Andrew Witty: Kevin, thanks so much for the question. So listen, by far and away the most important phenomena here are the things we’ve talked about to you already. So just to reiterate a little bit what we said to you back in Q2. So we’ve seen obviously the elevation in MLR which has stabilized, hasn’t really come down, isn’t accelerating up, but definitely is a phenomena year-over-year, number one, number two, increased behavioral care costs. Remember that within OptumHealth, our behavioral business is, that’s where our behavioral business sits, and that has also seen significant increase year-over-year. We’re very positive about that, because it’s a signal that people are engaging in seeking help for their behavioral conditions.
And we know that, that entwines very importantly with their ongoing medical costs. But nonetheless, it’s an element of elevation. And then as you rightly reiterate, a piece of it is the growth in our value-based lives and the mix of those lives. And by mix, that means complexity mix, as well as geographic mix. And it takes, as I said already today, takes a little bit of time to build up the capabilities to allow us to engage properly with those folks at the level we want to. And we have really have — we have not held back on doing that, Kevin, and that’s really the bulk of the investment during this cycle where we’ve really lent into building those capabilities in readiness for the next, we hope, many years of serving these individuals higher and higher capability.
You know, of course, and I made a comment earlier about re-engineering our cost base. Of course there are changes going on in our cost base across the whole organization, including OptumHealth in response to the change in pricing signals from CMS. But I would put those very much, kind of, secondary to the core elements I’ve just described. We’re in a position obviously where we know exactly what these populations are that we’re now looking after. That’s been very much the basis of our forward views in terms of how we’re starting to lay out for ‘24, ‘25, ‘26. And we feel very confident about our ability not only to grow as an organization, but to continue to strengthen margins back into the zone that you’ve historically been used to. Thanks so much, Kevin, for that and next question?
Operator: We’ll go next to Sarah James with Cantor Fitzgerald.
Sarah James: Thank you. I wanted to circle back to your comments on the strength in commercial growth and national accounts for next year. Can you give us a little bit of color on the pricing environment, given all the comments you’ve made on the moving pieces and cost trends, and then help us put into context that, and the broader economy with how your clients are thinking about product selection, either in breath or the type of products that they’re purchasing from you in ’24?
Andrew Witty: Sarah, thanks so much for the question. Let me ask Dan Kueter, who looks after our commercial insurance business to answer that.
Dan Kueter: Yes, thanks, Andrew. Hi, Sarah. Thanks for the question. The growth that John mentioned in his comments is settled business in our national accounts fee-based segment. So we’re very happy with how that’s completed. We’re pricing and negotiating our fully insured business for January right now, and we’re comfortable with how that’s materializing as well. Employers continue to focus on both affordability and innovation, and our innovative products continue to resonate significantly in the market, as Dirk highlighted in his comments. Thanks, Sarah.
Andrew Witty: Thanks so much, Don. Next question, please?
Operator: We’ll, the next two David Windley with Jefferies.
David Windley: Hi, good morning. Thanks for taking my question. I wanted to pivot to OptumInsight, you had commented in previous calls about a fairly heavy level of spending to integrate change and invest in that platform. I wondered if you could update us on any ongoing spend in that regard? What we should expect in terms of implementation on pro-health and kind of trajectory of margin in OptumInsight? Thank you.
Andrew Witty: Hey, David, thanks so much for the question. Let me ask Roger Connor, who’s our new CEO of OptumInsight to respond, Roger?
Roger Connor: Thank you, and David, thank you for the question. First of all, just to say I’m delighted to be taking over the leadership of Insight. This is a pretty unique and special business. And getting to know the people, the products, and the offerings, I think we’re going to make a real difference to healthcare. So excited about that future. Just specifically, David, on your question, the change integration’s gone really well, to be honest. You’ll see in the Q3 margin that we had the tail end of some of that spend to integrate, but the Q3 margin is in line with our expectations. I think it is worth understanding the longer term outlook for OptumInsight margin. We still believe that’s in the region of 18% to 22%, that’s really driven by the mix of the businesses.
As you know, we’re a business that has software, we have services, so there are different margins in there. But when you take what we’ve created with change and you look at the overall portfolio that we have, we have this incredible portfolio that is addressing everything from clinical decision support, we’ve got products for admin efficiency, we’ve got other products for payment optimization. You have that growth engine plus our innovation, plus that margin profile, we’re very confident about the future performance of Insight.
Andrew Witty: That’s great. And I wonder whether Dan Schumacher, who’s been very heavily involved in our various health systems partnerships, might just want to reflect a little bit on the question obviously was around pro-health, but rather than talking specifically, maybe just share a few thoughts about the overall evolution of those health system profiles and how they play out over the first couple of years.
Dan Schumacher: Sure, thanks Andrew. David, appreciate the question. Certainly our health system partnerships, you mentioned one that we’ve announced recently, it’s a growing portfolio for us. Obviously, at the health system level, there’s a lot of pressures. We’ve talked in earlier questions about wage inflation and so forth. And we have a unique opportunity to really be able to address some of those near-term challenges, while at the same time provide some capacity for future evolution of the system as they think about more digital capacities, greater outpatient catchment, as well as further engagement. So those are some of the things that we can help unlock for them and their migration to value-based care. So we’re encouraged by the portfolio. It continues to grow. Actually, from the initial scope nine out of 10 have expanded from their initial scope. So continuing to grow, we’re in the early days, and we see a lot of opportunity ahead of us.
Andrew Witty: Dan, appreciate it and thanks so much for the question. Next question, please.
Operator: We’ll go next to Ann Hynes with Mizuho Securities.
Ann Hynes: Hi, good morning. I would like to ask a GLP question more on the medical side. It sounds like right now price appears to be the greatest barrier for widespread adoption, assuming the outcome data continues to be positive. If pricing gets to a point that you view and your clients view as affordable. What do you think would be the long-term impact on care on the medical side? Are you seeing any near-term effects right now on MLR? I should say an MLR benefit. And do you think it would be reasonable to assume overall MLRs should decline with greater adoption of these drugs? And maybe what categories of health spend do you think or do you view would be the biggest opportunity going forward? Thanks.
Andrew Witty: Ann, thanks so much for the question. I mean, I think honestly it’s just way too early for us to be able to see anything like that, just in terms of, you know, obviously the weight loss indications are only just really coming into play. We haven’t really been able to see, I’d say, anything from that perspective yet. And as I said earlier, the real focus for us right now is to try and figure out a way in which we can get to a position where the affordability of this class puts it in a zone where, you know, the people who need it can get it and can afford it. Nothing more to say on that, honestly. Next question, please?
