Peter Haytaian: Thanks for the question, Michael. Yes, to answer your question directly, we are beginning the migration to BioPlus starting January 1. And again, just to reiterate, we’ve been very, very focused on the last year with regard to implementation and integration of BioPlus as it relates to our specialty strategy. A lot of the focus this year has been building the infrastructure and the team. So that we have the appropriate scale and capacity to take on the Elevance Health volume. And we feel very good about that. As Gail noted in his prepared remarks, we are accelerating the time line in that regard, and we are moving forward with that for January 1. And again, this is all a part of our strategy in pharmacy, just to reiterate, and that is to in-source the strategic levers that matter. Specialty pharmacy is very critical to that as well as what we’re doing in advanced home delivery. So again, excited about that. And yes, it is launching January 1.
Gail Boudreaux: Yes. And to the second part of your question is we have delved in and really looked deeply at sort of what the drivers especially around the three contracts and sort of what the cut points were. I guess I would say there’s a couple of things. One, has been easier navigation for our members. So I would not say it’s because of ownership or lack of ownership, but I will address sort of value-based care. Remember, this was measurement around year 2022. We’ve made significant progress around moving a lot of our contracts to value-based care and embedding that into the way we do it. We’ve also worked closely with aggregators and have been building quite frankly, the numbers in that. So we do feel that our strategies are intensely focused, and our health navigator will significantly help them.
The other area, quite frankly, around the cut points that impacted us was appeals and grievances, in some of our processes back in 2022. Those were very high performing contracts in the past and the cut points, while still good performance for us, were below the cut points. So I think those are very specific things that we can address. I want to take a moment, though, I think, to talk about where we are in value-based care because I think it is important to Medicare Advantage it’s an area that we’ve been intensely focused on. As I mentioned on the primary care side, we’ve been working with a number of aggregators, plus increasing the amount of value-based care, but more importantly, embedding in those contracts quality and outcome measures as well as access and service.
And I think those will have it, continue to, I guess, have an important impact on those. The other opportunity that we have is around specialty care. And we have been doing quite a bit of work on aggregation of specialty care, and particularly carving in high complex areas on specialty medical spend. That’s an area where we see significant opportunities and don’t see that as a really mature part of the market today. For example, Carelon is launching in January an oncology specialized care model with our affiliated health plans and it’s allowing us also to more broadly commercialize that opportunity. We also see opportunities in musculoskeletal, renal and more. And I think this is a really differentiated focus because as we think about where members are very focused on access to surround specialty care, and I think we have a unique opportunity from both our innovation, our technology and the clinical expertise we offer to run that through Carelon with our health benefits, particularly in Medicare, but also across all of our lines of business.
And that’s going to be an important strength for us, and that’s an area that I think in the specialty enablement will help our Medicare Advantage stars, but also help our patients get better access to that care. So that’s — we think it’s a differentiator. But overall your question, I think we’re very focused on the areas that drove some of the areas within those three contracts, and we feel we have very good line of sight to what they were and a lot of them were easier navigation for our members and making sure that it was a much more personalized experience than we’ve had in the past. And then again, ensuring that our supplemental benefits and over the counter are simpler and easier to use and we shared a little bit of that and we made those changes actually in our bids over the last couple of years.
So thanks very much for the question, Michael, next question, please.
Operator: Next, we’ll go to the line of Josh Raskin from Nephron Research. Please go ahead.
Josh Raskin: Hi, thanks. I’ll add my congrats for 88 quarters for John as well. My question, can you speak to the strategy of how Carelon and benefits segments aim to really work together over time? I’m specifically interested in how you tie sort of the various companies within Carelon together and then also on that care delivery side as part of the answer. And then lastly, are there certain any capabilities, certain capabilities that you think are missing or would be helpful for Elevance in terms of putting together that totality of strategy?
Gail Boudreaux: Yes. Thanks for that question, Josh. We’d love to share more about our strategy. I’m going to have Pete Haytaian talk about it as you know he leads that part of our business.
Peter Haytaian: Yes. No, thanks for the question. I really appreciate it. I think it is a good opportunity to talk about our strategy holistically. As Gail mentioned in her prepared remarks, we talk about whole health and integrated care and driving affordability. But I really want to tag off of what Gail just talked about because I really do believe it’s what we’re focused on and differentiating ourselves on. And that is looking at high cost, high spend areas of healthcare. We face off with our health plan partners. We identify those areas. Specialty care is a tremendous opportunity and a real differentiator. Gail mentioned some areas that are critically important to us as we move forward and this is across all lines of business.
Not one particular line of business, but when you think about high spend areas like oncology, like MSK, like renal, we have a wonderful opportunity to manage the member holistically and take full risk on those members. Now importantly that’s – it’s a big part of our strategy in terms of assuming full risk on those categories, driving earnings through Carelon, our unregulated entity and also focusing on areas and profit pools that are growing where we have a wonderful commercialization opportunity. And how this all plays together is we face off with Elevance Health. We identify these areas. We drive capitated full risk in many of these instances, and then we deploy those capabilities externally. This is really playing through in a nice way, and we’re seeing that play through in terms of our growth trajectory.
To just, again, reiterate what Gail said in January of this year, we’re going to be launching an oncology program at full risk. We are also looking at taking full risk on the seriously mentally ill in behavioral health, where we’re not only managing the behavioral health, but the physical health side. And this is all the type of thing that is playing through into our external pipeline, which we’re seeing grow nicely. So I really appreciate the question, Josh. I think — oh yes, and by the way, you did ask questions around additional capabilities. I would say that M&A also is an important part of our strategy as we move forward. And when you think about these highly specialized areas of care, we’re not naive to think that we have the capabilities internally to handle all of it.
