And again, I’ll keep going back to my flywheel, where we think that will improve the performance of our health benefit plans. There’s a lot of interest in externally in these. And Pete mentioned, we saw some nice traction in a few of these offerings this year. So overall, I’d say very consistent focus around our value-based care – care enablement, and we feel like we’re getting a lot of traction. And I would focus you a lot on the specialized care Specialty Care, particularly on the Carelon growth opportunity. So, thank you very much for the question. Next question, please?
Operator: Next, we’ll go to the line of Nathan Rich from Goldman Sachs. Please go ahead.
Nathan Rich: Great. Good morning. Thanks for the questions. Two on the Medicare business. First, you talked about Medicare cost trend developing as expected in the fourth quarter. I guess, I’d be curious if there are any areas that came in higher or lower than expected and what the benefit expense guidance for 2020 – for assumes for Medicare cost trend? And then I guess, higher level, as you reposition the Medicare business, and I understand there’s several moving pieces over the next couple of years. What’s the company’s current view, I guess, first of the Medicare Advantage market longer term? But then second, the membership growth and margin potential for Elevance, specifically within that market context? Thank you.
Gail Boudreaux: Thank you for the question. I’m going to ask Mark to address your first question, and then I’ll come back and share our long-term views on Medicare.
Mark Kaye: Nathan, overall utilization in the fourth quarter developed largely in line with our expectations. And that’s evidenced by our reported benefit expense ratio, which came in favorable, as you know, to consensus and really to the midpoint of our initial full year 2023 guidance range. We did see pockets of high utilization, specifically in Medicare related to orthopedics such as knee and hip replacements and other outpatient procedures. But this is broadly planned for as part of our underlying cost trained assumptions. Similarly, we saw a seasonal up-tick in respiratory elements, including the flu and COVID as well as increased RC vaccinations. But again, utilizations were aligned with what we planned. We’ll continue to monitor our claims trends closely, including prior authorization data. We remain confident that our Medicare Advantage bids for 2024, and our pricing commercial do reflect appropriate projections for utilization and medical cost trends.
Gail Boudreaux: Thank you, Mark. Nathan, in terms of your broader question, let me just provide a little bit of perspective. As I think about the market, we still think Medicare Advantage is a very good long-term market. And as I said, we’re committed to driving sustainable performance for the long term. Medicare Advantage delivers really strong differentiated value for seniors. I think you have to start there. And as you look at the aligned incentives across the system to deliver better outcomes and better care – it is very – it’s a very strong marketplace, and it continues to grow. And importantly, it’s incredibly popular with seniors with greater than 50% of seniors selecting Medicare Advantage today. So that’s – against that backdrop, we know seniors value stability in their benefits year-over-year, and the items that are most important to them.
And so, we have, as you heard from us earlier, look to make sure that we are in this market for the long-term, balancing that stability. So with what we know is happening in this market, we can make the right benefit decisions and again, feel that we positioned ourselves, and are making the right strategic investments, to improve our performance. We see this business maturing, as Mark shared in his comments as well. And again, been very intentional about our desire, or decision to exit certain programs or markets and plans where we didn’t think, we had a long-term sustainable path to performance. And that combined with the risk models, made that choice and then again, reposition Puerto Rico, which we believe is still a very good market, but there were some actions that we knew, we had to take.
So as we look at those decisions for the long-term, as Felicia shared, our business performed when you look at the mainland and take out those exits. We had very strong selling season. Again, I think that’s a testament to the value of the benefits and our position. And importantly, we do believe we can grow this business profitably even in a year with hypercompetitive markets in certain cases where we outperformed the growth in our Blue markets, which, again, has always been a strategy we’ve had, is to go deeper in our Blue markets and to gain more share with the value of our brand as well as in other places. So again, we think it’s a good market. We know we have some work to do in that market, but we feel we’re positioning for the long-term and think that we can add distinctive value for seniors as part of our focus on whole health and continuation of coverage to stay Blue for life and all of their coverage.
So, thank you very much for the question. Next question please?
Operator: Next, we’ll go to the line of Lisa Gill from JPMorgan. Please go ahead.
