瑞信美股医疗保健行业管理型护理良好开局2018年Q1总结201851430页

DISCLOSUREAPPENDIXATTHEBACKOFTHISREPORTCONTAINSIMPORTANTDISCLOSURES,ANALYSTCERTIFICATIONS,LEGALENTITYDISCLOSUREANDTHESTATUSOFNON-USANALYSTS.USDisclosure:CreditSuissedoesandseekstodobusinesswithcompaniescoveredinitsresearchreports.Asaresult,investorsshouldbeawarethattheFirmmayhaveaconflictofinterestthatcouldaffecttheobjectivityofthisreport.Investorsshouldconsiderthisreportasonlyasinglefactorinmakingtheirinvestmentdecision.14May2018Americas/UnitedStatesEquityResearchManagedC[e-mail]@[e-mail],[e-mail];1Q18EarningsRecap■AllMCOsinOurCoveragePostedEarningsAheadofExpectations;MLRTrendsRemainFavorable.TheMCOsinourcoveragebeatconsensusbyroughly10%,andreportedEPSgrowthof37.9%Y/Y,onaverage.Medicalcosttrendsremainedfavorableacrosstheboard,withtheimpactofabovenormalFluactivitycominginin-linetobetterthanwhatwasassumedintheoutlook.ForcoveredMCOs,consolidatedMLRdecreased200bps,onavg.Y/Yto81.5%in1Q18primarilyduetoHIFre-initiation,favorablemedicalcostspartiallyoffsetbyY/Yhigherfluactivity.■1Q18FluCommentaryfromMCOs.ThefluimpactonMLRrangedfromaheadwindof35-50bpsforMCOsin1Q18.Weestimatethatthisheadwindhadaroughly5%EPSimpactonQ1resultsforAET,ANTMandUNH,whilemoreGovernmentfocusednamesHUMandCNCsawa8%and9%adverseheadwind,respectively,onEPSresults.■IndividualMarketChangesDriveEnrollmentTrends.AET,ANTM,andHUM’smedicalenrollmentincludedanenrollmentdragrelatedtotheindividualmarketexits,whileCNCandCIgainedenrollmentintheindividualmarket.Infact,CNCwith1.6mlnHIXlivesistheleadingmarketplayerwithroughly16%marketsharenationwide.SomeMCOsalsohighlightedamodestaccelerationinthemovefromfully-insuredtoself-insuredarrangementsinthemiddlemarketprimarilydrivenbytheHIFre-initiation.MedicareAdvremainedabrightspotformostmajorMCOs.■2018GuidanceUpdates.Alongwiththe1Q18earningsrelease,amongthefiveMCOswhohaveissues2018outlooks,fourofthemraisedtheir2018outlooks.MostoftheMCOstookaconservativeviewwithrespecttotheirfullyearoutlookandraisedguidancebylessthanthe1Q18beat.Infact,mostMCOssaidtheraiseinguidancedidnotassumethefavorabletrendsMCOsexperiencedin1Qcontinuefortherestoftheyear.CNClowereditsEPSoutlooktoreflectthedelayinFidelisdealclosure.■SharePriceReactiontotheSecondLegofEarningsWasLargelyMutedtoNegative.MCOsrespondedpositivelytothestrong“BeatandRaise”quartersfromUNHandANTM.However,bythetime,AET,CI,andHUMreported,expectationshadrisen,resultinginmuchmoremutedreactionsdespitethestrongquartersfromeachofthem.StrongacuitytrendsreportedbyhospitalcompaniescreateduncertaintyonthelikelihoodoffavorablemedicalcosttrendscontinuinginQ2.Morerecently,thegroupgaveupsomeoftheYTDgainsgiventhenoiserelatedtotheTrumpAdministration’sdrugproposal(whichturnedoutmuchbetterthanfeared).■AETModelUpdate;LoweringPTto$194-MaintainNeutral:Weusea70%probabilitythattheAET-CVSdealisapproved($197dealpricebasedoncurrentCVSprice).IftheAET-CVSdealisrejected,weseeAETsharestradinginthelow-to-mid-$160rangenear-term,andour12-monthPTinthatscenariois$187(15.5xour2019EPSestplus$3/shareofexcesscash).PrimaryriskstoourPTwouldbetherejectionoftheAET-CVSdeal.14May2018ManagedCare2TableofContents1Q18EarningsFollow-up&Q&ANotes3KeyTakeawaysfrom1Q184Company-by-Company1Q18Recap7Aetna........................................................................................................................7Anthem.....................................................................................................................7Cigna........................................................................................................................8Centene....................................................................................................................9Humana..................................................................................................................10UnitedHealthGroup...............................................................................................10PricePerformance&Valuation12IndustryOperatingStatistics15CommercialEnrollment..........................................................................................15CommercialFully-Insured(“Risk-based”)Enrollment15CommercialSelf-Insured(“Non-Risk/ASObased”)Enrollment16ManagedMedicaidEnrollment...............................................................................17MedicareAdvantageEnrollment............................................................................18PDPEnrollmentTrends.........................................................................................19MLR/UtilizationTrends...........................................................................................20ConsolidatedMLRTrends20CommercialMLRTrends20InvestmentIncomeTrends.....................................................................................21AdjustedPre-TaxMarginTrends...........