is very much pro biosimilar. It's pro competition. It's pro bringing cost down. And it's a model we're going to apply on future -- and as you know, there's many more coming after this one. So this is an important step, and a ton of work has gone on this year to lay the ground, and we're feeling very good about how we sit as we roll into the new year. Julie?

Gary Taylor from Cowen.

I want to go back to value-based care for a minute. And what I'm thinking about when we look historically at entities that have assembled large groups of physicians, either employed or affiliated, and have quickly ramped the risk taking, the actuarial risk taking that those groups have had, so many have struggled or outright failed. So all we get to see when you guys acquire something or build something is we see it going into that Optum Health line, and we get to see the OI, and that's kind of all we're getting to see out of it. So I was hoping maybe you could talk about 2 or 3 things that you're tracking or looking at as CEO to give us comfort that the clinical technology, financial integration is happening and that the risk taking and the ramp of risk-taking is prudent and not getting ahead of yourself, so to speak.

No, that's a very fair question. So we spent a lot of time focused on this. And as Wyatt will confirm; Selemon, who's here, who's our finance leader for OptumCare; Travis Winkey, who's here, who many of you know well, John, Dirk and I, I think, monthly sit with the whole team. And we go through how all the vintages of our various clinics are doing each year, who's joined the organization, where are they in terms of risk transference, what's the performance of those groups, how are they doing in community MA, how are they doing in D-SNP and then a whole piece around our alignment and integration. So what -- and I'd say -- I give Wyatt enormous credit for this over the last 3 or 4 years. The transformation in the way in which Optum Health is integrating to a national system, a national approach is completely different to where it was 4 or 5 years ago. And that's critical because it's given us really clear insight, early warning in terms of where things aren't quite performing the way you'd like them to do. And then the final -- I think final thing I would say, Gary, is that we're a beneficiary of the portfolio. So because the scale of Optum Health is significant and because we have multiple vintages of risk transference going through, we learn as we go through. So when things go wrong, we're able to course correct and avoid it the next time. But we're also able to accommodate within the portfolio a mix of performance. So we're not exposed to any given trend typically. So if you have one part of the country or one clinic which for whatever reason stubs its toe, the overall portfolio is able to manage within it. And that's important because it -- there's no way that you can take this to perfection in 1 or 2 time cycles. It takes time for us to really get to that level. But we are running, I think, a very -- exactly what I expect from UHG. We're running a very, very focused operational excellence oversight over what is a very substantial development. I might just ask Sandeep, who is at the end here, Sandeep is our new CTO. And one of the key pieces here is how we're building out the technology backbone to support everything I've just described because a ton of that is really reenvisioning what a clinical risk-bearing entity tech back bone needs to be to deliver exactly the certainty that you're looking for? And maybe Sandeep, make a couple of comments on how you see that? And then Dirk to finish off on this.

Thank you, Andrew. And first of all, let me tell you what a privilege it is to join this leadership team just a couple of months ago to drive purpose at this scale with such impact. My early impressions here is that UHG has made fantastic investments in technology, in talent and in all the programs that we're running. But to Andrew's point, the opportunity here is immense in trying to make all of this technology, first, more consumer-friendly, frictionless, and there's just infinite opportunity there; second, make it more connected, as our beloved physics professor taught us today how a connected system would work much, much better. And then finally, the data that we collect, we use responsibly to continuously improve those systems so that our consumers get the best of all worlds. So I think those 3 things, consumer-friendly, frictionless, connected and always improving is the big opportunity in front of us.

Let me give you 2 specifics. Thanks, Sandeep. Let me give you 2 specifics, Gary, on how we manage and measure. So one of the key things you have to do is get the systems aligned, right? So you have things like utilization management systems. You have patient portals. You have EMRs. We track really explicitly for each of our local care delivery organizations where they are with respect to end state. What you want to ultimately do is have a model which is very consistent or as consistent it can be systems-wise across. In order to do all the efficient data that we've all talked about today, you got to be as common as you can with system-wide. That's one real KPI that we track. The other thing I would say that's a little bit under the covers is there's a big people piece of this, too. So you have to move -- we've moved some real actuarial talent from UnitedHealthcare. Now they're working in OptumCare. Network talent from UHN, UnitedHealth Networks, we move them. Now they're now Optum employees, right? So sort of the talent to be able to take that risk, there's a lot of that talent in our organization, and we deploy it across the enterprise, and that's really benefited us.

Thanks, Dirk. I'm afraid we only have time for one more question. So Zack?

Steve Valiquette from Barclays.

With the MLR guidance for '23 expected to be up 60 basis points at the midpoint versus the '22 estimate, can you just remind us and reiterate what the biggest variables are in your initial assumptions for the MLR to be a little higher year-over-year? And also, how are you thinking about the flu impact on MLR in early '23?

Yes. Great. John, why don't you start there? And maybe, Brian, you maybe add a little bit more depth.

So the outlook for '23 accommodates the view that we've been anticipating for some time now. Do we see people start to present with more acute conditions because of deferred care that occurred during the height of the pandemic? And does that present itself in the way we just see an average higher acuity level and return to pre-pandemic levels of consumption [ plus that ]? So that's a key component there. Also accommodating a view that there is a moderately higher flu incidence level than normal years. Something that we haven't actually experienced yet as we look at kind of current trending in month of November, but an anticipation that, that could occur.

And Brian, do you want to add?

The only thing I would say is really pleased with how we're stepping out for our [ BCR ] next year, particularly as you think about continued greater mix in our government programs, really stepping out at what I consider to be a real sustainable and durable position. And on the flu, we probably all experienced it as we gathered for Thanksgiving holidays, certainly seeing it a little bit higher, but that's really resonating in the Rx scripts, TAMIFLU, physician, not seeing it on our inpatient level. So I would suggest less intense but moderately higher than normal, and both rest of '22 and how we thought about '23 is instructed with what we've seen here early.

Thanks. So unfortunately, that's -- we're pretty much out of time in terms of the questions. Just to introduce -- make sure you know 3 people here you haven't heard speak already today but are going to be here for the rest of the -- Patricia Lewis, who leads our sustainability effort; Erin McSweeney, who's our Chief People Officer; and Dr. Margaret-Mary Wilson, who's our Chief Medical Officer. All 3 are going to be here, obviously. So although the questions didn't come up in that topic here, please do take advantage if you're interested in what we're doing in terms of people strategy, what we're doing in terms of our quality, patient safety strategies and what we're doing, of course, in our core ESG strategies where a ton of progress has been made this year. So please do take advantage in the corridors or in the seminars to catch up with everybody you want to. We've tried to put some time in the day for you to catch up with folks in the corridors. Please do, do that. You've seen about half of our team who are here. There are another half ready to go, ready to answer your questions. Please do avail yourself of that. I want to thank the team, but most importantly, thank you very much for the questions, and thank you for your attention today. Seminars are going to start after a short break. Please take advantage of all of that. We look forward to spending the rest of the day with you all. We appreciate your attention. Thank you so much.