UnitedHealth Group Incorporated (NYSE: UNH), one of the largest health insurers in the United States, reported its third-quarter financial results on Friday, October 13.
Last year, the company reported positive performance and balanced growth across its Optum and UnitedHealthcare business segments. This trend has continued into Q3:23, as the company’s growth in the third quarter was attributable to an increase in the number of people served by Optum and UnitedHealthcare, and the broadening scope of services offered.
During Q3:23, UnitedHealth reported group revenues of $92.4 billion, up 14% from $80.9 billion in Q3:22. The company also announced Q3:23 earnings from operations of $8.5 billion, a 13% increase over the previous year’s third quarter. Earnings per share exceeded expectations, coming in at $6.56, surpassing the Zacks Consensus Estimate of $6.33, and showing a 13% rise compared to the year-ago quarter.
Meanwhile, UnitedHealthcare, which provides insurance coverage and benefits services to more than 50 million people, reported third-quarter revenues of $69.9 billion, a 13% increase over Q3:22. Year-to-date, total people served by UnitedHealthcare with medical benefits has increased by 1.1 million, which UnitedHealth Group 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 more than 400,000.
Optum’s revenues grew 22% to $56.7 billion, with operating earnings increasing by 5% to $3.9 billion. This includes a 29% increase in revenue at Optum Health, the company’s provider arm. Revenue per patient served grew by 27%, backed by growth in the number of value-based care arrangements and “continued expansion” in the care options available.
At Optum Insight, which provides data, analytics, research, consulting, technology and managed services solutions to hospitals, physicians, health plans, governments and life sciences companies, revenues were up 35% compared to the prior year quarter. This increase follows the integration of Change Healthcare, which was officially acquired in October 2022.
As for Optum Rx, the company’s pharmacy benefit manager (PBM), revenues increased by 14% thanks to the addition of new clients as well as continued evolution in its product portfolio. The PBM processed 383 million adjusted prescriptions, according to the report.
“In 2023, you have seen both our commitment and financial capacity to invest to further enable our ability to serve and to grow far into the future,” Andrew Witty, CEO of UnitedHealth Group, said during the Q3:23 earnings call held on October 13, 2023. “In recent years, we’ve invested significant resources in building our capabilities to care for people most effectively for the life or health stage they find themselves in, whether they need preventative or palliative care or are best served in a clinic at home or virtually.”
Optum and UnitedHealth Group bolstered their home care capabilities this year through two major acquisitions. In February, UnitedHealth Group completed a $6 billion purchase of Lafayette, Louisiana-based LHC Group, a home health, hospice and home- and community-based service provider. More recently, Optum moved to acquire home health provider Amedisys in June for approximately $3.7 billion, though a second review by the Department of Justice may slow or alter the deal.
Witty noted that by growing the services and care capabilities offered by the company, UnitedHealth Group and Optum are able to reach more potential patients. Optum served 2 million more customers compared to the same period the previous year.
“As you look at 2023, essentially what we’ve seen, and we refer to this in Q2, greater growth in the number of people, patients, that we’ve been privileged to serve this year, particularly the more complex patients,” Witty said. “We’re very, very pleased to have that growth. We believe that is really foundational … for future long-term growth of the business.”
Large healthcare providers like UnitedHealth Group are increasingly diversifying their services to stay at the forefront of the industry. Offering a wide range of healthcare solutions helps control costs, improve quality and achieve scale. This approach aligns with the overarching trend of patient-centered care, where comprehensive, cost-effective and accessible healthcare services are crucial. As we move ahead into the final quarter of the year, and look forward to 2024 and beyond, it’s evident that such strategies will play a pivotal role in addressing the evolving healthcare challenges of tomorrow.
