John Rex: Sure. Good morning, Kevin. So yes, so the elements that contributed to the unfavorable development being around respiratory activity that was going on as the seniors came in to get vaccines, another care was being delivered and such. And that higher inpatient cost per case for the COVID admits that we’re seeing. So those would largely be the prime contributors of the elements that we are seeing here in terms of that unfavourability. So you’re absolutely correct in your assumption. That doesn’t impact our run-in assumption as we think about our outlook for 2024, and which — so keeps us right squarely in where we thought we’d be as we were at our investor conference, is taking out the 84% plus/minus 50 basis points.
Really as we look across the scope of our businesses and we think reflect on how we performed in ’20 and in ‘23, the scope of it being very much with what we saw back in mid-year of 2023, that this is — that the running factors are about outpatient care activity among senior populations, which we incorporated into our bids. The elements that you’re appropriately referring to in 4Q, again, not factors impacting our view at all in terms of how we staked out ‘24 and how we expect to perform in ‘24. Really good question.
Andrew Witty: Yes. And I’d also just add, I mean, as you would fully expect, Kevin, we’re reviewing the leading indicators of care activity, frankly, daily, weekly, monthly and have been all year. And we’ve also been investing significantly in increasing numbers of early warning signals, if I can put it that way, to strengthen our radar capability to see this. And I can tell you, we’re really not seeing any deviation from what we’ve been telling you all year in terms of the core activities across the system. The seasonal bumps at the end of the year, obviously, a little different. But in terms of outpatient utilization, all of those lines of activity that we’ve been discussing at different times with you, the patterns there, very supportive of how we’ve stepped out for ’24. Thanks for the question. Next question, please.
Operator: We’ll go next to Scott Fidel with Stephens.
Scott Fidel: Hi, thanks. I was hoping to just hop back over to Optum Health for a second. And just as it relates, one, to the margin targets that you gave us at Investor Day for the 7.7% to 8%, just want to see if those are still the appropriate targets for 2024? And then maybe if we could walk through the sort of pacing exercise with OH margins, given the expected step-up from the exit rate in the fourth quarter, how you’re thinking about those OH margins for 1Q, and then sort of pacing over the course of the year? Thanks.
Andrew Witty: Scott, thanks so much for the question. I’m going to ask Dr. Desai to make a couple of comments, and then I’m going to talk about where we’ve staked out for Optum Health next year. A ton of work done during 2023 to strengthen the business. You saw that beginning to show through as we roll through the second-half. We continue to expect that to be a very strong driver of improvement as we go into 2024. A lot of that work we talked about already today around engagement is a key element of our confidence in being able to build our profile of that business. And Amar, maybe you could go a little deeper, and then John can close out with discussing on the progression.
Amar Desai: Thanks for the question, Scott. We’re confident in our 7.7% to 8.0% target for 2024. We’ve discussed engagement in detail. The second important piece is our medical management programs, which we’ve scaled effectively. I talked a little bit about OptumCare and evidence-based guidelines. What I would reiterate is the work we’re doing across our network with payment integrity. Again, with the idea of being able to provide the right support services across our network. The last piece I would also hit on is our initiatives around OpEx, which have been progressing well and are on track, driving operating efficiencies and G&A discipline across the organization. And it really with focus on more consistency in our systems and unification of our operating platform. So we feel very good about the 7.7% to 8.0% as we go into ’24. A – Andrew Witty Great. Thanks so much, Amar. John?
John Rex: Yes, Scott. Good morning. So as Amar said, feel very good about where we established our margin objectives for 2024. The element super important here is, again, how these new patient cohorts progress as they come into our business, and we’re able to engage with them clinically and improve their health outcomes, make sure we’re able to close care gaps. And the progress that Amar and teams accomplished during 2023 in terms of getting those engagement levels will assist a lot in terms of the health of the people that we’re serving here, and then particularly, this cohort from 2023 to 900,000 new patients that we’re able to serve and how that business performs over the course of the year. So that’s a big step into it. Another big step into it is this group of 750,000 new patients that came on to the business.
The fact that we were able to. Yet engagement level is significantly higher than we were at last year, where the new cohort will help also. So it gives us a lot of confidence in where we’re stepping out in terms of serving these people throughout the course of the coming year. In terms of your comment, you’d expect them typical than seasonality factors to weigh in how the quarters performed. So much more think about that as seasonality factors, so they’re probably having impact here. So typical in terms of seasonal factors that we would have experienced this year, starting with a stronger base that sets us up well to reach our targets.
