UnitedHealth extends its hot streak as the most profitable payer in Q1

UnitedHealth Group extended its streak as the most profitable company among major national insurers in the first quarter of 2023, reporting $5.6 billion in earnings.

By comparison, fellow healthcare giant CVS Health reported the second-highest profit in the quarter at $2.1 billion, less than half of UnitedHealth's haul. CVS' profit also declined year over year, as it posted nearly $2.4 billion in the first quarter of 2022.

UnitedHealth also takes the top spot on revenue for the quarter, reporting $91.3 billion. That's up from $80.1 billion in the prior-year quarter. CVS again lands at No. 2 on revenue, posting $85.3 billion.

UHG's rising profits and revenue came on the back of growth at both of its core segments, UnitedHealthcare and Optum. Revenues at UHC were up by 13% and up by 25% at Optum, according to the company's earnings report. 

UnitedHealthcare added 2 million members compared to the first quarter of 2022, reflecting growth across its commercial and government plans. Optum, meanwhile, has been the company's growth engine for some time, and, in the first quarter, it reported 34% higher revenue per customer served at Optum Health compared to the prior-year quarter.

Optum Insight's revenue backlog increased by 35% year over year, thanks in large part to UHG's acquisition of Change Healthcare, and Optum Rx reported revenue growth of 15%.

CVS' highlights include the closure of its acquisition of Signify Health, which crossed the finish line in the final days of March. On the company's call, its top brass highlighted that deal and its Oak Street Health buy, which closed in the second quarter, as cornerstones of its strategy moving forward.

Through those deals, the healthcare giant is aiming to take on a much larger role in the healthcare delivery space. CEO Karen Lynch told investors that the company sees clear synergies between Oak Street's primary care services and Signify Health's focus on home care that it will bring to bear moving forward.

CVS was also the only company to see its profits decline in the first quarter.

Elevance Health comes in third on profitability for the quarter, though it falls behind the Cigna Group on revenues. Elevance, formerly Anthem, posted $42.2 billion in revenue for the first quarter as well as nearly $2 billion in profit. Both figures represent an increase from the prior-year quarter.

The insurer's membership continues to grow, and it has battled with UnitedHealthcare for the largest total membership in the U.S. In the first quarter, Elevance pulled ahead with 48.2 million members stateside compared to 47.6 million for its rival, though UHC's global membership is higher at 52.9 million.

Cigna lands third in revenue with $46.5 billion and fourth for profitability at $1.3 billion.

Cigna has focused on continuing to build out its Evernorth arm, which houses pharmacy benefit management giant Express Scripts as well as data analytics services, telehealth and specialty pharmacy. The first quarter was the company's first as the Cigna Group, a rebrand it launched in February to reflect the growing diversity in its portfolio.

A critical topic for investors was Express Scripts' newly unveiled PBM model that puts a focus on transparency, called ClearCareRx. CEO David Cordani said that initiative has been in the works for some time and reflects the company's ability to "flex" as needed with potential PBM reform coming down the pike.

Government insurance giant Centene had the quarter's fifth-highest revenue and lowest profit, reporting $38.9 billion and $1.1 billion, respectively.

The company has been chugging away at its value creation plan over the past several quarters, and in the first quarter it inked the sale of its Magellan Rx arm as well as made several updates in its C-suite and boardroom. Given its large member base in Medicaid, the redetermination process will also be a key topic for the insurer as the year goes on.

CEO Sarah London told investors that most states it works with chose a date between May and July to restart the eligibility determinations, and many states expect to take upward of a year to work through the backlog.

Medicare Advantage (MA) plan Humana had the lowest revenue among the top national insurers in the quarter, reporting $26.7 billion. However, its profit was just ahead of Centene's at $1.2 billion.

Over the past year, the insurer has focused on investing in its core insurance business after a disastrous showing in the 2022 annual enrollment period, and those investments have paid off as the company estimates it will add 775,000 MA members this year.

It has also invested in building out its CenterWell provider arm, which includes senior-focused primary care as well as home health services.