- UnitedHealth Group's 2019 first quarter revenue increased about 9% to $60.3 billion thanks to enrollment gains in Medicare Advantage plans, a bump in prescription drug volume and a higher mix of specialty drugs.
- The payer beat Wall Street expectations on earnings and revenue. Earnings from operations increased 19% to nearly $5 billion compared to the prior-year period, according to results released Tuesday and the company hiked its earnings outlook for the year as well.
- UnitedHealth Group CEO David Wichmann also took a shot at calls for a government run Medicare for all type system pushed by many Democratic candidates running for president in 2020 and defended its PBM model.
UnitedHealthcare's Medicare Advantage enrollment grew by more than 405,000 members year over year, representing a nearly 12% increase in revenue in the payer's Medicare & Retirement segment. MA enrollment growth has been a theme for payers in recent quarters as the program adds new opportunities for plans to offer nontraditional benefits.
Overall, UnitedHealthcare, the insurance unit for UnitedHealth Group, reported a 7.6% increase in revenue to about $49 billion while earnings increased 23.1% to $3 billion.
UnitedHealth's Optum unit also propelled first quarter growth. Optum's PBM unit, OptumRx, reported a slight uptick (2.1%) in prescription drugs fulfilled during the quarter. The PBM unit also filled more specialty drugs, typically more expensive prescription medications.
"Optum and UnitedHealthcare each contributed fully to this performance," UnitedHealth Group CEO David Wichmann said of the company's overall first quarter results. "With confidence and continued momentum, we are raising our earnings expectations for 2019."
As scrutiny around PBMs use of rebates continues, Wichmann provided an update on OptumRx's previously announced plan to pass through those savings directly to consumers.
Wichmann said that clients are saving on average $130 per eligible prescription and the point of sale consumer discounts are also shown to drive adherence. He said passing through rebates to the consumers will be OptumRx's "fundamental approach to business" going forward.
As the 2020 presidential election nears and as many Democratic hopefuls back some form of Medicare for All proposal, the CEO warned against a government-run system.
"The wholesale disruption of American healthcare being discussed in some of these proposals would surely jeopardize the relationship people have with their doctors, destabilize the nation's health system and limit the ability of clinicians to practice medicine at their best," Wichmann said Tuesday on a call with investors discussing the results. "And the inherent cost burden would surely have a severe impact on the economy and jobs — all without fundamentally increasing access to care."
The path forward is to aim for universal coverage, he said. To achieve that end it will be important to work collaboratively with state and national leaders and to use "proven private sector solutions," Wichmann said.
The company now expects net earnings to be between $13.80 and $14.05 per share and adjusted net earnings to be between $14.50 and $14.75 per share for the full year.