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 $18.65 to $18.90 per share. We continue to prioritize three 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 and data science platform to aid patient care and experience and to help the system run better. Third, strengthening our consumer experience, capabilities, and value. 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 in four-star rated 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 2022. 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 2022 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. Seniors served by our home and community offerings experienced a 14% lower rate of hospital admissions and about a 4% higher rate of physician encounters. In addition to caring 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 Optum's 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 and patients' care experiences. These and similar efforts simplify processes, reduce administrative burdens, and help our partners focus more attention on their core missions of patient care. OptumRx continues to deliver to health system partners such as its new multi-year agreement with Point32Health, which serves more than 2 million people in New England through its founding organizations, Harvard Pilgrim Health Care 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 and 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 are fundamentally complementary and 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 billion 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 2021 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 sales success for the largely completed 2022 selling season and early activity for 2023. 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 members, 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 paused. 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 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 2021. 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 2022 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 2021. There's still untapped collaborative potential between UnitedHealthcare and Optum to benefit individuals and the system: the power of applied technology to advance 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 remain 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 2022 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, please use the quetion function and dial *1 on your phone. We ask that you limit yourselves to one 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 is, and to the extent your visibility on others, are approaching group commercial, fully insured rate increases for 2022?

Why don't we let Brian Thompson 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 it has been over 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 value-based care, but more from the UnitedHealthcare side. 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 added 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.

I appreciate the question. 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. 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 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. 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 about our partnership with UHC, as well as our collaborative partnerships 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, Brian 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, as it relates to this year's $1.80, 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 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 is appropriate. And as we look at where the analyst consensus currently centers, that seems like kind of a reasonable starting point in terms of 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 capitated, 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.

We'll let Wyatt address that. But let me first start by saying, of course, all of the providers within Optum Care are responsible for managing the downstream spend, whether it's specialists or hospitals. 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 not just a paper transfer. It's actually a system where the providers are fully aware of the capitated arrangements and they're managing accordingly. Wyatt, why don't you add on top of that? You're more on the details.

Thanks for the question. As Dirk mentioned, we focus relentlessly on the quadruple aim, including lowering total cost of care, and providing better outcomes and outstanding patient experiences. We are relentless in monitoring specific data points that help deliver 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 a 40% lower skilled nursing facility utilization rate than their counterparts in fee-for-service Medicare, as an example. We'll continue to drive that value proposition. As you think about us with our home and community assets increasingly meeting people on their terms, in their homes to deliver components of value-based primary, preventive, 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 on very innovative behavioral health care delivery solutions that are integrated with primary care providers to identify and treat mental health and substance use disorders early and in lower-acuity settings when appropriate. Those are just a couple of examples of how we're creating value for those that we serve. Thank you.

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

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, a few perspectives on that as we think about utilization trends in the quarter. 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 further commentary, as we sit here today, about 5,000 of our members are in an inpatient setting for a COVID-related condition right now. Versus the peak that we experienced during the quarter, that's probably just a little more than 50% of the peak that we experienced over the course of the period. That fell across categories, much like you would have observed in national reports in terms of the types of individuals who are in these settings. The average age was considerably younger than we saw in prior periods for COVID, similar to what you would have noticed across the board. In terms of broad utilization trends, similar to what we described in Q2, commercial members continue to be more active in elective care, while public sector or government program members were a little bit less active. Those trends flowed across the businesses. It's been interesting over the course of the 20 months — 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 happened this quarter where there's a fairly quick hesitation in the system to access elective care, which we observed. Hopefully that provides a little additional color for you on what we're seeing across the full book of business. Thanks for the question, Kevin.

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 101% to 102% 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 a little higher and Medicare, Medicaid a little lower. But if you can give us those numbers specifically, just so we have a read through to the rest of the industry, that might be helpful for what you saw in the quarter. And then what do you price, would it be fair for you to share what you priced for next year in terms of trend, did you price to 101% to 102% for next year, similar conservatism versus this year? Thanks.

Good morning, Justin. A few elements on that. Similar broad trends to what we observed in Q2, just shifting because of the COVID prevalence. There's been a downshift in elective care when COVID prevalence rises, but that has often been offset by COVID-related care. That really flowed across the businesses. As I described earlier, the general outlook is the same in terms of the trends across the book. Let me turn to Dirk to comment on pricing implications.

Justin, we always price to our best estimates of forward trend and we take into consideration all the variables that we've talked about, including the toggle between COVID and what we expect with abatement. I don't want to get into specific competitive details, but 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.

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-account growth. And then as you're looking at 2022 and you're getting visibility on national accounts and middle market, can you 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.

Let's have Bill Golden address that in more detail.

Thank you for the question. We're excited about the traction we're seeing. Third quarter enrollment membership growth was really attributed to three main components. One, in-group growth was net positive for the quarter. Our wins versus losses were also positive for the third consecutive quarter, and the PreferredOne 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. Products like Bind, Care Cash, Harmony, Motion, and All Savers are all contributing to that growth. January 1, 2022 for middle market is obviously a little early to predict exactly how all those products will perform, but we're very confident in our ability to continue to perform well in the commercial market for 2022.

I would just add to what Bill said: the new products are important, but one of the fundamental things within the commercial group is clearly affordability. We have a good program where we manage utilization, medical cost initiatives, and work on our network contracts. Many things contribute to success in commercial — some product innovation and a lot of focus on affordability. Thanks for your question. Operator, next question, please.

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, whether you're seeing an impact as the vaccine mandates are going into effect as well. More broadly as we look at 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 now and it's more of a shift between COVID and non-COVID, but seems like the system is running pretty much at full capacity in terms of staffing dynamics. Thanks.

Very key question. 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 retention, engagement and recruitment of physicians and care providers. A couple of examples: we mentioned earlier our intent to bring on board 10,000 additional physicians to our ranks and we've already brought on about 8,000 year-to-date. So as a high-level indicator, that reflects our efforts. We attribute this to partnering with our Human Capital team, where we are relentlessly focused on supporting our front-line care provider teams throughout the pandemic. We work hard — this effort precedes the pandemic — to reduce clerical burden and allow providers to focus on the work they love, which is taking care of patients. Overall, we're managing through this. I won't kid you, it's tight and we're keeping a close eye on it across all of our operations in the 43 states where we provide care. Thank you.

I would add, as Wyatt said, we're managing through this. The environment is tight not just for clinicians but across all workers. We had a significant work-at-home presence before the pandemic, so our employee value proposition was already strong and has carried through. Like all employers, we're trying to take care of our people and continue to focus on our mission. I'm optimistic we'll continue to be able to staff our operation and provide services to our patients and members across the country.

Operator, next question, please.

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

Hi, good morning. Just a quick follow-up on the 2022 early comments. A couple of variables there: one is the Change transaction. I think you said you expect it to close in the first part of the year. If you can give us an updated Change accretion number — I think it was $0.20 to $0.50 previously for 2021 — how should we think about 2022? Also, I understand there are uncertainties around COVID and the $1.80 net COVID headwind, but I think previously you quantified about $0.70 as coming from risk adjustments, so should we think those are going to reverse next year? And maybe how are you tracking with annual wellness visits completion versus where you were last year or in 2019?

Thanks for the question, Ricky. A few components there. Regarding Change, we don't include acquisitions in our outlook until they close. So our commentary does not anticipate Change in the current outlook; we'll bring it into our outlook when it closes. When it does close, we have no reason to expect we wouldn't be trending along the same levels we talked about previously; it's just a question of timing. As it relates to the $1.80 we articulated last year, we broke out a number of different components that were important in that element. My hope would be we're not talking about a COVID number by the time we get into 2022 and that we move beyond that to business as normal as much as possible while remaining ready to address the environment at hand. In terms of annual wellness visits and other encounters, BT to comment: while both our Medicaid and Medicare businesses are running still below baseline on a net basis, we are encouraged by encounters with primary care physicians, annual wellness visits, and in-home clinical visits. Those have been encouraging, so I certainly expect less of a headwind in 2022 due to those encounters.

To add, elements such as annual wellness visits improving are encouraging. Thank you, Ricky.

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

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

Let's have Brian Thompson address those.

Kevin, as I think about elective care, we've really seen a pretty steady return to normal. We don't see an unnatural suppression nor a significant bounce back suggesting a big catch-up. Scheduled care tends to cycle through in about 4 to 6 months; procedures like colonoscopies and joint replacements run pretty close to baseline. With the spike we saw in September, there's a little bit of suppression, but we would expect that to flow through in the fourth quarter and that's fully accounted for in our outlook. From a commercial perspective, the quarter felt balanced across our fully insured growth; we also saw a return of non-exchange individual growth. So it was a really good quarter from a fully-insured perspective.

Thank you.

Thank you. Operator, next question please.

Next, we'll go to A.J. Rice with Credit Suisse.

Hi, everybody. Maybe to drill down a little on OptumRx and what's incorporated in the 2022 outlook — headwinds and tailwinds. I know we had vaccines this year that probably helped script trends a little. We had some specialty conversions that may have helped, and obviously dynamics around renewing contracts. What are you thinking about for 2022 for OptumRx?

Hi A.J., Heather Cianfrocco here. You mentioned the vaccine; we saw a little of that in growth this quarter, but proportionately it's down relative to earlier quarters. Last quarter vaccine-related growth was about a third of total, this quarter it was down to about 20% to 25%. Growth in the quarter was driven by modest PBM growth together with continued membership growth and continued pharmacy services growth. Our pharmacy services include home delivery specialty, infusion, multi-dose, as well as our direct-to-consumer community businesses; those will continue to grow in 2022. Our community pharmacies are expanding sites and existing sites are showing strong growth as they expand services to existing members and into different types of health centers. We'll continue to see that in 2022. The solutions we're bringing in an integrated way with our consumer experience and our push to make therapeutics affordable and accessible will continue to drive growth. We remain focused on revenue and earnings growth consistent with our long-range plan.

That was great. A broad pharmacy portfolio with a laser-focus on affordability and serving people, getting medications where they need them, and servicing the entire 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 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 give a little more detail around what those programs would look like and what the potential cost savings could be?

On the virtual products, we're moving from version 1 to version 2. The second version is not telehealth as a standalone service, but effectively integrated into overall care delivery. We expect to organize products that include a virtual primary care provider available to some people, particularly those who don't have an existing relationship with a PCP. That virtual PCP is managed like a brick-and-mortar PCP, manages downstream care, and can refer to digital properties and bring in behavioral specialists when needed. For some of the products we're designing, we expect about a 15% price advantage versus similar products in the market, which reflects the efficiency of virtual when integrated effectively. On the multi-channel aspect, it's home, it's digital, it's office-based care. Our ability to serve people where they want to be served is something we're really focused on across our lines of business. People have different care needs and preferences, and we want to provide access across the board.

Within Optum Health, the build-out of the home and community platform is a major focus for Wyatt and his team. There's been lots of development there.

We're excited about bringing virtual care in a differentiated way into people's homes so they can access care. We can triage and onboard them, provide primary care and when needed provide care delivery in the home, and leverage our urgent care platform to provide nearby physical care. We blend virtual and physical behavioral care delivery as well. We're now live in all 50 states, serving over 7 million members today, and we look forward to continuing to expand these offerings.

Next question, please. We have time for about two more questions as we approach the bottom of the hour.

Next we'll go to Steven Valiquette with Barclays.

Great. Thanks. Good morning. You touched on Medicare risk adjustment payments earlier. I guess I'm just curious if you have any updated high-level thoughts on risk adjustment payments conceptually for the managed care industry overall. Do you see any potential reform of risk adjustment near-term or do you expect status quo going forward?

Thank you for the question. First, let me point to the value proposition that Medicare Advantage provides, which is important context. Medicare Advantage serves 27 million Americans with very high-quality care, and compared to fee-for-service Medicare it may cost less, is more equitable, has better quality access and outcomes, and greater coverage and benefits with nearly 100% consumer satisfaction. It's important that we preserve the stability of this program that so many people rely on. The risk adjustment model in the payment system has been critical to providing broad and equitable access to Medicare Advantage. Risk adjustment levels the playing field and ensures that there's no disincentive to care for the most vulnerable. We feel that it's an essential part of encouraging the right incentives in the program and is something to build on as we think about policies to strengthen the program.

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

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 we're reading about provider financials. What are you hearing from your network partners on this issue and how do you think it will or will not influence rate negotiations over the next couple of years? Thanks.

Thanks for the question. What we're hearing from network partners is that their cost of labor is higher, so that does come up in negotiations. It's part of what we negotiate and how we try to work with our partners on pricing. There are staffing shortages and many hospitals and providers have to pay more for labor inputs, and that's going to be reflected in the economics as we go forward. Of course, all of that is reflected in how we price going forward.

Thank you everyone for your time and your questions today. We hope you're taking away the impression of a company that's confident in its opportunities and ability to grow. 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 more at our November 30 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.