A：To address underperformance, UnitedHealth Group is introducing new leaders, strengthening underperforming businesses, identifying opportunities and inefficiencies, recommitting to the company's mission and culture, and focusing on a keen sense of urgency across the enterprise.

A：Repricing within UnitedHealthcare is on track to drive solid operating earnings growth from margin improvement. In less mature businesses like Optum Health and Optum Insight, improvements may be more measured and take longer to bear fruit.

A：The company's belief in the need for value-based care remains intact and they are confident in returning to expected performance standards. Throughout the company, they are focusing on aligning activities with the long-term future and being disciplined about what to retain or let go to ensure consistent enterprise-wide performance.

A：External challenges include continued headwinds from industry-wide Medicare cuts and Medicaid funding and program pressures. Despite these, the company is confident in achieving solid earnings growth in the next year due to operational rigor and prudent pricing.

A：Pricing and cost management efforts are focused on supporting margin recovery in the commercial segment. Approximately 60% of group commercial insured offerings have been priced for next year, reflecting elevated cost levels. While the group fully insured business is expected to contract, strong traction for self-funded offerings is anticipated to return to normal margins in the next quarter.

A：In ACA markets, rate filings have been submitted to reflect experience and have resulted in average rate increases of over 25%. Targeted service area reductions are being enacted where agreements on sustainable rates are not reached. These actions are expected to drive margin improvement in the employer and individual segment in 2026, although it will still fall below the targeted range.

A：States have not funded Medicaid at levels sufficient to cover health needs, resulting in a mismatch between rate adequacy and member acuity. While progress is being made, this issue is expected to continue through 2026. The team is focusing on addressing unique drivers in these markets, such as behavioral health, and advocating for appropriate funding.

A：Medicare margins are expected to be breakeven for 2025 and decline further in 2026 due to existing cost trends and the current rate environment. UnitedHealthcare's underlying business is performing well, with digital member inquiry service, call handling efficiency, claims processing, and a focus on enhancing the member experience.

A：Optum Health's progress towards value-based care includes steps to correct the issues that strayed from the original intent of the model, such as a too large provider network, integration problems, and risk acceptance in unsuitable products and services. Understanding these issues has led to the pursuit of necessary steps to return to the original intent of Optum Health and value-based care.

A：The three key areas of focus for the new leadership at BBC are returning to the original intended clinical framework that best supports BC, moving towards a narrower, more integrated, and dedicated value-based care provider model and network, and focusing on the appropriate benefit product and patient base.

A：The team has made solid progress in terms of risk arrangements by partnering with payers on benefit adjustments and appropriate rates to match the risk mix of the populations served. They are close to completion, with over 90% of value-based payer contracts for next year, and on track to offset approximately half of the 2026 headwind through payer contracting.

A：To shape the care provider network, the team has finalized market and product exits, including from lower-performing PPO contracts, and is focusing on high-performing partners who demonstrate strong patient engagement and consistently positive outcomes. The targeted network actions will result in fewer providers in the network starting in 2023.

A：The actions taken to shape the care provider network and integrate clinical practices are increasing confidence in the ability to meet V28 cost reduction targets in 2023 and strengthen the operating foundations for the long term. Additionally, engagements and clinical work at Optum are tracking with expectations for reducing medical costs, with over 85% of high-risk members in 2025, which accounts for the remaining cost pressures.

A：The quarterly performance was in line with expectations, reflecting natural seasonality in the business and some pull-forward of investments. For the rest of the year, the outlook indicates a focus on capital and liquidity, including the resuming of share buybacks and strategic acquisition activities, and maintaining a conservative approach to investments and acquisitions.

A：Under the leadership of Sandeep Dudley, the alignment of end-to-end technology and AI innovation efforts is expected to come into formation. Investments in this area will accelerate the advancement of a distinctive platform that serves the health system, which is expected to ignite top-line revenue and operating earnings in line with long-term growth targets.

A：Optima X continues to perform well with double-digit revenue growth in pharmacies and strong selling seasons for its pharmacy offerings. The team is disciplined around pricing, transparency, and quality outcomes for customers, and full rebate pass-through arrangements are offered to customers, with over 85% participation. They have also increased payments to independent retail pharmacies.

A：Strategic decisions highlighted for UnitedHealth Group include quarterly adjusted earnings per share that slightly ahead of expectations, revenue growth, and efforts to balance immediate performance with strategic investments. Future plans involve returning to long-term capital deployment practices later in the year, focusing on investments needed to accelerate returns, and overcoming headwinds like the completion of Amedisys transactions.

A：The company is concentrating efforts on serving US health care needs and is reducing its presence in international markets that do not support these needs. This includes finalizing initiatives for recovering remaining outstanding loan balances from the care provider support programs related to the 2024 change cyber attack for Optum Health, consolidating locations, and completing plans to address the geographic markets where patients will be served.

A：The company is in the process of quantifying the accounting, tax, and cash impacts of its plan, which would result in a non-GAAP, substantially non-cash, low single-digit billion dollar charge. Further details are expected to be provided in the fourth quarter call as these efforts are concluded.

A：As of the last quarter, the revenue breakdown for Optum Health was 65% BC, 15% care delivery fee per service, and 20% our payer employer services within BC. UnitedHealthcare accounts for about two-thirds of the company's business. The company plans to close 2025 just under a 3% margin with BC margins under 1%. The actions taken in 2022 are expected to set the stage for further improvement in 2026.

A：Optum's competitive position is strong, and there is a commitment to the long-term potential of the business, with a goal of a 6 to 8% margin and a 5% commitment to the value-based care agenda. The company is working on a robust set of actions and opportunities with clear visibility and ambition for the work ahead.

A：Optum has launched several AI-first products, including Optum Rail, which is a real-time platform for claims and reimbursements, and Optum Integrity One, an advanced AI auto-coding tool. Crimson AI is another example, an AI-first clinical analytics platform that has demonstrated significant productivity improvements for providers. These offerings are part of a transition from traditional services to AI-first services and then to products and platforms.

A：The company projects commercial margins to return to the 7 to 9% target range for 2027. The current baseline for the commercial margin, based on the provided information, is not explicitly detailed but is implied to be in a script to script range for commercial, which needs to be confirmed by the discussion of Tim in the transcript.

A：Optum expects a million membership contraction for 2026 across Medicare Advantage (MA), which includes both group and individual plans. The 600,000 members from exiting products are considered a part of this contraction. The balance of the membership decline is evenly split between the group MA business, which is facing pricing pressures and dislocation due to competitor actions, and the individual MA business, which is impacted by market conditions.

A：The text does not provide a direct answer to how penetrated the value-based care model is in the MA market today, but it suggests that there is potential for expansion and growth in this area.

A：Optum Health is focusing on an integrated delivery system to create value in the markets they are focused on. They are aligning with the appropriate network, providers, and risk footprint portfolio for long-term success in value-based care. This includes investments in people, such as through Optum Insight, aligning incentives, and expanding both in Optum Health and AI.

A：Out of the $450 plus mentioned, about a third is a commitment to funding the foundation, which had not been funded at adequate levels in the past. The remainder is investments in people and aligning incentives, which is seen as recurring and part of their core business.

A：Optum's expectation for utilization in the back half of the year, including Part D, is tracking in line with the expectations set out in the last quarter's call. This includes tracking with normal seasonality, with a bit more emphasis on earnings in the first half of the year.

A：The change from a copay to co-insurance structure for tier 3 branded drugs in Medicare Part D was made due to uncertainty around the demo program and how it would persist into 2026. Optum took a cautious approach, managing and balancing various variables, including the impact of V 28 and the phased approach related to it.

A：Optum expects to breakeven in Medicaid in 2026, which is a slight downgrade from 2025 due to continued premium funding dislocation and elevated medical cost trends. However, they expect this to be the trough for performance and anticipate returning to margins around 2% over time. This outlook is driven by industry trends such as specialty pharmacy, behavioral health, and home health services. They also see potential for an Ed to Ed month period to return to prior performance.

A：Optum's outlook for the employer market in 2025 and 2026 aligns with the guidance last quarter, with trends at approximately script. Employers are focused on health care affordability, and this is particularly evident during selling and renewal seasons. They are exploring various considerations, including value-based care and integrating medical benefits with Rx benefits. Optum's portfolio includes products like Caresource, which continues to grow and has a robust pipeline for the upcoming selling season. Additionally, integrated advanced advocacy solutions that coordinate medical and Rx benefits are gaining attention.

A：The plan is to maintain the dividend as per historical practices, prioritize debt paydown, and then revert to the buyback program and strategic acquisitions. The intention is to return to normal capital deployment activities by the back half of the next year.

A：Optum Health is being reshaped to align with the most impactful and valuable model as envisioned. The goal is to bring it back into form to allow for movement, growth, and advancement within that disciplined model.

A：Portfolio rationalization in Optum Health involves considering factors such as clinical quality, operating cost performance, and engagement. The aim is to ensure the integrated model can deliver the best outcomes and is adaptable to both value-based and fee-for-service models.

A：Portfolio rationalization may result in the likely withdrawal from some geographic markets, reshaping practices within certain markets, and likely reshaping the primary delivery system along with complementary services.

A：The approach to improving value-based care includes focusing on integrated delivery systems, fee-for-service assets, and ensuring the model supports better quality, experience, and lower cost care. It is expected to improve productivity, scheduling, access, collections, and value-based portfolio performance.

A：Efforts to turnaround Optum Health are expected to progress throughout the year with some quick wins in fee-for-service improvements. However, precise quantification of the costs and investment required to achieve an 8% margin by 2028 is not provided due to the blending of various efforts.

A：V28 headwinds are being mitigated through recontracting efforts with all payers, with about half of the V28 headwinds addressed so far. The company has completed and is nearly 90% complete with the contracting related to this, including rates, products, benefits, and market exits.

A：UHC is engaging with CMS to modernize and improve the Medicare program, which has shown encouragement from the current administration for these discussions. UHC is not lobbying for anything specific and is focused on constructive engagement rather than advocating for particular outcomes.

A：UHC is addressing outlier trends in provider coding and is working to keep healthcare affordable. This includes network actions, enhanced use of AI in payment integrity, and other efforts to manage costs. The IDR process is being closely watched but is not seen as a material trend driver from this distance.