Please standby, we're about to begin. Good morning, everyone, and welcome to the UnitedHealth Group Third Quarter 2021 Earnings Conference Call. A question-and-answer session will follow UnitedHealth Group's prepared remarks. As a reminder, this call is being recorded. Here are some important introductory information. This call contains forward-looking statements under U.S. federal securities laws. These statements are subject to risks and uncertainties that could cause actual results to differ materially from historical experience or present expectations. A description of some of the risks and uncertainties can be found in the reports that we filed with the Securities and Exchange Commission, including the cautionary statements included in our current and periodic filings. This call will also reference non-GAAP amounts. A reconciliation of the non-GAAP to GAAP amounts is available on the financial and earnings reports section of the company's Investor Relations page at unitedhealthgroup.com. Information presented on this call is contained in the earnings release we issued this morning and in our Form 8-K dated October 14, 2021, which may be accessed from the Investor Relations page of the company's website. I will now turn the conference over to the President and Chief Operating Officer for UnitedHealth Group, Dirk McMahon. Please go ahead, sir.

Good morning. And thank you for joining us today. Unfortunately, our CEO and colleague, Andrew, is not with us this morning since he had an urgent but straightforward procedure last night for a kidney stone. All went very well and we expect him fully back in just a few days. I'm quite confident he's listening now. So I hope you're doing well, boss. John Rex and I will be subbing for Andrew this morning and we have our management team with us, as usual, to help with your questions. We're here today to discuss third-quarter results and the expanding opportunities we see looking ahead. As a result of the progress at both Optum and UnitedHealthcare, we have increased our 2021 adjusted earnings outlook to a range of 1865 to 1890 per share. We continue to prioritize 3 things Andrew has discussed before which are foundational to the growth of our enterprise. First, unlocking the collaborative potential within Optum and UnitedHealthcare for the benefit of all. Second, further developing our technology in data science platform to aid patient care and experience and to help the system run better. Third, strengthening our consumer experience, capabilities, and values. I'll briefly highlight a couple of items for you. You likely have seen the CMS Medicare advantage/quality ratings showing 95% of our UnitedHealthcare members will be in four-star rated plans or better for 2023, up from 78% for 2022 and a new high for our Company. with Optum Care on behalf of the many payers, we serve 99% of Medicare Advantage patients will be enforced our plans or better for 2023. A second important highlight in the quarter, we were encouraged by the ongoing strength in our employer and individual business, which has now grown by over 330,000 people this year with revenue up 7% year-over-year. We continue to see active interest in our product innovations, such as our All Savers level-funded offering and are encouraged by our competitiveness in the market and momentum heading into '22. We also elevated consumer connectivity by incorporating fitness offerings from industry-leading partners. OptumHealth continues to build momentum as well. Entering the open enrollment period for Medicare advantage, we have more than 2.2 million people served under physician-led, fully accountable arrangements, and expect '22 to be another year of record expansion in this key part of our portfolio. Our broad home-based clinical care initiatives at Optum and UnitedHealthcare are central to improving near and longer-term health outcomes for people with medical, behavioral, and social needs. These efforts include Optum at home, which delivers high-quality primary care services in the convenience of the home setting and supports recovery after hospitalizations. Senior served by our home and community offers experienced a 14% lower rate of hospital admissions and about a 4% higher rate of physician encounters. In addition to carrying for people in their homes, we continued to expand capabilities in other optimal sites of care, including via digital means. Optum is distinctively enabling virtual care for patients using their own primary care physicians and behavioral clinicians. For example, a physician engaging in a virtual visit with a patient can easily bring in a behavioral health professional for real-time consultation. UnitedHealthcare is using opt-ins virtual capabilities to introduce a new suite of digital-first products offering a near seamless experience between virtual and traditional primary, specialty, and urgent care. We expect, during 2022 and beyond, to further build on these opportunities to connect and integrate multiple channels of care. Simplify the experience for patients and providers, and deliver quality care that is affordable and in the optimal setting. Let me now go a little deeper in a few areas to give you an assessment of how we were doing on the themes I mentioned at the outset. OptumInsight continues to drive better clinical and operational performance at the health system level. Last week, we reached a new multi-year partnership with a leading and innovative health system, SSM Health, whose 40,000 employees, 33 hospitals and post-acute facilities, and 300 physician clinics, serve the people of Missouri, Oklahoma, Wisconsin, and Illinois. OptumInsight brings real value in helping the system strengthen and scale essential functions such as care coordination, revenue cycle management, and digital modernization, all to improve health outcomes in patients' care experiences. These and similar efforts to simplify processes, reduce administrative burdens, and help our partners focus more attention on their care, on their core missions of patient care. OptumRx continues to deliver to health system partners such as its new multi-year agreement with 0.32 health, which serves more than 2 million people in New England through its founding organizations, Harvard Pilgrim Healthcare, and Tufts Health Plan. OptumRx will provide integrated pharmacy benefit and specialty offerings that will enhance services and deliver improved affordability for their plan members. OptumRx is having a substantial impact through its community behavioral health pharmacies, which now serve nearly 700,000 people with mental health, addiction, and other conditions through more than 600 dispensaries across 47 states. The pharmacies deliver a high-touch approach to care that contributes to a more than 90% medication adherence rate and lower emergency room visits and hospitalizations by 18 and 40% respectively, driving better health outcomes and a lower total cost of care. Within our UnitedHealthcare government businesses, we have increased processing efficiency by 25% over the last year by using Optum technology to improve auto adjudication rates and intelligent work distribution to appropriately skilled channels. We have many such initiatives underway across the enterprise in affordability, provider experience, and product development as we employ advanced technology in data analytics to drive even greater value for the people we serve and the health system. Before turning over the call to John, a quick word on our pending combination with Change Healthcare. We continue to work diligently to satisfy regulatory requests and now believe, based on our experience so far, the transaction should close in the first part of 2022. We are highly energized about the positive impact we can have working together with the exceptional change team. A team aligned with our mission and values and focused on delivering substantial benefits for the healthcare system. These benefits will include helping clinicians by simplifying access to real-time evidence-based guidance as they are serving patients. Closing gaps in care more rapidly to improve health outcomes and lower costs, reducing unnecessary complexity by removing administrative waste and obstruction to make the care process simpler, more cost-effective, and more transparent. And bringing greater convenience, and simplicity to managing consumer health finances while ensuring care providers get paid more quickly and accurately. Optum and Change Healthcare's capabilities fundamentally are complementary in distinct, because both companies already successfully serve health plans and state governments, care providers, and consumers in a highly competitive market. We believe this combination will make the healthcare system work better for everyone and bring exceptional value to those we serve. With that, I'll turn it over to our Chief Financial Officer, John Rex.

Thank you, Dirk. This morning, we reported third quarter and year-to-date revenues of 72 and 214 billion respectively. Growth of 11 and 12% over last year. This growth was led by OptumHealth, primarily our care businesses. In the third quarter, the Optum platform comprised 54% of enterprise operating earnings and continues to show strong growth momentum. Our performance reflects the diverse and complementary strengths of our business, setting the stage for growth in the years ahead. Our updated full-year '21 outlook includes unfavorable COVID impacts consistent with the expectations we have discussed throughout the year. During the third quarter, while direct COVID care and testing costs ran above the expectations we had nearly a year ago, we again saw elective care offsetting the impacts of higher case rates, much like previous cycles in the pandemic. This quarter, there were approximately 60,000 COVID hospitalizations, meaningfully above the second quarter, with the month of August peaking at nearly 30,000 and then declining in September. Looking at specific business performance. OptumHealth's third-quarter revenue and earnings increased 32% and 37%, respectively, year-over-year. Revenue per consumer grew by 30%. This reflects the increasing impact and number of value-based relationships within Optum Care. The expansion of our in-home and community health platform, as well as the growing acuity of the needs we can serve. OptumInsight revenue grew 13% in the quarter, and earnings grew 15%, as the revenue backlog increased by 12% to 22.3 billion. We see overall business development sourcing and activity levels increasing, particularly with care provider customers. And for our software and analytics offerings. OptumRx revenue and scripts grew 6% year-over-year and earnings 5%. OptumRx is seeing both strong customer retention levels and sale success for the largely completed 22 selling season and early activity for 23. Turning to UnitedHealthcare, the third quarter showed increasing member growth in our commercial offerings, particularly in employer-sponsored benefits. Increased employment is a broad underlying contributor, but we are particularly encouraged by the growth we are achieving in our affordable consumer-centric offerings. Medicare advantage membership has grown 745,000 this year. Inclusive of plans which serve dual special needs numbers, we expect to add a total of over 900,000 Medicare advantage members. The number of people served through managed Medicaid grew by more than 1 million members over last year. As we began to serve people in new regions such as North Carolina, Kentucky, and Indiana, and as state-based redetermination activities remained popped, we were honored to begin serving people in the Missouri Medicaid expansion this month. Our liquidity and capital positions remain strong with third-quarter cash flows from operations at 7.6 billion or 1.8 times net income. And we ended the quarter with a debt-to-capital ratio of 39%. As noted earlier, given the strength of our business performance, this morning, we updated our 2021 adjusted earnings outlook to a range of $18.65 to $18.90 per share. Now, with the close of the third quarter, your attention understandably turns to next year. As is our custom, we will offer a few early observations here. While reserving the majority of this conversation for our November 30 Investor Conference, which we hope will be held in person and in New York. Our businesses are both growing and operating well with strong momentum heading into next year. While the pandemic-related impacts remain difficult to predict, given the current trends, we would expect a lower unfavorable COVID impact than experienced in '21. Still, as the dramatic variation of the last 20 months has demonstrated to all, prudent management suggests we should offer an outlook respectful of the fact that the current situation is without precedent. Taking all elements together at this distance, we see current analyst consensus as reasonably beginning to calibrate a '22 outlook. Envisioning that consensus as being towards the upper end of our initial adjusted earnings per share outlook range. With the range being similar to that offered initially for '21. There's still untapped collaborative potential between UnitedHealthcare and Optum to benefit individuals and the system. The power of applied technology to advanced care and service. Improved opportunities in consumer health and experience, and the passion of our people. These and so many other elements lead us to believe our performance expectations for the years ahead remained fully supportive of our long-term 13% to 16% earnings-per-share growth outlook. We look forward to going into more detail on both our view of '22 and the many years of growth beyond at our Investor Conference. With that, Operator, let's open up for questions. One for the caller, please.

Thank you, sir. The floor is now open for questions. At this time, if you have a question or comment, [Operator Instructions]. We ask that you limit yourselves to 1 question. If you ask multiple questions we'll only be answering the first question so we can respond to everyone in the queue this morning. So we'll go ahead and take our first caller, Matt Dosch with BMO Capital Markets. Please go ahead.

All right. Thank you. Squeaky clean quarter. I was hoping maybe you could just talk about how united and to the extent your visibility on others are approaching group commercial, fully insured rate increases for 2022.

Why don't we let Brian time to take that question. Go ahead.

Thanks for the question, Matt. Certainly as we look forward to 2022, the picture is a lot more clear than as we look at the past 20 months. I would say that we feel optimistic not only about our pricing and the rationality of the market, but most importantly the value that we're bringing to customers. So we're optimistic as we look forward.

Thank you, Matt, next question, please.

Let's go to Josh Raskin with Nephron Research.

Thanks. Good morning. My question relates to the value-based care, but more from the UnitedHealthcare side. And so how does UHC think about the use of value-based care providers and maybe some expectations on the movement of membership into fully cap arrangements in 2022. I think you saved 250,000 lives this year, so curious how you're thinking about next year. And then maybe as part of that, what advantages you see of using Optum Care as a partner over some of the others and how you evaluate partners in the markets.

Yeah, appreciate the question. A - Brian Thompson here again. I would say we certainly are encouraged by continuing our advanced care penetration with partners. OptumCare certainly being one of several. When we partner with OptumCare, we see not only our highest satisfaction, but our best benefits and overall performance. And you heard that in our star quality results as well. And we're encouraged not only by what we have done, but also by what's on the horizon. Historically, you've looked at our combinations largely in a traditional Medicare advantage space, and you're seeing us expand into complex populations and duals. And we're also really encouraged with what we're doing in the commercial marketplace as well. We've got some new offerings coming in that space. So I would say the key takeaway here is breadth and impact. We continue to scale and expand in that space and it's important. We really see this value-based aligned care as a way to drive good value for those that we support and serve.

Thanks, BT and Josh, thanks for the question to A - Wyatt Decker. I would just add that at Optum Health and Care, we are very pleased to be playing a role in reinventing the U.S. healthcare system focused around patients as consumers and value-based care as a major pillar. As you mentioned, we've grown by 250,000 fully capitated lives this year. And we're excited to our partnership with UHC, as well as collaboration partnership with over 90 payers in total to continue to grow our value-based care delivery construct. The other point I'd make is you'll see us increasingly weaving together all of our assets in a comprehensive care delivery paradigm that we feel is unique and differentiated in the marketplace. Thank you.

Thank you for that, BT and Wyatt. Let's go to the next question, Operator, please.

Next we'll go to Ralph Giacobbe with Citi.

Great. Thanks. Just wanted to go to the guidance commentary and I guess just clarify, John, is it inclusive or exclusive of the $1.80 headwind from this year? When you talked about reasonable relative to consensus, maybe at the higher end, do you factor in the $1.80? Or can you just provide some guardrails around how you're thinking about that $1.80. Thanks.

Hi, Ralph. Good morning. So yes. So as it relates to this year's $1.80, look, our expectation is that will clearly be lower than it was in 2021, as we think about it. We also don't think that will be nothing. I can't imagine we hit January 1 and everything ceases up immediately. So we don't think that will be the case at all. So inclusive of that, when you think about going to that, I think getting inclusive. And as we look at where the where the analyst consensus currently centers, that seems like kind of a reasonable starting point in terms of how we think about -- how we think about that and how we would anticipate and be respectful of the fact that we don't know exactly how this will progress as we move into the new year. Thanks, Ralph.

Next question, please.

Next, we'll go to Dave Windley with Jefferies.

Hi. Good morning. Thanks for taking my question. Coming back to the topic that Josh touched on in value-based care, but perhaps more Optum Care focused. I'm wondering if you could talk about, one, the providers within the 53,000 that are responsible for the 2.2 million fully capitalized, like how does that interweave? And then secondly, if you could talk about the call it the margin on the global cap revenue. So how capable or how much impact are those providers having on consumption of downstream care such that Optum Care makes a margin on the capitated revenue? Thanks.

Yeah, we'll go to light on that. But let me first start by saying, of course, all of the providers within Optum Care, they are responsible for managing the downstream spend, whether it'd be at specialists, whether it'd be at hospitals. [Indiscernible] And one of the key things that we do within Optum Care is we made investments in our systems to absorb, take, and manage risk. It's just not a paper transfer. It's actually a system where the providers are fully aware of the capitated arrangements and they're managing accordingly. So Wyatt, why don't you add on top of that? You're more on the details.

Yeah. Thanks for the question. And as Dirk mentioned, we focus relentlessly on the quadruple lame, including lowering total cost of care, and providing better outcomes and outstanding patient experiences. And we are relentless in monitoring specific data points that help deliver that out, those outcomes. Specifically, what we see is the members that are in fully capitated arrangements overall have about a 30% lower hospitalization rate and about 40% lower skilled nursing facility occupation rate than their counterparts and fee-for-service, Medicare, as an example. So we'll continue to drive that value proposition. And as I touched on in the previous question but I'll go a little deeper, as you think about us with our home and community assets increasingly meeting people in their terms, in their homes to deliver components of value-based and primary care, preventive care, and wellness care, and identify early conditions that otherwise might have led to an ER visit or hospitalization. You'll also see us continuing to bring onboard very innovative behavioral health care delivery solutions that are integrated with the primary care providers that again, identify and treat mental health and substance use disorders by identifying them early and treating them in lower acuity settings when that's appropriate. Those are just a couple of examples of how we're creating value for those that we served. Thank you.

Perfect. That's great, Wyatt. Thank you very much for the question. Can we have the next question, Operator, please?

Sure. Next, we'll go to Kevin Fischbeck with Bank of America.

All right. Great. Thanks. I wonder if you could provide just a little bit more color about utilization trends in the quarter and maybe do that by product line, and breaking it out by COVID and non-COVID utilization where you are versus baseline. Thanks.

Kevin, this is John. Good morning. Yes. A few perspective on that, as we think about utilizations, trends in the quarter. And I gave some broad indication just in terms of where we were with COVID inpatient stays, and that's for our members. Maybe to give a little kind of further commentary. So as we sit here today, about 5,000 of our members are in an inpatient setting for a COVID-related condition right now. And I'd say versus the peak that we experienced during the quarter. That's probably just a little more than 50% of the peak in that zone, probably a little of that we experienced over the course of the period. That fell across categories, probably categories, much like you would have observed and the reports coming out nationally in terms of the types of individuals who are in these settings. An average age that was considerably younger than we saw in prior set -- in prior periods for COVID, so similar to what you would have noticed across the board. In terms of broad utilization trends, similar to what we would have described in 2Q where we did describe where, we continue to see commercial members be more active in elective care, and public sector or government program members a little bit less active. And so kind of similar, just trending at different levels given the prevalence of COVID. It's been interesting over the course of the 20 month. There has been a consistent, fairly rapid reaction when COVID cases go up nationally in terms of the preference of patients to whether or not to seek elective care. That again happen this quarter where it comes in fairly quickly in terms of the hesitation in the system to access, so probably similar along those ranges. Hopefully that provides a little additional color for you on what we're seeing across the full book of business. Thanks for your, Kevin, question. Operator, next question please.

Yes, sir. Next we've got Justin Lake with Wolfe Research.

Thanks. Good morning. First let me just follow up there. John, if you've talked about I think on the previous calls, your guidance assumed about a 101, 102 percent of normal. in the back half of this year. If you could run that by, it sounds like you're saying commercial might have been on a little higher and Medicare, Medicaid a little lower. But if you can give us those numbers specifically, just we have kind of a read through to the rest of the industry, that might be helpful in what you saw in the quarter. And then what do you price, would it be fair that for you to share what you priced for, for next year in terms of trend due to priced to 101, 102% for next year, similar conservatism versus this year? Thanks.

Good morning, Justin. So a few other elements on that. Similar broad trends to what we observed in 2Q, just shifting because of the COVID prevalence. Downshifting a bit in terms of elective -- in terms of COVID prevalence but then really fully offset by COVID. That is elective downshifting because of COVID prevalence and then fully offset as we saw, COVID Care become a more important part of the business. That really flowed across the businesses with those trends across the book, like I described, in terms of the general outlook on that. And let me turn to Dirk here to talk about some implications to how we would have anticipated that in our forward pricing.

I mean, Justin, I mean, we of course, are going to always price to our best estimates of forward trend and we're going to take into consideration all the variables that we've talked about. That toggle that John just talked about between COVID, and what we expect with abatement. I don't want to get into the specific details clearly, that's competitive. But at the end of the day, just be aware that we've considered all factors as we priced our forward business within our books. Thanks. Next question.

Next, we'll go to Lance Wilkes with Bernstein.

Yeah. Wanted to ask a little bit about employer growth and was interested in for the third quarter, how much of that was new wins versus in accounts. And then as you're looking at '22 and you're getting visibility on national accounts and middle market. If you can just give a little color on those individual segments and what's driving wins in 2022 in particular? is it product features or is it all savers products, maybe just a little more color on why you're getting wins? Thanks.

Okay. Why don't we send that question to Bill Golden, who will talk about all three of those. Not only the quarter, but also why do you think we're having some success.

Yes. So thank you for the question. So we're excited about the traction we're seeing in our third quarter enrollment, membership growth for the quarter was really attributed to what I would say a three main components. One is in-group growth was net positive for the quarter. Our wins versus losses, was also positive for the third consecutive quarter, and obviously the preferred one acquisition contributed to overall growth. We're expecting continued commercial growth in 2022 across both our fully-insured and self-funded segments. We're confident in the value story. It is resonating in the market and we're getting good traction with our broad product portfolio. And so products like Bind and Care Cash, and Harmony, and Motion, and All Savers are all contributing to that growth. 1/1/22 for middle market is obviously a little early to predict exactly how all those products will perform in the market, but we're very confident in our ability to continue to perform well in the commercial market for 2022.

And I would just add on to what Bill said. I mean, the new products are important, but one of the fundamental things within the commercial group is clearly affordability. And as we sit back, we have a good program where we manage utilization, we manage medical cost initiatives. We work hard on our network contracts. So a lot of things contribute to success in commercial and some product and a lot affordability. So thanks for your question. Operator. Next question, please.

Certainly next, we'll go to Scott Fidel with Stephens.

Thanks. Good morning. Interested if you can maybe talk a bit about the labor and staffing environment right now in healthcare and, one, how that's impacting the OptumCare provider business is, whether you're seeing an impact as the vaccine mandates are going into effect as well? But just more broadly as we look at just some of the tightness around labor and staffing in the system. How is that influencing your thoughts in terms of where overall health system capacity is right now? It feels like we're pretty much maxed out right and we sorted just shift between COVID and non - COVID, but seems like the system itself is running pretty much at full capacity right now in terms of just the staffing dynamics. Thanks.

Scott, this is A - Wyatt Decker. Very key question. And as you point out, the U.S. healthcare market is very tight right now. For us in our care delivery assets, we are seeing good both retention, engagement and recruitment of physicians and care providers. A couple of examples like give you, we mentioned at the start of the year, our intend to bring on-board 10,000 additional physicians to our ranks and we've already brought onboard about 8,000 year-to-date. So just as a high level indicator, why, what do we attribute this to? And I would say in partnership with Patricia Lewis and our Human Capital team, we are relentlessly focused on supporting our front-line care provider teams throughout the pandemic. And they know this, and I haven't been deeply appreciative of it. And we work very hard and this precedes the pandemic, but has yielded dividends during the pandemic to support them in an environment that decreases clerical burden and allows them to focus on the work they love, which is actually taking care of patients, which is what we all want. So overall, we're managing through this. I won't kid you. It's tight and we're keeping a close eye on it throughout all of our operations in our 43 states where we provide care. Thank you.

Yeah. And I would just say as Wyatt said, we're managing through this. From an environmental standpoint, it's not just clinicians, it's in all workers. But one thing I would say is, we had a fairly significant work at home presence before the pandemic even started. So sort of our employee value proposition sort of was we had a good value proposition before. It started net sort of carried through. And I think like all employers, what we're trying to do is take care of our people, do the right things from a reasonable in this standpoint and continue to focus on our mission. And that's what we're continuing to do. So I'm optimistic that we're going to continue to be able to staff our operation and provide the services that we need to all of our patients and members across the country.

Operator, next question, please.

Certainly next, we'll go to Ricky Goldwasser with Morgan Stanley.

Hi, good morning. Just a quick follow-up question on the 2022 early comments. A couple of variables there. One is, we think about Change transaction. I think you said, you expect it to close in the first half of the year. If you can give us an updated Change accretion number, I think was 20 to $0.50 previously for 2021. So how should we think about for 2022? And then I understand that there are a lot of uncertainties around COVID and $1.80 in net COVID headwinds but I think previously you quantified about $0.70 as coming from risk adjustments, so should we think that these at least are going to reverse next year and maybe how are you tracking with the annual wellness visits completion versus where you were last year or where you were in 2019.

Thanks for the question, Ricky, I think a few components there and what get -- try to get it all those. So just in terms of the relates to change an impact, I just point out that we don't bring in acquisitions into our outlook until those close. So my commentary, doesn't anticipate change in there and we would look to bring that until it closes. When that is complete, we've no reason to expect that we wouldn't be trending along the same levels that we talked about prior. When that does come in, it's just a question of when it comes in and year and how the benefits play

They're just timing impacts in terms about when it would actually close during the year, but not incorporated in that outlook. As it relates to the $1.80 that we articulated last year, yeah, we broke out a number of different components that were important in that element. And frankly, my hope would be not talking about a COVID number by the time we get into '22, that we move beyond that and we can just move beyond to business as normal as we can while being always ready to address the environment that's at hand. But that would be certainly our intent as we'd step out here, that we'd be moving beyond that view. In terms of elements such as annual wellness visits and things, I'd ask BT to comment, A - Brian Thompson to comment a moment on that also.

Sure, John. As you laid out at the beginning, while both our Medicaid and Medicare businesses are running still below baseline on a net basis, we are encouraged by the encounters with the physicians of primary care visits and annual wellness visits, as well as in-home clinical visits. Those have been encouraging. So I certainly expect less of a headwind in 2022 due to those encounters, certainly getting traction, certainly compared to 2021.

Excellent. Thank you, Ricky. Operator, next question, please.

Certainly. Next, we'll go to Kevin Caliendo with UBS.

Hi. Good morning. Thanks for taking my call. Can you talk a little bit about elective trends in September and as they moved into October, how that's changed at all, if you've seen any uptick. Also just on your commercial market growth, your membership growth in the quarter. Can you break it out between small group versus large group? Thank you.

So thanks, Kevin. Let's let A - Brian Thompson address a couple of those.

Sure. Hey, Kevin, Brian here. As I think about elective care, what we've really seen is a pretty steady return to normal. We don't really see what I'll call as an unnatural suppression, nor have we seen a significant bounce back suggesting a big catch up. In fact, when you think about scheduled care, what we have found is it most of that cycles through in about 4 to 6 months, we look at things like colonoscopies and joint replacements as good leading indicators. And those are running pretty close to baseline, obviously with the spike that we saw in September, there's a little bit of that, but we would expect to flow through in the fourth quarter, but that's fully accounted for in our outlook. And I would just say from a commercial perspective, maybe echoing what Bill said, feeling really balanced, really across our fully insured growth for the quarter. So just optimistic that that was across not only our group business, but we also saw a return of our non-exchange individual growth. So a really good quarter from a fully-insured perspective.

Thank you.

Thank you. Operator, next question please.

Yes. Next, we'll go to AJ Rice with Credit Suisse. A.J. Rice: Hi, everybody. Maybe just to drill down a little bit on the OptumRx and what's incorporated in '22 outlook headwinds and tailwinds, I know we had the vaccine this year probably helped script trends a little bit. We had some specialty conversions, maybe that helped, and obviously what was the dynamic around renewing contracts and so forth? What do you thinking about for '22 for OptumRx?

Hey, Heather. San Franco here. Thanks A.J for the question. So you mentioned, we talked in the second quarter a bit about vaccine. We saw a little bit of that this quarter in growth, but it's proportionately down. The last quarter I think was about a third of the growth this quarter, it's down to about call it between 20% and 25%. So you are seeing really our growth. First of all, in this quarter as a result of modest PBM growth together with continued in membership growth together with continued pharmacy services growth, when we look at '22, we're going to see that to continue. Our pharmacy services growth, remember that's our home delivery specialty, infusion, the multi-dose, as well as our direct-to-consumer community, businesses, those will continue to grow in '22. We see those [Indiscernible] outpacing growth of the rest of OptumRx pharmacy. And I guess I'll call out a few things when I think about '22. First of all, we've made those investments and so we're seeing that we talked about [Indiscernible] in our community pharmacies. Dirk talked about those this morning and how they're growing, not just an expanded sites, but our existing sites are continuing to show really strong growth as they expand services to existing members, and expand in different types of health centers. We'll continue to see that in '22. And we think the solutions we're bringing in an integrated way together with our consumer experience and our real push to make drugs, therapeutics affordable, and easy to access for our members will continue to see that. And I just put you -- point you back to our long-range growth, where we'll continue to be as in stable with our revenue on our earnings growth in '22 as we look towards our long-range plan. So thanks for the question.

That was great. And I think AJ, what that points out clearly a broad pharmacy portfolio with clearly a laser-focus on affordability and laser-focus on serving people, getting their medications and people sales where they need them, and basically servicing the entire, what I'll call pharmacy landscape with effective products and services. Thank you very much for the question. Next question, please.

Next, we'll go to Lisa Gill with JPMorgan.

Thanks very much, and good morning. I just want to go back to your comments around virtual care and a digital first product in 2022, can you talk about what that will entail first up? And then secondly, when you talk about connecting multiple channels of care in 2022, I would assume that's primarily keeping the patient in the home, but can you maybe just give a little more detail around what those programs would look like and what the potential cost savings could be?

First of all, let me hit on the virtual products that we have. I talked about it before, we're getting into from version 1 to version 2. The second version is really not telehealth as a standalone service, but really effectively integrated into physical delivery in total, courses of care. And so as I think about how we might -- how we're organizing our products, what we would have is a virtual PCP available to some people. And many people across the country don't have relationships with PCPs. So a product based on having virtual PCP, having that PCP managed like a Brick-and-mortar PCP. And then manage the downstream expenses, being able to refer to digital properties, be able to, as I said, bringing a behavioral specialists, where needed. And as we sit and we look at some of the products that we have and we're designing, we're expecting probably about a 15% price advantage to other similar products in the market. So we're kind of excited about the efficiency of virtual in that context. So give me your second question again, Lisa. I was focused on virtual.

No. Just more around when you talk about connecting multiple channels of care in 2022. Should I assume that that's primarily connecting care in the home or is there something that I'm not thinking about?

No. You're thinking of this multi-modality, it's home, it's digital, it's what we do in the office. That's one of the things that we're trying to do. And I'm glad you hit on that. Our ability to serve people where they want to be served is something that we're really focused on across all three of our lines of business is very important. And clearly, people have different care needs and they have different preferences for care, and we want to provide that access across the board.

Yeah. We say within OptumHealth or Optum Care, the build out of the home and community platform is one of the more important areas that Wyatt and his team are focused on. There has been lots of development there. Wyatt, maybe you could add a little color.

Absolutely. So we're very excited about bringing virtual care, as Dirk said, in a differentiated way into people's homes so that they can access care. We can help TRIOS them and onboard them. We can provide primary care and when needed, we can provide care delivery in appropriate in some instances in the home, or we're leveraging particularly our urgent care platform to provide nearby physical care. And then we blended in our virtual and physical behavioral care deliveries as well. So we're now live in all 50 states, we're serving over 7 million members today, and we look forward to continue to expand these offerings. Thank you.

Thank you, Operator. Next question, please. And I think we have time for about two more questions here as we approach the bottom of the hour.

Next, we'll go to Steven Valiquette with Barclays.

Great. Thanks. Good morning, everybody. So you touched on the topic, Medicare risk adjuster payments earlier. This was also a little bit more topical about a month ago with The Wall Street Journal putting a spotlight on it. So I guess I'm just curious if you have any updated high-level thoughts on MRI payments conceptually for the managed care industry overall. And do you see any potential reform of MRI near-term or do you expect status quo going forward? Thanks.

Thank you very much for the question. First, let me point to the value proposition that Medicare Advantage provides, I think that's important context. MA serves 27 million Americans with very high quality care, and compared to fee-for-service Medicare it may cost less. It's more equitable, has better quality access and outcomes, and greater coverage and benefits with nearly 100% consumer satisfaction. Very important to the care that seniors receive, and it's important that we preserve the stability of this program that so many people rely on. And we think about the risk adjustment model in the payment system, the model has been critical to providing broad and equitable access to MA. Risk adjustment levels the playing field and ensures that there's no disincentives to care for the most vulnerable. So we really feel that it's an essential part of encouraging the right incentives in the program and think that it's something to build on and broadly support that we need to think about how to build on these positive elements and aspects of the program for which this is one of them.

Thanks, Tim. Operator, next question, please. Next and final question.

All right. We'll take our last question from Stephen Baxter with Wells Fargo.

Hi, thanks. I wanted to come back to the labor market and some of the things that we're reading new about provider financials. I was wondering what you're hearing from your network partners on this issue and how you think it will or will not influence rate negotiations over the next couple of years? Thanks.

Thanks for the question. I think, yeah. What we're hearing from network partners is that their cost of labor is higher, so that comes up in the negotiations and like anything else, it's part of what we negotiate and how we try to work with our network partners on coming up with the right pricing and negotiating accordingly. Yes, we're hearing that there is obviously, there's staffing shortages. Obviously, many of the hospitals and other providers have to pay more for their input. And that's going to be reflected in the economics as we go forward. And of course, all that is reflected in how we price going forward. So yes, that occurs.

Thank you for the question with that, what I would just like to close with is as follows. Thanks everybody for your time and your questions today. We hope you're taking away the impression of a Company that's confident, it's opportunities and the ability to grow. And we're deeply aware of where and how we need to improve and we're fully committed to our mission of helping people lead healthier lives and helping make the health system work better for everyone. We look forward to sharing with you a more at our November 30th Investor Conference, hopefully in-person in New York. Thanks for your time today.

That does conclude today's conference. We thank everyone again for their participation.