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    A.J. Rice

    Managing Director and Senior Health Care Equity Research Analyst at UBS

    A.J. Rice is a Managing Director and Senior Health Care Equity Research Analyst at UBS, specializing in healthcare services and facilities with a focus on covering major public companies such as The Ensign Group and Elevance Health. He has demonstrated notable performance, including timely price target increases and Buy ratings, with his coverage reflecting strong market and earnings analysis; for example, his Buy recommendation on Ensign Group coincided with the company exceeding earnings targets and raising guidance for 2025. Rice began his career as a Health Care Equity Research Analyst at Susquehanna Community Bank before joining UBS, where he currently leads coverage of the managed care and healthcare facilities space. He is known for his industry expertise and holds relevant professional credentials, including management-level roles and industry-mandated securities registration.

    A.J. Rice's questions to UNITEDHEALTH GROUP (UNH) leadership

    A.J. Rice's questions to UNITEDHEALTH GROUP (UNH) leadership • Q2 2025

    Question

    Asked for clarification on OptumHealth's margin outlook, specifically whether the repricing on the UnitedHealthcare side would flow through as a benefit to OptumHealth's capitation rates, and if they are seeing similar pricing discipline from other health plans they contract with.

    Answer

    Patrick Conway confirmed that pricing adjustments from UHC and other payers will flow into OptumHealth's capitation rates, acting as a tailwind. This, combined with benefit reductions and better payer dialogue, is expected to mitigate about 50% of the V'28 headwind in 2026. The other 50% will be addressed through operating cost reductions and improved patient cohort management. They expect to maintain the 1% margin level in 2026.

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    A.J. Rice's questions to UNIVERSAL HEALTH SERVICES (UHS) leadership

    A.J. Rice's questions to UNIVERSAL HEALTH SERVICES (UHS) leadership • Q4 2024

    Question

    Asked for the assumptions behind the estimated $50 million headwind if ACA exchange subsidies expire, and inquired about the impact of increased insurance revenue and new hospital openings on the 2025 guidance.

    Answer

    The $50M headwind is a 'guesstimate' based on losing coverage for about half of their exchange patients. The guidance includes a ~$200M increase in insurance revenue, which is a top-line item with minimal EBITDA impact. The two new hospitals are expected to be EBITDA positive in 2025 but will slightly depress same-store metrics due to some cannibalization.

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    A.J. Rice's questions to UNIVERSAL HEALTH SERVICES (UHS) leadership • Q3 2024

    Question

    Asked for comments on labor trends, the pace of new bed additions and JV pipeline in behavioral, and whether future free cash flow would be directed towards M&A or buybacks.

    Answer

    The executive noted that labor trends have stabilized, with lower wage inflation and diminished premium pay contributing to margin recovery. The company has restarted adding beds to its behavioral business in high-occupancy markets. Regarding capital deployment, the focus will likely remain on capital expenditures and share repurchases, as M&A opportunities have not been compelling.

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