UnitedHealth Group raised its profit outlook for the rest of the year as its
Optum health services business continues to treat more patients in a
value-based approach to capture more market share.
UnitedHealth Tuesday raised its 2019 net earnings outlook
to “a range of $14.90 to $15” compared to an earlier forecast that was raised
this past summer thanks to growth across its insurance and Optum medical
provider businesses. The raised guidance came as the nation’s largest health
insurance company reported an 11% increase in third quarter profits to $3.54
billion. Revenues jumped nearly 7% to $60.4 billion.
“Our business is progressing across multiple
dimensions with many of our growth and performance efforts beginning to fall
into place,” UnitedHealth chief executive officer David Wichmann told analysts
Tuesday during the company’s third quarter earnings call. “Higher quality,
better outcomes and experiences, lower costs (and) building the next generation
health system in a socially conscious way. These have been and will continue to
be consistent themes for our enterprise, an enterprise built for growth.”
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 working. It has also been a recipe that is being
followed by other health insurers after CVS Health, the operator of pharmacies
and retail clinics, bought the nation’s third largest health insurer, Aetna,
last year while other insurers like Humana are forming closer ties with medical
care providers including Walgreens Boots Alliances and Walmart.
For UnitedHealth, the strategy included
acquiring Davita Medical Group for $4 billion. That deal closed earlier this year and Optum executives
said the integration is progressing.
UnitedHealth group said its OptumHealth business
served about 95 million people as of Sept. 30 as “as revenue per consumer
increased 30% year-over-year, driven by growth in value-based care arrangements
and expanded local care delivery offerings.” OptumHealth’s revenues rose 34% to
$2.1 billion in the quarter.
The growth in OptumHealth sales helped Optum’s
overall revenues rise by 13% to nearly $29 billion. Optum’s overall sales
includes the pharmacy benefit manager OptumRx, which is one of the nation’s
largest PBMs.
“We are growing our physician base, applying
data analytics and technologies, advancing collaboration, driving distinctive
quality, and serving diverse payers to improve health outcomes at lower
costs,” Optum chief executive officer Andrew Witty told analysts
on Tuesday morning’s call. “We will further expand and deepen our local
presence, aligning and integrating our capabilities across OptumCare as well as
Optum more broadly in areas, including specialty pharmacy, behavioral health
services and community-based pharmacy dispensaries.”
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