UnitedHealth hosted its investor conference this week. Here are 4 things to know

Healthcare giant UnitedHealth Group hosted its annual investor conference this week, where it detailed key strategic initiatives ranging from value-based care to consumerism.

Alongside the event, the company released its outlook for 2024 and said it expects to bring in between $27.50 and $28 in earnings per share. By comparison, UHG projected between $24.85 and $25 per share for 2023 as of its third quarter earnings release.

In addition, UnitedHealth estimates between $400 billion and $403 billion in revenue for 2024.

CEO Andrew Witty said during the investor meeting that more than 3.9 million people have applied for open jobs at UHG over the last year, and that interest suggests that what the company is doing is resonating with people. UnitedHealth currently employs about 450,000 people across the enterprise.

He said that the healthcare industry is complex and daunting, and it has grown both in interwoven ways and fragmented ways. Healthcare has also made an effort to keep pace with innovation and technology, though there's still plenty of work to be done.

"Our mission is to try and improve all of those things," Witty said. "And that's why so many people want to be here."

Here are three other key takeaways from UnitedHealth's investor conference:

The ripple effect of changes to Medicare Advantage

UnitedHealthcare, the company's health plan arm, is the largest individual player in Medicare Advantage. About 13.7 million people are enrolled in its suite of Medicare products, which includes MA plans, Part D and Medicare supplements.

The company expects to add between 350,000 and 375,000 members in MA for 2024, which would put total MA enrollment at about 8 million. 

Witty said that the MA rate notice issued earlier this year had a "material impact" on revenue that was felt across the company, including putting pressure on the medical cost ratio. However, he said that the team began early to craft a response to weather the changes.

In the notice, the Centers for Medicare & Medicaid Services finalized significant updates to risk adjustment in MA, and while the changes will be phased in over the next several years, it will be felt in the program in 2024, 2025 and 2026. The rule has been roundly criticized by insurers, some of which warned that it may force plans to restrict benefits.

Chief Financial Officer John Rex told investors at the conference that since February, before the rule was finalized, the team has worked to develop a response that would allow them to mitigate the reimbursement changes while doing "all we could to keep benefits as stable as possible."

Witty said it also led to a major emphasis on reducing waste, a move he said should likely have been a focus in value-based care anyway.

"What I hope you will all take away is that we've made very, very deliberate decisions and tradeoffs in '24, not just for '24 but to make sure that we're positioned for '25 and '26," Witty said.

Optum Health remains at center stage

Optum's provider arm is a major growth engine for UnitedHealth Group as a whole and was a major focus of conversation at the conference.

Optum Health employs 130,000 physicians and advance practice clinicians across 2,700 sites of care. UHG expects Optum Health to post double-digit revenue growth in 2024, with an operating margin likely between 8% and 10%.

It currently treats more than 4 million patients in fully accountable value-based care models, and continuing to facilitate that shift is a central goal. UnitedHealth dedicated about half of its presentation to highlight its push for greater adoption of value-based care.

Optum's integrated care model, which includes in-home options, virtual care and behavioral health, allows it drive improved outcomes as well as a better patient experience. Amar Desai, M.D., CEO of Optum Health, said during the investor conference that it's also allowing the provider group to improve the physician experience and make significant gains in addressing benchmarks.

The shift to value goes beyond Optum Health, with Witty characterizing it as a major "growth pillar" across UnitedHealth Group.

"Today, value-based care is the centerpiece of our growth strategy,"  UnitedHealthcare CEO Brian Thompson said. "From my vantage point leading UnitedHealthcare, it is by far the greatest opportunity we have to deliver superior outcomes and lower costs."

A look at the push into provider enablement

Leadership at Optum's data analytics arm, Optum Insight, highlighted the company's provider enablement product, which drew some interest from the investors at the conference.

Called Practice Extend, the solution is designed to support independent primary care practices in making the shift to value. It supplies them with data to assist in care decisions and supports with scheduling and referrals.

Roger Connor, CEO of Optum Insight, said during the conference that the platform is essentially "value-based care in a box." The program offers practices a roadmap to adapt to value-based care, critical data on population health management and support around payer contracting within these models, Connor said.

"Many of our providers that we're working with really don't know all of the stepping stones and all of the things that they need to go on the journey," he said.

Connor said that the program operates from the payer side but they're also taking it directly to the providers who need these supports. The Optum Insight team is working both with the Optum Health providers as well as outside provider partners.

Witty said the platform is an example of how UnitedHealthcare and Optum work well in tandem as an innovation engine to develop solutions that UHG can then bring to the broader market.

"The goal of the company is to work together, figure out how to innovate, test drive it and then make it broadly available, not just through our own networks," Witty said. "And that's been a very successful model for us in however many years in many areas."