We will take very targeted positions, market by market as long as we have the right collaborative care relationships in place and have to be a complementary part of our portfolio. So I don’t see the exchange posture is changing as a result of this. And broadly speaking, I don’t think the investment strategy and the corporation changes as a result of it, it does create more capacity, though, as you articulated to accelerate in some of the categories I made reference to. I hope that helps, Scott.
Scott Fidel: Thank you.
Operator: Thank you. Our next question comes from Kevin Fischbeck with Bank of America. You may ask your question.
Kevin Fischbeck: Great. Thanks. I was wondering if you could give a little more color about the membership guidance for 2024 by product. I know you’re repricing exchanges, how is commercial going within commercial, the subsegments and then and then a little more color on the Medicare Advantage volume expectations, and I guess that’s in the guidance as well. Thanks.
Brian Evanko: Good morning, Kevin, it’s Brian. So as it relates to the net decline we have projected in the 2024 Cigna Healthcare customers. You can think of the primary driver of this being the individual exchange business. As we discussed late last year, we took some needed pricing actions in certain geographies in the individual exchange portfolio, and this will result in net customer declines for this business in 2024. Within the U.S. Commercial Employer business, we expect customer volumes to be up modestly. But you should think of this by subsegment being split a bit. So we expect to see a net decline in our national accounts business, but this will be more than offset by the continued strong growth within our Select segment.
And as a reminder, we continue to see opportunities for above-market growth in the Select segment, where our market share is still just 7%. And – when you think about the MA customer volume specifically, as we approach the 2024 bid cycle, as we always do, we apply a local market county level approach relative to how we price and set benefits. And so for most geographies, this resulted in stable benefits. A few areas, we had some targeted pullbacks just in light of the funding environment in 2024. And what we saw was in some of our local geographies, there was some very aggressive competitor behavior, which resulted in less net growth than what we had originally expected for the Medicare Advantage business. So taken all together, we would expect to see net customer volumes down slightly for year-end 2024 in comparison to year-end 2023 within the Medicare Advantage space specifically.
But when you put all these pieces together, we’re pleased with the overall balance in the Cigna Healthcare business right now is we expect to see profit margins expand year-over-year as I mentioned earlier, while we’re serving a meaningful volume of customers that’s grown markedly over the last two years.
Operator: Thank you. Our next question comes from Erin Wright with Morgan Stanley. You may ask your question.
Erin Wright: Great. Thanks. On Evernorth, how are you thinking about the implications of cost-plus models and what that means at the PBM level and how does that influence your discussions with customers? Or just around your pharmacy network relationships. And just more broadly, just around transparency. And obviously, you talked about that in your prepared remarks in more transparent offerings at the PBM level and how do you think those offerings are gaining or not getting traction across your customer base? Thanks.
Eric Palmer: Hi Erin, its Eric. First of all, just would not fundamentally, we start with the portfolio and approach that’s equipped to offer a choice and – flexibility in how we work to support our clients. And so, that’s the lens I ground back to. We’re always open to looking at new ways and approaches and such that drive increased affordability and meets the needs of our buyers. And I’m really proud of the range of different financing solutions we offer and the number of innovations that we’ve delivered in 2023 and already in 2024 in terms of the types of options that we bring to our clients. And in fact, as David mentioned, in the fourth quarter, we launched our clear network solution, which was its first of its kind. It’s comprehensive and simple solution to providing a cost index-based pharmacy network.
A solution is unique in that it provides access to all the drugs in pricing that’s based off of independent externally created cost on disease, kind of a simple margin that’s shared between us and the dispensing pharmacy. So use that as an example. We had a lot of good conversations about that as a program and as an offering, but would note that the selling seasons for these types of things tend to be long in time. It’s a long lead time in terms of implementation of such. So, some good conversations with our clients on solutions like that. Looking at other changes in the ecosystem, overall, with note, our clients are demanding more for their healthcare dollars. And are looking for ways to improve affordability overall and broadly are not interested in paying more for the same services that they received today.
We’ve got a wide variety of networks and solutions that exist already in the market and the flexibility to adapt and adjust the configuration of our networks to trade-off costs relative to the value and access profiles that exist. So overall, we’ve got good flexibility, good capabilities and modularity to be able to approach and line up our capabilities best with what our clients need.
Operator: Thank you. Our next question comes from Justin Lake with Wolfe Research. You may ask your question.
Justin Lake: Thanks. Good morning. I wanted to ask a broader strategic question beyond MA. Most of your peers set up their business models over the last five to 10 years to manage a significant amount of their internal healthcare spend, right, and drive additional profitability and revenue from those services businesses. So with the sale of MA, you’re repricing your exchanges which, makes sense, but your risk membership and the amount of medical costs you control, right, and are able to run through your services business just declines. How do you think about the value there are those individual synergies of controlling medical costs and being able to provide services there, the natural growth it provides each and every year, versus having to go out into the market and win each and every piece of business of growth, which obviously you’ve done pretty well over the last few years, but just the stability of kind of having that internal membership?
And how should investors expect this to impact your capital deployment strategy going forward? Thanks.
David Cordani: Justin, good morning, it’s David. There’s a lot in your question. Let me try to frame our thought process today and as we go forward. First, to date, we have a very clear proven track record of delivering a total cost, total quality, including clinical quality and service quality solution that resonates really well in the marketplace, whether it’s in the benefit side of the equation or on the services side of the equation and our results reinforce that. Point two is we’ve successfully executed an approach that is on the delivery and fulfillment, a mix of partner and owned we continue to evolve our portfolio. But philosophically, we do not believe have not, do not and continue to not believe that you have to own everything to be able to fulfill.
As you might recall, if you reflect back on prior conversations within our portfolio at Investor Days, we framed actually the amount of services that Evernorth, for example, was fulfilling at a point in time for the Signet Healthcare portfolio. And we frame the expansion opportunity to the point of your question that existed in front of us, and we continue to expand those services. Our model though is also importantly not predicated on only having economic alignment for guaranteed cost. We’re able to do it successfully for self-funded or shared funding mechanism as well. So point two is we see the ability to continue to grow that over time with our Evernorth services portfolio. Point three is as it relates to services to continue to invest in.
