UnitedHealth Group (NYSE: UNH) gross revenue grew 32% from $233.3 billion in 2016 to $308.5 billion in 2019, and it is estimated to be $330.4 billion in 2020. While the growth will be driven by gains across the segments, OptumHealth will likely be the key driver, and it could see revenue double between 2016 and 2020. OptumHealth offers population health management, using technology, analytics, and risk management practices to help lower costs and improve outcomes.
Among other segments, UnitedHealth’s Medicare & Retirement segment is expected to be the single-biggest revenue driver with $90.9 billion in gross revenues (27% of Total Revenues), which is 2.7x the size of its fastest growing segment, OptumHealth. Medicare & Retirement segment will likely add $34.5 billion over 2016-20 (36% of $97 billion in incremental revenues). OptumHealth will be the fastest-growing segment adding about $16.7 billion over 2016-20 (17% of the $97 billion in incremental revenue). Among other segments, Optum RX will likely add $18.9 billion (19% of incremental revenue), and Community & State to add $13.7 billion (14% of incremental revenue) in 2020.
With strong growth in UnitedHealthcare Medicare & Retirement, and OptumHealth segments, along with controlled operating costs and lower taxes, the company managed to grow its adjusted net income margin by 200 basis points and its EPS by a strong 100% between 2016 and 2019. This also drove the 85% surge in the company’s stock price between early 2017 and 2020. In our interactive dashboard analysis, ’UNH Revenues: How Does UnitedHealth Make Money?’, we discuss the company’s business model, followed by sections that review past performance and 2022 expectations.
UnitedHealth recently reported its Q1 earnings, which were better than street estimates, and the company maintained its full year guidance for earnings to be in the range of $16.25 and $16.55. The current coronavirus crisis could result in increased enrollments for health insurance, though the company will likely see increased medical costs in the near term. The company saw a decline of roughly half a million policyholders for its UnitedHealthcare Employer & Individual segment.
Source: Forbes