UnitedHealth, a leading health insurer, reported strong financial performance in its second quarter, driven by growth in its commercial health business and its pharmacy benefit manager (PBM), Optum Rx.UnitedHealth, a leading health insurer, reported strong financial performance in its second quarter, driven by growth in its commercial health business and its pharmacy benefit manager (PBM), Optum Rx. Despite the impact of a ransomware attack on Change, a health data infrastructure company acquired by UnitedHealth in 2021, the company posted net income of $4.4 billion on revenue of $99 billion. During a conference call with analysts, UnitedHealth President John Rex highlighted the growth in the commercial health business, which saw increased demand from large employers and unions. The company’s PBM division, Optum Rx, also performed well, with a 4.7% increase in prescription volume and a 13% growth in sales compared to the same quarter a year earlier. The combined revenue from UnitedHealth’s U.S. individual and group commercial plans rose 11% to $18.6 billion, while enrollment increased 8.8% to 29.6 million. Heather Cianfrocco, CEO of the Optum division, attributed the growth to investments in pharmacy and PBM capabilities. The ransomware attack on Change cost UnitedHealth an estimated $2 billion, including expenses for responding to the attack, supporting healthcare providers, and reduced revenue from health data services. The company stated that most of the service functionality has been restored and is now more modern and secure. Overall, UnitedHealth’s strong financial performance reflects the continued growth in the commercial health insurance market and the company’s ability to benefit from investments in its businesses.
UnitedHealth President John Rex referred to the commercial health insurance industry during a conference call with securities analysts today. One analyst asked how the company is able to post strong profits despite the impact of the Change attack.
“We’re seeing very strong growth in a number of the businesses,” Rex said. “Certainly in our commercial health business.”
According to Andrew Witty, CEO of UnitedHealth, demand from large individual employers and unions is high.
Federal regulators, state regulators, independent pharmacies and members of Congress have taken aim at the pharmaceutical health insurers, but UnitedHealth executives also spoke positively about the performance of the company’s PBM, Optum Rx.
The number of Optum Rx prescriptions filled increased 4.7% to 399 million.
The company did not disclose separate revenue, profit or customer numbers for Optum Rx, but did report that Optum Rx sales were up 13% in its most recent quarter compared to the same quarter a year earlier.
The second quarter: UnitedHealth held a conference call to discuss second-quarter results with analysts.
The second quarter ended on June 30.
According to the company’s quarterly results, the company as a whole reported net income of $4.4 billion for the second quarter on revenue of $99 billion, compared to net income of $5.5 billion on revenue of $93 billion for the second quarter of 2023.
The company’s annual revenue is approximately 1.4% of the U.S. gross domestic product.
UnitedHealth combines U.S. individual and group commercial results in its quarterly financial reports.
Domestic commercial revenue rose 11% to $18.6 billion in the second quarter.
Enrollment in commercial health plans rose 8.8% to 29.6 million, or about 9% of the U.S. population.
The PBM: Heather Cianfrocco, CEO of the Optum division, which includes Optum Rx and other businesses, said UnitedHealth has benefited from investments in the division’s pharmacy division, as well as its PBM division, and the results speak for themselves.
“You’ve seen the growth there in customers and, in terms of volume, for our existing customers,” Cianfrocco said. “We serve on the privilege of our customers, so what they need, we serve.
The Change Attack: UnitedHealth agreed in 2021 to acquire Change, a large health data infrastructure company that helps about half of U.S. health care providers communicate with insurers.
A ransomware attack discovered in February shut down Change systems for weeks. The shutdown crippled a number of hospitals and medical practices that relied on Change systems.
According to the earnings report, the attack cost UnitedHealth about $2 billion.
The total includes $779 million in spending on responding to the attack, $645 million in support for health care providers and $613 million in reduced revenue from health data services.
“Most of the service functionality has now been restored,” Witty said during the conference call. “These key services are now more modern, secure and capable.”
