Unitedhealth Group Inc Q4 2024 Earnings Call Transcript

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

Question: A.J. Rice - UBS - Analyst : Hello, everybody, and I appreciate the words about Brian. He's missed by all of us. Just maybe to focus in on the comments about cost trends and the MLR. Obviously, in the fourth quarter, there's variance relative to consensus expectations. It was probably a little greater than what we thought. It sounds like the cost items you're calling out are similar to the things you had seen all year long. Was there anything that changed in the intensity of any of those trends and anything -- any unusual items in there that impacted the results? And it sounds like you're still confident in your '25 MLR outlook, so the nothing you saw in the fourth quarter changes your view on '25?

Question: Josh Raskin - Nephron Research - Analyst : Hi. Thanks. A question on the Optum Health segment. I guess, and I apologize if I missed this, but did you comment on the change in the consumers? I know you talked about portfolio changes and things like that, but the consumer count dropped about 4 million and then sort of a noticeable drop in margins. And I'm wondering if some of that is related to the MA rebates that you just mentioned in terms of the impact on the UHC side as well.

Question: Lisa Gill - JPMorgan - Analyst : Thanks very much for taking my question. Andrew, I want to talk about PBM reform. There seems to be a very large drumbeat right now that we'll see reform at some point in 2025. Really two things here. One, what do you think that means to your business? And then secondly, you talked about educating those in the marketplace to better understand what you actually bring to the market from a PBM perspective. Are there incremental ways that you can potentially maybe educate Congress? Because it seems to be a very big disconnect versus how Congress is viewing this versus what PBMs actually do.

Question: Stephen Baxter - Wells Fargo Securities, LLC - Analyst : Hi. Thanks. Just staying on the policy front, I was wondering if you had any early perspective to share on the Medicare Advantage advance notice for 2026. I guess anything you see as encouraging or any potential areas of concern as you progress from advance to final. And then I guess (technical difficulty) the reimbursement that's embedded in these rates is still not reflective of the elevated cost trend that we saw in 2024, even if taking the step in the right direction. Is that a company perspective that you share? Thank you.

Question: Lance Wilkes - Bernstein - Analyst : Great. Thanks so much, and really appreciate your comments at the beginning of the call. Could you talk a little bit about one of the things I think is hanging over long-term investors out there which is levels of customer satisfaction. I know that's difficult to measure, but I know NPS and other metrics are things you guys look at. Can you talk a little bit about what you perceive to be the major sources of dissatisfaction in those sorts of measures? And then, what are some of your strategies and priorities? And does it have any impacts on long-term algorithms for the company as far as economic algorithms, growth algorithms, or just where you prioritize your capabilities? Thanks.

Question: David Windley - Jefferies - Analyst : Thank you for taking my questions. And Andrew, thank you. I want to give you kudos for your emphasis on price. I feel like that's underappreciated in the United States. My question is around SG&A. If I extract -- if I ignore the portfolio changes, what you might call normal course SG&A improvement, efficiency improvement in '24 was still substantial. You need another step down in 2025 per your guidance. Both of those are significant relative to historical norms. Could you talk about the sources of that efficiency, perhaps a nod to AI and some of the technology that you've talked about, but the sources of those savings and the durability of the savings that you're extracting? Thank you.

Question: Scott Fidel - Stephens Inc. - Analyst : (technical difficulty) saw in '24 and that then will have effects on 2025 when thinking about the sequencing of Medicaid margins and MLRs and some of the utilization patterns. If you would help us maybe in thinking about any comments on EPS seasonality that may be different in 2025 relative to '24, and then similarly, MLR sequencing that you're thinking maybe having a bit of a different pattern around that guidance that you gave for the full year. Thanks.

Question: Sarah James - Cantor Fitzgerald - Analyst : Thank you. I'll stick on MLR. John, could you help us bridge '24 to '25 by sizing some of the impact of the components that you called out, like your assumptions on core trend versus IRA and any offsets like rates or non-repeat of the MA group refunds? Thanks.

Question: Joanna Gajuk - BofA Global Research - Analyst : Hey. Good morning. Thanks for squeezing me in. So I guess something that maybe didn't come up. During the discussion of MLR being high in '24, but also the outlook for '25, can you talk about the margins in your Medicare Advantage business? So I appreciate second year or V28 and such, but just can you explain for us how the margin in that particular business was in '24 versus your target margins? And do you expect the margins to improve year over year in '25? Thank you.