Good afternoon, and thanks for joining us in our healthcare services track. It's my pleasure to host The Cigna Group. The Cigna Group provides group health insurance, managed care, and pharmacy benefit products and services, international health plans worldwide. The company recently rebranded their health services business, now named Evernorth, and completed the sale of its group life and disability business to New York Life. The company will generate approximately $158 billion in revenue in 2020. This afternoon, I'm primarily going to be speaking with CEO David Cordani. Alexis Jones is on as well to be the police if we stray into non-public disclosure world. She'll keep an eye on this, I think. David, welcome to the conference. Good to see you. Too bad it has to be virtual, but I wanted to let you make a couple of introductory remarks, and then we'll have a fireside chat.
Sure, Jerry. Great to be with you, and thanks for the time. Look forward to our opening dialogue in terms of whatever's on your minds and whatever's on your colleagues' minds from that standpoint. Just a few things I did want to cover as we got rolling. One is, as we completed 2020, I want to underscore how proud I am of the way my Cigna colleagues showed up each and every day in support of our customers, our clients, our physician partners, our communities, as well as the programs we've embarked upon in support of our own colleagues. 2020, as everybody knows, was a unique and challenging year from a COVID standpoint, and we stretched ourselves to be guided by our mission to improve health, well-being, and peace of mind of those we serve.
I feel very fortunate to be part of this company in terms of the way we showed up for all the respective stakeholders. Against that backdrop, we're also proud of the fact that we delivered on our promises for our shareholders as well. What I want to do is just spend a couple of minutes in terms of the way we see the marketplace evolving and the backdrop of what we've done to position ourselves. First and foremost, the last couple of years, we had a variety of strategic imperatives that sat in front of us. One, effectuate the combination of Express Scripts with Cigna. We've sufficiently completed that combination and completed our integration at the end of calendar year 2020. Two, we said we were going to divest of our group insurance portfolio to New York Life. We successfully completed that by the end of the year.
Three, deleverage our franchise over the 24-month period of 2019 to 2020. We completed that, and meanwhile, deliver on our growth objectives, our earning objectives, deliver new innovative products to market, as well as give back to the community. Additionally, what we did was, as we closed the calendar year, we positioned ourselves with some new leadership deployments by pulling from the deep repository of talent we have in our organization and redeploying and providing some additional opportunities for key leaders in our organization, both on my team and on the teams beneath those individuals, to position us for sustained growth that we could talk about on a go-forward basis.
Against that backdrop, we still operate in an environment, so you have the global map behind you, that globally, as well as back here in the U.S., affordability is the number one tension point for those we serve: customers, clients, governmental partners, et cetera. Against that backdrop, as we know, population around the globe continues to age, and health burdens continue to amass from that standpoint. Additionally, we see three transformative curves that sit in front of us for the next strategic time horizon. One, pharmacological innovation will be the primary innovation in healthcare. We see that transpiring. In fact, we see the rapid innovation take place just even step up to COVID. Beyond that, we see new Alzheimer's drugs and new treatments coming forth, and we think that rate and curve is going to accelerate.
Two, we see now more acceptance globally for the connectivity between health and mental health from that standpoint. Three, with technological innovation, proliferation of data, and multiple new modalities of engagement, we see the opportunity to transform care access with more longitudinal virtual care and augmented in-home care to support the physical aspects of care delivery. Lastly, I'll comment, as we look forward, we see an exciting growth trajectory in front of our corporation, and our growth story will be predicated on four buckets of activities. One, making sure we continue to deliver strong value to our existing clients against our value proposition. That yields differentiated retention. It yields the opportunity to deepen relationships, and of course, it yields the credibility to bring new relationships into the organization. Added to that, we will continue to invest in innovation and partnerships to both expand our capabilities and expand our reach.
Thirdly, we see tremendous opportunities to expand our addressable market or our strike zone against our business platforms. When you add all that together, it'll yield strong differentiated top-line growth, bottom-line growth, and attractive free cash flow as we position our corporation to be a significant free cash flow generator and therefore a significant amount of shareholder value. We'll be excited to have a more comprehensive conversation around that at our I-Day in early March. With that, Jerry, I'll turn it back to you and go down whatever paths you think are most important right now.
Great, thanks. David, you're the first one to recognize the value of this global map.
Nice backdrop. I'm a little jealous.
It takes a global perspective to recognize that, so I appreciate it.
I wonder how long it took you to draw it.
I can make a joke, but I won't, about somebody else that used to draw some maps earlier, but I won't. For those that didn't see it, March 8 is the next Cigna Investor Day that was just announced today. I want to just ask about, just as we began, the leadership transition you did have from Eric Palmer moving over to President of Evernorth and then Brian Evanko coming up to be CFO. I think a lot of folks know Brian from his history at the company and the access that he provided. Can you give us just a short snippet of the strategic thinking behind those changes?
Sure. Thanks for going there. First and foremost, at The Cigna Group, we have a long track record and a long history of growing and developing talent. Providing diverse experiences for individuals to grow and develop actually helps in the way we operate because we don't operate in verticals in our corporation. We operate from the marketplace back in. Having more individuals from leadership positions throughout the organization, having multiple diverse experiences, actually creates more connectivity. You highlight some of the changes. Eric Palmer moving over to Evernorth to be President and COO is a reinforcement as well of the phenomenal growth opportunities we see in front of us. Brian Evanko, who has a financial background and was several levels removed, previously CFO of our international operation, most recently ran our government businesses, presents a great opportunity for Brian to return to finance in an enterprise leading role.
Matt Manders, who has experience running our U.S. field operations, all lines of business, has taken over the responsibility for oversight of the government portfolio in addition to other responsibilities with dedicated seniors' oversight. Everett Neville, a part of the legacy Express Scripts organization on Tim's team, who is working with Matt, takes over strategy and M&A, reporting directly to me. There's a cascading effect, Jerry, I think equally important, of other leaders because of those moves who take on additional or more diverse opportunities and responsibilities. It's on strategy. It's exciting. It's well received in the organization and positions us for another run of very attractive growth across the franchise.
Great, thanks. I also just wanted to ask about some of your interim news just in the last couple of weeks here around capital deployment. Cigna established your first dividend, a dollar a quarter. It's about a $1 billion annual commitment. There was also some accelerated share repurchase activity looking to at least a couple of billion dollars in the first quarter. Just walk us through the decision-making on those.
Sure. Again, we completed, as I mentioned in my opening remarks, over the last two years, a lot of what we said we're going to do: grow the franchise, service our clients and customers, of course, deliver new innovations, deleverage the franchise, and put ourselves in position as we step into 2021. In the first week of 2021, we stepped forward and said, obviously, we completed all those activities. Our view is that our free cash flow generation puts us in position now to have an AM strategy. To have an attractive dividend, we targeted a specific payout ratio from that standpoint relative to that $1 per quarter dividend from that standpoint. We also highlighted the fact that we were quite active in share repurchase in the month of November and December. We repurchased about $1.2 billion of our stock in November and December.
I would underscore that was reinforcing the confidence we had in closing the group insurance combination, achieving our deleveraging activity, and the underlying fiscal health of the franchise. As you noted, we indicated that we will repurchase at least $2 billion of our stock in the first quarter, and we have about $3.9 billion of share repurchase authority. I think it's a first installment of the next chapter of the corporation as we move forward with a very healthy free cash flow profile. We see significant shareholder value creation through the deployment of that free cash flow.
Thank you . I want to move on to some of your key markets, and I want to see if you can help us think through this in sort of the real-world way. I think most investors look at commercial group market either as a declining market or a zero-sum gain market, yet, you know, The Cigna Group consistently generates a share gain in that market. Really consistently, when we talk to brokers and employee benefit managers, it ranks very highly, if not the highest, in terms of companies that are most innovative in terms of what you're doing in the commercial group market. Can you sort of talk to us, you know, how are you, or what's in The Cigna Group's DNA that drives that innovation and allows you to, you know, fairly consistently gain share in a commercial market that in aggregate doesn't have enormous growth characteristics?
Yeah. Jerry, I appreciate the framing very much that you walked through. It does start with the philosophy. A couple of grounding points. One, we don't view that the commercial market is one large market or three markets: big, medium, and small. Right? We view segmenting markets as a philosophy we have as an organization, so micro-segmenting the markets. Within the commercial marketplace, we try to identify employers who view that to be successful within their business, they need highly engaged, healthy, productive coworkers, and ideally doing that in an affordable, predictable fashion. Right? If philosophically you view that that's what you need to run your business, you're going to orient a little differently around your employee benefits programs. We work with them to understand culture, strategy, health burden, readiness to change, openness to using incentives, disincentives, levels of engagement programs, and very importantly, then dynamically manage it.
There's no static nature in terms of the way we go to market. Therefore, the vast majority of our services happen to be self-funded because that yields a level of transparency, and we view the transparency as a gateway to alignment. More alignment, more dynamism, more active engagement of those programs throughout the 365 days as opposed to, let's tally up and see how we did at the end of the calendar year. Thirdly, viewing that the healthcare services is a broad set of capabilities. Right? It's not just a medical offering or a medical and pharmacy or medical pharmacy, behavioral or disease management. There's decision support, consumer support, health engagement, behavior modification programs that you're embedding in there, all with the objective of helping people maintain their health, improve their health, or maximize their quality of life if they're dealing with a health condition.
Back to the employer, trying to demonstrate we're making their business better. Our objective is to help an employer have a better business through those healthy, engaged, highly productive individuals in an affordable, predictable fashion. That recipe, knock wood, has served us well for a decade, but it's relentless. Right? You're relentlessly driving innovation and change in the marketplace with your healthcare partners, with products, programs, and services, and with our client management teams and clinical management teams servicing our commercial clients. We continue to see that as a growth market going forward.
Is there a way to think about what general trends we're seeing in the commercial market in terms of, I guess we're used to thinking about sort of traditional benefit design, and maybe that's not a sophisticated enough way to think about it. Maybe it really needs to be more focused and customized, as you're alluding to. If we think about sort of the last decade where, you know, a high deductible plan was kind of the trend and a lot of employers were pursuing it, I think for the most part, employers have been disappointed by the result of that and maybe felt that consumers don't really, you know, shop and it wasn't driving, maybe even driving perverse incentives as opposed to positive incentives.
When we think about the commercial market in terms of benefit design, I guess, one, are there any trends you would highlight, or is the answer really, it does have to be more employer company-specific and more micro-driven?
Yeah. Let's take your example for a moment. A high deductible program or CDHP program is neither good nor bad. It's just a tool. If that tool is used as a kind of a binary event, OK, we put a high deductible plan in, we're going to get some good things. What the employer most likely is going to see is they'll see a one-year trend deflection, which to your point may or may not be an efficient trend deflection because you may have avoided some services and you may have people rationing services the wrong way. What you need to do is build a suite of services around that that incentivize more of the right utilization. Maybe zero fiscal obligation for preventative care, maybe zero fiscal obligation even within the fund relative to generic chronic medications from that standpoint because the evidence says you want 100% adoption there.
Then dial the incentives a little differently relative to preference-centric care from that standpoint. Point one is your starting point. It's not good, not bad. The question is, what is it augmented with and what additional tools are brought to bear? As it relates to trends in the present state and going forward, the mental medical, so the mental health, medical health is front and center in every conversation. COVID has taken it to another level, but it was present in advance of that. That's one. Two, specialty pharmaceuticals are present in every conversation because it represents the fastest growing part of the overall cost equation, back to the comment I made before about pharmacological innovation.
Seeking innovative solutions that work with the healthcare provider, that don't just carve out the specialty pharmacy, but work with the healthcare provider, manage appropriate site of care, including home infusion, site of care, and the care coordination capabilities. Those are two to limit and try to be succinct. Two trends that are front and center in almost every employer conversation: mental and medical coordination and dealing with it more than mental health coverage. How do you redefine loneliness, depression, stress, and have additional products, programs, and services that come into play from that standpoint and have them highly coordinated and integrated? Taking the most holistic perspective view of specialty pharmaceuticals exist in just about every conversation right now.
Thanks. On that behavioral point, how is The Cigna Group positioned to help employers with integrating that? You've got, I think, my notes, 37 million behavioral lives that you're playing some role with. Is it going to move away towards carve out and more towards carve in on that business, or how do you feel the company's positioned to deliver that?
Yeah. A way to think about behavioral is historically in the marketplace, I would submit that behavioral existed in one of two ways. Either A, the coverage, and I use coverage on purpose, was integrated as part of the medical behavioral pharmacy offering, but you may not have had a services coordination around it, like extending it, as I said, stress, depression, et cetera, but dealing with the more traditional and necessary parts of behavioral health. Secondly, it would be a point solution, a carve-out standalone EAP or a carve-out standalone abonement. We see both of those markets as necessary, but we see an additional market, what we'll call coordinated services from that standpoint. In pursuit of that, we've actually taken within Evernorth, all of our behavioral health assets are now part of Evernorth.
The leadership, the infrastructure, all the colleagues are transitioned as part of the Evernorth organization because those capabilities are obviously consumed by the Cigna medical side of the equation you made reference to, but are highly on strategy to Evernorth bringing solutions forward for large corporate entities, health plans, governmental agencies, as well as risk-bearing healthcare professionals from that standpoint. We have a broad set of capabilities. We continue to invest in those, but think about those as being part of the Evernorth services portfolio available both for Cigna commercial consumption, Cigna government consumption, but also standalone employer a la carte, standalone health plan relationships, and coordinated relationships in governmental entities on a go-forward basis. We see it as an exciting growth opportunity.
Thank you. David, do you see the Trump administration price transparency rules being material to the marketplace either in terms of negotiations with providers, any additional transparency that would give you or would give them, or on more sort of the B2C side, if you will, how consumers may or may not be able to actually use that information to any effective end?
Yeah. As configured, first, we passionately support an environment of more transparency. I made reference to it as a mechanism within ASO to get alignment. We have transparency tools in pharmacy. We have transparency tools in specialty care, et cetera, from that standpoint. Point two is that the rule as it stands today, we do not believe provides us or our benchmark competitors a differentiated level of insight in terms of cost structure. There are a variety of ways to get visibility relative to competitive cost structure, relative to consulting benchmarking exercises, the way in which you compete for transparent relationships and the like from that standpoint.
Point three, really important in your question, I do not believe they will have the intended consequences of aiding the consumer to make informed decisions because maybe to oversimplify, if I was to give you two choices, one, you walk into a restaurant and I say, here is a transparent pricing, and I give you the price of every item that is in the kitchen, the parsley, the oregano, the olive oil, et cetera, you have full price transparency, but it is not actionable for you for what you order. If I give you a menu that gives you a suite of choices and an aggregation of price for everything in those, that is actionable and you can make informed trade-offs. We think more of the batches, bundles, or components of care being brought to bear at shoppable moments for the consumer.
That helps on the consumer side of the equation. Taking a hospital's ChargeMaster and making it into some Uber database is not going to be actionable at the consumer level. Intent is right, I do not think that helps the consumer.
How is Cigna going to deliver that actionable or that relevant sort of, you know, pricing package or that sort of episode to your customers?
Let's take today as an example. It's an ever-innovating, so we're not declaring that we have it, check the box, move on. Today and for quite some time, a Cigna customer could go online and shop medications, and based on your specific medication, based upon your location, and based on your specific coverage, tell you exactly what a medication costs and tell you whether or not that medication is cheaper at a different pharmacy. If you hop in a three-mile radius, that pharmacy may have the same brand label on it, but may be priced somewhat differently from that standpoint. It'll also present to you a generic alternative if the generic alternative exists from that standpoint. That's one example.
A second example was to take a series of episodes of care and provide to our customers the cost and quality indicators for specific episodes of care by bundling up the cost. Let's say a knee replacement or hip replacement or otherwise, and to provide to a customer what the requisite level of total cost is, what their financial obligation is, and very importantly, provide the quality indicator for the physician providing the service or the facility based upon aggregate Medicare data that exists to put quality indicators. Those are two concrete examples that when you go back to your CDHP question before, when you augment with those tools, they become quite actionable when you're trying to activate a consumer. Without those tools, you don't have the ability to be an activated consumer. Two concrete examples.
Thanks. I want to talk a little bit about 2021, and I've got an investor portal here with investor questions. I already see three or four all sort of in the same vein. The question is, you know, how is The Cigna Group thinking about medical care that was deferred in 2020 that might return at or above trend in 2021, either just because deferred things are being caught up or because there's been some deterioration of health condition, and when that does return, it returns at, you know, higher acuity? I know you guys recently reaffirmed your 2021 earnings guidance, maybe in the deployment 8K, if I recall correctly. In the context of that earnings outlook, how have you thought about, you know, what trend looks like, what MLR looks like?
You started out with the risk of or concern relative to deferral of necessary care. Let's start with that. Within our model, within our approach, we have a significant amount of resources that every day wake up trying to stimulate utilization, trying to ensure that if preventative care is necessary, somebody is getting the preventative care, trying to make sure that if we see a gap in care for a chronic member who's not taking the medication, we engage from that standpoint. That model is then tested pretty heavily in 2020, given the amount of disruption. When we look at medication compliance, medication adherence, preventative screening for high-risk individuals from that standpoint, that's a big part of the positive dimension of health services, even against the backdrop of disruption that we're configuring today.
Point two, within the commercial marketplace, remind you that 85% of all of our commercial relationships are self-funded. That doesn't mean we don't worry about it, but it means back to where aligned. As there was movement in lower costs in 2020 that directly benefited the employer and the consumer, in 2021, a change in that curve will work employer by employer to try to get those predictions in place. Additionally, in Medicare Advantage as an example, approximately 85% of all of our Medicare Advantage customers are in some form of a value-based care relationship with the healthcare professionals, so a level of alignment. Having said all that, it comes down to some really complex estimation because these estimates are highly localized and highly specific to the client or the books of business from that standpoint.
Our teams are making the most informed view of how we think the medical costs are going to change in 2021 versus 2020. It's a highly localized, a highly client-specific level of assumptions. Obviously, we think we've made informed decisions relative to the renewals we've put in place with our clients.
I wanted to ask you about something. We conducted an insurance broker survey late in the year that did suggest there were some, this is the risk market we're talking about, obviously, but did suggest some price hardening in large group commercial risk market heading into 2021. Interestingly, The Cigna Group was cited as least aggressive, you know, from a pricing perspective, meaning more conservative from an underwriting perspective. I just wanted to get your thoughts on, do you think The Cigna Group sort of uniquely preserved underwriting discipline versus the market heading into 2021, or surveys can be surveys, is not necessarily representative? You don't think there's a point to draw from it?
My underwriters are probably pretty happy to hear you if they're publicly listening to this. I wouldn't say unique, Jerry, is really a very fair question. I'll never put us in the category of unique. We try to be quite disciplined. Even when you take the, you said the large group commercial marketplace, if you think commercial, 85% of my business is ASO. Of the 15%, a portion of that is shared returns, and the residual part of it is risk-based. Within the risk-based, we're typically not in blocks and pools. We're rating based on the underlying experience case by case. When we're looking at the contractual relationship we have, our underwriting team has had a lot of continuity and a lot of longstanding relationships. We feel good about what we put into the marketplace, and we think we've been responsible.
Thanks. I have a client question that might be a little broad, but it ties into a question I want to answer. I'm going to give you an out, making it a little more specific. The question was, you know, what are the next countries and regions you'd expect to expand into over the next three to five years? My more specific question was, I wanted you to talk about your strategy growing your MA business. I'm sure that is a business that fits your sort of geographic expansion plan. If you want to, if you can address, you know, high-level products, countries, regions, or certainly, I do want to hear about your outlook on Medicare Advantage.
Sure. Here I want to ground back to my opening comments and then whet your appetite ideally a little bit for stay tuned for more at our investor day in early March from that standpoint. As I commented in my opening comments, I talked about delivering differentiated value, partnering and innovating, and expanding our strike zone. Within each of our businesses, we look at strike zone expansion. They could be geography, they could be buying group, they could be solution-based. We'll take the concrete example you have of Medicare Advantage. Within Medicare Advantage, our Medicare Advantage growth strategy, which we are excited by and excited with and is quite attractive in the 10% - 15% life growth range over the strategic horizon, is based upon growing in market with existing platforms, growing in market with a new platform we introduced in 2020, which is individual PPO.
We added that to the individual HMO offering, and then opening new markets. Back to net new market adds, adjacent counties, but then net new organic markets. Our opportunity to expand, as we articulated in 2019, is going from slightly less than 20% of the Medicare addressable marketplace to about 50% over a five-year horizon. We're actively engaged, and in the first year, we executed where we wanted to be. For 2021, we extend further. We know where we want to expand in 2022. We know we want to extend in 2023. We're also aided by the fact that we have, broadly speaking, very good relationships with healthcare professional anchor partner relationships from our commercial relationships in many cases that are value-based and want us in market partnering with them on Medicare Advantage. We see the MA market expansion plan being highly disciplined in front of us.
We started in 2020, further in 2021, and we're on a track to go from 19% or 18% of the addressable market to 50% of the addressable market over that five-year horizon. That's example one. Example two in the U.S., I think we probably articulated that we meaningfully expanded our public exchange footprint as we stepped into 2021. Another illustration where we look across all of our lines of business, cross commercial, Medicare, and then exchange business and identify additional opportunities. We'll profile that more for each of our platforms at our investor day as we look at the strike zone expansion part of our growth trajectory.
Thanks. You've talked historically about not necessarily interest in sort of traditional Medicaid per se, but a lot of interest in value-based arrangements around Medicaid such that they exist. Do you feel like the market is moving in that direction and there will be more opportunities to engage with, you know, state customers in that way?
We viewed, as you said, point one, historically, we've put Medicaid on the traditional side, so on the integrated side of the equation, as a lower growth priority for our franchise versus commercial and Medicare Advantage from that standpoint historically. Point two, as we brought the companies together with The Cigna Group and Express Scripts within our service chassis, and now, you know, as Evernorth, we see the ability to grow Medicaid through the services we're able to offer. First and foremost, through health plans that have Medicaid blocks of business. Secondly, through state-based activities where states begin to look toward additional service, we'll use the term carve-outs or specialization of some services, be they pharmacy, be they behavioral, or be they care management from that standpoint.
Off of our existing chassis, we see that opportunity in front of us today, and we have proof points in the health plan space where we're servicing more health plans today than we were two or three years ago with their Medicaid chassis and books of business. To your last part of your question, we do believe that as we go forward, more states will be looking toward derivatives or subsegments of their Medicaid population and looking for risk-based or performance-based partners to be able to deliver. That could present an additional opportunity for our book of business beyond the services opportunities we said.
Thank you. Can I ask you about a couple of regulatory questions? The first is around the Trump administration finalizing the rebate rule in Medicare Part D, not to take effect until 2022. I think an important part of this is it gives you time to structure that business, price that business, et cetera. The two-part question is, do you have any thought or visibility yet on whether the Biden administration will allow that rule to take effect? Do you feel like as long as you have until 2022, you're able to manage through whatever that change is? Third, should we expect Part D premiums to move up if that rule takes effect?
In no particular order, it's another example of the intent of the rule. We think it's positive. It's an intent to improve affordability. The pragmatic aspect of how the rule is applied, we don't think is prudent. Moving from the premium side of the equation to the point of service side of the equation doesn't change affordability and actually increases costs. You're going to have an increase in premium for all seniors, an improvement in cost for some seniors episodically, and an increase in cost for the federal government based upon all the independent scorekeeping that has taken place relative to that. That's point one. Point two is if it stays in effect, being prepared to operationalize it for 2022, we could operationalize it for 2022, even though we don't think it is prudent.
Point three, which is the first point you made, is we would expect the new administration to relook at a lot of the more recent activities of the prior administration and evaluate whether or not they think it is prudent. This is one that scorekeeps negative from an economic standpoint and from a CBO standpoint. This administration has already articulated certain priorities of where they want to spend money, and this wasn't one of the top ones. Stay tuned for more.
I have an investor question asking about, under the new administration, potential policy legislative changes. Is there anything you would highlight as a particular risk or opportunity?
I think it's too soon to be declarative relative to that. Obviously, this administration, we know one thing. We know day one, COVID will occupy a massive amount of the new administration's set of responsibilities and focus. Achieving president-elect's objective of 100 million people in the first 100 days will be quite consuming. The second piece, attempt to be responsive. We know that the president-elect himself has articulated energy toward further strengthening as he sees what Obamacare sought to do. He's been consistent relative to that all the way back to the debates to the present state. He has some conviction relative to that. That could show up in the form of further strengthening exchange subsidies, exchange eligibility, increasing the ceiling threshold relative to where the subsidies are. It could also take place through more fund stabilization for Medicaid expansion.
I think we have to wait and see in terms of where the highest priority items come forth beyond COVID.
Thanks. Can I ask a question around, you know, one place where there is some exposure to the Medicaid market is in the pharmacy services and the PBM segment. We continue to see a lot of reports from states, from consultants that talk about the contracts they have with PBMs that are structured as spread pricing are far more profitable than contracts they have where there's pass-through pricing. Basically, what happens is every time there's a rumor that something's going to happen to Medicaid spread pricing in a piece of legislation, 10 or 15 investors call me and they want to walk through all the potential implications and how that might impact The Cigna Group. It seemed to be very topical in the back half of the year. I thought I'd give you a chance just to address it.
Spread pricing, as we've talked before, is one of many tools that can be used to finance the overall purchase. The commercial marketplace uses it. Some employers do, some employers don't. Specific to the question on Medicaid, we have a small percentage in aggregate today, although I referenced before we see servicing Medicaid more as an opportunity going forward within the services portfolio, both directly through the health plan business we support, as well as potentially direct to state obligation from that standpoint. The headline here, Jerry, is it is a small portion of what is in the service portfolio today, Medicaid in aggregate, and then within Medicaid, the subsegment of that that is spread pricing. If overnight that went away, specifically spread pricing and Medicaid specific spread pricing, it would be a relatively small ramification for the overall service portfolio we have.
Thanks. Yeah, I want to sneak in another investor question. I think I know the answer to this, but I'll let you clarify it. The question is basically around what capital deployment assumptions were in that, you know, $20 - $21 guidance for 2021. If you're now going to be paying dividends, does that mean by default less share repurchase and potentially EPS, you know, would be lower than whatever the range would have been before? I'm not sure the question is pointing to say, oh, whether you, the dividend doesn't mean you can make the earnings guys, but just in general, if more is going out for dividend, less for share repurchase, maybe the real question is, does it change that growth algorithm that you laid out for us, you know, a few years ago at your last investor day?
Yeah. Big picture, the way you started with the question, when that target was put forward in 2018, if you go back, we're rather proud of the fact that we've been able to deliver 2019, 2020, and on track to deliver an attractive 2021 against an amazingly disruptive environment. The underpinning of that target was the fundamental growth of the organization, the synergies we expected to capture, and the capital deployment modeled out as share repurchase. That was a fundamental blocking that the capital that was deployable would be deployed in a creative way for the benefit of shareholders, and it was traditionally modeled out as share repurchase from that standpoint. Broadly speaking, that is what's transpired in 2019 and 2020.
When we go through our year-end results with you in early February, we'll go through our detailed year-end results, and we'll lay down the markers relative to the specifics of our 2021. I got to make sure I'm commenting on the right calendar year right now, outlook and expectations, and we'll give you the buildup of what that looks like. We'll take into consideration the fact that we now have a dividend payout that wasn't previously in the equation, and we'll have other puts and takes in there to be able to factor in. All in, we're excited that we're going to have another attractive top line, midline, bottom line, and cash flow production in 2021.
Thanks. Can we spend the last couple of minutes talking about Amazon Pharmacy? I think some investors sort of struggle to understand, you know, Amazon, in essence, is attempting to enter sort of the mail-order pharmacy business, which is an important part of Evernorth and a profitable business for you. On the other hand, you know, The Cigna Group is going to be providing, you know, the back end to Amazon's new, you know, discount card, you know, program. I think there's still some confusion on, is Amazon a competitor or is Amazon a customer? I know Amazon is a customer for their own employees for Evernorth. How do you summarize what that relationship looks like for folks?
Amazon's a client. That's what we refer to as an employer. Amazon's a partner, and Amazon's a competitor. Pause for a moment until you step back and say, one of the guiding tenets we have executed in our strategy and it served us well over a long period of time is we articulated internally that we seek to be the undisputed partner of choice. Seek, aspire, undisputed, differentiated, choice to partner. We view that there are significant opportunities to partner with and work with others to create shared value, so long as that shared value is mutually beneficial. Sometimes they put you in positions to be partnering with folks that traditional filters may say, well, you can't partner with that party, Amazon, or anybody else because they may be a competitor.
In an environment of continuous change, an environment of sustained innovation, an environment of disruption, we think that's actually a healthy part of our DNA and a healthy philosophy. We're pleased with the fact that Amazon chose us and we chose Amazon to expand some collaboration with. We'll seek to drive mutual value for their Prime customers through their cash card, leveraging our capabilities. We'll also recognize that we're going to continue to innovate within our own captive set of capabilities, and they're going to continue to innovate. This may give rise to further collaborations with them. Philosophically, we're open to that. We think it's a bad philosophy to have in a dynamic market to actually close the door on the potential to collaborate or partner with so many different parties that may exist because they are or may be competitors.
We think that's a very narrow way of looking at it. We enthusiastically engage and we celebrated this combination, and we'll continue to innovate with them. We'll continue to innovate on our own, and we'll continue to innovate with other partners going forward.
Yeah, it seems consistent with your very open-minded approach to the Haven, you know, venture when that was announced a couple of years ago. We're out of time. Really want to thank David and Alexis for joining us on the call today. We'll look to see you again in a month or so on earnings and then in March for the investor day. Thank you very much.
Great. Thanks for walking through so much. Have a great day.
Thank you, Jerry.