UnitedHealth reports strong earnings, despite Change cyberattack
The company's Optum Rx pharmacy benefit manager has also been doing just fine.
Solid performance at employer-sponsored health plans is helping UnitedHealth Group overcome the effects of a big ransomware attack on the company’s Change Healthcare health data exchange unit.
John Rex, UnitedHealth’s president, pointed to the commercial health plan business today, during a conference call with securities analysts, when an analyst asked how the company is managing to post strong earnings in spite of the impact of the Change attack.
“Across a number of the businesses, we’re seeing very strong growth,” Rex said. “Certainly in our commercial health business.”
Demand from large individual employers and union plans has been strong, according to Andrew Witty, UnitedHealth’s chief executive officer.
Federal regulators, state regulators, independent pharmacies and members of Congress have been attacking pharmacy benefit managers, but UnitedHealth executives also spoke happily about the performance of the company’s PBM, Optum Rx.
Related: UnitedHealth’s PBM, Optum Rx, launches a more ‘transparent’ drug pricing model
Optum Rx prescription volume increased 4.7%, to 399 million.
The company did not break out separate revenue or profit figures or customer counts for Optum Rx, but it reported that Optum Rx was 13% higher in the latest quarter than in the year-earlier quarter.
The second quarter: UnitedHealth held the conference call to go over second-quarter earnings with the analysts.
The second quarter ended June 30.
The company as a whole reported $4.4 billion in net income for the second quarter on $99 billion in revenue, compared with $5.5 billion in net income on $93 billion in revenue for the second quarter of 2023, according to the company’s quarterly earnings release.
The company’s annual revenue amounts to about 1.4% of U.S. gross domestic product.
UnitedHealth combines U.S. individual and group commercial results in its quarterly financial reports.
Commercial domestic revenue increased 11% in the second quarter, to $18.6 billion.
Commercial health plan enrollment increased 8.8%, to 29.6 million, or about 9% of the U.S. population.
The PBM: Heather Cianfrocco , the CEO of the Optum unit, which includes Optum Rx and other businesses, said UnitedHealth has benefited from investments made in the unit’s pharmacy business as well as its PBM business, and that the results speak for themselves.
“You’ve seen the growth there in clients and, with respect to volume, for our existing clients,” Cianfrocco said. “We serve at the privilege of our clients, so, what they need, we serve.
The Change attack: UnitedHealth agreed to acquire Change, a large health data infrastructure business, in 2021. The business helps about half of U.S. health care providers communicate with health insurers.
A ransomware attacked discovered in February shut down Change systems for weeks. The shutdown paralyzed some of the hospital and medical practices that had relied on Change systems.
The attack has cost UnitedHealth $2 billion so farm, according to the earnings release.
The total includes $779 million spent on responding to the attack, $645 million in support for health care providers and $613 million in reduced health data services revenue.
“Most of the service functionality is now restored,” Witty said during the conference call. “These important services are now more modern, secure and capable.”