Optum helps UnitedHealth Group post $5.1 billion in Q2 profit

Photo courtesy of UnitedHealthcare

UnitedHealth Group posted $5.1 billion in profits while raking in $80.3 billion in revenues in the second quarter of the year, showing 13% growth year-over-year, driven by double-digit growth at Optum and UnitedHealthcare, the company's provider and insurance arms.

Value-based arrangements at Optum and a growing customer base for UnitedHealthcare were the main drivers of this growth, UHG said in an earnings report released today.

Second-quarter earnings from operations were $7.1 billion. Adjusted net earnings of $5.57 per share increased 19% year-over-year.

The medical care ratio was 81.5%, compared to 82.8% last year, due to COVID-19 effects and business mix. The operating cost ratio of 14.6% compares to 14.5% in 2021, reflecting continued productivity gains, offset by business mix and continued investments in future growth.

Cash flows from operations for the second quarter of 2022 were $6.9 billion, or 1.3 times net income. The company returned $4 billion to shareholders in the second quarter through dividends and share repurchases and increased the dividend by 14% in June.

Based on the first-half performance and growth expectations, the company increased its full-year net earnings outlook to $20.45 to $20.95 per share and adjusted net earnings to $21.40 to $21.90 per share.

WHAT'S THE IMPACT?

Optum second-quarter revenues of $45.1 billion grew $6.8 billion, or 18%, year-over-year, with double-digit growth at each business, led by Optum Health. Operating earnings were $3.3 billion, compared to $2.9 billion last year.

Optum Health revenue per consumer served increased 30% over the year-ago period, driven by growth in the number of people served under value-based care arrangements and continued expansion of the care services offered, including in-home, digital, clinic-based and outpatient services.

Meanwhile, Optum Insight's revenue backlog increased by $2.3 billion, to $23.6 billion, compared to a year ago. UHG attributed this growth to managed services for health systems and an expanding suite of information technology and data analytics offerings.

An expansion of pharmacy care service offerings, including specialty and community pharmacy, led to 10% revenue growth for Optum Rx.

UnitedHealthcare's revenues, on the other hand, grew $6.6 billion YOY to $62.1 billion, a 12% jump. Operating earnings were $3.9 billion, compared to $3.1 billion last year, while total people served grew by more than 600,000, which UHG said was due to community-based and senior offerings. 

The number of people served with domestic commercial benefit offerings has grown by more than 250,000 over the past year, including 80,000 in the second quarter.

THE LARGER TREND

UHG is putting some of its earnings back into affordable housing initiatives. Earlier this year, the company said it's investing an additional $100 million in affordable housing with a focus on the Health and Housing Fund, a partnership with Stewards of Affordable Housing for the Future and National Affordable Housing Trust.

To date, the company's investments total roughly $800 million, and according to a statement, this has resulted in the creation of nearly 19,000 homes for those struggling with housing insecurity. The new investment will add about 1,000 homes to that total, said UHG.

Construction is already underway – in East Point, Georgia; Monroe, North Carolina; and Beaverton, Oregon – for three affordable housing communities that will provide about 250 homes for older adults and families. Additional affordable housing locations will be announced in the coming months as development proposals are finalized.
 

Twitter: @JELagasse
Email the writer: jeff.lagasse@himssmedia.com