WHEN: Today, Wednesday, March 28
WHERE: CNBC's "Mad Money w/Jim Cramer"
Following is the unofficial transcript of a CNBC EXCLUSIVE interview with David Wichmann, UnitedHealth Group CEO, on CNBC's "Mad Money w/Jim Cramer" (M-F, 6-7PM ET) today, Wednesday, March 28.
All references must be sourced to CNBC.
JIM CRAMER: David, I am a member of UnitedHealthcare. What am I getting that the other guys won't give me?
DAVID WICHMANN: A lot of things.
JIM CRAMER: All right. Tell me.
DAVID WICHMANN: I think you get 285,000 people that are focused on helping people live healthier lives and helping make the health system work better every day. They are very passionate about driving -- you know, restless servants, if you will, of change in healthcare broadly; and they hope to bring you a better healthcare experience every day.
JIM CRAMER: But what do I have to do to be a good patient? Because I know that one of your mantras is -- how do you get people to take better care of themselves, to live healthier lives? There is nothing in this that says I've got to do a good job myself.
DAVID WICHMANN: Yeah, well, that's why we try to engage you as a consumer; and engagement is a big part of what makes healthcare work. Well, both engagement of the health system, but also engagement of you in managing your health conditions, as well as keeping yourself well.
JIM CRAMER: You talk about one of the two Holy Grails as being the doctors, the network that you own. Talk about engagement, you're able to get data from them, you're able to find out what outcomes are. I imagine it's the best way to figure out what should go right in the healthcare system.
DAVID WICHMANN: That's right. Well, it's not just about getting the data from them, it's about making the best use of the data that you have and converting it to information, applying it against best known science, identifying gaps in care, places where you can, you know, change the way in which you access the health system and make yourself better.
JIM CRAMER: Okay. This last mile, access. You've got a business which I am fascinated by -- hopefully, I don't have to use -- MedExpress. And in it, you say, versus the emergency room. You are on record saying that MedExpress can do 90 percent of what an emergency rooms does at 1/10 the cost.
Why are you not in charge of our healthcare system?
DAVID WICHMANN: Well, MedExpress is just one of the many assets that we bring. And as you realize pretty quickly, the healthcare system is made up of a number of relationships. That's one of the strengths of our organization, is managing millions of relationships with physicians, as well as bringing our own innovations to the market. MedExpress is a strong company that gets great consumer response, as well, NPS over 70, and just a well performing company.
JIM CRAMER: How is that test going with Walgreens? Because they reported this morning -- and, you know, they have a lot of good things to say about actual healthcare.
DAVID WICHMANN: Well, we have a pilot underway in 15 markets -- or 15 stores, I should say, across several markets. You know, it's early stage right now. We're just coming up on the first year of the first implementations of --
JIM CRAMER: But do you look at it?
DAVID WICHMANN: We look at it every month. Every month, look at it and evaluate it and discuss it with Stefano and others. And we do our best to evaluate, you know, whether or not it will fit nicely into a forward-looking health system.
JIM CRAMER: Okay. One of the things, I speak to a lot of health insurance executives, I speak to a lot of drugstore people and drug company people. I am surprised uniformly that they are not afraid of the Death Star, that's Jeff Bezos, and what he can do to healthcare.
Why is UnitedHealth not afraid? Because I presume you're not. And why do I bet that in the end, maybe they either return to you, take your people perhaps, as CEO, or realize that you can do a better job than they can?
DAVID WICHMANN: Well, we're operating our business in an expansive market that will continue to expand over time, and we have a very strong track record of growth. And expectations around growing in five critical areas around healthcare delivery, pharmacy care services, advancing consumer-centered benefits, really advancing also digital and health information aspects of our business, as well as going global. And as I said before, there's millions of relationships you need to manage; and, obviously, that would be just one that we would need to perfect.
JIM CRAMER: If I'm Bezos, I like big data. That's how I predict what you want, the artificial intelligence. Optum has got the biggest data bank in the world. Why don't they just say, you know what, we can't reinvent this?
DAVID WICHMANN: So data around 200 million people on the administrative side, and then another 100 million or so in terms of medical records. That is used by us for AI, machine learning, advancing, you know, the advanced technologies broadly in healthcare and making a difference on, you know, the predictive values of understanding, you know, who may get sick and under what circumstances we need to help them with their care.
JIM CRAMER: Well, speaking of that kind of analysis, I had seen this the other day, David Cordani -- and there could -- these guys work closely with you.
DAVID WICHMANN: Yes.
JIM CRAMER: Do you expect changes when they finish their merger with Express Scripts -- changes for your company?
DAVID WICHMANN: I think our company will continue to pursue the same growth opportunities overall. Cigna is a very fine company and a good partner of ours in certain aspects of our business, and we look forward to continuing to work with them.
JIM CRAMER: There's no reason to think that you can't, right?
DAVID WICHMANN: That's right.
JIM CRAMER: It's not either/or?
DAVID WICHMANN: No, it's not either/or at all.
JIM CRAMER: Now, do you envision a day where healthcare won't be such a huge part of the GDP, it won't be growing faster than the GDP?
DAVID WICHMANN: I can envision a day that will happen.
JIM CRAMER: You do?
DAVID WICHMANN: Yes, for sure. If you look to the future, call it seven, eight, nine, ten years out, I think you're going to see the real strong implications of technology on helping to curtail healthcare costs. I think the systems of the benefits and the health systems broadly going to more value-based mechanisms will drive greater efficiency and effectiveness in healthcare.
Now, we are up against a series of macro demographic trends with an aging population.
JIM CRAMER: Right.
DAVID WICHMANN: We have 86 percent of the healthcare costs are driven by chronic disease.
JIM CRAMER: Right.
DAVID WICHMANN: And that's not going to shift anytime soon.
JIM CRAMER: Well, do you think that you can manage drug prices? And I say that because this coupon initiative is one that I'm a customer, right? I want to know more about it. Because the one thing I know is that there are drugs that I really want and the prices are too high, but I see in Canada and other places they've got coupons. How do I -- are you in favor of it or are you going to help me actually get them?
DAVID WICHMANN: Well, drug prices are too high, and we work every day to bring greater affordability for drugs for consumers. Like we did -- announced a few weeks back where we're bringing greater discounts at the point of service for consumers.
JIM CRAMER: That's a big deal.
DAVID WICHMANN: It's a huge deal.
JIM CRAMER: Jeff Bezos is in the news every day about something that -- that nothing's been done. This was something that I was at Kohl's yesterday, and they talk about Kohl's Cash. This is UnitedHealth cash. Why aren't we talking about it more?
DAVID WICHMANN: Well, I think that it just -- you know, over time I think it'll continue to get greater levels of attention. We saw yesterday that Aetna also adopted a similar policy, and hopefully the rest of the industry finds its way to that same position.
JIM CRAMER: You talk about the need to have people think healthier, take better care of themselves. I'm a person who works really hard. Are there people who are a health risk because they take their job too seriously?
DAVID WICHMANN: I don't think so. I think that -- that's a good stress reliever, work.
JIM CRAMER: And do you encourage places, if they can -- I was up at salesforce.com's New York headquarters. They've got mindfulness rooms. They have yoga rooms.
DAVID WICHMANN: Yes.
JIM CRAMER: If you wanted to lower, ultimately, your cost of healthcare, would you tell people, "You know what? Be mindful, get those employees in one of those rooms"? Is that a sensible thing to do?
DAVID WICHMANN: It is, actually. You know, we've adopted or developed a mindfulness business as well. It's more in a venture format as we sit here today.
JIM CRAMER: Venture format meaning that you might spin it out?
DAVID WICHMANN: No, that we are -- it's early stage in its development, and we're incubating and modifying the model. But, you know, stress relief is an important factor in managing your health as well. And so many of those efforts make a lot of sense.
JIM CRAMER: Are we to the point where there are a lot of people who make fun. Like, when I say that I'm trying to be mindful. People say: "Are you kidding me? Mindfulness. That's something that's in San Francisco."
Are there people who are starting to take care of their mind, not just their body, because their mind can produce better results for their body?
DAVID WICHMANN: That's right. In fact, most of -- a lot of our engagement tools that we've just rolled out to seniors really focus on engaging their mind, because loss of memory is something that we're trying to manage. But it's important also.
We apply mindfulness with many of the cohorts of our employee base as well, particularly, you know, those that may engage in more stress than others, like our nurses and others that are working every day to bring better healthcare to people.
JIM CRAMER: Okay. Last thing I need to know.
DAVID WICHMANN: Okay.
JIM CRAMER: If I were President of the United States, which I am most certainly not -- certainly -- well, whatever, I would call you in and I would say: "Okay. Here's the keys to the car. You have done a remarkable job. It's all yours." If it was all yours, what's the first thing you would do?
DAVID WICHMANN: Well, I think the first thing I would do, there's about a trillion dollars of cost that's in the fee-for-service system today that's largely unmanaged. There is no question that we can do a better job with that in terms of just applying practical, private company practices to that population, and I think we would save a lot there. But I would also have everybody kind of get focused on a similar mission and drive a culture to improve healthcare costs by lowering them, drive greater levels of effectiveness overall in making sure that we are driving a great deal of consumer satisfaction.
JIM CRAMER: But we don't want to put UnitedHealth out of business.
DAVID WICHMANN: No, we wouldn't want to put UnitedHealth out of business. I think, though, that we can work together to make a difference.
JIM CRAMER: Terrific. Okay. That's David Wichmann. He is the CEO of UnitedHealth Group International, a stock that I've been recommending, believe it or not, since the '80s, and it's been a winner. Thank you so much, David. Good to talk to you.
DAVID WICHMANN: You, too.
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Emma Martin
CNBC
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e: emma.martin@nbcuni.com