Good morning and welcome to the UnitedHealth Group Second Quarter 2023 Earnings Conference Call. A question-and-answer session will follow UnitedHealth Group’s prepared remarks. As a reminder, this call is being recorded. Here is 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 file 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 earning reports section of the company’s Investor Relations page at www.unitedhealthgroup.com.

Information presented on this call is contained in the earnings release we issued this morning and in our Form 8-K dated July 14, 2023, which may be accessed from the Investor Relations page of the company’s website. I will now turn the conference over to the Chief Executive Officer of UnitedHealth Group, Andrew Witty..

including hospital readmissions and emergency department visits. We see these results as compelling validation of the value-based care approach and signal more strongly its promise and potential, as we expand these care models to many millions more patients in the years ahead.

I'll now turn it over to UnitedHealth Group, President and Chief Operating Officer, Dirk McMahon, to elaborate on how we're focusing on affordability, transparency, and simplicity for the people we serve.

Dirk?.

Thanks Andrew. Making high quality care, more affordable and more accessible is what we do. So it is really great to see people getting the care they need, especially as our teams are working to build more capacity and our benefit networks and care delivery resources to accommodate consumers' evolving needs. Affordability is vital.

For far too many people, cost remains the most significant barrier to high quality care. We are leaning in hard on behalf of consumers, employers, and health plans to lower out of pocket costs and drive greater affordability throughout the system. As you heard from Andrew, recently we've seen an uptick in outpatient surgeries.

Finding the most appropriate site of service is crucial, because the cost of those procedures can differ dramatically depending upon where they are performed. Overall, evidence shows that comparable procedures performed in ambulatory surgery centers cost about half as much as traditional settings with comparable outcomes.

For consumers, that translates into many 100 of dollars in out of pocket cost savings for just a single procedure. And the patient satisfaction levels at our centers are among the highest in healthcare with NPS approaching 90. Also high on our affordability agenda is continuing to lower the cost of prescription drugs.

Our customers including employers, unions, health plans and governments count on us to help them access the most effective medicines at the lowest possible cost. In fact, pharmacy benefit managers like ours are the only link in the drug supply chain whose main purpose is to improve affordability for everyone.

We go further by recommending benefit designs and providing tools to help consumers navigate their options and find the best value for their prescription. A recently launched feature called Price Edge, which provides the lowest cost option for a patient's medication. Already has delivered millions of dollars in customer out of pocket savings.

Especially drug cost continue to be a focus of every customer OptumRx works with. Our differentiated approach to specialty is designed to serve the unique needs of patients, payers, providers, and pharma partners and has allowed us to greatly expand our access to limited distribution drugs.

We work to tailor our programs with individualized single point of contact care for rare disease and clinical excellence programs for conditions such as MS, autoimmune diseases, and cancer. Clients working with OptumRx, who implement all our specialty medication management programs can save up to 20% on the specialty drug cost.

Most related to specialty biosimilars are another area where we are helping drive affordability and consumer choice. Earlier this year, we began offering Amjevita, a biosimilar to Humira at parity ensuring patients and their doctors have more options to choose from when deciding on a course of care.

Recently OptumRx and UnitedHealthcare announced the addition of two new Humira biosimilars, Cyltezo and Hyrimoz to our standard prescription drug list also at parry. This increased competition for the innovator drug will result in double-digit savings for our customers.

You might also recall that a year ago, we announced our initiative to offer lifesaving drugs at no cost to our customers. This benefit is available to everyone in UnitedHealthcare's Group fully insured commercial plans and has been adopted by more than 500 of our self-funded customers, increasing adherence, and saving people millions of dollars.

Finally, another important customer innovation that is making the health system simpler is Optum Financial’s integrated card, which enables seamless access to benefits, programs, and rewards for more than 13 million consumers, who have been issued the card since we broadly rolled it out at the start of the year.

Adoption and satisfaction levels have been very strong, make it much simpler for seniors to navigate the system and understand their benefits and creating a more satisfying consumer experience. These and many other results are validating our strategic approach to healthcare.

I know from my many meetings with customers that these affordability, transparency, and simplicity initiatives are resonating. They are a key reason for our continued growth in a highly competitive environment and for our confidence in maintaining our momentum as we look ahead. With that, let me hand it over to Chief Financial Officer, John Rex..

Thank you, Dirk. Adaptability and delivering greater value for the people we serve continue as foundational elements for our enterprise.

These last few months are a good example, identifying evolving market trends; moving quickly to help people get the care they need; incorporating our broad and multifaceted insights into planning and importantly delivering on our commitments to you, our shareholders.

These traits underpin our confidence not only in achieving our goals for ‘23, but also as we look toward ‘24 and beyond. Before reviewing our business results, let me elaborate on the care patterns Andrew described earlier. To illustrate in the second quarter, outpatient care activity among seniors was a few 100 basis points above our expectations.

As we've highlighted, specific orthopedic and cardiac procedures had increased its far above that level of variation. And as we developed and filed our 2024 Medicare Advantage offerings, we assume that these levels of heightened care activity will persist throughout next year.

Overall care activity among our Medicaid and commercial populations is consistent with our expectations. As always, we continue to intensely analyze trends that may indicate more severe disease progression, which could point to rising acuity.

For example, in areas such as cancer or cardiovascular disease, we see no such evidence, while continuing to monitor closely. With that, let's turn to out second quarter results. Revenue of $92.9 billion, grew by nearly $12.6 billion or 16% over the prior year with double-digit growth at both Optum and UnitedHealthcare.

OptumHealth revenues grew by 36% to $23.9 billion, driven by an increase in the number of patients served, a growing mix of patients with more complex needs and the expanding scope of care services we can offer.

Operating margins reflect the higher care activity patterns we have discussed with seniors comprising a significant majority of value-based patients served. OptumRx revenues grew by 15%, surpassing $28 billion, driven by continued new customer wins and strong double-digit growth across our specialty, infusion, and community pharmacies.

Script growth of nearly 7% reflects continued demand for our affordable solutions that give customers choice and simplify the pharmacy experience, such as biosimilar access and digital pharmacy tools. Part way into the ‘24 selling season, this momentum continues with strong client additions. OptumInsight revenues grew 42% to nearly $4.7 billion.

The revenue backlog reached over $31 billion, an increase of $8 billion over last year, in part due to the addition of Change Healthcare. The integration and investment activities discussed on previous calls have gone well and are setting the stage for the next phase of growth for OptumInsight. Turning to UnitedHealthcare.

Our commercial business added nearly 500,000 people in the first-half and continues its growth with the ‘24 selling season indications tracking favorably. Within our public sector programs, we continue to expect growth of over 900,000 Medicare Advantage members this year.

And our Medicaid performance remains strong, as we continue to support states as they initiate redeterminations. Comprehensive outreach efforts to help individuals retain coverage are underway though it is still early as most states began this work only recently. Our capital capacities are strong.

Adjusted cash flows from operations were at $10.4 billion or nearly 2 times net income in the second quarter and $15.6 billion or nearly 1.4 times net income in the first-half.

In the first six 6 months of this year, we returned $8.3 billion to shareholders through dividends and share repurchases and in June, our Board of Directors increased the dividend by 14%.

As Andrew mentioned, based upon our growth outlook and the trends discussed, today we were able to strengthen and narrow our full-year ‘23 adjusted earnings outlook to a range of $24.70 to $25 per share. Within this, we expect a relatively balanced pacing in the second-half. Now I'll turn it back to Andrew..

John, thank you. Overall, for UnitedHealth Group, looking to the second-half of the year and into 2024 and beyond.

We're confident that we're capturing the current landscape in our planning decisions, which in turn gives us confidence in our ability to sustain the growth momentum shown in our first-half and continue to demonstrate the adaptability, performance, and mission-driven purpose of this enterprise, especially in evolving environments.

With that, operator, let's open it up for questions. One per caller, please..

The floor is now opened for questions. [Operator Instructions] We'll take our first question from A.J. Rice with Credit Suisse..

Thanks. Hi, everybody. Maybe I appreciate the comments about what you're seeing in the care demand. Maybe on the OptumHealth side, if you guys, obviously top line continues to be very strong there.

There's a little bit of margin degradation from first quarter to second quarter? How much of that relates to what you're describing around senior utilization? I know you've got a capitated component and you've got a free for service component.

But I think last quarter you also said that the growth in membership would be something that would pressure margin short-term, but obviously be a long-term positive? And then there's a lot of other things in OptumHealth. Are they helping or hurting margin? Give us a little bit of flavor for what's happening underneath the aggregate number..

A.J., thanks so much for the question. So first off, let me start off, I'm super pleased with the performance of OptumHealth overall.

And when you look at the growth of that business and particularly the expansion of the number of patients who we're now looking after in value based arrangements now about 4 million folks, but not just from UAC, but of course, from many other payors as well, really strong validation of the model that we've been building and you can continue to see us extend that.

In terms of the margin compression during the Q really I'd say there are a couple of dynamics to that. One, is trend and you’d very much echo in the senior trend comments you've heard us make earlier in the quarter and I think is well understood. A second element of that which specifically affects OptumHealth is the behavioral growth.

And I mentioned that in my prepared comments A.J., around continued strong growth in behavioral. That certainly has played its part within Q2 for OptumHealth. And then the third area is a kind of, a good news story, but with short-term implication. So that's really the growth of the membership that's coming this year.

As you know, we've grown very strongly this year, actually a little ahead of our expectations. We've also brought in a very significant number of complex patients as we invest in helping those folks manage their care better, that puts a little pressure on the margin in the short run.

But that's really laying super strong foundation stones, not just 4 million as we move through the year, but into ‘24, ‘25, ‘26. So those three elements, the senior trend piece, the behavioral piece, and then the effect of the strong growth is really what explains what goes on. We're going to continue to lean into that growth very assertively.

A.J, thanks so much..

Alright..

We’ll go next to Lisa Gill with JPMorgan..

Hi. Thanks very much. Good morning. I just want to understand when I think about the guide to the upper end for the full-year MLR.

How much of that is driven by this MA outpatient trend versus behavioral? And when I think about behavioral utilization, is that being driven by a particular population, or is it more broad-based? And, you know, how do I just think about behavioral as a percentage of your cost?.

So Lisa, thanks so very much for that. Let me ask John to just context for you a little bit the balance between the senior and behavioral. And then maybe ask Dr. Decker to just give you a little bit of commentary around the type of consultation that we're dealing with in terms of the growth..

Lisa, good morning, it's John. So in terms of your question, the majority of the guide to the upper end of the full-year is driven by what we've described in terms of the activity, the care activity we're seeing amongst the seniors in outpatient, so that's the core there.

In terms of behavioral, what we've noticed in behavioral is an increase in the number of people accessing care. Andrew have this in his comments, but a very, very significant increase even just since a year ago in terms of the number of people that are looking to access care, it’s a great thing, we are planning on that continuing.

We don't see why that trend slows down, so we're designing our benefits for that to continue. As you recall, I know Lisa, behavioral resides within OptumHealth, and so that's a kind of an impact that we'd see in that component.

And Wyatt, maybe some other commentary?.

Yes, absolutely. Thank you, Lisa. So you asked about the types of consultations and care being provided within behavioral. And we're seeing across the board increasing utilization, but what's encouraging from a public health perspective is it isn't strictly young people. It's across the board.

We're seeing 30, 40, 50-year old accessing behavioral healthcare for needed care for conditions like anxiety, depression, substance use disorder. And our commitment is to make sure that they have access to that care.

So as you heard from Andrew earlier, we've expanded our behavioral healthcare network and we also a couple of years ago very thoughtfully launched a behavioral care provider services and we now have ambulatory services available in 37 states, and we have self-paced modules for things like anxiety and depression and we add a therapist as appropriate.

So you'll see us continuing to make sure our members have access, as well as providing innovative scalable solutions for behavioral healthcare needs across the age spectrum. Thank you..

Yes, Wyatt, thank you so much. So, Lisa, I think you got it there. Overall, it’s very much around the senior trend phenomena. Within OptumHealth, that the behavioral piece plays its part we see that very much as an area where we will continue to step up and make sure that we're delivering the care in the way that Wyatt just described to you.

Next question please..

We'll go next to Nathan Rich with Goldman Sachs..

Hi, good morning. Thanks for the question. John, you mentioned the balance pacing of EPS in the back half of the year between 3Q and 4Q.

Could you talk about your expectations for MCR, specifically between the two quarters? And how are you thinking about the trend of care activity as we head into the back half of the year given what you're seeing with respect to demand, as well as some of the supply bottlenecks that took care being delivered maybe being removed? And do those factors differ significantly between Medicare and the commercial or Medicaid lines of business? Thank you..

Nate, good morning. Thanks for the question. Yes, in terms of the balance pacing, the way I describe that is -- and MCR and how that feeds in, we'd expect the MCR to be a little bit lower in the 3Q than we saw in the 2Q, some of that seasonality, as you would fully expect.

So within the contexting of balance, expect earnings to be a little bit higher marginally in 3Q than 4Q, because of that typical factor in there, and thinking of an MCR somewhere in the zone of between, kind of, what we saw in the 1Q and 2Q just by seasonality factor.

Important in that is we expect the, kind of, general pacing of care activity to remain consistent. That's what we've actually been seeing here.

So since we've talked about this and as we've looked at the level of care activity across the company, these elements we talked about in terms of senior outpatient care are really remaining stable at the levels we talk to. And our expectation is it continues in that level.

So as you look out to the second-half of this year, our expectation, it continues at those levels that we've been seeing with the -- I mentioned a few 100 basis points above our expectations in the senior business, that continues. The only underlying factor is a little bit of seasonality that you would see occurring there..

Right. Thanks so much John and thanks Nate. Next question..

We’ll go next to Justin Lake with Wolfe Research..

Thanks, good morning. My question is on commercial trend. That you mentioned it's in line with expectations. I wanted to delve a little bit deeper. I think you might have said previously that you'd priced for commercial trend to be above normal this year, so some conservatism.

So does that mean that it's running above normal, but in line with your pricing at this point? If it's above normal, can you tell us how Q2 emerged versus Q4, Q1, meaning that an uptick versus -- in 2Q versus 1Q or 4Q? And then just lastly, any insight on the commercial components, is outpatient at pressure here as well? Thanks..

Yes. Justin, thanks so much for the question. I mean, so really not much to see here in all honesty, first off. Where we came into the year, we -- as you alluded to, we priced for some anticipation of unit cost inflation. We've seen some of that come through. Within that, everything is tracking very much within our expectations.

So we set the year anticipating a little bit of price/cost growth, if you will. But beyond that, really nothing to note and we feel good about where we sit here. Thanks so much.

Next question?.

We'll go next to Josh Raskin with Nephron Research..

Hi, thanks. SO good morning.

Do you think any of the increased utilization you're seeing on the MA side was self-inflicted in the sense that you've really augmented benefits dramatically in the last year -- really last two years, and perhaps that's encouraged or even catalyzed, sort of, an overutilization of trends relative to historical patterns and expectations? And then how did you address the utilization trends in your benefit designs for ‘24? I know there's sensitivity about saying something on a public call, but maybe just broad changes that you'd expected?.

Josh, thanks so much for the question. I'm going to ask Tim Noel to give you a little bit more commentary. But I think bottom line, I don't really think the benefits are driving this.

I think this is -- when you look at the concentration of what we're seeing in terms of the outpatients, the orthopedics, in particular, those sorts of areas, it looks very much more like a kind of deferment of care. Super interesting when you look at maybe what's changed a little bit within that.

We've seen a shift in the fraction of people who, once they have been essentially recommended for surgery, actually go through, and complete the procedure. Arguably, what might drive that change is, one, more supply.

So actually, it's more possible to go get it done; but two, maybe a little less reticent from an individual to go into a facility in a post-COVID environment versus a COVID environment. That feels like the thing that's shifted.

And maybe ask Tim to just add a little bit to that as well, Tim?.

Yes. Thanks, Josh. Consistent with what Andrew said, when we look at potential drivers everything from acuity to benefits added to mix of membership. Everything is really tracking very normally and in line with what we would expect.

So nothing to call out there, but certainly something that we look at closely and carefully each and every year, and this year being no different. With respect to your question regarding benefits, so I think one thing to keep in mind is that the more important driver to our benefit decisions this year were the changes to the risk model.

Certainly, we've been talking a lot about care patterns, but that has far less of an impact on the benefits filed and is really one of many assumptions that we make inside of our bids.

But we feel very confident in our ability to provide stability to the benefits that seniors value most, things like zero co-pays for primary care visits, zero co-pays for Tier 1 drugs. Keeping zero monthly planned premiums where we had them in the past and keeping level out of pocket maximums are very important things for benefits for stability.

And we are able to preserve those, so we're really happy about that. So on balance, combined with the great momentum we see in our value proposition, the great partnerships we have and confidence from the broker community, we feel really good about the benefits we filed.

And also, as we talked about in our opening remarks, really confident in seeing that momentum pull through into some great growth results next year..

Tim, thanks so much. And Josh, thanks very much for the question.

Next questions?.

We'll go next to Lance Wilkes with Bernstein..

Yes, a question on the commercial side of the business.

Can you talk a little bit about membership and in the fee-based business being down? And also may be related to that and your outlook going forward, in Medicaid redetermination, are you seeing any trends with respect to recapture of those sorts of members? Or anything that's driving the opportunity for either growth in membership or maybe you're seeing in-account attrition due to weakness in the economy? Thanks..

Lance, thanks so much for the question. Before I hand it to Dan Kueter, who looks after our E&I business, I just want to make a couple of kind of high-level comments. We're seeing overall a very strong performance from our commercial business this year and also setting up, it feels like very well for the ‘24 season.

We've seen fantastic overall growth, as I mentioned, in terms of membership. And that's been led very much by a lot of the product innovation that the team have been putting together and into the marketplace. And we see that continuing pretty assertively as we roll into ‘24.

Just with that kind of backdrop, maybe, Dan, if you could respond to Lance's specific questions, that would be great..

Yes, Lance, thanks for the question. Growth is on track for the full-year. And what you see in Q2 really is represented by the contraction of one large customer in our fee-based business.

Your question about attrition and redeterminations, the outcome of those, which will be some puts and takes, will probably determine where within our range we will fall. But the punch line is, we're on track to hit our range for this year. Thanks for the question, Lance..

Great. Thanks, Dan. Thanks so much, Lance, for the questions. And just to be super clear as well that client loss that Dan just referred to, we knew about that about a year ago very much within our expectations and forecast plan. It was something we were anticipating and makes no impact at all to our full-year expectation.

But thanks so much for the question.

And next questions, please?.

We'll go next to Kevin Fischbeck with Bank of America..

Great, thanks. I just want to follow-up on the OptumHealth, because the margin there was obviously pressured in the quarter. And I just want to understand how the margin normalization -- how should we think about that over the next couple of years. I mean, you can -- on the MA side, you can reprice for things.

It sounds like you saw it in time for your bids and costs have come in line with the way that you price. Maybe just confirm that piece first. But then since within OptumHealth, you're also relying on other providers and how they price for 2024.

How are you thinking about the market? If you're below target this year? Is this something you can get back to next year or just a multi-year thing depending on how others price? Are the leverage within your control or is this kind of a longer-term normalization? Thanks..

Hey, Kevin, thanks so much for the question. So first off, as I mentioned earlier, the pressure is really coming from those three sources, the senior trend phenomenon that we talked a lot about, the very specific Optum piece around behavioral and then the growth in the book.

And within that, very much to complex care patient, which, as I'm going to repeat again, is an extremely positive element of our growth going forward. That's going to be an extraordinarily important foundation stone for the future of the company. We're going to continue to lean into that growth, first and foremost.

We do expect to see margins continue to strengthen, particularly as you roll through into ‘24. You're absolutely right. We believe we've caught this in our pricing for next year.

But more importantly, the longer time we have to look after folks and wrap around care, we can deliver much better outcomes for them, as we talked about earlier and we can also make the economic proposition better. It really builds much more sustainable capability. So all of that will kick in, as well as we roll through subsequent quarters and years.

This is going to be a continuing building pressure. I feel very good about that range we've laid out for OptumHealth over the next several years. And actually, I think if I had the choice on a slightly suppressed margin in Q2 or the very significant growth that we've taken in. I'll take the growth all day long.

And I'll take that growth, because it's going to underpin years of growth going forward. Appreciate the question, Kevin.

Next question?.

We'll go next to Gary Taylor with Cowen..

Hi, good morning. I just want to talk about some of the -- or ask about some of the levers and offset, because it is a little counterintuitive to hear the commentary intra-quarter about higher MLR and then seeing your largest profit segment, OptumHealth, with lower margin.

So this quarter, obviously, investment income was far stronger The Street was looking for, at least versus our model G&A, was better. But I know moving into the back half, I think you believe there's more time potentially to pull some of those G&A levers.

So could you just talk about investment income, G&A or what other offsets there might be in the back half? And how much of that is carrying forward into your ‘24 thinking at this point?.

Yes. Very much appreciate the question. Let me ask John to make some comments to that.

John?.

Good morning, Gary, it's John. So yes, you're right. Those investment income has frankly, been growing strongly over the past number of quarters and continues to grow. Some of that is the backdrop of the rising interest rate environment, as you know, very well.

Some of that is also a result of very active management by our treasury teams in terms of deploying more and more cash balances into interest-bearing accounts and such as they've been working hard at that over the past few quarters and advancing the productivity of that cash.

That's after coming off of a period of many years of a zero interest rate environment. So a lot of elements in that. In any given quarter, we can experience some gains from our -- in our investment portfolio. So that can be gained from -- anything from our regular fixed income investments to anything from our diverse venture holdings.

And so those come in -- they come in at different points in time. And perhaps sometimes they're a little bit less predictable, but kind of are typically in a similar zone frankly, not outside. I don't expect those, kind of, things, I don't count on those kind of things, frankly, every quarter. That's not the thing we look at.

But there are elements that we've seen over time in kind of the zones that we're experiencing even now, too. So, yes, thanks, Gary..

Thanks, John. And maybe I'll ask Dirk to also comment a little bit. As you think about the G&A side of the equation going forward. Dirk maybe reflect a little bit on the work you're leading around technology and other interventions as we look to drive down our overall costs..

Yes. Gary, what I would say is much of the focus -- we've really been applying a lot of artificial intelligence, machine learning and natural language processing. Long-term, we think there's great hope for those.

And some of the short-term things that we're working on in those areas, like using generative AI to help more efficiently write medical appeal letters, things like optimizing our provider search and all of our digital properties with natural language processing and AI, doing a lot of work, improving our payment integrity models, using AI to detect waste, fraud, and abuse.

And then a lot in the G&A world to answer basic questions in our call centers, like leveraging our benefit bots to reduce the number of calls and the labor associated with that, for simple questions like is x, y, or z disease covered or have I met my deductible.

From a long range perspective, however, I'm really optimistic about our significant data sets. Our ability to take advantage of whatever new technology comes down the pipe to improve health care, I'm really excited about it. So thanks for the question..

Yes, Dirk, thanks so much. And I think, Gary, overall, and I think I tried to allude at the very beginning. Obviously, when you see a movement in care activity like we saw in the quarter, it's been great to see the range of levers that we have within the organization to respond. And you've seen what we've been able to do in the very short run.

And as you would expect that we have more and more of those levers as you roll through into the medium and longer-term outlooks as both John and Dirk have described both in the financial side of the company, but also critically in the core operating cost structure of the company, which we're going to continue to bear down on very, very assertively.

Consequence of all of that is that even with the backdrop of some of the fluidity we've seen. We're able to continue to commit to the investment behind growth and the investment behind looking after patients, as well as we possibly can and giving people a fantastic experience, which is what we think builds super sustainable shareholder value.

So that's very much the priority that we're focused on.

Next question?.

We'll go next to George Hill with Deutsche Bank..

Yes. Good morning, guys. And thanks for taking the question. I guess, John, I want to talk a little bit more about your expectations for the senior book in ‘24. You guys kind of talked about that you expect the current elevated trend to continue and price for it when you think about the MA bids.

I guess, kind of talk about like what drove, like what drives the visibility there from what you see now in ortho, like looking all the way out to ‘24. And should we think of the pricing is just kind of conservatism on UNH's part? Or like I'm kind of interested in the data that drives the visibility? Thank you.

Hey George, thanks for the question.

I'm actually going to ask Tim Noel, who leads the Medicare business to respond to that, Tim?.

Thanks, George, for the question. So I'll start by reiterating one thing as an important point. The biggest item though shaping this year has been -- thinking was around the risk model changes. The outpatient care patterns plays a far smaller role there.

But that said, having the ability to incorporate the latest data, anything we've learned recently into our Medicare Advantage bids is extremely important in each and every year especially given how we see both key revenue and medical elements firm up inside of Q2, being able to incorporate the latest thinking that we have in our bid filings is really, really important.

And because of that, we've designed a bid process that is very nimble and able to accommodate late changes. This year, out of respect for a developing trend, we made the assumption that some of these early indications that we are seeing in the outpatient care patterns we have talked about would remain durable.

And as we sit here today, as John has talked about, these assumptions have validated and they've also stabilized. And we feel confident that we've made the appropriate accommodations inside of our 2024 bids for all of this. Thank you..

Tim, thanks so much. Jenifer, we have time for one last question. So, let’s take the last question. Thank you..

We'll take our last question from Scott Fidel with Stephens..

Hi, all. Thanks. I was hoping maybe you could drill a little bit just into the announcement of the Amedisys acquisition.

And maybe in particular, just talk about, sort of, strategy for ramping up the exposure here given the tough near-term reimbursement environment for home health? And then maybe some early thoughts around some of the integrations or synergies that you could generate from integrating Amedisys in LHCG together? Thanks..

Scott, thanks so much for the question. Well, first of all, we're obviously very pleased to have come to an agreement on the transaction with Amedisys, so we appreciate that. But as you'd expect, it's -- we're now in the very early stages of that process. It wouldn't be appropriate to talk about anything specific in that regard.

If I just take it maybe a level higher, it's no secret that we are very strong believers in the value of home health and no secret that we believe that value -- home health capabilities, when combined with other activities in terms of wrapping care around patients, is a really important element of future value-based care, particularly as you speak towards complex patients, many of whom maybe struggle to get out of the home, maybe don't have quite the same kind of relationship with the clinic as you might often expect.

So we do think that the general area is an important area. As I said, as far as the specifics are concerned, I think we're now -- we'll go through our -- the regular kind of process, and we'll update you as appropriate, but probably not much more to say today. Thanks so much, Scott, for the question.

And thank you, everybody, for joining us this morning. We very much appreciate your time. And we hope you take away from this call our confidence in our ability to continue to perform and grow strongly, while we pursue our mission and build the foundations for continued growth in 2024 and beyond.

And we are very much looking forward to sharing more on our progress with you again in October. Thanks so much for your time this morning..

This does concludes today's conference. We thank you for your participation..