© Reuters. The corporate logo of the UnitedHealth Group appears on the side of one of their office buildings in Santa Ana, California, U.S., April 13, 2020. REUTERS/Mike Blake
(Reuters) -UnitedHealth Group Inc on Friday reported a quarterly profit that beat Wall Street estimates, helped by lower medical costs and a boost from its Optum health services unit, which operates the company’s pharmacy benefit management business.
Health insurers’ costs have been in flux during the pandemic, but have eased over the past year as COVID-related hospitalizations have fallen from their peak.
UnitedHealth (NYSE:)’s medical cost ratio – the percentage of payout on claims compared to its premiums – fell to 82.8%, marginally lower than analysts’ estimates of 82.87%, according to Refinitiv IBES data. The ratio was also lower than the 83.7% a year earlier.
Revenue from Optum rose 16.5% to $47.87 billion, aided by strong growth in its health service and pharmacy benefit management business.
Optum includes the company’s pharmacy benefit management business that helps negotiate the terms of coverage between health insurers, their clients and drug manufacturers.
Excluding items, the company reported a profit of $5.34 per share for the fourth quarter ended Dec. 31, beating analysts’ estimates of $5.17 per share, according to Refinitiv IBES data.
UnitedHealth’s revenue rose 12% to $82.79 billion, beating estimates of $82.59 billion.
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