Optum biggest driver of UnitedHealth Group's $4.2 billion Q2 profit

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UnitedHealth Group rebounded from a challenging first quarter to post a $4.2 billion profit in Q2, logging revenues of $98.9 billion.

That's quite a turnaround from Q1, during which the insurer reported a $1.4 billion loss. That was largely due to the massive cyberattack on Change Healthcare, as well as a divestiture of its Brazilian business, which was completed in the first quarter.

UHG said it was reaffirming its guidance for the year. The company updated its full year 2024 net earnings outlook to $15.95 to $16.40 per share, and affirmed the adjusted net earnings outlook of $27.50 to $28.00 per share established at its November 2023 Investor Conference. The consistent outlook absorbs an estimated $0.60 to $0.70 per share of business disruption impacts for the affected Change Healthcare services, which has increased $0.30 per share since the initial estimate was provided last quarter.

"The diversified, durable growth across UnitedHealth Group stems from our colleagues' commitment to ensuring high-quality, affordable care is available to the people we serve, and positions us well for the near and long-term," said UHG CEO Andrew Witty.

WHAT'S THE IMPACT?

UHG CFO John Rex, who was named president in April, said at the time that the Change Healthcare cyberattack was expected to cost UnitedHealth Group $1 billion to $1.5 billion this year.

The February 21 cyberattack disconnected Change from claims payments for hospitals and physician practices, disrupting provider revenue and financial stability to the point of potential bankruptcy for some practices, according to a recent American Medical Association survey.

UnitedHealth Group, the parent company of Optum, which owns Change, has mostly restored its systems and is offering accelerated payments to providers. The company said it has provided over $9 billion to date in advance funding and interest-free loans.

Optum was the biggest driver of UHG's revenue growth in the quarter, posting $62.9 billion in revenue, an increase from the $56.3 billion logged in Q2 2023. Revenues at Optum Health and Optum Rx, the company's pharmacy benefit manager, were both up 13%, respectively.

UnitedHealthcare also saw revenues increase to the tune of $73.9 billion (up from $70.2 billion in the prior-year quarter) largely by adding 2.3 million commercial customers so far this year, bringing total global membership to 50.4 million beneficiaries as of Q2.

That breaks down to 26.6 million people in commercial plans, 7.8 million in Medicare Advantage and 7.4 million in Medicaid.

THE LARGER TREND

In Q1, UnitedHealth Group reported a net loss of $1.2 billion, compared to $5.7 billion in profits during the first quarter of last year.

Witty confirmed in May that $22 million in bitcoin was paid as ransom for the Change cyberattack, and said he believed access was gained through the use of stolen passwords sold on the dark web.

Jeff Lagasse is editor of Healthcare Finance News.
Email: jlagasse@himss.org
Healthcare Finance News is a HIMSS Media publication.