AET
#Thanks for the question, <UNK>.
I would say that we continue to look for opportunities to grow in the provider space around technology in better building out the Healthagen asset.
We just recently made an acquisition in the exchange space, bswift, last year, and so we continue to look for assets in the commercial space that will work for us.
As it relates to larger consolidation of M&A, we have a strong balance sheet and we are paying attention to what's going on in the marketplace and will react appropriately, or act appropriately, should the opportunity arise.
On the last two, on the public exchange, it is early, given the growth we had, the way we are accounting for the system, the issues we saw last year in accounting for the way we have to for public exchanges.
So, it's just really caution, particularly on that front, around what to expect for the rest of the year.
As it relates to Kentucky, obviously early, and still in midst of that conversation.
Cost trend, if there's one number that always has us keep one eye open at night and has the biggest impact on our ability to deliver, is cost trend.
We are down at the lower end of our guidance.
We've seen positive cost trend.
We also saw positive cost trend in the first quarter of last year and we don't see any reason to get out in front of a relatively cautious view on where trend heads.
What the rating agencies tend to be interested in is obviously the dividends that we get from non-regulated subsidiaries, which is typically where some of that service fee business is.
As you'd suspect, given the composition of our company, most of our dividends do come from regulated subsidiaries, but it's not insignificant, the amount that does come from the non-reg business.
It certainly is something that they look at and we think about, but it's really just part of a bigger strategy to grow the revenue profile of the company as opposed to a specific strategy just to grow the non-regulated fee-based business.
I'll remind you, for everybody, and also you, <UNK>, first, that we did not give up complete PBM relationship, from a pharmacy benefit standpoint, when we did our deal with CVS.
Our deal with CVS is very structured, where we continue to control formulary, we continue to control actions around case management and how we look at drugs and introducing drugs.
So our P&T committees are still very active and involved in how we manage drugs.
But in the end analysis, as we look at the pressure, it's all on the specialty side, and we are looking for ways to move the cost of these drugs away from the medical benefit into the pharmacy benefit, where we can both negotiate formulary and rebates, and we can also have coinsurance cost-sharing on the drugs, and we can tier the drugs based on their clinical efficacy.
So that's how we think about managing this going forward.
If there's one trend on the page that continues to move up, it is largely around the specialty drug area.
A transcript of the prepared portion of this call will be posted shortly on the Investor Information section of Aetna.com, where you can also find a copy of our updated guidance summary containing details of our guidance metrics, including those that were unchanged or not discussed on this call.
If you have any questions about matters discussed this morning, please feel free to call me or Joe Krocheski in the Investor Relations office.
Thank you for joining us this morning.
