UnitedHealth Group posts $5.8 billion in profit in Q3
Optum growth led the way, with the subsidiary's revenues growing 22% year-over-year to $56.7 billion.
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With subsidiary Optum leading the way, UnitedHealth Group posted $5.8 billion in profit for the third quarter, a slight increase over last year's Q3 figure, and raked in $92.4 billion in revenue, a 14% increase over the year prior, according to the latest earnings report.
Optum third-quarter revenues grew 22% to $56.7 billion. Operating earnings were $3.9 billion compared to $3.7 billion last year. The operating margin of 6.9% compares to 7.9% in the prior year, which officials said reflect investments in services for patients and customers.
Optum Health revenue increased 29% over last year and revenue per consumer served increased 27%, driven by growth in patients served under value-based care arrangements, as well as continued expansion of the types and levels of care provided. Optum Insight revenue increased 35% compared to a year ago due to the addition of Change Healthcare and growth across its technology-enabled offerings, the company said.
Meanwhile, Optum Rx revenue increased 14% in the third quarter due to growth in serving new clients, expanded relationships with existing clients and "continued advancement in the comprehensive scope of pharmacy services offered, including specialty and community-based pharmacy offerings," according to UHG.
WHAT'S THE IMPACT?
For the broader company, growth in the quarter was attributable to the continuing increase in the number of people served by Optum and UnitedHealthcare, and the broadening scope of services offered. The company strengthened the range of its full year 2023 net earnings outlook to $23.60 to $23.75 per share and adjusted net earnings to $24.85 to $25.00 per share.
UHG's Q3 medical care ratio was 82.3%, compared to 81.6% last year, driven by outpatient care, primarily serving seniors and business mix. The third-quarter 2023 operating cost ratio of 15% increased from 14.4% last year as the company's business mix continues to shift to services and due to investments to support growth, offset in part by productivity improvements.
Subsidiary UnitedHealthcare's third quarter revenues grew 13% to $69.9 billion, reflecting growth in the number of people served. Operating earnings were $4.6 billion, compared to $3.8 billion last year.
Year-to-date, total people served by UnitedHealthcare with medical benefits has increased by 1.1 million, which UHG attributes to growth in the company's commercial and public sector businesses. The number of consumers served with commercial benefits has grown by nearly 700,000 in 2023, while the number of people served by the company's senior and community offerings grew by over 400,000.
Officials said the UnitedHealthcare team "remains actively engaged with individuals impacted by the ongoing state-driven Medicaid eligibility redetermination process." Outreach efforts are helping people connect with resources to maintain affordable coverage, the company said.
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.
Twitter: @JELagasse
Email the writer: Jeff.Lagasse@himssmedia.com
