UnitedHealth Earnings Call Insights: Outlook for Medicare Advantage and Continued Earnings Growth
Outlook for Medicare Advantage
Matthew Borsch – Goldman Sachs: My questions on the outlook for Medicare Advantage and just hearing your comments about the pragmatism of the implementation so far. When you look at all of the provisions that are impacting Medicare Advantage in 2014 and ’15 in the interest of ‘parity’ that seemingly without regard to the, the supplemental coverage that you are providing for low and moderate income seniors. Do you think those provisions as it stands today are manageable or do you think that they will need to be revised as you move through the next three years?
Stephen J. Hemsley – President and CEO: I would say if you are basically saying that as it exists today. We would always have an appetite for things that would offer let’s say more flexibility and more responsiveness in the marketplace for Medicare Advantage and we would also hold a view that Medicare in total would benefit from themes of what I would might call modernization of the program and we see those things most effectively in the private sector today. So our posture on Medicare Advantage is that we would be advocates of continued change and kind of proactive change around (indiscernible) of modernization. As it relates to kind of specifics of the regulations and the elements that are effecting rates and so forth I think we would prefer things to be somewhat to otherwise, but I think that it is manageable as it exist today, we probably don’t have – we think that if for things that move further would really start to impact, beneficiaries, affect quality of care that there would be significant pushback, if there were greater activities going forward as you deal with elements like fiscal cliff and things like that. I don’t know if, Gail do you want to comment or Jack.
Jack Larsen – CEO, UnitedHealthcare Community & State: Thank you. I think Steve said it right there, the only thing that perhaps I might point out, we certainly always would have a fairly short list of things we perhaps might suggest modification, more modernization than anything but a lot of the provisions with healthcare reform are things that we’re doing more broadly across our business. So, for example, a focus on payment for success and outcomes and the like that are embedded in stars rating, those are things that are really good and should be preserved we might have a different point of view on the individual elements, of course, but I think the bigger things that are in play are things that will ultimately be good for Medicare Advantage and certainly Medicare broadly.
Continued Earnings Growth
Justin Lake – JPMorgan: Steve, it seems like you are comfortable and saying that you see no real reason why you wouldn’t be able to grow earnings in 2014, is that related hearing that correctly?
Stephen J. Hemsley – President and CEO: Yes, from this the distance and given the opportunities in front of us, yes.
Justin Lake – JPMorgan: So, outside of the exchange uncertainty, which I think we all understand, can you walk us through your main business segments and let us know anything that you believe would take you off to a typical growth path, I know you have a 13% to 16% target. Matt just mentioned Medicare advantage anything further you can tell us there on Medicaid, some of the segments and that might be different than what we typically see year-to-year?
Stephen J. Hemsley – President and CEO: Well, I’m not sure I fully understand the question but if you are asking what – again what gives us a sense of why ‘14 could represent continued growth and opportunity is that if you look at across the expanse of our businesses over the last several years as a lot of these elements have been formulating, coming in the marketplace. We have been growing market share, growing in our commercial business, growing in Medicare, states have been responding in terms of Medicaid and expanding. The military business is coming online, our Optum businesses are getting – really establishing us a very positive momentum as they mature at same time, their growth opportunities seems to be taking off because of the pressure in healthcare system in total…
…And then there is the opportunity to do this all over again in Brazil off a platform that is already market-leading and that’s a pretty good hand to be holding at the moment in – particularly in a nation that’s looking for positive change in higher performance out of its healthcare system and population and continues to value high-quality benefits, modernization and innovation that comes to those benefits and cost. So, cost matter and we are all over cost in terms of the focus of our clinical programs, strategies with our networks and so forth. So, I think that we are executionally trying to take this enterprise to a next level of performance so those factors suggest to me that we have as good a chance as anyone of growing and performing in the marketplace.
Justin Lake – JPMorgan: Do you expect to grow EBIT next year or are you talking about EPS?
Stephen J. Hemsley – President and CEO: I am talking about growing earnings and I have no interest in giving guidance on ’14 at this instance. So you ask me what themes, that’s what we responded.
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