UnitedHealth beat second-quarter expectations as an acquisition and more Medicare Advantage customers helped balance a jump in care use.
The health care giant also raised the low end of its 2023 earnings forecast range on Friday after its profit jumped 8% to $5.47 billion in the quarter.
UnitedHealth runs a health insurance business that covers more than 50 million people, mostly in the United States. It also has an Optum business that provides care and runs one of the nation’s largest pharmacy benefit managers.
Optum revenue jumped 25% to more than $56 billion in the quarter, helped partly by UnitedHealth’s roughly $8 billion acquisition of Change Healthcare.
The company also said it squeezed more revenue out of customers served through its Optum Health business, which runs clinics, outpatient surgery centers and provides home care. That business has been treating more people through value-based care arrangements, which base care provider pay more on how a patient population does instead of delivering a fee for each service.
UnitedHealth leaders have been touting their growth in this area of care for several quarters now, as bill payers like the federal government grow more interested in these arrangements. They want to keep people like those on Medicare Advantage plans healthy and out of expensive hospitals.
UnitedHealth’s Medicare Advantage enrollment jumped 9% to 7.6 million people in the quarter. Medicare Advantage plans are privately run versions of the government’s Medicare program mainly for people ages 65 and older.
That Medicare business also was a source of higher-than-expected cost increases.
Shares of UnitedHealth and other insurers tumbled last month after an executive told a conference that the company saw a meaningful jump in outpatient surgeries that looked like pent-up demand being satisfied.
CEO Andrew Witty said Friday that the company saw a shift in patients who were recommended for surgery actually going through and having procedures done. He said patients appear less reluctant to go to a surgery center than they were earlier in the COVID-19 pandemic.
Overall, the company’s numbers turned out better than expected. UnitedHealth reported adjusted earnings of $6.14 per share in the quarter as total revenue grew 16% to $92.9 billion.
FactSet said analysts expect earnings of $5.99 per share on $90.97 billion in revenue.
UnitedHealth now expects 2023 adjusted earnings per share of $24.70 to $25 this year.
Analysts forecast $24.70 per share.
Company shares jumped 7% Friday morning while broader indexes rose slightly.