About United Healthcare Services Inc.

UnitedHealth unites its health plans with consumers across the US. As 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 plans, as well as Medicare, Medicaid, state-funded, and supplemental vision and dental options. Together, the UnitedHealthcare businesses serve more than 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 to an additional 45 million.

Operations

Within the universe of UnitedHealth, UnitedHealthcare is king, with the core health benefits segment accounting for about 75% of annual revenues. The UnitedHealthcare Employer & Individual unit, which serves about 30 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. The UnitedHealthcare Global (formerly UnitedHealthcare International) unit serves international markets and includes  Amil, which provides health and dental benefits to some 7 million people in Brazil.

The Optum health services division includes OptumHealth, OptumInsight, and OptumRx. OptumHealth is the health and wellness arm serving more than 63 million individuals, while OptumInsight provides technology and consulting services to the health care industry. OptumRx is a PBM company that processes about 600 million drug prescriptions and manages more than $40 billion in pharmaceutical spending each year.

Altogether, the UnitedHealthcare divisions and Optum health service businesses provide benefits and related services to more than 85 million individuals.

Geographic Reach

UnitedHealth's plans have a combined provider network of some 850,000 doctors and 6,100 hospitals nationwide. Its health plan units and other divisions serve customers throughout the US, as well as 125 international countries.

Sales and Marketing

UnitedHealth's insurance products are largely sold through independent brokers and consultants, as well as some direct and online sales programs. Optum Rx's network includes more than 67,000 retail pharmacies and two home delivery facilities in California and Kansas.

Financial Performance

The company has reported several years of revenue growth and 2014 didn't disappoint with a 7% increase. It rose from $123 billion to $131 billion driven by acquisitions as well as organic growth within the Optum businesses (primarily in the OptumRx division related to the public and senior markets). Additionally, UnitedHealthcare began insourcing its commercial PBM programs in mid-2014, which contributed to growth that year. OptumHealth grew through acquisitions; its local care delivery and subacute care services operations performed well in 2014. Finally, OptumInsight experienced growth and expansion in  revenue management and government exchange services.

Despite the rise in revenue, net income remained flat in 2014 as operating expenses rose and provisions for income tax increased. Cash flow from operations increased 15% to $8 billion (versus $7 billion in 2013) due to an increased level of accounts payable.

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 like those that occurred during the Great Recession. 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. 

Strategy

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. In 2014 it began offering a Medicare Advantage plan for beneficiaries in the Cincinnati area and northern Kentucky.

The company has been busily working to introduce new plan options that provide a broader range of coverage. In 2014 it launched UnitedHealthcare Marketplace, a shopping platform for employers seeking to provide a variety of UnitedHealthcare plan options to their employees. It also introduced Baby Blocks, a mobile, interactive incentive program for expectant mothers and new parents enrolled in its employer-sponsored plans to promote prenatal and well-baby care. In 2013 UnitedHealthcare launched myEasyBook, an online appointment booking service; it also began offering its NOT ME diabetes prevention program in an online format.

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.

In early 2015 Optum bought Alere Health, the case management division of Alere, in a $600 million transaction. Alere Health provides condition management, case management, wellness, and women's and children's health services to more than 200 health plans and some 90 large corporations. The deal expanded Optum's scope, adding Alere Health's tobacco cessation, home-based obstetrical services, and other offerings.

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. In 2014 Optum launched Optum One, which analyzes patient and claims data to help providers engage patients and coordinate care.

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 has agreed to buy PBM Catamaran Corporation for $12.8 billion. Catamaran will be absorbed into the company's OptumRx division.

In 2014 UnitedHealth acquired MedSynergies, which provides physician practice, physician referral, and revenue management services. It targets physician groups associated with large health systems and serves more than 9,300 care providers throughout the US.

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United Healthcare Services Inc.

9700 Health Care Ln
Minnetonka, MN 55343-4522
Phone: 1 (952) 936-1300
www.uhc.com

Stats

  • Employer Type: Public
  • Chief Marketing Officer: Christine W Gibson
  • Chb: Aubrey Miller
  • Chief Operating Officer: Arthur R Miller

Major Office Locations

  • Minnetonka, MN
  • Minneapolis, MN

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