Bruce
Japsen Senior Contributor Apr 15, 2020,09:42am EDT
UnitedHealth
Group reported ‘minimal impact’ to first quarter profits as elective procedures
the large health insurer pays for were postponed amid the spread of the
Coronavirus strain COVID-19.
UnitedHealth
Group, which runs the health insurer UnitedHealthcare and the big provider of
healthcare services Optum, reported profits from operations rose 3.4% to nearly
$5 billion in the first quarter. Revenues rose nearly 7% to $64.4 billion
“reflecting broad-based revenue growth across Optum and
UnitedHealthcare,” the company said Wednesday.
Elective
procedures are being postponed at hospitals across the country to free up
inpatient capacity for patients sickened by COVID-19, which is expected to be a
temporary benefit for health insurers like UnitedHealth.
UnitedHealth,
however, is seeing some impact to its Optum health services business and higher
usage of services that counter the reduced patient volume from elective
procedures. Optum has provided care for more than 10,000 COVID-19 patients so
far and is operating “more than 400 testing sites across the country,”
executives said.
“Like
the broader health system, in recent weeks we have seen a reduction in elective
care, which is impacting both the UnitedHealthcare benefits and the Optum care
delivery businesses,” UnitedHealth chief executive David Wichmann told analysts
Wednesday morning on the company’s first quarter earnings call. “Most
traditional procedural work has been postponed at our SCA ambulatory surgery
centers. Likewise, the UnitedHealthcare and Optum at-risk care delivery
businesses have seen lower demand for these services.”
The
company said its UnitedHealthcare first quarter revenues increased 4.4% to $51
billion due largely to the insurer’s growth from new enrollees in Medicare
Advantage, the private health insurance for seniors.
UnitedHealth’s strong Medicare Advantage growth comes amid
unprecedented competition given a record number of health plans is
participating in a program that offers seniors the same benefits as traditional
Medicare plus extras like preventative care and outpatient healthcare services.
UnitedHealth’s Medicare Advantage business competes against rivals in the
health insurance business including Anthem, the Aetna unit of CVS Health,
Cigna, Humana and Centene.
Meanwhile,
Optum revenues grew more than 24% to $32.8 billion. Optum revenues include the
pharmacy benefit manager OptumRx and an array of medical care provider
businesses.
Looking
ahead, UnitedHealth executives said they are shifting resources in the battle
against COVID-19 and have not made any changes to the company’s financial
outlook for 2020.
“While it feels awkward to be talking about
earnings outlooks in this moment, you saw in our press release we are
maintaining the 2020 earnings per share outlook established
at our investor conference,” Wichmann said. “We view this as the most
reasonable baseline posture in these uncertain times as we continue to grow and
operate our businesses while assessing the multitude of potentially offsetting
factors across our uniquely diverse enterprise. These factors will become clearer
in the months to come.”
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