UnitedHealth Group Inc. signage stands in front of company headquarters in Minnetonka, Minnesota, ... [+]
UnitedHealth Group profits fell nearly 40% in the fourth quarter of last year as Americans returned to the doctor’s office to get medical treatment put off by the Covid-19 pandemic.
UnitedHealth, the nation’s largest health insurer, still made $2.2 billion in the fourth quarter though that number was down significantly from the more than $3.5 billion the company made in the fourth quarter of 2019. Revenues rose to $65.5 billion in the period compared to $60.9 billion in the fourth quarter of 2019.
The company said its fourth quarter operating results reflected “restoration of care patterns” as well as “the company’s continued efforts to provide support and relief efforts to correct economic imbalances caused by the pandemic,” among other efforts during a historic period of turbulence for health insurers and providers of medical care.
Prior to the fourth quarter, health insurers like UnitedHealth had been seeing big boosts in profits as Americans deferred medical care procedures and trips to the doctor’s office, particularly in the second and third quarter of last year when states issued stay-at-home orders. Those decrees kept most Americans from getting routine and elective procedures and other care as patients avoided hospitals and clinics unless they had emergencies.
Thus, fewer medical claims submitted to UnitedHealth’s UnitedHealthcare health insurance business meant wider profit margins.
But UnitedHealth Group saw medical costs rise to more than $42 billion in the fourth quarter compared to $39.2 billion in the fourth quarter of last year.
Still, UnitedHealth Group has a diverse portfolio of businesses thanks to its Optum health services business which includes an array of medical care provider businesses and the large pharmacy benefit manager, OptumRx.
In the fourth quarter, Optum’s earnings from operations were up slightly to $3.1 billion compared to $3 billion in the year ago period. Optum’s revenues were up 20% to $35.9 billion compared to $29.8 billion in the fourth quarter of 2019.
UnitedHealth CEO David Wichmann expects Optum to continue to be a key driver of the company’s overall growth in 2021 as it grows its medical care provider businesses.
“OptumCare entered 2021 with over 50,000 physicians and 1,400 clinics,” Wichmann told analysts Wednesday morning on a call to discuss earnings. “Over the course of this year, we expect to grow our employed and affiliated physicians by at least 10,000. This work of building local, physician-led systems of care continues to be central to our mission and is accelerating with notable progress in the Northeast, Pacific Northwest, and Southern California in 2020.”
