Good morning, everyone, and welcome to today’s UnitedHealth Group’s Second 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 is 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 file 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 www.unitedhealthgroup.com. Information presented on this call is contained in the earnings release we issued this morning and in our Form 8-K dated July 15, 2021, which may be accessed from the Investor Relations page of the company’s website. I will now turn the conference over to the Chief Executive Officer of UnitedHealth Group, Andrew Witty. Please go ahead, sir.

Good morning and thank you for joining us. As we discuss our enterprise today, I hope you sense its growing momentum as we advance on our path of improving the quality, cost and experience of healthcare for everyone we serve. Both Optum and UnitedHealthcare grew and delivered on our longstanding strategy, and we’ve increased our outlook for the year to a range of $18.30 to $18.80 per share. We continue to prioritize three key themes that we believe will underpin the next era of growth for our enterprise: first, unlock the collaborative opportunities within and between Optum and UnitedHealthcare; second, increasingly apply technology to improve patient care and experience and to help the system run better; and third, strengthen our consumer focus, capabilities and value. During the quarter, we accelerated our efforts to develop and deploy new and innovative products informed by the insights of both Optum and UnitedHealthcare in areas such as oncology care delivery, rare disease drug management, Optum Virtual, Optum Financial Services and many others. We are doubling down on efforts to both expand and link services where it creates value for consumers and patients to make their healthcare journey easier, simpler, and more intuitive. We constantly challenge ourselves to develop capabilities which lead to improved care, better value, and a simpler system. Our sales to clients and partners across all parts of the health system demonstrate the strong relevance of our innovation and the strengthening of our sales pipeline is a key opportunity as we emerge from the COVID market pause. A good example of bringing our collective strengths together at scale is the Optum home and community care platform, through which we care for nearly 10 million people. This platform includes our well-known HouseCalls service, comprehensive post-acute care for smoother transitions to home, and integrated primary and behavioral care for Medicare Advantage patients who prefer to receive their care at home. Home and community platform services can reduce post-acute medical care costs by a quarter, unnecessary readmissions by up to a fifth, and hospital admissions by up to 25%. In Medicaid, we are addressing consumer needs by expanding our long-term collaboration with public housing authorities, working with government agencies and community-based organizations to identify and address specific healthcare issues for people who are hard to reach and support. In just the past six months, we’ve introduced new partnerships in over 20 communities to close gaps in care and address health equity challenges. Using data and analytic capabilities, we’re able to rapidly identify local health trends and gaps and then work with community partners to inform guidelines, training materials, processes, and create better tools to advance health. We believe this will result in better health of community members and help to optimize limited state resources. These and other targeted initiatives on the social determinants of health are essential elements and illustrative of our natural and longstanding ESG impact. Our recently published sustainability report captures the full range of efforts we’ve dedicated ourselves to in areas of crucial concern to our stakeholders, none more so than advancing health and health equity. This agenda is an essential part of our way of doing business. I’d like to thank our 330,000 colleagues from across the company for the passion and diligence they show every day in helping to deliver improvements in serving our members, clients and patients. I’ve great confidence that we’re emerging from the last 18 months of disruption with an unprecedented set of opportunities to help improve the health system for all of those we can serve. And now, I’ll turn it over to President and Chief Operating Officer, Dirk McMahon, to provide more detail on initiatives to drive performance across the organization.

Thank you, Andrew. In an enterprise with our breadth of market engagement, we have many ways to assess how we’re doing. I’d like to share some of those metrics with you, picking up on Andrew’s commentary on our three key strategic themes. First, collaboration. UnitedHealthcare’s value proposition is rooted in lower costs, better outcomes, and a better experience. Optum supports this value proposition for UnitedHealthcare and other health plans with ambulatory services, which patients and their doctors value. In this quarter, we met the ambulatory surgery needs of over 250,000 patients, delivering exceptional care in convenient and affordable settings, with revenue growth approaching 20% over the non-pandemic affected 2019 second quarter. These centers are meeting higher acuity and more complex needs such as total joint replacement, spine and cardiovascular procedures, which are performed at an increasing number of centers. Our ambulatory settings receive a consumer NPS of 92 and we deliver better and more consistent quality outcomes at about half the cost of traditional settings. Optum Care has over 1,600 clinics and is rapidly expanding virtual offerings to serve patients in settings where they feel the most comfortable, and importantly with their own physician. Seniors served by Optum Care under our integrated care approach spend considerably more time with their primary care physicians than seniors in traditional Medicare and, as a result, spend one-third fewer days in a hospital. Second is our strategy to increase the application of technology to improve patient care and help the system run better. We recently announced the partnership with Bassett Healthcare, another strong example of how OptumInsight is helping health systems to expand and scale essential capabilities, including revenue cycle management and digital modernization to improve health outcomes and patients’ healthcare experiences. We expect to continue to add new partnerships like this. Also at OptumInsight, we’ve been tackling the most resource-intensive operations through the deployment of advanced technology and other approaches. For example, we have transformed what were once largely manual chart review processes into highly automated operations. Third, we have been hard at work advancing our consumer capabilities. UnitedHealthcare has made significant advances in the management of complex conditions. We’re focused on making sure that patients with the highest acute care needs are able to access the most appropriate site of care by assigning them advocates to help navigate the system. Nearly one million of these members are matched with a personal navigator to help them manage and improve their health. OptumRx continues to improve access and affordability of home delivery for patients, leading to significant improvements in continuity of care and having already reduced the cost to process and dispense prescriptions by nearly 20% in just the past two years. Also, along consumer cost savings lines, for those who prefer an in-store retail experience, we now offer tools to find the lowest cost prescriptions near them regardless of their health benefits coverage status. These tools can save self-paying consumers up to 80% on their medications. Consumer preference is also having an impact in behavioral health. Already this year, the OptumHealth behavioral platform has delivered over 500,000 virtual visits, an option we initiated in just the last year. Many consumers and clinicians prefer these virtual encounters since they offer enhanced accessibility, flexibility and simplicity. Care encounters delivered through our dedicated channel have a patient satisfaction of 98%. These are just a few of the many initiatives we are executing on as we apply technology, data and analytics to make our strategic growth agenda come alive. We look forward to updating you on our progress over the quarters to come. With that, now I’ll turn it over to Chief Financial Officer, John Rex.

Thank you Dirk. Our first half performance supports the foundation for strong and expanding growth for the remainder of this year and beyond. Before I review business performance, I’ll offer a brief perspective on the pandemic-driven trends we’re observing. The core takeaway is that our outlook for COVID-19 impacts is consistent with our past commentary. The second quarter showed overall care activity continuing to trend toward baseline or normalized levels, albeit with variation across lines of business. For example, in commercial markets care activity was above baseline as members were willing and able to obtain needed care, some of which was deferred from prior periods. Our public sector markets continued to run below baseline, even as we are actively encouraging people to get the care they need. We were gratified to see care activity for these populations begin to progress over the course of the quarter as vaccination rates advanced. We continue to estimate approximately $1.80 per share of unfavorable COVID-19 impacts for full year 2021 and to expect the majority of these effects to occur in the second half. Moving to overall business performance, OptumHealth second quarter revenue and earnings increased 46% and 34% respectively year-over-year. Revenue per consumer grew by 43%, reflecting the impact of accountable arrangements and our expanding home and community health platform combined with the growing complexity of the needs we’re serving. Of the 20 million patients we serve through Optum Care, over 2 million are in fully accountable or capitated care arrangements, an increase of 17% from a year ago, and we expect this pacing to accelerate strongly in the years ahead. OptumInsight revenue grew 12% in the quarter and earnings grew 36% with the revenue backlog increasing by $1.9 billion to $21.3 billion. Key growth drivers were managed services, the continued recovery of care activity to more normal levels, and further implementations of technology-enabled services. In particular, we are seeing strong sales momentum in the services, software and analytics business, which serve care providers. OptumRx revenue and earnings increased 5% and 19% year-over-year and script growth was 8%, with this comparison impacted by last year’s pandemic-affected care patterns. Our expanding pharmacy care and specialty services continue to grow strongly, now comprising just under half of OptumRx revenues. Turning to UnitedHealthcare, we are encouraged by the receptivity to our expanding set of responsive commercial benefits centered around virtual first, on demand and physician-led offerings. Year to date, we have added about 150,000 members in such innovative commercial offerings, even with the evolving and uneven labor market trends which impacted second quarter membership. Medicare Advantage membership has grown by 675,000 year to date, tracking well to our full year outlook. Our house calls clinicians have been able to provide their vital services to seniors, conducting over 1.1 million home visits in the first half, more than double the year-ago level. People served in managed Medicaid programs grew by nearly 920,000 over the year-ago quarter, in part as state-based redetermination activities remained on hold. Our Medicaid offerings continue to deliver a positive consumer experience and demonstrable cost effectiveness for our state government partners, and we look for this momentum to build heading into next year. Our liquidity and capital positions remain strong with second quarter cash flows from operations at $5.5 billion or 1.3 times net income, and we ended the quarter with a debt to capital ratio of 40%. In early June, our board of directors increased the dividend by 16%. As noted earlier, given the strength of our business performance, we’ve updated our full year adjusted earnings per share outlook to a range of $18.30 to $18.80 per share, inclusive of the COVID-19 impact incorporated into our full year view. Within this, we expect the pacing through the second half to be fairly level. Now I’ll turn it back to Andrew.

Thanks John. What we’ve tried to provide you with this quarter, as we do each time, is a sense not only of what UnitedHealth Group’s results are but how we achieved them. The examples we’ve referenced and countless others throughout this enterprise, along with the consistent execution by our colleagues, are what underpin our confidence in our long term 13% to 16% EPS growth rate target and in our ability to help people live healthier lives and help the health system work better for everyone over the years to come. With that, Operator, let’s open up the call for questions. One question per caller, please. Alan, over to you.

Certainly, sir. The floor is now open for questions. Operator provided instructions. The first person we’ll take a question from will be Kevin Fischbeck with Bank of America.

All right. Great. Thanks. I guess you guys reported two good quarters in a row but raised guidance both times by less than the beat. You singled out the $1.80 headwind included in the guidance. Is there any other kind of major one-time positives or negatives in the guidance that we should think about when thinking about this year as a base for how to forecast future numbers? And is there anything offsetting the upside in the first half that we should think about in the back half?

Kevin, thanks so much for the question. Before I ask John to give a little bit more detail, I mean a couple of things. Obviously, still too early to give you kind of real shaping for 2022, so you won’t be surprised we won’t go there. And I would say, the overwhelming story for this year is of course the dynamic of COVID in terms of the various puts and takes, which are taking place under the surface. And as we’ve done for the last several quarters, we’ve tried to kind of dimension that within the $1.80. But as we’ve also said repeatedly, the bulk of that $1.80 sits in the rest of the year, the year to go between now and the end of 2021. And so really, really pleased with the momentum and underlying performance of the company in the first two quarters of this year, but also respectful of uncertainties that remain around the COVID puts and takes. And of course, that all feeds into how we make the judgment on raising the earnings expectation for the rest of the year. I think where I sit, I feel great about that underlying performance so far. Broadly speaking, the COVID dynamic has played the way we would have anticipated more or less, but there’s still a way to go and there are uncertainties within that. Maybe John, you might go a little further and take that $1.80 apart and maybe reflect a little bit on how you’re seeing those different elements of the driver of that.

Kevin, good morning, it’s John Rex. Yes, just to get a little further into those. So within the $1.80, we still expect about 70% of that to occur in the second half of the year, so the vast majority. A lot to be seen on how that $1.80 really plays out. Keep in mind kind of the main elements that that comprises: It’s the direct treatment and testing costs that we see, offset by elective care deferrals that might continue to occur or not in the rest of the year; the potential for higher acuity for those that have missed or deferred care; and at least within 2021, the impact of the care deferrals that occurred last year. So those are all super important components here. Within those elements, the things to play out would be most around the direct treatment and testing costs and the potential for higher acuity and how much care occurs in the back half. The other elements within the $1.80, I would say, are more steady throughout the course of the year. So that point being around care deferral in 2020 and the related revenue impacts for 2021, those should be relatively steady, and I would say are running in line with the expectations that were set out for you back in December. So I don’t think we’ve had a surprise on that element within our outlook. And I would say, the kind of economic impacts also pretty relatively steady over the course of the year in terms of the quarterly progression, so those are really the elements that we continue to look for. You’re right. Look, we saw good strength in a lot of the business, growth across the platform - really, we could point to every business. But it’s that look out to really understanding how those trends play in the second half of the year. Thank you.

Thanks, John. And Kevin, thanks very much for the question. Appreciate it. Next question?

We’ll next go to Josh Raskin with Nephron Research.

Hi, thanks. Good morning. Here with Mr. Percher as well. So our question again this quarter is around Optum Care. And I think the question is really how do you think about the capacity constraints for Optum Care? Is that more on the provider side, or gaining consumers in the totality of OptumHealth? And with all of these sort of new options or what appear to be new options available to physicians, how are you convincing docs that Optum is the best solution? And lastly, and I know I apologize for the last part here. But is there an argument to be made that Optum Care, not Optum overall, but just the Optum Care segment, would be more valuable to shareholders as a standalone company because of the physician independence issue that comes up?

So, Josh, thanks so much for the questions. Before I ask Dr. Decker to make a few comments in a minute or two, let me make a couple of introductory observations. You’re really starting to see OptumHealth broadly, and within that business in particular, Optum Care and home and community are beginning to demonstrate their capacity for growth because of the scale of the footprint they now have across the country. These businesses are moving into a critical mass dynamic, which is reflected in overall growth and in the very rapid expansion of OptumHealth revenue per consumer, up over 40% this quarter. That reflects the quality of services being delivered and the perceived value they represent, so we feel very good about that. Your question around capacity constraints is a good one. We continue to expand rapidly the number of physicians and clinicians in our organization, either directly or through affiliation. This year, we expect to add about 10,000, and we’re well over halfway through that journey, so it’s going very well on that front. One of the key elements is making sure those practices, as rapidly as possible, develop the skills to manage capitated risk, which is what drives a tremendous amount of distinctive behavior and value creation for patients and for the system. That process has been continually refined. As you know, in the marketplace people have tried different models and they don’t always work well. I’ll ask Dr. Decker in a second to dive into more detail about the work they’re doing to accelerate that dimension of capacity, because it’s not simply having the practices and clinicians; it’s having that way of working which really drives the change in what we’re able to do. As for your last question, I think the OptumCare clinics within the broader Optum and UHG organization are where some of the magic sits in terms of being able to leverage many different aspects. As you see these elements of OptumHealth and Optum Care develop, you’re also seeing significant amounts of support and help provided by other businesses across the organization. Payment integrity is a good example and is beginning to be adopted by parts of Optum Care. With all of that, I’d like Dr. Decker to go a little deeper on how we move or help practices develop the capabilities that allow them to deliver the value we’re now seeing.

Yes. Thanks, Andrew, and thanks, Josh, for the question. To Andrew’s comments, we are increasingly bringing our depth and breadth in value-based care delivery to new markets that have been historically fee-for-service. And you’ll see this unfolding right now and over the next year or two in markets like the Pacific Northwest and Northeast, where we have - we’ve acquired and grown considerable clinical delivery assets. But we are now bringing the expertise in markets like Texas and Southern California, that have been delivering value-based and full risk capitated care for years. And so that really is a differentiator for us. And the other piece I’d build on is Andrew’s comment around how we are creating a comprehensive set of offerings that address virtually every aspect of an individual’s healthcare journey, from a focus on primary care and keeping you healthy and well, to post-acute care to end of life care and complex care in all environments, virtual, home, and in the clinic. And that to us, as we bring that together, connect the dots, is a differentiator in all markets. Thanks.

Wyatt, thanks so much, and Josh, thanks so much for the questions. Next question, please.

Next we’ll go to Ricky Goldwasser with Morgan Stanley.

Yes, hi. Good morning. Many of the initiatives that you are putting in place and the assets that you’re putting together are leading to lower utilization, at least in the hospital setting and a move to lower cost settings. Keeping this in mind, when we see the lower utilization at least on the public side, do you still think that 2019 is the right baseline for utilization?

Ricky, that’s a great question. You’re quite right that a lot of what we focus on is, well, first and foremost, to try to understand what is the very best care that an individual needs and to make sure that they get access to that. One of the big things we’ve been doing this year is trying to get people, particularly seniors, back into the system — those who maybe held back because of the pandemic — and as you heard earlier, we’re glad to see some of that moving, albeit with some way to go. Within that, we also recognize there are many places where, frankly, there are better, more effective ways to deliver care. I’ll pick out one simple example to build on what you described. If I think about some of the work that’s going into OptumRx and our Optum infusion business, you can take drugs that might cost $10,000 to $15,000 per treatment in a hospital outpatient setting and deliver exactly the same drug via Optum at-home infusion for $3,500. That’s the kind of impact we can deliver through thoughtful application of location of delivery and similar approaches, and that’s just one example. UnitedHealthcare is very much focused on this in much of their guidance, and Optum is building a variety of different capabilities. Having said all of that, the reality is it’s very early days, even for us, in terms of changing behaviors against the overall trend of the healthcare system, so I think using 2019 as the baseline is probably the right, rational choice. Over time, I think these practices will start to bring down the overall trend of cost, as those capabilities spread more broadly, see greater adoption, and begin to change the price point in the marketplace for some of these treatments or therapies that are, frankly, overpriced. What our clients are looking for us to do, both through UnitedHealthcare and Optum, is find ways to get great care at lower cost, and that’s exactly what we’re focused on doing. Ricky, thanks so much for the question. Next question, please.

Next we’ll go to AJ Rice with Credit Suisse.

Hi everybody. I might just continue to focus on OptumRx - you’ve got good script growth and a pick-up in margin there. There are two things that are sort of impacting script growth, it seems like to me, across some of the companies that are reporting it. One is how quickly we’re seeing the rebound of the acute scripts as people start going back to their doctor and getting new prescriptions. Can you comment on where we’re at relative to pre-pandemic levels on that? And then vaccines in some of the script reporting is having an impact - I’m not sure that that’s relevant for you guys in OptumRx, but can you parse that out in any way? And then I guess just any comments on the selling season for OptumRx for this year going into next that you see.

Listen, that’s a great question, AJ, and before I hand it over to Heather Cianfrocco, our head of OptumRx, let me make a couple of introductory remarks. Of that 8% script growth, about half, we would estimate, is a bounce back from the suppression at this time last year caused by the initial waves of the COVID disruption. Even so, the 4% residual growth is strong and we feel very good about the performance of OptumRx across its breadth of businesses, within the core PBM and across its various other pharmacy services businesses, which the company has been investing in over the last several years. We’ve done about 10 million vaccine prescriptions year to date. To give you a bit more detail on that and some selling season observations, I’ll hand it over to Heather. Heather, go ahead.

Thanks Andrew. Thanks, AJ, for the question. Yes, I think as Andrew said, maybe I’ll take script volume quickly just to finish that off, and then maybe talk a little bit about selling season. As Andrew said, really if you look at, whether ours is indicative of other things you’ve seen, what I’d say is specific to us, what you’ve seen over the last year is, yes, about half of that is the rebound from compression and the rest of that is really a little bit of vaccine volume, and Andrew gave you the number there. But that really hits volumes for us more than anything else because of the ratio of revenue to scripts there. In addition to that, there is continued double-digit growth in the pharmacy services business, so that’s making up the bulk of the additional growth that you’re seeing year over year there. As far as the split of acute maintenance, etc., I guess I would say - you know, we just had this discussion about what baseline is. I can specifically say that we’re seeing second quarter looks more like 2019 than it certainly did looking like second quarter of 2020, and we basically don’t see anything unique there as far as acute versus - as far as acute ratio, kind of back to what we saw pre-pandemic for this quarter. Maybe let me switch quickly to selling season. We’re still in the midst of it this year, and that’s for all segments - that’s for employer, it’s for health plan, public sector and coalition. I’d say generally same activity, maybe a little different pacing of decision making right now, but really in the midst of it. The biggest thing I would say about the selling season is clients very interested in solutions to address high cost of specialty drugs and getting to medications and therapies that really help on the medical and the pharmacy side, so for us we’re very focused on those solutions and we’re finding that our site of care services for alternative sites and alternative therapies, like biosimilars, together with some of our specialty programs that work through OptumHealth and OptumRx and straddle the medical and pharmacy benefit are really resonating, together with our really intense clinical client consulting that we’re bringing to the market right now, so we’re finding that resonating in the selling season and we think we’ve got a lot of value to add there. Hopefully, that answers your question.

Thanks Heather, really appreciate it. I might just add, AJ, one other dimension that’s under Heather’s leadership, which is really pertinent to behavioral health. As I think we all recognize, that’s a huge issue across the U.S. I think many of us anticipate the COVID pandemic and various impacts from that may well exacerbate some of the trend there, but I just wanted to call out the progress of Genoa Pharmacy within that. It’s a business that came into our organization two or three years ago. We’re going to open 60 more of those centers this year. We’re already up to 582 of those centers, we’re well on the way to close to double what we had when they first became part of the organization, and the impact that that group has is extraordinary, both from a consumer NPS score of 95, provider NPS score of 80, the impact they have in terms of helping improve adherence for highly complex patients, particularly those patients who are served through our Medicaid books of business is super important. So just wanted to mention that alongside the other elements of OptumRx, another key part of the growth, and a key part of where OptumRx is really helping our Medicaid business deliver really high-quality service for folks who need it. Next question?

Next we’ll go to Justin Lake with Wolfe Research.

Thanks, good morning. I wanted to follow up on the helpful comment that John gave during the prepared remarks on medical cost trends. For instance, John, you mentioned that commercial utilization was back above typical. Would love to know how that progressed during the quarter and how far above typical you saw it coming out of the quarter, what you’re thinking for the rest of the year, and then any other commentary on Medicare and Medicaid there. Then also, if you could give us your view on this new Biogen Alzheimer’s drug in terms of how you think things developed in terms of pricing and physician take-up or patient take-up rates, and how you think you’re going to manage this process, would be great as well. Thanks.

Yes Justin, thanks so much. I’ll address the Alzheimer’s drug issue in a second, but first of all I’d like John maybe to pick up on your broader MCR questions.

Justin, good morning. A little color perhaps on how the progression occurred in the quarter here. As it relates particularly, thinking about the quarterly progression that we saw, perhaps not unsurprisingly COVID testing and treatment costs were highest in the month of April, actually trending up a little bit from what we saw in March, and that tracks with the incidence rate and the hospitalization rates that we would have been seeing, and then that trending down pretty rapidly in May and June in terms of the number of individuals in hospital beds and the treatment costs. In terms of utilization in commercial populations, interestingly that was also highest in the month of April, trending down a bit over the course of the quarter but still just marginally, very marginally above baseline as we end June, as we exited June, just to give you a little color commentary on how that was progressing. That was really the trending that we saw within that, and Andrew, I’ll turn it back to you.

Great, thanks John. The other thing I’d say, Justin, is there’s plenty of noise within those numbers that John just described, so you see inpatient, outpatient, physician visit trends by different books of business, it’s a more complex picture than it looks on the surface. As far as the Alzheimer’s drug is concerned, I’m going to - in a second, I’m going to ask Dr. Migliori, our Chief Medical Officer, to make a couple of comments on this particular thing. Overall, bottom line from our perspective is this remains obviously a super important area for patients, families to look for progress in. We all want to see that progress happen. I think from where we stand today, there’s still a lot of information that we need to be able to make really clear decisions, and I think we’re not the only ones in that regard looking for greater clarity in this arena. Maybe Dr. Migliori, you might give a perspective from the medical perspective, please.

Yes, thanks Andrew, and you said it well - we are encouraged to see meaningful progress being made against this devastating disease and advances in its treatment. We are continuing to develop our clinical policy as well as our ultimate position on coverage, but in doing so we’re looking forward to getting the guidance that we need from Medicare, and also looking at the continually contributing clinical evidence that comes from the ongoing clinical trials. But most importantly, we’re looking for the advice from those expert, professional organizations, the physicians who have committed their careers to helping people with this devastating disease.

Yes, thanks so much, Dr. Migliori. Justin, I think bottom line is I think this has some way to go before we get to real clarity, so I wouldn’t guide you to expect very rapid decision making on this piece, not because we don’t want to see these good effective treatments being made available - of course we do, but it’s really important to have a real clear understanding of really how they should be used, what their value is in utilization, and as Dr. Migliori said really well, really understanding where CMS get recognized in that the MA population likely to be very significant fraction of utilizers, we need to understand where all of that fits. So I think this is potentially good news, but it’s still early days and we have a lot more to learn before we can be more definitive than that, so can’t be too much more helpful at this point, I’m afraid, Justin, but thank you so much for the question. Next question, please.

Next we’ll go to Ralph Giacobbe with Citi.

Thanks, good morning. I want to stick onto that last question. Sounds like commercial was marginally above baseline for the quarter. Hoping you can give us similar comments on magnitude of how much lower Medicare and Medicaid are, and then also if you could provide any sense of magnitude of the rising utilization you embed in guidance at this point for the second half of the year, if you could frame that just in terms of what normal growth would be and maybe what you’re embedding, or how much higher guidance contemplates. Thanks.

Yes Ralph, thanks so much. I’m going to ask John to reflect on the second part of your question, in terms of forward-looking for the second half of the year. Just to nail this first part, though, the commercial book, as you’ve heard already now from John a couple of times, basically right on baseline, maybe a hair above but right there, and then the two government books of business a few percentage points below, so I won’t go further than that. Maybe John, you could give some insight into how you’re seeing things within the next six months.

Good morning, Ralph. Yes, so then you blend to a little bit below overall when you blend the books and you weight our books across in terms of what we’re seeing in the second quarter. Then as you might expect, that trends up progressively every quarter. Every quarter, you’d see rising in that overall level of utilization and the expectations as we had into the end of the year. Embedded in that is also a view in terms of what happens with intensity, acuity levels. One comment - question that we’ve often received is what are we seeing currently in acuity levels as we progress, and part of the impact as we progress in the second half is an expectation that you do see rising acuity levels. I’ll tell you, we haven’t observed that yet, but it still is probably a little bit early to say. Among the things we look at, we look at new cancer diagnoses, new cardiac diagnoses - those are still running below baseline levels that we’d expect, but a view is that could continue to progress as we get into the back half of the year. The other element in terms of just thinking about utilization and rising in the back of the year, and ultimately this is about what occurs with COVID testing and treatment costs. Clearly there’s been the evidence of the new variants and their impacts in other countries and then also moving into the U.S., and even in our own data we can see that, but I would tell you still fairly limited in terms of impact. As I sit here and look at number of members, of our members that we have receiving treatment today, in hospital beds today as we sit here this morning, still well below the levels even as we sit here in mid-July what we were seeing in the April levels, but that could be a trend back factor also in the second half of the year as we see that progression. Thank you.

John, thanks so much, and Ralph, thanks for the question. Next question?

Next we’ll go to Scott Fidel with Stephens.

Hi, thanks. Good morning. Wanted to just ask a question around Medicare Advantage, and just interested in terms of what you’ve been seeing progressing year to date around the risk scores and how that’s been normalizing relative to the post pandemic disruption. Then, just also interested if you’ve received the update yet from CMS on the midyear risk score updates, and if you could share how those came out relative to expectations.

Scott, thanks so much for your question. I’m going to pass that over to our new CEO of UnitedHealthcare, BT. BT, you and Tim might like to address those two points from Scott. BT?

Sure, I’ll start. I think as a follow-on, perhaps - this is Brian Thompson, thanks for the question. To the question around engagement levels, I think the piece that I am most encouraged by is the physician engagement levels, and in particular in our senior communities. We’re really seeing strong receptivity, certainly reflective of the vaccination rates, and I think that’s really giving us encouraging signals overall not only to 2022, but just the population and health at large. With that, I’ll turn it over to Tim to talk a little bit more specifically about MA.

Good morning Scott, thanks for the question. The revenue for 2021 and the risk scores that support those are totally in line with our expectation, as John indicated in his remarks, and yes, we did receive the midyear payment from CMS which gives us a more fulsome view into what 2021 revenue is. Again, that aligns to our expectations, and at this point we consider 2021 revenue to be pretty complete in terms of what we know about risk scores.

Tim, BT, thanks so much. Scott, thanks for the question. Next question?

Next we’ll go to Dave Windley with Jefferies.

Thanks very much. I wonder, relative to your conversations about the relative headwinds, does your view of your ability to recoup the $1.80 in ’22, is that influenced at all by the timing of when these things hit, if they do, in the second half of ’21? I’d be curious about your comments there, please.

Yes, and I’ll ask John in a second to give you more on this. First off, obviously again we’re not going to be really shining a light on our expectation for ’22 yet. Having said that, we also think the majority of the $1.80 headwind will have been utilized this year, will essentially be non-recurring. Of course, that depends on some assumptions around the pandemic itself remaining under control, so that is an observation which has to be taken in that context; but as we sit today, I think that is a prudent view. John, you may want to go a little deeper on how each of the elements perhaps you think about.

Sure, a few factors on that and how timing might impact those. Maybe just to refresh a little bit on that, Tim did a nice job describing the impacts in terms of the revenue impacts from particularly Medicare Advantage members being able to be seen by their physicians. We are encouraged by what’s going on in our house calls activity - very strong receptivity to those. BT just mentioned we’re encouraged by what we’re seeing in terms of seniors and their receptivity to even going in and seeing their physicians - that’s all super important. I don’t know if timing is so important on that piece, it just needs to occur during the year in terms of when that activity occurs, so that would be the more important factor as it relates to 2022 - does it occur in 2021, do they get in, so that’s an important factor. Other factors here, I would say, there is care that didn’t occur in 2020 and probably hasn’t occurred in 2021 yet, that was deferred and needs to occur, so that’s more about also an element of does it not occur at all in this year, does it work its way into 2022, and the potential for that and the revenue impact of whether or not there’s an increase in acuity from those populations. Those are really the main elements, I would say, in terms of what I would call timing related. The other elements are more just - would be around this concept around the occurrence of COVID-19 incidence, direct treatment and testing costs, how that progresses over the back half of the year too. But those would be the elements that would be sensitive to timing factors.

Right. John, thanks so much, and Dave, thanks for asking the clarifying question. Appreciate that. Next question?

Next we’ll go to Lance Wilkes with Bernstein.

Yes, you made a comment about virtual first offerings helping to drive incremental membership growth this year. Can you talk a little bit about what the digital first and/or virtual first offerings look like, and then is that contribution in ’21 and, if it is, could you talk a little bit about in the sales cycle, how it’s looking for uptake in ’22?

Great question, Lance, thanks. I’m going to ask Dirk in a second to make a couple of comments around the overall shift towards digital first, virtual first, and may also ask Dr. Decker to refer to some of further what’s going on within OptumHealth, which is important around OptumVirtual. As I’ve made super clear over the last couple of quarters, really elevating our consumer focus is a top priority for the whole company, and that really speaks to ensuring that we’re delivering simpler, more intuitive experiences, that we’re thinking about the journey of the consumer and the patient in an end-to-end sense, that we’re making it easier for them to make all of the very sequential decisions, and we also want to meet the consumer where they want to be met, whether that be outside of a facility, in their home, online or in person. We fully recognize how the premium the patients and consumers in particular, being able to talk to the physicians they know rather just any physician, and so how we start to pull all that together is essentially reflected in many of the different initiatives we have. Over the last few quarters, you’ve seen us build up things like OptumVirtual - Dr. Decker will talk to you in a second, but things like OptumStore just being rolled out under the OptumRx organization really starts to bring together a ton of access for consumers in terms of what they’re able to do with us. With that introduction, Dirk, love to get your perspective, and then maybe Wyatt. Dirk?

Yes, thanks Andrew, and Lance for the question. Of course, we continue to see telehealth be a broadly desired consumer access vehicle to the health system. We’ve seen that grow. We’re hoping we get to sort of the next generation, and we think a lot of that begins with - like for example, with OptumCare physicians being able to deliver that, because as Andrew said, people have a good preference to go to their own physician. The product with respect to virtual first, to answer your specific question, we plan on rolling that on in eight, nine markets in UnitedHealthcare at the end of this year. What it will basically be is - think of it as sort of a virtual PCP with an OptumCare doc being the quarterback, with the UnitedHealthcare navigate network backing it up for the physical access. We’re starting to sort of, what I would refer to as productize this, and we’re hopeful it will - which will aid to UnitedHealthcare’s commercial growth. Thanks.

Dirk, thanks. Wyatt, we’d like to just get a little more on OptumVirtual and what you’ve been building inside OptumHealth.

Yes, thanks Lance for the question. We are bringing together the virtual care experience that we stood up rapidly during the pandemic with over 18,000 providers onto, as Dirk mentioned, a next generation technical solution that we’ve created, which creates the opportunity to seamlessly onboard and triage an individual virtually, so we make sure they’re getting the right care in the right environment, whether that’s a virtual, physical or behavioral healthcare need. We believe that that is a differentiated patient experience. The second, which Dirk mentioned but I’ll underscore, is a focus on primary care delivery and keeping people tethered to their trusted and known providers. As this matures - and we’re live today in all 50 states, to be clear, and we’ll continue to roll this out in a more comprehensive way to our OptumCare patients as well as members of UHC and other payors, and look forward to continued conversations about our capabilities here. Thank you.

Thanks Wyatt. I think Lance, just to close this out, this is - I’m excited about what’s been built in OptumHealth here. If you think about this build-out of ambulatory clinic facilities and other attendant services, perhaps in the pharmacy space, you think about the home and community agenda, really investing to make sure that folks who want to spend as much time at home as possible are able to do that, and then you see OptumVirtual essentially pulling all of that together, you’ve got to think about this as all three of those elements essentially all at play at the same time. I think it’s a very important step forward that gives us a really significant opportunity to ensure that we deliver a much more seamless experience, we’re much more responsive to consumer need, and we can focus on bringing costs down and delivering better care. That’s what we really believe we can do here. You’re going to hear a lot more about this. It’s an important step up in the energy around our OptumHealth strategy. We just have time, I’m afraid, for one last question, so Alan, if you could ask for a last question, please.

Sure. We’ll take our last question from Matt Borsch with BMO Capital Markets.

Okay, thank you. I realize you’re parsing through everything that happened last year and now the catch-up in care this year. Are you getting a perspective yet on how much of the care was unnecessary, that would have happened but is not actually going to occur, and I guess you could put that in two categories - care that you can see in hindsight was unnecessary, but maybe was necessary at the time because the person didn’t know, and care that was just unnecessary proactively and in hindsight?

Matt, thanks so much for the question. Really, it’s a great question, and you would have to expect that the answer is that some of it would have been unnecessary. I think at this distance, it’s a little hard to really call that at this point. I mean, there are some tantalizing signals in some of the trends, so if you look at emergency department use, for example, it looks pretty sustained down and doesn’t seem to be coming back, and certainly if you look at our advisory board surveys that we’re running with many, many non-UHC providers and institutions across American healthcare, people don’t - a lot of people don’t expect that ED utilization to come back. Now, that may be because they were being unnecessarily used, maybe folks have realized that urgent care centers are a much better option, maybe virtual is a much better option that they can get what they need at much lower cost. Whether it’s unnecessary, whether or not the pandemic has disturbed people’s allegiance to certain types of sites of care and people are a little bit more open minded about where to go, all of that I think is in play. I would say it’s premature to call it. I think we’re watching it really carefully. I could build those theories I just shared with you. I’m not going to tell you that those are proven. I think there is tantalizing signals in the data, but it’s going to take another six, 12 months before you can really settle out how this all plays. But Matt, thanks for the question, and we’ll probably loop back on that once again, I’m sure. Listen everybody, I want to say thank you for all of your attention today, for your participation, very much appreciated. We hope very much that what you’ve heard from our team gives you a flavor of why we have such confidence in the outlook for our company and for the ability of Optum and UnitedHealthcare separately and together to improve the lives of those we serve and the health system overall. With that, I’d like to say thank you very much, and to close this morning’s call.

This does conclude today’s conference. We thank everyone again for their participation.