UnitedHealth Group dominated its competitors in 2022, bringing in more than double the amount of profit compared to other major national payers.
Fierce Healthcare analyzed financial reports for the six largest insurers in the fourth quarter and full year 2022. UHG raked in $20.1 billion in profit for the year. By comparison, its biggest competitor, Cigna, posted $6.7 billion.
UnitedHealth also closed the year with a revenue edge, bringing in $324.2 billion. This just surpasses CVS Health, which reported $322.5 billion.
What's driving UnitedHealth Group's massive profits? Largely its Optum subsidiary, which encompasses a slew of businesses including its pharmacy benefit manager, a data analytics arm and its massive provider group, Optum Health.
Optum Health, in particular, has proven to be a growth engine for UnitedHealth. According to the company's earnings report, revenue per patient at the provider group increased by 29% in 2022. Optum includes some 60,000 doctors and treats more than 20 million patients per year, making it one of the largest employers of doctors nationwide.
Part of where the provider group is driving that growth is through its focus on value-based care, UnitedHealth's top brass told investors on its earnings call. CEO Andrew Witty said Optum will have 4 million patients in accountable care arrangements this year.
UnitedHealth also led the way in profitability in the fourth quarter, where it reported $4.8 billion. CVS did edge it out on revenue, though, bringing in $83.8 billion compared to UnitedHealth's $82.8 billion.
Cigna and Elevance Health, formerly Anthem, duked it out for the second-highest profits in 2022, with Cigna on top at $6.7 billion. Elevance didn't trail by much, however, reporting $6 billion in profit.
The pair landed in the middle of the pack on revenue, with Cigna reporting $180.5 billion in revenue and Elevance Health posting $156.6 billion. Cigna's revenue has grown significantly since it closed its Express Scripts acquisition in late 2018.
Much like Optum is for UnitedHealth, Cigna's Evernorth subsidiary is its major growth engine. Evernorth includes Express Scripts, the specialty pharmacy Accredo, telehealth from MDLive and a data analytics arm.
Evernorth is much younger than Optum, however—the subsidiary formally launched in late 2020—so the company has focused on investing to expand its reach, which has paid off for the bottom line. Cigna does not aspire to emulate Optum in one major way, though. Executives have emphasized that the company does not plan to snap up doctors and build out a large care delivery business.
Elevance is on a similar path with its recently launched Carelon. The insurer rebranded its corporate enterprise last summer and followed that move up by establishing Carelon, which unites multiple key business lines including pharmacy benefit management, care delivery and technology.
In the fourth quarter, Cigna reported $45.8 billion in revenue and $1.2 billion in profit. Elevance Health, meanwhile, posted $39.9 billion in revenue and $949 million in profit.
CVS Health is UnitedHealth's closest rival in terms of sheer size, but the pharmacy giant falls far short on profitability. The company reported $4.1 billion in profit for 2022 and $2.3 billion in the fourth quarter.
For the quarter, CVS reported double-digit revenue hikes at both its health plan, Aetna, and its pharmacy benefit management arm, Caremark. Revenues were also up at its retail business, CVS Pharmacy, though by slimmer margins.
CVS' business was already sprawling before it got into the insurance business in 2018 by acquiring Aetna, one of the country's largest health plans. However, it has its sights set on expansion in primary care. Alongside the fourth-quarter earnings, it announced the plan to buy Oak Street Health, a Medicare-focused provider group, in a deal valued at $10.6 billion.
Humana and Centene both posted losses in the fourth quarter, though both companies were profitable for the full year. Humana reported a $15 million loss in the fourth quarter and $22.4 billion in revenue. For 2022, the Medicare Advantage-focused insurer brought in $2.8 billion in profit and $92.9 billion in revenue.
Centene posted a $213 million loss in the fourth quarter alongside $35.6 billion in revenue. The government insurance giant also reported $144.5 billion in revenue for the full year 2022 and $1.2 billion in profit.
Humana is charting a similar path as its competitors in diversifying its business, but much of its focus has been on primary care and home health through its CenterWell subsidiary. CenterWell is rapidly scaling the number of senior-focused primary care clinics it operates, and, through its acquisition of Kindred at Home, Humana is now the country's largest provider of home health services.
Centene, meanwhile, is an outlier compared to its competitors, as it put a focus over the past two years on its value creation plan, making a number of strategic divestitures to better focus its business. The insurer closed multiple divestitures in the fourth quarter and has already made strategic moves in the early weeks of this year, including closing the sale of Magellan Specialty Health. These efforts position the company for "its next stage of growth," according to its earnings release.