UnitedHealth Group (NYSE:UNH) reported a robust 14% growth in revenues for the third quarter of 2023, reaching $92.4 billion. The growth was primarily driven by its divisions, including OptumHealth, OptumRx, and UnitedHealthcare. The company also upgraded its 2023 adjusted earnings outlook to a range of $24.85 to $25 per share. UnitedHealth Group plans to serve nearly 900,000 additional patients under value-based care arrangements and almost 1 million new consumers with its Medicare Advantage offerings by year-end. The company's financial position remains robust, with adjusted cash flows from operations of $22.4 billion in the first nine months of the year.
Key takeaways from the call include:
- UnitedHealth Group's Optum and UnitedHealthcare divisions experienced double-digit growth, contributing to the overall revenue increase.
- The company returned over $11.5 billion to shareholders through dividends and share repurchases.
- UnitedHealth Group is focused on executing its growth strategies and expanding its capacity to serve more people.
- The company plans to provide further insights into its 2024 outlook at its investor conference on November 29th.
OptumHealth revenues grew by 29% to nearly $24 billion, driven by an increase in care services and patients, particularly those with complex care needs. OptumRx revenues also experienced a 14% growth, reaching nearly $29 billion, supported by pharmacy care services and new customer wins. OptumInsight revenues grew by 35% to $5 billion, with the revenue backlog increasing by over $7 billion, partly due to the change healthcare combination.
UnitedHealthcare's commercial business added approximately 700,000 people in the third quarter. The company anticipates serving an additional 1 million people with commercial benefits in 2024 and expects a growth of nearly 1 million Medicare Advantage members this year.
UnitedHealth Group expressed confidence in the continued strengthening of OptumHealth, stating that 2023 has been focused on re-engineering the cost base, adjusting benefit strategies, managing affordability of care, and investing in consumer engagement and technology capabilities. The company also acknowledged changes in funding for Medicare Advantage and the need to adapt their strategy accordingly.
The company highlighted innovation and market success in their various business segments, contributing to improved margins. UnitedHealth Group emphasized the importance of affordability in healthcare innovation and mentioned that they are working with manufacturers to find more affordable options for clients.
UnitedHealth Group's executives addressed various topics related to wage inflation, health care costs, and the company's growth strategies. They stated that wage inflation is a factor in negotiations with health systems but is currently manageable and factored into pricing. The executives also discussed the pricing environment for commercial insurance, the integration of OptumInsight, and the potential impact of affordable gene therapy drugs on medical care.
UnitedHealth Group discussed the early stages of their weight loss indications and stated that it is too early to see any results. The company's current focus is on making this class more affordable so that those who need it can afford it. They also mentioned that they have seen significant growth in their fully accountable membership, with over 900,000 patients added for the year.
In response to a question about Medicaid disenrollment, Tim Spilker, who leads the Community and State business, stated that there has been significant disenrollment for procedural reasons and variability across states. They are implementing strategies to engage members and support states in finding coverage. They have seen strong re-enrollment rates and believe their membership outlook is in line with expectations. UnitedHealth Group aims to be nimble, agile, and focused on their mission. The call concluded with gratitude for the participants' attention.
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