This health management company beat analysts’ estimates by $.07 last quarter, and Wall Street expects the company to grow at an annual rate of 15.07% over the next five years.
UnitedHealth Group Incorporated (UNH)
From IQ Trends
UnitedHealth Group, Incorporated (UNH) is the largest health care management company in the U.S., providing a broad range of healthcare products and services including traditional risk-based health insurance plans, administration of health insurance plans, pharmacy benefit management and health care delivery optimization strategies.
UNH is organized in two business segments: UnitedHealthcare, which focuses health insurance plans, and Optum, which focuses on healthcare optimization. UnitedHealthcare generated approximately 64% of UNH’s total revenue and 53% of operating income in 2018. Its primary value to customers is arranging cost-effective access to healthcare services through its large provider networks that include 1.2 million physicians and approximately 6,500 hospitals and outpatient facilities.
The Optum segment generated approximately 36% of UNH’s total revenue and 47% of operating income in 2018. Optum is the information technology and services arm of UNH and its primary customers are healthcare payers seeking to grow their top-lines or to deliver improved and more cost-effective healthcare to their insured populations. The largest business within Optum is OptumRx, a pharmacy benefit manager (PBM), which generated 31% of UNH’s total revenue in 2018. OptumRx negotiates prescription drug prices on behalf of healthcare customers. Scale is a key competitive advantage for PBMs as drug makers will typically offer price concessions to PBMs with significant customer bases that will purchase large volumes of pharmaceuticals. Lower negotiated drug prices then make the PBM more competitive in winning business from insurers or providers.
Kelley Wright, IQ Trends, https://iqtrends.com/, info@iqtrends.com, 866.927.5250, First-April 2019