UnitedHealth Group saw profits leap 17% to $4.9 billion during the fourth quarter, beating analyst estimates and prompting the company to reiterate its upbeat financial guidance for the new year.
The Minnetonka-based health care giant credited the quarter's results to broad-based growth across its Optum and UnitedHealthcare divisions as the number of people and the services provided both swelled. Officials also said medical and operating cost management efforts proved effective.
UnitedHealth Group reported adjusted earnings of $4.9 billion, or $5.03 a share, on revenue of $82.8 billion for the quarter ending Dec. 31. Revenue, which was up 12%, met Wall Street expectations; earnings exceeded them.
CEO Andrew Witty told analysts during a conference call Friday morning that despite widespread fears that a "triple pandemic" of COVID-10, flu, and RSV respiratory illnesses might clobber the industry and fourth quarter results, in the end it affected results little.
"It was almost not noticeable," he said.
Full year 2022 earnings rose 16% to $20.1 billion on revenue of $324 billion, up from $288 billion in 2021.
"We expect the efforts by the people of our company that led to strong performance in 2022 will define 2023 as well, especially delivering balanced growth enterprise-wide, improving support for consumers and care providers, and investing to make high-quality care simpler, more accessible and affordable for everyone," Witty said.
Going forward, company officials said they expect 2023 revenues to continue climbing, reaching between $357 billion and $360 billion. They expect adjusted earnings will hit $24.40 to $24.90 per share.
Officials noted key trends expected this year included the continued growth of the firm's pharmacy business which focuses on delivering low cost options for patients, the addition of more than a million seniors and other customers looking for "value" health plans, continued patient demand for behavioral health services and further integration of the firm's Optum Insight data research unit that helps squash costs.
Witty declined to speculate how pending federal regulations surrounding rates for Medicare Part B might impact the coming year.
During the October-to-December period, the company's United Healthcare business — the nation's largest health insurer and the company's largest division — saw operating profit grow by more than one-third for the second consecutive quarter.
Executives credited its membership increases as the number of Americans served by the unit grew by 1.2 million people during 2022. The division provides health care benefits to individuals as well as employers and Medicare and Medicaid patients. United Healthcare revenue grew 12% to $250 billion for the full year.
The corporation's other major division, Optum health services businesses, saw operating profits rise 18% during the quarter.
Company officials attributed Optum results to growth in the number of patients served under "value-based arrangements" as well as expanded care services provided through its in-home, clinic-based, ambulatory surgery, behavioral and digital outlets.
CEO Witty told analysts Friday that in-home health services were growing and an effective way to manage costs for seniors and the services prevented hospitalizations and caught potential problems early.
"Not everything happens in the 20 minutes you are in the clinic," he said. "A lot of things happen in the home." While the in-home health care model has "caught the attention" of a lot of other players, it will continue to be a growth model for UnitedHealth, he said.
The unit's Optum RX pharmacy care services also continued to expand, which helped the number of prescriptions managed to reach 1.44 billion compared to 1.37 billion last year.
Optum's customer base includes payers, care providers, employers, governments, life sciences companies and consumers. Optum's revenue during the full year 2022 grew 17% to $182.8 billion.
