UnitedHealth 3Q Earnings Call: Execs Talk Redeterminations, Acquisitions, Inflation

UnitedHealth 3Q Earnings Call: Execs Talk Redeterminations, Acquisitions, Inflation   by Leslie Small   During UnitedHealth Group’s recent conference call to discuss third-quarter 2022 financial results, executives discussed a variety of topics in addition to the company’s earnings — including broad-based trends like inflation and the looming return of Medicaid redeterminations, as well as UnitedHealth’s strategies for integrating a recent acquisition and furthering risk-based payment models.     Redeterminations will be ‘big lift’ for states  Tim Spilker, CEO of UnitedHealthcare Community and State, said the company is assuming that the COVID-19 public health emergency (PHE) will end in January. That would mean Medicaid eligibility redeterminations would resume in the first quarter of 2023.    “This will be a big lift for states, a really long-term effort over the course of 12 to 14 months,” Spilker said, referring to the process of restarting eligibility checks. UnitedHealth is planning to help the process by sharing its data “and then really connecting with individuals where they access care, so places like pharmacies.”  SVB Securities analyst Whit Mayo estimates that the resumption of Medicaid redeterminations will represent a “0% headwind” for UnitedHealth, explaining in an Oct. 3 research note that “UNH’s diversified stream of revenues virtually offsets any material impact the company could experience from redeterminations.”   Optum eyes the next frontier of value-based care  UnitedHealth’s care delivery arm OptumHealth saw its third-quarter revenue rise 34% year over year, Chief Financial Officer John Rex said during the firm’s earnings call. “Growth continues to be led by the increasing number of patients served under value-based care relationships and the expanding types of care settings offered by Optum,” he said.  In an Oct. 17 note to investors, Jefferies analyst David Windley pointed out that “while the heart of Optum’s risk book sits in OptumCare, incorporating other services into the controlled, vertically-integrated delivery [platform] potentially increases efficiency and margin capture. Home Health and Behavioral appear to be the next risk frontiers where Optum is adding lives.”   That strategy can help OptumHealth capture more margin, as “risk-taking PCPs [primary care physicians] can direct referrals to owned Home Health and Behavioral assets to better orchestrate overall care efficiency,” he suggested.   Company has high hopes for ‘Change’  While the $13 billion acquisition of Change Healthcare officially closed earlier this month, efforts to integrate Change are ongoing. During UnitedHealth’s third-quarter earnings call, executives offered some more details about that process and its financial impact.   Rex confirmed that UnitedHealth expects the transaction to be accretive to earnings beginning next year. He also said the company projects it will spend $100 million on integration activities “so we can bring the potential benefits of the combination of OptumInsight and Change to the health system more quickly.”    From Health Plan Weekly   Subscribers may read the in-depth article online. Learn more about subscribing to AIS Health's publications.