UnitedHealth Group reported third quarter profits of $3 billion as healthcare “patterns disrupted by the pandemic moved closer to normal levels.”
UnitedHealth, like other health plans, reported profits that more than doubled earlier this year in this second quarter to $6 billion as elective procedures the large health insurer pays for were postponed or delayed amid the spread of Covid-19.
But the third quarter saw “care disrupted by the pandemic moved closer to normal levels,” the company said Wednesday in its third quarter earnings report.
UnitedHealth Group, which runs the health insurer UnitedHealthcare and the big provider of healthcare services Optum, reported profits fell 10% to $3.25 billion in the third quarter compared to $3.6 billion in the third quarter of 2019. Revenues rose nearly 8% to $65.1 billion from $60.3.
The drop was somewhat anticipated given UnitedHealth earlier this year said the cost of claims from healthcare treatments deferred earlier this year plus the cost of its medical care provider and customer assistance efforts would hit earnings in the second half of this year.
UnitedHealth, however, is weathering the storm of Covid-19 and raised its full year 2020 earnings per share guidance to between $16.50 to $16.75 per share from its previous 2020 guidance range of $16.25 per share to $16.55 per share.
“In this, we remain committed to ensuring any financial imbalances arising from the pandemic are addressed proactively and fairly for those we serve,” UnitedHealth Group chief executive David Wichmann told analysts on a call to discuss earnings Wednesday morning. “We have done this consistently over this period, even as ultimate outcomes remain unclear, as the timeliness of relief to our stakeholders is critical.”
UnitedHealth’s diversified portfolio of businesses continue to help the company to meet or beat its earnings forecasts even during the pandemic. As one example, UnitedHealth said its UnitedHealthcare health insurance business revenues rose nearly 5% to $50.4 billion despite declines in commercial health plan enrollment that were offset by growth of nearly 10% in its “public-sector and senior program revenues.”
Meanwhile, the company’s Optum unit continued to drive overall company growth with its revenues rising more than 21% to $34.9 billion in the quarter.
Optum owns one of the nation’s largest pharmacy benefit managers in OptumRx as well as an array of medical care provider businesses, including doctor practices, surgery centers and urgent care sites across the country.
UnitedHealth executives say the pandemic is putting its efforts to reach patients in the right place, at the right time and with the right amount of healthcare to the test.
UnitedHealth Group has more than 1,250 accountable care programs, which the insurer says pay more than $80 billion annually to providers via value-based contracts. UnitedHealthcare has said the value of these contracts is 45% of the company’s annual medical spend.
“Early in the pandemic we quickly enabled Optum physicians and the physicians of UnitedHealthcare’s most vulnerable patients to adapt and expand rapidly to meet the needs of millions of patients for care of chronic and emerging conditions,” Wichmann told analysts. “This included advancing telehealth by creating direct connections between patients and their own physicians, a critical element to highly effective digital health, ensuring adoption will extend well beyond this crisis.”