UnitedHealth Group executives said Thursday that its Optum Health subsidiary, which is one of the country's largest physician groups, is building out value-based care partnerships at a faster rate than was expected.
In its earnings report, the healthcare giant said it initially projected that 500,000 new patients would be treated in value-based arrangements. It's upping that projection to 600,000. Wyatt Decker, M.D., CEO of Optum Health, said on the company's earnings call that reflects Optum's efforts to invest in technology, analytics and building networks are paying off.
"What you're really seeing is a result of almost 10 years of building a flywheel that now has significant momentum," Decker said. "All of that continues to yield benefits and, frankly, growth."
Decker said a significant area of growth the company has seen is among dual special needs patients, who are particularly high acuity. Value-based arrangements allow their provider to offer care across the continuum, including wrap-around services in the home.
In addition, UnitedHealth Group remains committed to its acquisition of Change Healthcare. The deal was challenged by the Department of Justice in late February, and is set to go to trial in August.
The combination's ability to address friction and administrative burden "will benefit the entire health system," said CEO Andrew Witty on the earnings call.
"Our extended agreement with Change Healthcare reflects our firm belief in the potential benefits of this combination to improve health care and in our ability to successfully overcome the challenge to this merger," Witty said.
UnitedHealth Group posted its first-quarter earnings Thursday morning, when it reported $5 billion in profit.
That's up slightly from the first quarter of 2021, when the healthcare giant reported $4.9 billion. Revenues for the quarter were $80.1 billion, increasing from $70.2 billion in the prior-year quarter.
The company beat Wall Street's expectations for both earnings and revenue, according to Zacks Investment Research.
“Disciplined execution of our long-term strategy, with a sharp focus on ensuring access to care for the people we serve, enabled us to deliver high-quality, diversified growth across Optum and UnitedHealthcare during this first quarter of 2022,” said Witty in a statement.
The revenue growth is on the back of double-digit hikes at both UnitedHealthcare and Optum, the company said.
Revenues at UnitedHealthcare were $62.6 billion, growth of 13.6% year over year from the $55.1 billion haul in the first quarter of 2021. The insurer added 1.5 million members over the quarter, including notable growth in Medicare Advantage, dual special needs plans and Medicaid.
UnitedHealth said it has added 350,000 members across its new product offerings, such as virtual-first plans, over the past year.
Optum's revenue grew 18.9% year over year, reaching $43.3 billion. At OptumRx, the company's pharmacy benefit management arm, revenues were up 11% as it grew its base with large health plan clients and further expanded offerings in behavioral health, specialty pharmacy and e-commerce.
Revenue per customer served at Optum Health grew 33% compared to the prior year quarter as more of its patients enroll in value-based care programs.
Based on the performance, UnitedHealth said it will increase its guidance to between $21.20 and $21.70 per share.