Welcome to UnitedHealth Group's Annual Investor Conference. I'd like to offer what I would believe to be the largest Safe Harbor statement I've ever seen. We're going to take a moment to remind you that today's presentations will include forward looking statements that are subject to risks and uncertainties. Actual results might differ substantially. These risks and uncertainties can be found in the cautionary statements in our SEC filings and are summarized on our investor conference materials posted on our website.
Our posted materials also contain a reconciliation of the non GAAP financial measures referred to in our remarks to the most comparable GAAP measures. If you followed us, you've seen an interesting development over time. Our markets have grown and matured and our company has developed and evolved and as that process has happened, windows open, doors swing open, runways extend. And so here we are today, we have a terrific set of growth opportunities in front of us. You're going to hear a lot about that this morning.
You're also going to get a sense of how we address some of those, some qualitative bullets and some stories, and those are designed to give you a sense of how and why our growth might be sustainable. I want to give you a sense of your day here. We are going to go with our monthly leadership meeting pace. That means that there are no breaks between now and 11:40. There is coffee and water across the hall in the Empire room, you should feel absolutely free at any time to get up and step out for anything, if you need to take care of a phone call or whatever.
We're going to keep rolling. We have 3 questions segments across the morning and at 11:40, we're going to take a break before lunch and I'll talk more about that later. Here to get us started is Office of the CEO and leader of our Human Capital Function at UnitedHealth Group, Alan Wilson.
Thanks, John. Good morning, everyone. So at past sessions and actually for most of this session, you hear an awful lot about what we do and about how we do it and our results. But what we don't talk about too often is who we are, How we do actually what we do all over the globe. So we thought that who we were mattered enough to talk about it first thing this morning.
And it matters an awful lot to our regulators and our customers. It matters to our business partners and certainly to the consumers that we serve. We thought you might be interested as well. So I'd like to start off by introducing you to Greg. Greg is a nurse practitioner.
He is also a military veteran and a competitive fencer. And Greg is one of our clinicians, our largest group of employees, 56,000 of them, doctors and nurses, pharmacists and care delivery specialists, who take care of people all over the world, in this country, in Brazil, in Portugal and in the Philippines. They take care of folks in their homes, in hospitals, in surgery care centers and urgent care centers. This is Joanna. Joanna is a telecommuter from Texas.
And I like to think of Joanna as a typical UnitedHealth Group employee. She is one of our 48,000 customer service representatives who actually works from home. Now Joanna may be a little bit atypical and that she is also a podcaster and a stand up comedienne. But when I think about these employees, I mean, they really are UnitedHealth Group's voice to the customer. And in some respects, they hold our reputation in their hands every day.
I'd like to introduce you to Kelsey and Cat. Kelsey and Cat are 2 of the 1600 people that we hired off some of the most competitive college campuses in the country last year. And we hired them into our technology development program over in Optum. Kelsey and Kat and the 1600 folks that we hired in, I like to think of them as our future, our future innovators and creators and our future leaders. And Kelsey and Cat already are working on a pretty cool project.
They're working with voice enabled technology to create a personal health assistant to help folks with mobility challenges. Kelsey and Cat are 2 of 32,000 IT professionals that we have working for us all over the world, 8,700 of whom are actually in the Philippines and India, like Herbin in Manila and Rohit in Hyderabad. These folks are working with data from over 200 1,000,000 individuals. And they're working with this data to create breakthrough technology and consumer solutions to help improve the healthcare system. These are 3 largest employee segments, but by no means do they really define us.
We're so much broader than that. There's Ricardo, a helicopter rescue physician in Brazil Paul, a cybersecurity expert from Letterkenny Ireland. There's Jamie, 1 of 570 who actually work in people's homes providing specialty infusion services. And then finally, there's Sarah from Nebraska, one of our 2,700 Care Coordinator Community Based Specialists. We speak 61 different languages.
We're 260,000 employees strong, working in 1900 different roles and 300 offices in 13 countries. But again, we're more than that. We're moms and we're dads. We're employees taking care of our elderly parents. We're military veterans.
We're knitters. We're fishermen. We're ice fishermen. And I know we have at least one belly dance instructor. We even have an employee who sings the national anthem at Minor League Baseball games.
So in other words, we're a diverse passionate group with as many interests and ideas and opinions as there are people. But we're united in one thing and that's our commitment. Our commitment to delivering our mission of helping people live healthier lives and helping the healthcare system work better for everyone, one individual and one interaction at a time. So I hope I've given you a better sense of who we are. And now I'd like to introduce Dave Wichman, our CEO, to give you a better sense of where we're headed.
Thank you, Ellen. Good morning. Welcome. I appreciate you all being here today, investing your time and to understand our business, to understand our plans and how we see the future. Before we get started today, I'd like to acknowledge someone who's in the room today that will not be with us on stage for the first time in many years, Steve Hemsley.
Steve to us is an authentic, forward looking, determined, courageous and restless leader who has humbly served this enterprise and healthcare for the past 20 years. I know I speak for all of us at UnitedHealth Group. When I express our appreciation for serving for him as he's led us and learning from him over these past 20 years. And we look forward to continuing to work with Steve as our Executive Chairman over the coming years. So Steve, thank you.
It's an honor for me to lead this organization of 260,000 people that Ellen described. People who work every day to serve the healthcare needs of 140,000,000 people in 130 countries. Our people recognize the duty we have to serve and the impact our decisions have on this socially sensitive area of healthcare. Like most of my colleagues, I awake every day with gratitude for the resources of this company and with the ambition to achieve the full performance potential of UnitedHealth Group, a place we have yet to fully imagine, let alone achieve. Some like to define that potential numerically, and there is certainly value in that.
But the key to success for UnitedHealth Group has never been found in a spreadsheet. Sure, we have models of what the business could look like in 2025, a very clear range of possibilities, and they are all very attractive from an investor point of view. But our business is empowered by models. It's powered by the ambitions of our people to achieve our social mission and the opportunity offered by the growing and challenging global healthcare markets. Our people are driven to help others with their healthcare needs and in helping to make the health system work better for everyone.
They're frankly less interested in the big numbers like the $225,000,000,000 in 2018 revenues we will discuss with you later this morning. Instead, they're more interested in the smaller ones like the number 1. They're becoming obsessed with serving others, 1 person at a time, grounded in 1 culture and guided by 1 mission. It's becoming deeply ingrained in our culture. Our people see 1 in the way we innovate outside in through the business in our disruptive R and D and new platform development efforts and in how we use M and A to identify and open source new models, our next generation capabilities and market presence.
They see 1 in our plans to elevate our quality to a near zero defect standard and to advance our MPS to 70 in just 7 years to better serve people, clients and care providers. They see 1 in the 5 key areas of our future growth of our business in healthcare delivery, pharmacy care services, consumer centric benefits, digital healthcare and global. Personally, I think it's good for you as our investors and hopefully as our customers that our people respond to this whole idea of 1. It's what will make our business even more attractive and in turn grow. And it's what keeps this enterprise humbly focused on what's most important in this business, serving others.
And they appreciate how your committed investments enables them to serve 1 person, 1 health system at a time in ways others cannot. In turn, we stand firmly committed to delivering to you a long term earnings growth rate of 13% to 16% and distinctive shareholder returns as we have over the last 18 years. It's a relationship with you we deeply respect and hold in the highest regard and remain committed to. People have asked me what's going to be different now that you're the CEO. My short response is that very little will change and everything will change.
It is healthcare after all. But the deeper answer lies in the behaviors we have cultivated in this enterprise over the past 40 or more years, including the last 10 under Steve Hemsley's direct leadership. This is a restless company, dissatisfied with the status quo in healthcare. We know healthcare is constantly evolving and that it needs to change. And we look forward to working with others, developing deep relationships and applying our significant knowledge and capabilities to shape it for the better.
So the answer to that question really is both. Much will be the same as it was before, meaning you can expect us to improve healthcare and pursue restless change at an ever increasing pace. Perhaps you can think of the next title for the next chapter of UnitedHealth Group as the continuity of restless change. To do this over the past 20 years, we have relied on our core competencies. These competencies are what define us as a healthcare company, working across the breadth of the health system, organizing care, delivering care and paying for care and serving people.
Our first core competency, the application of clinical insights and resources to improve the performance of the health system continues to mature across our business from leading advances in robotic surgery in South America to building higher performing health systems in the U. S. To better meet the needs of the local communities we serve. In our second and third competencies, information and technology, we are uniquely positioned to improve the health of individuals and the delivery of care on two fronts, how we apply to improve how we apply each to improve our operating and clinical performance and how we design and develop products and services to grow our business in even more diverse ways. To help demonstrate this for you, I've asked a couple of our more progressive technologists, operators and clinical leaders to help explain where we're headed to a more modern information and technology enabled health system.
We'll start with information and give you a sense of how we are meaningfully advancing its use. Joining me to demonstrate how we use data are John Centelli, UnitedHealth Group's Chief Information Officer and Phil McCoy, Chief Information Officer, UnitedHealthcare.
Thank you, Dave. Today 30% of the entire world's stored data is generated by the healthcare industry. It's coming from structured sources like claims and electronic health records, unstructured sources such as documents and images and quickly moving into the Internet of Things with wearables and devices. UnitedHealth Group has more data from more sources at faster speeds becoming more real time And that's big data. And it can make the healthcare system smarter.
At UnitedHealth Group, we're leveraging big data for insights to help people make better healthcare decisions across all stakeholders, patients, providers and sponsors. By combining our extraordinary data sources with machine learning and artificial intelligence, we create a comprehensive view of quality, cost, access and outcomes. Big data is the fuel that artificial intelligence and machine learning feed on to make analytics more predictive and more personalized. Without big data, AI is just another hammer looking for a nail. This combination predicts disease before someone is afflicted.
It understands what facilities or physicians produce the best outcomes for a specific condition and engages patients so they receive the best care in a timely manner. Today, using big data and artificial intelligence, we're reengineering care and administrative processes to be more proactive and preventative. On the care side, we're investing deeply in AI to create a holistic view of the consumer and to connect their care across doctors and settings. And we're using natural language processing to answer consumer calls faster and more accurately. And we identify the next best action to address gaps in care and guide patients to programs that can help them lose weight and manage chronic conditions.
The impact can be enormous. Let's take diabetes as an example. According to the CDC, over 23,000,000 people in the U. S. Are diagnosed with diabetes and another 7,000,000 are undiagnosed, that's nearly 10% of the U.
S. Population. A person with diabetes can cost more than 2 times the care for than the average patient. With our capabilities, we can identify clinical markers to predict a pre diabetic and then intervene to help them avoid complications and control costs. The earlier the intervention, the better and the greater the impact.
In fact, we now have an entire business dedicated to reducing the onset of diabetes and other metabolic disorders. It's called Real Appeal. So imagine being able to do all that for all major diseases, predicting an individual patient who will likely develop a disease and then preventing that disease before it happens. On the administrative side, each year more than $200,000,000,000 is wasted due to administrative inefficiencies, care documentation and excessive paperwork costs. We deploy solutions like Optum 360 to take waste out of the system and get billing right the first time.
We use machine learning and natural language processing to analyze unstructured data, eliminate repetitive manual tasks while improving quality. Through the use of intelligent robotics, we can automate manual processes such as clinical authorizations, guiding patients to the right care faster while reducing administrative overhead. That's what big data combined with artificial intelligence makes possible. And we're investing heavily in both to create a better experience, take out more cost, increase NPS and greater loyalty. My colleague, Phil McCoy is here to tell you more.
Thanks, John. To get the most value out of big data, you have to think small. It's the small data, information specific to one individual where we apply advanced analytics and artificial intelligence to make a meaningful impact on experience, quality and cost. We constantly analyze fresh data from the more than 140,000,000 people we serve in order to personalize every interaction for the one consumer Dave referred to in his opening. I'll highlight three examples.
The first is our ability to close critical gaps in care for seniors. We quickly identify patients who would benefit from specific interventions and make sure they receive the personal care they need. For a senior with diabetes, this personalization means ensuring their glucose level is checked remotely and regularly, and their eyes and feet are examined frequently to stay healthy. When we see something, we say something to both the patient and their physician. This kind of communication prevents a lot of unpleasant and costly complications in the future.
The second example is our ability to understand the needs of the consumers we serve. Our customer service program, Advocate For Me, uses real time data to intelligently route calls to the right customer service rep, wellness coach or nurse, reducing transfers by 40% and improving the customer experience. The advocate understands what the individual is calling about and can meet their needs quicker and more comprehensively and can identify other actions for the person to consider. Consumers love this high touch approach, as evidenced by 88% of people saying they have a high level of trust in their UnitedHealthcare Advocate. A third example is our focus on the whole person, including social determinants of their health.
Particularly for our most vulnerable consumers, basic needs must be met, such as food, housing, transportation before we can influence better health. We take disparate sets of data from the services provided to an individual, including social services, and we aggregate and enrich them to create a holistic view of the person. With this insight, we can guide them to the full spectrum of community services and support that will help keep them independent and healthy. That's the power of small data, personalized whole person care when and where people need it.
Thanks, Phil. We're now going to give you 2 more examples of how we apply data and technology in our business. The first example is how we're advancing care for the frail elderly in our home visits program. And the second describes how we're advancing a more flexible consumer centric benefits platform using next generation technologies at scale. Joining us now are Doctor.
Deneen Vojta, Executive Vice President, Research and Development, UnitedHealth Group and Rashmita Mistry, Senior Vice President, UnitedHealthcare Employer and Individual Consumer Services.
Thank you, John. Each and every morning, nearly 1700 Optum Clinicians head into neighborhoods across the nation to visit seniors. Aging Americans get personalized care where it is most convenient for them, in their home through Optum's House Calls program. House Calls leverages some of the most innovative technology in our industry, all delivered at the point of care. The glue to this system is Optum's information data exchange, which allows the house call clinicians to send comprehensive data directly to the participant's primary care physician.
And this data set is unique in that it goes far beyond clinical data to include environmental and social data. This is information that typically practices have no access to. The results? Doctors have a more real time and holistic view of the patient and can address issues more quickly. And communication processes among health care teams are dramatically streamlined.
We are also unlocking the power of data and technology that now allows patients to see directly how nutrition and exercise are powerful medications, how nutrition and exercise directly affect their need for pharmaceuticals. People living with diabetes need to check their glucose level frequently, because if blood sugar levels get too high or too low, this leads to serious health concerns. The most current testing method includes taking blood from a finger stick every day, often multiple times a day. UnitedHealth Group is now partnering with Dexcom to advance a smarter, less invasive way of continually monitoring blood glucose throughout the day with a sensor that goes just beneath the skin on the abdomen. In the next few months, Optum plans on enrolling nearly 10,000 participants in a pilot of this approach.
House call clinicians will visit participants in their home and teach them how to set up and use their continuous glucose monitor. Participants will use their smartphones to see real time glucose reading from the sensor. And whether those levels are rising or falling, it will be dramatically clear to people. Additionally, UnitedHealth Group will receive all this information wirelessly, so that our coaches can counsel participants on how best to use their information. The coaches, for example, may recommend that a participant take a walk after a meal and see how that exercise directly influences their glucose level.
Or they may recommend a slight modification to their diet and see how that stabilizes their glucose throughout the day. And they will work with participants to optimize their medication. So when is the best time of day to take a daily medication? All that data will also be fed back to the participant's primary care physician, so they have a more realistic view of the patient and can create a better care plan. This represents a digital therapeutic.
We are using data and exercise and potentially reducing the need for higher level pharmaceuticals. In total, this literally could save the system 1,000,000,000 of dollars and many, many lives. Shamina?
Thank you, Deneem. Now let's shift our focus from clinical to benefits administration. Yes, that's right, benefits administration. We don't get to talk about this all that much, but it's a critical part of our business and it touches all of our constituents in so many ways. But behind the scenes, it's there, enabling and supporting the many activities across our businesses.
We do it well and at scale every day and in progressively sophisticated ways. Over the course of these sessions, you often hear us talk about driving higher levels of consumer engagement and moving to highly evolved models of care, high performance networks, integrated delivery networks, ACOs, risk sharing arrangements with our providers and even bundles. Certainly across the enterprise, it's evident that we're investing in and pursuing these higher models of care and they're becoming more deeply incorporated into our modern benefit designs. By 2025, we expect over 150,000,000 people in the United States will be served by benefit designs that will require complex benefits configuration. These designs will have progressive product, network and reimbursement systems that will be more consumer centric.
They'll be supported by risk allocation, quality incentives and reporting capabilities. And fundamentally, these product designs will need to be supported by a technology that is seamless and integrated, one that allows us to close gaps in care, increase consumer engagement and advance our incentive management systems, one that combines both the industrial strength and the flexibility of the current forms. We've been on a multiyear journey to get ahead of these trends and we've seen strong growth as a result. We've positioned our commercial business well to offer diverse product variations and this will help us serve 175,000,000 people in the commercial market space and government market space at scale. These evolved capabilities elevate the consumer experience through personalized product and service offerings, deploy local market product and network configurations at scale, lead in the market in flexibility and growth, apply sophisticated value based contract designs to better align future incentives and fully automate over 90% of our claims processing and reduce our implementation cycle times and on boarding costs by 2 thirds.
With these significant efforts, we'll continue to positively impact our overall cost structure and growth over the next half decade. This is just one example of how we're enabling future growth, efficiency and satisfaction at UnitedHealthcare, while significantly reducing the administrative cost burden that John Santelli talked about earlier. Back to you then.
Thank you. We have ambitious goals for the broader health system that we're getting after real time. Over the coming years, we expect to become a leader in both digital health and as a custodian of consumer health information. And with that foundation, we plan to step beyond the four walls of UnitedHealth Group to enable the 1st fully informed and fully interoperable health system at scale. We will apply modern technologies and clinical insights to improve healthcare quality, compliance, consumer activation and the patient experience.
Here to discuss how we're doing this are Grant Verstandag, Founder of Rally Health and Brett Woods, Chief Creative Officer, Rally Health.
Thanks, Dave. As you've heard, technology is always a means to an end and that end is enabling better health for people more efficiently. Rhett and I are excited to give you a glimpse to how UnitedHealth Group approaches digital to support those goals. Digital engagement is critical in helping get consumers where they need to go because it's the easy thing can become the right thing. And we can do that by creating an experience that already fits with the habits consumers have today.
We want them to evolve their health behavior and today's technology fundamentally makes that possible. Today's technology isn't just meeting needs, it's actually anticipating them. And consumers in digital healthcare want 2 core things. First, they want to stay out of the healthcare system through incentives and rewards for taking preventative actions like taking more steps or getting a mammogram. And second, they can actually figure out when they have to engage with the system who is the right doctor at the right place at the right price.
Give them those two things and you've helped them stay healthier and save money and what could possibly be better than that. But to accomplish this, there is one foundational element that's critical and that's deep personalization and Rally's mission is to put health in the hands of the consumer. We help people navigate the complexities of a fragmented healthcare system through a simple, transparent and digital approach to personal health. And our metrics tell us that consumers are already jumping on board. Some 13,000,000 people have registered for Rally already and earned $650,000,000 in incentive payments.
With that mission in mind, I'd like to turn it over to Rhett to show you how we apply these technologies to these goals.
Rhett? Thanks, Grant. I'd like
to walk through some new digital experiences through the eyes of a 50 year old male who learns about Rally from his employer. We'll call him Doug. When Doug joins Rally, he takes a simple health and lifestyle survey so that we can learn more about him. And at the end, we give him something back, his Rally Age, which gives him a contextualization of his health status. And then we help him understand what lifestyle factors and biometric values are contributing to it.
It looks like Doug is 5 years older than his real age. We offered Doug some program options that can help and because of his BMI and the way he's been feeling, he chooses to enroll in Real Appeal, our scientifically proven consumer focused weight loss and diabetes prevention program in which members have already lost more than £1,000,000 collectively. In addition to programs, Doug's company also offers incentives. So Doug looks at the variety of options and health actions that he can take and he sees that he can earn up to $200 for selecting and identifying a new primary care provider which he currently does not have. He is covered by UnitedHealthcare, so when he chooses this option, he is automatically logged into the new myuhc.com in which he already sees a filtered list of PCPs.
Finding a doctor is easy. The results are sorted by premium designation, meaning they meet UHC's standards for quality and cost. And with our new 2 heart rating system, it's easier for Doug to understand. He can even see the cost of the services that doctors provide through a new 2016 edition which we've now rolled out to all 30,000,000 commercial members. And just like he would if he were shopping online, Doug picks a premium doctor based on the location as well as the consumer star ratings that he sees in the application.
Now that Doug has his new doctor, he'd like to see them right away. In just a few clicks, Doug is able to select a time that works for him, set up a mobile confirmation reminder and he's all set. We're currently piloting a new scheduling system and the early results are great. We look forward to sharing more as we continue to improve the member experience and help our members move through our digital ecosystem. Back to you Grant.
Thanks, Rhett. What we just showed you was a single seamless experience from helping Doug understand his health to ultimately improving his habits And our experience encompasses many more things from benefits enrollment to health and well-being resources to incentives and much, much more. But all this could be done on the phone for Doug. But the most important thing here is Doug isn't being forced through some system. He's taking actions to improve his health because he wants to and because it's easy.
When members like Doug are engaged and active, they can interact with the healthcare system more confidently and when they interact more confidently and invest in their own well-being, they are going to be healthier and more efficient utilizers of care. This kind of personalized proactive data driven approach is rarely seen in healthcare. But that's just the beginning of how we're using data and technology to improve the health of our consumers and bring change to the system at large. Another example, we have laid the foundation for the universal health ID, so every consumer in America has a universal health record that can connect and exchange data securely across the ecosystem. And so far, 13,000,000 people have registered for this product and we are just getting started.
We also have been in the process of developing the individual health record or IHR for some 50,000,000 consumers across North and South America. In short, the IHR is a personalized medical record with deep intelligence that puts patients at the center of their care and allows them to collaborate with doctors in fundamentally new ways. Here's a little bit on how it works. The IHR consumes information from various sources including imaging centers, labs, pharmacies, electronic medical records, claim systems and many, many more. We have spent 3,000,000 hours developing this IHR and it features a patented cognitive data transformation technique that creates a meaningful understanding for each individual's health.
It simultaneously provides the sophisticated information needed by a physician with the simplicity needed for the consumer. The IHR also rides above the current health system today and is truly platform agnostic. Now think forward, but not too far forward to a day when you'll see the merger of the IHR with the simplified rally experience you just saw and the EMR from the provider all in one place. It will no longer mean we are just helping consumers navigate a fragmented healthcare system, but fundamentally empowering the consumer and the system to work hand in hand together. Back to you Dave.
These glimpses into our technology give you just one reason why we see more opportunity for us in the next 10 years than we've seen in the last 10. We are always looking to the future, but more recently and more intently at what UnitedHealth Group might look like in 2025 against the backdrop of commonly understood global healthcare trends inside what will be a $5,500,000,000,000 U. S. And an $11,000,000,000,000 global healthcare market. These efforts helped shape our focus on the 5 key areas of growth I referenced earlier.
You just saw some quick examples of where our technology is going. In digital health, by 2019, we expect to take a leading position as a custodian of individual health records supported with a unique universal health ID and a full digital health platform available in 3 languages to at least 50,000,000 people in North and South America as a start. By 2025, advanced technologies will have been applied to these and other vast data assets in our transaction systems, tightly integrating information incentives and engagement to support both the patient and the physician at the point of care. Our technologies will enable next generation products serving a wide spectrum of needs in a growing market, while improving the effectiveness of our core operating and clinical engagement processes and importantly reducing costs. In healthcare delivery by 2025, we aim to have established primary and ambulatory healthcare in markets representing at least 60% of the U.
S. Population. Our efforts will bend the cost curve of healthcare in these markets by delivering higher quality, more valued services. We expect to be participating broadly in performance based and risk based arrangements on a fiercely multi payer basis. These arrangements will provide real value for those payers and strong quality for patients all enabled by our data and technology.
In pharmacy care services, our synchronization model linking medical and pharmacy services through advanced analytics will have become our standard model of care early in the journey to 2025. We will have driven a fully transparent pharmacy care services business with all participants in the health system. We will continue to apply digital technologies for consumer navigation and decision support, while deeply embedding technologies in the physician's workflow to streamline the patient experience in both mail and retail pharmacy settings. Our pattern of strong growth in consumer centric benefits will continue. Next generation products with fully integrated digital resources will be critical to serving people's healthcare needs.
And they will help the U. S. And others manage growing demographic and disease trends. Employers and individuals will pursue products and services highly configured for consumer use and tailored to local market performance based network designs. Medicaid will see new market expansions, significant growth in complex care as states partner with the private sector and growth in new lines of service addressing social determinants like housing and transportation.
And Medicare Advantage will continue to achieve market share gains in a market still growing in 2025 by optimizing quality, stability and distinguished service. And global, we see health systems around the world wrestling with many of the same issues we face here in the United States. Our capabilities are quite relevant to creating real opportunities for growth. We're seeing that in Brazil, in Portugal and in the UK. And we're seeing it as we continue to move in smart and prudent ways first in South America and in Europe.
We expect to have taken similar positions of significance in other global markets by 2025. In each of these five areas, partnership will continue to be essential, with government at all levels as public spending continues to grow and as a percentage of healthcare costs and with other companies from the largest organizations to the smallest of startups. Where it makes sense to improve healthcare, we will be a willing partner. Arguably though the biggest challenge in front of us as a company is one we have to solve ourselves to unlock the full potential of this enterprise. When we collectively are on our game, we can advance healthcare in ways few others can.
That's a tremendous responsibility. It's also a tremendous opportunity to serve many people, one person at a time at an NPS of 70 or more. To keep us grounded and reliable and focused, we are fortunate to have a mission and a culture and what we consider to be among the strongest, most ambitious and deepest teams in healthcare. You will see our team today, 54 in total. They are a sample of our current and next generation leaders, including the Office of the Chief Executive Officer, Ellen Wilson, who you met earlier Larry Rempro, our Vice Chairman and CEO of Optum Steve Nelson, CEO, UnitedHealthcare Maryann Short, Chief Legal Officer Dirk McMahon, President, Chief Operating Officer, Optum Dan Schumacher, President, Chief Operating Officer, UnitedHealthcare and John Rex, UnitedHealth Group Chief Financial Officer.
In addition, we have 25 emerging leaders with us here today in advance of a full day session we have with them tomorrow. It's one of the ways we cultivate management depth. Our goal is to develop them to their full potential, so that one day they too can advance a restless and ambitious agenda here at UnitedHealth Group. Over the day, you'll get an exceptional view of our 2 business platforms. Their strong 2017 performance driven by growth, clinical value and operating excellence.
We will provide a deep dive into 8 areas of current interest through our seminars, including global, policy, individual Medicare Advantage, complex care and Medicaid, ACOs, ambulatory care, specialty pharmacy and the work we're doing with our partners at care provider systems. And yes, don't worry, you'll get to hear John Rex unpack our financial expectations for 2018 and describe our consistent posture on capital allocation balanced to build the business at a long term growth rate of 13% to 16%, while advancing our dividend at a market competitive level. It is indeed the continuity of restless change. I thank you again for your time and for your interest and attention today. Here to start the discussion of UnitedHealthcare's agenda is Chief Executive Officer, Steve Nelson.
Thanks, Dave. Good morning. It's exciting to be with you this morning, really a great opportunity to share some perspectives about UnitedHealthcare. It's such an exciting and important time in the history of healthcare and our company. I'm also very appreciative of the opportunity to work alongside such a talented group of leaders, many of whom you will meet and hear from today.
We believe that UnitedHealthcare is well positioned to help solve one of the most important challenges of our time, how to ensure everyone has access to quality, affordable healthcare. And we're fortunate to serve more than 52,000,000 people at every stage of life. We understand the vital role that we play as this role is embedded in our mission, helping people live healthier lives and helping the health system work better for everyone. Earlier Ellen Wilson showed you how we interact with the people that we're privileged to serve every day. For us, success means responding to each person as an individual with compassion every time, access to the right care provider in the right place at the right time is a priority for people and that's why we're reshaping the way we work with and reward care providers by aligning incentives and sharing data and insights about practice performance, evidence based medicine, we're improving healthcare and the health of the people that we serve.
Today more than 1,000,000 doctors and health professionals have relationships with us, giving us this tremendous potential to catalyze system wide change. Before Dan Schumacher and I share how UnitedHealthcare drives growth, we want to say a few words about our priorities and our strengths. Quality, growth, managing total cost of care and our partnership with Optum, which we believe create true distinction as we improve health and the health experience for people. Our number one priority is delivering consistent quality, which is measured in every interaction from administrative to clinical and everything in between. Let me share some clinical examples.
In Medicare, over 85% of our Medicare Advantage members are enrolled in plans rated 4 stars or better by CMS for the 2018 payment year and group retiree is at 100% for 2019. In Medicaid, our members and plans rated NCQA commendable or excellent is up 15 points from the previous cycle. And 100% of our commercial plans achieved NCQA accreditation with 37 at the commendable level, up from just 10 in 2016. Strong evidence that we're creating quality experiences for people is reflected in rising NPS scores across our businesses. NPS, as you'll recall, is a proven and a valuable operating discipline focused on the quality of our customer and consumer relationships.
We remain focused on delivering on our 707 NPS targets, as Dave mentioned a few minutes ago, and we're encouraged by the 16 point increase in care provider NPS in just the last year. Likewise, NPS is up 3 points in Medicare Advantage and 5 points in our dual special needs plans. And our relationships with employer market are also showing strong NPS advancements over the past year. Mid market is up 14 points, small business is up 7 points and broker channel is up 14 points. These are meaningful advances as we are just in the early stages of these efforts.
Our next priority is growth. Improvements in the quality drive trust, trust drives loyalty and loyalty leads to growth. In Medicaid, while more than 70% of Americans are in managed care, still about 60% of Medicaid spending is unmanaged. Over the last year, we expanded into 4 new states in our Medicaid business, adding service to 500,000 people and nearly $1,500,000,000 in annual revenue. And now with more than 10,000 people a day becoming Medicare eligible, we see continued opportunity as it grows towards a $1,000,000,000,000 market serving 73,000,000 people by 2025.
Nationwide, we captured nearly 60% of net Medicare Advantage market growth over the past 2 years. Over the same period, we will add service to nearly 1,500,000 people and over $16,000,000,000 in revenue. In our commercial business, UnitedHealthcare serves nearly 28,000,000 people, including almost 225,000 employer groups. Over the past 7 years, we've added nearly 5,000,000 people, more than all of our publicly traded competitors combined over the same period. We expect to add 450,000 fully insured group members in 2017.
And while the U. S. Continues to be our largest opportunity, there are deep unmet needs globally with plenty of opportunity for growth. 3rd is our focus on reducing the total cost of care for our customers. We accomplish this through our value based care arrangements and other actions that ensure quality care happens in the appropriate setting, which results in fewer hospital admissions and emergency room visits.
We achieve this by engaging consumers, helping them make more informed decisions and take better actions. For example, we help guide people to clinically appropriate and cost effective medications and provide them with greater transparency to healthcare costs. These actions when combined with our ongoing efforts to increase operating efficiency and leverage technology and our scale contribute to more than $3,000,000,000 in annual improvements to total cost of care. 4th is growing and winning with Optum, which means being even more intentional about how we work together to help each other succeed. UnitedHealthcare supports Optum by helping grow their customer base and defining and scaling innovation.
UnitedHealthcare customers benefit from Optum's industry leading services. Focusing on these first four priorities results in us achieving our 5th priority, becoming truly distinct. To us, distinction means delivering a compelling and a differentiated experience and outcomes characterized by simplicity, partnership and a focus on being mission driven, qualities that we believe UnitedHealthcare can uniquely deliver on. You'll hear more about our work in these five areas in our business review shortly. But first, let me turn to Dan, our President and Chief Operating Officer to share how these priorities shape our agenda across UnitedHealthcare.
Thank you, Steve. This concept of a distinctive experience is grounded in several unique enterprise strengths. In partnership with Optum, we generate meaningful insights to solve tough problems, to engage people and empower them to more effectively manage their health, to identify risks and gaps in care, to simplify and deeply personalize the consumer experience, to strengthen our collaboration with care providers and to help organize and coordinate services that correlate with better health. Using technology to create a seamless experience allows us to identify unique individuals across multiple platforms. People generate enormous amounts of health data today from steps walked to calories consumed to glucose, blood pressure and stress levels.
Individual mobile devices now carry as much health related information as an entire clinic once did. We expect the individual health record market to be robust and we plan to be first to market at scale, helping consumers with applied intelligence to their records and incentives around the next best actions to manage their health. And the thread that ties all of it together is the universal health ID that Dave and Grant mentioned earlier. Enabling people to be empowered healthcare consumers is only half the battle. We are enabling doctors by providing a secure private connectivity system called LINC.
Used 25000000 to 30000000 times a month and growing, LINC enables care providers to seamlessly connect pieces of a patient's medical care and reduces administrative demands such as submitting claims, reviewing preferred drug lists and assessing authorization needs. It improves care quality, increases provider and consumer NPS and we continue to add more capabilities. Our strength in network and clinical management is foundational to improving quality and removing costs. Gone are the days of having 1 large national network. Today, we use more than 50 network configurations to advance stronger consumer value and lasting relationships between care providers and consumers.
Over the past 5 years, we doubled the membership in premium designation tiered plans and doubled the value. Consumers experienced nearly 20% lower costs when using premium care physicians. We are also making steady and meaningful advancements in value based care, which has tripled in volume in the past 5 years to reach $62,000,000,000 in medical spend. Our improving partnerships and transparency with care providers are fundamentally changing the way we work together on behalf of patients. We expect value based care arrangements to account for $75,000,000,000 of our contractual relationships by 2020.
Our top performing commercial ACO providers performed better than non ACO providers on 87% of the quality measures we most commonly track and our Medicare ACOs lower costs, as evident by 13% lower ER use and 8% fewer hospitalizations for our Medicare Advantage ACO members. Proprietary technology advances, like our system advances to improve seamlessness and integration that Rashmita mentioned earlier will proliferate the use of ACOs
over the next 5 years.
Our commitment to clinical excellence is high across the board, not just with our ACO partners. We are broadly making advances in quality with hospital admissions declining as much as 30% per 1,000 members across commercial, Medicare and Medicaid over the last 9 years. Finally, we are making significant investments in offerings that support health in a more holistic way. People's health often involves factors beyond traditional medical care. We've long seen the correlation between the social determinants of health and people's overall well-being.
As a nation, we under invest in social determinants and then become over reliant on high cost medical care services. We can and will play a powerful role in changing that. Let's now look at how we use all of these enterprise strengths to drive growth in each of our 4 business platforms, starting with our commercial business here in the U. S. UnitedHealthcare creates relationships that drive innovation and speed to market to generate better health, better experience and lower costs for our customers.
For example, through our relationship with the Health Transformation Alliance, we are working with some of the world's largest employers to build solutions to network and pharmacy challenges and our relationship with Qualcomm has helped power innovations like Motion, which you'll hear more about later. The employer and individual business continues to perform well. Our fully insured employer group enrollment has grown for 12 consecutive quarters, adding more than a 1000000 new lives and more than 700,000 Group Medicare Advantage lives. Both are contributing to enterprise earnings growth for UnitedHealthcare and Optum. We help our customers control medical costs through modern benefit designs and informed clinical engagement, all aligned to the best performing care providers.
Our centers of excellence are a prime example. Consumers use this design to access integrated, personally relevant health guidance, modern technology and care services that deliver improved health outcomes. People can identify the high performing care providers, including those who have committed to value based relationships. Across the spectrum, accountable care organizations improve prescribing and patient referrals, avoid unnecessary ER use and reduce hospital admissions and readmissions, better coordinate care transitions from post acute to rehab to home and identify gaps in care so that they can be appropriately closed, all helping to reduce the cost and improve the quality of the healthcare system and health outcomes. Nexus ACO packages our success in these areas.
It is the 1st national health benefits plan to integrate value based ACO contracts with incentive based consumer benefits. Allison Richards from our National Accounts team is here to tell you a bit more about NexSys ACO.
Hi. Meet Nancy. Nancy is the benefit manager of an employer who has employees spread across the country. Nancy is looking for plans that deliver higher quality and better costs. Nancy knows that an ACO based health plan could be the right solution, but because most ACOs today only serve a single market, that hasn't been an option.
Nancy needs Nexus ACO. Nexus ACO represents the next generation of our value based health plans, organizing our high performing ACOs and our premium care physicians into a national tiered network, all supported by a digital experience. Employers utilizing Nexus ACO today are saving on overall health care costs, such as 44% lower spine and joint surgeries, 10% fewer hospital readmissions and 11% increase in preventative services such as breast cancer screenings. Now meet Julie. Julie is one of Nancy's employees and is the healthcare decision maker for her husband and 3 kids.
She gets better care coordination because of Nexus ACL. Her primary care physician is helping her navigate the health care system, making sure that her family gets to the right care with the right doctors. She gets better health outcomes. By using our real time data analytics, Julie's physicians are proactively engaging with her, helping her get lower costs and better health outcomes. And Julie receives quality care at lower costs.
By us helping Julie with Nexus ACO, we are helping her save 8% to 12% on her plan. Nexus ACO takes the local expertise of our ACO partners and scales it into a product that benefits more members across the country. Welcome to Nexus ACO.
Thank you, Alison. Nexus ACO just launched this year and as you can see, it's already delivering strong results. We expect to grow to 250,000 people in Nexus ACO by the end of 2019. In addition to improving customer and consumer value, UnitedHealthcare's commercial business is intensely focused on leveraging modern technology applications to create a simpler, more personal experience. This shows up in a number of ways, including a best in class digital onboarding capability, a symptom checker with content from Mayo Clinic and personalized video EOBs that help employees understand their benefits.
Finally, we are leveraging technology to improve health. For example, Health Plan Manager is an interactive platform from Optum that offers a comprehensive view of health data to help guide plan design and improve member engagement. Customers who use Health Plan Manager have seen a reduction in inpatient hospital usage by nearly 10%. Another example is UnitedHealthcare Motion, a wellness program that uses activity trackers to measure the frequency, intensity and tenacity of activity, allowing employees to earn awards of up to $1500 per year by meeting certain goals. Participants in this program have walked about 65,000,000 miles and have earned nearly $20,000,000 in incentives to cover out of pocket medical expenses.
UnitedHealthcare is growing our share in the commercial market and building relationships that allow us to develop innovations that deliver better health, a better experience and lower costs. As a result, we have seen meaningful growth in recent years, particularly in our core group fully insured business. That growth together with our personalized data analytics and technology approaches, innovative partnership with Optum and our shift to value based care have all translated to strong financial results. In 2017, we expect to see growth in our core fully insured group offerings of 450,000 people, surpassing the high end of the range we provided a year ago by 150,000 lives. Including 2017, our 3 year group fully insured growth will be approximately 1,200,000 members.
Side, we realized a modest decline in enrollment in 2017, driven by 1 public sector client. In 2018, we expect continued profitable growth in our fully insured business. The enrollment growth outlook range of 200,000 people is broad. The range reflects 2 uncertainties. 1st, we do not yet have the regulations supporting the executive orders for the individual insurance market, making precise membership predictions more challenging.
Secondly, our commercial pricing fully reflects the return of the health insurance tax. It's too early to determine how the market will absorb that cost increase. We could see more business out to bid or greater interest in self funded offerings, for example. National accounts continues to be a fairly stable market overall. We expect our self funded enrollment to be slightly lower in 2018.
Our clients continue to move to the compelling value offered in our 4 Star National Medicare Group Plan. This shift is driving about half of our decrease and doing so with favorable economics for our customers, for the retirees and for our shareholders. Moving to medical costs. We expect a full year 2017 commercial net medical trend in the lower half of the range of 5.5% to 6.5% we provided a year ago. Overall, our trend continues to benefit as we move more of our reimbursement arrangements towards value based care with a focus on embracing ACO collaborations.
Turning to 2018, at this distance, we expect a commercial net medical trend outlook in the range of 6%, plus or minus 50 basis points. This outlook reflects unit cost increases of around 4% and utilization of approximately 2%. Across our health cost categories, we expect trends to be relatively consistent. We are well dialed in on the pipeline of new specialty therapies and expect their 2018 impact to be in line with 2017. Physician trends should continue to remain steady while improving our population health and quality metrics.
And we expect our inpatient and outpatient trends to remain consistent year over year, driven by continued intense medical management focus. Overall, a strong outlook. Now let me turn it back to Steve to walk you through Medicare and Medicaid.
Thanks, Dan. Our community and state business works with states to manage care for families and individuals on Medicaid. States look to us for better help for help in better addressing the growing cost of care burden. They find value in the way we serve vulnerable families and are quickly moving more complex care out of fee for service and self administered programs into managed care arrangements. In this business, we seek to achieve distinction in how we serve people with complex needs.
The 5% of the population that generates 50% of the cost. That has led to a favorable product mix shift, revenue tied to serving people with complex needs has grown more than 50% faster over the past 5 years than that of traditional Medicaid, including the expansion populations. In our dual special needs plans, we identify, target, intervene and care for people with the most complex conditions. Over the past 12 months, our DSNP membership has grown 30% and now serves more than 500,000 people. And it's a point of pride that consumers of our DSNP products trust and value UnitedHealthcare, resulting in a 5 point increase in our NPS.
But there's still much more we and others can do to help these vulnerable people. Take the homeless population, because homeless people have a much higher frequency of unmet mental and physical health needs, they use more healthcare. In fact, 9 times the number of ER visits, 6 times the number of hospitalizations and 3 times the overall costs. We're helping the homeless by arranging for more consistent and affordable housing and then working with local agencies to deploy counselors who deliver individual and group therapy in these settings. We also facilitate transportation, job training and connect people with community health workers who can help provide additional support.
Having access to these services makes a real difference to health status, outcomes and overall costs. My connections for example helps vulnerable people, including those who are homeless get essential social medical and behavioral services. Our 2,700 community based care coordinators support this work using evidence based real time clinical information and claims data. Doctor. Jeff Brenner, Founder of the Camden Coalition is now part of our community and state business.
He's here to tell you about TJ's story and how my connections is changing his life.
TJ is a kind man with a quiet voice and a warm smile. I was visiting my team in Phoenix, Arizona when I first met TJ. He was homeless and unemployed. He'd been on the streets for some time. He would go from emergency room to emergency room just over the last 2 weeks.
He had been admitted and discharged from one hospital and a few days later show up at another. That's when we asked the My Connections team to help. They met TJ, they got to know him and they learned that TJ had had 254 trips to the local emergency room, that he had had 32 admissions to the local hospital at a total cost of care of more than $294,000 since 2015. They learned that TJ was suffering from depression, from diabetes, from asthma, chest pain, that he would go back to the emergency rooms repeatedly over and over. As we talk to T.
J. And we learned what was occurring in his life, it was clear that if we didn't address his homelessness, that nothing was going to improve for him. We helped TJ move into a supportive housing community made up of redeveloped apartments that were set aside for My Connection's members. The first step in this process was to help TJ move into temporary housing where he stayed for a couple of days, while we helped him buy furniture, set up his apartment. The most exciting day for my team is when we help our patients move in, patients like TJ.
As we coordinated with a local provider to help him move in, the next step was to set up a wraparound plan for TJ. This was things like counseling for his depression, treatment for his diabetic foot ulcer, help applying for Social Security disability and education on rental housing. It's been 4 months since TJ moved in. And Steve, I'm excited to tell you that he's stayed off the streets of Phoenix, that his health is improving. He's staying out of the emergency room and he's beginning to establish goals and imagine a future for himself.
He's thinking about staying well and he's working towards achieving self sufficiency.
Thanks, Doctor. Brenner. UnitedHealthcare's participation in managed social services is an incredible business and a social opportunity. After hearing this story, hopefully you can get a sense of why we love working here. When you think about replicating TJ's experience for all the people who need our help, you start to get an idea of the positive impact we can have on millions of people.
Now on to Medicaid growth. We expect another strong year in Medicaid after adding over 800,000 people in 2017. This year, we entered full risk programs in 4 new states, including Colorado, Virginia, Missouri and California, and we've been awarded nearly 3,000,000 lives in contracts since 2014, including 1,400,000 through renewals across 10 states. In 2018 overall, we project continued positive growth of 150,000 Medicaid lives. And we will expand into 5 new DSNP markets continuing to serve more people with more complex needs.
Our outlook for growth absorbs a decrease of 215,000 people in 2 states, where each state has decided to expand plan options in 2018 and shift a portion of their beneficiaries from concentrated incumbents to the new participant. However, we will continue to serve thousands of people in both of these states. And now to Medicare and Retirement. We serve more than 12,000,000 seniors and others eligible for Medicare, more than any other health plan in America. We create distinction in this market through benefit and premium stability, supported by a foundation of compassionate, senior focused operating capabilities, simple and personalized service and our very unique culture.
Our performance in Medicare is balanced, strong and consistent. NPS scores have increased steadily since 2016 and reflect our focus on improving the overall consumer experience and making it simpler and more hassle free. The percentage of our members in 4 plus star plans has grown from just 9% in 2014 to 85% today, And we have created long term brand affinity with others who are also trusted to uniquely serve Medicare beneficiaries. All of that leads to more seniors selecting and staying with UnitedHealthcare more often than ever before. And this is reflected in our record level consumer voluntary retention.
So let me elaborate on some of the actions that we're taking to drive these results. First, we have a well diversified portfolio of stable products that will continue to carry the AARP brand exclusively through at least 2025. In Part B, our new low premium plan is growing more than any other competitor nationally. And this year, we introduced a low premium Medicare supplement product in 43 states. Including our expected 2017 growth, we've grown to serve 1,300,000 more people in Medicare Supplement over the past 5 years.
In Group Medicare Advantage, leading employers continue to choose UnitedHealthcare to serve their retirees. This is a great example of how we bring together our established commercial relationships and our strong Medicare knowledge. Over the past 5 years, we've added more than 850,000 people in Group MA. And finally, individual Medicare Advantage. Over the years, we've learned seniors value benefit and experience stability.
As simple as it sounds, it makes a huge difference for the people that we serve. Stability in our Medicare Advantage products has contributed to our record retention level and growth in individual retail Medicare Advantage of approximately 1,000,000 lives over the past 5 years. But our growth story is about much more than product design and stability. It's also the ever advancing positive, simpler and personalized experience that we intentionally create. Medicare and Retirement uses data and technology to personalize our service.
This is brought to life through services like Navigate for Me and House Calls, services that drive better health, a better consumer experience and lower cost. Navigate for me provides personalized one stop service for financial, social, medical, behavioral and product needs. Our navigators help coordinate treatment schedule and keep appointments and remind seniors to take their medications as prescribed. We began offering Navigate for Me to certain high acuity populations in June and we plan to scale it further in 2018. House calls offered in collaboration with Optum delivers a personal health assessment in the comfort of seniors homes at absolutely no charge to them.
These visits from registered nurses and physicians provide seniors information on current and potential health issues and on topics for them to discuss with their doctor. We're on pace to complete 1,200,000 house calls and close more than 2,000,000 gaps in care in 2017. Our third driver is our relentless focus on serving senior populations uniquely, which starts with how we hire, train and retain our frontline employees or advocates as we call them. We have industry leading customer service, advocate engagement and employee retention, in part because our advocates view their role as helping to save lives and not just answering the phone. Now to bring it all together and show you how this unique formula works in one market, here's Lotta Birmingham, Executive Director of Medicare and Retirement in New Jersey.
New Jersey is a complicated and competitive Medicare Advantage market. We serve more than 100,000 lives in the state. The prevalence of diabetes among the people we serve is nearly twice the state average for adults. 26% of the people we serve are disabled and over 20% are also eligible for Medicaid. We were experiencing respectable market growth in New Jersey, but we were underperforming across critical quality member and provider satisfaction measures.
This is when our 1 person at a time vision was born. Our one person focus is based on a vision of personalized service because one size definitely does not fit all in healthcare. It includes holding community based screening events in partnership with local care providers, providing mammograms, diabetic eye exams, bone density scans and other critical care services. In the last 20 months, we have held more than 125 events in New Jersey, partnering with pharmacies, senior centers, faith based organizations and the American Diabetes Association. How do I know health screenings make a difference?
I know because this is me. I am a breast cancer survivor and like this mailing to our UnitedHealthcare members says, I would not be here today if it weren't for preventive screenings. I'm honored to share my experience with our members to encourage them to live a healthier life. We don't just stop at the community level though, we also feed on the street, knocking on doors to rich people with the greatest needs. The numbers tell our story in New Jersey with an increase in every growth and quality measure.
Medicare Advantage retention is up. Membership growth is in the double digits. NPS has advanced year over year by nearly 50%. We are 4 plus star rated for quality and since 2013, we have addressed more than 200,000 care opportunities, including 117,000 colonoscopies and 45,000 mammograms. We are proud and grateful to make a difference in the lives of so many people in New Jersey.
Thank you, Lotta, for not only what you and your team are doing the work that you're doing, but also for sharing your personal journey. New Jersey is a great example of how we're growing our Medicare business locally by creating truly personalized distinctive experiences for people. Now let's take a look at growth. We've seen significant growth this year in Medicare Advantage. Last year, we set an ambitious goal to grow Medicare Advantage by at least 700,000 lives in 2017.
We now expect to grow our MA business by approximately 800,000 lives in 2017, firmly at the high end of the range we provided last year, balanced between individual and our group offerings. This strong growth has translated to market share advances, a trend we expect to continue. And we're also pleased with the enrollment performance inside our standalone Part D offering, and we continue to see steady growth in Medicare Supplement. Moving to 2018, we expect our recent strong growth trends to continue by adding 500,000 people in Medicare Advantage. Medicare Supplement is expected to grow by 200,000 people, while we expect to retain our market position within standalone Part D.
So our 3 U. S. Businesses are performing strongly and all have positive momentum for growth in 2018 and beyond. But before I close with the enterprise outlook, let's turn it back to Dan to say a few words about our business outside of the United States.
Thank you, Steve. The way healthcare is organized and funded varies across the globe. However, the fundamental challenges of access, affordability and outcomes are the same. We believe UnitedHealthcare is uniquely positioned to address these healthcare needs and create value in global markets. UnitedHealthcare Global consists of a global markets business and a global solutions business.
In Brazil, our largest global markets business, we provide both health benefits and medical delivery. In health benefits, we serve more than 4,000,000 people with comprehensive medical and 2,000,000 people with dental through a broad contracted network of nearly 30,000 care providers. In medical delivery, we own and operate 135 hospitals and clinics providing care for our members, as well as patients covered by 3rd party payers. In Portugal, we provide a complete range of health services nationwide through our 7 hospitals, including one public private partnership with the Portuguese government and 6 outpatient clinics. Our Global Solutions business focuses on international employers operating in over 130 countries, providing benefits, services and on-site medical care to individuals who live or work outside their home countries.
Molly Joseph runs our global business and she'll tell you more about our approach to global integrated medical management.
At UnitedHealthcare Global, we approach both our health benefits and our medical delivery businesses with a single integrated evidence based medical management approach. This has had a tremendous impact in improving affordability for our clients, improving value and efficiency for our health systems and most importantly, improving health outcomes for those that we serve. Let me share with you a few proof points, starting first with our health benefits business. We've applied this model in Brazil, and we've reduced our high utilizer spend by over 19%. In our global mobility business, we've reduced the days our members spend in hospitals by 27%, and we've reduced our international medical evacuations by 5%.
We've done all of that while improving health outcomes and improving the performance of our own business. In both 2016 and in 2017, UnitedHealthcare Global was awarded the Doyle Award for Leadership and Innovation in Healthcare. This award recognized the value of that clinically integrated evidence based approach, both in Brazil and in our global mobility business, making UnitedHealthcare Global the only international organization to ever receive the award and the only payer organization to receive the award 2 years in a row. We apply this very same framework at points of care in our medical delivery business, improving health outcomes for our patients, improving value for our payer customers and improving case mix and margin in our own business. In Brazil, we operate over 100 outpatient and ambulatory centers and 34 hospitals.
Within that owned delivery system, we have built 28 centers of excellence across the country of Brazil, and we're targeting 20 more by the end of 2018. Our Cardiology Center of Excellence was recently recognized by the American College of Cardiology as a Global Center of Excellence, 1 of only 5 outside the United States. And many of our hospitals in Brazil are using state of the art surgical robotic technology, which yields far superior health outcomes for our patients. Earlier this year, we opened the Edson Bueno Training Center, Latin America's largest and most advanced training center for minimally invasive surgery and robotics. There, we will train as many as 4,000 surgeons a year across all of Latin America.
So these advancements have certainly had a strong impact on the performance of our business, but nowhere is that impact felt more than on those that we serve, our members, our patients and our clinicians.
Thank you, Molly. We look forward to applying your continued learnings with an integrated care delivery model back here in the United States. Over the next decade, we will continue to build our services in Brazil, Europe and with multinational employers and we will look to enter new markets prudently through platform acquisitions in both public and private systems. For 2017, we have made meaningful advances in our operating margin marked by improvements on the medical cost side in our health benefits business and strong growth and improved case mix in our hospitals. In 2018, we expect health benefits enrollment to remain flat to slightly down, due in large part to the challenging economic backdrop in Brazil, and we remain steadfast in our pricing disciplines.
We will again make further advances in our operating margin in 2018 with our continued focus on medical cost management, targeted operating efficiency and greater occupancy and complexity of care provided in our medical facilities. We are excited for the opportunities that lie ahead as we continue to expand our reach globally.
Thanks, Dan. So this morning we've shared how we are focusing on the distinctive capabilities and offerings each business brings to the people that we serve. When you walk the halls of UnitedHealthcare, I can tell you that people are fired up about the opportunities that lie ahead. Together with our Optum partners, we're dedicated to supporting better health and creating a better experience, all while making healthcare more affordable and creating distinctive value proposition for all of the people that we serve. Domestic medical enrollment in our group fully insured and government businesses will grow by over 2,000,000 individuals in 2017, including by nearly 1,000,000 people in Medicare Advantage and Medicare Supplement, approximately 450,000 in group fully insured commercial and over 800,000 in Medicaid.
2017 revenues of approximately $163,000,000,000 advanced nearly $14,000,000,000 or 10% year over year. In 2018, we expect to grow to serve 1,000,000 additional people at the high end of our range, excluding one item, our transition out of the fee based TRICARE West region contract effective January 1, 2018. This growth translates to 2018 revenues approaching $181,000,000,000 an $18,000,000,000 or 11% increase over 2017 with every business advancing. And we expect operating profit in the range of $9,600,000,000 to $10,000,000,000 and this reflects a growth of 14% to 19% year over year. The after tax operating profit will be muted by the return of the health insurers tax, which John Rex will take you through in greater detail a bit later on.
So UnitedHealthcare heads into 2018 with powerful momentum and we remain relentless, restless and determined to reach our full potential and to achieve true distinction with the people and communities that we are so proud to serve. We're making tremendous progress, but there is so much more to do. We're both energized and humbled by our responsibility to fulfill our mission, to help people live healthier lives and with our Optum partners help the health system work better for everyone. So with that, I'd like to ask my colleagues to join me on the stage for some Q and A. Thank you.
So a couple of thoughts. We've got a lot of light in a large room. So if you'll allow me, I'm not going to call you by name, because that will be imperfect before we finish. And we want to do questions for about 15 minutes on the UnitedHealthcare segment. If you've got group level questions, we're going to pick that up at the end and there'll be an optimum session in between.
So, yes, right here. And then here at the back, Becky next.
Hi, it's AJ Rice from Credit Suisse. Just maybe expanding a little bit on Medicare and the comments there. So it looks like your projection for Medicare Advantage would indicate about 10% to 11% growth next year off a good year this year. Can you give us any more flavor for how that breaks down between group and individual? And as you've had a chance to see the market overall, there's been various predictions about what the market is supposed to grow.
What is your assessment of maybe overall market growth? And then to slip in a final Part C to that question. You are consistent, my friend. There was a release from CMS about baseline trend assumption for 2019 last night showing 4 plus percent growth, any quick comment on that?
So maybe I'll just say a word and then Brian Thompson, our CEO of Medicare and Retirement can I think handle that question well? In terms of the last question, it's pretty early in the rating process. As you know, there's a lot of components to it and it's a journey to the final notice and rate release that we get in April. So it's just kind of one component and so that's how we think about that.
Brian?
Thanks, Steve. A. J, great question. As I think about 2018, you've probably heard, as I've commented in each of our last two conference calls, we remain very optimistic about 2018. We've indicated that we expect to gain share in 2018.
I've indicated previously that the CMS growth rate of 9% was our baseline for believing that we would outperform that and obviously the ranges that we've provided today if we accomplish those would achieve that as well. So continue our expectations of an optimistic landscape. As you think about the breakdown in group and individual, as you know this year 800,000 lives of growth was pretty well balanced between individual and group. I would look at group as a very exceptional year. But 2018 is shaping up to be a very strong year in its own right.
And as you think about the growth rates, I would say we're largely expecting the rate of growth in both individual and group to be the same, but not the overall growth in its totality. So I wouldn't say our overall growth is split evenly, but the rate of growth is very consistent in both individual and group. As we think about the industry, I think it's good for the senior. We're seeing less movement. We're seeing less switching.
We're seeing folks not exiting marketplaces. And we're excited about that. That's good for the senior. That's good for Medicare Advantage at large. So as we're pacing through AEP, we remain very encouraged and are excited about what we're seeing.
As Steve said, we did see just the growth rate last night. I think that's just an input for us in and of itself is not very instructive, so really not much to comment on at this stage. Thank you.
Yes.
Thanks, John. I heard a lot about clients or say customer engagement and patient engagement and changing behaviors. I'm curious how is United changing across their business lines, their sales process? What is the sort of evolution of consumerism doing to United as the selling agent in health insurance?
I might ask Jeff, if you would comment on how you're engaging with the clients on that process, but particularly as we think about how we bring sort of a portfolio of strategies to employers to help them engage and we really do think about the modern health plan as a more engaged consumer tools and strategies to engage the consumer differently. And so, Jeff, you want to comment on how we're doing that?
Sure. Yes, thanks for the question. Couple of years ago, we undertook a review of not only our consultant and broker channels, but also our own sales teams and realized that as we moved into more complex benefit structures, more complex network structures that we had to retrain our sales team to talk more about a value story as opposed to a traditional sales cycle. And we have instituted pretty rigorous training around the UnitedHealthcare value story and that consulting consultive selling with our clients. We mentioned Health Plan Manager.
Health Plan Manager has been a very, very good tool partnered with Optum to give the information to our sales teams to be able to be those consultant sales organization to talk about a value story,
to talk
about all the ways that UnitedHealthcare could solve a client's benefit strategy and benefit need without talking about the hundreds of products or 50 networks that we have, because that just added confusion to the sales cycle. So we have been selling the value story now for a year and I think our results have shown that investment in training and creation of a single value story across the country has been successful.
Us. Dan, go ahead.
Sure, Josh. One thing I'd add is, obviously the distribution side of it engaging at the employer level and then the next part of it is at the consumer level. So as they're making planned selections, as they're shopping, you heard us talk about our new digital onboarding capability and you heard Grant and Rhett talk about the advances we're making in our digital assets and that's been really important. So that as consumers take on a greater share of the healthcare costs, as deductibles grow that they understand when they're making selections around tiered networks, custom networks and plan designs that are more appropriate for them and then what are the cost implications of that, knowing that on the at the outset. So a lot of investment on the digital side as we bring on consumers after we've made the sale to the employer as well.
And we have mics come up to the front here. Yes, right there, there and over here, please.
Kevin Fischbeck from BofA. Question on trend, You're looking for trend to be relatively similar to last year, up slightly. This is a number of years now in a row where trend has been pretty muted. Can you give your thoughts about what you're looking forward to see when trend is going to accelerate
in greater speed? And then I guess also the other problem that we always have from our side is that the
numbers that most companies talk about trend expectations. Know you all talk about trend a little bit differently, which makes it apples and oranges to some degree. But is there some way that you can help us level set how you're thinking about how you've been able to impact trend on an apples to apples basis across multiple players?
So John, I'd ask thanks Kevin for the question. I'd ask Jeff Putnam, our CFO to start and then Dan, you might want to add some color to the medical management strategies and how we go after trend?
So thanks for the question. Yes, it is a slight uptick in trend from what we're seeing this year, but it's in the same spot that we've been for the last several years. As you've noted, we are always very respectful for trend and we spend a lot of effort around monitoring things such as specialty pharmacy pipeline, watching all of our utilization metrics to look at where things are headed. And then we're taking actions across the board to manage that. At the same time, I talked a little bit earlier in the commentary today around as we're trying to drive more value based care and provider arrangements and drive consumer engagement that is playing into the physician category there.
And then we're doing a lot of work on site of service, which we've been doing every year to keep making sure that we get the care done at the appropriate setting, leveraging things like MedExpress, SCA, getting things into the right place. I would just
allow Mollie or Austin to talk about how in your populations you're going after the total cost of care burden as well. I think there's some interesting things happening there.
Sure. Well, thanks, Steve. You talked about it well from the main stage you saw that our approach around whole person care, that's all about engaging the individual and really looking at all of their needs, their medical, their behavioral, the social needs that they have that are impacting total cost of care, very locally deployed. If you read through the materials, you'll see a number of 2,700 care managers deployed locally in markets and literally in people's homes, putting wraparound plans in place for our most complex members. Those are all things that improve quality of life, 1st and foremost, health outcomes and helps control trend.
And that's what we've been doing successfully for our state partners and for our consumers for years years, literally decades.
And in Brazil, healthcare trend has really been a market wide very serious challenge for the health marketplace. We've done a lot of work in really three areas. 1st is that integrated care model I talked to earlier about. The second is rounding out the health ecosystem for our members. It's a very hospital centric system.
We've done a lot of work to build an outpatient supportive environment around those hospitals. And 3rd is really consumer engagement. We have engaged our high utilizers. We've had a very powerful together in a very significant way, and we're seeing a health trend reduction within our Brazil business that is in excess of 40%.
We have time for one more.
Hi, Lance Wilkes from Sanford Bernstein. A question on the employer segment. Could you just talk a little bit about where you're getting your growth in the fully insured book of business? Why you're seeing some level of shrinkage in self insured, maybe just a little bit on penetration of specialty products and things like that in the self insured business?
Sure. 1st and foremost, our growth started to be driven by improved customer retention. So we focused our focus on NPS and focus on improving our service across the spectrum, started our growth cycle by improving our employee employer retention numbers. And they are at historical high levels for us across both our small business and our key account and our national account. We always enjoyed strong retention in that marketplace and that continue.
What we were also able to do is take a really ground up view of our product portfolio, particularly in our small business and create a much broader product spectrum and many, many more networks. I heard Dan earlier talk about the expansion of our networks from basically a single national network to 50 custom local networks and applying those local networks to a larger more broad product portfolio allowed us to achieve price points in our small business that we weren't able to do in the past. So primarily customer retention and then really strong small business growth and we think there is still a lot of runway there. We are less penetrated in our in small business in that market than we are in other markets. And so we see a longer runway there as well.
We've done really well in our specialty business over the last 2 or 3 years, both in quality, expansion of those networks and expansion of capabilities, our vision and dental life and disability programs have expanded those product portfolios also and we've increased our penetration of our medical book by about 500 basis points over the last 2 years and again continue to see increased penetration, particularly as we go to E channels and improve our small group sales. Small business is a great place to tag along a vision, dental and other ancillary products. It's an easier step. Thanks
for the question.
Thank you, Jeff. Next, we're going to have Larry Renfro offer a couple of observations about UnitedHealth Group as Executive Vice Chairman, and then he's going to dive into a discussion of Optum's positioning and results. Thank you.
Thank you, John. Everybody leaving? Good morning. I want to add my thanks to all of you for joining us. Today, you are hearing a story about growth at UnitedHealth Group, growth built on a foundation of relationships, relationships with progressive companies and leaders, including 70% of the Fortune 500, who share a determination to improve quality and value in healthcare.
Relationships with channel partners and customers like health plans, health systems, technology firms and the pharmacy and hospital supply chains. Relationships with 140,000,000 people. We have the privilege of serving through a broad range of benefit and clinical programs. And relationships we share across our own enterprise, challenging each other to get better every day. Through all of these relationships, we have the unique opportunity to help solve the biggest challenges facing health care by integrating our leading capabilities across the enterprise to deliver meaningful value.
Let me illustrate with a few examples. AARP has partnered with us for more than 20 years to improve the health and well-being of older Americans. We provide AARP members with UnitedHealthcare branded Medicare plans and other benefit products, as well as Optum services that help seniors get the care, support and medicines they need. As a result, seniors are better off. We have renewed and extended this long term partnership through at least 2025.
OptumRx and UnitedHealthcare have launched an innovative tool called PreCheckMyScript that gives physicians real time insight into drug cost and a patient's benefits during appointments. This is another step in aligning doctors, pharmacists, health plans and consumers around the goal of ensuring people get the right drugs at the right cost, hassle free. At the national and local market levels, UnitedHealth Group is bringing capabilities together to combat the opioid epidemic. We are in a unique position to help curb the crisis through alternative pain management therapies, prescribing practices consistent with CDC guidelines and effective addiction treatment and recovery programs. Now turning to Optum.
I am honored to share the progress driven by our 135,000 talented health care professionals. What they have done is remarkable for health care
and
for our business. 6 years have passed since we introduced an expanded vision for a health services company capable of leading transformation. We were a $30,000,000,000 company then. By the end of this year, we will be at $91,000,000,000 That is a compounded annual growth rate of 21%. Our relationships, capabilities and impact have grown just as notably in that time.
But we are still just getting started, and our focus is on delivering the tremendous promise of Optum. We first envisioned a $500,000,000,000 market opportunity for Optum in the United States alone. That domestic market scope has grown and expanded to over $800,000,000,000 and to more than $1,400,000,000,000 globally. When we looked at the health system in 2011, 3 major market changing forces were emerging: data and technology, value based care and the rise of the consumer. These trends have continued to emerge.
The demand for advanced data and analytics and technology solutions grew as the industry recognized that every single data point in health care can have an impact on the quality and cost of care, and most importantly, the health of people. When we collect, refine, analyze and then activate each of these small data points at the point of care, we can make the health system massively smarter and more effective. So we have focused on developing capabilities that bring together precision and predictability to health care decisions and strategies. This year, we formalized how we present these capabilities under the Optum IQ brand. Optum IQ reflects the unique health care intelligence embedded in everything we do across Optum Health, Optum Insight and OptumRx.
This data and analytics expertise is being enhanced by our combination this year with the Advisory Board and its industry leading research and advisory services. These strengths deepen our industry relationships and enable larger scale solutions. 6 years ago, the talk was about too much paper, too many obstacles and not enough collaboration. Today, we help thousands of care providers and benefits sponsors better connect and collaborate with innovative technology and operational support. Octum 360 is a key example.
This is our revenue management venture in collaboration with leading hospitals, health systems and labs. It is improving back office efficiency, simplifying the payment and billing process, shortening collection cycles and making it all more accurate. Industry collaboration is also critical to driving innovation that benefits people at the point of care. We have expanded the OptumLabs research collaborative from Cambridge, Massachusetts to include centers in San Francisco and London. Important next generation work is also happening at healthcare technology startups.
To support these innovators and give Optum faster access to the cutting edge, we are pleased today to be announcing the launch of Optum Ventures. We will be providing capital as well as strategic guidance, access to data resources and critical test beds needed to successfully develop and bring new technologies to the market. 2 of our first portfolio companies are Mindstrong Health, which has developed advanced digital phenotyping through smartphones and mental health monitoring and management and Bui, which has created an AI powered diagnostic tool that provides people accurate, useful information about where and when to really seek care based on their symptoms. 6 years ago, the movement to fully leverage data and advanced technology in healthcare was in a much earlier stage. Today, those assets are the price of admission for improving care quality, experiences and value.
And 6 years from now, they will be the very fabric of healthcare. For us, this is not about theory, marketing or buzzwords. It is about making healthcare better. We will continue to invest heavily in applying the most advanced tools to push forward our long standing work in advanced analytics and machine learning. And our team of thousands of technologists and data scientists is exploring new ways to monitor patient health, fight fraud and increase interoperability.
The 2nd major force we have been advancing steadily is the movement to value based care. Care providers need support and additional expertise from the examination room to the back office in order to adapt and ultimately succeed in a system anchored in outcomes and performance. We are doing this in partnership with some of the most progressive care providers today. OptumCare is one of the leading providers of high value primary, urgent and surgical care in the country. Earlier this year, surgical care affiliates brought its ambulatory surgery capabilities to Optum.
SCA works with providers and payers to ensure doctors are capable of delivering high quality services and consumer friendly, cost effective outpatient settings. The economics are clear. Value based care works and will continue to expand in the marketplace. It will continue growing in Medicare, while adoption in the Medicaid and commercial markets starts to take shape. In addition to expanding our own value based care, we are ensuring it works for others.
Continued technology investments through Optum Insight will further support payer and provider success. And our advisory services will provide strategic guidance that ensures smooth transitions as the market evolves and advances. Ultimately, we will give the delivery system the end to end capabilities needed to more effectively engage people, more efficiently address their wellness and chronic care needs. And we intend to continue being highly active in the marketplace as we look to team up with the most progressive Care Delivery Organizations. The rise of the consumer was the 3rd emerging force.
Our consumer support is as broad as healthcare itself. Consumers expect instant information 24 hours a day. So we develop and refine the tools they need to take control of their health and wellness. These tools provide insight and transparency to help them make the best informed decisions. As you saw earlier, Rally Health provides a suite of engagement tools that helps people select their benefits as well as get and stay engaged in managing their health.
Since we launched our patented approach a little over a year ago, we have seen consumer acceptance of our care programs double. Our pharmacy care services drive better consumer experiences and outcomes. Every time a consumer interacts with their pharmacy, we have the chance to connect them to health and well-being services beyond drugs. Finally, with a bank focused exclusively on health care, we provide consumers the platforms and tools they need to save and pay for their care. At the end of this year, more than 3,000,000 people will have health savings accounts with Optum Bank.
The consumer's role as a force in healthcare continues to grow. Our investments in new technologies, products and engagement models will focus squarely on meeting their demands now and into the future. And you're hearing a lot today about our enterprise wide focus on Net Promoter Score and how this drives us every day to ensure we are delivering on our promises. The 3 emerging forces that motivated us 6 years ago have now accelerated into movements that are changing health care for the better. I hope one of the things you take away from our discussion this morning is how our Optum businesses are strongly aligned and as an operating platform and collaborating to drive these movements forward.
Thus, Optum Insights' analytics and technology expertise, Optum IQ, empowers the work of Optum Health and OptumRx. Unique OptumHealth predictive models that find care gaps are built into OptumRx pharmacy care services. Optum Insights' ability to help providers modernize their infrastructure creates opportunity for OptumHealth to partner with the same organizations to advance value based care. And OptumRx frequent touch points with consumers improve OptumHealth's ability to serve people's broader needs. The list goes on and on.
We will continue to focus on growth and on reaching our full potential and helping people live healthier lives and helping make the health system work better for everyone. It is our privilege every day to live this mission with our customers and the consumers we serve. It is our purpose to keep driving it forward with courage, determination and humility. I am confident our people will do exactly that as they deliver on the promise of Optum for years to come. Thank you for your attention today.
And now before I leave the stage, I am honored to introduce the next speaker. A major growth opportunity lies in supporting the growing of government entities at all level. These changes, complexities and demands for value they face are daunting. This year, we brought together numerous capabilities and launched Optum Serve. This is our growing business supporting federal agency efforts to modernize the U.
S. Health system and improve the health and well-being of Americans. Here to tell you more about it is retired Lieutenant General, Patty Horoho, United States Army. Patty?
Thank you, Larry. I am honored to be part of the Optum team and this is why. We serve America's sons and daughters, selfless men and women who are willing to raise their right hand to defend our freedoms. We have an unprecedented opportunity that's in front of us to improve care for them and for 1,000,000 by supporting the Department of Defense, the Veterans Affairs and other federal agencies. This is why we created Optum Serve, bringing together capabilities such as data, data analytics, federal IT, consulting and care delivery to help our military and our federal clients.
We're in all 50 states to include the District of Columbia, providing disability exams to our service members and our veterans in collaboration with the Veterans Benefit Administration. And we're leveraging enterprise assets to ensure that we connect the right care where it's needed and when it's needed. And our presence is expanding to points around the globe. Earlier this year, Department of Defense chose Optum to operate its global nurse advice line. In March, Optum Nurses will answer calls 20 fourseven to over 9,000,000 people, military, retirees and their family members stationed around the globe.
And this is just the beginning. Government increasingly wants the same advanced solution that Optum provides its commercial clients to manage care, quality and cost. And I know firsthand that Optum has the agility, the scalability, the understanding, the relationship and the culture to improve the health readiness of our force and deliver on our promise to them. Serving together, honored to serve, and this is the value that Optum brings and this is the heart of Optum Serve. I'd like to now introduce the CEO of Optum Insight, Eric Murphy.
Thank you.
Thank you, Patty. Optum customers are grappling with growing quality and cost challenges as they navigate the demands of a fast changing system. These challenges range from making better patient care decisions to improving the health of individuals and entire communities. From building more efficient back office systems to developing new and better treatments. They all share the same ultimate goal, consistently better health and cost outcomes for everyone.
OptumInsight brings a distinctive proprietary combination of capabilities and resources to advancing this goal. Data, analytics and healthcare expertise informed by decades of firsthand experience in healthcare. As Larry mentioned, this is what we call Optim IQ. It starts with data. Our data resources are fresh and continually growing.
Today, we draw from nearly 100000000 190000000 lives of claims data and nearly 100,000,000 lives of clinical encounter data. We also have data covering billions of medical procedures, lab results and diagnoses. While the amount of data we work with is vast, the unique value we bring to the market stems from how we take disparate data from across the health system and organize, enrich, constantly refresh and deploy it every minute of every day. Combining insight rich data with leading analytics tools and connecting to machine learning utilities provides more comprehensive insights into our customers' biggest opportunities and challenges. It helps them predict what will happen in the future so they can make better actions today.
Optum customers rely on Optum IQ to discover patterns in quality and health outcomes, to better understand and predict consumer behavior, to manage cost, risk and utilization, and to improve operational performance. Optim IQ is a foundational capability designed, developed and delivered by healthcare experts. This is an important distinction. We are a healthcare company. Our data and analytics are backed by 1,000 of active in the market clinicians, technologists and experts devoted exclusively to and in the daily flow of healthcare.
At Optum Insight, we create and deliver the value of Optum IQ to care providers and benefit sponsors of all kinds. We use it to support the innovation work of life sciences companies and researchers in all walks of healthcare. Our clinical analytics are critical sources of insight for care providers from large hospitals to local practices, reliably predicting outcomes at the point of care, which helps them take the next best actions for individuals and populations. More than 700 hospitals and 7,000 medical clinics depend on Optum's proprietary analytic engines. 20 of the top 25 U.
S. Health plans use our analytics to ensure high quality care for their populations and to improve their claims processing. And more than 100 global life sciences companies use these capabilities to understand the safety and efficacy of new treatments and medicines. Let's hear more about the impact and value from Optum Analytics' Chief Product Officer, Sarah London.
Thank you, Eric. Good morning. Optum Performance Analytics is our next generation providers as they navigate this transition to value based care. Under the hood, clients can access our industry leading algorithms and predictive models and dive directly into robust curated clinical data, integrated claims and innovative inputs like patient reported outcomes and social determinants of health. In addition to enabling custom exploration though, we wanted performance analytics to accelerate value for our clients.
So we also built a library of prescriptive dashboards that diagnose for each client where their greatest opportunities are and how best to address them. An example of this is our leakage dashboard. Providers think of leakage as any care that leaves their system. It means a loss of market share, uncoordinated care experience and often higher costs both for patients and the system overall. So the leakage dashboard tells them very quickly how much care is leaving the system and what the drivers are.
Are there specific procedures that are leaving more often than others? Are there individual providers or clinics that have common out of network referral patterns? And most importantly, where are these patients going instead? And this level of information ends up being really powerful as our clients look to move from insight to action. A great example of that right here in New York City is NYU's clinically integrated network.
They are a client of ours and they confront leakage in a major way given the fractured landscape of healthcare in New York. Just by taking this information out to facilitate 1 on 1 conversations with their providers, they were able to reverse their leakage trend by 5%, creating 1,000,000 of dollars of value for their risk contract. And as the team at NY UPN will tell you, even more importantly, creating a higher quality patient experience and better outcomes for the patients they're responsible for. This is just one example of how Optum Performance Analytics is helping our provider clients become market leaders in value based care.
Thank you, Sarah. Working alongside and often integrated with our analytics solutions, our technology driven capabilities that modernize operations and enable greater collaboration across the system. We see growing demand for end to end managed services. Increasingly, this includes managing and operating an entire core process, like revenue management. Through Optum 360, we help hospitals and laboratory partners more efficiently manage their revenue needs and make the billing process easier and more transparent for their patients.
Today, we manage more than $65,000,000,000 in billings for our major partners. We are focused on driving tangible operational benefits for our customers. In healthcare operations, our payment integrity solutions help 150 payers save 1,000,000,000 of dollars annually. These savings result from greater payment accuracy, reductions in fraud and abuse, and overall improvements in payment system efficiency. Another way we create value is with our healthcare technology as a service.
More customers are entrusting their key information technology and operational services to Optum because we have the right expertise and solutions and we know how to do it more cost effectively. Let me give you an example. We just started working with Triple S Salud in Puerto Rico to develop a better local health system for the 1,200,000 members they serve. We were selected to strengthen and operate all of their core processes, including information technology services and claims processing. This relationship underscores our ability to help customers understand their unique needs and opportunities, then draw on our expansive capabilities and expertise to build the best path forward.
We have continued to advance Optum Insights Research and Advisory Services in 2017, including the addition of the Advisory Board. Together, we will better support our collective customers in 3 ways. 1st, with industry leading research that offers unprecedented insight into best practices and opportunities to drive value for system participants. 2nd, with enhanced technology capabilities focused on improving performance and efficiency across healthcare. For example, our Optum Analytics platform will work hand in hand with the advisory board's Crimson software, which measures variability in clinical performance.
And 3rd, with dedicated consulting services that will help us better meet our clients' needs, bringing the broad capabilities of Optum to help them. The Advisory Board positions us to enhance value for customers of both organizations in the near term and ultimately grow into new and untapped markets, including bringing Advisory Board capabilities to the payer and Life Sciences markets for the very first time. We are very excited to be joining with Robert Musselwhite and the talented Advisory Board team, and Robert is here with us today. Finally, let's take a look at Optum performance in 2017 and what we expect for 2018. We expect to finish strong in 2017 with revenue growth of 10% and earnings growth of 16%.
Key contributors to our revenue growth include Optum 360, comprehensive risk and quality solutions and payment integrity. Optum Insight revenue backlog will grow to $15,500,000,000 by the end of 2017, a year over year increase of over 20%. This indicates a continued strong growth pace for the business, particularly in the payer and care provider markets. We project to grow revenues 14% to 17% in 2018, and we will have more than 80% of that already booked in backlog by the end of the year. We forecast to end 2018 with backlog in the range of $17,000,000,000 to $18,000,000,000 That's growth of 10% to 16%, driven by large managed service awards as well as mid market sales.
For earnings, we expect growth of 16% to 22%, driven by Payment Integrity, our comprehensive risk and quality solutions, as well as our managed services, including Optum 360 and State Government Solutions. I'm grateful for your time this morning. And now I'd like to introduce John Prince, Chief Executive Officer of OptumRx.
Good morning. OptumRx is distinct in how we engage and support the consumer, apply information and technology and impact both care quality and total healthcare costs. Our pharmacy care services leverage capabilities unique to OptumRx, starting with OptumIQ. We use the most common touch point in healthcare, the pharmacy experience, to apply our data and analytics, engaging our 65,000,000 members in every aspect of their health and bringing their pharmacy and medical experiences closer together. We take a whole person approach, targeting care gaps and opportunities to address health needs well beyond the prescription.
We have 100 of millions of interactions with our members each year. During each one, our analytics help us 0 in on a person's specific needs and opportunities as much as doubling the likelihood they're going to take action. The pharmacy market today is very dynamic and we apply the strengths of OptumRx to address 3 of the most significant problems in healthcare. First, the continued increase in drug prices. In 2017, drug prices set by pharmaceutical manufacturers have increased nearly 10%, and many drugs have increased by 50% or more.
The demand for these expensive drugs is growing as more people than ever struggle with chronic illness. 2nd, health care is fragmented and difficult to navigate for everyone. Care delivery often involves multiple providers and organizations with no single entity quoting the different aspects of a patient's care. 3rd, there isn't enough trust and aligned incentives in pharmacy. For example, consumers, especially the 40% in high deductible health plans, need to better understand drug cost and what is covered under their plans, insight they can use to make the best decisions.
Pharmacy Care Services enables us to meet these challenges head on. We take direct aim at the high cost of drugs by driving more value for our customers and our consumers, including aggressive drug contracting strategies targeting the lowest net total cost. Importantly, we passed these savings on to plan sponsors and consumers. We offer OptumRx customers an option to provide rebates to consumers at the point of sale. In the first half of twenty eighteen, our customer UnitedHealthcare will offer the same for employers using their fully insured plans.
For consumers, we're providing greater transparency into drug costs and how their benefits impact what they pay. Our digital tools help them determine what drugs are covered under their specific benefit plans, identify lower cost alternatives and find out how to get the lowest cost for the drugs they need. And we simplify patient experiences by giving their doctors better, more timely information at the point of care. Here to give us a closer look is Dee Grein, OptumRx product leader.
Thanks, John. Good morning. PreCheckMyScript is a new breakthrough capability that provides real time visibility into the patient's drug benefit. Here's how it works. Imagine you're a patient with your physician in the exam room and they want to prescribe you a medication.
Immediately, they can talk to you about whether or not the drug is covered, how much it costs you in out of pocket expenses and whether or not there's an alternate that might save you money. For your physician, it's simple and easy to use because it's seamlessly integrated into the electronic medical record. PreCheck My Script also alerts the physician if a prior authorization is required. It enables them to take action, saving you from potential disruption at the pharmacy counter. All they have to do is either prescribe an alternative drug or file electronically and know instantly if it's been approved.
The benefits are real and tangible. As a patient, you get the right drug at the best price with less hassle. And this is really important, because if you encounter a lot of problems in getting your medication, you might not fill the prescription at all. UnitedHealthcare has already adopted PreCheckMyScript. And in the few short months it's been in action, tens of thousands of prescribers have used it over a 1000000 times.
And in 20% of the cases where an alternate drug is offered, physicians prescribe it. The results are savings for consumers and our clients and less frustration for everyone. But this is just the beginning. OptumRx is going to make PreCheckMyScript available to all of our health plan and employer clients. Ultimately, we want all 65,000,000 members to benefit.
In 2018, we're going to take the content and make it available to consumers through our portal and mobile app. And by the end of 2019, 80% of active prescribers will have access. PreCheck My Script is a critical tool, helping OptumRx drive greater value and transparency across the health system. Thank you.
Thank you, Dee. Some of our most essential work is in helping solve one of the biggest public health problems of our time, the opioid crisis. We were among the 1st in our industry to launch an aggressive opioid risk management program. More than 1700 OptumRx customers, representing nearly 50% of our direct commercial lives now partner with us. In 2018, we will continue to promote adoption among all of our 65,000,000 members.
Since launch, we've seen an overall reduction of 12% in opioid prescriptions being dispensed, reducing opportunities for misuse and abuse, while making sure patients get the care and support they need. Likewise, we are working with our health plan partners on improving integration of medication assisted therapy and custom designed opioid behavioral health services from Optum. This combination improves the effectiveness of addiction management by up to 50% versus 10% with traditional treatment. More broadly, influencing the site of service is another way we're improving patient experiences and cost. We are helping patients transition from receiving regular medication infusions in a hospital to a more comfortable and cost effective site, their home.
By doing this, we can realize as much as a 33% lower cost, while ensuring patients continue to get the effective care they need. And we're just getting started in driving value through our unique combination of supply chain efforts, transparency and synchronized care. As this impact expands, more large sophisticated buyers are choosing us. Today, we have relationships with 2,300 benefit plan sponsors. This year, we established and renewed several key relationships, including with the State of New Jersey, Health Choice of Arizona and Independence Blue Cross.
Our overall customer retention rate remains strong at 98%. And as you heard from UnitedHealthcare, we are proud to be among those selected to participate in Health Transformation Alliance, a group of 40 major companies focused on promoting value. On January 1, we will begin serving the people of 5 new high profile customers who are part of this group. Now let's look at OptumRx performance in 2017 and look ahead to 2018. We will finish strong this year with revenue growth of 5%, driven by membership growth and expansion in the specialty business.
I want to emphasize that as we grow, we're driving value for the broader health system. This year alone, we've taken an additional $2,000,000,000 in cost out of the system through our various pharmacy care services programs and delivered a majority of that directly back to our clients and consumers. This makes healthcare more affordable, but also decreases revenue. In terms of earnings, we will deliver 16% growth this year, driven by membership expansion as well as purchasing and operating efficiencies. Looking ahead to 2018, we expect adjusted scripts of $1,300,000,000 growth that is meaningfully above a flat industry outlook.
This is driven by another successful selling season and strong retention rates as well as growth from UnitedHealthcare. As a result, we expect revenues of 66.5 to $67,500,000,000 growth of 5% to 6%, again, well above industry growth rates. We forecast earnings will expand 8% to 11%, driven by growth in script volumes, continued success leveraging our supply chain efforts, as well as expansion in our specialty business. Thank you. And now I want to hand it over to Andrew Hayek, Chief Executive Officer of OptumHealth.
Good morning.
Today OptumHealth is driving meaningful improvements across the health system in partnership with physicians, health systems and health plans. There are 3 main ways OptumHealth improves outcomes and improves the health system. 1st, encouraging people to better understand and manage their health and to make better choices. 2nd, helping people with chronic and complex conditions to better manage their health. And third, directly providing high quality care in local communities.
And I want to emphasize that we are committed to serving a multi payer world. OptumHealth works with over 100 payers, nationals, regionals and not for profits. These payer relationships span the entire spectrum and together we enable each other to expand our impact. Improving health starts with engaging people in their well-being and helping them to make better decisions. We help people to shop for and enroll in benefits, to take positive steps to improve their health, and to make better choices about where to access care.
We showed you how we do this through our Rally Health platform. We also help people manage their financial health, which is especially important as more consumers engage in high deductible health plans. Today, Optum Bank is the largest health savings account administrator in the country with $8,400,000,000 in assets under management. When people use Optum Bank to manage their healthcare finances, they become more engaged in their overall health and make better decisions about where to get the care they need. This year, Empower Retirement, one of the largest retirement plan administrators in the country with 8,200,000 members named Optum its exclusive health savings account partner.
The second major way we improve outcomes is by helping people to manage their chronic complex and behavioral conditions. Today, 60% of people in the United States have at least one chronic illness and people with chronic illnesses account for 86% of total U. S. Healthcare spending. Our efforts help people to better manage their conditions and engage with the right providers and we address both medical and behavioral needs because they go hand in hand.
Heart disease is a powerful example of this need. Nearly 30,000,000 adults in the United States have been diagnosed with heart disease and it drives more than $30,000,000,000 in annual costs. Heart disease remains one of the leading causes of death. For heart attack survivors, 1 in 5 will develop major depression and this depression doubles the risk of premature death. Our programs leverage the depth and breadth of Optum's capabilities starting with data driven insight into treatment effectiveness and outcomes using Optum IQ.
This insight determines the best action to take for each diagnosed patient. Our programs include 1 on 1 coaching with nurses and mental health professionals, in home monitoring and the direct delivery of high touch care. In our behavioral health case management program for heart disease patients, more than half of those engaged show significant clinical improvement. This results in a 35% reduction in total medical cost. This level of personal support also comes to life every day across a variety of clinical services digitally, by phone and through in person care.
Our 1600 advanced practice clinicians in our house calls program will make more than 1,200,000 home visits this year to help people better manage their health and close gaps in care. The 3rd way we improve outcomes is by developing data driven, risk bearing, high value ambulatory care systems in local communities. OptumCare Medical Groups comprise more than 20,000 physicians providing primary and specialty care with a deep commitment to value, investing proactively in the health of their patients and taking accountability for the quality, experience and total cost of care. Again, we serve a multi payer system to meet the needs of the entire community. Physician groups choose OptumCare as a partner to help them transition from fee for service healthcare to value based care.
We provide the analytic approaches and processes, the tools, technology and the support needed to improve care and take full accountability for quality and cost. In 2018 for our medical groups serving Medicare Advantage populations, 100 percent of our patients will be in a 4 star or better plan. We complement our physician groups with high value ambulatory care capabilities, including urgent care and ambulatory surgery centers, which provide outstanding quality and consumer experience at significantly lower costs. We have nearly 250 MedExpress Neighborhood Care Centers which provide a broad range of services. MedExpress facilities can perform roughly 90% of care provided in emergency rooms at 90% lower costs.
And this year, we expanded our range of services with the addition of surgical care affiliates. I joined Optum through SCA and I'm honored to have the opportunity to help lead the next stage of growth for Optum Health. And as we envisioned, SCA complements our strategy for OptumCare. A significant portion of the care currently developed in hospitals or hospital licensed facilities can be performed at 1 of more than 200 facilities in our growing SCA network. Our clinicians and physician partners provide a broad range of surgical and procedural care with outstanding clinical outcomes and patient satisfaction and 50% to 75% lower costs than if the same care was provided in a hospital setting.
This year, we will perform approximately 1,000,000 surgeries and procedures in SCA facilities. If we could do all clinically appropriate outpatient surgeries in the surgery center setting, we could reduce outpatient surgery costs by more than 50% while delivering outstanding quality and patient experience. An example of this is total joint replacement surgeries, which often cost $50,000 or more in a hospital setting and can now be performed at half that cost in an ambulatory surgery center with outstanding clinical outcomes and patient satisfaction. In many markets, we have the opportunity to reduce total health expense by shifting appropriate care to the ambulatory surgery center setting, while driving outstanding clinical outcomes and a net promoter score above 90. Today, in total, OptumCare Medical Groups serve 30 markets and when combined with MedExpress and Surgical Care affiliates serve 60 markets across the country.
And we do this working with multiple payers in our markets. We will continue to grow revenues at a double digit rate by expanding into new markets and deepening our presence in existing markets, adding physicians and ambulatory care locations and serving more patients and payers. OptumHealth's growing impact is reflected in our 2017 performance. We expect to deliver revenue of $20,400,000,000 and earnings over $1,800,000,000 this year, up 28% from 2016, driven primarily by expansion in our care delivery businesses and the addition of SCA. OptumHealth grew to serve 8,000,000 more people in 2017 and we now serve a total of 91,000,000 consumers.
In 2018, we expect to deliver revenue growth of 18% to 20% and earnings of $2,350,000,000 to $2,450,000,000 up 29 percent to 34% from 2017 driven both by organic growth and expansion in Care Delivery, SCA and Optum Serve as well as growth in our consumer solutions businesses. We expect to end 2018 with 92,000,000 to 93,000,000 consumers served, which is growth of approximately 5% when you exclude the impact of TRICARE consumers. As you know, the revenue and earnings contributions from increases in consumer served is influenced by product mix. So over time, as we deepen our relationships with consumers, such as through OptumCare, we expect the financial contributions per consumer to grow. It's an honor to be part of the Optum team and to have the opportunity to help shape the future of Optum Health.
Now I am pleased to introduce the President and Chief Operating Officer of Optum, Dirk McMahon.
Thank you, Andrew. After hearing from the Optum leadership team, we hope you've gained a deeper understanding of what we're of the work we're doing across our businesses. It's about improving the health system and driving growth for Optum. Our progress so far has been rooted in an unwavering focus on the 6 priorities that have guided Optum from the start: business alignment execution, simplification and cost management relationships, growth, strengthening leadership and culture and employee engagement. At the start of every year, Larry reminds the entire organization of these priorities and what they mean.
They keep us focused on what matters most, doing what is best for our consumers and the customers we serve. They are the most important measure of Optum's success. So we collect, track and dissect Net Promoter Scores across all areas of our businesses to understand the drivers of satisfaction and loyalty. We want to know what they expect from us and where we can improve for them. To us, NPS equals EPS.
We know that organizations with the highest NPS scores have higher retention, higher growth rates and better financial performance. Companies with NPS scores over 60 are considered high performing. Our goal is to increase our NPS to 70 and reduce the variability of performance over the next few years. And we're making good progress. Each Optum business and function is driving their own robust series of plans to elevate NPS.
Here's just one example. We constantly monitor multiple metrics connected to our call center and we know customers don't like providing the same information twice when they call for information or help. I know I can't stand it when I have to do that. So we teach our voice response systems to do this better. This includes simplifying menus and automatically matching member phone numbers to their profiles in our system.
We verify a person's identity and route them to the right resource who can get to the heart of their concern, whether it's a clinical or administrative manner. We apply the same attention to detail to continually improve and service and delivery in every aspect of our business. Everybody at Optum from the leaders to the frontline staff is accountable for improving NPS. And we continually reinforce it. We measure NPS at the moments that matter to the customer.
Through a phone call or an email survey, we reach out to them right after their interactions with us to get feedback. Then those individual customer NPS survey scores are shared with team members, so they know how they perform for the specific customer they work with. And we hold our people accountable, including through performance evaluations and compensation incentives. Everybody knows that healthcare costs are challenging. So ultimately NPS comes down to value, specifically whether or not customers feel like they're getting good value for their money.
As you've seen throughout this discussion, a major way we drive value for our clients is improving affordability. From our payment integrity solutions that eliminate waste, fraud and abuse to the way surgical care affiliates reduces cost by bringing expensive surgeries to better settings. And how OptumRx improves treatment adherence and closes gaps in care by integrating pharmacy with clinical care. From a strategic perspective, we will continue to drive the highest value possible for our customers now and in the future. We will continue to meet consumers' growing need for a more personalized digital experience, delivering it in ways that motivate them to close care gaps and stay diligent about improving their health.
And as I noted, consistently higher NPS results will help us increase EPS through retention of the great customers in our portfolio today as well as winning Nuance, which brings me to our financials. You've heard each of if you've heard the financial expectations from each of our business CEOs, but let me pull it all together so you can see the total Optum picture. We will finish 2017 with earnings of $6,700,000,000 each business segment delivering double digit earnings growth. Optimum revenues will be over $90,000,000,000 growth of 9% with OptumHealth and OptumInsight delivering double digit growth and OptumRx solidly above market growth. And we will deliver margin expansion of 70 basis points.
In 2018, we expect to deliver $100,000,000,000 in revenue, a milestone accomplishment as we continue to see double digit growth at OptumHealth and OptumInsight and again market leading growth from Rx. This revenue growth coupled with continued operating advances will once again drive double digit growth in earnings and margin expansion. We expect earnings will grow to a range of $7,800,000,000 to $8,000,000,000 driven by strong growth in each of our segments and we anticipate margin expansion of 40 to 70 basis points. Thank you again for your time today and especially for your support during the 1st 6 years of the Optum Growth story. In the years ahead, we look forward to continuing this conversation with you.
At this point, I'd like to welcome back to the stage my colleagues, so we can answer your questions.
Thank you, Dirk. I'd like to spread the mics out to the two sides of the room since we got more questions from the center on the first session. Over here, please. And in the front, if we can get 2 going in position. Thank you.
Okay. Thank you. Can you talk about the composition of revenue in OptumHealth? And as we it looks to us from your 10Q, 10 ks disclosures that about half of it is premium revenue and what's in that, my understanding most of it is mental health contracts. We don't hear much about that.
I noticed that the growth there was slower at about 4%, if I got it right in at least year to date for 2017. And so if you could just talk to what's happening there, that would be great.
Why don't we start with Tim and then maybe Andrew?
Sure. So let me just address the question around 4% and then Andrew more of the composition. And so if you think about the growth year over year, a lot of what's driving the artificially lower growth in 2017 is a consequence of a large behavioral client that moved from risk to administrative services. And then, one other piece of business that we had as well that was really around the CMS rate reduction. And so as you adjust for both of those, that would move the growth rate back to 13%, which would be back in line with the premium revenue growth you've seen in prior periods.
And then Andrew maybe some of the composition of the revenue. You bet. So the largest portion of premium oriented revenue would be the risk based contracts we have within our Optum Care delivery groups, which take full capitation, seniors, commercial as well as Medicaid populations and behavioral health business would be secondary to that revenue source around premium oriented revenues, the OptumCare would be substantially larger in that basis.
Thank you. Up here, please.
Thanks very much. It's Mark Cusick from Edgerton. I'd just be interested to get some breakdown of that huge backlog in Optum Insights. It's growing at an incredibly impressive rate. You give us the principal elements within that whatever it is $15,000,000,000 or $1,000,000,000 of backlog at the end of 2017?
Eric?
Yes. Thank you, Mark. So the composition of our backlog is really a broad range of our portfolio, starting with our Optum 360 capabilities, which are both ambulatory and acute end to end revenue cycle management capabilities. On the payer side of the marketplace, our comprehensive payment integrity and our risk and quality solutions, our key managed services offerings that we deliver to the health plan side of the market that contribute greatly to our backlog. And in the state government market, where we have large contracts around our data services, our business intelligence and the work that we do with the state Medicaid programs.
You mentioned the performance of our backlog. We finished, as you know, Q3 at just under $14,000,000,000 I shared with you in my opening comments that we forecast to finish the year at $15,500,000,000 Those are primarily that delta to finish to $15,500,000,000 will come from both acute and ambulatory growth cycle as well as state government contracts.
And I think you mentioned as well when we close-up the year, you expect to have well above 80% of 2018 revenues
as a result of that backlog performance in 2017?
Yes, right here. And then we're going to go back here.
Hi, good morning. Thanks. It's Dave Windley at Jefferies. Management has talked about OptumCare becoming a very large business, many fold larger than it is today. We know you're targeting 75 markets presence and maybe 45 of those today in some of the services, but not all.
So the question is, how can you help us to understand the path to this many fold larger business? It seems like it's more than just filling out the 75 markets, but probably includes addition of other services and what would those be? The second part of the question is, how does the OptumCare business intersect with the Nexus ACO effort on the UHC side? Thanks.
Larry, you want to start with talking about the
Well, I'm going to hand this to Andrew, but I will start by kind of framing a bit. The whole strategy of Optum that goes back 6 years when we put together the first original plan, Call 1 Optum, was to actually have this side of the business put together with urgent care, with what we're doing with our physician groups, what we're doing now with surgery care, house calls as well as behavioral. So we're kind of marching down that road toward those 5 markets as we kind of build those up. And you're right, there are certain markets that we are more in than we are others, but we have strategies to put all that together. I think that as you bring up the point of where you at with UHC, where you at with what you're doing internally, I think you probably get the feel that we're doing a lot with all the Optum companies as they tie together in some of these programs that we are starting to put together.
We are in the marketplace. We are continuing to look at assets that make sense to us, but we have put together what I'd call solid models in terms of how we view the organizations and how they fit. And we really do a lot of what I'll call have a lot of discretion and pay a lot of attention to what we're doing in terms of bringing those organizations into the fold that they're going to fit. But Andy, you might just elaborate on your strategy.
Yes. So today with the medical groups, we're in 30 markets. When you combine that with MedExpress and SCA locations, that expands to 60 markets. So we'll continue to add markets by partnering with more physician groups and those physician groups are often looking for a partner to help them on that journey from fee for service to value based care and they want to access our tools and technology, our clinical models, our ability to assess and underwrite and finance the shift to risk, a whole bevy of services we can provide to help that transition. So we'll continue to add medical groups that are looking for that kind of partner, scaled groups.
We'll also look at more organic building of groups where we're starting with a smaller footprint and really doing tuck in additions to those groups to scale more organically. Our focus from an ambulatory standpoint, as you would imagine, is focused around urgent care and surgery centers, both of which have tremendous opportunity in the markets we serve currently to go deeper and expand the range of services. We also have medical groups that include lab pathology, imaging and other services. And so selectively over time we'll look at other high value ambulatory care assets that we can add that really augment our fee for service business because they are value oriented, competitively priced, great quality, great experience and they also serve a risk based model very, very well. In terms of how we work with UnitedHealthcare, it's a very collaborative relationship that spans of course Medicare and retirement as well as commercial and community and state.
A lot of energy is around the Medicare and retirement. That's a large portion of the risk OptumCare gets today is in the MA space generally and UHC is a leader in that space, so very collaborative relationship.
On the UHC side, Dave talked about in the 2025 view about how Optum would be fiercely multi payer in care delivery. One of those payers is UnitedHealthcare. At lunch, we're going to give you a sense of how Optum can interoperate with payers and the easiest way to demonstrate that is to use UnitedHealthcare. So I think we're going to give you some really tangible examples to get to that question.
John, there was like one
point. Yes, sorry.
We are multi payer in what we do. And as we expand, obviously, we're working with other ACO organizations around the country to tie into what their strategies are and so forth. And I think you'll see more and more of that as we go down the road.
There's a question back here.
Thanks a lot. Mike Baker from Raymond James. Just a question on the OptumRx side. John, you mentioned kind of the growth in specialty, was just trying to get a sense of pace of that growth as well as kind of remaining opportunity within your book. And then secondarily, given the backdrop of drug pricing, what are you seeing employers tend to in terms of transparent relationships versus traditional on the PDM side?
Thank you, Mike. In terms of the two areas, first of all, specialty has been a high growth area for us. There is a session later this afternoon, which will actually go specifically into that in pretty good detail. The main message at a macro level, we're growing probably 2 to 3 times the market rate and we're doing that through better execution, sales force that's in the market, calling on doctors, winning in the open market and there's a huge opportunity to expand that. We still are not reaching our full potential in terms of that market.
In terms of the employer market, we are out in the market with a transparent model. That transparent model starts with a open and transparent P and T process where we have over 100 clients that come to our P and T every quarter, So you can see how we make decisions. We do full transfer of transparent in terms of our supply chain economics to our employers, so they can see the full supply chain, they pay us a fee for that. It's up to a client in terms of how they decide. So we have active dialogue with lots of different national accounts where we might bid multiple different ways.
They want a transparent way, they want to do other ways which help where we take on more risk, but it's up to the client to decide how they want to do that. And we are open to whatever way they want to work with us.
Right here, please.
Thank you. Chris Rigg with Deutsche Bank. Obviously, Optum is multi payer, but your largest client is still UnitedHealthcare. And I guess what I'm wondering is how or who oversees what I would perceive to be some internal profit conflicts when you think about the Optum business lines versus the total profits of the organization? And do we ever reach a point where it becomes more about the total profits of the enterprise versus each individual Optum segment in UnitedHealthcare?
Thanks.
Well, I might offer from UnitedHealth Group standpoint, all of our businesses are expected to return on capital. They need to earn it, they need to generate economic value added, the Board measures that. We look at that value creation every year. And so these products have to stand on their feet, they have to stand on their cost structure, they have to hit market quality expectations and service expectations, that's what being a hardened external business is about. And so, I would take that question and turn it and say, all of these things have to stand on their feet.
Is there a question over here? I think there was one. Thank you, Fran.
This is Zach Sopcich, Morgan Stanley. I have a question on MedExpress, in particular the urgent care market as it's getting a lot more competitive with many providers opening urgent care clinics, retailers opening or potentially opening more. How is the MedExpress business competing and differentiating itself particularly for that multi payer business?
Andrew? Sure. I think MedExpress is distinctive in its range of services and the quality of the experience, net promoter score and the ability to truly impact what would otherwise go to an emergency room and care for it in a far more effective setting from a quality experience and cost standpoint. We're very disciplined around the markets that we enter and we really want to focus on areas where we can complement our OptumCare strategy and work with payers to solve some of their needs around more access to high quality lower cost care. So we're targeted, we're selective, we're disciplined.
And to the point Larry made, we are multi payer with MedExpress just like we are across OptumCare and so we really look to work with those payer partners in every community we serve.
All right. Thank you. I think I may ask you to we'll have one more set of questions here after UnitedHealth Group. We're going to have John Rex come out and roll all this together. Thank
you.
Good morning. I have to stand here and take you all in for a moment here. It's always great to see so many of you here again with us today and we thank you for taking an entire day to spend it with us. You know that by nature conferences like these are generally themed around the coming year. It's late November, the markets and frankly all of you have long since moved on from the current year.
It's widely known we formally introduce the next year's outlook. And then there is that grand unveiling when Fran Jacobs sweeps back the covers on the book. And you all turn quickly to the financial summary page. I know it. It makes complete sense and it's geared that way.
It's important that we make commitments to you about how we expect to perform over the next 12 months. And we don't take those commitments lightly. But hopefully what you're seeing today is much more than just the next 12 months. Because that is not the only reason you've committed your capital to this enterprise. It's really about the next many years and the opportunities we have to better serve people and society and to grow through the businesses thoughtfully started, integrated and grown to create today's UnitedHealth Group.
You've been listening for several hours now and I'm sure you've got some top of mind questions. So in my comments, I'm going to try to anticipate a few of those. For lack of a better term, a top ten list of sorts. While the CFO in me, will get it done in 7. All right, let's go.
To begin, question number 1. Is a long term EPS growth objective of 13% to 16% still feasible for a company of this size? The answer simply is yes. It's not only feasible, it is a reasonable expectation for an enterprise with our unique capabilities and opportunities. Over the last 5 10 years, our EPS CAGR is 13% 16% respectively.
Even at $225,000,000,000 in expected revenue next year, we serve multi $1,000,000,000,000 healthcare markets with urgent needs and the potential for us to help. Consistent with past periods, our 13% to 16% objective assumes we may derive up to 5% from capital allocation activities, implying 8% to 11% growth from the existing businesses. So we view our long term target as highly achievable given the markets we serve. Question number 2, you're right Rex, we only really care about 2018. But we'll humor the finance guy by asking about 2017 performance highlights.
Well, I'd be delighted to provide that insight to you. And I'd sum up 2017 in 3 words, balanced, substantial growth. We expect UnitedHealth Group revenues will cross $200,000,000,000 for the first time in 2017, advancing by $16,000,000,000 or 9%. This even with a $6,500,000,000 impact from the deferral of the health insurance tax and the ACA individual market withdrawals. Growth was broad based with 5 of the 7 businesses achieving double digit percentage revenue gains.
Total company operating earnings will grow 17% with both UnitedHealthcare and Optum
each contributing
more than $1,000,000,000 to that. Notably, all of the Optum reporting segments are tracking to earnings growth in excess of 15%. And adjusted net earnings per share approaching $10 will have grown 24%. This is on top of a 25% gain in 2016. 2017 also stands out for the strength and consistency of operating cash flows.
At $12,500,000,000 full year cash flow will exceed 1.3 times net income. Question number 3, all right, enough on 2017, we really have moved on. Let's get to 'eighteen. Yes, let's do that. That's exactly where our heads are too, in the future.
We expect strong underlying financial performance to continue in 2018. We look for revenue to approach $225,000,000,000 a growth rate of 11% to 12%. As in 2017, the broad based growth across UnitedHealthcare Public and Senior Businesses and Optum will again be the prime catalyst. Operating earnings at UnitedHealthcare are expected to rise 14% to 19%. Similar to past years, given how the health insurance tax flows through the P and L, we suggest you focus on the after tax expectations.
On that basis and adjusting out the insurance tax impact, we expect 9% to 14% growth at UnitedHealthcare. Optum earnings are again expected to increase at a high teens percentage pace, led by growth at OptumHealth. Starting with this year's adjusted $10 per share base, the return of the health insurance tax is expected to create a transitory headwind of $0.75 per share. So outside the insurance tax reinstatement, we see 2018 adjusted earnings per share squarely within our long term 13% to 16% target. The cash flow generating capabilities of our businesses remain strong.
We again expect to grow operating cash flows in 2018 to a range of $13,300,000,000 to 13 point $8,000,000,000 a consistent 1.3x net income. This even with the negative impact of the health insurance tax. Over half of the enterprise total will be generated by the non insurance based businesses. That's up from just around 40% 2 years ago. As you become well accustomed to, the health insurance tax impacts other key metrics on the P and L.
So I'll provide a few thoughts on those elements. First, the medical care ratio. Removing the tax, we expect the care ratio to be impacted somewhat by business mix, mostly the faster growth in government programs. The tax itself creates 160 basis points of reduction in this ratio. Taken together, we expect the CARE ratio to decline by 80 basis points to 81.2 percent plus or minus 50 basis points.
We will continue to balance operational investments with productivity improvements. Investments are important for growth areas such as OptumCare, Optum360 and in expanding capabilities around social determinants of care to better serve people with complex health needs. The return of the insurance tax adds about 120 basis points to this ratio as the tax flows through the operating cost line. Likewise, the effective tax rate will rise over 5.50 basis points due to the non deductibility of the health insurance fee. Absent this, the effective tax rate would be similar to this year.
Our effective tax rate remains high compared to other industries and large companies in this country, ranking in the top 20 of the Fortune 100. All right, question number 4. I still don't get the $0.75 per share tax headwind. Could you walk me through that? Sure.
But first, the impact that the tax has on us pales in comparison to the core issue. The impact it has on increasing healthcare costs in particular for our nation's most vulnerable people. Taking into account the non deductibility, the sector wide impact exceeds $22,000,000,000 next year. This is a substantial burden to consumers, adding cost to the system and limiting access and benefits. As to the $0.75 over 2 thirds is the end year 2018 earnings reduction, while the rest derives from the tail impact from 2017.
On the over 2 thirds end year, more than half comes from Medicare Advantage and the non deductibility of the tax. The rest arises from commercial risk products and the accounting that creates a gap between collection and expense recognition. Question number 5. All right. I really don't want to ask this out loud, but I still don't get how to model Optum.
Can you help us with that? Sure. I would love to and I thought the Optum team did a remarkable job laying out some of the key metrics today. But let me highlight them again. On OptumRx, most sitting in this room have a good understanding of that model with adjusted scripts being the key, much like it is for others in the industry.
And that figure is reported quarterly. For OptumHealth, consumers served is the key unit growth metric. But I'd also pay attention to revenue per consumer served. A strong base of more than 90,000,000 consumers has been established. And as Andrew Hayek said, that will continue to grow, but the more significant opportunity lies in expanding the scope of services.
For example, in 2017, revenue per consumer served at OptumHealth grew 12%. We expect that metric to move up another 13% in 2018. As OptumHealth moves deeper into delivering more comprehensive solutions, chiefly care delivery, we would expect revenue per consumer serve to continue as a key growth indicator. For OptumInsight, like other technology companies you may follow, revenue backlog is the key growth metric. It provides insight into how we are growing, visibility into that growth and the out year objectives.
We provide this metric every quarter. The average duration of the backlog is 20 months. And as we consider revenue coverage for next year, over 80% of Optum Insight revenues will be derived from this year's ending 2017 backlog. Okay. Question number 6.
Can we talk capital? Yes. Yes. You just hit the sweet spot for a CFO. Let's talk capital, sit back.
Realistically, this one is going to be a multi part answer. We all have different perspectives on capital. On the equity side, it could be why not pursue more aggressive share repurchase or M and A or a higher dividend. If you're on the debt side, likely you are thinking about debt to capital ratios, EBITDA coverage and leverage overall. And if you're in my seat, it is all of the above plus balancing growth opportunities.
Let me address a few. Our EBITDA coverage ratio remains comfortably in the mid teens at 15 times as we have reduced our leverage position over 600 basis points since last year. Share repurchase activity next year will likely rise to $3,000,000,000 to $4,000,000,000 now that we have reached our deleveraging target. We have increased the dividend at a rate of 20% or more for each of the past 8 years. Current payout levels are about a 30% payout ratio and we've indicated that we target a markup payout ratio roughly in the mid-thirty percent range.
Of course, the dividend is in the purview of our Board of Directors, but our ambition is to continue to advance it. We view M and A as a core capability. Our approach is refined and systematic. We take care in assessing risks for all transactions, in integration planning and in execution. And yes, we've done more than a few over the past 20 years.
Through the early 2000s, we focused on building out our capabilities and geographic presence across the 3 main health benefit categories of commercial, Medicare and Medicaid. The past 10 years we have leaned into services with some global investment as well. And we will continue to allocate capital to such markets. Allocating capital is an important component of value creation and total shareholder return. So it might help to review how we've been doing.
Behind me is a sampling of our activity over the last number of years. We could go back more than a decade to look at Oxford, PacificCare or DEFINITY and see them now as foundational to UnitedHealthcare. But let's take a closer look at the newer vintage capability acquisitions. Great companies on a standalone basis, but also the type that create much more value when the broader UnitedHealth Group assets are brought to bear. WellMed is a large high performing care delivery organization in Texas and Florida.
Part of OptumCare, WellMed is now aligning with specialist groups and ancillary service providers, including our MedExpress and Surgical Care businesses. The practice has grown to serve about 325,000 seniors today. That's up more than 3 times from when it joined Optum. Another example is AppCell Health. In 2012, we acquired what on the surface looked to be a small Medicare Advantage Plan in Texas.
What we saw though were unique capabilities providing in home health assessments, primarily to seniors. Clinicians use tablet based computing programs to evaluate a senior's health and living conditions, make sure they understand the medicines they're taking and close gaps in care. Some of these being urgent in nature. We call this service house calls and you've heard us talk about it today. The number of yearly house calls is up over 10 times since the acquisition And it has a long runway because it really represents meaningful clinical engagement in cost effective settings.
We are now performing house call services at MedExpress locations for people who don't want someone in their home. We're also piloting commercial and Medicaid market applications and even how to use these experienced clinical practitioners to extend our OptumCare practice reach for their Medicare Advantage populations. Humedica, now known as Optum Performance Analytics, is a technology company we acquired in 2013. It had market leading capabilities in extracting patient clinical data from electronic medical records of any type. This business has nearly 100,000,000 patient clinical records today, up from 30,000,000 when acquired.
The value of this type of information will continue to grow exponentially in the years ahead, as is combined with other data and as artificial intelligence, including machine learning continues to advance. This analytics engine will be core to our population health and clinical work for years to come. Finally, I'll mention Catamaran, the largest acquisition we've ever completed. It diversified OptumRx's client base and further leveled the playing field around scaled purchasing capabilities up and down the supply chain. As a result, billions in economic value have been delivered to customers through improved sourcing economics.
As you heard John Prince describe, we now more effectively sell OptumRx's value proposition. A synchronized approach which tightly aligns pharmacy with medical care and focuses on total health outcomes and costs. We are encouraged by the initial results, but it's early. And we believe there is a long productive road ahead in transforming the pharmacy care services market. Future iterations will drive quality even higher, greater consumer transparency and greatly expanded medical savings for customers.
From a financial perspective, our M and A activity has created measurable value both long and short term. Optum Performance Analytics underpins our entire health population platform. It remains in investment mode with exceptional opportunities ahead. The other three companies that I mentioned, Xcel Health, WellMed and Catamaran continue with strong organic growth prospects and with current EBITDA contributions far above performance as of the acquisition dates. We remain disciplined in evaluating our prior transactions.
We monitor performance, perform extensive look backs and importantly apply learnings to future opportunities. Through long established M and A best practices, we realize returns substantially above our cost of capital. And finally, question number 7. We keep hearing NPS equals EPS. I don't mean to be skeptical, but we're financial analysts.
How seriously you actually take that? In a word, very. And hopefully, as you reflect on the many other words you've heard on this stage today, you've seen just how committed we are. Start with the mission, helping people live healthier lives and helping make health systems work better for everyone. Could there be an industry where MPS matters more?
These are not commodity products. They're not luxury goods. It's people's lives. It's about the health and well-being of all those we care most about. It's about being trusted, welcomed and relied upon to serve in a socially sensitive sector.
As Dave said, 1 person at a time, better serving people, clients and care providers. As Larry defined, building a foundation that is anchored in ever deeper relationships. And as Steve described about driving quality, trust and loyalty. So you should be encouraged that we care deeply about MPS. It measures factors that will drive durable value creation for decades to come.
The factors that demonstrate we are earning the right to serve people in ever deeper and more impactful ways. The factors that drive retention. And critically, the factors that drive sustainable long term earnings growth. And that brings us full circle back to EPS. So to wrap up the morning, we hope you take away that our businesses are performing well and we expect that to continue.
We are strongly positioned for growth in the near and the long term. Yes, we have a considerable agenda. We always do. That is because of the urgent needs of the immense and personal markets we serve and the restless nature that defines this organization. As Dave said earlier, we are far from achieving our full potential and perhaps we have yet to even fully imagine it.
And that's why it often feels to us like we're just getting started. And why we believe the decade ahead holds even more potential than the one we have just completed. I am now pleased to welcome back John Pinchorn and members of the Office of the CEO as we move into questions and answers. We thank you for your time. Thank you,
John.
Where are my mic runners? Thank you, Fran. There and then Becky over here please all the way out to my left, your right.
Yes, sir.
Thanks. All this talent assembled, I'm going to ask a question on tax rate, so I apologize upfront. If I go back to the first half of the year, you took your tax rate from 34.5% to 32.5% and said about that 200 basis points decline, half is unsustainable, half is kind of core because of the SCA transaction. So it kind of came in thinking 33.5% was a sustainable number. It looks like you've lowered your guidance to 31.5% for the normal tax rate and it looks like that number is again kind of implied as the normal tax rate for 2018.
Just trying to understand what drove that from 33 to 31? And is that sustainable going forward? Do you think this is the normal run rate or do you think we should be looking for something different going forward?
Just so I think it's a couple of items. John, maybe you can unpack that for him.
Sure. I would say kind of versus where he worked in 1Q and where we were in 1Q, how we have advanced, there would be a couple of primary elements on that. One is just the businesses and geographies in which we expect to earn in 2018. There are variations in states obviously, certain businesses are performing in different categories and or different levels of performance, there's certainly impact on that. And then just different types of businesses also that we will be earning.
2, we just always continue like everything else in the organization and the kind of part of the charge we have in my area, always examining how we've been doing over time, where we could improve and factors like that. So I would say that, yes, we've advanced from that period, Justin, from when we talked about 1Q, but we view this as given those elements as where we should be now.
Great. Thanks. Thank you. There's one over here.
Thank you. Yes, just a technical question really, which is your guidance for share repurchase looks healthy $3,000,000,000 to $4,000,000,000 Yet the share count reduction looks to me anyway less than we might have expected with
that. A part of that's
our higher share price as well. So it takes more dollars to get the same output, but anything else?
That is far and away the largest impact that's going on here is the share price has advanced meaningfully over the past year or so. And so there's elements on that. That also has impact on common stock equivalents given the advancing share price. So that would be the other area that would be weighing in here.
Well, if I could just one other. Are there any acquisitions in the various revenue components of your guidance at this point?
Acquisitions that haven't closed?
Right, that have not closed.
No. Thank you.
Acquisitions which have closed, for example, advisory board, those types of acquisitions are in our revenue guidance and your question implies correctly, share repurchase flexes based on what the M and A capital opportunities are relative. Yes, in the center.
My question is related to the individual business, the individual commercial business. Do you see that reforming under the Trump executive order? And how do you see that business evolving? And would you consider getting back involved in the exchanges considering they seem to have shown a little more stable performance this year?
I'll start with the back end of that and then ask Dan to comment on the specific opportunities. The way we look at the individual exchange market is a market that just didn't work for us as a company, not one we performed particularly well in and nor do we really did we see the dynamics of how that risk pool and market segment, if you will, which is relatively small, are shaping up over time. As we sit here today, I'd suggest there's really been no change in the overall complexion of that market segment. And as a result, we wouldn't see ourselves reentering, but as is always the case, never say never. Then maybe just talk about the Trump executive order.
Sure.
So Peter, I would say that, as we look at the individual business with the executive order and pulling back some of the limitations on the short duration policies that emerged on April 1 this year, to the extent that those get rolled back, we do see some opportunity for growth there. It's actually we were growing nicely before the limitations went in. And we see it as a nice viable alternative for people that are in between coverage in particular because it gives people the opportunity to purchase an offering at generally about 25% of the price that you'd see on the exchange marketplace. At the same time, you enjoy the full access that we provide across our broad network. So in a lot of ways, it's a richer product and it provides a real viable opportunity.
So to the executive order offers longer durations, we'll look forward to participating in that. And rest assured we're actively engaged in the dialogue in helping shape the executive order and the final regulations that come from it.
And the work on the HRA and the association group elements of it, if formed properly, could assist that marketplace as well.
Thanks. Can we hand that right to the center, please?
Thanks. I want to go to Medicare Advantage. You mentioned a lot in your remarks, higher retention of late and sort of less churn. I was hoping you can give us what those retention rates were in sort of 2017, however you measure them versus what your historical has been? And I guess the second part of that is, as we think about a seemingly more competitive MA environment going forward, some of your peers coming off of sanctions, deals that haven't gone through, Can you sort of, I guess, comment on your ability to sort of retain those retention rates?
And maybe how you think about sort of the margin versus membership sort of debate within the MA market given that retention? Thanks.
Yes. I think what the team showed today was a strong performance really on two fronts, both in the individual Medicare Advantage market as well as the group MA as well. And that really has a very strong foundation of capabilities. It's one of the things that should pull through around house calls around the strength of stars, which our ratings are largely formed organically meaning that they're substantiated not by mapping, but rather by the core performance of the business and then the service models and things like that that we described. So I think we have a very competitive set.
And what that's really yielded for us long term is a great deal of stability in the offerings that we provide consumers both in rate and benefit coverage, their networks, including who they go to see for their pharmacist. So it's a combination of those things that really create a distinctive level of retention that we've experienced in the past. Do you want to comment further about Radian?
Sure. Just maybe a little bit of perspective on retention and we've been focused on that for a period of years and this is really the Medicare Advantage business, you really do have to take a long range view to this. You do the work in stars and you get paid for that 3 years later, you intervene and provide great medical interactions and engagement with your members and then you get paid for that in the 2nd year of their membership. So you really do have to take a long view here and retention turns out to be as you know a key fundamental principle in winning in this business and offering the kind of engagement and the value that we can to consumer. So we've moved from over the years from somewhere in the 80s to above 90 in our retention rates and that's been very deliberate and that comes with increasing NPS scores and all things we talked about this morning too.
So that's been powerful. And I would say in terms of the competitive dynamics, it's been a competitive market and it's going to continue to be a competitive market. And so we are really, I guess, encouraged and excited about the foundation that we've laid down over the past several years, focusing on our quality outcomes and experience that we've provided. And this idea of stability in our product portfolio combined with all those things gives us this incredible foundation. Then you have the growth trajectory of this business that we've talked about, not just in terms of the actual demographics and the aging, 10,000 people turning 65 every day, but you also have more people that have been in non Medicare Advantage products kind of taking a look again at Medicare Advantage.
So I think you've got a growth trajectory from a bunch of different fronts and you add to that some of the capabilities we've been working on over a number of years. We're really excited about where this goes and we think we're positioned well even in the midst of a very competitive market.
We have a seminar on this. 1 of the 8 seminars is on individual Medicare Advantage, if you all have additional interest in that area.
In the back, please. I think we've got time for 2 more.
John, in the past, you've talked about a debt to cap target of 40%. Wanted to know how high are you willing to stretch the balance sheet for the right deal? And then how do you think about your single A credit ratings?
Thank you. We value our ratings enormously and maybe just some perspective, historical perspective on I don't know what we've done. So, correctly pointed out, so after catamaran,
we were at a for a brief period of
time at about a 49% debt to cap ratio. And then at the end of the Q3, this year, we were at 38%. So met our commitments ahead of schedule in terms of getting the debt to cap ratio back to that level and where we've talked about is wanting to operate over extended period of times over the long term at about a 40% debt to cap ratio. Certainly that kind of that 49% level was the highest level we had been at before. I mean, I don't know that I have specific parameters, but kind of that historical perspective maybe gives you some ideas of what we've been comfortable with in the past at least in terms of where we go for specific transactions.
But we are very committed to being in the long term this 40% ratio. We place a great deal of value on our ratings. And so take we take all that quite seriously.
Thank you. So last question over here, Fran.
Hi. If I could just pivot to the vision that you've been painting for 2025 and it seems this year particularly technology and the rise of the consumer played a bigger role than I seem to have heard in the past anyway. And as you think about Rally and Optum and all of the brands and offerings that you're putting together, is the intent to build a direct relationship with the consumer and brand as United or Optum or Rally? Or are you looking at potential JVs with Facebook or Google or Apple or Amazon as you're thinking about this distinction and sustainable competitive advantage?
Maybe I'll start and Larry ask you to add on. So we do have a pretty strong forward lean this year on information and technology, which have been 2 of the core competencies of this business for quite some time. Part of that is because of how the business has evolved very deliberately, let's call it over the course of the last half decade, but a lot of it has to do with the opportunity that the market will present for us in the next decade or so. The value in it really not only is around the products and markets and that we can serve I'm sorry, the markets we can serve with a wider array of products, but it's also there's a tremendous amount of effort inside our company really around aiding our own both operating and clinical business processes, so that we can reduce our cost structures, but also and more importantly really streamline the consumers experience. And part of that is setting up what we believe to be an increasingly higher level of consumer engagement, if you will, in healthcare broadly, not just in terms of their own personal responsibility for their benefits, but also the way in which they're engaging and making decisions day in and day out.
And a lot of it has to do with the proliferation of tools and things like that. One of the other things that we did this year, which we'll be announcing later this afternoon as well as we've begun to invest more substantively in smaller technology based companies, because if you look at what's happening and what's emerging in the market is there's a significant amount of innovation that's going on in the venture and private equity markets. And at the same time, as you know, there's a significant amount of investment being made by larger technical technology companies in this space as well. We're interested in partnering with anybody who can contribute to a better cost position in healthcare, to better quality in healthcare and to greater levels of consumer satisfaction in healthcare, we think we have a lot to add in that regard. But maybe, Larry, can you touch on what you're dealing with ventures and more broadly?
So I'll
go more broadly first. And you can think about this that, I mean, our number one customer is UHC. But as we get into the market more and more and more, and that's what we've done over the last 6 years, we're dealing with a lot of other partners and a lot of other relationships and that could be on the payer side, that could be on the hospital side, the health system obviously. It can be states. It can be the federal government.
It can be other countries. One thing that's always at the center is the consumer. And we believe that everything that we're working on fits across the board. And we have the expertise and we have a great test bed to use in putting things together. And we're finding that to be very, very attractive in the marketplace.
So that's one part of it. And I think everything Dave said kind of applies across the industry and that's the way that we're actually getting, I believe, our input from our prospects as well as customers that we have on the outside when we start talking about the retail and what they're looking for. You take that another step and you look at where we might have a gap, and that's probably on early stage companies. And that's, I mentioned it earlier, where we're today launching Optum Ventures. And it will be with an office on the West Coast and an office on the East Coast.
And it will be looking at A and B round. So that's early stage. And we'll start to get into a lot more that will tie into really working with our internal organization as we go forward. So it's a key, key focus. And I think don't lose perspective that MPS ties into all that, because that's where the consumer starts to really the rubber hits the road there.
So I think it's a full tie in.
Yes. I think what you'll also see is, you heard up here earlier today about the personalized digital experience and more and more as the millennials become more involved with healthcare, the digital bend is much greater. And what you'll see overlapping that is a lot of the artificial intelligence and machine learning capabilities that we have that make those recommendations digitally to the consumer much more effectively. So from a general perspective, you'll see that kind of investment continue from us.
Last thing I'll just say is this industry has historically been or at least our aspect of it has been historically very viewed as very B2B. And I'd suggest to you once you get beyond the procurement phase, assuming that's with another business, it is intensely B2C. The value, the distinction, the differentiation in the business is how you administer the product, if you will, whether it be an Optum product and revenue cycle or if it's a traditional group commercial product. Those relationships today with the consumer are so much have so much greater depth to them than they've ever had in the past. And that's just going to continue to grow over time.
And so one of the areas you see is a great deal of distinction in this company coming forward from our ability to manage those interactions quite effectively and that's why we're centering so much on individual consumers in our business.
Thanks for the color.
Thank you, Office of the CEO. So before Dave closes us out with a couple of observations, I have to ask your help on 2 subjects. The first is surveys. We did a survey last year, had great response. You indicated high favorability to some of the favorite long time elements, dinners, the book, seminars, and so we brought all of that back.
And you gave us some great suggestions, putting more Q and A during the course of the day, lengthening the seminar Q and A time by 33%, having flat tables that you could lay out stuff on and using a different format to the room, elevating the lunch presentation to something that's more like the way the morning is done. So we appreciate all those suggestions. Please respond to the survey, tell us what you think and if there's something that you want more of also think about pairing that with what you would then want less of because one thing that was clear is we were spending about the right amount of time. Second thing is in fact lunch. This is going to be a little bit tricky.
They are going to bring in and serve at your tables and that's going to occur at noon, lunch will be served. You do not need to evacuate the room, but feel free to get up and stretch, go across the hall if you want for coffee, walk around and come back in here. You can leave your books, no pads, whatever you want to leave on your chair, please, not on the surface of the table. That will facilitate the servers. And then if you could just kind of work with them as they're laying this out.
We'll come back with some lunch program and I'll talk about that later. Dave, do you have some observations to close off the morning?
Yes. So if you can so I know part of the feedback will be, my goodness, John, do we really need to stick sit in these chairs for 4 hours straight at a time. So we appreciate your patience with us as we try to go through this company in relatively short order. I really appreciate your questions this morning. And what I've noticed is there was an intense amount of engagement on your part as well.
So hopefully you heard and you saw a lot from us today and we have a lot more coming. We have a clinical launch and if you will and then we have all of our seminar activity and those seminars are in the categories I described earlier and I think you'll find them to be extremely informative. Unfortunately, I won't be able to see 4 of them of the 8 that we have. Couple of takeaways from today, hopefully you picked up. One is that this is a good market and it is a growing market.
Very rarely would you find one as big as it is and as fast growing as it is as well. The other thing you should take away is the levels of relationships that the company has forged. And if you think about not only what we have in place today, but maybe some of the ones that we'll need to advance over the course of the next decade or so, you can quickly imagine that those relationship skills that Larry talked about will come in quite handy. We are a comfortable company that's really comfortable with change. In fact, we're a company that embraces it and thrives off of it.
The more dislocation there is in the market, we have a tendency to be able to perform well because we're a solutions oriented, innovation oriented base business. We are well advanced in data and technology. Part of the reason we gave you the overview that we did this morning was to give you a sense of the baseline of where we're at. There's a lot of conversation about technology and how information is used in healthcare in the marketplace today and we wanted to make sure that you were reasonably well baselined. It's hard to give you the countless numbers of examples of where we apply machine learning, artificial intelligence, natural language processing, all the buzzwords that you can see, but it's fairly well embedded in our business, but yet we have so much more opportunity to grow and thrive.
We're similarly advancing clinical. I think you'll pick that up in the lunch this afternoon just like you did last year. And I'd suggest you that we're a young company. You could see that not only in our people, but you can also feel it in terms of the restlessness that each and every one of us have as well as the opportunity that we see and the ambition that we have as a company overall. And we know we can perform better.
Hopefully, you got a sense of humility coming off the stage today. The company has performed well, but we recognize and you can see just in the bringing forward NPS that we recognize that we needed to be more consumer responsive, more customer responsive and just by virtue of putting that metric in place has caused us to drive a whole new quality agenda across our business. And frankly that was much needed necessary. And we're committed to delivering consistent and positive financial performance across the board. You can see that we are more than willing to and capable of stepping up our game and that is what our full intention is.
This is not a period of time where we rest on the strength of the performance that we had in 2016 2017, but rather we push it even harder for '18 and beyond. And you can expect that future here will involve a growth agenda, but that growth agenda will be centered 1st and foremost on each of the individuals we're privileged to serve. So thank you. Let's break for lunch before the seminars this afternoon. Appreciate your patience.