Unitedhealth Group Inc Q3 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Lisa Gill - J.P. Morgan Securities LLC - Analyst : John, I want to go back to where you talked about your observations here in the fourth quarter. Can you talk about some of those that you expect to impact '25? And I really want to focus on the third one, which you talked about the rapid acceleration in Rx, but you also talked about the positive impact that you're seeing within your Optum Rx business on the specialty side. How do we think about that playing into '25?

Question: AJ Rice - UBS Securities LLC - Analyst : So I appreciate the early comments on 2025. I wonder if relative to sort of a normal year of 13% to 16% growth, is there any way to sort of size some of the different headwinds and tailwinds you're looking at to formulate what looks like a $30 about 8% growth?

Question: Stephen Baxter - Wells Fargo Securities, LLC - Analyst : Thanks for the color on the MLR factors that you called out. When you think about the Q3 MLR unfavorably developing in the quarter, is it fair to think that all three of those factors were about the same? Or would you call out one of them as maybe being larger? And when we think about the coding and utilization management, I guess, operationally, what needs to happen for you to make progress on this front. I don't think you've attributed much of this to midnight rule to date. Can you update us on whether that changed at all in the quarter? And maybe if not, where are the pressures manifesting on the coding side? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 15, 2024 / 12:45PM, UNH.N - Q3 2024 Unitedhealth Group Inc Earnings Call

Question: Justin Lake - Wolfe Research, LLC - Analyst : Given all the volatility, you've been -- we've seen in the sector, I was hoping you could share with us some incremental color on how your Medicaid business, ex duals, and your Medicare Advantage business including duals are performing in the third quarter and for the full year of 2024 relative to target margins? And maybe also give us some color on the expected pace of potential improvement that's implied within 2025 guidance, if there is any improvement expected?

Question: Scott Fidel - Stephens Inc. - Analyst : I was hoping just to talk a over to the commercial business and how some of those -- I guess, those three elements, obviously, excluding the Medicaid one, but the other two elements that you talked about that were -- costs were coming in higher than expected. Just if you could maybe sort of bifurcate that between commercial group and then commercial individual, and I guess how you're seeing those flow through into both of those markets. And then just on the individual side, just how that informs your view on how you've priced your exchange products for 2025, and sort of comfort with the margin trajectory there?

Question: Lance Wilkes - Sanford C. Bernstein - Analyst : Could you talk a little bit about OptumHealth? And I had three points there. If you could talk a little bit about some of the drivers of margin improvement in the quarter. If you talk about the outlook for 25 for risk contracting. In particular, what things might be driving that as far as adoption in MA and if you're seeing adoption in other segments like employer. And then maybe a sort of related question, are you seeing any other responses in the employer segment to the high premium inflation environment that's out there, like PBC adoption, but also things like binder or whatever?

Question: Joanna Gajuk - BofA Global Research (US) - Analyst : So I just have a follow-up question on the OptumHealth discussion sites question was about margins. But I want to ask about revenues. In the quarter, the revenues actually did decline sequentially quarter-over-quarter from second quarter, about 4%. So -- and I know there was a commentary around streamlining the portfolio and some contracts. So is that sequential decline and a fraction that you -- there was something that actually did already take place in the third quarter in terms of exiting maybe some underperforming contracts or business lines? So can you comment on that? And I guess, were margins also benefiting from investment income and to what degree? And then I guess for the quarter, real question is about trying to ask again what you assume for margins in OptumHealth next year.

Question: Sarah James - Cantor Fitzgerald Europe - Analyst : I was hoping you could give us a little bit more color on OptumInsight. So excluding change, how are -- how is the sales pipeline and margins going versus your expectations on the nonchange business? And then on change specifically, as we think about its transition into 2025, is that business an earnings drag? And how should we think about the revenue being a headwind or a tailwind compared to '24?

Question: Andrew Mok - Barclays Capital Inc. - Analyst : SG&A has been a strong contributor to earnings this year. Just curious how we should think about the permanency of some of those cost changes as we look forward to 2025. Is there anything that you would call out as being more temporary in nature?

Question: Erin Wright - Morgan Stanley Co. LLC - Analyst : So you mentioned some of the internal investments just around AI and other initiatives into 2025. But what about broader capital deployment? I guess,how should we be thinking about the priorities heading into 2025 in the context of everything that's going on in and otherwise, but also just what's embedded in your expectation share buybacks or otherwise?