Whit Mayo: Great. Thanks so much, Tim. Next question.
Operator: We’ll go next to Ann Hynes with Mizuho Securities.
Ann Hynes: Hi. Good morning. So, I would say your commentary on care patterns is definitely more positive than what investors feared. And you referenced several times that trend came in line with your expectations, can you actually tell us what growth rates you’re assuming like the major trend categories in guidance, whether that’s inpatient and outpatient, and maybe some year-over-year growth versus historical averages? And within that, can you specifically talk about what you’re assuming for MA? That’d be great. Thank you.
Andrew Witty: John, would you like to start that?
John Rex: Yeah. Ann, good morning. So the components that I would call outliers are the similar components that we’ve talked about for a while here in terms of trend outlooks. So in particular, still go back to outpatient care for senior, what we’ve seen in orthopedic, cardiac, those kind of categories primarily have been the big factors. I think you brought up a really important point though. So the percentage growth in those was much bigger last year. You’re coming off an environment where both the supply side had been constrained and the willingness of seniors, in particular, consumers to access that environment had been constrained for a couple of years. So those percentage factors were quite significant. You heard us talk about very significant levels on those double-digit levels of last year as we looked at those.
The way we look at those really though is because you would expect that to start normalizing in terms of the percentage change. So you really look at that in terms of the number of units consumed per patient served. And so you look at those levels, that’s what we’re talking about and we’re seeing those kind of continuing at those levels. They’re continuing at those levels in terms of the number of units consumed, delivered, and — but those percentage levels, of course, would start normalizing out a little bit in terms of what you’d seen. So that continues to be the area. It’s outpatient care for seniors. It’s those categories that we’d call real outlier areas versus our historical levels of trend factors. The other — the other historical levels of trend factors remain much closer to kind of our traditional views that we’ve always had as a company.
In the quarter, other things you look at just to get indications, and by the way, we kind of vastly expanded all those areas. First fills, you’ve heard us talk about that a lot. Also, first fills in the quarter, an indication of outpatient care, physician visit activity, it’s kind of normalized in there also in terms of stabilizing for us and many — the many other factors of the company historically looked at. Thank you.
Andrew Witty: Thanks, John. And maybe ask Brian maybe to give you a little bit more from a UHC perspective, and then maybe Heather also from a Optum perspective in a second, just maybe reflect a little bit on the work you’re doing in terms of how we — obviously, medical trend is one thing, then there’s a question of how well we’re able to engage with folks to actually help them manage their cost and maybe come to you in a second, Heather, on some of the word that you’re leading at Optum. So Brian, first?
Brian Thompson: Sure. I think John said it well. The first headline is what we’re seeing is what we plan for. But as he alluded to, some of those elements, we plan for them to be elevated year-over-year. And I don’t want to lose sight of unit costs. We’ve talked for some time that multi-year provider group and hospital contracts renew a little later than perhaps the inflation we’ve seen and that is up year-over-year. The biggest driver was the outpatient. We’re really pleased to see that in line with as John explained. But also, we’ve been able to see increases in Specialty Rx. We’ve planned for those. Those are in our pricing appropriately, et cetera. And we’ve certainly worked hard to create more access in the behavioral space.
So all of those elements are modestly up, but up as we had planned for and they’ll hopefully sound familiar to you because we spoke to all of these at our investor conference as we ended the year. So I think that’s what I would summarize or add to John’s commentary. Heather?
Heather Cianfrocco: So, I would say, incredibly consistent on the Optum side. So maybe just focusing on the medical first. So I mean, I think you’ve heard us say this, when you look, when we came out of last year, looking into this year, our focus was on the behavioral health, those outpatient sides consistent with UnitedHealthcare. And what was very important for Optum Health was using that capacity that Amar explained in our physicians, as well as those wrap-around services and our investments to ensure that we were looking at those care patterns. So, we feel really good about coming into this year. That work we’ve done, John referenced engagement with particularly those most complex numbers, 75% already engaged. And that PCP engagement, that member engagement is incredibly important, whether it’s with their PCP directly or it’s with some of our care — our own care management wrap-around services.
Because it identifies affordability opportunities incredibly quickly. It also identifies chronic disease that needs to be managed and it gets them connected to primary care quickly. So that’s our focus for the year and that’s why we feel good about that our ability to control utilization on the medical side particularly. And again, what we’ll remind you is a reduced funding environment as we go into this year. So that’s what brings us — that’s what brings that value-based care proposition, incredible value to all of our payers. On the pharmacy side, I call it, same things. For our clients, that specialty trend is a focus and we bring those products and solutions and that’s why we’ve seen growth on the PBM side and our pharmacies around our clinical model and the continued innovative products that we’re bringing to bear.
So you’re seeing that pull-through in the diversified growth and strength of the performance on the Optum Rx side as well.
Andrew Witty: Great. Thanks so much, Heather. Just one number Heather just shared with you there, which I’m very pleased of and it’s a significant improvement year-over-year is that 75% engagement of the most complex members in Optum Health. And just for that, that means three out of every four most complex, most disadvantaged folks in the country have had a direct engagement with us in the first three months of the year. That’s a great rate of touch. Opens the door then for us really getting to know those folks, helping the system, helping bring the system to support that many of these people, particularly those who are trapped in their homes have just not had access to that kind of care opportunity. That engagement is the first step of doing that.
We have — we really believe that is a key to how we not only deliver an effective care delivery from a cost point of view, but also make sure they get the very best quality that they deserve. So really pleased to see that step up year-over-year. I think we have time for one last question. If we could take that question, please, Jennifer.
Operator: Yes, we’ll go to our last question from Jessica Tassan with Piper Sandler.
Jessica Tassan: [Technical Difficulty] A few more details maybe on the —
Andrew Witty: Sorry, we missed the beginning of your question.
Jessica Tassan: Hi. Sorry about that. I’m interested in a few more details maybe around the launch of Change 2.0. If you could talk a little about what payer receptivity to reconnection has been? Whether Change retains its legacy data rights post breach? And then just any change or updated thoughts on kind of the long-term thesis on Change for something like a real-time transparent payments and decision support network? Thanks so much.
Andrew Witty: Thanks very much for the question. Let me ask Roger to kick that one off.
Roger Connor: Yeah, Jessica, thanks very much for the question. First of all, on your first part about Change 2.0. Again, we’re just confident in terms of our ability to reconnect. I mentioned the level of functional restoration that we have. You can imagine now the next stage of this is working with payer and provider to reconnect them in a safe way and an appropriate way, and all of the conversations that we’re having with them are positive as we work through it. As I mentioned, there’s still work to do and that’s going to take us a little bit of time, but we’re continuing to work through that functionality. I think it’s important also to recognize, where Change sits in the overall Optum Insight portfolio. Change Healthcare was about 15% of our projected revenue for this year and when you look at — that means I’ve got thousands of people who are continuing to work on other products outside of Change, not impacted by this and their underlying performance this quarter has been strong.
If you adjust for the Change out, that business’ earnings actually grew by around 10%. But what we haven’t slowed either, as you mentioned, is our innovation agenda. The excitement of the Change portfolio across the Optum Insight portfolio is what we can bring to this market to transform it from an innovation point-of-view. And the real-time settlement work that we’re doing, plus work that we’ve been doing with Optum Health on value-based care and provider risk enablement, that’s all still going ahead. So in terms of our innovation agenda and the performance of the underlying business within Optum Insight, we’re very positive.
Andrew Witty: Roger, thanks so much. And yeah, absolutely, Change Healthcare, the important acquisition for the group and I think important for the country that we own Change Healthcare. Without UnitedHealth Group owning Change Healthcare, this attack would likely still have happened and it would have — it would have left Change Healthcare, I think, extremely challenged to come back because it was a part of UnitedHealth Group, we’ve been able to bring it back. We’re going to bring it back much stronger than it was before. And secondarily, all of the reasons that we were interested in bringing the Change Healthcare capabilities and customer connectivity closer to UnitedHealth Group still absolutely holds fast in terms of the potential innovation around things like real-time settlement, clinical decision support capabilities, all of those products are the future services of the future, which ought to be characteristics of a modern healthcare environment.
Those are all the reasons why we believe Change and Health — and UHG were better together. This cyberattack has unfortunately created another true validation of why that was the right thing to do because it meant UHG was in position to resolve this much more quickly than I think would ever have been imaginable in a standalone situation.
Andrew Witty: Thanks, everybody, for all of your questions this morning. It’s been a bit more of a complex quarter for sure this time around, but one that’s also showed the depth and breadth of our company’s capabilities. We’re recovering quickly from the Change Healthcare attack and are a stronger, more capable company as a result. We’re continuing to build our business based on the five strategic growth pillars that we’re relentlessly focused on, and we’re steadfastly confident in our ability to achieve our 13% to 16% long-term growth objective as we look to the years ahead. We very much appreciate all of your time and attention this morning. Thank you.
Operator: This does conclude today’s conference. We thank you for your participation.
