Sentiment Analysis of the earnings transcript to help figure out if there are any bullish or bearish sentiments that could be gathered from it. We're doing ML and AI based analysis on the earnings call to get some more insights.
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| Statement |
|---|
| We continue to optimize our health benefits business, including by executing a multiyear margin recovery in our commercial risk-based margins to return to pre-pandemic levels and expect margin improvement will continue next year |
| But we believe as we head into 2024, we're going to be able deliver solid growth |
| Our results demonstrate our ability to execute on our enterprise strategy of delivering whole health solutions that are affordable, personalized and simple |
| Based on our strong year-to-date results and confidence in our outlook, we are increasing our guidance for adjusted earnings per share to be greater than $33 for 2023, which includes incremental investments planned for the fourth quarter that will accelerate our strategy and enhance the performance of our Medicare Advantage business |
| It is the strength and resilience of our diverse businesses that provides comfort in our outlook, while the earnings power of our Health Benefits and Carelon division provides us the confidence to reiterate our commitment to our long-term target compound annual growth rate in adjusted earnings per share of 12% to 15% |
| So as we think about where are today, we feel good about our positioning |
| In our Commercial Risk business, we are successfully executing on our goal to deliver operating margins in line with pre-pandemic norms |
| Retention has been consistent with our expectations, and we're pleased with our progress, which we expect will extend well into 2024 |
| Strategically, it was the right thing to do so that we can make sure we are focused on those markets where we have an opportunity to be very successful, deliver strong benefits for the members that we're privileged to serve |
| As Gail referenced, we are only three days in, but we're actually very pleased with the response we have from our brokers regarding the competitive positioning of our benefits and we believe that will be able to grow membership above the market in excess of some strategic decisions that we made around targeted market exit |
| We are actually very excited about AEP |
| In the individual market, we are seeing strong growth in plans that offer affordable and comprehensive coverage designed around the needs of consumers in our communities, including those transitioning from Medicaid to individual ACA coverage |
| We have a very diversified business and I'm excited about Mark joining our team and excited about the whole team |
| We have great growth |
| Our government business also posted a strong quarter |
| Mark brings -- he's an actuary by training, brings an incredible insight to our business |
| We are seeing encouraging signs in some of our Blue states where we offer Medicaid and commercial coverage |
| And we have a great opportunity to provide greater certainty and cost management to our owned health businesses, but externally commercialize that and seen a lot of momentum going into '24 on that, prove it on ourselves and then show the market the capabilities, particularly around the Blue system |
| Not one particular line of business, but when you think about high spend areas like oncology, like MSK, like renal, we have a wonderful opportunity to manage the member holistically and take full risk on those members |
| Specialty care is a tremendous opportunity and a real differentiator |
| And that's going to be an important strength for us, and that's an area that I think in the specialty enablement will help our Medicare Advantage stars, but also help our patients get better access to that care |
| And I think this is a really differentiated focus because as we think about where members are very focused on access to surround specialty care, and I think we have a unique opportunity from both our innovation, our technology and the clinical expertise we offer to run that through Carelon with our health benefits, particularly in Medicare, but also across all of our lines of business |
| Furthermore, we have enhanced our core and supplemental benefits to reduce member's out-of-pocket costs for prescription medications, simplified our dental benefits and strengthened our grocery and over-the-counter benefits |
| We're also simplifying consumer and provider experiences through the automation and elimination of certain prior authorizations, accelerating our work with value-based care provider partners and improving clinical decision appeal rates |
| Collectively, these actions and the ongoing investments should enhance our performance in key star measures and ultimately increase member satisfaction with our plans |
| And we feel very good about that |
| We are pleased with our momentum in the business as it continues to advance its strategy of integrated physical, behavioral, social and pharmacy services to deliver whole health affordably |
| Carelon Services delivered particularly strong growth in operating earnings, led by the expansion of our post-acute care management solutions |
| We also extended our service offerings in adjacent areas, including durable medical equipment and wound care, further enhancing our customer value proposition and differentiation |
| And we have leading market share in virtually every market we operate in, both in employer-sponsored as well as very strong in the ACA products |
| Statement |
|---|
| But as I said in my opening comments, we're extremely disappointed on the recent results of the Stars and the decline that we saw in the number of our members in 4-star plans for payment year '25 |
| We're disappointed, however, with our Stars performance for measurement year 2022, which is the basis for Star ratings that will impact the 2025 payment year and specifically, with our decline in consumer survey scores and the way in which CMS applied a new statistical methodology that resulted in significant increases to many star measure touchpoints |
| During the quarter, medical membership declined by 664,000, driven by attrition in Medicaid due to eligibility redeterminations and a new entrant into one of our state programs in July, which resulted in a loss of approximately 140,000 Medicaid members |
| In addition, comparisons to the third quarter of 2022 have been negatively affected by the out-of-period fee-based revenue realized in the third quarter of last year |
| The employer-sponsored side that's actually going maybe a little bit less than we had anticipated |
| We experienced some declines in the CAP survey scores, which were the most heavily weighted measures |
| In our Medicaid business, rates are actuarially appropriate, but we are absorbing a membership headwind related to the pace of Medicaid redeterminations, especially in states that have adopted accelerated time lines |
| What we are seeing is that there's administrative churn and that a lot of people are losing Medicaid coverage temporarily and then they're coming back on |
| I believe you came into the year thinking that you performed in 2022 above your long-term targeted range, and there might be some pressure |
| Our tailwinds will be partially offset by our headwinds, which all relate to the Medicaid business, where we anticipate membership attrition associated with ongoing eligibility redeterminations and the net loss of approximately 930,000 additional members associated with changes in our footprint |
| Those were very high performing contracts in the past and the cut points, while still good performance for us, were below the cut points |
| And we were also impacted by that new CMS statistical methodology, which caused some significant increases in cut points |
| Accordingly, we anticipate the rate of membership attrition associated with redeterminations will slow considerably in the coming quarters |
| While we are disappointed in the outcome of the recently released Star quality ratings, we remain committed to this important line of business for the long-term and are exploring all options to mitigate the financial impact on 2025 |
| Every year has had its opportunities and challenges and 2024 is no different |
| So what you're seeing in that first bucket is the write-down of some of those legacy processes that have now been replaced with our support -- that support our long-term goals with digital and AI and other things |
| We face off with our health plan partners |
| It's just going to be a little bumpier or rockier along the way because of the gaps in coverage and because of the administrative churn |
| However, the third quarter last year included additional out-of-period quality improvement expenses due to the accounting realignment we announced then |
| These risks and uncertainties can cause actual results to differ materially from our current expectations |
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