Cigna Corporation (NYSE:CI) Q2 2023 Earnings Call Transcript - Page 7 of 7 - InvestingChannel

Cigna Corporation (NYSE:CI) Q2 2023 Earnings Call Transcript

Operator: Thank you, Mr. Hill. Our last question comes from Mr. Lance Wilkes with Bernstein. Your line is open. You may ask your question.

Lance Wilkes: Great. Thanks. A question on the specialty products in the Healthcare segment. And just had kind of three elements to it. One was, what sort of utilization trends you were seeing in behavioral, dental and some of the other areas where you’re taking some risk? And then a broader question, just understanding, how much specialty is contributing to the earnings power of the business versus just the core medical? And what do you think the cross-sell opportunities might still remain for that business? Thanks.

Brian Evanko: Good morning, Lance. It’s Brian. I’ll start, and then David, if you want to chime in with anything, feel free. So, for a long period of time, as I think you know, our specialty products within Cigna Healthcare been a really core part of the value proposition as we seek to expand client relationships. So, we have few clients that only purchase medical services from us more and more purchase a full suite because we’ve demonstrated over time our clinical models perform best when we have a fuller suite of services. As it relates to what we’re seeing in terms of trends in terms of utilization, behavioral health has certainly been growing at a strong clip, not just this year, but for the past few years. Part of that is by design as we engage with our customers.

And over time, that’s a good thing because the more utilization we see in behavioral health services, it helps to defray core medical costs over time. We’ve also seen an uptick in dental utilization this year as well, but all of these things are within, again, the boundaries of what we had forecasted and planned for and priced for within our Cigna Healthcare book of business, which is why you’re seeing our commercial employer business continue to perform so well financially. And again, that line is on track to achieve target margins here in 2023. David, anything you want to pick up on here?

David Cordani: Sure, Brian. Thanks. Good morning, Lance. A few items to highlight, specifically, just click down a little more notch, in behavioral, as Brian noted, elevated trend and as you would expect, and over a prolonged period of time, I think the last three to five years, as you click down in it, think about the professional services as such, we continue to innovate new products, new programs, expansion of network, both physical network, we operate the largest virtual behavioral network in America today, and then expanding behavioral services even further in our value-based care programs to help medical professionals be a first line of screening and support from that standpoint. To the last part of your question around the expansion opportunities within our portfolio, you know our portfolio well in terms of the healthcare side of the equation.

If you think about the old monikers of Select, I think under 500 employees, middle market, 500 to 5,000 old monikers, and Nashville above 5,000, multi-geographic. Select, you still think about that as totally cross-sold and penetrated. We go to market with bundled solutions. It’s a big part of our value proposition. Helps us generate a predictable high quality, low trend and outcome. Middle market remains and has a high level of penetration, yet there are cross-sell opportunities. And national accounts, a lower level of penetration versus the other segments. However, as I noted to A.J.’s question, the point solution fatigue in the marketplace presents it even further opportunity as you coordinate those services. The last note I would make is as we leverage the breadth of the Evernorth capabilities today and into the future, we’re innovating new solutions.

So, you’ll hear us talk more about [path wall] (ph) programs to take specific diagnoses and look at reengineering those episodes of care end-to-end. And in cases to your phraseology, we take risk based on the performance, we hold ourself accountable based upon the clinical service and financial outcomes. So, strong penetration down market, opportunities upmarket, market buying behavior is evolving because of point solution fatigue, and importantly, continued innovation will continue to drive growth for us there. Thanks, Lance.

Operator: Thank you, Mr. Wilkes. I will now turn the call back over to David Cordani for closing remarks.

David Cordani: Thank you for your engagement and questions today. I just want to highlight a few items. We stepped into 2023 with strong growth and have been successful in building beyond that momentum throughout the first half of the year. We remain confident that we’ll deliver on our commitments, including our adjusted EPS outlook for 2023 of at least $24.70 and our commitment for at least $28.00 of EPS in 2024. I’d also know how proud and appreciative I am of our colleagues around the world who continue to be dedicated to driving innovation and delivering on the programs and solutions, as well as partnerships that support every day the health and vitality of our customers, our patients and our clients. As always, we look forward to talking to you again soon about how we’re working to sustain the growth of our company and capture more opportunities to serve more lives and achieve a greater impact, and we continue to invest in our future every day to drive further innovation.

Have a great day.

Operator: Ladies and gentlemen, this concludes Cigna Group’s second quarter 2023 results review. Cigna Investor Relations will be available to respond to additional questions shortly. A recording of this conference will be available for 10 business days following this call. You may access the recorded conference by dialing 800-839-1335 or 203-369-3357. There is no passcode required for this replay. Thank you for participating. We will now disconnect.

Related posts

Advisors in Focus- January 6, 2021

Gavin Maguire

Advisors in Focus- February 15, 2021

Gavin Maguire

Advisors in Focus- February 22, 2021

Gavin Maguire

Advisors in Focus- February 28, 2021

Gavin Maguire

Advisors in Focus- March 18, 2021

Gavin Maguire

Advisors in Focus- March 21, 2021

Gavin Maguire