Optum led UnitedHealth Group’s $5 billion earnings growth in Q1

UnitedHealth Group showed a slight year-to-year improvement in the first quarter of this year in posting a $5 billion profit, up from $4.9 billion in Q1 2021, according to the organization’s first quarter earnings report.

Revenues over that time grew to $80.1 billion, a 14% improvement over the previous year, with double-digit growth seen in both the Optum and UnitedHealthcare business segments.

Earnings from operations were $7 billion, while cash flows from operations were $5.3 Billion.

Based upon the first quarter performance and its growth outlook across the enterprise, UHG increased its full-year net earnings outlook to $20.30 to $20.80 per share, and adjusted net earnings to $21.20 to $21.70 per share.

WHAT’S THE IMPACT

Year-over-year earnings growth was led by Optum Health, which UHG attributed to the accelerating expansion of its value-based care delivery initiatives. Optum first quarter revenues grew 18.9% to $43.3 billion, and operating earnings grew 19.8% to $3.2 billion.

Optum Health revenue per consumer served increased 33% over Q1 2021, driven by growth of people served under value-based care arrangements. Optum Health now expects to serve 600,000 new patients under such arrangements in 2022 compared to its initial outlook of 500,000.

Optum Insight’s revenue backlog increased by $2 billion to $22.8 billion compared to a year ago, driven by growth in its expanding comprehensive managed services offerings for health systems. And OptumRx showed strong revenue growth of 11% in the first quarter, which UHG said was due to new, large health plan clients, as well as the further expansion of community-behavioral, specialty pharmacy and e-commerce services.

Meanwhile, UnitedHealthcare’s first quarter revenues of $62.6 billion grew $7.5 billion, or 13.6% year-over-year. In the quarter, UnitedHealthcare grew to serve 1.5 million more people than a year ago, with UHG pointing to strong growth in Medicare Advantage and Dual Special Needs Plans and in the broader Medicaid market.

UHG’s operating earnings were $3.8 billion compared to $4.1 billion last year, documents showed.

THE LARGER TREND

UHG is putting at some of its earnings back into affordable housing initiatives. Earlier this week the company said it’s investing an additional $100 million toward affordable housing with a focus on the Health and Housing Fund, a partnership with Stewards of Affordable Housing for the Future and National Affordable Housing Trust.

To date, the company’s investments total roughly $800 million, and according to a statement, this has resulted in the creation of nearly 19,000 homes for those struggling with housing insecurity. The new investment will add about 1,000 homes to that total, said UHG.

Construction is already underway – in East Point, Georgia, Monroe, North Carolina and Beaverton, Oregon – for three affordable housing communities that will provide about 250 homes for older adults and families. Additional affordable housing locations will be announced in the coming months as development proposals are finalized.

ON THE RECORD

“Disciplined execution of our long-term strategy, with a sharp focus on ensuring access to care for the people we serve, enabled us to deliver high-quality, diversified growth across Optum and UnitedHealthcare during this first quarter of 2022,” said Andrew Witty, CEO of UnitedHealth Group.
 

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