So far, UnitedHealth Group has seen a “minimal impact” from the Covid-19 pandemic, executives said during the company’s first quarter earnings call. United reported revenues of $64.4 billion for the quarter, up from $60.3 billion last year. The company also beat earnings expectations, reporting earnings of $5 billion, up from $4.8 billion last year.
Both its UnitedHealthcare and Optum segments performed well, with PBM OptumRx bringing in $21 billion in revenue, a 21% increase year-over-year. The company had a medical loss ratio of 81%, down slightly from 82% last year.
“Given the timing of the COVID-19 outbreak and its progression in the United States, the first quarter financial impact was limited,” CFO John Rex said in an earnings call. “As you know, incidence rates in the U.S. only started moving meaningfully in mid-March. And elective care trends did not begin to be meaningfully impacted until later in the month.”
Looking to the end of 2020, UnitedHealth Group plans to keep its earnings outlook of $15.45 to $15.75 per share.
CEO David Wichmann said the company has experienced a reduction in elective care, as most providers are obligated to cancel elective procedures to free up resources for the pandemic. Surgical Care Affiliates, a series of ambulatory surgery centers owned by Optum, has seen most procedural work postponed. But overall, cancelled procedures are not necessarily a bad thing for United — in the short-term, it could reduce costs.
On the other hand, for providers, the cancelled procedures can be financially devastating. To help alleviate some of the financial pressure, United said earlier this month that it would fast-track nearly $2 billion in claims payments to hospitals and physicians.
Later in the year, broader economic shifts could affect the UnitedHealth Group’s business.
“Many employers have had to furlough employees, driving higher levels of unemployment, which may ultimately affect the outlook for growth in our group benefits business, while increasing our membership in individual lines and Medicaid coverage,” Wichmann said.
In other news, UnitedHealth Group President and Optum CEO Andrew Witty will take a leave of absence to help with the World Health Organization’s new initiative to develop a Covid-19 vaccine. Witty will return to his position once this task is complete, the company said.
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