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UnitedHealth Group Inc.'s second-quarter results were lifted by lower costs of care that portend well for other health insurers but may be a warning sign for hospital companies.
Medical-loss ratio, a closely watched measure of the percentage of premium income spent on patient care, came in at 81.5%, down from 82.8% a year ago and roughly a percentage point below the average of analysts' estimates compiled by Bloomberg. A lower number means the company has more money for administrative costs and profit.
That may mean good news for other insurers like Humana Inc. and Cigna Corp. UnitedHealth's results are positive for other managed care companies, "reinforcing expectations for continued favorable utilization trends and beats & raises this quarter," Evercore ISI's Michael Newshel wrote in a research note Friday.
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