UnitedHealth Group Incorporated (NYSE:UNH) Q4 2022 Earnings Call Transcript

Page 10 of 12

Andrew Witty : Heather, well said. And again, you’ve seen a real transformation of the Optum Rx platform. If you look at five years ago, about 1/3 of the revenues in that business came from non-PBM pharmacy services. Now it’s at half. As a tremendous shift on the business’ scale, really is significant. And I’d say one of the key themes, which is driving a lot of that is a relentless shift was the consumer in the way in which that business is orientated and building its product. Real focus on delivering the best possible deal for consumers, making sure they get the lowest net cost. And then you’ll see through, as Heather just mentioned, partnerships like RVO Health, you’ll see us to continue to innovate the way in which we engage with consumers to make that much more modern, much more as U.S. consumers should get and should expect. Heather, thank you so much. Next question please?

Operator: The next question comes from the line of Steven Valiquette with Barclays.

Steven Valiquette : so regarding the acuity level of the elevated flu and respiratory costs in the fourth quarter, is there any sense for just how much of the elevated cost for, hate to call it, tripledemic, let’s just call it that, I guess, for the quarter, how much of that was related to the hospital inpatient setting in particular? And then from your data, was there any sense that there may have been any slightly lower elective procedures or traditional non-COVID and non-flu-related care in the fourth quarter in light of the elevated flu and respiratory cost and utilization?

Andrew Witty : Stephen, thanks so much for asking that. Listen, I think — listen, of course, it was Q4. There was a bit more flu and respiratory. But really, I’d say immaterial in the scheme — in the grand — in the way I’d say in the grand scheme of the healthcare costs of the U.S., almost not noticeable. I mean, almost nothing to see. And I think I wouldn’t — much as I think there was a lot of anticipation around what could be coming in this notion of different viruses all come, somehow creating this, I think you said triple pandemic, really not there. And the little elevation we saw was somewhat within the ranges of what you typically would expect in a normal Q4 early flu season, which, as Brian mentioned earlier, looks like it’s — we’ve seen the last five weeks coming down.

That’s pretty much it, yes. So I really wouldn’t guide you to characterize this as a big deal within the overall mix of the total healthcare costs that we’re dealing with. It really isn’t. Next question?

Operator: Our next question comes from the line of Kevin Fischbeck with Bank of America.

Kevin Fischbeck : Just wondering if you could talk a little bit about your expectations for redeterminations that you talked a bit about how you see that as a membership opportunity, but some more focus on the MLR implications. I guess, if you think about the potentially significant change in the membership of the Medicaid program and the implications for the risk pool there, how are you thinking about potential margin compression and how quickly rates might be able to reflect that, if it does play out?

Andrew Witty : Kevin, thanks so much. I’m going to ask Tim Spilker, who looks after our Medicaid business to talk to that. And maybe Tim, as you do that, you could also maybe just allude a little bit on the degree of visibility you have for your book of business as you roll into 2023. That might also be helpful.

Page 10 of 12