Welcome to the UnitedHealth Group Investor Conference. We are pleased to introduce Senior Vice President, UnitedHealth Group, John Penshorn .
Good morning. Welcome to our investor conference. It turns out that we are going to make forward-looking projections today. That turns out to be a popular feature. I would like to take a moment to remind you that today's presentations will include forward-looking statements that are subject to risk and uncertainties. Actual results may differ materially. These risks and uncertainties can be found in the cautionary statements in our SEC filings and are summarized in our investor conference materials posted on our website. Our posted materials also contain a reconciliation of non-GAAP financial measures, which are fairly minimal. Those are referred to in our remarks. We present the most comparable GAAP measures to those non-GAAP measures. Welcome to our investor conference. We never call it investor day. We call it investor conference because we pack so much more into it.
I promise you, if you are interested in healthcare, you're interested in care delivery, IT, big data, granular data, the benefits business, the financing of healthcare, any of these subjects, there is something here for you today. It's my pleasure to welcome our CEO, Stephen Hemsley, to provide some opening remarks and give us a little bit of perspective and context for the day.
Thank you, John. Good morning. It's my pleasure to welcome you this morning to our 2014 investor conference. We thank you for the time you're committing to UnitedHealth Group this morning. My purpose as we open today is not to speak to you at length. My colleagues will do plenty of that through the course of the day. Instead, my role is to briefly and simply set a tone for the day and a tone for the next few years. Perhaps to be more accurate, I should say, we will be setting up somewhat of a change in tone. 2014 has been a solid performance year for our enterprise, with the vast majority of our portfolio growing and advancing. During the year, we addressed the initial impacts of the Affordable Care Act, as well as the usual array of unforeseen issues.
We leave 2014 with stronger, more broad-based momentum than we entered this year and better momentum than we've seen in the last couple of years. Although we remain far from achieving our full growth and performance potential, today we are a more capable, more mature, more diversely deployed enterprise across a receptive and expanding healthcare landscape in the United States, and increasingly for international markets as well. We have great talent across our businesses, and a next generation of strong and capable leaders is emerging with great energy, creativity, and commitment. Many of them are here today, participated in last night's dinners, and will be making presentations throughout our agenda today. The headwinds we face looking into 2015 and beyond diminish significantly and are more muted than in recent memory.
That's true both in terms of the market-driven issues, like healthcare reform factors that have either run their course or are setting in as a new normal, and in terms of working through our own company-specific challenges. We are bearing down on the remaining challenges, such as improving our own Stars performance with CMS and advocating for fair, sustainable Medicare Advantage funding levels. Today, we are a stronger, more proficient, more diversified enterprise with compelling long-term growth opportunities and a shorter list of impediments for our progress. We have deep experience, distinctive assets to bring to bear, leading market positions, a broad array of opportunities, and great people eager to seize those opportunities.
If we focus sharply on serving our customers, our consumers, care providers, government sponsors, and execute consistently along paths already known to us, we can expect to see revenue and earnings growth accelerate in the years ahead and to continue our enterprise expansion and diversification efforts. The growing momentum across our enterprise is building because we are applying a greater focus on the needs of each specific business. Commitment to greater precision and consistency in our own work with greater speed to market, driving the last mile in integration of data, services, transaction processes, essentially modernizing and simplifying every experience, every relationship touchpoint with and for our consumers and care providers. Seeking deeper and more rapid adoption of market initiatives, and in essence, reaching on or exceeding the full potential of our enterprise. Along with the change in tone comes a change in vocabulary.
As you listen through the course of the day, you should pick up on a new vocabulary taking hold of key words standing out in our conversations. Words such as growth and opportunity, relationships, brand equity, change and innovation, speed, precision and consistency, simplicity, consumer and care provider value, culture, and organizational character. Before we move forward to what I believe will be a strong day, let me circle back in a fashion similar to last year and pose a few questions that we believe are best addressed right as we start the day. First, what motivated the recent organizational changes? Well, it was simply time to once more evolve the organization. Over just the last four years, our company has grown remarkably well in many ways. Revenues up more than $35 billion. Millions more people served, thousands more employees.
Strong levels of service with growing overall participation in an ever more complex American healthcare system and in healthcare around the world. We've done a good job navigating through a changing industry landscape, but the demands of our business today are greater than they have ever been. We must continue to adapt and evolve, not only to better meet today's demands, but more significantly, to anticipate the demands and opportunities the future holds for us. After five years of growth, diversity, and increasing regulatory complexity, it was time to evolve and reorient our organization once again as we continue to drive towards full potential performance. As you know, we have purposefully deployed executive leaders from business to business over the years. We introduce them to new responsibilities and opportunities to benefit our performance and to broaden their experience.
We are always looking to align the right skills with the right challenges for today and tomorrow in a changing healthcare environment, and to develop our own leadership in the process. Consumerism is driving the development of new products, expanding incentives and protocols. Networks are reshaping. Quality metrics and regulations are increasing in their significance. To more precisely and rapidly respond to these dynamics and to better reflect the distinct needs of our broadest markets, we focused two groups within UnitedHealthcare, commercial and government, among other changes. These groups will work together to optimize our performance on the consumer and local needs across all markets, as well as focusing on the distinctive needs of their markets and their businesses. UnitedHealthcare remains our single organization, brand, and face to the health benefits markets in the U.S. The individual businesses fully retain their identities and reporting responsibilities.
Optum is essentially unchanged as well. As we have often done, we are simply leveraging the skills of talented executives to benefit the broader enterprise. Next question. Last year, you viewed UnitedHealthcare and Optum as being better together. Do you still feel that way? The answer to this one remains yes. The performance and innovation dynamics across the 80-some businesses that make up UnitedHealthcare and Optum today are highly complementary. You can see shared and collaborative innovation efforts as you'll see through the course of the day. Rapid deployment and scale, such as in our Link and Rally applications, efforts you'll hear more about in just a few minutes. Balanced, regulated, and less regulated platforms. Unique capital and technology efficiencies.
The ability to concentrate and scale distinct capabilities such as data analytics, actuarial expertise, clinical care practices, distinctive pharmacy expertise, particularly in specialty drugs, benefit and information exchanges, specialty networks, healthcare banking and account capabilities. Together, we present a diverse and attractive model for international markets and prospects. This is just to name a few. We have consciously positioned all our businesses to work together as an integrated and strategically aligned operating portfolio, as well as to be fully freestanding market-facing businesses. Optum's growth pace is accelerating nicely outside its strong historical UnitedHealthcare business profile. Yes, I continue to view us as better together, even as we retain full optionality in every way. Third question. What are your thoughts about 2016 earnings growth? This one will be simpler. For 2015, we are looking at double-digit growth near the top of our $6 to $6.25 per share range.
For 2016, given our momentum and the diminishing effects of the ACA, I would be disappointed if we were not solidly above that 2015 pace and accelerating from there. Next. What changes can we expect in capital allocation patterns? There are no changes in our basic capital philosophies and disciplines. Our businesses are distinctively strong capital generators. We use roughly $1.2 billion-$1.4 billion per year on internal capital needs. We remain committed to dividends and have advanced our dividend at least 30% for five consecutive years as we move toward a market payout ratio. Excuse me. We expect to advance a strong dividend increase again this year, we'll eventually normalize that pace to align more to earnings and cash flow growth trends once we reach market levels.
Our share buyback disciplines remain consistent with our historical capital positioning, we maintain a strong, flexible balance sheet with significant capital capacities if we have the opportunity to use capital for more significant business expansion. For us, I would call that no real change in capital use. Are you making any changes in long-term growth outlook? Would be a natural next question. We have not been within our 13%-16% long-term growth rate the last few years, but we believe without question, as we perform to our full potential coming out of the ACA implementation era, it is still the right range for the growth and potential of this diverse enterprise. Consider that we were in or above that 13%-16% range in nine out of 10 years through 2011. In 2012, we saw 12% EPS growth.
In 2013, year 1 of ACA implementation, EPS growth was 4%. For 2014, it's 3% at the top of our current range. Earnings growth in 2015 rebounds to 11% from the top of our current EPS range to the top of our 2015 range, while still absorbing residual ACA aftermath. When you consider the performance upside to UnitedHealthcare over the next few years as the ACA works through the last stages of its market changes, the growth and Stars improvement potential of our Medicare Advantage business, the exceptional growth and expansion of Medicaid across this country. Add to that Amil's strengthening performance and significant international opportunities for Optum as global governments respond to their own national budget and healthcare system pressures.
Consider the performance and expansion potential of the Optum platform in its entirety and its growing contribution to UnitedHealth Group earnings, we see our future squarely in the 13%-16% range. A last question, what should we take away from today? Just a few key points. A strong focus team. Growing momentum. Revenue and earnings growth across the enterprise with clear acceleration in our out-year perspectives. Committed to adapt, evolve, innovate, and more consistently deliver value to the markets we serve. The right leaders with the right culture committed to full potential performance. Whether you're a UnitedHealth Group investor or a UnitedHealth Group leader, that is what you should take away from today's conference. We look forward to spending the day with you, Thank you for coming.
John Penshorn will now come up and tell you how to take full advantage of our innovation forum. Thank you for being here.
Thank you, Steve. I'll admit, I undersold that a little bit when I called it welcome and opening remarks. We have that context set. We'd like to talk about innovation. We have an innovation forum again this year. In the back of your investor book, there's a pocket. There's a folder in there. I'd like you to take that folder out. We have 14 innovations that we would like to preview for you here today. They run the gamut from things which are still in the lab, so to speak, very early versions of things that we're thinking about that have the capacity to change things for consumers or care providers. We have things that help care providers and consumers and benefit sponsors that are fully scaled or fully scaling. It's a mixed collection in that regard.
The people that are presenting these to you will give you context on where it is in terms of its maturity and rollout. On the left-hand side, you can see one or two-sentence descriptions. We will have time today to see four of the 14. On the right-hand side, you can see the schedule and map. That layout there matches the way these exhibits are set up. If you were here last year, we're doing it in the same format, so there's a footprint in front of the presentation screens. There's directed sound. If you're standing inside of the footprint, you'll be able to hear the speaker clearly. If you're behind the edge of that footprint, it's going to be harder to hear. You need to be close enough in.
That technology allows us to get multiple presentations sort of packed together and be able to pull this off. The presentation sessions are 15 minutes in length. Then we rotate. I would like to make a schedule change. I hope everybody in the back who's prepared to deliver these can hear me as well. We are going to start this at 8:20. We're going to be back here at 9:50. Larry Renfro will be on stage at 9:50, beginning a discussion of Optum's business and prospects. I think the best way to finish on time for a day is to get ahead. We are well-positioned to do that. That means that the schedule times on the right side of your brochure all need to be advanced by 10 minutes. I think that provides the information we need here.
Stretch out, have a step back, and take a look at what we've got to show this year.
Ladies and gentlemen, please welcome back John Penshorn.
A couple of people still sitting down. Thank you for your interest. On behalf of the teams, we had a lot of fun putting that together. We're excited about the things that we've got in development and how they can change healthcare. We just appreciate the opportunity to share it with you, and we thank you for your interest in that. We're going to move to more of the traditional portion of the program. We're going to have interactive Q&A by business and descriptions of business strategy and how we see the world playing out, what our business plans are for the coming year. To kick that off, I'm pleased to introduce Larry Renfro, Chief Executive Officer of Optum.
Good morning. I'm Larry Renfro. Once again, I am honored to represent the dedicated people of Optum and update you on our mission to help make the health system work better for everyone, those who provide care, those who pay for care, and most importantly, those who need care. In 2011, I introduced you to the promise of One Optum. Our goal is bold: to be the most valued partner to all health system participants in solving their toughest, most complex challenges. As our story progresses, we remain steadfast in our mission to enable a healthier system and create a healthier world. Today, we are 80,000 professionals working worldwide to help modernize the system and improve the health of people and communities. We are building innovative partnerships where none existed. We are providing technology and tools that enable unprecedented collaboration and efficiency.
We are tapping into the most valuable healthcare data in the world to cover insights that lead to better care at lower cost. Yet, we are still a young company and just starting to realize our potential for long-term earnings growth. We continue to see a U.S. health services market opportunity that exceeds a half trillion dollars. As we pursue it, our growth is outpacing our competitors and the market as a whole. My aim today is twofold. I will start with a look at how we see the healthcare environment shifting with a focus on forces transforming the system over the next five years. From where Optum uniquely sits in the system, I will explain how we are both driving and benefiting from these transformations and how they will impact our growth.
As you know, the health system today is very different than just a few years ago. We see a landscape being fundamentally transformed by highly engaged consumers and a growing emphasis on value. Consumer engagement and value are still early stage in terms of system-wide adoption and impact. I want to provide a view of how they influence our work, where we see opportunities forming, and where you can expect us to be the most active. The participant with the greatest stake in a better performing health system is also at the very center of the first major trend, a more engaged, empowered consumer. There is a consumer awakening happening. Their mindset is changing from, "My health, your money," to, "My health, my money." By 2019, U.S. consumers will spend $75 billion more out of their own pockets on healthcare compared to today.
Getting and staying healthy will take on more importance, leading to greater use of services such as remote monitoring, telehealth, and home healthcare devices. More broadly, they will need expert guidance, education, and resources to find the right care at the right time at the best value. We already touch consumers at every point of their healthcare journey through programs that promote clinical effectiveness, wellness, care management, financial management, and benefits navigation. Optum's Rally Health is one example of how we are improving the customer experience. Rally uses the power of data, social connections, mobile tools, and rewards to help consumers create and follow personal lifestyle plans. The second major force, focus on value, will be led by an improved clinical model as patient care is provided, managed, and paid for with an eye squarely on higher quality at lower cost.
Fee for value is becoming the dominant payment model in the health system. CMS is pushing hard in that direction, and many leading not-for-profit systems are promoting mass adoption of the approach. This means systems and physician groups are taking on more accountability as they adapt to models where they are compensated on the quality of patient care and outcomes. Five years out, we expect two-thirds of every dollar spent on medical care will be in accountable care models. Doctors and other caregivers will increasingly align with health systems and larger medical groups. The emphasis will be on coordination across the care continuum with primary care as the focal point for more extensive real-time collaboration among care providers, payers, and patients themselves. Optum can support everyone in the transition to a clinical model focused on quality and cost.
Our core capabilities in data, predictive analytics, and healthcare technology will become even more critical as care delivery fundamentally changes. Taking on risk requires more actionable intelligence. Big data funneled through advanced analytics helps care providers and payers better understand patients, and it helps hospitals and health systems better understand clinical performance and processes. Value-based care also requires a modern, connected infrastructure. Reducing manual processes and automating connections among providers, payers, and patients is a growing need worldwide. We bring together unique capabilities in areas including analytics, revenue management, care coordination, and cost management to enable the transition to fee for value for our clients and health system partners. This focus is evident in solutions like our cloud-based Link digital healthcare platform. Link cuts administrative costs by streamlining healthcare transactions among care providers, payers, and governments. Link has already been adopted by 350,000 care providers.
Today, we bring the full breadth and depth of our capabilities to the work of driving these two major transformations and enabling everyone we serve to participate in them. We provide the expertise to enable and manage change, the analytics-driven insight to inform better decisions, the technology to modernize infrastructure and processes, and the tools that everyone needs to collaborate on delivering better care. I want to talk about how Optum is advancing and benefiting from these transformations. Over the next 5 years, there are 5 areas that will drive over half of our earnings growth. Number 1, a distinctive collaborative care approach. 2, next generation pharmacy care services. 3, technology-enabled products and services. 4, an active government sector. Number 5, emerging international needs. I'll start with collaborative care.
This business includes our local physician practices, behavioral and other specialty networks, home assessments, and a growing spectrum of complementary services that help patients and payers manage complex health conditions. Today, we provide care directly to more than 2 million people through own physician practices and many thousands of physician partnerships. Our powerful capabilities and tools are helping these physicians adapt to and succeed in value-based care. We partner with more than 40 payers through this business. In every market we enter, we maintain and build relationships with multiple health plans, which makes sense for the community and for us. We are already seeing strong results, including reductions in overall healthcare costs in excess of 40% for medically complex consumers while delivering strong outcomes. We are successfully managing utilization.
For example, in San Antonio, our physicians have driven a 13% reduction in inpatient bed days per thousand since last year. Readmission rates have dropped roughly 130 basis points and are nearly 400 basis points below the national average. We plan to add several local care delivery markets every year. Our most recent expansion is here in the New York City metro area, which is ready for a transition to more value-based care. It is just getting started, we are involved in designing a quality and affordability-based system. The impact of collaborative care also extends to fragile and acute populations in institutions and home settings. This year, we will conduct 1 million home visits with Medicare members to understand their health needs, eliminate care gaps, and guide them to the right care and the services.
Collaborative care is nearly a $10 billion business growing at double digits for the foreseeable future. Moving to pharmacy care services. OptumRx is one of the largest pharmacy benefits managers in the U.S., with total claims volume of nearly 600 million adjusted scripts and more than $40 billion per year in managed drug spend. You know we serve 24 million UnitedHealthcare members, but we also serve another 6 million Americans outside of UnitedHealthcare. For the last 2 years, we have achieved double-digit growth with non-UHC customers, and we expect to accelerate external growth going forward. We are focusing on three key drivers, synchronization, specialty pharmacy, and consumer service to create the most diverse and highest performing pharmacy care services platform in the industry. Pharmacy has the most frequent and recurring touchpoints with members. We use these touchpoints to influence positive behavior and impact care beyond prescriptions.
We started testing synchronization in 2012 with 175,000 consumers and increased to over 2 million consumers in 2014. The results so far are highly encouraging. We have seen a 10%-15% increase in care management value through this approach, and we see increased evidence of savings that are material to our clients' healthcare costs. We will roll out our synchronization model more broadly across our pharmacy care services membership in 2015. It is another instance of how, as One Optum, we take the core capabilities of each segment and connect them to create greater value for those we serve and growth opportunities for us. The synchronization model becomes ever more powerful with the growth of specialty pharmacy, the fastest-growing segment in life sciences.
We have significant opportunity to use Optum's analytics and expertise in working with patients, caregivers, and drug companies to consistently deliver the best outcomes at lower costs. We continue to build an industry-best multi-payer pharmacy care service platform to set new standards of member satisfaction and convenience. Again, everything we do ultimately needs to result in better care and better experiences for consumers. The third key area I'll cover is technology-enabled services and business process outsourcing. Our leading healthcare technologies, data resources, and analytic capabilities are among our most significant differentiators. Our integrated technology-enabled services model supports our clients wherever they are in their transition to value-based care and includes analytic tools that enable population health and risk management, advanced business process capabilities, elimination of redundancy, and reduced friction in payer-provider interactions, and enhancement of physician engagement.
For example, our unique Optum One platform brings together claims, clinical, demographic, and care management data to provide both backward and forward-looking views of patient populations. Care providers tell us they do not have time to analyze big data. Optum One delivers critical insight where and when they need it most, helping them coordinate care, identify gaps, and compare treatment options. This platform uses a rich clinical data set with more than 50 million lives, combined with more than 20 years of administrative claims data from more than 155 million individuals. Since launching this year, Optum One is already being used by nearly 40 hospital systems with a growing backlog. Industry analyst Frost & Sullivan calls Optum One a game-changing cloud-based health analytics tool. This time last year, we introduced Optum360, which we had just launched with our partner, Dignity Health.
This venture combines proprietary analytics, technology, and applications along with people, expertise, and outsourcing services to simplify administration and revenue cycle management for large hospitals and health systems. Optum360's revenue management operations support 1,300 facilities and manage or process $35 billion in billings. Optum360 continues to add new partners, today, we are happy to announce our newest partner, the North Shore-LIJ Health System, which is the largest health system in this state and among the largest in the nation. I am very pleased to be able to welcome and introduce to you the CEO of North Shore, Michael Dowling. Michael, would you please stand? We are really excited to be working with Michael and his outstanding team and are grateful that he has joined us today. Michael, thank you again.
In 2014, we expanded the reach of Optum360's capabilities when we acquired MedSynergies, the market leader in management services for physician practice settings. With this addition, Optum360 can now offer end-to-end performance improvements across all delivery settings. We aim to be the go-to partner for capabilities and processes that make the health system work better. We expect several more of our deeper client relationships to emerge from our Optum360 business. Overall, the opportunities in the technology services space are large, potentially a $100 billion market. We are off to a great start, but we have just scratched the surface. Our fourth major focus is the government sector. We are increasingly recognized at being able to meet the growing needs of federal, state, and local governments. We are now focused on expanding growth by deepening our service penetration into an already substantial government client base.
You may recall that Optum served as the general contractor to help fix the challenges that affected the launch of healthcare.gov last year. We were honored that CMS trusted us to bring the right teams and capabilities together. We continue to support the program. We also support a number of state exchanges with work including operation support, systems integration, analytics, and project management. Beyond exchanges, we have many established programs and growth opportunities across areas including Medicaid analytics and data management, program integrity, case management, behavioral health, and military readiness exams. Our Medicaid program integrity initiatives save hundreds of millions of dollars per year by targeting fraud, waste, abuse, and claim errors. One example, the state of Iowa has saved more than $135 million in partnership with Optum.
Today, we work with 17 federal agencies and government offices across 36 states and the District of Columbia, providing value at a time when they are expanding enrollment and coverage under tight budgetary constraints. Lastly, I would like to provide some perspective on our developing international activities. Around the world, local markets have unique characteristics, but their fundamental needs are similar. They need higher quality care at lower cost, data and analytics to make the best decisions, and technology and resources to drive change. We are expanding our work to support and improve global systems on the local level, focusing on regions where we can have the greatest near-term impact. Key markets include Brazil, working both with our sister company, Amil, and in the broader commercial market, the U.K., supporting the NHS, and Australia, as privatization and consumerism continue to take hold.
We continue to see near-term opportunities in broader Latin America, Southeast Asia, and Canada. Our Optum services translate well across borders. Our global presence is early, but growing. To put it in perspective, the addressable global market potential for services Optum provides nearly doubles our half trillion-dollar U.S. market opportunity. Balance is important here, and we will not be distracted from our enormous U.S. opportunity. We believe that we have the talent within our enterprise to broaden our global scope without hindering our U.S. agenda. In addition to these five major areas, we will continue to see growth in other areas where capabilities, execution, and scale distinguish us in the marketplace. In financial services, we are one of the largest providers of health savings accounts, and Optum Bank is the largest bank dedicated only to healthcare.
We continue to develop market leadership in population health management capabilities, including our care, disease, and complex condition management programs. These are complemented by our prevention and wellness programs, where we continued to enhance our offerings in 2014. Another promising growth area is the employer private exchange market. Our solution goes beyond enrollment to integrating health and wellness tools that keep employees engaged throughout the year. I hope that I've been able to give you a strong sense of how we see our marketplace evolving, our major growth initiatives, and important steps we are taking today to expand our market leadership. Now I'd like to ask our Chief Financial Officer, John Rex, to talk about our performance and how we have executed on our business and growth commitments. John?
Thank you, Larry. First, I'd like to add my thanks to all of you for joining us here today. Pleasure to see so many familiar faces. So far, you've heard examples of how our expertise and diverse portfolio are helping clients and partners evolve, solve complex challenges, and succeed in a new environment. Now I'd like to focus on how we're delivering on our commitments. One constant of our Optum journey is a focus on performance. Without it, we could not have achieved the level of growth we realized and what we envision going forward. You may recall the major business objectives that we shared with you last year. While we view ourselves as just getting started in these areas, I'd like to give you some examples of our progress to date.
An example of integration and alignment is standing up a leading shared services organization to deliver better, more consistent experiences to clients and consumers and gain greater efficiency across all of Optum. Our average speed to answer a call has improved by more than 30%, and our transaction accuracy is now 99.8%. We achieved these improvements, attained greater efficiency, and reduced the number of service sites by one-third, even as we've grown our business. In terms of execution and cost management, there are a number of highlights. We referenced the progress our pharmacy care business has made. The flawless transition of 12 million members to our own services platform was the largest of its kind. Through new technology, process improvements, and our growing scale, in 2014 alone, we'll reduce the cost to fill a home delivery script by more than 20%.
At the same time, we've maintained five nines dispensing accuracy rates. By continuing to execute for consumers through this major change, we've attained a client retention rate of 98%. As mentioned earlier, we played an instrumental role in healthcare.gov following its challenging start last year. We continue to support CMS and a number of state-based exchanges at the start of their successful 2015 enrollment season. More than 100,000 people were able to apply for coverage through healthcare.gov on the first day of open enrollment. That's compared to just six last year. During the first week, nearly half a million people selected plans, more than four times the level achieved during the entire first month last year. Also, state exchanges we support have reported strong performance. For example, Maryland enrolled nearly 17,000 in the first week, a figure that took two months to reach last year.
Through our ongoing simplification efforts, we have integrated and streamlined our product portfolio, consolidating like products and reducing product variation by about half over the past two years. This work will help us realize significant savings across all of Optum. We will always maintain a strong cost management discipline to complement and support our growth agenda. Through this constant focus, our operating expense ratio has improved 300 basis points over the last two years. One basic example here, in becoming One Optum, we were able to integrate our core data management operations across the company, realizing tens of millions in savings. We also continue to focus on driving growth through larger, deeper, and more comprehensive relationships. Larry introduced you to our new Optum360 partner, North Shore-LIJ Health System.
Looking at broader measures of expanding relationships, the average deal size within Optum Health has increased by about 80% over just the last two years. We also noted our continued expansion in collaborative care, where strong relationships with local care providers and multiple payers form the very foundation of our work. We've added more than 10 new partners to Optum Labs over the last year, including Pfizer, Harvard Medical School, and Boston Scientific. In terms of growth, we focus most today on organic opportunities and how our strong portfolio positions us to expand market leadership in health services. Supplementing these organic opportunities, we continue to enhance the portfolio through strategic investments. For example, Larry discussed how we are extending our core revenue management operations through MedSynergies. We are augmenting our already robust population and condition management offerings with the addition of Alere Health and other capabilities.
These build on the ongoing investments we've discussed in collaborative care. Finally, we've continued to bolster our leadership ranks and bench strength this year with the addition of numerous accomplished executives. Many of them are here with us today. While these key objectives will evolve over time, you will continue to see an organization with a sharp focus on fundamental execution, expanding strategic relationships, and building a high-performance enterprise. Now, let me turn to how we've executed on our financial commitments in 2014 and our performance expectations for 2015. We expect to finish this year strong. Our earnings will be $3.25 billion, above the high end of our guidance range, and an increase of 30%. Revenues will exceed $47 billion, up 24%. Each business will post double-digit top and bottom-line growth.
We've accomplished this even while investing more than $200 million within Optum Insight and Optum Health to drive future growth. Key drivers of our 2014 growth include full realization of our pharmacy care services insourcing activity, diverse market expansion of technology-enabled businesses, including Optum360, government exchanges, and clinical quality solutions, and continued expansion and margin improvement in collaborative care. It's important to note, however, that much of this growth is coming from external sources outside of our UnitedHealth Group relationship. For example, our external Optum Insight backlog has grown over 20% this year. We are also seeing strong external membership growth in OptumRx, which has increased by about a million people just this year. We've noted our local care delivery model is truly multi-payer. Today, about two-thirds of the 2 million consumers that we serve through this business are affiliated with payers other than UnitedHealthcare.
Our focus on growth, cost discipline, and efficient capital deployment has also helped us nearly double our return on invested capital from just three years ago, reaching our 15 by 2015 commitment a year early. Turning to 2015, we expect to continue this strong momentum. Revenue will surpass $50 billion, growth of 10%-13%. Earnings will expand 15%-18% to a range of $3.75 billion-$3.85 billion. The operating margin, at upwards of 7.4%, is tracking to our 8 by 2016 commitment. In terms of visibility, we enter 2015 with revenue coverage exceeding 90% of our full-year plan and a pipeline that is 2.5 times larger than just one year ago. With earnings nearly tripling in four years, we'll have made some reasonable progress since we began this One Optum journey.
Over the coming years, we expect Optum will continue to post double-digit growth. Our diverse capabilities set us apart in the market, and you should expect to see us in many, many places. I appreciate the opportunity to speak with you today about how we're performing and delivering on our commitment. Now I'll turn it back to Larry for his closing thoughts.
Thank you, John. You can tell from the numbers how aggressively Optum has grown in 2014, and that we will continue to build on that momentum in 2015 and beyond. As Steve Hemsley said, seizing momentum is of the utmost importance across UnitedHealth Group. I'm honored to serve not only as head of Optum but also as vice chairman in the office of the CEO with Steve, Dave Wichmann, Marianne Short, and Ellen Wilson. I will be focused on strengthening and growing relationships and developing other ways to drive expansive growth across UnitedHealth Group. This role provides the best possible platform to support UnitedHealthcare as Optum's largest client and partner while ensuring that UnitedHealth Group will continue to be the most valuable, innovative, and highly performing organization in healthcare.
This only succeeds as long as Optum continues to stand out as the most differentiating and powerful growth engine in healthcare, which remains my primary focus. To summarize the Optum story so far, over the past four years, we successfully unified Optum by bringing our people and capabilities together. We integrated our assets to solve bigger problems, and we became simpler to understand and work with. We continued to strengthen a world-class leadership team. We will start 2015 with a growing market presence and strong momentum. This young company is at the center of the most significant healthcare transformation that will unfold over the next several years. Finally, as we continue to emerge, we will be amplifying our voice in the marketplace. The time is right to bring the work of this $50 billion enterprise more sharply into view.
This week marks the launch of a new brand campaign, you will see Optum positioned more prominently in the coming year. As I noted at the beginning of my remarks, I am honored to represent the people of Optum on this journey. As I close, let me share with you a short video featuring a few of our amazing employees talking about who we are.
[Presentation]
We have an exceptional opportunity for an exceptional company. Our commitment to you is to make the most of it. Thank you for spending time with us today, and we look forward to continuing this important conversation in 2015. I'd like to invite the Optum executive team to the stage to help answer your questions
80,000 employees, deep leadership team. Yes, let's start right here up front.
Thanks. When we look at the forecast, especially the margin trend, you're going to grow, I think, in the base forecast for 2015, 10-50 basis points, and then another 60-100 basis points in 2016 to get to your 8% target. Can you talk a little bit about what some of the drivers are behind that? Is that normalizing the investment, gaining leverage on scale, or are there some specific highlights that you'd single out from each of the businesses?
John, you want to take that?
Sure. Thank you. Yes to your first point in terms of there's some impact from the areas you described about in terms of some of the investments that we've discussed this year, starting to yield results within the enterprise. I think the other thing that you can take away from it as you think about the pathway also that we have broadly and setting it up to be by 2016, there would be some thought in there that the businesses of Optum Health and Optum Insight will be posting meaningfully higher growth rates. You could think about very robust double-digit rates in those businesses. That's outpacing our lower margin business, but particularly OptumRx. That would be your blend and your path to 8 by 2016.
Frankly, if I were sitting here in front of you at the end of 2015 or sometime in 2016 and telling you that OptumRx just grew way too fast, that would be probably a good problem to have. That's the setup and the path there by 2016. Does that help?
Yes.
Great.
Yep. Thank you.
In the past, you guys have laid out a couple of goals for growing external customers. One of them, I believe, was Project 750, where you had a goal of 100 conversations by year-end, and the other one was bringing on 8 to 10 more larger comprehensive clients by 2016. Can you guys update us on how progress is going with those conversations?
Larry?
I am going to start, and I am going to hand this off to Mike Mikan. The 750, I think you know, are organizations that we do not do business with today, and we're putting together a direct sales force that's actually calling on them at this point in time. We've done pretty well in terms of recruitment of the executives. I know Mike will tell you exactly how many, I believe five out of six positions, but Mike might give some statistics and talk about that.
Yeah, sure. Thanks. Great question. We have recruited five out of six. We have one open position that we're still recruiting for in the upper Midwest. Somebody knows somebody. We've taken the 750. We've assigned up basically 574 of those have been signed out to people to be called on. The missing group is that group in the upper Midwest. At this point, we are on track to have 100 conversations by the end of the year. The conversations really, I can tell you, have been going extremely well. These large employers are extremely open to the idea of how Optum can wrap all of its services around what they do, regardless of who the carrier is, and we're getting great response so far.
Larry or Bill Miller or both, you want to talk about broader strategic relationships?
Well, I'm assuming what you're talking about, I think last year we talked about in this 2018 by 2016 goal, that we were going to have 10 of these, what we call larger, deeper, more comprehensive relationships. We announced another one today, obviously, North Shore. I'll ask Bill Miller to talk about this. From my perspective, and I think from everyone that's working on this, we're pretty much in line, on target to achieve. Bill, you want to talk?
Yeah. I think we feel real comfortable about the pending deals that we will announce in 2015 on our march to get to that 10. Some of the pipeline numbers that John referenced are highly influenced by the names in that pipeline. They're large deals. They cover anywhere from seven to 10 years. What I think is encouraging and driving the growth there is there's a need. I mean, there's clearly a market need with the challenge that your average health system is facing, whether it's the transition to more risk-based work or their challenges with the changing environment and the focus on revenue cycle. We're positioned well. I don't see anything that's slowing that down. There's going to be a balance that we have to strike of adding those large and important accounts with executing for every one of them from day one.
Feel very good about it.
Thank you. Let's come up here, Janice. Thank you.
Thanks, John. Two questions. The first one is just a real quick one. The $200 million of investment that you spoke about impacting 2014, is there a similar level in 2015? Is that part of the margin appreciation?
Yeah. It's a great question. We will continue to invest in our businesses. Many of these businesses have so much opportunity ahead that we will continue to invest. My expectation is that we will be pacing at a somewhat lower rate of investment. The reason we highlight it, and I think we may have mentioned even on our 3Q call, by the end of the 3Q, we actually hit our $200 million investment. One can assume we actually probably spent a bit more than that in all of 2014. I do expect that to begin to trail down in 2015, at least from that level. A continued focus on some of these growth areas.
Okay. Just more of a sort of strategic or maybe theoretical question for Optum as an entity. When you develop new mousetraps for health plans, I think about something like Rally, for example. Is there a conversation that's ever had that says, "You know what? This is probably more valuable as a differentiator for UnitedHealthcare than it is for us to sell it externally?" Do you just think of your entity as, we're focused on revenue generation and growth and innovation, and if we're helping competitors of UnitedHealthcare, that's part of the business?
I'll take that. If we're looking at something that's a true differentiator, the way we would look at that is that UnitedHealthcare should probably start with that. We might put timing on that of a certain period, I don't know, two years or so, that that innovation might be totally dedicated. Eventually, we would look at being able to offer that to the broader market because obviously the broader market will catch up on that as well. We talk these things through, we collaborate, and I think we work together to make those decisions.
If I could just also offer a point on that. If you listen to Stephen Hemsley talk about the company, we're about helping people live healthier lives and helping the health system to perform better for everyone, which is a different mission than selling more medical memberships. We've got a great health plan, performs very well. That business is pursuing that same mission. The way we think about this may be different than where someone might be if they had a more singular business focus. To the back. Yeah, to Cheryl, please.
John, thank you so much for that segue. It's the perfect question. First, I'd like to say thank you very much. I'm a shareholder now, so otherwise unaffiliated. Second, on that point of integration, part of the promise of Optum from the very beginning was the ability to collaborate between the innovation and the unique services and the differentiated technology-driven services and the health plan. I sense that a large part of the growth, and certainly the street was worried that a large part of the growth of Optum initially would be that the only customer you would have would be UnitedHealthcare and the benefits business. Now we're talking about the extending the reach, and you've done it very successfully. Congratulations on the growth. You've got plans to do it even more. I'm going to turn the table and say, great, you did all that.
You grew a lot. Let's go back and look and review how well you've done the integration and collaboration with UnitedHealthcare. Now that there have been some changes in the leadership structure as well as in the dynamics of the business itself, should we expect a different pace of integration, collaboration, and most importantly, innovation between that nexus that I like to talk about, between the transformative impact of Optum and its services and the need for that transformative impact and the ability to affect the transformation much more directly of UnitedHealthcare?
Larry, how are you working with UnitedHealthcare?
How is that going to change?
Well, I have a new job. I would say this. When Steve spoke this morning, he talked about better together. When I talked, I talked about our largest partner and client. It is a great relationship. It is a growing relationship. Can we do it better? Probably. I think we are going to look at those different areas that, Cheryl, we could kind of tighten this up and see what we could do. I think when it comes to technology, data analytics, the wellness programs, we do need to take a look at where we are today and where we might want to be in the future, especially with some of the things that not only in the States, we might be looking international, that these will apply to as well. If you are asking me if there is some room for improvement, absolutely. I think it will always be that way.
I do believe that we have the teams in place to do that right now, and that everyone is on board in that case. There are two people up here that probably do a lot of that. One would be John Prince. You might want to, John, talk a little bit about that.
Sure. Great question. I will give you two good examples around, Cheryl, areas where we are working together. One is around the consumer experience and how you actually create one experience for the company, and two is around clinical. I do not want to get ahead of my UnitedHealthcare colleagues that will be talking a little later. We spent a lot of time in the last year really thinking about how do we create one experience for consumer. As you enter the organization, I am talking on behalf of UnitedHealthcare, how do you actually integrate and have one phone number, one digital experience, and actually be able to take people through the journey of selling benefits, enrolling, experiencing it, and retaining them. We have a lot of work that we are doing together around actually having that occur.
One example of that is the Advocate4Me program, which you hear periodically talked about, which is now with 3.4 million members, 6 million by the end of the year. Rolling out about 12 million just in national accounts, which is really driving that one experience. I think those are great example around driving a differential consumer experience. The second big area example is around the clinical experience and actually really figuring out all these great resources, both within Optum and in healthcare, how do we actually create one clinical model? We've done a lot of work, and I think Austin Pittman will be talking about a little later, around how do you actually create one integrated experience as you go to the market?
Healthcare is whether locally, how to create one integrated experience serving both the medical, the behavioral, and the pharmacy needs, psychosocial needs of an individual in a very complex population. Two great examples about how we're working better together.
I might just ask John Santelli, if, Jon, you might comment on that as well.
Sure. I'll just pick up on where John left off. The clinical model and integrating that for UnitedHealthcare, I think, is instrumental. If you think about synchronization, which we've talked a lot about, we were able to bring together medical data with pharmacy data, create these longitudinal views of a patient, identify their gaps in care, and then through Advocate4Me, really be able to identify members when they're calling in and giving them a better experience and having the opportunity to actually close the gap in care, where not having that data or those insights, it would not be possible.
I'm going to do one more. Lisa, would you mind talking about what you've been working on with UnitedHealthcare on the complex conditions side?
Definitely. We've been working very well with UnitedHealthcare in providing better post-acute care for the patients. Within 24 hours of their hospital discharge, we're able to integrate data about the patient's diagnoses, their conditions, their medications, and gaps in care related to Stars in HEDIS, and be at the patient's bedside while they're recovering in the home or in the nursing home to ensure that they have a great recovery and do not go back to the hospital. UnitedHealthcare has been a tremendous partner in this, and this has grown across the country, and it's really a differentiating part of the UnitedHealthcare experience, as well as the Optum Care Delivery model.
Thank you, doctor. I appreciate the forward lean in our answers. UnitedHealthcare has grown eight million people organically in the last five years. Even as we talk about the forward lean, I promise you Optum is a piece of that very strong differentiated growth as well. Over on this side, please, Kelly?
Oh, thank you. If I could, maybe to Tim Wicks on the PBM business, can you describe the selling season that you went through, how you think the PBM business is doing with external customers? Maybe give us a snapshot of how you plan to approach the 2016 selling season.
Sure. Great. When I think about where we are on the basis of selling into 2015, we are in very good shape as it relates to the progress that we've made year-to-date. When I think about the revenue forecast and the guidance that you saw, we're in very good shape as it relates to the membership that we've delivered vis-a-vis that revenue forecast as well. The additional piece that gives us confidence is when we look at where we are into the 2015 selling season versus where we were one year ago into the 2014 selling season, we're ahead of where we were a year ago as well. We have very good confidence around where we expect to be in 2015.
When we think about, to your question about 2016, what I believe is driving us to have confidence as we go through 2015, and we deliver on our plan for 2015, and incidentally, as Jon mentioned earlier in his discussion, adding about a million external lives each year. When we think about 2016 and we think about where we're heading there, much of it really comes down to the value proposition of what we bring to the market. Many of the things Larry talked about when he was mentioning pharmacy care services.
The ability to have a synchronized model, to be able to focus not just on how care is delivered in terms of, or the cost of care, by the way we procure drugs, but how care actually gets delivered and how you have a better outcome as a consequence of linking the medical and the pharmacy information. Being able to provide a service model to our clients, when they call, their calls are answered quickly, they're answered accurately. When we dispense through the home delivery services, that we dispense with the utmost accuracy, and that every aspect of the financial transactions are done accurately as well. You heard John Penshorn mention five nines as well in terms of the accuracy of our delivery performance.
When you think about those aspects of performance, then on top of that, add the focus that we have around driving affordability. Everything from generic dispense rates, the work that we do around specialty, and being able to, in addition to those pieces, drive the negotiations with pharma manufacturers around rebates and the approaches that will drive affordability. Those all coupled together are playing well in the marketplace, and the best evidence we have about how they're playing in the marketplace is the consistent growth that we've had over the last several years, and that gives us good confidence about the growth we expect heading toward 2016.
All right. We're at time, but I'm going to squeeze one more in here. Paul?
I just had a quick question on Optum Insight. The margins in 2006, 2007 were 18 or 20, and then they dipped for several years, and now it's heading back up to 20. Is there a reason? Is it a mix of business? I'm just curious. It's just an extraordinary business.
John or Bill, either one of you want to
John, why don't you start, and then we'll
I'll start with it. Yes. One point is there is some mix
That goes on in this business. Realize we're kind of in a 16%-20% margin guidance range, pro forma Insight, and I sometimes get the question, "Well, you're pushing to that already. Where are you?" Then you could go back to two years ago where you're pushing the other side. Because we are entering into extremely significant new relationships. Those take some effort to stand up when we go into those relationships before they start bearing the benefits. You see some of that cyclicality in the margins. Bill can maybe talk a little more about some of those relationships. You should expect to see that kind of range. You'll see we stuck with our 16%-20% range as we establish these long-term ranges or reestablish them today.
Over those time frames that you're referring, remember we were making investments not only in 360 but also think about the acquisition we made in Humedica that is really beginning to distance us from the pack with respect to our analytics capability. Coupling our strong administrative legacy to the new world of clinical data and the combination thereof. Some of the things that you saw back there, some of the pipeline is heavily influenced taking advantage of that investment that we've made in that company. I'm pulling together our analytics capability in ways that we hadn't done before. I think we will see the benefit. I know that we're seeing the benefit of making those investments. They were planned, anticipated all of it, and anticipate, in fact, the return to higher margins as a result of having the foresight to make those investments and taking that gamble.
When I use the word gamble, I don't think it really was. I think we were pretty confident what was the market going to need, what kind of capabilities was it going to need. I think Larry has said it well. Health systems and health plans don't do great with big data. They need that targeted data. They need to pull together and useful and actionable, and that's what you're seeing some of the evidence and some of the Optum One capabilities and others that we have them display out here are byproducts of that patience and that foresight.
All right. Thank you, Bill. Thank you, team.
Okay.
I'd like to invite my colleagues from UnitedHealthcare to provide their perspective on 2015 strategy outlook performance.
Good morning. I'm Jeff Alter, UnitedHealthcare's CEO of Employer and Individual Business. Joining me on stage is UnitedHealthcare's senior leadership team, and you'll hear from each of us this morning. As a team, we are focused on growth and on reaching UnitedHealthcare's fullest potential in service to consumers and customers. The strategies we will highlight today have delivered strong results over the past several years. This morning, we will talk about why UnitedHealthcare is positioned to grow in 2015 and even more in 2016. Over the past five years, we have grown organically by eight million people, over two million more than our five largest publicly traded competitors combined. This team's goal is to leverage our strong foundation and reach higher levels of performance. In short, to realize the fullest potential of this enterprise.
The strength of UnitedHealthcare stems from delivering value to all people in all stages of life, at all income levels, and in all categories. Our differentiation lies in the way we integrate four core facets of our business: modern benefit designs, distinctive consumer relationships, targeted clinical engagement, and an accountable delivery system. Many competitors are active on some or even all of these fronts, but no one integrates them as a system that reaches people and produces results with the depth, breadth, and consistency UnitedHealthcare can. We're committed as a team to sharpen and advance this strategy across all of our businesses. Let's start with advances for consumers. We focus intensely on reaching consumers directly to deliver simpler and more personalized care. Every point of contact matters. Take, for example, our service model, Advocate4Me.
Advocate4Me provides a single point of contact, anticipating a person's needs as they navigate their personal healthcare journey. It builds trust, it improves outcomes, and it drives more affordable care. Consumer satisfaction is 97%. Today, over 4 million people have access to the Advocate4Me experience. By the beginning of 2016, it will be available to about 22 million consumers in Medicare, Medicaid, and commercial markets. Our consumers' digital experience continues to deepen. Health4Me, our mobile app, makes it simple for our consumers to navigate their healthcare journey, from finding a doctor to paying their share of costs. It's been downloaded more than 1 million times. Embedded in the app is my healthcare cost estimator, which allows consumers to make better decisions based upon cost and quality to the tune of $3 billion in medical treatment estimates already.
Rally is our new interactive digital consumer engagement platform, unlike any other. Now let's turn to care quality and performance. There'll be a seminar on our network and clinical model this afternoon. I'll hit on a few key points here. We organize health resources around the person, eliminating complexity and making the healthcare experience simpler. We focus resources on highest-need individuals, driving higher, more consistent, and comprehensive care performance for them with advanced data. Across all our value-based contracts, the sharing of actionable data with care providers makes our value-based care work for people and care providers. We share not only information, but best-in-class practices and tools to manage costs, improve efficiency, and measure and reward outcomes. The goals are simple: improved access to care and improved care for high-risk patients.
We have intensified the ways we reach and support the highest risk 5% of the population who drives 54% of the cost. As a result, we have further lowered overall costs for these people by an additional 2%-5% beyond the cost profile of the broader population we manage. Progress on the care provider side includes changing the way we pay to drive better results. We offer a wide range of value-based payment models that improve quality and cost outcomes by increasing provider accountability. At the most advanced end of our suite of programs are population-based offerings. These include shared savings, shared risk, and full performance incentive models integrated with patient-centered clinical care. We have an industry-leading 500 of these arrangements today and plan to add 250 in 2015. Our value-based spend is $36 billion today, going to $43 billion by this time next year.
We are on track to achieve our goal of $65 billion in value-based spend across all lines of businesses by the end of 2018, if not sooner. Now let's take a closer look at how our focus on consumer relationships, clinical quality, and aligned incentives come together to drive differentiated value in each of our businesses. We'll start with our employer and individual business. Intentional integration is opening doors to new growth and changing the way we serve individuals. We are creating stronger, more connected relationships with consumers built on information, service, and trust. On the care provider side, our clinical and contractual relationships are supported by more modern thinking, data, technology, and service. One of the results is we are able to offer new product designs with competitive pricing and sustainable trends. Different network configurations offer different cost structures and greater flexibility to respond to local market dynamics.
For example, in the commercial risk-based market, we can reduce open access PPOs cost structure by 3%-6% just by changing the network. Putting managed access in front so that a capable primary care physician can really focus the patient's use of the health system based on data and their professional training and judgment, they can improve initial costs by another 3%-5%. We can further improve the cost by focusing use with premium designated physicians. Finally, the ultimate package, higher performance networks combined with financial alignment and care providers with effective consumer incentives deliver even greater affordability and value. Throughout 2014, we launched a variety of new offerings, including managed products using tailored performance-oriented networks, as well as new managed and tiered network features. These all will be factors in our 2015 growth. New markets and distribution channels also offer an opportunity for significant growth.
As you know, we're expanding our footprint on the exchanges. We will be active in 23 states next year versus four this year with a broad portfolio of plans at competitive prices. Winning on the public exchanges require winning with individual consumers. We can offer consumers on a personal level the same value and innovation we have offered employers for over three decades. Consumers flow between the commercial exchange and Medicaid markets depending on their status at a point in time. Take the example of a cashier at a big box retail store. A cashier who works 28 hours a week, 52 weeks a year for an average wage will qualify for a subsidy on the public exchange.
If that same cashier works just two fewer weeks, they'll qualify for Medicaid. UnitedHealthcare will be there for that cashier as they move between the commercial market and the government Medicaid benefits. Our commercial and Medicaid business will overlap in 15 of the 23 exchange markets we'll serve next year. I'll discuss exchanges in much, much greater detail this afternoon at the seminar. Growth requires a focus on consistent execution for the people that we serve. Our reputation is strong, our goal is to strengthen it further as we move our relationships from those of a basic service to ones that foster trust and loyalty across every stage of life. For 2015, we estimate we'll add between 400,000 and 500,000 new people through public exchanges to start the year.
We expect commercial risk lives will remain relatively flat in 2015, with offsets to exchange growth from small group market pressures, mainly in New York, as we continue our consistent pricing disciplines. This represents a swing in fully insured of as many as 900,000 people from 2014. Our commercial fee business will also remain flat year-over-year in 2015 as we take share in the national employer market with strong wins and retention, offset by our customers migrating their retiree membership to Group Medicare Advantage, where there's a compelling value for them. For us, that earnings profile is more substantial. Taken together, this will result in a turnaround of nearly 1.6 million people from 2014. We expect 2015 commercial revenues to be consistent or up slightly in the area of $43 billion. Thank you very much.
Now I'd like to turn it over to Steve Nelson, our CEO of Medicare and Retirement. Steve?
Thanks, Jeff. Good morning. It's good to be with you. It's my privilege to represent this diverse and strong business that serves more than 10 million seniors or nearly one in five Medicare beneficiaries. Medicare is a growing market, but it's also a market that is changing from one focused on benefit structures to one focused on creating a personalized member experience, an experience that leads to better quality, better outcomes, and lower costs. It's a fundamental change and one that we have prepared for. Our focus on the consumer centers around three key priorities. We connect individuals to people and resources to help them live healthier lives. We connect them to the care they need, and we help them save money along the way.
Our members want to be part of a modern health system with features and information like they may have used in the commercial market before they retired. We eliminate confusion and complexity in healthcare and make things simpler for them. Delivering this requires consistent, stable funding for care providers and health plans. We continue to advocate for seniors and their health in Washington because we believe our nation's seniors deserve the benefits of the more modern approaches available today. The value we offer seniors is the result of our work in six key areas. Relationships mean anticipating a problem before it becomes one and communicating with seniors at a personal level. The second lever is a community-based approach. Personalized care requires a strong local orientation. Individual leaders drive performance in each local market, supported in those markets by executives with direct responsibility for clinical, Stars, and network activities.
Third is a high-quality relational consumer experience. All of our programs touch people in a way that engages them in their health and empowers them to take action. The fourth category is engaged and supported care providers. To foster productive relationships with care providers, we give them support, tools, data, and even people working right in their offices. We can then further strengthen our relationships with care providers through aligned incentives. The fifth lever is our partnership with Optum, and this one may be underestimated by some. Optum's capabilities advance our performance in many of the categories on this graphic. By focusing on these areas, UnitedHealthcare is able to offer products that consumers want and need. That translates into meaningful growth and sustainable differentiation in the marketplace. The sixth and final performance lever is quality Stars.
We have made meaningful progress in Stars performance, particularly in operations where we are now running at 5-star levels. We've also advanced in consumer experience, where we are leading the competition in the areas of customer service, resolving complaints, and Part D service. We have more work to do. We are determined to deliver strong performance across all categories of CMS measured metrics in our broad, diversified national Medicare business and to do so on a consistent and sustained basis. We are committed to having 80% or more of our members in 4-star plans by 2018 payment year. As we construct our local product offerings each year, we focus on delivering the benefits seniors tell us they value the most, while also taking into account funding pressures. This year, we strengthened benefits selectively while adding monthly premiums.
These changes covered markets where slightly more than one-third of our members previously had purchased zero premium products. We also added a new zero premium alternative in about one-third of the markets where we added premiums or enhanced benefits. We are encouraged by what we are seeing this sales season, and we are anticipating an improvement in our customer retention as well. We have grown organically by 2 million people in our Medicare programs over the past five years. In 2015, we expect to grow revenues by $3 billion-$4 billion and provide services to about three-quarters of a million more individuals. This strong and diversified growth will bring our revenue to $49 billion-$50 billion in 2015. All of this in the context of a changing relationship with seniors built on serving their needs. We are very excited about the future of both state and federal government healthcare programs.
Now let me turn things over to Austin Pittman, CEO of Community & State, to discuss the other side of our government business, Medicaid. Austin?
Thanks, Steve. Good morning. Community & State is a story about growth and execution. Growth from consumers who are newly eligible for Medicaid, growth from states expanding their managed care programs to new geographies, and growth from more and more consumers with complex healthcare needs moving into managed care. In 2014, these opportunities enabled us to grow by 1 million members. 40% of our growth was from traditional sources, not by reform. This speaks to our commitment to attracting new members to UnitedHealthcare, building deep state partnerships, and delivering fundamental execution with financial discipline in our existing markets. We also had important program expansion wins with partners in Texas, Ohio, and Florida who increased their commitment to managed care for their citizens. 60% of our 2014 growth came from Medicaid expansion.
Through outreach and education in our communities, we made sure those newly eligible beneficiaries got connected with local health navigators and completed the application process. The result was significant growth with a strong increase in market share. Over the past two years, Community & State, between expansion and more traditional organic growth, has produced a 43% increase in revenue and a 31% increase in membership. Let me say that again. A 43% increase in revenue and a 31% increase in membership in two years. We see a number of exciting paths to growth ahead, four in particular. First are the states where we already have a plan presence. Between market share growth and an ongoing movement of consumers from fee-for-service to managed care, there is strong organic potential. Second, there are 23 states that have not committed to Medicaid expansion.
Some states are considering a more traditional Medicaid approach as they look to expand their programs. Others, like Pennsylvania, are working to create hybrids that have both Medicaid and commercial elements. Either way, UnitedHealthcare has a proven track record of success and is well-positioned to help develop strong programs with our state partners and attract new consumers into the system. Third, even though we are the largest Medicaid company in the country, there is still significant opportunity for us to grow, as you can see from the map. Finally, and perhaps most importantly, our state partners continue to grapple with costs from consumers requiring complex care. To address the issue, states are migrating people from fee-for-service plans into managed care. In 2014, seven out of our eight new implementations involved complex care services.
We have become a market leader in serving those consumers with over 300,000 duals and 220,000 long-term care members. Serving consumers with complex care needs has become a central part of our business and also a core competence. As Jeff mentioned earlier, 5% of our members consume 54% of the medical cost. Last year at this conference, we introduced a pilot of our new care model. We have made significant advances with it and are now introducing this model across the country. At the center of this patient-centered care model is an understanding that 83% of the people who have this level of need have at least three chronic conditions. In fact, over 60% of them have more than five chronic conditions, and those are just the physical needs. Often, the medical needs are exacerbated by behavioral needs, and the combination leads to regular emergency room visits.
We needed new solutions. We changed our care model from telephonic to face-to-face. We hired hundreds of community health workers, people who live and work in the community and have local and cultural sensitivities. They find our members. They build relationships and identify what is standing in the way of better health. They connect those members to a multidisciplinary team of care specialists, all of which is coordinated by Optum care managers on behalf of UnitedHealthcare. Addressing complex needs not only takes a coordinated care team but also the deep data and analytics unique to UnitedHealthcare, put into action one member at a time. The early results are very strong.
We're deploying the care model in an additional 14 states. Adding more resources at the neighborhood level, strengthening our market-leading inpatient and transitional care capabilities. We will begin helping states confront the core issues of nutrition, housing, and education, all of which contribute to the long-term cost of healthcare. 2014 has been an incredibly strong year, the result of fundamental execution and discipline. We will grow in 2015 with new membership of 250,000 to 350,000 individuals and revenue of more than $27 billion. The landscape ahead is full of opportunity. Managing the high cost of complex populations, bringing new consumers into the system, and the ongoing move to managed care. To achieve success, we will continue to deliver new ideas and solutions that will reduce cost and achieve better outcomes through clinical performance, operating performance, and a superior consumer and provider experience.
UnitedHealthcare's ability to deliver on these fundamentals, combined with a deep understanding and commitment to serving America's most vulnerable populations, position us as the partner of choice and will drive momentum for the years to come. It's now my pleasure to turn this over to Dan Schumacher, Chief Operating Officer and Chief Financial Officer of UnitedHealthcare for the financial overview. Dan?
Thank you, Austin. Good morning, everyone. My colleagues have discussed growth and execution across the broadest benefits business in America. I will show you how that translated to our 2015 outlook, starting with our view of medical costs. Each year, in each of our businesses, we set an expectation for our forward outlook for medical trends and then work hard to outperform it. In commercial and government businesses, we performed well against our initial outlook due to strong contributions from our robust medical cost management and clinical engagement efforts. Focusing more specifically on the commercial medical trend, we now expect to close the year at the low end of the range we provided one year ago of 6% ± 50 basis points, possibly better. Looking to 2015, we expect a modest increase in trend across the benefits platform compared to 2014, driven primarily by utilization.
In the commercial business, we expect the commercial net medical trend to be in the range of 6% ± 50 basis points. Again, in 2015, we will strive to outperform our medical trend outlook through our focused clinical efforts. Looking at the components, facility unit costs continue to be the primary driver of cost increases. However, we expect utilization, primarily in the outpatient setting, to be up again from 2014 as treatments continue to shift from inpatient to outpatient. Physician trends reflect modest increases in office visits and fee schedules. Pharmacy trends are expected to be lower than 2014, given the high level of specialty drug utilization this year. Turning to enrollment. We are privileged to currently serve 49 million people across our domestic and international businesses. As Jeff shared, we have grown organically to serve 8 million more people over the past five years.
This year, enrollment contracted by about 600,000 people as strong, consistent growth in our government businesses was more than offset by the loss of a large public sector client, reform impacts to our individual business, and the effects of disciplined pricing in our commercial and international businesses. In 2015, we expect substantial improvement in our medical enrollment with our growth range straddling 1 million consumers, a turnaround of 1.5 million at the midpoint of our guidance. Enrollment in our commercial fully insured business will be roughly flat. Growth from expansion in public exchanges is expected to be largely offset by a decrease in traditional products, driven by our continued pricing discipline. Our self-funded enrollment will be steady, as Jeff mentioned. Strong gains in international and each product line within our government-sponsored businesses lift our consolidated growth.
Government growth will be fueled by continued Medicaid expansion, key wins in our Group Medicare business, and another strong year in Medicare Supplement. In addition to our medical enrollment, we expect to add more than 200,000 standalone Medicare Part D consumers. Growth in our international business will be driven by our market-leading position in Brazil. By this time next year, we expect to be serving nearly 50 million people. Turning to operating results. We expect to close 2014 with revenue of more than $119 billion, exceeding by $1 billion the range we provided one year ago. We expect 2014 earnings of $6.9 billion. In 2015, we will expand and strengthen our businesses, growing revenue by more than $7 billion to a range of $127 billion-$128 billion.
On a consolidated basis, we expect our UnitedHealth Group medical care ratio to be relatively stable in 2015, with slight increases in commercial and government care ratios offset by improvements in our international and Optum businesses. Consistent with past practices, we have not assumed any reserve development, favorable or unfavorable, in our forward outlook. My comments are focused on the consolidated care ratio as it better reflects the totality of our business. We will continue to deliver strong operating cost performance, helping keep our products affordable. Considering all of these factors, we expect 2015 UnitedHealthcare earnings from operations to be in the range of $7 billion-$7.4 billion, an increase of up to 7% or $500 million at the high end of the range. To give you better insight into the underlying performance of UnitedHealthcare, I've provided a pro forma bridge of our after-tax operating profit.
In 2015, we are absorbing $400 million of reform-related pressure. This includes the negative impacts of prescribed Medicare rate cuts and the more than 40% increase in the insurer's tax. These are slightly offset by anticipated growth from Medicaid expansion. Excluding these impacts, our businesses are driving strong underlying earnings growth of 10% at the midpoint of our guidance. By 2016, these impacts are far less significant. We expect to grow faster in 2016 and beyond. Over the past several years, we have spent more time than we care to discussing headwinds. Today, the conversation is about potential, performing at our fullest potential. When you stand back and reflect on what we shared with you today, I'd like you to leave with two thoughts in mind. One, that UnitedHealthcare has built a strong foundation, the most diverse and capable in our industry. Two, we are not content.
There is too much unmet need in healthcare from consumers, employers, states, and the federal government. We have more work to do to perform to our fullest potential. We are intensely focused on growth in every one of our market segments, more valuable consumer relationships, working with care providers to improve the value of care access. We are focused on technology and innovation that make interactions simpler, easier, and more effective. Simply put, we are focused on creating value, whether serving individuals in public exchanges, seniors as they age into Medicare, or more complex populations in Medicaid. That value is why we are growing. Now, I'd like to invite John back up to the stage. We'd be happy to take your questions as a team.
Thank you, Dan.
First, a quick numbers question for Steve. The 200,000-300,000 Medicare Advantage members you expect to add next year, can you give us a breakdown between retail and employer?
Sure. I'm not going to break that out. I'll just tell you that we had a strong group selling season. We also plan to grow in individual as well. 200-300, that's the range. It'll be made up of both group and individual.
Okay then. Dan, on the cost trend, your guidance for this year is about 5.5%, give or take. I think that included 50 to 100 basis points of reform mandate.
The core trend more like 4.5 to 5? Is that a reasonable way to think about it? Looking for six next year, just trying to figure out how much that's conservatism, how much should we think about any kind of factors that I know you guys might be focused on that we should consider. Maybe you can throw in a comment on the pricing environment as well as where you're seeing everybody else while you're at it. Thanks.
Anything else, Justin?
I'd expect nothing less, Justin. On the commercial cost trend, we had guided to 6% for 2014, at this conference last year, we did indicate that that included reform elements. At that point, we had thought that would be closer to a point, the reality is that number is smaller in 2014 than we expected, that really had to do with greater levels of transitional relief. People keeping the plan that they had, not moving into the higher mandated benefit requirements. If you look at the trend impact of reform, it's about comparable in terms of the contribution to trend in both '14 and in '15. As you look at our outlook for next year, we are expecting an increase in utilization. At this distance, we don't see that right now in the performance right now.
We have a healthy respect for underlying costs and the growth in them, and we think it's the right place to position our business at this point. With regard to pricing, perhaps, Jeff, you could address that.
Sure. Yeah, I don't think our commentary changed much from the third quarter call. The market remains competitive. That view of how that pricing environment has shaped up for the remainder of 2014 into 2015 is
Reflective in some of our numbers in fully insured. I'd just add there, we still have some pockets like New York where we've got a more competitive environment than in the past.
Shelley, can we come up here?
Question about Medicare Advantage. Can you talk about what you're expecting for rate increases from the government for Medicare Advantage in 2016, given that they think that Medicare spending was flat for 2014? Are you looking for much improvement in rates in 2016, or what are you thinking in terms of the glide path there?
Sure. It's always difficult to speculate on what CMS is going to do with the rates, I will not do that. Just our view is that this is a very successful and popular program. It's growing. Satisfaction is up, outcomes are up, costs are down. It's been very popular, but the concern is, as you indicate in your question, there's been underfunding for the past several years. We are advocating strongly with CMS and Washington to, as I mentioned in my comments, for seniors, for fair, sustainable, adequate funding. That's how we think about it, and that's what we're talking with CMS about, and that's what we are hoping for. There is concern because of the past several years and how they've approached it. It's difficult to speculate, but that's how we're thinking about it.
Thank you. Right here, please.
How do you see the change in the political system impacting your opportunities in Medicaid and exchanges? Do you see any risk of eroding the potential, or?
Sure. Well, first of all, I think the growth that we've experienced kind of speaks to the value that states find in what we do in managed care. I think that the need cuts across any political line. The fundamental need in the marketplace in states is there. We don't really view ourselves and have a lot of thoughts about the political environment as much as we do about performing and continuing to drive value, particularly as you look at more and more complex populations that states need help with. I think that creates a real durability to this business as long as we continue to do exactly what I talked about in my comments, and that's deliver real value for those consumers.
Do you see political risk to the funding of Medicaid expansions and the durability of exchanges?
That's what I was trying to get to on the first answers around Medicaid. In just a minute, I'll turn to Jeff to talk about the exchanges. We're in ongoing discussions with our states and have been. We've built strong relationships. Those relationships are built on performance. They're built on providing value. They're built on approaching it in a fact-based way. There always have been and will continue to be discussions, ongoing discussions with states. One of the things that we try to focus on in their look to fix coverage gaps is to meet them where they are. Some states, as I mentioned, want to expand their traditional Medicaid approach. Some states want to take a hybrid approach.
I think we're well-positioned and have a track record of helping states however they want to approach their populations, which are always very unique from state to state. That's how we're approaching and thinking about it.
I think I would echo Austin's comments around the political environment as it affects exchanges. I think what we see with exchanges in the first year is that they will become part of sort of the fabric of how people get healthcare coverage in the U.S. The tax impact has already been felt. It's already there. Quite frankly, the access that the Act kind of began in its infancy to create has been created through the exchanges. Similar to Medicaid, as long as we're focused on delivering value and creating that value for those individuals and for those states, as the political environments change, that fundamental underlying need is not going to change. If we can deliver value for those individuals, I think we're in a fine place.
Seven million people receiving benefits this year, going to 10 to 13 next year. Pick your number. That's a mainstream program today.
Absolutely. Over here, please.
How would you break that down just between small group losses that you're expecting in New York relative to the other areas? Just on the public exchange enrollment growth that you're expecting, can you talk about it, whether there's any specific markets where you feel that you're going to drive a majority of that growth, or do you think it's going to be pretty well spread out across the 23 markets that you're going into?
That sounds like a plug for our exchange seminar this afternoon, Jeff. If you'd like to start it.
Just on the exchanges, yes, it's where people live. Texas, Florida, North Carolina, Pennsylvania are some of the larger markets for us in that growth spectrum. On the losses, it's primarily or predominantly still a New York small group loss spread across the vast numbers of our geographies and different market segments kind of make
Still in the remainder. I would say the majority of our projected losses will continue to be in New York small group.
Yes. Scott, I would just add that the other places in our off-exchange individual business, that's another place where we'll expect to see a decline in enrollment. That coupled with New York and a couple of other markets really combine to offset the growth in the public exchange.
Let's go back one. Kelly, thank you.
A couple questions. One on the ASO business. Are you seeing fewer conversions this year? Maybe related to that, I don't think I've heard anybody talk about today about private exchanges and how that might be altering the enrollment mix, if at all. Maybe it isn't this year.
Matt, can you help me with conversions? Which type of conversions?
I'm sorry. I mean, what we've seen steadily over the years are fully insured employers moving to self-insurance.
Yeah.
Is part of the flat outlook reflecting that there's not as much of that going on the ASO side?
No. I would say part of the flat outlook on our is a combination of movements from retirees into group retirees, and then really sort of specific individual actions by some of our larger clients, whether it's job changes or employment changes in their profile or eliminating retirees, spousal coverages, part-timers. That's kind of the underlying adjustment in the national account space. We actually had a very good, strong national account selling season, retention season. The conversions, they are still continuing to happen, but probably more down in that 51 to 300 space. I think those large accounts have already done their conversion process. We're beginning to see some of that move down market.
We've got a couple of really innovative solutions for employers of that size that might be looking to change the way that they fund their healthcare coverage, and we've seen some uptake in that, particularly in that sort of low-end large business.
Anything to say on private exchanges?
It wasn't a really big event for 1/1/2015. I know there's some projections that it may have been a shopping year and 2016 will be the bigger year, but not a big impact for our membership in 2015.
Last one, if I could. You guys have the goal of 80% of your members in four-Stars plus plans by 2018. Do you think you'll get halfway there when we get to next September, October, and we see the 2017 Stars scores announced? How do you think we should think about your staging? Because that's a big jump from where you are today.
I think we got a big tailwind over a multi-year period. How do you want to take that, Steve?
80% is the goal. We're tracking to that. We've made meaningful progress. A lot of areas that I mentioned during my presentation, but we're very focused on the clinical and HEDIS measures at this point. We have a lot of plans and initiatives, right resources, right technology, right investments in place. We are going to make meaningful progress. It's a little bit hard to kind of predict the staging of exactly where we'll land with 2017, but we're at 37% now, which is up meaningfully from just the year before. We expect to make progress up to the 80%, and that's about as probably as direct as I can be. Matt, I think it would be fair to say that you would expect more of that to be in the 2017 to 2018 than in the 2016 to 2017 change.
I do want to amplify John's point, which is we really look at that as a tailwind. We have a very competitive offering today. We're successful selling and retaining new business in the group and individual space, and that bonus, as it continues to grow, becomes a differentiator for us.
Yeah. We'll mention we will get into more detail in the seminar as well about how we're thinking about the specific elements of our Stars work and plan. Let's go in the middle section.
Thanks. I think you mentioned a goal of 400,000 to 500,000 lives on the public exchange in 2015. Can you help us on what your margin assumptions are for that business next year and how that evolves into 2016 and whether there's a reliance on the three Rs? Thanks.
Sure. Jeff?
Sure. Our initial year for 2015, we expect margins somewhere around 2%. We think long term, we're more in that 4%-5% range and have plans to get there. We do not have any reliance on the corridors. We do have reliance, as everyone does, on the reinsurance. Risk adjustment, we've priced that at a neutral right now. We'll see as time goes along what that is.
Thank you. Back here, please.
I'm just wondering if you could give us some color on where the health insurer fee stands with regard to the Texas Medicaid program and whether you've come to any kind of agreement with the state at this point?
I'll take that. First of all, I'd be remiss if I didn't give a shout-out to our team, government affairs, our teams in every state. The success that they've had in working to get agreements in place for the insurer fee across the board has been tremendous, and it's been a real success. We've had verbal commitments where we don't have written ones. We haven't recognized any revenue where we don't have that written commitment. We expect to get it worked out in post-haste. Back here, please.
Excuse me. I had two questions. First one, relatively quick. Do you have an exchange kind of aggregate target in the 10-13 range that John made mention of earlier? How much does the country need to see advance this year to support your views of both membership growth and profitability in your exchange effort?
I think the overall market size is just one component. This is all a plug for this afternoon's seminar, I don't want to steal all that thunder, there are a lot of components that went into our growth projection. One of them was the size of the market. We did not use the $13 million. We were somewhere lower than that, probably somewhere closer to where the HHS range is, somewhere around $9 million-$11 million. Really, our projection is based upon a more micro-level view, and it's kind of by county, by state, where people live, what our product pricing could be in those marketplaces. That's more of a driver than overall market size.
Okay. My second question-
I'm sorry, I want to just chime in on this, David. Dan was speaking to what are the reconciling items in growth, and he talked about decline in individual insured business. If you step back from this, if, for example, exchanges grew more slowly than anticipated, that might mean that individuals retain their existing coverage, and you get less downside. A focus on total membership position is how we actually think about this. We've got individual estimates, but it's the total commercial population that we're serving here.
Okay, thank you. Then the follow-up, I wanted to get a UnitedHealthcare view on Optum. The question is: As Optum creates more solutions that are payer agnostic, provider agnostic to go to a broader external market, how does that influence the customization and the fit of their solutions to UnitedHealthcare's specific needs? Thanks.
Maybe I'll jump in first, just because I spent so much time on our clinical model. First and foremost, we work hand in glove with Optum. When we move to redesign that clinical model and start to move people from call center based into the field, that's been a collective effort that has worked beautifully. That was a customer, an incredibly great relationship that where we were speaking what our needs were, they were speaking solutions, and together we designed that. I think when other tools, other things that make the system work better, we get a lift from that as well. If you take a physician's practice, even as large as we are, the odds of us actually dominating the totality of that practice, it's not there. You heard that in the description of our own practices within Optum.
When those practices are improved, we would expect to get a lift as well. Then we differentiate on the way that we relate to consumers, the way we relate to customers, the way we actually deliver from the health plan side. I think the more innovation that Optum can bring to the marketplace, there's plenty of opportunity for improvement, and we improve right along with that and outpace the rest of the market.
John, just maybe one comment.
Yeah, Steve.
I like the comment that Larry made earlier today where we talk through it, we think about it, and we're deliberate about how we stage things. I think that's alive and well. I also like your comment, John, which is we're here to help the health system be better. We care about that, and we think through that. I would say that one kind of unique advantage that we have about working together is, as UnitedHealthcare as a client and a major partner of Optum, we have this tremendous opportunity to scale and to incubate and to develop quickly and to test these ideas quickly. I think that's an advantage, and we try to think about it that way as well.
Yeah. I'll just say, Optum has great tools, capabilities, but what UnitedHealthcare can do is unique with those tools and capabilities than what some of our competitors can do. The depth and breadth of UnitedHealthcare, coupled with all the great tools, capabilities, insights that Optum can bring to us, it's more what we do with them than what our competitors can do with them.
All right. We're past time. We'll take one last question here, please, Janice. In the front, Josh.
Two-part question, we'll call it that. The first would be any change in expectations around the market dynamics of the off-exchange individual business as you go into 2015? Secondly, are you seeing any signs or thoughts of employer dumping? If that's going to occur, when would that really start to manifest in the market?
Yes, on the first part, the individual marketplace, I would say we prepared for, and actually it was a good thing we did for short-term sales. We believe more of that will happen in 2015. The traditional individual market was always somewhat a short-term sales product, but now with the annual enrollment period and people maybe not getting covered and not having an event that triggers their special enrollment, we've seen a pretty good business in short-term coverage in the individual world. We think that'll continue in 2015. We've put in some more product for that. Employer dumping, it's anybody's guess. We don't see it. We haven't seen an acceleration or an interest. That's not to say that as the exchanges become a more mature marketplace that that couldn't accelerate.
Quite frankly, that is one of the reasons in our long-term strategy for us to build fairly quickly into the exchanges as a hedge, if particularly in the small group environment, we get more employers putting their employees into the exchanges. All right. Thank you, guys. We will elevate back up to the UnitedHealth Group level, and I'm pleased to bring up David Wichmann, President and Chief Financial Officer.
Good morning. By now, our ambition for this company should be crystallizing. We want to grow as an enterprise as a whole more quickly, but still sustainably. To do so, we must continue to add value to the markets, customers, and people we serve. Our ability to add value rests on twin foundations, our competencies and our culture. I'll start with these and demonstrate why we believe they contribute to the realization of our growth ambitions. The foundational competencies underpinning this enterprise, which enable us to serve the changing needs of healthcare, are themselves unchanging. Technology that advances and enables care. healthcare data, collected and applied to provide unique insights and build actionable information. Clinical care expertise, accumulated and applied in practice now for more than 30 years. We continue to cultivate these competencies across our enterprise, measure our performance in each, and invest in their advancement.
The way in which we apply these competencies is equally vital. To reach our potential as people and as a company, we need an outside-in perspective. Over the past five years, we have been on a journey to deepen our culture of serving people, to better assess what we do and our performance, not on our terms, but as others experience it. This is not a simple thing to change, but it is necessary if we are to serve well and continue to grow in the future. Our core values are integrity, compassion, relationships, innovation, performance. They are both aspirational and practical and function as an interconnected set. Taken together, they create a commitment to excellence and healthcare quality, to helping people live healthier lives, to better navigate the healthcare system or perform better as part of that system.
These values help us fulfill our mission, helping people live healthier lives and making the healthcare system work better for everyone. That mission is a cross-enterprise statement. It links health services with health benefits and aligns 170,000 people behind a shared goal and culture. It also helps explain how we think about our brands. We first start with the experience people have with our company and how that matches up with their expectations of us. The most important brand work for our company lies in operational excellence, consistently executing and establishing consumer trust in us. We are also measuring and investing in our brands, a direction we started several years ago as we recognized individual consumer decision-making was becoming increasingly important to our growth. The growing importance of exchanges and Medicare and Medicaid market expansion is apparent for UnitedHealthcare.
The growth and development of Optum will rely in part on the nearly 16 million healthcare workers in this nation who form the backbone of the health system. The Optum brand must speak directly to them, as well as the 300 million-plus consumers in the United States who may someday visit an Optum clinic, enroll in benefits through Optum Market, receive health coaching through Optum, or have their prescription filled through an Optum mail-order pharmacy. We will invest more in our brands in 2015 than we did this past year. We will increase that investment in the coming years, building brand presence that tells our story and resonates with people. More than investments, slogans, and stories, a great brand represents a promise, and a promise requires satisfactory fulfillment, which brings us back to consistent execution.
We must further elevate our fundamental performance and the breadth and depth of our offerings, providing consumers and customers an experience they value and would recommend to others. These are the elements of the growth story for our enterprise. Mission linked to culture, linked to execution, linked to growth. With our three competencies, data technology and clinical care insight, they form the foundation of our business vision and strategy. They support our service to people as an enterprise through two market-facing platforms, benefits at UnitedHealthcare and services at Optum, two very investable external-facing brands. We draw on this strategy to serve virtually all key markets and all participants in healthcare to serve the health system in a myriad of ways. Let's begin with one of those ways, how we serve care providers.
Physicians and other care providers hold the key to successfully making positive change in how healthcare is delivered and experienced. As you heard earlier, we directly employ or deeply affiliate with 16,000 doctors through Optum Care Delivery. We help health systems and their physician groups operate and improve their practices, covering everything from patient scheduling through cash collection. Link is a great illustration. A multi-payer digital platform for care providers we launched this past year. Link is used by more than 350,000 care providers today, and we expect it to be serving more than 600,000 by this time next year. This digital platform is a clear example of positive disruption through technology. It is a secure channel for conducting a wide array of transactions among physicians and their practices, and eventually consumers, and for executing the business of healthcare services.
It greatly simplifies workflow and enables real-time transactions across the system. Link's architecture is an open environment. Like all of Optum, it is multi-payer by design and now readily accessible to the whole developer community. This means the pace of development is about to accelerate, along with the level of value this platform will bring to care providers, similar to the way you have seen with other open environments. If you believe in a modern connected system, Link is the future. UnitedHealthcare also serves care providers in a number of critical ways. UnitedHealthcare is a prime channel for patient volume for more than 850,000 physicians and other care providers through our network. That patient flow is supported by simplified workflow processes and administrative and clinical tools that help physician offices perform more efficiently and effectively.
Physicians want transparent guidelines and documentation processes, as well as comprehensive, relevant information about their patients. They want to know what their reimbursement will be and how much their patients will need to pay. We provide all of these services as part of the modern healthcare infrastructure. We align further with many of them with performance-based contracting. This all relates to the levels of medical costs and affordability for society. Care providers and healthcare consumers increasingly share aligned financial incentives. Better processes to manage healthcare utilization and costs are in place today, supported by relevant information shared real time. The upshot is simple. More patients are increasingly getting the right care from the right provider at the right location and at the right time. We serve the sponsors of health benefits, employers, and governments.
Optum partners with scores of government agencies providing services ranging from data analytics for primary care in the U.K., to warehousing health data for one out of every three U.S. Medicaid recipients, to the work Optum has done in support of various government health insurance exchanges. UnitedHealthcare serves the healthcare needs of millions of individuals in government-sponsored programs. They include members of the military, veterans, and their families through TRICARE, the economically disadvantaged through our high-growth Medicaid program, and seniors and other beneficiaries who are part of the demographic boom looking to the government to fulfill benefit commitments. Collectively, Optum and UnitedHealthcare serve more than 150 government agencies and more than 300,000 employers, including over half of the Fortune 500, with broad access to care, distinguished service, targeted informed care and condition management, pharmacy services that are integrated or freestanding, custom portal and consumer engagement services, and more.
We serve consumers. Optum has launched Optum Market, a private multi-carrier insurance exchange to assist consumers as they select benefits that best fit their individual needs and budget. While private exchanges are not new, our approach is. With consumer enrollment and engagement in wellness and clinical programs established at the time of the benefit selection process. Our UnitedHealthcare Advocate & Rally service redefines the benefit and clinical care experience for consumers. We are active listeners who engage with consumers to enable better health and solve problems rather than just being efficient administrative processors. The services we provide are simple and direct, engaging, and easy to access. Sounds easy. Yet it required some profound engineering and advanced use of our data and technology to enable comprehensive, real-time, consumer-focused, intelligent interactions around total consumer needs, whether they be administrative, clinical, or wellness-oriented.
In the digital channel, we have launched Rally, which engages people across the wide array of benefits administration, wellness, and insurance exchange needs. We expect and are excited to provide this social media gamification-style platform through multiple sponsors to 30 million people by the end of 2015. Sponsors will include health plans and other risk-bearing entities, exchanges, large employers, condition management, and health media companies, a true multi-sponsor format that will eventually include self-pay and global versions. Consumer uptake is literally off the healthcare charts. Rally users start to look more like LinkedIn and Twitter users. We have just begun to scratch the surface of its full potential. As with Link, if you believe that better-informed consumers making better decisions about their health and healthcare will drive better population health and cost containment in the future, then Rally is the future.
The value of Link and Rally is optimized when they work together. They form a complete end-to-end digital healthcare experience, serving care providers with transaction administration, practice intelligence and healthcare services, and consumers with benefits administration, wellness, and exchange services. UnitedHealthcare is poised to further elevate its already differentiated service behind these fresh, strong, modern service models. When you see these assets and how the markets are changing, you understand why brand now becomes part of our story. Mission, culture, execution, brand. Together, these lead to growth. Let's take a look at how this hard work translates to financial performance. Your book has all the traditional financial slides we have provided in past conferences. In the interest of time, I am only going to cover those which are most meaningful to addressing our 2014 results, our 2015 outlook, and our approach to capital allocation.
For example, there are several slides in your book on 2014's results. I'm just going to speak to a few of them today. 2014 will be marked as a year with substantial impacts from reform, with earnings per share headwinds of just over $1. Despite this, our business grew. We had very strong operating cash flows. We raised our dividend by 34%, and we repurchased shares at very strong levels. We are on track to post an increase in earnings per share year-over-year, despite absorbing the new fees, taxes, and rate cuts under the ACA, offset by what we billed for these and the contributions from the Medicaid expansion. This was due to strong core business performance, which absent these matters, would have contributed to earnings per share growth of about 20% in 2014. This is one of our stronger years.
As we look at the past half-decade, the ACA implementation period, we project our revenues will have compounded at 8%, comfortably in our long-term target range of 6%-9% per year. Earnings per share will have compounded at 12% per year, just under our 13%-16% target. This despite undergoing significant pressure from the implementation of the ACA. We expect to generate $35 billion in operating cash flows over the five-year period and return $20 billion to shareholders between our rising dividend and steady share repurchase activity. My colleagues have covered the financial details of their businesses with you already. I'm going to move on to our 2015 outlook. This slide shows our improving momentum as ACA effects begin to moderate. Recall that we're forecasting a 6% top-line increase in 2014.
This accelerates to 8% growth in 2015, driven by strengthening growth at UnitedHealthcare, particularly our services to Medicare and Medicaid beneficiaries, serving consumers through exchanges, and services to the growing middle class in Brazil through Amil. Optum will grow its services to hospitals, care providers, health plans, employers, and governments globally as well. There are no future acquisitions in the 8% growth target. The $141 billion in revenue is based on our company as it stands today. We expect this top-line strength to carry through to earnings. We are forecasting accelerating earnings per share growth to 9% at the midpoint of the $6-$6.25 per share target. This despite $0.40-$0.50 per share of further net ACA impact in 2015. Finally, we expect to sustain strong cash flows even in the face of payment of ACA reinsurers fee for the first time in the first quarter of 2015.
We expect full-year cash flows to be in the range of 1.4 times net income, again above our long-term target of 1.3 times net income. Let's look a little more deeply at the impact of reform on earnings. As I said today, we are forecasting about $0.40-$0.50 per share in ACA impact year-over-year in 2015. The increase in the reinsurance and insurer fee impact is dramatically lower in 2015. We foresee about $0.15 per share incremental pressure above the nearly $0.80 experienced in 2014. The remaining headwind is due to scheduled Medicare Advantage rate cuts under the law at a level similar to what we experienced in 2014.
To give you a sense of what lies underneath our reported numbers, we intend to drive as much as 21% earnings per share growth from our core operations next year, offsetting the reform pressures and producing an improved bottom line. By 2016, we expect the incremental ACA pressures to be down to $0.15 per share, putting us in a much better position to further accelerate our growth. Optum continues to have a very strong growth profile as expected, as it increases its contribution to about 35% of UnitedHealth Group's operating earnings and even more on an after-tax basis. UnitedHealthcare's after-tax operating earnings are flat as we fully offset the ACA pressures I just described. Bottom line, we are accelerating net earnings per share.
Breaking our performance down by platform, UnitedHealthcare will have driven core earnings growth of approximately 10% each of the last two years, you can start to see that the ACA impacts are beginning to subside. UnitedHealthcare took you through their growth objectives for 2015, I'm going to move to a five-year view. It's characterized by the diversity and breadth of our business, the two most striking data points are the absolute totals, growth of over 13 million people, and the absolute market shares of UnitedHealthcare. They are all solid positions. Even as large as it is, UnitedHealthcare still has enormous organic growth potential given the size of the end markets that it serves. Optum has posted and is expected to post striking revenue and earnings growth performance over the past three years into 2015. Optum took you through these numbers already today.
The key takeaways are that revenue, earnings, and margins are all growing overall and by reporting segment, reflecting the demands of our customers and the value they place on the array of solutions that Optum delivers. The over 13 million new people at UnitedHealthcare I described earlier also help Optum grow. I should add, many became UnitedHealthcare customers in part because of what Optum does for UnitedHealthcare. The rest of the health system is learning what Optum can do for it too, the result is strong growth on a number of external customer metrics. I've chosen three key metrics to illustrate Optum's expected performance since 2013. Optum Health's growth is being fueled in part by growth in our local care delivery business. While Optum Insight continues to deliver higher sales for more complex and larger relationships like those Optum360 pursues.
While OptumRx has grown 33% in external members served. These three give you a sense of the power of diversification and external growth underway at Optum. Dan has already covered medical cost trends and our medical care ratio is projected to be pretty steady next year, I'm going to move on to operating costs. Our business mix continues to diversify. When we grow at Optum, Amil, or our fee-based business, we naturally dilute our operating cost ratio. Offsetting this trend are the benefits of modernization and productivity projects and our increasing scale. The 30 to 40 basis points of benefit you see here represent approximately $500 million in operating cost reduction. This improving efficiency is critical to advancing affordable products for our consumers, as well as advancing our earnings in each year. We expect 2015 to be another strong cash flow year.
The key is the 1.4 times net income metric I described earlier. Our midpoint cash flow number of $8.2 billion for 2015 absorbs a $600 million year-over-year swing due to the timing of the payment of reinsurance fees under the ACA. The reinsurance fees collected in 2014 are mostly due in the first quarter of 2015, creating a one-time headwind on cash flow as we move into a cycle of regular annual payments for this item. For 2015, we see very solid revenue, earnings, and cash flow growth across the board. Margins are strong despite the ongoing impact of the ACA. With the growth and cost management agenda I outlined earlier, we expect our earnings will be in the range of $6-$6.25 per share. Our financial position remains strong and flexible, with strong coverage ratios, favorable agency ratings, and a conservative balance sheet.
We have long believed in a balanced use of capital. Capital is used for growth to extend into logical market adjacencies, to strengthen and solidify core market positions, to acquire new capabilities that can be leveraged across large customer bases. Shareholders benefit from that growth. Shareholders also benefit from the direct and indirect return of cash through dividend and share repurchase programs. We are conscious of the value of both. The data shows that over a very long time frame, the split has been roughly half growth investment, half return to owners, although individual years vary. The benefits of the growth investment side are clear. A $141 billion enterprise built to serve across all key U.S. benefits and services markets, and increasingly on an international stage.
An enterprise that drives strong cash returns and an upper teens returns on equity and is able to return meaningful levels of cash to our shareholders. We continue to hold an interest in M&A across a wide spectrum of markets where we believe we can create value for customers and shareholders and further our mission. Our capital management programs have been effective over time, with share repurchase yields exceeding the S&P 500 index performance, a fast rise to our dividend as we continue to modernize it in the face of reform, and market competitive total payout ratio. The 50/50 balance between reinvesting in the business and returning capital to shareholders in each half of the last decade isn't a coincidence. This is very deliberate. Likewise, our growth capital allocation has shifted from a bias towards benefits to a bias towards international and services. Again, this is not random.
It's reflecting a deliberate strategy to pursue growth in services and beyond our shores. We continue to have interest in benefits businesses but have seen greater value in pursuing growth there more on organic means. Last year, I told you we've come a long way and described the growth and development of the company over the past 16 years. Today, I can say we've come even further. We are now Fortune number 14 and continue to post metrics that are comparable to, if not stronger than, the Dow and Fortune 50 neighborhood we are privileged to reside in. Even more important, we are positioned to make a difference in the healthcare of the people we are honored to serve and to make the healthcare system work better for everyone. That will lead to further and faster growth in the years ahead.
There is so much more to be done before our mission is fulfilled. I will close by taking you back to the beginning. Mission, culture, execution, brand, growth. That is the formula we are all committed to in 2015, 2016, 2017, 2018, and beyond. Thank you for your interest and attention this morning. It's my pleasure to invite my colleagues back to the stage. As we assemble up here, I'm going to take a minute. I get to be Mr. On Stage. We couldn't put this together without my colleague, Brett Manderfeld, who many of you know. I couldn't ask for a better partner than Brett. Thank you. Joining Steve, Larry, and Dave is Dirk McMahon, who many of you know and has done many things for our company over the last 10 years, now Chief Operating Officer, UnitedHealth Group. Questions. Right here.
Thank you.
Great. Thanks. I was wondering if you could help us understand a long-term growth that you guys have outlined. You guys outlined 13%-16% long-term EPS growth. Looks like you're buying back about 4% of your stock. It looks like 9%-12% long-term earnings growth on 6%-9%, I think, long-term revenue growth. Can you help maybe break down where that earnings growth trajectory is on UnitedHealthcare versus Optum margins and if I'm right on that 4% capital number?
Steve? I'll go ahead and take it. You're pretty close. We'd actually expect about five percentage points or so to come from the deployment of capital. Share repurchases as well as M&A-based activities as well, to the extent that they create accretion in a go-forward period. Generally speaking, it's largely related to capital deployment in that case. The vast majority, the rest is as you described, it's all about organic growth in our business, led first and foremost by Optum, which has both double-digit top line and bottom line growth, which you've seen, I think, more prominently over the course of the last couple few years. As Larry pointed out today, not only in 2015 but as we see that growth in the future, we would expect continued growth in those businesses with a bias more towards the Optum Insight and Optum Health-based businesses as well.
The other thing this organization has is a significant opportunity to grow. If you think about all the channels that are there, while the margins may be viewed as less, the growth opportunity that resides inside Medicaid, which you saw we've brought on about 1 million members, and those come not only from expansion but also our direct competitiveness in the marketplace. You go into Medicare, which we have a macro effect going on there, whereby people are aging into Medicare, and obviously, they are selecting the private sector plans at significant levels as well. Medicare is obviously a big growth arm for us as well. Then we have the whole opportunity that sits with the exchanges, particularly the public exchanges, which we're just beginning to enter into today. We see great growth from those as well.
Beyond that, think about our opportunities internationally as well, which I think are oftentimes overlooked. Optum, I think, laid out a very nice international growth agenda today, focused on what are 4 prominent markets, also referenced the ability to expand into additional markets as well. Also the success that we're having with Amil. Despite a modest setback with that organization, you can see that we really nicely advanced our revenue base in that business, and we would expect it to return to more normal levels of profitability by the end of 2015 then continue to grow as the middle market in Brazil grows as well. I see that as a great opportunity for growth and expansion in our business as well.
Just to clarify, you said there's no deals in the guidance for 2015 in your uses of capital, you have $1.4, $1.9 of additional growth capital. Does that mean that's upside if you actually deploy that number? How do I think about that?
Yeah, you can think about it that way. With a bias towards investing in the services-oriented businesses and internationally. Those have a tendency to have higher growth rates, but we are still getting nice accretion coming off of those transactions as we close them.
Thank you. I think I've been remiss and have missed this far wing of the room for a while. Are there any questions back on this side? Fran, are you bringing that to somebody or just-
I was just.
All right. How about in the center section right here? Thank you, Janice.
Sure. [Hema Ingole], Bank of America, asking on behalf of bondholders. If you could please outline your debt-to-capital ratio target commitment to current credit ratings, and then will you be willing to slide to BBB levels for the right transformation and acquisition, if you want to take one?
The question is, right now, if I take S&P, we're an A-plus rated company. We just recently got an upgrade, which I think is distinguished relative to our peers in that market. We also have a largely stable rating across our business as well. We've been operating pretty religiously at a 35% debt to total cap to date. As you know, we took that up a little bit when we did the acquisition of Amil, and we committed to bringing it back into that line when we did that. We have substantial excess capacity in our capital structure. At an A-plus, we are 3 levels above investment grade. You all recognize what the cost of each potential downgrade is relatively modest. We believe we have a lot of financial flexibility.
All that said, we also believe in retaining a lot of flexibility in our capital structure so that to the extent that we did want to pursue M&A at a more advanced level, if you will, we could certainly do so. We do reserve a lot of capacity across our business. All that said, we very much respect and appreciate the ratings that we have, and we'll remain conscious of those and relatively conservative with respect to how we manage our balance sheet position across our business.
All right, Janice, in the center here, please.
Yeah, the question's around consolidation, what's going on already in the hospital landscape and potential future consolidation in health insurance and the benefits landscape. You as a leadership team, how do you think about defending your position as a market leader with your competitors, and then from a unit cost perspective with your supply chain, as far as any moves you might do or influence policy in that regard?
Maybe I'll start, then maybe you can talk about the hospital landscape, Larry. First of all, I don't necessarily think that we consider M&A or the use of capital as a way of defending our positions. We pursue capabilities and presence. Those are the two things we pursue when we acquire. We either have a unique capability that we're seeking to acquire that we can, it's almost like open-sourced innovation that we can acquire and then advance our business as a result of that. Or we see local geographic market positions like you saw UnitedHealthcare do over the last 15 years, as it took a national position from a kind of what I would characterize as a more super-regional type position. I don't think utilizing capital to defend number 1 market positions in Medicare, Medicaid, Commercial is necessary.
We're more likely to pursue opportunities that, like I said, give us further capability and/or geographic presence across our benefits-based businesses. You want to talk about hospitals?
When we look at hospitals, when we look at this from an enterprise standpoint, we look at them in 3 parts. We look at the front end being what we'll call physician management, ACO, accountable care. We look at the back end being the administration, what goes on with revenue cycle, and obviously there's revenue cycle for physicians in the front end. There's this middle ground in the way we look at it, the bricks and mortar, heads in the bed, and so forth. That's the area we don't play in. With a lot of the consolidation going on and so forth with the hospital systems, we are working with them. They're using our tools. They're using the way that we are approaching the business.
We bought this organization, MedSynergies, that if you get a chance, there's a seminar this afternoon with Bill Miller, J.R. Thomas, and they will talk about this in terms of what that front-end physician management service is going to look like. What we've been doing with Dignity Health and about to do with North Shore really fits around the simplification and illustration, as well as revenue cycle on the back end.
[Presentation]
In the commercial area, $50 billion in Medicare, $27 billion in Medicaid. So I think that we are not suffering from scale. Know that this is a market-by-market, local market proposition. So I think the marketplace has been consolidated. It'll continue to consolidate. We've actually probably done pretty well in that overall scheme of things. From the benefit side, our own participation in consolidating in the marketplace, I think, has been favorable for us for the long term, and I see the potential for that to continue to be favorable for us. So I think generally that those themes are relatively positive for an enterprise as deployed as we are today.
I also take a look at the challenges that are being put in front of the healthcare marketplace and the need for the capabilities and the ability to deliver on the social promises that are being formed today and the kind of capacities you're going to need as an enterprise to be able to deliver on that, to do that consistently, to return on capital on that. And I see consolidation as being a continuing trend and something that we'll participate in across the landscape of our businesses. Let's go to the center section. There's a hand in the back here. Thank you, Shelley.
Thanks. I was hoping you could talk a little bit more about the strategy around acquiring physician practices. Is the thought now that the platform's been established, and you use that to help other physician practices manage more efficiently? Or is the thought that you're going to continue to buy up physician practices, one? And then second, as we think about the evolution of healthcare, I think, Larry, you mentioned you sort of do it all except for heads in the beds. Any updated thoughts on vertical integration and how you see that potentially evolving over time? Thanks.
Sure. I think we talked about this a little bit last night, we break the U.S. down into about 75 different markets. It's the Medicare markets, about 300-plus, but we really look at 75 that we believe that 80% of the population is where we would want to be. About a third of those fall in what we'll call physician-dominated, about a third fall in hospital-dominated, and about a third fall in they're not really one or the other. I think we see the physician or the medical group as a prime area for us in those markets, along with organizations that we're going to be working with from a hospital system standpoint that complement that. I'll use an example here.
NorthShore with Michael is a good example of where we have a physician group that we just bought in the metro area here that's going to work closely with his hospital system. We'll work closely on the back side of that with the revenue cycle side, the administration side, to bring those closer together. We believe that in the markets that we're going to be in as we continue to grow, we want to have those strategic relationships to tie everything together, whether it's on the delivery side or it's on the hospital side. We say that we'll never be in the hospital business, the heads in the beds. We should probably never say never, but that is not our focus. I would say that we're not good at that yet.
Amil is good at that in Brazil, but we've got a ways to go before we'll understand how to manage that. We're staying focused. Another comment I would just make is, so you have the hospital systems that have physicians in the hospital system, and then you have the medical groups like we have that sit on the outside. We believe that MedSynergies will be able to tie all that together as the hospital systems with the physicians inside and our medical groups will get closer and closer together on the delivery side. We want to be in that space, working with the hospital systems.
I think that was the commercial for two seminars, both revenue management services and care delivery. I think we've got time for one more question. I saw a number of hands here. Let's go to Peter. In front of you, Shelley. Thank you.
This is really a question for David, and maybe Dirk McMahon as well. Can you talk about what expected changes you would have.
In how you'd run the UnitedHealthcare business, the benefits business, relative to the way Gail was running it in the past. In particular, as part of that, can you address if there's any thought, any planned changes in how commercial groups are going to be priced?
Definitely no change in the way in which we price. Just to address that, it's a forward view of a trend and pricing to that forward view. I think as you saw, hopefully here today, UnitedHealthcare operates a very strong business. It has extremely strong market positions. If we could have had the management team up here beyond the four that were on the stage, I think you would find that that management team is deep and very strong at what they do. My full expectation is the three business leaders and Dan as the Chief Operating Officer will carry that business forward and carry the agenda forward that was forged over a number of years, including these summer months as Gail and others were involved in the development of our plans and our forward view.
I think you're seeing that forward view having much more of an upbeat view about growth. I think that that's timing, meaning that we're at a point in time now in the evolution of the healthcare market that there's a strong exchange growth opportunity, there's a strong Medicare growth opportunity, there's a strong Medicaid growth opportunity. They're going to pursue that growth, we're going to do so in a very disciplined way, as I outlined in my remarks. I think that's essential. The things that I think we're going to pursue or the things that you'll probably see from me really pushing on the team is really around the way in which we advance technology in the organization, the speed at which we change, the agility that that organization has, and its ability to adapt and respond to market pressures much more quickly.
Those are the kinds of things, operating principles that you'll see. Of course, we have Dirk as our overseeing all of our enterprise performance, our enterprise operations and technologies. The reason we picked Dirk is because Dirk is by far, I think, the best operator in this industry. Now he'll navigate across both Optum and UnitedHealthcare, driving a consistent expectation with respect to how we interface with consumers, how we take care of care providers, how we serve our customers and governments, so on and so forth.
Yeah, no, I would just add on to that, a couple of things. What you'll see is, and you've heard today about the consumer. The consumers across, as John Prince talked about, Advocate4Me across both Optum and UnitedHealthcare, a new consumer model that we want to optimize. If you think about the clinical model, much more local in nature, very similar to what Austin talked about for Medicaid, making sure again that Optum and UnitedHealthcare participate and ultimately optimize. If you think about also the value-based payment from the network side across the board, making sure that we're optimizing in that regard as well. Then, one of the key things, we have to continue to rationalize our operating platforms.
One platform for commercial, one platform for Medicaid, one platform for Medicare, making sure all those costs get taken out and ultimately our development speed and development efficiency gets better. I think those are things which we'll collectively be focused on.
Then just last thing I'd say, I've had experience working at UnitedHealthcare, UnitedHealth Group, and at Optum. In fact, I've been a part of, I think, the first foundational company at Optum all the way to where it is today. The one thing I have is a deep and profound respect for what Optum can do for UnitedHealthcare. I expect to fully take advantage of that as part of the relationship. At the same time, I'm going to call on Optum a lot for help. I'm also going to provide opportunity for growth as well.
What you're seeing in Brazil with Amil, Optum is a big part of how we're transforming Amil, but frankly transforming the way in which healthcare is delivered and managed in that country, both starting with analytics all the way through to the development and deployment of care delivery practices. That's probably another thing that you'll see from me is a deep and profound respect for both companies and how they can leverage each other to advance their collective growth.
I think that's one thing that we both bring to the table. Both Dave and I have worked, as he said, in both UnitedHealthcare and Optum, and we know the strengths of both business platforms. Those strengths leveraged appropriately, and it's a great team. Ultimately, I think really the teaming nature of Optum and United working together, it's tough to beat. Thanks.
Sure. Thank you, Pete.
Thank you. A variety of things to cover off here in our last couple of minutes. As I think about the day, I don't know what you heard. What I heard was a leadership team that feels privileged to serve the people that we serve, and it is absolutely focused on taking this enterprise to its fullest potential. There's tremendous opportunity for us, and we want to see that that is fully realized. This concludes the structured formal presentation portion of the day. I hope you can stay because we have more. We will have lunch for about an hour back through the innovation forum. On the far side, it will be set, and we will have enough time to have lunch before we start seminars. In the public service announcements department, if anybody is missing a clear set of reading glasses, I have them. Cover everything. It's full service.
After lunch, we have seminars located on the third floor. We are on the second floor. We go up one floor. That's the math. There's two ways to do it, escalator or elevator. I say that with a smile because it's a different location. The hotel is remodeling, so we're not in the same rooms that we've used the last couple of years. You go up to the third floor, and there will be signs directing you to these seminars. They start at 1:15 P.M., and they run every 45 minutes. They run three times. Leadership teams are going to present them back to back. You will therefore have opportunity to see up to three of the six seminars, and they cover off a whole variety of popular topics.
They're structured in a way where we'll have about 20 minutes worth of Q&A available at each one of those sessions. Thank you for investing your time with us today. We appreciate your interest, and I look forward to seeing you all at lunch.