James Rechtin
President and Chief Executive Officer at Humana
Thanks, Lisa, and good morning, everyone. Thank you for joining us. In the last quarter, I outlined four basic drivers of our business that we need to be able to deliver against over and over again. Those are, first, providing a Medicare product and experience that delivers against consumer needs and is priced with discipline. Second, it is operating with clinical excellence. This really is the foundation of industry leading margins. Third, managing a highly efficient back office; and it's fourth, deploying growth capital in a way that complements our Medicare Advantage core business, but really focused around CenterWell and Medicaid.
I'd like to review the quarter's results with a little bit of a lens towards those four drivers. Before I do that, let me just start with a few headlines. First of all, as we noted, we exceeded expectations for the quarter. We're also confident that we will achieve at least $16 of EPS for the full year, and we are comfortable with where 2024 EPS consensus sits today. Exactly where we're going to land is largely dependent on a number of investment decisions in AEP and in Stars that we continue to evaluate.
We also feel good that we priced our MA product for margin expansion in 2025. However, similar to our strategy for the rest of 2024, we will be balancing near term earnings progression with investment in the business. And when we say investment in the business, certainly that is STARZ, but it's also looking at investment opportunities in growth, admin, cost efficiency and medical cost management. We understand that investors would like more clarity on the multi year outlook of the business and to address this we are targeting an Investor Day in May of 2025.
So let me turn to the four basic drivers for a moment. So, right now, if I start with product and experience that we are delivering through our Medicare product, we're feeling pretty good about what we're delivering. And let me point out a couple of things. Our individual MA membership growth continues to outpace our expectations for the year. We anticipate at this point full year growth, year-over-year growth of around 5%. The year started slowly in AP last autumn, but we made pretty significant gains over the course of 2024. When we look at it, we believe that this is a reflection of disciplined product pricing that has allowed us to continue to emphasize growth at a time when others in the market have pulled back.
And we also attribute some of the growth to incremental marketing investments that we've made in our internal sales channel. This is a channel that we believe is increasingly important for us and that and those investments have been paying off. We continue to deliver best in class service. Recently, we were ranked the number one health insurer for customer experience by Forrester. This is now four years in a row of being ranked number one by Forrester. And finally, while it's early in this year's AEP cycle from what we can tell, sales appear to be generally on track with expectations.
Turning to the second driver, clinical excellence. Let me start with STARZ. We've acknowledged now that we've got work to do to get back to the results that we expect of ourselves and that we expect for our members and our patients and our investors. We've been moving quickly to make investments and to align incentives in our provider and pharmacy networks to close more gaps in care. We've also redirected care management and call center capacity to increase member outreach and that is also related to gaps in care. Just last week, those efforts resulted in about 5,000 incremental primary care appointments. And I learned last night that we've got about another 3,000 -- to start this week 3,000 primary care appointments scheduled.
We're also making technology investments. This includes improvements to our Plan Finder capability. And really the way I'd characterize it, we're on a sprint to take ground and to impact 2027. And I simultaneously feel good about the team's focus and the effort and the impact that we're making, and they're frankly frustrated that we have allowed ourselves a shorter runway than we would like to make up that ground.
Clinical excellence also translates to lower cost when we deliver better care. And so in Q3, medical costs are largely in line with our expectations. There's obviously some give and take across categories. The environment is still dynamic, and we will be careful with our expectations around medical cost trend. However, right now, we are seeing some success in a number of our cost control efforts. The example I'll give is we've been extending value based care contracts beyond primary care into areas like kidney disease and oncology care management, and we're seeing good results from that effort.
Shifting to the third driver. Highly efficient back office, we do continue to make progress in this area. We're expecting a 30 basis point decrease in our adjusted operating cost ratio for the year. And just to give one example with the type of work that is helping to drive this, we are implementing more and more uses use cases for AI. We recently launched a Generative AI solution that allows our care management team to spend about half as much time on post call documentation. They are still doing all the same human oversight for any clinical decision making, but they're spending less time on documentation.
That brings us to our final driver. Deploying growth capital to drive efficient growth. I would argue that we're quietly building the leading senior oriented primary care organization in the nation. Our primary care clinics are hitting their clinical and their financial targets. They're on track to mitigate v28. We recently released a study in collaboration with a leading researcher and professor from Harvard that demonstrates both the clinical and economic value the clinics create. It found that our members have a better experience when they are part of a senior focused primary care clinic. We expect to add another roughly 40 clinics this year. Often this is through acquisition of underperforming clinics that we've demonstrated we can pretty rapidly turn around, and our patient growth continues to outpace expectations.
I'm encouraged by our recent performance trajectory and growth absent our STARZ performance in BY26, and at the same time, recognize that these continue to be dynamic times for the industry and I believe it's critical that we continue to strengthen the organization by making investments to drive long term shareholder value. This is obviously a balance with how we think about short term earnings progression. We look forward to providing formal 2025 guidance on our fourth quarter call, and, we will also look forward to providing a more fulsome update on our strategic initiatives and their expected impact at Investor Day, which again we're targeting in May of 2025.
Finally, I'd just say, look, our conviction remains high regarding the positive outlook for MA and for value based care. And with that, we will turn to Q&A.
