The Centers for Medicare & Medicaid Services’ (CMS) Medicare rate cuts, state-driven Medicaid member redeterminations and the Change Healthcare cyberattack. These are just three disruptions that UnitedHealth Group’s (NYSE: UNH) leadership has had to factor in when setting future growth objectives.
“It’s a distinctive part of the culture of UnitedHealth Group that we continue to strive to deliver on our financial commitments to you through changing environments and unforeseen challenges,” UnitedHealth Group CEO Andrew Witty said during the company’s third-quarter earnings call on Tuesday. “As we look to 2025 … we remain in a dynamic period for the health care sector. Amid this, it’s important that we continue to invest in the durable value creating capabilities of this company that support our 13% to 16% long-term growth objectives.”
Despite this current operating environment, Witty expressed optimism about the company’s ability to grow in the years to come.
The company already owns the home health giant LHC Group, and is in the process of acquiring Amedisys Inc. (Nasdaq: AMED), another one of the largest home health providers in the country.
One of the elements laying the groundwork for growth is UnitedHealth Group’s commitment to the transition of the health system to value-based care, Witty noted.
“At UnitedHealth Group, we’re purposefully organized to support the transition to value-based care,” he said. “It requires deep engagement with patients, setting the foundation to move to more coordinated care, connecting patients to primary care earlier, driving clinically accurate diagnoses more effectively, recognizing and managing chronic conditions and slowing disease progression. We’re seeing the benefits of this work come to fruition.”
Specifically, individuals who receive care services under Optum’s value-based models are more likely to receive cancer screenings. Optum is UnitedHealth Group’s health care services arm.
These individuals are also better positioned to control their diabetes and hypertension, compared to those under fee-for-service Medicare. Plus, they are 10% less likely to visit the emergency room, or be readmitted to hospital.
UnitedHealth Group’s value-based care models incorporate home-based care services, such as house calls, home health care and other in-home visits.
For the third quarter of 2024, UnitedHealth Group brought in revenues of $100.8 billion, a $8.5 billion increase over the prior year period.
Optum’s Q3 revenue was $63.9 billion, a $7.2 billion increase over the prior year.
“This was driven by an increase in both the number and type of care services we offer and the patients we serve, especially in the home and among those with complex needs,” John Rex, president and CFO of UnitedHealth Group, said during the call.
UnitedHealthcare’s Q3 revenue was $74.9 billion, a $5 billion increase over the previous year.
“Indications are tracking favorably as we head into 2025, reflecting continued strong uptake of UnitedHealthcare’s innovative offerings,” Rex said. “Our Medicare Advantage plans, on offer this fall, balance providing as much benefit stability as possible for seniors, while contending with the CMS funding cuts, IRA changes and expected care patterns.”
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