Anthem Inc (NYSE:ANTM) Q2 2019 Earnings Conference Call Transcript

Jul 24, 2019 • 08:30 am ET

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Anthem Inc (NYSE:ANTM) Q2 2019 Earnings Conference Call Transcript

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Q & A
Operator
Operator

Thank you. [Operator Instructions] Your first question comes from the line of Sarah James from Piper Jaffray. Please go ahead.

Analyst
Sarah James

Thank you. And so, cost trends has been a pretty big topic recently and some of your peers have been talking about thinking about long-term trend in terms of CPI or national health expenditure plus or minus. How do you think about the right framework for long-term cost trend discussions and then thinking through the levers there one that's been coming up recently is outcomes based pricing for gene therapy or medical devices. So is Anthem doing anything on that front? And is it meaningful to your long-term cost trends management?

Executive
Gail K. Boudreaux

Thank you, Sarah. Thanks very much for the question. I think it's actually really important question, because this issue of overall challenge affordability, I think, poses one of the most significant additions to our members and we're committed to ultimately driving the lowest cost. The one of the most important levers, is this ability to move to more value based care. And as I shared in our -- my opening comments, enhanced personal health care is an area that we've been focused and have made a significant commitment to move up to 60% of our spend in value based care arrangements.

Thinking about the alignment of consumer spending to care provider alignment, I think that's really the best opportunity for a long-term management of the trend issues. Specifically to pharmacy, we recently reported, you probably saw on our 2018 Drug Trend Report that we have been successful at keeping drug trends relatively flat and focusing on total cost of care.

And again, I think our best opportunity to rein in overall escalation in cost is to think about whole person health, which is managing the alignment of incentives that the care provider lever with the incentives around pharmacy and so that total costs are ultimately managed. And we have seen that in specific areas like an inflammatory disease such as crohn's and ulcerative colitis and rheumatoid arthritis, for example , where members are seeing anywhere from an 8% to 12%, if not more, savings per month and average lower inpatient hospitalizations etc. So that overall contributes our overall quality.

So in terms of your broader question, I think it's absolutely the right one that we should be asking and I think we should be looking for all of our value based care both from pharmacy, the integration of social, as well as the integration of behavioral health and that's one of the reasons we're excited about bringing Beacon into the fold for Anthem that our best chance to manage total trend is going to be aligned with managing those components in value based arrangements.

Thank you very much for the call -- for the question. Next question, please.

Operator
Operator

Your next question comes from the line of Matt Borsch from BMO Capital Markets. Please go ahead.

Analyst
Matthew Borsch

Yeah. I just wanted to ask about the group Commercial pricing environment. And the context