Good afternoon. Thank you for joining us. My name is Lisa Gill, and I'm the healthcare services analyst with JPMorgan. It is with great pleasure this afternoon that we have with us Cigna Healthcare. With me today is CEO David Cordani. Dave will make a few comments, and then we're going to jump into a fireside chat. Dave?
Thanks. Thank you, Lisa. Hello, everyone. Happy New Year. As Lisa said, we'll just make a few comments, and then we're gonna get into a conversation here. A couple headlines. One, our corporation is quite proud of the results we were able to deliver for 2022. 2022 has been a very good year from a clinical quality, from a service quality, from an innovation standpoint, from a growth standpoint, and from an overall performance that sets us up for what we expect to be another strong year in 2023 with very good customer or member additions as we start the year in the month of January. Stepping back, key to our success is ongoing, sustained growth. Our growth framework is a very simple growth framework. We leverage our business portfolio that falls into two tranches.
We have three large-scale foundational businesses. That's our PBM business, it's our commercial benefits business, and it's our global benefits business. Taken as a whole, that's about $100 billion of revenue. Those are mature, stable, established businesses in mature, stable markets that generate low to mid-single-digit growth in a relatively predictable way, high cash flow, and importantly, present the opportunity to establish foundational relationships with clients that we can grow and expand over time. We add to that the leverage we have from our accelerate businesses, of which there's three. These businesses are in sub-segments that have secular tailwinds that are greater for growth. That is specialty pharmacy, our Evernorth care capabilities, and our government benefits business. Taken as a whole, that's approaching $75 billion of revenue together.
The third part of our growth strategy in terms of enabling our sustained growth is enterprise leverage. How do we harness capabilities to do something that any one business couldn't do? Typically leveraging data, talent or in some cases, client relationships. When you put that recipe together as a whole, we generate 6%-8% revenue growth, 6%-8% earnings growth, and importantly, our service-oriented framework enables us to generate a significant amount of operating cash flow. We project over the foreseeable several years, we'll generate an additional $50 billion of operating cash flow, a meaningful portion that is deployable back to shareholder value creation, either through accretive M&A or share repurchase, as well as an attractive dividend. That enables us to deliver on our commitment, which is on average 10%-13% EPS growth on average over time.
If you back check us over the last 12 years, we've done that over the last 12 years, and an attractive dividend. My last comments will be relative to forward-looking positioning. There's plenty of areas of innovation we could chat about. Two, I will call out. In the space of mental health and physical health, we have been a long-standing believer in terms of the connectivity between physical health and mental health, and have been driving innovative clinical programs, engagement programs, and services, both for our patients or customers, as well as with our physician partners. Our more recent expression of that is a unique program through Evernorth, our Evernorth Vitality Index, that measures in a credible way the level of underlying vitality, which starts with health for an individual, for an employer, for community and otherwise, and provides you a pathway to improve vitality.
For example, for employers, we know when we improve vitality, you improve engagement, you improve retention of those employees, you improve productivity of those employees. Conversely, the opposite exists if vitality is low. You could see that in the community as well. Areas of innovation include the mental health, physical health connection, and evolving that into vitality. My final comments are we are deep believers in evolving the set of capabilities to making healthcare more personalized, real-time, and coordinated. We believe a digital-first orientation presents the opportunity to do so, not to the exclusion of physical access and care delivery, but to augment, extend, and bring more leverage to the physical assets. That takes place not just through traditional virtual medical care, but virtual behavioral care, extension of capabilities that are brought into the home, leveraging technology and otherwise.
Importantly, as extenders of the care equation, not as a means of disintermediating the care equation. Our Evernorth services portfolio are well positioned. In summary, strong 2022, good start to 2023 in terms of customer growth, a durable growth profile for our organization with established foundational businesses and accelerated growth businesses and enterprise leverage, a track record of delivering on our targets, and sustained innovation on a go-forward basis. I just teased out two headlines with Vitality as well as with our digital-first approach. With that, I'll follow your lead.
Great. Thanks so much. The stock performed exceptionally well last year. When we think about Cigna on a go-forward basis, you laid out two roads here, but as I think about the competitive strengths of Cigna, Evernorth really stands out to me. Can you talk about, you know, from an Evernorth perspective, do you have all the pieces you need today? Where do you think you're best positioned competitively as we think about the future?
Sure. When I think about the competitive assets of the franchise, I tend to boil them down and it's at risk, sometimes oversimplified. There's two pieces we pull upon day in, day out. Deep clinical expertise and data. Data as a mechanism of providing more predictability, more speed, and more precision relative to intervention, and how we bring our clinical capabilities and our data together present competitive advantages or points of differentiation for us. Importantly, as it relates to Evernorth as well as Cigna Healthcare, we bring that to market not through products or point solutions. We seek to bring it to market consultatively. Working with employers, health plans, governmental agencies, healthcare delivery systems, to understand the pain points or opportunities for improvement, and then design the solutions that best work for them through that lens.
Within Evernorth, our Evernorth portfolio has grown in tens of billions of dollars of organic revenue over the last several years, and we continue to grow that. As you look at our accelerate businesses, two businesses within those are Evernorth business. Our specialty portfolio.
Right.
Both Accredo direct-to-patient, as well as CuraScript's direct-to-physician and our Evernorth care capabilities. Both of those will continue to be fed aggressively, organically, and situationally and organically as an illustration.
You know, as we think about one other business within Evernorth, that's the PBM, something that you know I know well. You had nice extensions with Prime and Department of Defense as well as the CNC win, Centene win. Can you talk about the PBM's competitive positioning, as we think about 2023 and maybe even early 2024 comments around the selling season?
The PBM at least comes back to that's a foundational business I made reference to before. You have a scaled, mature, high-performing business that has very attractive cost of goods sold, infrastructure, services, and importantly, clinical programs. Even over the last several years, we've continued to evolve the clinical programs through the SafeGuardRx programs, and the ability to leverage further programs that actually yield value-based care configurations for the benefit of those we serve. Lisa, to your point, we've had material growth. Looking to 2023, I gotta make sure I have the right years that I'm quoting in my mind. We'll have another year of very good retention.
Right.
New business wins. Early look to 2024, 'cause we're already in that selling season. Beyond the tremendous Centene win, which is strategic, there's some additional wins, and we expect 2024 to be another year of very strong, client retention levels 'cause a smaller portion of our business is out to bid. Strong foundational assets. We continue to invest in them from an innovation standpoint, typically around the clinical side of the equation, and very good retention and good targeted growth.
You know, over the years, there's been a lot of talk around value-based programs within pharmacy. I think, you know, having followed Express Scripts for a long time, there were a number of different programs. You talk about SafeGuardRx and some others, but really proving that the drug that's on the formulary truly works. I think we can go back and we look at what they were able to do in Hep C all those years ago, right?
Yes.
Really moving patients to the lower cost option. As we think of the next frontier, which is biosimilars, we think of HUMIRA's coming to the market. We know the first product, right, has already been here, but pricing will come. We'll see one small product that will have interchangeability. More broadly, how do I think about biosimilars, the opportunity in 2023? Is this more of a 2024, 2025 opportunity? How do I think about the margin profile of a biosimilar?
Yes. There's a lot in that very important question. Big picture, this is a tremendous societal opportunity. Before we come to it from a business standpoint, it's a tremendous societal opportunity to create some more affordability or pay for capacity as new high cost drugs come forward. We're not the first to blaze this path as a country. There's other OECD countries that are far advanced relative to biosimilars. Order of magnitude we deal with about, as a society, about 7% of the specialty drugs as having a biosimilar alternative today. That'll rapidly go up 3.5x over the next several years to about 25%. Meaningful alternatives are available. However, biosimilar transitions aren't as simple as the on the other side of the pharmacy equation going from a brand to a generic.
Typically, you're dealing with a level of clinical engagement that's necessary to make sure you get the right drug for the right patient with the right clinical efficacy, and that's a lot of where the strength of both Accredo and our Evernorth portfolio and coupled with Cigna Healthcare because of our deep physician relationships from a network standpoint. We see this as a tremendous growth opportunity. We see 2023 as a transitional year.
If we roll the clock back a year ago, we were very clear that, while some thought that 2023 was gonna be the pivot year and said that there'd be a couple points of EPS accretion in 2023, we said, no, we view that there'll be continued building momentum for the biosimilar transition in 23, but it will build momentum throughout the course of the year and then build further momentum as we go into 2024. As it relates to margin profile for us, the way in which our business model is built is we align incentives.
Right.
Although a biosimilar will have less revenue as an example, right? One of the affordability dimensions is the price comes down, so our revenue profile comes down. Our ability to have an equal margin-
Even slightly better, depending on the clinical programs that are required to make the mechanism work, are gonna be quite attractive. Anywhere I started, this is a really important societal win in terms of getting higher adoption of the biosimilars, not just in 23, but as we go forward to create more affordability capacity for other transformative medications that will come forward that are curative in nature.
I started the conversation around value-based care and thinking, you know, how biosimilars fit into value-based care, but I really think of value-based care in two other ways when I think about pharmacy. One, relationships with the manufacturers and programs you can do around value-based care there. Secondly, your thoughts on how important pharmacy is in the total care of the patient and how we think about that from a value-based care perspective.
Two different comments. Let me click back to another tangible example and then come back up to the importance. We both mentioned SafeGuardRx. Think about SafeGuardRx as coordinated clinical programs around a drug class, and a drug class being used to address a clinical need, whereby we've aligned an incentive structure back to the manufacturer that if the clinical efficacy and/or the consistency of consumption pattern by the patient is broken, the pharmaceutical manufacturer takes on some additional economic burden. Said otherwise, we wanna pay for outcomes, not just for consumption.
Right.
SafeGuardRx has over 100 drugs that actually function in that way, and that will continue to grow through that lens. Stepping back to your broader point, we have believed, and we do believe that in some way, shape, or form, pharmaceutical innovation, or take the word out pharmaceutical and maybe insert the word chemical innovation, presents largely where the majority of healthcare innovation will transpire over the course of the next decade. That doesn't mean there won't be evolutions in terms of medical devices or surgical interventions, but a disproportionate amount of the curative or life-changing, of course, as a treatment for the foreseeable future will be pharmaceutical or chemical in nature. Our ability to have leading resources.
Right.
both the way in which to work with the manufacturers, the way in which to have use the data to get the precision of the right patient and the right time, and then the clinical coordination. The more complicated the drug, the more imperative the clinical coordination that's necessary. We see that as game-changing. It's a big part of the future.
Generally, those people are taking more than one drug, right? We think about the comorbidities of that.
Correct.
-individual.
Correct.
You know, as we think about, you know, some other things from a pharmaceutical perspective, the IRA may have some unintended consequences as we think about Part D, and I know it's still early on. We did a panel on Monday where we tried to really kinda decipher what does it mean and how are we gonna think about it.
What was the answer?
We're still waiting.
Okay.
you know.
That's okay. That's okay.
How are you thinking about it, from a PBM perspective, when we think about Medicare Part D?
Yep.
You know, you have done a number of programs as it pertains to insulin and diabetes, and that's an area that they're gonna cap the out-of-pocket costs.
Yeah. Let me come to the end and then work my way back. The number of programs you make reference to, one I'm quite proud of, and actually it was stood up, plus or minus to the day, 100 days after we closed the combination with Express Scripts, was our insulin-based patient assurance program. We challenged our team to design a program whereby we would cap the cost of insulin out of pocket for an insulin-dependent beneficiary at $25 per month. We challenged the team to reverse engineer the ecosystem to enable that to happen. Today, order of magnitude, 10 million people benefit from that program today. We took the architecture that we shared it with CMS, and a part of that architecture is the underpinnings of the CMS program, which have the cap at $35.
Right.
What that proves is that you could step up to a challenge and try to get the level of affordability, simplicity, and predictability for the patient and beneficiary and the economic incentive align. You had to do it by challenging the status quo through that lens. Moving back up through the IRA, I think you're right. There's still a lot to be determined. As it relates for PDP. For PDP in aggregate, this will change aspects of how the PDP program work.
Right.
It'll change it across the board. The competitive landscape will change. Our business model is durable. We thrive in an environment of change.
You compete on a relative basis.
Right.
You just need to be on the balls of your feet and be prepared to evolve your sets of capabilities to be able to innovate. If you look at PDP in order of scale and magnitude to our franchise, Not that it's not important, we typically don't talk about it because it's not a big earnings driver for our franchise in aggregate. That doesn't mean it's unimportant. IRA is, I think, a symbol of continued evolutionary regulatory or legislative change with seeking to get to better simplicity, affordability, and predictability for individuals. We did it three years ago with the $25 program.
Right.
We received the intent favorably, and we need to be able to flex our capabilities to be able to continue to innovate.
You know, one of the things that came out around IRA is potentially could you see more Part D participants move into Medicare Advantage? This will be, you know, a better program for them, for the health plans, and is this a pipeline to converting some of those individuals? Do you think of it that way?
I've obviously, read the positioning relative to that, and if everything else was static and the decision for a beneficiary was on the margin and this was the only change, yes. When you step back, an individual who buys Part D is an individual who's consciously buying something else and is not buying MA-
Right.
From that standpoint. A beneficiary is deciding they want Medicare fee for service, and they wanna augment it with a PDP and SUP or otherwise through that lens. Having said that, though, big picture, we all see the same trend, right? Medicare Advantage continues to outgrow the growth of Medicare fee for service. It's doing so because it's delivering real value to individuals. Beneficiaries benefit from the clinical quality, the service quality, the coordination, and the additional services. I think to your point, this may be just one more added value proposition that weighs down one side and lifts the other side on a relative basis.
Do you think that that's an education process for the individual? You say. I feel that a lot of times that senior population is not quite as educated. Is this an opportunity for that incremental education around Medicare Advantage and the shift towards Medicare Advantage?
I'm gonna try to agree with your opening statement because Medicare beneficiary purchasers are, in general, pretty sophisticated when they go out and do their drug compares and otherwise.
Okay.
through that lens. However, there may be a further opportunity. Like most populations, Medicare is not a single segment.
Right.
You have to orient your way around re-segmenting. What we see in Medicare is new Medicare eligibles adopt Medicare Advantage at a higher rate than maybe a Medicare eligible from 20 years ago through that lens as well. Bringing more precision and data to figure out where, if you will.
Where that's right.
Education or information sharing may matter, I think that's where it will play out.
You know, in that lens, when we think about Medicare Advantage for 2023, I don't think you've released your numbers to date on how the open enrollment season went. Any color that you can add?
What we did do. You're correct. We didn't release numbers in detail. What we did do is I think we posted a deck in support of this conference, and what we indicated is for Cigna Healthcare lines of business, we were gonna grow at least in line with the market. What some investors concluded from that is if you take MA, the MA extrapolation is the market's gonna grow high single digit.
That's right.
We've essentially published that we're gonna grow at least that. My tone to you all would be, we feel good about how we're gonna step into January one from an MA standpoint and from a growth standpoint and the way AEP performed for us and what we believe we'll see throughout the course of the year, including the fact that a portion of our portfolio is in a five-star configuration as well.
Great. you know, sticking to MA just for a minute, if we look at the last couple of years, Medicare Advantage rates came in better than we on the street had anticipated, I think better than the industry had anticipated. What, what are your thoughts going into 2024 at this point?
Well, we don't know. You're asking me to look in, with several other questions, crystal balls, of which I don't have one. I think we could be instructed by looking to the past to look to the future.
Yeah.
Whether it's 2024 or 2025, that rate environment tended to do this.
... over time. Over time, when you draw a line through it, you get to a reasonable result, but it ebbs and flows. If you take your T-up, if it flowed a little bit with the rates being pretty good, it may speak to the rates being under a little bit of pressure.
Right.
I'm not sure if that's 2024 or 2025, but it might speak to a little bit of pressure on the rates.
Just from our perspective, that's the way we're thinking about it as well. Kinda maybe 0-2%. It feels that that's where consensus is going, just for whatever it's worth. Sticking on that topic of D.C. and MA, we're all looking to the ruling on February 1st around RADV. I've asked other managed care companies that have been here this week their thoughts around it and how they're thinking about that going into that ruling, I'd love to hear your thoughts as well.
Yeah. We'll obviously wait and see what the final ruling is. For context, 'cause everybody doesn't know, Cigna in the same context that Lisa knows, our MA book of business represents about 5% of the enterprise revenue. Important on its own, a Fortune 500 company. In the context of the franchise as a whole, it's 5% of the company that's gonna grow. Our strategic objective is to grow it organically, in the 10%-15% customer growth range per year on average. That's the backdrop. Relative to RADV, we await the posture of the government. We understand what RADV's intended to do. My personal hope is that it's more prospective than retrospective.
Right.
Because you adjust yourself on a prospective basis versus retrospective. We'll see what the impact is.
Okay, great. That seems to be also the consensus after this week.
Why don't you give me the answers before I...
Well, now that's how consensus builds.
There you go.
Cause you're giving the same answer.
There you go.
... as the others that I've been able.
Fair enough.
As we think about the health plan selling season, now moving to the commercial side, can you maybe just talk about some of the key themes employers were looking for for 2023 around benefits? Secondly, there's so much talk right now around layoffs, especially for white-collar jobs, right? We haven't seen it in blue collar, more so in white collar. Will that have an impact on Cigna as we think about 2023?
Yeah. Maybe me a couple themes here. As we looked at the economic environment going back to mid last year, began to cast it forward, as the economic dislocation data points were starting to manifest itself, our posture was publicly that we still saw by and large employers as being in a net hiring mode versus a net RIF or reduction in force mode. We saw that carry out throughout 2022, although we do see some of the headlines. As we look at our current pattern of stepping into the beginning part of this calendar year, we still see that transpiring. There's still net adds versus decrements, but we still see the effects of what you all are seeing or some of the headlines beginning to manifest itself.
As it relates to aggregate growth, what employers are continuing to look for, and COVID helped to amplify a few of the need states, right? Employers realize that they need, it sounds overly simple, healthy, productive, highly present coworkers. Present doesn't mean physically present, it means mentally and emotionally present to get to the productivity and the engagement and minimize the level of turnover to make their businesses thrive. COVID created a challenge. COVID also reinforced that individuals were even more value-oriented relative to the benefits that their employers were providing and trusted more of what their employer was telling them throughout the course of COVID. Therefore, employers are looking around innovation and additional products and programs and services they could bring back to their employees that are of value. Two, employers that have a lot of point solutions.
Point solutions are a lot of à la carte solutions that are not coordinated or integrated. More and more employers are challenging their suite of point solutions to say, "These all made sense at a point in time, but when I look in aggregate, the menu feels a little disconnected, and I'm gonna look to rationalize some of those point solutions and remove some, coordinate some, and integrate some." That bodes really well for our value proposition. That's what we do on a regular basis. The trend toward more transparency continues.
Okay.
Employers looking for more transparency of their solutions. You would know that tactically as a self-funded arrangement or otherwise, but there's other mechanisms. Transparency is a mechanism to get to alignment. Alignment is a mechanism to create mutual value. Transparency is a means to an end. It's not an end unto itself, and we like transparent tools through that lens. Last couple comments here is we've been in a net share gain in the commercial space and margin expansion, which is a difficult thing to do. To repeat, net share gain, net growth, and margin expansion over the recent past. We'll step into 2023 with very good net customer growth again in our health plan business, and it's across our multiple buying segments.
Select, which are smaller employers, 100-500, middle market, 500-3,000, and national account employers will see good growth across the board. It's that continued pressing for value to help the employer have a differentiated value proposition with their employee and doing so in an affordable way.
When we think about the affordable way, I guess really two questions here. First would be, in some of our discussions, there is an expectation that perhaps we see a higher level of acuity in 2023. Not so much that there was a pent-up demand, right?
Yeah.
Perhaps, you know, just because of COVID and other things so that the acuity level could be higher. That would be my first question. Do you anticipate that as well, and did you anticipate that in your pricing for 2023?
As we look at the... We've been focused on this for the last three years. We obviously all saw a decrement in utilization early on in COVID. Everybody hunkered down other than from an acute standpoint. Within our commercial population, we saw a relatively rapid reversion to more normal utilization for two reasons. One, the commercial consumer was more active from a lifestyle standpoint, and the supply side of the ecosystem is reimbursed at the highest level for commercial lives versus any other lives. That's one dimension. Secondly is our model. Our model is built to push certain utilization, so colonoscopies, mammographies, PSA screenings, childhood immunizations, medication compliance for chronic care programs.
We were able to monitor that throughout COVID, it remained at a very elevated level through that standpoint, which helped us to mute any acuity spikes that happened from either gaps in care breakage or finding cancer, but finding it later in a gestation cycle. On the services side of our business, within Evernorth, we serve a broad array of customers and clients. The vast majority of Evernorth services are not Cigna Healthcare. The vast majority of what Evernorth does is other than Cigna Healthcare, they include Cigna Healthcare. Within that, we do see some data points. We do see some data points for some blocks of business where there's more breaks in medication compliance, there's decrements in terms of testing and otherwise, where there could be some uptick from an acuity. For our commercial block of business, we do not see that.
Right.
For our Medicare Advantage block of business, we do not see that, and we've been mining that data pretty regularly. We did build in a little bit of.
Okay.
-for 2023 for an anticipation of a little bit of cost increase.
That, that's my next question?
Tied more to the supply chain versus the demand side of the equation. We were proactive relative to that.
That would be my second question is, has there been any impact because of the constraints from just, you know, nurses and other clinicians, as well as supply costs, right? My understanding is, as a managed care entity, your contracts are generally three years in length, so you've got a third that are up for renewal. Hospitals looking to capture part of that bag. For those of you that live in New York City, Mount Sinai nurses right now are striking, right? They're walking up and down Madison Avenue. Is there an impact from that perspective when we think about the cost?
For 2022, the aggregate answer to that is no. There's always little bits and pockets, but aggregate relative to our portfolio, no. As I noted, we anticipated a small portion that we built into 2023. These are tough negotiations back and forth, make no doubt about it, 'cause the employer on the back end or the individual exchange business can't afford just perpetual rate increases.
Right.
That has us collaborating, figuring out how to get the best possible outcomes from that standpoint. Small in the aggregate cost equation, but we did see some, and we did build in some of that cost pressure. It's largely in recognition of the labor costs.
Right.
-not the deferral, right? Our commercial volumes stayed high, and they're very valuable volumes for the hospital systems in the supply side.
You know, the last question here is just again, on the cost side. When we think about shifting costs towards the patient, high deductible health plans, I think we're north of 50% today. Is there still that opportunity for employers to shift costs? Do there have to be new programs that come into play when we think about the ability to manage costs going forward?
Our general consultation with employers is be very cautious to shifting more costs. The whole notion of shifting costs, and shift may be a bad word. I'm gonna remove that. The whole tenet in terms of what was transpiring, it was to try to get some level of alignment. Back to what we talked about with employers around transparency, to try to get some alignment with consumers, in this case, their employees. There was a level of awareness that it's not just $5 that you pay and then it's free. There are different choices relative to it. In some cases, the cost shifting, to use that term, may have gone too far, or the cost shifting was being done for a population as a whole.
For people making $50,000 a year and people making $500,000 a year had the same cost shifting. Your relative out-of-pocket was a dislocation for the $50,000 person and still wasn't relevant enough to move the behavior of the $500,000 person. This is where you bring data back and behavioral economics to understand where are the right levels of alignment, and then you reverse engineer some of the cost shifting, and you say, you know, in some of the high cost medications, you want zero cost shift. If it's a $100,000 drug, me having a $100 out of pocket or a $500 out of pocket isn't gonna delineate whether or not I pursue that.
Right.
Less of a cost shifting, and we consult with less of a cost shifting, more precision relative to alignment, and then determining based upon how an employer is utilizing services. There may be specific pockets of services that are inefficient that then you want to pinpoint some of the costs, if you will, shifting or the alignment of financial incentive to have an impact.
You talked earlier about transparency, and I think. You know JPMorgan well. You're one of our health insurance providers.
We are large.
We are self-funded at JPMorgan. One of the things that they're trying to do at JPMorgan is to bring that transparency to me as the employee, right? I can make better choices. I've gotten information from Cigna that perhaps I should have gone to XYZ for a mammogram rather than where I had gone. That was after the fact. How can you know, via technology, via that outreach, is there a better way to be able to engage with that individual? Maybe next year I'll make a different decision. That already happened this year.
Yeah. It's interesting because we recently had a visit with the, your team relative to looking back and looking forward, because these are choices that are made in the design. What level of navigation support do you wanna have for your colleagues.
Right.
-your coworkers, and what level of do you want it to be brought forward in the front? Do you wanna actually have to go through a gate, and I use that term on purpose, before you could access a certain service, to make sure that the employees digested the alternatives and then made an informed decision, or do you wanna provide that information in the rears as a point of education? There are choices relative to that. Every employer makes this different set of decisions at a point in time based upon culture, strategy, readiness to change, et cetera. You know, your digital service lead is fully engaged in that because it needs to be digitally enabled-
Right.
given the diversity of your population, the physical dispersion of your population, and importantly, the different behaviors, right? What you may want as an individual consumer may be very different from a colleague who may have a similar role, but their desires, their consumer-directed desires are somewhat different. That's an ever-changing part of our portfolio of services.
You know, when we talked about Evernorth, you touched a little bit on digital and some other areas, but we didn't really talk about virtual healthcare and you bought MDLIVE. It was a company you made an investment in and then later bought. What are your thoughts around the future of virtual healthcare?
Yeah. First, a belief state, we believe that fully 40% of all healthcare will be able to be delivered virtually. We start with the premise. We disintermediate all the healthcare consumption in America. This is a U.S. framework. Some of it correlates outside the U.S. We have our digital orientation and virtual orientation outside the United States, back in the U.S., we believe the current low single-digit number can be achieved up to 40%. Again, this is not a negative statement relative to the physical delivery of care by any stretch of the imagination. It's both a recognition of innovation, of technology and data innovation, consumer need, consumer expectations, and the supply chain doesn't have the physical assets to supply everything we need.
We have a shortage of primary care, OB-GYNs, pediatricians, geriatricians, and behavioral health professionals, either in aggregate or in the physical proximity that someone needs to get access to that.
Right.
Now take virtual. The MDLIVE combination was very successful, continues to grow. We've taken that chassis. It continues to do what MDLIVE does each and every day. We've taken replications of the technology and innovated it further to do a primary care virtual first offering in some markets. We've taken a behavioral health virtual care offering because in behavioral health, in many cases, it takes a person on average 13 days from need state to get access to a behavioral health professional. Just pause and freeze on that. If someone is in need for a behavioral health interaction, consultation, this is not crisis, not acute, but consultation, and has to wait 13 days, that doesn't sound quite good. On average, a person has a 50% probability of making magic with their therapist in their first interaction.
Right.
With data and digitization, you could use matching algorithms to match individual preference and therapists to increase the probability that when we do interact, that 50% is gonna be much higher, and you could close the 13 days down to a day and a half from that standpoint and get more rapid engagement. Those are examples of what we're already doing, and that is not an exclusion of the physical delivery network. We actually grew our physical delivery network for behavioral by 50%, during the same time. We continue to expand the virtual resources for both medical as well as mental health and the coordination of that, and we will continue to expand that going forward.
You talked about a primary care, virtual first option. Is that a pilot program at this point, or is it a bigger program? How do I think... Is that like a lower premium type of product where it's really virtual first and then they coordinate care from there? How do I think about that product?
I wouldn't say it's pilot. It's geographic specific, so it's not national, so if you want to deem that to be a pilot. We're convicted to it. We believe it functions. Early adoption is high. When you design it, you make the decision, are you gonna design it relative to your employed physicians who are fulfilling virtually, your contracted and employed physicians who are fulfilling virtually, or a subset of your existing physician relationships that you're gonna be able to work your virtual infrastructure in with theirs? That's what will dictate the rate and pace of the rollout from a national basis. Your point is also correct. It, on average, would be a lower premium product because you're actually pulling some costs out of the ecosystem through what you all may know as a term of site of service leverage. You're modifying the site of service.
You're not modifying the service, you're modifying the site of service, and by changing the venue, you're taking costs out of the system.
Right.
You need to share that, and you share some of that back with the customer or beneficiary through, in this case, lower premiums.
A lot of your competitors have primary care actual delivery systems. I think you've talked historically about more partnerships. I think many in the room know that you made an investment when VillageMD bought Summit. Can you talk about what your strategy is around primary care and primary care delivery?
Yep. First, we're very clear. We seek to partner and enable the medical delivery infrastructure with our Evernorth service capabilities versus own as our national strategy. Two, we're willing to own in targeted MSAs or markets if we deem that's the only way to get the physical delivery and the virtual delivery to come together to deliver the right value. We do that in Maricopa County in Arizona on scale right now. As an illustration, point one. Point two, we will seek to continue to own subsets of the healthcare delivery ecosystem, specialty pharmaceuticals, behavioral health, virtual health, subsegments of home care, which are multi-geographic or natural national in nature. With Village, as an illustration, we deem that to be on strategy. It's capital light, as we articulate, it's partnership-oriented, and it's enabling. We were a financier enabling part of their strategy to grow.
As part of that, we secured a relationship where we are, broadly speaking, gonna be their next stage value-based care infrastructure within Village, Summit, and any additional growth that they have, not just for Cigna Healthcare or Cigna Healthcare and Evernorth lives, but for their lives.
Yeah.
Taking our behavioral resources, our virtual resources, our specialty resources, and other clinical capabilities, as well as our ability to harness data to curate, the optimal sub-network for specialists. Let me punch that down a notch. Take oncology. Unfortunately, we all know loved ones who've had oncology journeys. The more acute the oncology, oftentimes the more fragmented and more scary that journey is. We've taken data, we've taken our network, we went to a scaled MSA, and actually we've run a, an equivalent of a simultaneous evaluation of the clinical paths for oncological events. The first 100 cases that went through it, 53 of the cases, the math is easy for all of us, 53% of the cases had a change in diagnosis or treatment pattern that was validated by the practicing physician and the patient. It wasn't that we were right.
We were just able to harness different data and present it at key decision points along the way. All those resources will be made available, and it's all with an objective of delivering more value for an already powerful engine, which is what VillageMD and Summit Health are, but they need extenders. They need behavioral extenders, they need data extenders, et cetera. We'll continue to be able to do so and bring that to other physician groups as well.
Okay. We only have 1 minute left, in the end here. David, what do you think investors don't appreciate about Cigna today that when we're sitting here in 2024, they'll better appreciate?
First, investors are right at a moment in time relative to the conclusion, and I accept that thesis. I'm a capitalist at heart. I get the way the market works. I think the investors have underwritten the legacy of Cigna, now Cigna Evernorth, through a relatively traditional frame and said, because Cigna has a lot of commercial business and a lot of PBM business, it is low growth and therefore low PE. Because it doesn't have a lot of Medicare and Medicaid and potentially some aspects of health services like own physicians, it doesn't have a lot of high PE. One, we've sought to break that out and provide more transparency relative to that, the $70 billion that is in our accelerate businesses.
As a subset of that, I believe investors will better appreciate the growth power of our franchise, over the course of the next year, as you've seen over this past year, our ability to grow our franchise, not just on the foundational businesses, but on the accelerate businesses, and therefore generate very attractive top line and bottom line growth and innovate along the way to drive change in the marketplace like some of the examples we talked about.
Well, thanks for the discussion today. It was great. Thank you very much, everyone.
Thank you for your time. Thank you all.