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    Stephen Baxter

    Senior Equity Research Analyst at Wells Fargo & Company

    Stephen Baxter is a Senior Equity Research Analyst at Wells Fargo Securities, specializing in coverage of major U.S. managed care organizations such as UnitedHealth Group, Elevance Health, Centene, Molina Healthcare, and Humana. With over 500 published ratings since 2019, Baxter has achieved a success rate ranging from 37% to 47%, with a historically negative average return but notable high-performing calls including a +223% gain on Oscar Health. He joined Wells Fargo as an analyst in 2019 and has been recognized as a guest expert for university investment clubs, with prior experience details not publicly disclosed. Baxter is FINRA registered and holds relevant securities analyst credentials, reflecting his role in institutional equity research.

    Stephen Baxter's questions to CARDINAL HEALTH (CAH) leadership

    Stephen Baxter's questions to CARDINAL HEALTH (CAH) leadership • Q4 2025

    Question

    Stephen Baxter of Wells Fargo & Company asked for the specific dollar impact of the pharma items that caused the Q4 miss and for a breakdown of the elevated 'other income' line to isolate the revaluation impact.

    Answer

    CFO Aaron Alt confirmed the analyst's estimate that the pharma items were in a range that would have placed results above the guidance midpoint. For the 'other income' details, he referred the analyst to the forthcoming 10-K filing.

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    Stephen Baxter's questions to CARDINAL HEALTH (CAH) leadership • Q3 2025

    Question

    Stephen Baxter sought clarity on the specific level of tariffs assumed in the company's guidance and asked about the process for reversing price increases if the tariff situation moderates.

    Answer

    CEO Jason Hollar stated the guidance is based on the tariff landscape as of 'literally today.' He explained that future sourcing and pricing decisions depend on relative tariff rates between countries, not just absolute levels. He highlighted that while North American production is now over 50% of value, the 10% of product from China remains a key driver of tariff costs and will continue to influence the financial impact.

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    Stephen Baxter's questions to CARDINAL HEALTH (CAH) leadership • Q1 2025

    Question

    Stephen Baxter asked for clarification on the pharma guidance raise, questioning whether it reflects the annualization of Q1's underlying strength or is simply pulling forward the Q1 beat.

    Answer

    CEO Jason Hollar explained it was a combination of factors. He noted that the broad volume growth seen in Q1 is expected to return to more normalized levels for the rest of the year. The favorable product mix in Q1 is not assumed to continue, while ongoing cost reductions are a consistent but smaller factor. The guidance for Q2-Q4 reflects a more normalized performance, adjusted for the known COVID vaccine timing headwind in Q2.

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    Stephen Baxter's questions to Concentra Group Holdings Parent (CON) leadership

    Stephen Baxter's questions to Concentra Group Holdings Parent (CON) leadership • Q2 2025

    Question

    Stephen Baxter of Wells Fargo asked why the updated guidance reflected a larger percentage increase in revenue than in EBITDA. He also inquired about the timing of any potential benefit from the 'doc fix' legislation and whether rising employer health costs are increasing demand for Concentra's on-site model.

    Answer

    President & CFO Matthew DiCanio explained the conservative EBITDA guidance reflects ongoing, non-recurring M&A transition costs. CEO Keith Newton added that any 'doc fix' benefit would likely materialize in 2026, not 2025, due to state-specific timelines. He confirmed that while rising health costs are a factor, the primary driver of new on-site business is Concentra's new, competitive advanced primary care offering, which gives them a 'seat at the table' with employer benefits departments.

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    Stephen Baxter's questions to Concentra Group Holdings Parent (CON) leadership • Q1 2025

    Question

    Stephen Baxter asked for details on the expected timing and revenue contribution of the Pivot acquisition within the updated guidance and inquired about how employer services rates have historically performed during uncertain economic cycles.

    Answer

    Executive Matthew DiCanio stated that the Pivot deal is expected to close late in Q2, contributing approximately half a year of its $60 million in annualized revenue to 2025 results. He explained the guidance raise was deliberately prudent, reflecting a strong Q1 but also accounting for macroeconomic uncertainty. Executive William Newton added that employer services pricing has historically trended with inflation. The company typically sets new rates late in the year, and these adjustments have been well-received by customers with minimal pushback, as evidenced by the 3.9% rate growth seen in the current quarter.

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    Stephen Baxter's questions to Concentra Group Holdings Parent (CON) leadership • Q4 2024

    Question

    Stephen Baxter of Wells Fargo requested more context on the degree of improvement expected in the Employer Services business for 2025. He also asked about underlying rate trends for both workers' comp and employer services, excluding the significant Florida fee schedule update.

    Answer

    Executive Matthew DiCanio explained that after recent quarterly declines of 4-5% in Employer Services visits, early 2025 trends are 'a decent bit better,' with guidance assuming a progression to flat and then slightly positive growth by year-end. Regarding rates, both DiCanio and Executive William Newton confirmed that underlying rate growth, even excluding Florida, is expected to be 'slightly elevated' and 'stronger' than in the past year, influenced by inflationary pressures.

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    Stephen Baxter's questions to Concentra Group Holdings Parent (CON) leadership • Q3 2024

    Question

    Stephen Baxter of Wells Fargo asked about the company's controllable growth levers, such as strategies to deepen relationships with employers, and how the economic sensitivity of the sales cycle affects these efforts.

    Answer

    Executive William Newton explained that the company's strategy to increase penetration is consistent across economic cycles. He detailed a multi-channel sales approach that targets not only employers directly but also key ecosystem partners like third-party claims administrators (e.g., Sedgwick), workers' comp insurers (e.g., Liberty Mutual), and employer services aggregators (e.g., eScreen) to drive patient volume.

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    Stephen Baxter's questions to Pennant Group (PNTG) leadership

    Stephen Baxter's questions to Pennant Group (PNTG) leadership • Q2 2025

    Question

    Stephen Baxter of Wells Fargo sought clarification on the updated guidance, asking for a breakdown of the revenue raise between organic and acquired sources, updated same-store growth expectations, and the key drivers behind the implied year-over-year margin improvement in the second half of the year.

    Answer

    CFO Lynette Walbom attributed approximately $6 million of the revenue raise to the GranCare acquisition and reiterated growth targets. CEO Brent Guerisoli outlined several drivers for second-half margin expansion, including operational improvements, a decline in the hospice cap impact, the positive hospice final rule rate update, growing contributions from recent acquisitions like Signature and GranCare, and continued momentum in the senior living segment.

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    Stephen Baxter's questions to Pennant Group (PNTG) leadership • Q1 2025

    Question

    Stephen Baxter of Wells Fargo asked a series of questions covering several key areas. He inquired about the drivers of reaccelerated same-store growth in home health and hospice, the components of the updated annual guidance, the strategic rationale behind the potential UnitedHealth-Amedisys asset acquisition, the sustainability of strong rate growth in senior living amid macro uncertainty, and the current hiring and labor inflation environment.

    Answer

    President and COO John Gochnour and CEO Brent Guerisoli addressed the questions. Gochnour attributed the Q1 growth rebound to normal seasonality after a holiday-related Q4 dip and noted positive hiring trends with normalizing wage inflation (3.2% in home health/hospice, ~5% in senior living). Guerisoli confirmed strong performance in both segments is driving the company toward the high end of its guidance. Regarding M&A, he cited the successful Signature integration as a model for larger deals, emphasizing their focus on leadership capacity. He also explained that strong senior living rate growth was a result of a deliberate focus on revenue quality, which now allows for a dual focus on occupancy.

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    Stephen Baxter's questions to Pennant Group (PNTG) leadership • Q4 2024

    Question

    Stephen Baxter asked about the drivers of the guided EBITDA margin improvement for 2025, seeking to understand the balance between recently acquired assets and same-store performance. He also requested more detail on the Q4 hospice cap issue, including operational remedies and its potential drag on 2025 results.

    Answer

    CFO Lynette Walbom stated that while recent acquisitions will create some noise, she expects the home health margin to be in the high 15% to low 16% range and the senior living margin to improve toward 10.5%. President and COO John Gochnour explained the $1.7 million Q4 hospice cap impact was primarily from California and that the company is adjusting referral patterns to mitigate it. He anticipates a reduced drag in 2025, potentially one-third of the 2024 impact, as they work to eliminate the issue.

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    Stephen Baxter's questions to MCKESSON (MCK) leadership

    Stephen Baxter's questions to MCKESSON (MCK) leadership • Q1 2026

    Question

    Stephen Baxter of Wells Fargo & Company asked about the potential impact of a rising uninsured rate on pharmaceutical demand, particularly for the U.S. Pharma segment in the second half of the year.

    Answer

    CEO & Director Brian Tyler downplayed the potential for a material impact, noting that proposed Medicaid cuts are spread over a long period and represent a small fraction of total healthcare spending. He argued that, historically, people who need care tend to find ways to receive it, even if it becomes uncompensated, suggesting that underlying demand for care remains relatively stable despite changes in coverage.

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    Stephen Baxter's questions to MCKESSON (MCK) leadership • Q3 2025

    Question

    Stephen Baxter of Wells Fargo asked management to identify any potential headwinds or significant swing factors that should be considered for the fiscal 2026 earnings baseline, beyond the positive drivers already mentioned.

    Answer

    CFO Britt Vitalone pointed to the onboarding of a large strategic customer during fiscal 2025 as a key item to consider when establishing a baseline for the next year. Otherwise, he reiterated the strong underlying performance of the business, particularly in pharmaceutical distribution and specialty areas like oncology.

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    Stephen Baxter's questions to Cencora (COR) leadership

    Stephen Baxter's questions to Cencora (COR) leadership • Q3 2025

    Question

    Stephen Baxter of Wells Fargo & Company requested an explanation for the acceleration in U.S. Healthcare operating income growth from 23% in the prior quarter to 29% in the current quarter, questioning if factors beyond the RCA acquisition's contribution were at play.

    Answer

    EVP & CFO James Cleary confirmed that while RCA contributed to the year-over-year growth rate, the outperformance was primarily driven by the fundamental strength of the core business. He highlighted exceptional execution and broad-based strength in the U.S. segment, particularly strong utilization trends and sales of specialty products to physician practices and health systems. He also noted a reduced headwind from COVID-19 compared to prior periods.

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    Stephen Baxter's questions to Cencora (COR) leadership • Q1 2025

    Question

    Stephen Baxter from Wells Fargo & Company asked for the U.S. business's organic guidance revision, excluding RCA, and for more detail on the expected ramp-up of RCA's accretion during fiscal 2025.

    Answer

    CFO James Cleary stated that while an exact organic number isn't provided, the U.S. segment's performance ex-RCA is well above the initial 5-6.5% guidance range. He explained that RCA's expected $0.35 accretion will ramp up over the fiscal year, driven by business growth and the execution of strategic initiatives.

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    Stephen Baxter's questions to Oscar Health (OSCR) leadership

    Stephen Baxter's questions to Oscar Health (OSCR) leadership • Q2 2025

    Question

    Stephen Baxter of Wells Fargo inquired about the potential impact from CMS's scrubbing of duplicative enrollments, the magnitude of the provision for higher Q4 utilization, and Oscar's confidence that state regulators will approve its refiled, higher rates for 2026.

    Answer

    CFO Scott Blackley reiterated that the dual-eligible member impact is small and factored into guidance, and while a Q4 utilization increase is contemplated, it will be moderated by initiatives like FWA investments. CEO Mark Bertolini expressed high confidence in rate approvals, noting that regulators have been receptive and are focused on ensuring market stability.

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    Stephen Baxter's questions to Oscar Health (OSCR) leadership • Q1 2025

    Question

    Stephen Baxter of Wells Fargo inquired about the proportion of grace period membership in the quarter, its effect on MLR seasonality, and the specific value of the 2024 risk adjustment true-up, as well as its influence on 2025 projections.

    Answer

    CFO Scott Blackley explained that the gap between effectuated and paid members was normalizing and would reach typical levels in Q2. He detailed that the net unfavorable prior period development (PPD) of $30 million was driven by a $92 million increase to the 2024 risk adjustment payable, which was partially offset by favorable claims runout. This PPD accounted for approximately 60 basis points of the year-over-year MLR increase.

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    Stephen Baxter's questions to Oscar Health (OSCR) leadership • Q4 2024

    Question

    Stephen Baxter asked for a detailed discussion on payment integrity, effectuation rates, and assumptions for enrollment declines due to reverification programs.

    Answer

    CEO Mark Bertolini clarified that Oscar is now reporting 1.8 million paid members, a more conservative figure than the 1.98 million effectuated members, to account for a 9.1% non-payment assumption. CFO Scott Blackley added that the risks from broker restrictions and the 'file to reconcile' process have already been incorporated into the company's full-year revenue guidance, making the 1.8 million member count a de-risked starting point for 2025.

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    Stephen Baxter's questions to Oscar Health (OSCR) leadership • Q3 2024

    Question

    Stephen Baxter from Wells Fargo Securities inquired about Oscar's competitive positioning for 2025, noting the company's 6% rate increase versus the market's 7%, and asked for clarification on the drivers of the higher-than-expected pressure from Special Enrollment Period (SEP) members.

    Answer

    CEO Mark Bertolini characterized the pricing market as largely rational and stable, dismissing competitors chasing market share as unsustainable. CFO Scott Blackley explained that the SEP pressure stems from a higher volume of new members than anticipated, not from poor performance, which has been in line with expectations. This volume impacts the in-year Medical Loss Ratio (MLR) due to partial-year risk adjustment dynamics.

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    Stephen Baxter's questions to CVS HEALTH (CVS) leadership

    Stephen Baxter's questions to CVS HEALTH (CVS) leadership • Q2 2025

    Question

    Stephen Baxter of Wells Fargo & Company asked about Group Medicare Advantage margins, specifically where the recent PDR places margins for 2025 and if the 2026 repricing effort is expected to restore target margins in a single cycle.

    Answer

    EVP & President - Aetna, Steve Nelson, explained that Group MA contracts are typically 3-5 years long and that the company is taking a disciplined approach to renewals to achieve target margins, acknowledging that it can sometimes take more than one cycle to reach that goal.

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    Stephen Baxter's questions to CVS HEALTH (CVS) leadership • Q1 2025

    Question

    Stephen Baxter requested clarification on the Health Care Benefits guidance, asking about the nature of the prior period revenue adjustments and which business lines they affected. He also asked if the projected variable loss from exiting the individual exchange business is the correct way to estimate the future earnings benefit.

    Answer

    CFO Tom Cowhey clarified that the favorable reserve development occurred across all business lines, with the majority from Q4 2024 dates of service, and the net impact on the bottom line was the $400 million guidance increase. He confirmed the year-over-year earnings improvement from exiting the individual exchange business should be viewed as the elimination of the variable loss, which is projected to be $350 million to $400 million for 2025, while noting uncertainty around reallocating fixed costs.

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    Stephen Baxter's questions to CVS HEALTH (CVS) leadership • Q3 2024

    Question

    Stephen Baxter asked to differentiate between utilization trends driven by benefits being restructured for 2025 versus more core trends, and questioned why a PDR might be needed for group MA but not individual MA or the exchanges.

    Answer

    CFO Tom Cowhey explained that PDR calculations differ by product; group MA contracts are often multi-year, limiting the ability to make swift improvements. For the individual exchange business, he noted that double-digit rate increases and an expected 20-25% membership reduction should improve 2025 performance, avoiding a PDR. He identified elevated supplemental benefits, inpatient/outpatient services, and medical pharmacy as key trend drivers. CEO J. Joyner added that the company is proactively addressing these known issues.

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    Stephen Baxter's questions to HUMANA (HUM) leadership

    Stephen Baxter's questions to HUMANA (HUM) leadership • Q2 2025

    Question

    Stephen Baxter from Wells Fargo asked for Humana's perspective on inpatient utilization trends in Medicare Advantage during the second quarter, noting a competitor had reported an acceleration.

    Answer

    CFO Celeste Mellet responded that Humana's inpatient trends are developing in line with, or on the better end of, their expectations when considering both admissions and cost per unit. She explicitly stated, 'we're not seeing an acceleration of anything.'

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    Stephen Baxter's questions to HUMANA (HUM) leadership • Q1 2025

    Question

    Stephen Baxter inquired about Humana's visibility on risk adjustment following significant membership changes and asked for an update on Group MA performance in light of recent industry commentary.

    Answer

    George Renaudin, President of the Insurance Segment, reported a favorable shift toward higher lifetime value members and confirmed Group MA is performing as expected, with no unusual behavioral changes from repricing. CFO Celeste Mellet added that the V28 risk model impact is materializing as anticipated and was factored into guidance.

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    Stephen Baxter's questions to HUMANA (HUM) leadership • Q3 2024

    Question

    Stephen Baxter inquired about the impact of the 2-midnight rule on Q3 results, given better-than-expected inpatient unit costs, and asked about the 2025 outlook's capacity to absorb potential cost volatility.

    Answer

    CFO Susan Diamond explained that the trend of lower inpatient unit costs has been durable throughout the year and that Q3 also benefited from lower-cost seasonality (flu/respiratory). She stated that these updated cost dynamics are fully embedded in the baseline for 2025 planning, and management feels confident in its unit cost trend assumptions for next year.

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    Stephen Baxter's questions to CENTENE (CNC) leadership

    Stephen Baxter's questions to CENTENE (CNC) leadership • Q2 2025

    Question

    Stephen Baxter of Wells Fargo followed up on the Medicaid outlook, asking for more detail on the cost assumptions underlying the guided 93.5% MLR for the second half, as it implies rate increases must drop through with minimal cost growth.

    Answer

    CEO Sarah London and CFO Drew Asher addressed the question. London emphasized that levers within their control, like utilization management, are key. Asher provided specifics, stating the forecast includes a greater than 4% lift in medical expense PMPMs for the second half versus the first. He also noted the forecast is prudent, as it does not include potential upside like a retroactive premium adjustment from Florida, and highlighted the power of the 5% rate increase coming in Q3.

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    Stephen Baxter's questions to CENTENE (CNC) leadership • Q2 2025

    Question

    Stephen Baxter of Wells Fargo sought more detail on the assumptions underpinning the guided Medicaid MLR improvement to 93.5% in the second half, asking specifically about cost growth expectations and projected membership trends.

    Answer

    EVP & CFO Drew Asher provided specifics, stating that the forecast includes a 5% rate increase impacting 29% of revenue in Q3. Critically, he noted that the company has baked in a more than 4% lift in medical expense PMPMs for the second half versus the first, indicating they are not assuming flat cost trends. He added that potential tailwinds, like a retroactive payment in Florida, are not included in the forecast.

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    Stephen Baxter's questions to CENTENE (CNC) leadership • Q1 2025

    Question

    Stephen Baxter asked for clarification on the expected progression of the Medicaid MLR throughout the year, noting that significant improvement is needed in the latter half to meet the full-year guidance after a high Q1 result.

    Answer

    CEO Sarah London explained the progression relies on two levers: securing adequate rates, supported by stronger data on member acuity, and internal clinical and operational initiatives to manage costs. EVP and CFO Andrew Asher added that the full-year rate goal is 4%+, implying a back-half rate assumption in the mid-3s, along with benefits from program changes like regaining pharmacy management in one state.

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    Stephen Baxter's questions to CENTENE (CNC) leadership • Q4 2024

    Question

    Stephen Baxter questioned the conservatism of the Medicaid rate assumptions for the remainder of 2025, noting that the strong 1/1 rates suggest the placeholder for the rest of the year might be low.

    Answer

    CEO Sarah London reiterated the full-year 2025 composite rate expectation of 3% to 4%. She acknowledged that more robust data is improving rate conversations with state partners and noted that states are now more open to mid-year adjustments. However, she cautioned that the timing of achieving rate and acuity equilibrium may still play out over the course of the full year.

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    Stephen Baxter's questions to CENTENE (CNC) leadership • Q3 2024

    Question

    Stephen Baxter inquired about the expected Medicaid Medical Loss Ratio (MLR) for the fourth quarter, any retroactive rate impacts in Q3, and the underlying cost growth trends in the Medicaid business.

    Answer

    CEO Sarah London highlighted that proactive state dialogues and data sharing led to a composite rate adjustment in the high 4% to 5% range. CFO Andrew Asher added that Q3 represents the 'high watermark' for the Medicaid HBR, with Q4 expected to improve due to new rates taking effect. He also noted typical seasonal HBR increases in Medicare and Commercial for Q4.

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    Stephen Baxter's questions to COMMUNITY HEALTH SYSTEMS (CYH) leadership

    Stephen Baxter's questions to COMMUNITY HEALTH SYSTEMS (CYH) leadership • Q2 2025

    Question

    Stephen Baxter of Wells Fargo requested further clarification on the guidance bridge, specifically the full-year impact of supplemental Medicaid payments. He also asked for the absolute annual run-rate of these programs and inquired about volume trends within the Medicare business.

    Answer

    President & CFO Kevin Hammons clarified the full-year 2025 guidance includes a ~$140M benefit from the Tennessee and New Mexico DPPs. He declined to provide a total run-rate for all such programs, as they are integrated into base Medicaid reimbursement once established. He confirmed that Medicare volumes have been stable, which supports the hypothesis that financial pressures are the primary driver of softness in the commercial business.

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    Stephen Baxter's questions to COMMUNITY HEALTH SYSTEMS (CYH) leadership • Q1 2025

    Question

    Stephen Baxter sought clarification on whether the retroactive 2024 portion of the Tennessee and New Mexico DPP programs was recognized in Q1. He also asked for more detail on the payer mix dynamics, specifically the cause of the lower commercial mix and the mentioned Medicaid rate decreases.

    Answer

    CFO Kevin Hammons stated that the retroactive component of the Tennessee DPP has not yet received final approval and therefore has not been recognized. Regarding payer mix, Hammons attributed the decline in elective commercial procedures to the flu season and economic uncertainty causing patients with high-deductible plans to delay care. CEO Tim Hingtgen added that a higher volume of lower-acuity medical cases related to the flu diluted the overall case mix index for the quarter.

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    Stephen Baxter's questions to COMMUNITY HEALTH SYSTEMS (CYH) leadership • Q4 2024

    Question

    Mitchell, on behalf of Stephen Baxter, asked for a quantification of the continued hurricane impacts in Q4 and inquired about the outlook for a full volume recovery in 2025.

    Answer

    Kevin Hammons, President and CFO, stated that the Q4 hurricane impact was approximately $10 million, in line with expectations. He explained that there would be no ongoing impact in 2025 because the affected assets, the Shore Point Health System, are being sold in a transaction expected to close in the first quarter of 2025.

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    Stephen Baxter's questions to COMMUNITY HEALTH SYSTEMS (CYH) leadership • Q3 2024

    Question

    Stephen Baxter of Wells Fargo inquired about the suitability of the revised 2024 guidance as a baseline for 2025 projections, asking how to factor in the potential recovery from hurricane headwinds and the ongoing impact of claim denials.

    Answer

    President and CFO Kevin Hammons affirmed that the 2024 guidance is a reasonable starting point for 2025, but highlighted necessary adjustments for upcoming divestitures and the significant expected benefit from new state payment programs. He noted that hurricane-related losses should be recovered over time via business interruption insurance. CEO Tim Hingtgen added that strategic investments in capacity and services provide a foundation for continued growth into 2025.

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    Stephen Baxter's questions to MOLINA HEALTHCARE (MOH) leadership

    Stephen Baxter's questions to MOLINA HEALTHCARE (MOH) leadership • Q2 2025

    Question

    Stephen Baxter from Wells Fargo inquired about Molina's forecast for the market-wide enrollment decline in the ACA exchanges for 2026, the magnitude of the acuity shift being priced in, and the company's planned response if states reject their requested rate hikes.

    Answer

    CFO Mark Keim stated that specific forecasts are competitive and vary significantly by state, so national averages are not as useful. CEO Joseph Zubretsky added that their pricing models are complex and that the risk of mispricing is mitigated because most states have confirmed they will allow a "second pass" rate filing, enabling the use of the most current data available.

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    Stephen Baxter's questions to MOLINA HEALTHCARE (MOH) leadership • Q1 2025

    Question

    Stephen Baxter asked for details on the Q1 Marketplace MCR increase, specifically the drivers behind the risk adjustment and member reconciliation items, and why they should be considered nonrecurring.

    Answer

    CEO Joseph Zubretsky and CFO Mark Keim explained that the 400 basis point MCR elevation was driven by three nonrecurring items: a final 2024 risk adjustment true-up, a one-time CMS member reconciliation scrub, and the initial higher MCR from the new ConnectiCare acquisition. Keim broke down the $40 million impact as roughly one-third from each factor, expressing confidence that the issues are contained to the prior year.

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    Stephen Baxter's questions to MOLINA HEALTHCARE (MOH) leadership • Q4 2024

    Question

    Stephen Baxter of Wells Fargo asked for a detailed breakdown of the fourth-quarter Medicaid MLR, seeking to identify any impacts from new stores, retroactivity, or prior period development to better understand the 2025 guidance jump-off point. He also requested the year-end IBNR balance.

    Answer

    CEO Joe Zubretsky characterized the Q4 Medicaid MCR as 'very, very clean,' stating it was driven purely by higher-than-forecasted medical trend (1.2% vs. 50 bps forecast) without any one-time items or retros. He cited pressure from LTSS, pharmacy, and behavioral health. CFO Mark Keim addressed reserves, reporting Days in Claims Payable (DCP) at 48, consistent with the prior quarter and within the historical average range of 47-51, affirming confidence in the $4.6 billion medical claims payable balance.

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    Stephen Baxter's questions to TENET HEALTHCARE (THC) leadership

    Stephen Baxter's questions to TENET HEALTHCARE (THC) leadership • Q2 2025

    Question

    Stephen Baxter of Wells Fargo asked about the appropriate EBITDA jump-off point for 2026, specifically questioning if it's as simple as removing the out-of-period Medicaid supplemental payments or if other one-time items should be considered.

    Answer

    Chairman & CEO Saum Sutaria directly stated that the company is not providing any comments on 2026 or discussing future headwinds and tailwinds at this time.

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    Stephen Baxter's questions to TENET HEALTHCARE (THC) leadership • Q1 2025

    Question

    Stephen Baxter asked about Tenet's decision not to raise full-year guidance despite the Q1 beat and questioned the drivers of USPI's high revenue per case growth, noting that total joint case growth was lower than the prior year.

    Answer

    Saumya Sutaria, Chairman and CEO, stated that the company is not addressing guidance this early in the year but acknowledged the fundamental outperformance. He attributed USPI's revenue per case growth to the contracting platform, higher acuity, and a strategic shift away from lower acuity work, adding that as the platform grows, percentage growth rates for joints will naturally moderate.

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    Stephen Baxter's questions to TENET HEALTHCARE (THC) leadership • Q4 2024

    Question

    Stephen Baxter requested a quantification of how much new hospital capacity will be online in 2025 to better understand the drivers of the 2-3% same-store volume guidance.

    Answer

    Dr. Saum Sutaria, Chairman and CEO, explained that the growth is driven by both market-level demand and selective capacity expansion, with market demand being the majority contributor. While he did not provide a specific quantification, he emphasized that service line choices and strong underlying demand patterns support the growth outlook.

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    Stephen Baxter's questions to TENET HEALTHCARE (THC) leadership • Q3 2024

    Question

    Stephen Baxter questioned the hospital segment's Q4 earnings guidance, noting it implied a different seasonal cadence than usual. He also asked if any unusual positive or negative items impacted the hospital business in Q3.

    Answer

    Chairman and CEO Dr. Saum Sutaria attributed the Q4 guidance primarily to the impact of the Alabama hospital divestiture. EVP and CFO Sun Park added that the prior year's Q4 included a significant out-of-period payment, making comparisons less straightforward, and he confirmed there were no one-time items of note in the Q3 2024 hospital results.

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    Stephen Baxter's questions to Elevance Health (ELV) leadership

    Stephen Baxter's questions to Elevance Health (ELV) leadership • Q2 2025

    Question

    Stephen Baxter asked about the risk of a persistent disconnect in Medicaid rates, where base period rates lag and forward trend assumptions may also be misaligned, and how the company addresses this with states.

    Answer

    CEO Gail Boudreaux characterized the current environment as an unusual cycle due to post-pandemic redeterminations but emphasized that state partners have been constructive and responsive when provided with timely data. CFO Mark Kaye added that while a slower trend deceleration is now anticipated, Medicaid margins are still expected to show year-over-year improvement in the second half of 2025.

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    Stephen Baxter's questions to Elevance Health (ELV) leadership • Q1 2025

    Question

    Stephen Baxter requested a quantitative explanation for the lower-than-expected effectuation rates in the ACA exchanges, asking about the anticipated membership decline in Q2 and the impact of these dynamics on the full-year profitability outlook for the exchange business.

    Answer

    Mark Kaye, CFO, explained that effectuation rates are tracking lighter than initial expectations, partly due to a surge in passive renewals from former Medicaid members who are now required to pay premiums. He projected a mid-single-digit percentage membership attrition in early Q2, after which the base should stabilize. Mr. Kaye confirmed these revised assumptions are factored into the reaffirmed 2025 EPS guidance and projected commercial risk-based membership to end the year between 4.9 million and 5.0 million.

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    Stephen Baxter's questions to Elevance Health (ELV) leadership • Q3 2024

    Question

    Stephen Baxter of Wells Fargo sought to understand why the Medicaid business deteriorated so significantly and quickly in the third quarter, questioning if the issues were new developments or a misreading of trends from the previous quarter.

    Answer

    CFO Mark Kaye explained that Medicaid cost trends accelerated throughout Q3, accompanied by unfavorable prior period development related to the current year. He attributed the elevated trend, now 3x to 5x historical averages, to higher overall member acuity following the completion of the redetermination cycle and the inherent lag in state rate-setting processes, which rely on older data.

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    Stephen Baxter's questions to agilon health (AGL) leadership

    Stephen Baxter's questions to agilon health (AGL) leadership • Q1 2025

    Question

    Stephen Baxter inquired about the impact of the V28 risk model transition on 2025 performance, how it compares to 2024, and the expected pacing for the remainder of the phase-in.

    Answer

    CEO Steven Sell stated that the 2025 risk adjustment impact is in line with expectations, reflecting a 2% net increase year-over-year which includes a 3% headwind from V28. He attributed this to the continuity of care from long-standing PCP-patient relationships and a stable member base, noting the preparatory work was completed in 2024.

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    Stephen Baxter's questions to agilon health (AGL) leadership • Q4 2024

    Question

    Stephen Baxter asked for details on the P&L impact of 2025 Part D contracting changes and inquired about the actual Part D medical margin for 2024.

    Answer

    CEO Steven Sell explained the strategy was to reduce exposure to uncontrollable Part D risk, successfully lowering it to under 30% of membership. CFO Jeffrey Schwaneke clarified that Part D is recorded net within revenue. For the remaining members with Part D risk in 2025, the company has doubled the projected per-member-per-month (PMPM) loss from 2024 to conservatively account for the Inflation Reduction Act's impact.

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    Stephen Baxter's questions to agilon health (AGL) leadership • Q3 2024

    Question

    Stephen Baxter inquired about the specific driver for the upward revision to the Q2 cost trend and asked for the reasoning behind not using Q4 as a trend baseline, seeking clarity on a more appropriate historical period for seasonality.

    Answer

    CFO Jeffrey Schwaneke attributed the Q2 trend revision to the receipt of more complete paid claims data, which indicated that costs in the month of May were higher than initially anticipated. He advised against using Q4 as a baseline due to the business's strong seasonality, where Q4 is historically the highest cost quarter and not representative of a full-year run rate. He noted Q1 is typically much lower.

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    Stephen Baxter's questions to HCA Healthcare (HCA) leadership

    Stephen Baxter's questions to HCA Healthcare (HCA) leadership • Q1 2025

    Question

    Stephen Baxter sought clarification on the 5.4% managed care volume growth figure, asking if it included exchange volumes and requesting the growth rate for commercial managed care excluding exchanges.

    Answer

    CFO Mike Marks confirmed that the 5.4% same-facility equivalent admission growth for total managed care was inclusive of exchange plans. He then provided a breakdown, stating that exchange volumes grew 22.4%, while traditional employer-sponsored insurance volumes grew by just under 0.5% year-over-year.

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    Stephen Baxter's questions to HCA Healthcare (HCA) leadership • Q4 2024

    Question

    Steve Baxter sought to reconcile the moving parts in the quarter, noting that the full-year supplemental Medicaid benefit was higher than previously discussed while the hurricane impact was at the high end of the range, and asked if this implied core performance was softer than it appeared.

    Answer

    CFO Mike Marks framed the quarter's results by highlighting the hurricane impact, the fact that Q4 had the lowest supplemental payment benefit of the year, a tough comparison to a very strong Q4 2023, and admission growth of 3% that was lower than the year-to-date trend. He concluded that given these factors, it was a good quarter and a solid launching point for 2025 guidance.

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    Stephen Baxter's questions to HCA Healthcare (HCA) leadership • Q3 2024

    Question

    Stephen Baxter of Wells Fargo questioned the 3% to 4% volume growth assumption for 2025, asking how management is thinking about the impact from unusual coverage dynamics, such as moderating exchange growth and the stabilization of Medicaid.

    Answer

    CFO Mike Marks explained that the 2025 forecast anticipates a moderation in exchange enrollment growth to around 8-10%, down from over 30% in 2024. He also expects Medicaid volumes to flatten out as the redetermination process concludes. The net effect of these dynamics is expected to result in a generally stable payer mix for 2025.

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    Stephen Baxter's questions to UNITEDHEALTH GROUP (UNH) leadership

    Stephen Baxter's questions to UNITEDHEALTH GROUP (UNH) leadership • Q1 2025

    Question

    Stephen Baxter followed up on the trend discussion, asking where Medicare Advantage margins are expected to land in 2025, the timeline for recovering to target levels, and if the long-term margin target has changed due to V28.

    Answer

    Timothy Noel, an executive, responded that MA margins for 2025 are still anticipated to be within the company's targeted range, despite the revised outlook. Looking ahead to 2026, he stated that at this distance, the company can accommodate the higher care activity levels and return to its historical planning target margins.

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    Stephen Baxter's questions to UNITEDHEALTH GROUP (UNH) leadership • Q4 2024

    Question

    Stephen Baxter of Wells Fargo & Company asked for perspective on the 2026 Medicare Advantage advanced notice, including any areas of encouragement or concern, and whether the proposed reimbursement reflects the elevated cost trends seen in 2024.

    Answer

    Executive Timothy Noel noted the rates are preliminary and it's too early to speculate, but the company looks forward to engaging with the administration. CEO Andrew Witty added that the key is for rate-setting to be 'rational' and reflect actual cost trends, a dynamic he hopes will return to the MA rate process as it has in Medicaid.

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    Stephen Baxter's questions to UNITEDHEALTH GROUP (UNH) leadership • Q4 2024

    Question

    Stephen Baxter from Wells Fargo & Company sought early perspectives on the Medicare Advantage advanced notice for 2026 and whether the proposed reimbursement reflects the elevated cost trends seen in 2024.

    Answer

    Executive Timothy Noel stated it was premature to speculate on the preliminary rates but noted the company will engage with the new administration. Executive Andrew Witty added that the hope is for future rate-setting to be 'rational' and reflect actual cost trends, a behavior they have seen improve with state Medicaid agencies.

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    Stephen Baxter's questions to UNITEDHEALTH GROUP (UNH) leadership • Q3 2024

    Question

    Stephen Baxter asked if the three factors driving MLR unfavorability were roughly equal in impact and what operational steps are being taken to address provider coding intensity and utilization management.

    Answer

    John Rex, President and CFO, confirmed that the three factors (coding intensity, Medicaid rate mismatch, specialty Rx) were roughly equal in their impact during the quarter versus expectations. Brian Thompson, CEO of UnitedHealthcare, added that the upcoding behavior has persisted, driven by a few large systems, and that the company remains vigilant in its utilization management to ensure appropriate billing, which impacts consumer costs.

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    Stephen Baxter's questions to BrightSpring Health Services (BTSG) leadership

    Stephen Baxter's questions to BrightSpring Health Services (BTSG) leadership • Q4 2024

    Question

    Stephen Baxter asked about the expected pace of margin change in the pharmacy business for 2025, questioning if the recent step-down due to mix would continue or moderate. He also asked what drove the decision to increase the full-year guidance.

    Answer

    Executive Jon Rousseau stated that outside of the mix impact from specialty growth, he expects margins within the Infusion and Home & Community pharmacy businesses to be stable or improve, driven by lower OpEx per script as volume scales. Regarding the guidance increase, Rousseau attributed it not to a single factor but to 'continued momentum and breadth of progress across the entirety of the organization' observed during a productive start to the first quarter.

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    Stephen Baxter's questions to UNIVERSAL HEALTH SERVICES (UHS) leadership

    Stephen Baxter's questions to UNIVERSAL HEALTH SERVICES (UHS) leadership • Q4 2024

    Question

    Stephen Baxter of Wells Fargo & Company asked for the size of the 2024 medical malpractice expense overage and its expected tailwind for 2025. He also inquired about the portion of 2025 guided DPP revenue that still requires program renewal.

    Answer

    Executive Steve Filton stated that UHS recorded $79 million in malpractice reserves above its original 2024 plan, and the non-recurrence of this expense is a key driver of 2025 EBITDA growth. He estimated that roughly half of the Directed Payment Program (DPP) revenue included in the 2025 forecast is from programs that are still pending annual renewal.

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    Stephen Baxter's questions to UNIVERSAL HEALTH SERVICES (UHS) leadership • Q4 2024

    Question

    Stephen Baxter asked for the size of the 2024 medical malpractice expense that exceeded the initial plan and inquired what percentage of the 2025 DPP guidance is tied to programs that still require renewal.

    Answer

    Executive Steve Filton specified that UHS recorded $79 million in additional malpractice reserves in 2024 beyond its original guidance, which is not expected to recur and thus provides a tailwind for 2025. For DPP renewals, he estimated that roughly half of the DPP revenue included in the 2025 forecast is from programs where approval is still pending.

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    Stephen Baxter's questions to Cigna (CI) leadership

    Stephen Baxter's questions to Cigna (CI) leadership • Q4 2024

    Question

    Stephen Baxter of Wells Fargo asked about the historical impact of stop-loss repricing on client retention and membership, and questioned why the margin recovery from current pressures might extend as far as 2027.

    Answer

    Brian Evanko, CFO, explained that Cigna's stop-loss is an integrated product, not standalone, which strengthens client relationships. He noted that these multifaceted relationships, which provide budget certainty, lead to high persistency, with over half of stop-loss clients having a tenure of five years or more. This history gives them confidence in their ability to balance margin recovery with client retention over the 2025-2027 period.

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