Optum's 25% revenue growth fuels UnitedHealth Group's Q1 earnings

Photo courtesy of UnitedHealthcare

Thanks in part to a 25% increase in revenue for Optum, UnitedHealth Group saw $5.6 billion in earnings during the first quarter of the year, and $91.3 billion in revenue, both far and above other major insurers, according to the company's financial results.

Optum's first-quarter revenues grew 25% to $54.1 billion, and operating earnings grew 19% to $3.7 billion. Optum Health revenue per consumer served increased 34% year-over-year, driven by growth in people served under value-based care arrangements.

Meanwhile, Optum Insight's revenue backlog increased by 35% to $30.7 billion, compared to a year ago, driven by the addition of Change Healthcare and growth in comprehensive managed services offerings for health systems.

And according to UHG, Optum Rx's revenue growth of 15% in the first quarter resulted from advances in serving new clients, as well as further expansion of its specialty and community-based pharmacy offerings. Adjusted prescriptions grew to 378 million, compared to 352 million last year.

WHAT'S THE IMPACT

UnitedHealth Group's other core segment, UnitedHealthcare, saw revenues grow 13% to $70.5 billion, while operating earnings grew 14% to $4.3 billion, reflecting growth in the number of people served.

In the quarter, UnitedHealthcare grew to serve nearly 2 million more people than a year ago, with growth across the company's commercial, community-based and senior benefit offerings, the organization said. The number of consumers served with domestic commercial benefit offerings grew 665,000 in the quarter, compared to year-end 2022. 

According to UHG, recent Medicaid contract awards in Indiana and Texas will expand the products and geographies served by UnitedHealthcare, which is on pace for another strong year due to its Medicare Advantage offerings.

"Our strong, enterprise-wide growth this quarter is a direct result of our colleagues' unwavering commitment to offering more health services to more people and connecting consumers with greater access to high-quality, affordable care," said UHG CEO Andrew Witty.

THE LARGER TREND

UHG's $5.4 billion acquisition of home health company LHC Group formally closed in February. LHC provides healthcare services in the home for a demographic of mostly older patients dealing with chronic illnesses and injuries. It will be melded with Optum, which manages drug benefits and offers data analytics services and works with more than 100 health plans.

Optum positioned the move as helping to advance value-based care and said it would accelerate the combined companies' ability to deliver integrated care, leading to improved outcomes.

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Email the writer: Jeff.Lagasse@himssmedia.com