UnitedHealth's Optum Sales Hit $100B For First Time

Bruce Japsen, Senior Contributor

Jan 15, 2019, 11:12am

UnitedHealth Group’s fast-growing Optum health services business surpassed $100 billion in annual revenues for the first time last year as the diversified healthcare giant continues to successfully meld its insurance business with the provision of medical care, the company said Tuesday.

UnitedHealth's strategy to offer both health insurance and a menu of healthcare services including pharmacy benefit management, surgical and outpatient care from the doctor’s office to the urgent care center via Optum is increasingly being followed by rivals. Aetna, the third largest health insurer, is now owned by drugstore and retail clinic giant CVS Health while other insurers including Humana are forming closer ties with providers like Walgreens Boots Alliance.

In announcing its fourth quarter 2018 and full year earnings, UnitedHealth, the nation's largest health insurer, reported profits dipped 16% in the fourth quarter to $3.04 billion but were still in line with Wall Street analysts’ expectations as the insurer saw a boost in sales of Medicare Advantage plans. UnitedHealth Group’s revenues were up 12% to $58.4 billion in the fourth quarter. UnitedHealth also affirmed its outlook for 2019, including net earnings of $13.70 to $14 per share, the company said Tuesday

“We completed a strong Medicare Advantage enrollment season last month and are on track to achieve 2019 growth within the 400,000 to 450,000 range of expectations,” Steve Nelson, CEO of UnitedHealthcare, UnitedHealth’s insurance business told analysts Tuesday morning on a call to discuss earnings. “We are thoughtfully advancing in areas like digital therapeutics, real time health information and artificial intelligence to drive an even more distinctive consumer experience, all at lower costs.”

Optum, meanwhile, continued to outpace growth of UnitedHealth’s insurance lines of business. Revenues grew 11% to $101.3 billion on strong sales from the OptumHealth unit, which increased the number of people it served by 5 million or 6% to 93 million as of the end of 2018.

"Our focus is to accelerate the access to and integration of the individual strengths of Optum to deliver better health care and more affordability across the whole of the health system," Optum CEO Andrew Witty told analysts. "In leveraging our data analytics capability to improve care pathways with local care delivery and pharmacy care services, we have unique potential to improve patient well-being and health, while bringing health care costs under better control."

https://www.forbes.com/sites/brucejapsen/2019/01/15/unitedhealths-optum-sales-hit-100b-for-first-time/#3e92fb836ccb