{"id":48400,"date":"2017-01-17T17:15:09","date_gmt":"2017-01-17T23:15:09","guid":{"rendered":"http:\/\/news.medill.northwestern.edu\/chicago\/?p=48400"},"modified":"2017-01-17T17:25:13","modified_gmt":"2017-01-17T23:25:13","slug":"unitedhealth-profit-increases-56-percent-in-fourth-quarter","status":"publish","type":"post","link":"https:\/\/news.medill.northwestern.edu\/chicago\/unitedhealth-profit-increases-56-percent-in-fourth-quarter\/","title":{"rendered":"UnitedHealth profit increases 56 percent in fourth quarter"},"content":{"rendered":"

By Rachel Newman<\/strong><\/p>\n

UnitedHealth Group Inc. reported a 56 percent increase in profit in the fourth quarter of 2016, driven by continued growth of its health services business and a nearly 16 percent increase in revenue from premiums.<\/p>\n

The Minnesota-based company reported a fourth quarter profit of $1.9 billion, or $1.96 diluted earnings per share, compared with $1.2 billion in the year-ago period. Earnings per share adjusted for acquisition-related expenses came to $2.11, four cents above analysts\u2019 expectation of $2.07. <\/p>\n

UnitedHealth added more than two million medical members in the fiscal year, which helped drive the increase in premiums in the final quarter. <\/p>\n

<\/p>\n

\u201cThe market has been stable with strengthening employment rates helping us grow within existing customers,\u201d David Wichmann, president, said in a conference call with investors. <\/p>\n

The company’s Optum pharmaceutical and pharmacy benefit management units drove revenue growth and improved operating margins, said Ana Gupte, an analyst for Leerink, in a research note. The quarterly results are a \u201cgood set-up for 2017,\u201d Gupte said.<\/p>\n

\"UnitedHealth
Graph of UnitedHealth net earnings from 2012 to 2016 (Rachel Newman\/MEDILL)<\/figcaption><\/figure>\n

In January, UnitedHealth announced that it will acquire Deerfield, Ill.-based Surgical Care Affiliates for $2.3 billion. The company operates 205 outpatient surgical facilitates across the country.<\/p>\n

SCA will be added to the company\u2019s Optum business, which seeks to grow its ambulatory care portfolio, Renfro said in a conference call with investors.<\/p>\n

Strategic partnerships with Walgreens Boots Alliance Inc., CVS Health Corp. and AllScripts Healthcare Solutions Inc., as well as new contracts with the Department of Veterans Affairs, contributed to Optum\u2019s revenue growth, said Optum CEO Larry Renfro in the conference call. <\/p>\n

UnitedHealth expects to take a $350 million operating charge in 2017 due to the liquidation of Penn Treaty American Corp., a financially distressed long-term care insurer based in Pennsylvania. <\/p>\n

Though the company is not affiliated with Penn Treaty, state laws require that health insurers be assessed a share of the funds needed to protect Penn Treaty policy holders, Wichmann said. <\/p>\n

UnitedHealth\u2019s earnings report comes amid political uncertainty about the future of the Affordable Care Act. Last spring, the company announced that it would pull out of many state Obamacare exchanges, including the exchange in Illinois. <\/p>\n

In a conference call with investors, CEO Steve Hemsley spoke in favor of \u201crobust state-based health care markets\u201d as well as \u201cflexible Medicaid available to eligible as well as paying beneficiaries\u201d and \u201cwell-structured and managed high risk pools.\u201d <\/p>\n

Following the earnings release UnitedHealth stock fell 2.5 percent and then rebounded to $160.66 per share at the close of trading, down 0.7 percent from Friday’s close. <\/p>\n

Walgreens Pharmacy on State Street. UnitedHealth’s Optum unit partnered with Walgreens, which contributed to UnitedHealth’s revenue growth. (Rachel Newman\/MEDILL)<\/div>\n","protected":false},"excerpt":{"rendered":"

By Rachel Newman UnitedHealth Group Inc. reported a 56 percent increase in profit in the fourth quarter of 2016, driven by continued growth of its health services business and a nearly 16 percent increase in revenue from premiums. The Minnesota-based company reported a fourth quarter profit of $1.9 billion, or $1.96 diluted earnings per share, […]<\/p>\n","protected":false},"author":335,"featured_media":48404,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3516],"tags":[],"class_list":["post-48400","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-winter-2017"],"yoast_head":"\nUnitedHealth profit increases 56 percent in fourth quarter - Medill Reports Chicago<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/news.medill.northwestern.edu\/chicago\/unitedhealth-profit-increases-56-percent-in-fourth-quarter\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"UnitedHealth profit increases 56 percent in fourth quarter - Medill Reports Chicago\" \/>\n<meta property=\"og:description\" content=\"By Rachel Newman UnitedHealth Group Inc. reported a 56 percent increase in profit in the fourth quarter of 2016, driven by continued growth of its health services business and a nearly 16 percent increase in revenue from premiums. 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