UnitedHealth's Profit Slips as Health-Care Visits Return
By Matt Grossman
UnitedHealth Group Inc. recorded a smaller profit for the last
quarter of 2020 as the company had to pay more in medical costs to
cover insured members who returned in greater numbers to doctors'
offices after putting off care earlier in the coronavirus
The Minnetonka, Minn., health-care company, the parent of
insurer UnitedHealthcare as well as the Optum health-services
business, said Wednesday that the pandemic dragged on revenue
growth from commercial insurance customers last year as its
economic fallout disrupted the labor market. But revenue grew
overall for the company's insurance business in the year amid
expansion of its programs to serve communities and seniors.
Fourth-quarter revenue for UnitedHealth climbed to $65.47
billion, up from $60.9 billion in the same quarter a year earlier.
Analysts surveyed by FactSet had forecast revenue of $64.96
UnitedHealth's revenue from premiums grew to $50.58 billion,
from $47.63 billion a year earlier. The company also logged higher
revenue from products, services and investment income than it did
in the year-ago quarter.
As more people returned to medical providers for care that they
had avoided or postponed earlier in the pandemic, UnitedHealth's
costs rose as well. Medical costs climbed to $42.08 billion, up
from $39.28 billion in the year-ago period. Operating costs
increased to $11.51 billion, from $9.3 billion in last year's
UnitedHealth posted fourth-quarter net income of $2.21 billion,
or $2.30 a share, compared with $3.54 billion, or $3.68 a share, in
the same period a year earlier.
On an adjusted basis, UnitedHealth's profit was $2.52 a share.
Analysts surveyed by FactSet had forecast an adjusted profit of
$2.41 a share.
Revenue from Optum grew in the quarter as the number of
customers served rose by 2.1% to 98 million and as revenue per
customer jumped 29% year over year. Prescription volume under the
company's OptumRX business started to return to more normal levels
as more health-care services returned after a lull earlier in the
Optum's quarterly revenue was $35.9 billion, up from $29.8
billion a year ago.
Earlier this month, UnitedHealth agreed to pay roughly $8
billion to acquire Change Healthcare Inc., a health-care technology
company that it said it plans to merge into Optum.
UnitedHealth said it expects its full-year profit in 2021 to be
between $16.90 a share and $17.40 a share, or $17.75 a share to
$18.25 a share on an adjusted basis. That estimate includes a
negative effect of $1.80 a share from coronavirus-related concerns,
UnitedHealth said, such as testing and treatment costs, deferred
care from last year and broader economic factors.
(END) Dow Jones Newswires
January 20, 2021 07:28 ET (12:28 GMT)
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