Good morning. My name is [ph] Melissa, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Humana First Quarter 2015 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks there will be a question-and-answer session. [Operator Instructions] Thank you. I will now turn the call over to Ms. Regina Nethery. You may begin your conference.

Thank you, and good morning. In a moment, Humana's senior management team will discuss our first quarter results and our of dated earnings outlook for 2015. Participating in today's prepared remarks will be Bruce Broussard, Humana's President and Chief Executive Officer, and Brian Kane, Senior Vice President and Chief Financial Officer. Following these prepared remarks, we will open up the lines for question-and-answer session with industry analysts. Joining Bruce and Brian for the Q&A session will be Jim Murray, Executive Vice President and Chief Operating Officer and Christopher Todoroff, Senior Vice President and General Counsel. We encourage the investing public and media to listen to both managements' prepare my remarks and the related Q&A with analysts. This call is being recorded for replay purposes. That replay will be available on the Investor Relations page of Humana's website, humana.com, later today. This call is also being simulcast via the Internet along with the virtual slide presentation. An Adobe version of today's slide deck has been posted to the Investor Relations section of Humana's website. Before we begin our discussion, I need to advise call participants of our cautionary statements. Certain of the matters discussed in this conference call are forward-looking and involve a number of risks and uncertainties. Actual results could differ materially. Investors are advised to read the detailed risk factors discussed in this morning's earnings press release as well as in our filings with the Securities and Exchange Commission. Today's press release, our historical financial news releases, and our filings with the SEC are all available on Humana's investor relations website. Call participants should also note that today's discussion and slide presentation include financial measures that are not in accordance with generally accepted accounting principles. Management's explanation for the use of these non-GAAP measures is included in today's slide presentation as well as a reconciliation of GAAP to non-GAAP financial measures. Finally, any references to earnings per share or EPS made during this morning's call refer to diluted earnings per common share. With that, I'll turn the call over to Bruce Broussard.

Good morning, everyone, and thank you for joining us. This morning, Humana and announced first quarter 2015 adjusted earnings per share of $2.47, up 5% from the first quarter of last year. Our pre-tax earnings of $744 million were a record high, and we believe are a clear demonstration on the progress we continue to make as a company. Further, we continue to have confidence in our full year guidance for adjusted earnings of $8.50 to $9 per share. Our more significant achievements during the quarter included substantial membership growth in our Medicare Advantage standalone PDT and HumanaOne one products, the recent launch of our population health technology business, Transcend Insights, announcement of the pending sale of our Concentra business, and completion of our $500 million accelerated share repurchase program. I'll begin with our Medicare Advantage growth. As we shared with you last quarter, we experienced another successful Medicare enrollment season for 2015. Individual Medicare Advantage membership at March 31, 2015 was up 11% versus the end of the fourth quarter 2014, up 14% year-over-year. We continue to see the positive impact for our members of stability in our value proposition as well as high star quality ratings. A recent Mackenzie study on the 2015 star ratings concludes that HMO plans perform best on an enrollment weighted basis. Approximately 56% of our individual members are in HMO plans compared to 53% a year ago. Further, the Mackenzie study indicates that plans built around integrated delivery networks achieve higher average star ratings. CMS recently eliminated certain fixed thresholds for four-star ratings for 2017 bonus year. These changes may result in some pressure on our overall star ratings, but we believe we will sustain our solid competitive advantage. We expect we will maintain our high quality ratings due to our successful integrated…

Thank you, Bruce, and good morning, everyone. As Bruce mentioned, the first quarter of 2015 produced strong results and continues to demonstrate the successful implementation of our integrated care delivery model. The attractiveness of our product offerings is resonating with our customers as demonstrated by the continuing increases in our Medicare Advantage, standalone PDP and exchange membership. Consequently, we have raised full year membership expectations for both standalone PDP and HumanaOne. Standalone PDP is being driven by higher retention that we are seeing post the open enrollment period, which is largely the results of fewer auto enrollees being reassigned. I'll speak more to the HumanaOne business shortly. With regard to our Medicare Advantage growth, early indications for our new members are positive as we evaluate individual market growth and performance. Additionally, the growth in our PBM and Humana At Home businesses remains unabated with not only more volume driven by membership growth but also deeper penetration in terms of increased engagement as well as benefits from scale that are driving results. First quarter revenues for the healthcare services segment rose 26% versus the prior year and pre-tax earnings are up 24% year over year. The quarter had several developments that will be the focus of my remarks today. These include the following: the increase in our projected 3R receivables for the year, medical utilization and prior-period development, days and claims payable and cash flows from operations, the earnings implications of the Concentra transaction, and capital allocation. Let's begin with our exchange business in the premium stabilization programs commonly called the 3Rs. Our conviction in our healthcare exchange strategy remains strong. We continue to focus on our key growth markets by offering high-value networks to drive affordability and access for our customers. We believe that this strategy has been effective in…

Your first question comes from Joshua Raskin with Barclays.

Hi. Thanks. Good morning. I want to talk a little bit about the utilization transit you guys are monitoring. I just want to understand what exactly is driving that? I think you mentioned in public data from some of the hospitals, but I have to assume you're going off of more internal data. So is there any specific lines of service or are there specific type of lives, any geographies or any new members? Do you have any color on where this utilization is coming from?

Good morning, Josh. It's certainly from our own data that we're seeing a slight uptick in admissions over the last few weeks and into April. There's no specific geography that we would point to. It's something that we continue to evaluate. I would note that interestingly, not only are the unit cost of these admits lower, which as I said in my remarks suggesting lower severity of claims, but also our outpatient utilization seems to be down and our pharmacy utilization is in line. And so it's very early really to ascertain exactly what this is telling us. It's just something that we thought it would be important to communicate because it's something that we're watching very closely, and it's something that we always watch very closely.

Josh, just to build on what Brian talked about and the reason that he specifically addressed it in his opening remarks is as we saw this, we began to dive into a lot of the information relative to new members and what we call concurrent members. And actually the new members that we just, that just join the plans, which were fairly significant, we're seeing actually better utilization than the concurrent members. So that gives us comfort that there wasn't an issue with any of the markets that we grew in. A lot of the deep dives that we're doing, and there's a lot of work that we're trying to pull together, would suggest that there are some respiratory issues that we're facing. So that leads us somewhat to a conclusion that it's maybe a longer extension of the flu, but a lot of work needs to be done to get our arms around it, but we feel very confident about how it's progressing, and we feel good about a lot of the things that we do from a process perspective. This looks like an isolated incident.

Okay. That's helpful, Jim. And I guess just maybe help us understand the magnitude here. If you take a look at this uptick in outpatient utilization within lower outpatient RX in line and maybe it's just flu. I mean if this were to persist through April, May, June, is this enough to change guidance? Or is this just something that the pressure point and the reason we're still comfortable in a relatively wide range of EPS [ph]?

Josh, I would say if this persists as we see it, it's not something that would impact guidance, but it's something that we watch very closely, obviously, to the extent there was a continued uptick and a greater uptick. That's something that would have an impact, but we're not seeing that right now.

Okay. Thanks.

No problem.

Your next question is from David Windley from Jefferies.

Hi. Thanks. I'm going to shift over to the HumanaOne. I wanted to understand if your change in or lack of change in age distribution in that book of business in the slide that you presented to us last quarter, yet fairly significant change in medals for your distribution, if essentially that adverse selection had anything to do with your additional reliance on 3Rs?

It's something we continue to evaluate. We certainly evaluate all of our medal tiers and try to understand where the utilization is coming from, particularly in Georgia where we've seen that. I think it's fair to say that we're going to continue to evaluate as we go into 2016 our participation in the various middle tiers. And certainly our pricing will reflect the increased morbidity we are seeing in that block. I would also say that the out-of-network utilization is something that we think we can address in short order, and so that will not be a recurring issue going forward.

And on the out-of-network, just to follow up on that, is that something where you are essentially only lightly enforcing the existing policy or rule and now you're going to more stringently enforce? Or do you actually have to change the policy, and is that possible entry year?

I would say the former. It's something that we lightly enforce as we're coming into this program with new product, with new customers; it was something that they were going to get accustomed to the product design. Over the next few months, it's something that we will enforce the policy that exists, and that really, as I said my remarks, goes both to working with providers to the out-of-network providers and some of the reimbursement levels that we pay them as well as educating our customers as to the product that they bought. We believe strongly that the strategy that we've pursued is one that allows our customers to have a very affordable and compelling product, and as we educate them, we think we will be able to get that out-of-network utilization under control.

Great. Thanks for taking the questions.

Your next question comes from A.J. Rice with UBS.

Hello, everybody. I'm going to go back to the comments that Bruce had made about there being some pressure for threshold eliminations on the STARS program. Can you give us a little more color on how significant that would be and are we talking about something that would impact your potentially in 2017? Is that the right way to think about it? Or is there any reason it would impact earlier?

This is Jim Murray. It would be 2017, and as many of you know, we're in the process today and for the next several weeks of finalizing a lot of the work related to the benefit year 2017. The threshold elimination puts a little bit of pressure and what that would translate into is the number of members that are in four-star or greater plans. A lot of the feedback that we are getting; we have a team of people that comes before us every Friday to talk about the progress that we are making around a lot of the tactical steps that are part of this whole process that goes over this two-month period. We feel very good about where we are positioned. Some pressure related to the elimination by CMS of the threshold, but frankly, feel pretty good about how things are playing out this year, and we should be favorable positioned relative to the competition, because we like a lot of the good work we do around the STARS program.

And, A.J, I think it's important to keep in mind that it is a relative measurement, and so our performance is highly predicated on everyone else's performance. And I think as investors have seen over the past few years, our clinical capabilities have really outperformed the industry as a whole, and we continue to be confident that we will be able to continue to outperform even as these changes persist.

Okay. All right. Thanks a lot.

Your next question is from Andrew Schenker with Morgan Stanley.

Thanks. Good morning. I was just hoping to follow up on your comments around some may be some of the moving parts in guidance. It sounds like the concentric deal as you guys pointed out in the press release originally is about 11% headwind to earnings this year. You also called out around the pressure around the impact from share repurchases related to the stock appreciation here, and now looking at guidance, it seems like the tax rate may have come down a little bit, but I'm just curious what some of the other moving parts were that let you feel confident to maintain your guidance range maybe versus where it was last quarter? Thanks.

I think you outlined some of the major issues that we are focused. Concentra will pressure earnings by $0.11. With the share repurchases tax rates and the like it's probably about $0.04, so it's a $0.15 headwind coming into this quarterly call. Again, we feel comfortable about reiterating our guidance of $8.50 to $9.00. And really was going to drive that performance, as we said to the first question is where is utilization ultimately end up? And right now, we feel good about where we are, but that's something we're very focused on that will ultimately drive the year's numbers. I think the important point on the Concentra sale is it is a timing issue for us versus a long-term business problem. As we think about the sale, we think about it as that we are really allowing the company to redeploy assets that will advance us strategically at a price that we feel was a very good value for what we are doing, and now what we can do is take that and redeploy it, whether it's in capital structure alterations such as stock buybacks or acquisitions that will be more accretive long-term and strategically much stronger.

Thanks. Maybe if I could just squeeze one more in real quick. The Healthcare Services segment specifically, I hear a lot of moving parts related to Concentra as well as your Home Health [ph] acquisition. If you could just maybe talk about how those kind of offset each other as well as maybe membership growth that allowed you to kind of maintain revenue guidance. And it seems like the only impact pre-tax results was related to the pre-tax gains. So just making sure I understand moving parts there as well. Thank you.

Sure. Well as you'll see in the Healthcare Services segment guidance, we did adjust the revenue numbers and the like to comport with a divestiture of Concentra. I would say more broadly that as I said in my remarks, that business is performing extremely well. Membership is growing pretty dramatically based on largely our Medicare Advantage and PDP growth, but we're also seeing better engagement with our members both from a mail-order perspective on the pharmacy, which is very important, but also with Humana At Home as our analytical capabilities continue to identify people who would benefit from our Humana At Home capabilities. And so the combination of those is really driving that performance. So we feel very good about the range we have out there for Healthcare Services pre-tax.

Thank you.

Your next question is from Matthew Borsch with Goldman Sachs.

Yes. If I could just ask a question about the individual market, just with two parts. Number one, the extent to which you are seeing in flow of new members coming into the exchanges generally for this year. A peer company of yours earlier today talked about seeing less in flow than they had expected. Secondly, just on Georgia, how you reprice in that market and avoid getting stuck in sort of an adverse collections spiral?

I think as far as new members, I think really is consistent with what we expected in terms of coming into the market and actually feel reasonably good about the overall pool for what we received. With Georgia, there is no doubt, Matt, that there is something we are very focused on as you put in higher price increases or you're going to attract the wrong members. Part of that is going to go to product design in the middle tiers that we participate in. So we're very cognizant of that risk, and we're going to price appropriately.

Okay. Thank you.

Your next question comes from Peter Costa with Wells Fargo Securities.

Getting back to the individual business again, why do you think you had the problems in Georgia? One of your competitors reported earnings earlier that has a number of low-priced silver plans in Georgia. It didn't seem to share the problem that you guys are having there. Do you think it's a local market related to you? Is it some cost disadvantage that you have in Georgia? And how do we avoid this from happening in another state down the road when the risk corridors and risk reinsurance goes away?

Peter, this is Jim. I will take your question, and we wondered how long before you would dial-in. With respect to Georgia, as Brian said earlier, one of the things that we did at the very beginning was to take our individual legacy business and do relativities to our small group block of business, because that was a guarantee issue population. We thought that was fairly close to what might ultimately happen on the exchanges. And after that, and that was done local market by local market, we evaluated morbidities across a national basis with the help of an outside consulting actuarial firm. And as a result of that overall evaluation from a national perspective, we lowered some of our markets and expected morbidities. And with respects to Georgia, while other markets turned out just fine relative to that pricing philosophy, Georgia didn't. Another part of the Georgia issue has to do with the platinum plans, which you have asked about in the past. One of the things that we're seeing with the platinum plans is that the philosophy or the strategy that we've enumerated in the past with you and others is that you need to have documentable risk conditions for the members that are heavier utilizers, and as we study the Georgia population, as we're doing some of our risk adjustment work, we're seeing that the Georgia population, although heavier utilizers, don't have documentable risk conditions, which doesn't allow us then to get risk adjustment for them. And as a result of that, as Brian said, not only in Georgia but also in other states, we're evaluating that requirement as it respects our platinum plan strategies going forward, and you'll see us take some actions relative to that.

That's helpful. And what is your strategy for avoiding this going forward in other states?

Well now we have a lot more actual claims information on which to set pricing, and so as we've done with all of our other products over the years, we're using actual claims to set our pricing, and so our pricing will be consistent with our desire that this block of business will produce a satisfactory return. A lot of what we've done up to this point has been models and estimates based upon other lines of business. Now that we've gotten some real claims information relative to not only 2014 but 2015, that's how we will set our pricing going forward, and we feel very confident on our ability to properly set the right rates.

Will you offer platinum plans next year?

We're going to evaluate that market-by-market and to the extent that it doesn't make sense because of what I talked about relative to documentable risk conditions. We'll evaluate that, and we'll act accordingly.

Thanks, guys.

Your next question comes from Kevin Fischbeck with Bank of America.

Great. Thanks. Just wanted to ask a little bit about the commentary in the Medicaid side of the business. The company seems to be more aggressively pursuing RFPs, I guess, that you have in the past. Can you talk a little bit about your view kind of what's changed in the last couple of years? And you pursued RFPs in a couple of different ways outright or through joint ventures and things like that. So how do you think about the form that these types of participation might take?

I don't think our posture has changed relative to what we look at going forward. I think we continue to believe a partnership model in Medicaid makes sense in most states, if not all states, and we'll continue to do that. We do look at states where we have existing membership, and as their RFPs come out, we want to participate in those RFPs, and that really has been the standard direction and strategy for us. And our existing Medicaid results continue to meet expectations and continues to grow quite nicely, and so as we look at going forward, we continue to believe that the Medicaid platform is a platform that has partnership, a partnership model in states that we are operating at within today.

Okay. Great. Thanks.

Your next question comes from Sarah James with Wedbush.

Thank you. I'd like to go back to the out of network utilization portion of the 3R boost. It sounded like this was mainly something that pertained to new members transitioning onto an exchange product, and there has been some stricter network enforcement going on lately, and I guess going forward. Should I think about this as really stepping into the 3Rs for just the first quarter and it adjusts going forward? Or is this something that's going to continue on through the year? And how can you modify your benefit designs in 2016 in a way that would improve this scenario?

Well I would say it's going to impact the 3Rs for this year just given where we are with our performance and the like. When people go out-of-network, those are higher costs than we had anticipated and that drives the receivables. As I mentioned in my remarks, we are working with these out-of-network providers both in terms of the reimbursable fees that we pay them in the fee schedules, contracting with them and the like, and it's also a matter of educating our members as to their product, the product that they have. I would say we believe very deeply in the strategy of having these high-value networks that allows us to drive very affordable and attractive pricing to our members. And so those are really the puts and takes. It's a combination of provider and member education. So...

It's more education and less of financial incentives?

Well I would say with the providers, there will be financial impacts and financial incentives to ensure that we pay the appropriate levels of reimbursement for what we call our non-par or nonparticipating providers. I should note it's a small number of members that are utilizing the benefit out of network. To some extent, there might be some product design in terms of higher out-of-pocket costs for members who tend to go out of network, and that's something that we would be evaluating for next year. But I think the combination of provider education, provider contracting, as well as member education and some tweaks in the product design, it's a problem that we think we can get our head around and saw for next year and frankly, the back half of this year as well.

Thank you.

Your next question is from Scott Fidel with Deutsche Bank.

Thanks. Just wanted to stick on the individual business, and I know you're talking about Georgia specifically, but just interested and how much you think you're going to need to be raising premiums on the exchange business more broadly. If we look at your 3Rs accruals now for this year, they're right around a half billion for 2015, and I would calculate that on your sort of ACA compliant individual business, that equates to around 13% of revenue, so given that bowl of three insurance and risk corridors really sort of scale away over the next year or two, just help us think about how much sort of excess premium increases you're going to need to be implementing in order to reflect the expiration of those 2Rs of the 3Rs.

That's not a specific number for obviously competitive reasons. We wouldn't want to comment on it right now. I would say that certainly we have the 3Rs squarely in mind as we price for next year, we recognize there's one more year to go here with two of the 3Rs. And so we're going to price such that as I said in my remarks we can earn an attractive return on capital in 2016 and beyond. So we understand the dynamics of the market and the 3Rs and the pricing required to do that, and we'll take the necessary steps to make sure we get the right financial return.

To Brian's earlier point, many of the markets are performing well, we've got some problems in the state of Georgia that we plan to address with our pricing and product design.

Okay. And then just quickly, just on the Medicare, hospital admissions, how geographically broad-based are you seeing that? I mean, I'm just trying to tie that into the comments from CMS on their final 2016 rates call where they said that their actuaries have also seen some flattening out of the admissions trends and I would assume if CMS was highlighting that then was probably more of a broader base. So just interested geographically on how much you're seeing that.

Yeah, I think is Jim said earlier, we wouldn't call any specific geographies. Where we were very focused was to see where we grew in particular markets and whether that more outsized growth was the cause of the slightly higher admits, and we haven't seen that, they're actually running pretty favorably. So I would suggest it's a broad-based phenomenon that we're watching very closely.

Okay. Thank you.

Your next question comes from Ralph Giacobbe with Credit Suisse.

Thanks. Good morning. Switching a little bit, you guys have reclassified segments, and I guess within the group book you've seen enrollment declines, I guess the question is how committed are you to this business I guess going forward? Is there any strategic review being contemplated for this segment? And I guess separately, just on the PBM, just want to clarify, you talked about sort of a full debrief on the 3Q call in November. Just hoping to get a little more clarity on that. Is that just a final decision you expect at that point on whether you keep it or come up with some sort of outsourcing arrangement or the like? Thanks.

To your question on enrollment declines, we made the strategic decision a year or so ago, and I think we talked about that that with the large group business, we're going to wind that down over the next several years, because we are not a national player, and we can't compete in that space. But we are focused on what we call our sweet spot of smaller case sizes. And over the last six months, we performed reasonably well with our sweet spot focus. You may recall that in the fourth quarter, we grew very nicely with our smaller, focused business. This past quarter, we have seen some shrinkage in our fully insured smaller case of membership, as a lot of our competitors are implementing their new rates relative to community rating, and we are seeing a little bit of an aggressive posture in some of the states that we do business. That will ultimately change over time, and we think that that will work itself out. We feel very confident with our focus on the smaller case size. Over the next several years, we're going to be evaluating our Group business and again feel very good about its prospects for continued profitability, and it serves very nicely as a complement to our focus on local market scale. We talk about that with our Medicare business, our individual business car Medicaid business and our Group business, in certain of what we refer to as bold move markets. So again, we feel very confident with our ability to compete and win with a smaller case size. Hopefully you will see that play out over the next several quarters. I think even as the results show this quarter, we really have a three-pronged approach within Group. One is around continuing to increase our efficiency within the Group sector, and you can see that as you see our cost ratios coming down. The second is to focus on where we probably have a better value proposition, and that's in the Small Group is what Jim talked about, our sweet spot, and begin to start exiting relationships that are not profitable for us and that traditionally is the larger ASO model. And then the third is to continue to migrate customers to more of a consumer choice model within the markets that we are at, and that would be both a private exchange and public exchanges as we see that being both a long-term trend, and frankly, I think where we can even add more value with our retail capabilities that we've had in the past.

Okay, that's helpful. And just on the PBM?

As we said, the PBM, we're going to evaluate, and it's under continued evaluation. We've provided some updates in the past, but the full update will be in the third quarter of this year.

Thank you.

Your next question is from on Ana Gupte with Leerink Partners.

Thanks, good morning. So I just want to make sure I understand this. I am a little confused with everything. I'm getting a lot of questions from investors who are pretty confused as well. On retail MLR, what exactly; is this the underlying and Medicare MLR, okay, ex-PYD, and this sort of late quarter potential uptick you are seeing, and is the deterioration, which is not great, but it is deteriorating; because your HumanaOne individual public exchange product is now going to be much more reliant on reinsurance and you're having all these issues?

Yes. Again, Ana, if you look at our retail MER's for the quarter, and you adjust them for prior periods, they're actually down from prior quarters. So I think that's important to note. As we said, in the prior period we did have a pretty materially impact on our numbers. A lot of it was expected; some of it wasn't car related to the flu and the like. But, when you look at the MER's, we feel pretty good about where we are on an incurred basis from an MER perspective. As I said, they are actually down. So I hope that answers your question.

Okay so MA has been displaced. On Individual, did you see any improvement on your off-exchange ACA compliant type MLR at all? Your competitors seem to be seeing what they said they would see. And so net-net on Individual, you had said you would see margin expansion ex-exchange, public exchanges. What's going on in the rest of the book?

Okay, again we don't break our ACA compliant off-exchange and on-exchange. I think when you adjust for the 3Rs, our MER is in line with our expectations, which is why, as I said in my remarks, that we are going to break even or better for 2015. That still is the case. I'm sorry?

No, sorry. Please go ahead.

I was going to say that the 3Rs truly help us in that regard, and it's higher than we anticipated for the reasons that we went through.

Okay, one final one if I may. So then on HumanaOne, why you be in a place where you had some adverse selection last year, and as you're raising prices, are you seeing more of the deterioration in that book, because anyone who can afford or is relatively healthy might migrate someplace else and so you might have challenges just turning around the book?

As respect to the state of Georgia, which we've talked about a couple of times, I wouldn't have said that it was adverse selection as opposed to the health condition of the entire population. We just have to price reflective of the health condition, and that may cause some of those members to move on to other plans, but we've got to get our pricing commensurate with the risk conditions that we're assuming, and we think that we've got a pretty good plan in place not only to increase pricing but also evaluate some of the products that are in the marketplace.

Great. Thanks so much. Appreciate it.

And your final question is from Christine Arnold with Cowen.

Hey there. Thanks for taking the question. I'm trying to sort through what belongs in this year versus last year. Was there any net prior-period negative development in the first quarter of this year related to last year in any products?

I'm not sure I understand the question. There was – the prior-period development was positive this quarter based on 2014 in prior results. It was less positive than it was last first quarter in 2014. That was largely expected for the reasons I discussed, i.e., it was a very high PPD quarter in the first quarter of 2014, and we implemented some claims processing changes with front end review in Medicare that drove some of the change. Some of that was unexpected. So there is positive PPD in our numbers just less than there was last year.

Okay. And then payables versus premiums, I agree we should exclude PDP but if we exclude PDP premiums, your payables versus premiums are still upside down in the first quarter. Now this could be because you've got more capitated costs. It could be because of other factors. Can you help me understand why if you're seeing an increase in utilization, I would think you'd be booking more payables so than premiums. It put these issues with the individual, but it looks like that's not happening. So can you help me sort through what other factors might be accounting for that?

That comparison, change of premium versus change in claims payables, as we've discussed in the past is not something that we focus on. There are a lot of moving pieces that go into that number. As we have said, with regard to utilization, I wouldn't have made the statement as boldly as you just made it with regard to overall utilization. What we pointed out, because it's important that we pointed out to be fully transparent is that we have seen that slight increase in admits over the recent weeks, and it's something that we're waiting to see how it plays through our claims lags over the coming months. As you know, it takes a few months for those to work through, but I wouldn't have made the overall statement that utilization is up. Remember that our admits are actually down year over year. Our trend benders are working as we've said and so I wouldn't read into it anything more than that. As you look for balance sheet quality and cash flow quality, the claims, the processed claims and unprocessed claims on a DCP basis are actually up, which I know is a measure that you and others look at. And when you look at our cash flow for the year, which is where we focus because of the timing of these working capital issues that I went through, other than the 3Rs and of course Concentra, we're actually reasonably in line. As you know, we took up our cash flow last quarter, and I think were it not for some of these other adjustments that I just discussed, we would be in pretty good stead there.

Thanks.

We appreciate the support the shareholders are providing us. We recognize that this quarter is a complicated quarter as a result of our Concentra sale, as a result of some of the changes in the comparison. But we do believe it is a quarter that continues to reconfirm the organization strategy around our growth in retail and in addition the integrated delivery model. So in conclusion, as always, we thank our 60,000 associates that help us bring these results to life every day, and we appreciate the shareholder support. So thank you, and we look forward to continuing our conversations later. Thank you.