UnitedHealthcare Q4 Earnings Report Shows Leveling Care Activity

Membership

For UnitedHealthcare’s Medicare Advantage offerings, 2021 promises to be a year of high growth, as the payer approaches 900,000 more individuals served. That statistic includes individual and group Medicare Advantage members and those in dual special needs plans.

UnitedHealthcare will have served 3.5 million more seniors over the course of five years, Wichmann added.

For these senior members, the payer is expanding concierge services and emphasizing the home as the safest and most effective place for senior care.

Medicaid offerings continued to grow in 2020. The payer has plans to enter three new states in 2021. Wichmann highlighted the push towards managed care adoption across many state Medicaid programs, possibly fueling further growth.

Wichmann acknowledged that UnitedHealthcare’s employer-sponsored health plan growth took a hit due to the pandemic-induced economic downturn. Policymakers and researchers have estimated that two to three million individuals lost their employer-sponsored health plan between March and September of 2020.

However, John Rex, chief financial officer at UnitedHealth Group, added that UnitedHealthcare ended 2020 with a commercial membership population that was approximately 100,000 members more than the payer’s estimates.

Payer executives expect UnitedHealthcare to serve over 1.5 million more individuals in its senior lines of business, employer-sponsored health plans, and individual plans in 2021.

Healthcare Spending

Individuals with UnitedHealthcare commercial benefits engaged in higher care activity and healthcare spending with fewer deferrals than public program beneficiaries, according to Rex.

Members’ care activity—gauged by healthcare spending costs—returned to levels that UnitedHealthcare usually sees during the fourth quarter, escalating from slightly below the baseline in the first half of the quarter to slightly above the baseline in the second half.

Coronavirus-related treatment and care contributed around 11 percent of this activity. Coronavirus care costs were heavily concentrated toward the end of the quarter.

Outpatient activity reacted to the latest coronavirus spike, UnitedHealthcare found. While at the beginning of the semester, the payer saw outpatient care exceeding its baseline, by the end of the semester it had “moderated” due to the influx in coronavirus cases.

Members utilized telehealth regularly as well. UnitedHealth Group leaders pointed out that certain services—behavioral healthcare, for example—lend themselves to telehealth solutions, driving utilization in that space. In fact, UnitedHealthcare delivered 50 percent of its behavioral healthcare services in telehealth settings through 2020, even as the coronavirus pandemic subsided.

In 2021, the payer is pushing into digital-first, on-demand, physician-led plan options. Wichmann asserted that these kinds of solutions can save members 20 percent, compared to more traditional products.

“These innovative products are generating significant responses because they are designed to better meet the unique needs and financial means of more people,” Wichmann said.

Revenue

UnitedHealthcare's total revenue from 2020 equaled around $280 billion.

Among Optum members, revenue grew 29 percent over the 2019 fourth quarter, an increase which Rex attributed in part to the movement toward value-based care contracts.

The payer expects ten to 15 percent growth in 2021 in its OptumInsights earnings, excluding the impact of the Change Healthcare acquisition.

Cash flows from operations brought in $22.2 billion in 2020, which was 1.4 times net income and which went beyond the company’s outlook.

Additionally, UnitedHealthcare entered 2021 with 50,000 physicians and 1,400 clinics and expects to increase the number of physicians by at least 10,000.