Growth at Optum Health Helps Power UnitedHealth’s Q2 Numbers
Strong growth at its Optum Health services business and lower insurance claims expenses helped UnitedHealth Group Inc. grow its second-quarter profits 19 percent and lifts its operating margin for the period by half a percentage from a year earlier.
Minnetonka, Minn.-based UnitedHealth posted net income of nearly $5.2 billion in the three months ended June 30 on total revenues of $80.3 billion. Operating profits rose to $7.1 billion from $6.0 billion in Q2 of 2021, helped by a drop in the company’s medical loss ratio to 81.5 percent from 82.8 percent.
United’s Optum Health unit, which comprises physician groups as well as surgery centers and home and specialty care services, also contributed in a major way. Its revenues climbed to $17.6 billion from $13.3 billion in the year-earlier period – at that size, it is now nearly as large in revenues as United’s employer and individual insurance businesses — as the broader Optum division produced operating profits of nearly $3.3 billion.
Optum Health’s contribution looks set to grow further: Revenue per consumer rose 30 percent year over year in the second quarter as its surgery centers handled more high-acuity cases and a greater number of people received care under value-based care arrangements. On a July 15 call with analysts and investor, CEO Andrew Witty said his team has its eyes on more service line expansions.
“You’ll continue to see us prospect, experiment and invest in areas like behavioral health and in areas like oncology. These are going to be important areas for us to solve,” Witty said. “I’d say those are early-day opportunities but as you think about where the burden of cost and complexity sits in the healthcare environment, those are the kind of places where we need to make progress and we are. And you should expect to hear much more from us on that over the next two or three years.”
On the insurance side, CFO John Rex said on the conference call said some groups of patients – he specifically mentioned pediatrics and emergency department visitors – are still not using the healthcare system at the levels they were pre-pandemic while groups such as seniors looking for preventive care, are “coming back more fully.”
Shares of United (Ticker: UNH) were up more than 5% Friday afternoon to nearly $529. Year to date, they have risen about 5%, growing the company’s market capitalization to nearly $500 billion.
