UnitedHealth Lifts Value-Based Enrollment Target
The leaders of UnitedHealth Group Inc. have raised their 2022 expectations for growth in the number of patients they expect to add to value-based arrangements in their Optum Health services group.
Minnetonka, Minn.-based United is now forecasting Optum Health will bring 600,000 people under its umbrella this year, up from its previous outlook of 500,000. The group brings together clinic-based and outpatient services with a growing range of at-home and digital offerings and wellness, engagement and financial services. Last year, the division worked with 100 million people in some way and produced an operating profit of nearly $4.5 billion on $54.1 billion in revenues, of which 54% came from United affiliates. Those numbers were up 36% and 30%, respectively, from 2020.
For the first three months of 2022, Optum Health – seen as a key cog in United’s long-term growth plans – grew revenue per consumer rose by a third from early last year. On an April 14 conference call with analysts and investors after they reported first-quarter results, executives said they’ve been making progress weaving together their home and community care assets such as care coordination venture naviHealth and home care provider Landmark Health. (United’s planned $5.5 billion purchase of LHC Group will further grow this network.)
“It's an extraordinary set of capabilities,” CEO Andrew Witty said. “And it's positioning us very well to, for example, serve the D-SNP population in a way which historically would not have been possible.”
Optum Health CEO Wyatt Decker said his team was able to put up high member retention numbers late last year and also add new people to its plans. A third of the growth so far in 2022, he added, has been attributable to dual-special needs patients who often struggle to access healthcare.
“What you're really seeing is a result of almost 10 years of building a flywheel that now has significant momentum,” Decker said. “We've invested in people, in technology, in data and building out networks and deepening in our established geographies as well as going into new geographies. All of that continues to yield benefits and, frankly, growth.”
Other notes from the conference call, which came after United published consolidated first-quarter profits of more than $5.1 billion on revenues of $80.1 billion:
• Investors can expect more acquisitions this year. Witty, whose team is looking to complete its roughly $8 billion purchase of Change Healthcare Inc. in addition to buying LHC Group, said United’s M&A pipeline is “probably as diverse as it's ever been and probably deeper than it's ever been.”
• Consumers’ acceptance of virtual health options as part of their lineup is growing. Nearly 90% of people who have enrolled in United’s individual exchange offerings in the past year picked plans with “significant” virtual components. During the fall/winter open enrollment period, nearly 30% chose a virtual-first option, Witty said, adding that United will add more options in that area for 2023.
Shares of United (Ticker: UNH) were up slightly to $539 in afternoon trading April 14. They have climbed nearly 30% over the past six months, growing the company’s market capitalization to more than $500 billion.
