UnitedHealth Group unites its health plans with consumers across the US. A leading health insurer, it offers a variety of plans and services to group and individual customers nationwide. Its UnitedHealthcare health benefits segment manages HMO, PPO, and POS (point-of-service) plans, as well as Medicare, Medicaid, state-funded, and supplemental vision and dental options. Together, the UnitedHealthcare businesses serve about 40 million members. In addition, UnitedHealth's Optum health services units -- OptumHealth, OptumInsight, and OptumRx -- provide wellness and care management programs, financial services, information technology solutions, and pharmacy benefit management (PBM) services.
UnitedHealth's plans have a combined provider network of some 780,000 doctors and 5,900 hospitals nationwide. Its health plan units and other divisions serve customers throughout the US, as well as 20 international countries.
Within the universe of UnitedHealth, UnitedHealthcare is king, with the core health benefits segment accounting for about 80% of annual revenues. The UnitedHealthcare Employer & Individual unit, which serves 26 million members through its plans for students, families, individuals, and businesses (ranging from sole proprietorships to multinational enterprises), is the largest health benefits business, with the UnitedHealthcare Medicare & Retirement senior services unit not far behind. A smaller division, UnitedHealthcare Community & State, manages public Medicaid programs for disabled and disadvantaged citizens. The UnitedHealthcare Military & Veterans provides medical plans for about 3 million active and retired military personnel and their families in the western US through a government TRICARE contract, while the UnitedHealthcare International unit serves international markets.
Altogether, the UnitedHealthcare divisions and Optum health service businesses provide benefits and related services to more than 85 million individuals.
Sales and Marketing
UnitedHealth's insurance products are largely sold through independent brokers and consultants, as well as some direct and online sales programs.
Revenues in 2012 rose 9% to $111 billion due to an increase in membership in the UnitedHealthcare division, as well as due to premium rate increases stemming from medical cost trends. It also experienced revenue growth in sales of Optum's technology and service offerings. Net income also rose by 7% to $5.5 billion in 2012 as a result of the higher revenues.
UnitedHealth is not immune to market fluctuations, and as a provider of workplace benefits, UnitedHealth can be particularly vulnerable to massive layoffs occurring during troubled economic times. Workplace attrition contributed to a significant decline in UnitedHealthcare's commercial membership in 2009; however, the trend reversed itself in 2010 and 2011 despite a continuously challenged employment market, and growth in public and senior market plan enrollment levels were strong enough to help keep UnitedHealth's revenue and income levels climbing all three years.
Uncertainty over future impacts of federal health reform measures in the US is also a concern for the company. Like many US health insurers, UnitedHealth has worked to insulate itself against economic and market concerns by increasing its commercial premium rates in response to rising medical costs.
UnitedHealth has prospered to become the largest US health insurer, in part, by expanding into new regions through the purchase of smaller rivals and corporate health plans. It also widens its geographic reach by establishing subsidiaries in new markets, as well as by gaining new government health coverage contracts. For instance, at the beginning of 2013, UnitedHealthcare became the new administrator for the federal TRICARE West Region health plan, which provides coverage for military personnel in the western US. The company also expanded its international coverage for global expatriates by forming partnerships with regional insurers in Australia and the Middle East during 2012.
Growth in the diversified health services businesses, which are grouped under the Optum umbrella, have also helped UnitedHealth continue to grow despite economic challenges, especially as the company has been working to expand its wellness and information technology services to meet the growing needs of clients as the US health care landscape undergoes reform measures.
For instance, OptumHealth has added personalized wellness, employee assistance, onsite screening, and other services to encourage consumers to actively participate in managing their health and seek preventative care, which helps lower overall medical costs. In addition, the UnitedHealthcare plans are promoting wellness and preventative care by partnering with community organizations (such as the New York and Long Island YMCA groups) and retailers (including Kroger and Albertson's) to educate consumers on issues such as obesity and diabetes.
UnitedHealth has also reshaped its OptumInsight business around the booming data management needs of US health providers, primarily in the implementation of electronic health record (EHR) and accountable care organization (ACO) systems, which are reimbursable through new federal health laws.
UnitedHealth occasionally divests noncore operations to focus on core markets and territories. In 2013 it sold its South Carolina Medicaid plan (covering about 65,000 members) to WellCare.
Mergers and Acquisitions
The highly acquisitive company widened its senior plan offerings in 2012 by acquiring private insurer XLHealth for an undisclosed price; the purchase added some 110,000 Medicare Advantage customers in six states and also expanded the firm's joint Medicare/Medicaid offerings for special needs clients. UnitedHealth also acquired two Florida Medicare Advantage providers, Preferred Care Partners (50,000 members) and Medica HealthCare Plans (35,000 members), that year in two separate transactions. Both Preferred Care Partners and Medica HealthCare Plans also serve several thousand Medicaid beneficiaries.
The company expanded internationally in 2012 when it purchased a majority stake in Brazilian health care firm Amil Participações; it plans to acquire the remaining shares in Amil during 2013. The purchase, worth a total of some $4.9 billion, includes the Amil Assistencia Medica Internacional health plan provider, as well as a network of hospitals and clinics in Brazil.