Major highlights from the earnings report and subsequent call:
Financials: UnitedHealthcare (insurance) revenue totaled $62.1B before elims and a 81.5 MLR for Q2. Optum's (services) revenue totaled $45.1B before elims and revenue per consumer jumped 30% as it continues to tout its growth in value-based care arrangements.
Acquisitions: UNH spent $7.2B on net acquisitions in the first half of the year - I'm not sure if that includes the LHC acquisition but I would assume so. United spent $6 billion on acquisitions in the second quarter, which is what the entire firm spent annually each of the last 5 years. It's clear that UNH is acquiring healthcare assets opportunistically as compelling valuations present themselves.
Utilization trends: Interesting tidbit for what we might see volume-wise on the hospital side - UNH noted that Covid-related inpatient admissions in Q2 dropped to 1/3 the volume of that seen during the Q1 Omicron wave. United management also noted lower pediatric and ER usage as compared to historical norms, but heightened utilization for senior preventative services (more wellness visits, specifically called out colonoscopies). Finally, United mentioned strong growth in its SCA segment as outpatient surgeries continue to see strong growth.
Other Tidbits: Optum's financial team (I guess it makes sense they'd have a payments or fintech team) has been piloting a consumer benefits card, which it expects to roll out to all members starting in 2023. As a savvy PR move and great benefit politics aside, United is planning to offer insulin and a few other notable drugs at no out of pocket cost to its members in 2023 as well.
Madden's Musing
United management seemed to dodge a pointed question about inflation and premium expectations for 2023, stating that some big ways to stave off inflation might stem from virtual care, more digital engagement, and heightened consumer choice.
The comments about utilization lead me to believe that hospitals will report patient volumes back on track with expectations in Q2, but there's always the next variant to cause chaos, burnout, and destruction of patient census for more profitable elective procedures.
"It's really around virtual care and around emergency department use. We've seen, obviously, virtual care increase and emergency department use go down.
As I think in the particular, again, back to that concept of consumer and choice, it's around product design, Bind being our best example when we can put that consumer in the driver's seat where they can choose site of service and optimize both their cost and quality, they do. And when you couple that with a high-performing network, obviously, you get the benefit both of the unit cost as well as that consumer choice. So those are the greatest examples that I can see really emerging in this environment." - Brian Thompson, UNH Q2 2022 earnings call
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