UnitedHealth Leaders Plan Greater Push Into Financial Services

June 5, 2023
In addition to building out retail features, the company is piloting working capital loans for small physician groups

UnitedHealth Group Inc. executives are looking to their financial services group to help build the insurance giant’s consumer-facing businesses—including by picking up the tab for some items at the corner pharmacy.

Speaking to an investor conference hosted by research firm Bernstein, United CEO Andrew Witty last week said his team is dedicating plenty of capital and attention to Optum Financial and the payment systems that connect it to about 20 million Americans. The executive team, Witty said, is looking at the group as United leaders did at healthcare services a decade or so—a venture that has since bloomed into Optum Health, which works with more than 100 healthcare payers and some 102 million consumers.

“We probably feel the same way about financial services,” Witty said. “A decade from now, financial services ought to be a very, very material-scale business for us.”

Optum Financial is a part of Optum Health (which last year had $71 billion in revenues) and the company doesn’t break out dollar details for the financial services division. But numbers reported to the Federal Deposit Insurance Corp. by Optum Bank, where insurance plan members’ savings accounts are housed, point to growth and profit momentum: After generating net income of $273 million on assets of $14.9 billion in 2021, Optum Bank last year brought home $304 million on $15.7 billion in assets. In the first three months of this year, the bank’s asset base passed $16 billion and its profits grew to nearly $99 million.

Optum Bank’s large customer base is letting the United team try some novel things on the retail front. For example, if health plan members buying qualifying medications or supplies at retail stores use their United card, the company will recognize those covered items and automatically pay for them, showing members the details on their receipts. Witty said employers have shown great interest in this feature, both to help members spend their HSA dollars more efficiently and to show them that their employers “are looking after them.”

Optum’s massive processing network—with the acquisition last year of Change Healthcare, it now includes 2 million providers—also gives it the chance to get into more conventional financial products: Witty said his team is piloting working capital loans for small physician groups that sometimes struggle to connect productively with traditional lenders.

United/Optum can open doors, Witty said, because its visibility into claims and payments gives it a clearer view of such doctor groups’ future income. That, he added, can help a practice more quickly hire a staff member to keep up with demand.

“Our understanding of the risk in that loan is very much better than the average person’s understanding,” Witty said.

Shares of United (Ticker: UNH) were changing hands around $500 on the afternoon of June 2. Over the past six months, they have given up about 7 percent of their value, trimming the company’s market capitalization to about $465 billion.

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