Insurer UnitedHealth’s 4Q Profit Jumps 20 Percent

INDIANAPOLIS (AP) — UnitedHealth Group Inc.’s fourth-quarter net income jumped 21 percent, but the insurer saw signs of health care use picking up and left its 2012 earnings forecast unchanged.

The Minnetonka, Minn., company said Thursday utilization started rising in the last half of the year, as commercial health insurance costs increased 5.5 percent in 2011. That was a larger increase than in 2010 but still smaller than the jumps of 7 percent or more that insurers saw before the recession.

UnitedHealth and other health insurers have been helped in recent quarters by health care use that has risen at rates that were slower than expected when they set premiums. Industry analysts and other experts have said use tends to rise at slower levels after a recession, as consumers cut back on spending.

Many analysts think this trend will continue into 2012, but insurers have warned that they expect growth in use to return to normal levels.

Citi analyst Carl McDonald said patient volumes at hospitals are picking up, but they remain relatively low, and it’s unclear yet whether health care use is on the rebound. He noted that use typically picks up in the fourth quarter, when patients with high-deductible health plans seek care before their deductibles renew in the new year.

The company told analysts Thursday that while use is climbing, price increases for inpatient hospital care are the biggest reason behind its growth in medical costs.

“It’s an area of intense pressure and intense focus for us as a business,” said Daniel J. Schumacher, chief financial officer for UnitedHealthcare, the insurer’s largest segment.

UnitedHealth earned $1.26 billion, or $1.17 per share, in the three months that ended Dec. 31. That’s up from $1.04 billion, or 94 cents per share, in the same quarter last year.

Revenue grew 8 percent to $25.92 billion.

Analysts surveyed by FactSet had forecast, on average, earnings of $1.03 per share on $25.64 billion in revenue.

Total medical costs, UnitedHealth’s largest expense, climbed 8 percent to $18.6 billion in the quarter. Enrollment grew 5 percent to 34.6 million people compared to the 2010 quarter.

For the full year, UnitedHealth earned $5.14 billion, or $4.73 per share, on $101.9 billion in revenue.

The insurer reiterated a 2012 forecast it announced in November that calls for earnings to range between $4.55 and $4.75 per share on revenue of $107 billion to $108 billion. Analysts have labeled that forecast conservative and expect, on average, earnings of $4.77 per share.

UnitedHealth CEO Stephen J. Hemsley told analysts on Thursday that while his company’s results surpassed expectations, they don’t alter the insurer’s forecast. He said the company is taking “an appropriately cautious posture” on 2012.

“We expect steadily increasing medical utilization over the course of the year,” Hemsley said.

UnitedHealth shares climbed more than 6 percent this year leading up to Thursday’s earnings announcement. The stock then slipped 3 percent, or $1.62, to $52.32 in midday trading Thursday. Analyst Les Funtleyder suspects that some of that drop may be attributable to investors taking profits.

“Everyone expected a good quarter and they got one,” said Funtleyder, healthcare portfolio manager at Miller Tabak, which owns UnitedHealth shares.

UnitedHealth is the largest health insurer based on revenue and the first to report earnings every quarter. WellPoint Inc. reports on its fourth-quarter performance Wednesday. Aetna Inc. releases results Feb. 1, Cigna Corp. follows on Feb. 2 and Humana Inc. rounds out the earnings reports of the largest health insurers on Feb. 6.

(© Copyright 2012 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)

Comments

One Comment

  1. G Dog says:

    Corporate pigs.

    45 million Americans without health insurance and boys in the corner offices add up their stock options, stockholders count their dividends and their fellow citizens die.

    1. wooohooo@yahoo.com says:

      Don’t forget all your pensions for federal, state and local enmployees and many unions also have UNH in their portfolios. So they are all pigs too. Many private individuals have IRA’s with mutual funds that have UNH as well, so they would be pigs too. It appeasr that the only ones that would not qualify as pigs in your eyes are people that are not saving for retirement.

    2. Jack says:

      Your a good socialist. Stop whining and get a job.

    3. Joan says:

      Thats what makes this country great. We will always have winners and losers, hard workers and bums, inovators and slackers, smart people and dopes. You are obviously the latter.

      1. Kevin says:

        Wow….your right on this one G Diggity Dog…..My gf works for them. Greed 101! They treat their employees like cr*p. Their employees have the worse health insurance you can imagine! And they are shiftint alot of their jobs to India…or as they call it “Global Opportunity”! They have their American employees training their India counterparts…so they can then terminate the Americans. Every year they post biliions…while they refuse care to the ill……if Amreicans knew the real story they would riot…oh and Joan is right….we must be dopes…I cant wait until someone Joan knows get terminally ill…and when UHC refuses to pay….she will see the “loser” side…what a mor*n….

        1. Ima POS says:

          OMG wHAT IS THE WORLD COMING T? KEVIN POSTED SOMETHING THAT IS ULTIMATELY TRUE!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! In regards to UHC, Kevin is so correct. If he has had experience with someone with UHC and being very sick no wonder he is hateful to the world. It now makes sense.

          1. Kevin says:

            Oh POS dont get all lovey with me….I am a realist, hence I state the truth, and the truth at times makes some uneasy. You will again be uncomfortable and hate me by the morning….and I am not hateful of the world. I love the world. Its liberals and Republicans I hate…..oh and whacky taffy pis*es me off too…

    4. dan says:

      This would be the same company that saved the Milwaukee School District $690,000 in 2012 for lower premiums and same coverage. There is nothing wrong with making a profit

      1. Tom says:

        @ Dan

        There is nothing wrong with making a profit. But the way they feel they need to do it sometimes is what upsets people.

        1. Not Citizen says:

          Tom, you can read their minds and know how they feel? You should be a doctor of psychology.

          1. Tom says:

            @ Not Citizen

            I dont need to be Dr to know how people feel when it comes to certain things. I know a majority of Social Conservatives are nuts. And you don’t need to be Dr to know when someone is consumed by GREED. Money / Greed are the most POWERFUL drugs out there. And when people let them control their lives especially corp they are never happy with the bottom line if they are MAKING money, If the company made $5Billion then they start to think how many do we have let go to double that next year, or will we have enough enrollments that they don’t have to do that. And I guess making people buy Health Insurance isn’t such a bad thing after all!

    5. Free says:

      Corporations are in business to make money!

  2. Citizen says:

    Yes, 45 million Americans are without insurance and CANNOT AFFORD the insurance. That is a crime in the richest nation in the world. While Mitt Romney owns multiple million-dollar homes and many of the other candidates have platinum care public health insurance, there are families facing foreclosure and 1 and 4 children lives in poverty. I hardly think those people have health insurance of any kind. In the meantime, the 20% profit of this company is because of higher fees charged to those of us who do have health insurance to cover the costs of the uninsured. The Mayo Clinic provides low-cost, wonderful health insurance to its employees–low cost meaning well below what most of us pay in this wealthy country for less-than-adequate insurance. It can be done! It must be done! Take the age limit off Medicare, adjust the premiums, and cover everyone in this country. Run the health insurance countries out of business on a tar-covered rail. A lifetime of experience with these slimy, police-themselves supposed “health insurance” providers, has left me with absolutely no respect for them and their “policies!”

    1. Just Me says:

      Citizen,

      Great idea but it wont work in real life. Take a look at how many doctors now refuse to accept Medicare or Medicaid patients. The payout on these do not even cover the cost of the services. Pretty tough to draw a comparison to the Mayo employees. That’s like saying we should be able to buy McDonalds meals for 50% less becasue their employees get that rate.

      1. Citizen says:

        When Medicaid/Medicare are the only payout around, you can bet the doctors will accept the payments. By the way, Mayo is also 17th from the bottom for the lowest cost health care provider in the U.S. Yet, the physicians and staff are the best.

        1. Facts please says:

          Do you mean those doctors that are some of the smartest people in the country with hundreds of thousands in debt from getting their doctorate and specialized training, you mean they will accept any payment over none? So they will lose their cars, and homes and default on their loans? The problem is not the health insurance companies as you propose as they are constantly fighting with doctors to lower fees and to match other doctors lower fees. The problem is we require so much training (as we should) for a doctor and it cost so much. The problem is doctors expect to be at the top of the pay scale and maybe they should, but then who takes the hit?

          It was not a 20% profit, it was a 20% increase over a year ago. So if they went up 1% last year, they went up 1.2% this year. Did you read the story, or do you always just attach anything capitalistic and not government? Recall, that our government selected UNH to run Tri-care until several appeals changed that decision. Our Governmetn wanted to save money by using UNH. UNH must be doing something right to get offered those sort of contracts from our government.

        2. Sid says:

          Its not name calling, its identifing the source of the comment, and no universal health care is not coming. If the courts don’t repeal it the 2012 congress will. Why would anyone want to follow other countrys health care system when most americans think we have the best in the world. For people like you that dispise the U.S. and our way of life I truely feel sorry for you as you have not been able to adapt, but it is the best country in the world.

          1. old nurse says:

            I think you are extremely rude also. America does have the best health care available, except if you have a pop. PPO are for profit. Their job is to say no. I interviewed a time or two. They hate people like me. I look out for what is best for the patient, not the bottom line.

            1. dhillips says:

              Sorry, but Europe has the best in healthcare!

              1. Jack says:

                thats why they flock to the Mayo when its important.

        3. Betty says:

          The smartest and most talented people in the world will gravitate towards other professions if your dream of Socialized medicine ever comes true. Why would someone subject themselves to 12 years of higher education and internships to make $50,000 to $100,000 per year? Do you have any idea of the cost of education and the income needed to justify the cost? I suppose you would just propose to socialize higher education so no one has to pay for anything.

          1. Betty says:

            yes, and you will get what you pay for. I would venture to guess that the increase in deaths and misdiagnosis will go thru the roof. Funny you bring up personla injury lawyers. Arent these the same folks Obama has protected and refused to go after in his new ObamaCare? Oh, that’s right he is a Law professor.

          2. dhillips says:

            Seem to have talented healthcare professionals in Europe!

            1. Betty says:

              Have you seen their teeth?

    2. dan says:

      So lets shut down United Health Care. Lay off thousands of more people to fight for the shrinking number of job openings and take Unemployment checks for the next 2 years. Great idea Citizen! I guess this is another jobs plan from your imaginary world

  3. Not Citizen says:

    apparently citizen works for WCCO, as I am not allowed to reply to his false statements. UNH did not make 20% last quarter, they only made 20% more over last year same quarter, that is a BIG difference in end result. Also, UNH always is fighting with doctors to lower rates and fee’s, without this intermediary, how much more would you be paying. That profit margin is regulated and UNH is at par with payouts to gross intake compared to all the non profits in Minnesota, so what makes the non profits any better? Also, UNH does a lot of business with state and federal governments saving them a lot of money, so how is this company somehow evil?

    1. Carl says:

      Anyone that is pro capitalism is scrutinized and have a major delay in any postings at CCO. Dont think Citizen is getting a free ride, there are others that are having their comments delayed or deleted as CCO doesnt agree.

      1. mwallek says:

        the censor toadies are really anal at the star tribune.

    2. Give me liberty says:

      What the government will do is drive good doctors and health care providers out of the field as they line their pockets with adminstration and regulation fees. Result will be a black market where only the super rich and government employees will have access to quality health care. Little Susie has a potentially terminal illness, better hope you know someone in the government or she’s a goner.

    3. Carl says:

      Sorry to burst your bubble Citizen, but administrative costs are extememly lower in Private Insurance Companies. Take a look at the Heritage Foundation study by Robert A Book Phd and the summary article he wrote on 6-25-09. He reviewed side by side comparisons from 2000 to 2005 and Medicare was anywhere from 5.3% to 48.5% higher in administrative cost. Just Facts!

      1. Carl says:

        Typical Citizen,

        Ignore the facts, make incorrect statements and have nothing to back them up.

        Have a great day!

  4. Best3800 says:

    I’m all for companies making a nice profit, but how much is enough? When these CEO,s make ungodly amounts of money in a down economy and many average Joe,s going bankrupt for getting sick,America is better than that! Greed is becoming the norm

  5. mwallek says:

    It’s just great to know that our capitalized medical system is affording six figure paychecks to CEO’s and CFO’s, and who knows who else. The zinger is that these people take our medical dollars hand over fist and have absolutely nothing to do with our medical well being.

  6. Jon M says:

    I have United Health insurance and have never been turned down for anything I needed. These posts are typical liberal anti-capitalist crap. They come out of the woodwork like roaches when ever a company reports a profit. I only wish you could just flip on the lights and clap your hands and make them scatter like the vermin they are. But this resilient strain of roaches resists truth and light. A hardy strain of losers. No doubt union members, and government employees and obviously on the dole. Hopefully they don’t reproduce.

    1. old nurse says:

      Not a union member, but you have no clue what they turn down. Hopefully you will never need transittional care orrr prolonged hospitalization

  7. dhillips says:

    Univerasl heaithcare is the way to go. Hopefully the U.S. will join
    the rest of the world one day!

    1. dan says:

      When Canadians and foreign leaders stop coming to the US for our First Class medical care is when we will make the change to socialized medicine. Ask any Canadian what they think of their medical plan. If you are seriously hurt in an accident you are well taken care of, but if you want to get into an oncologist for a lump you are going to be waiting 6 months or more.

      1. Citizen says:

        @dan. Foreign leaders and the Canadians who come to the U.S. for its health care can afford whatever the costs are….and they mostly come to the prestigious medical institutions like Johns Hopkins or the Mayo Clinic. They don’t come for the U.S. health insurance and pay those premiums. And they don’t get the health care reserve for the unwashed American masses, either.

      2. Mark says:

        @ dan
        Our system is so wonderful without waiting? I just recently had to wait 7 months to be treated with a torn and detached Labrum muscle with additional shoulder damage. It was almost a year since the initial injury until surgery and eventual repair of the injury.

        My friends in Canada laugh uncontrollably at the inept idiots in America who continue to live under this for profit system where the paitients and doctors have no rights. Only the insurance companies and banks decide just exactly what kind of treatment you will receive.

        1. jackactionhero says:

          Torn and detached labrum muscle, eh?

          Your labrum is not a muscle first of all, and secondly, if it were “torn and detached” you would not be able to move your arm almost at all and would not be able to take the pain for more than a few hours before passing out. Torn maybe. Detached, no chance.

          Most people go almost a year from initial injury to surgery, if their initial diagnosis isn’t a torn labrum. Otherwise, it’s usually suspected as a muscular injury that can be rested and rehabilitated, which is what contributes to the long time between injury and surgery.

  8. barrister says:

    UHC raises my premiums every quarter claiming higher operating costs
    What a joke! Agreed we need univerasl health care

  9. Carl says:

    Citizen,

    I bet your husband never wins an arguement with you. You have to have the last word and if proven wrong go off topic to try and make any point.

    Have a great day!

  10. barrister says:

    Very well said!

  11. dhillips says:

    To all you people who crticize Canadian and European healthcare, I lived in Canada for 20 yrs,and Englanf for ten years. Always had excellent healthcare.Never had to wai tmore than a week to see the DR.!

  12. FirstTimer says:

    Relax Citizen and try to stay on point. The article above and following arguments are about the current private insurance companies vs your idealistic world of lowering the Medicare age from 65 to zero I think most people are fine with Medicare and the age bracket it protects. You my friend are in the minority when it comes to universal coverage and the myth that it will be cheaper for everyone.

    1. FirstTimer says:

      @Citizen
      We still live within a Democracy and individuals have a right to form a company and make a profit. If they have done something illegal then go after them. We do not live in a country that will ever allow someone with a warped sense of the World to control and “get rid of” companies if you think they make too much money or you dont believe in.

      1. FirstTimer says:

        I hear ya on cost increase, but dont you think we expect more from health care today than we did 30 years ago? We expect an MRI anytime our kid bumps his head. If we dont ask for it the doctor orders it to cover himself in case of a lawsuit.
        Cancer had one option for treatment 30 years ago,Chemo. today we can do test after test, treatment after treatment and it still isnt enough for some. We have to realize the human body is only built for so many useful years. I cant tell you the exact numbers but if my memory serves me right its that 90% of your lifetime health care cost are provided in the last 2-3 years of life.
        Ma Bell was a monopoly and that is why they were diassembled into more private companies. If you remember, phone rates did not make any significant drop after the breakup. This is not the case with health care insurers as their are plenty of companies to foster competion. It is our govt that is setting the rules on which ones are allowed in which state. I have a private policy I aqm very happy with, but I could cut my premiumd by 25% if I was allowed to shop out of State companies.

  13. Citizen says:

    With all my comments now awaiting moderation, I must have struck a nerve with either Sid, who likes to call people names, or someone from UHC or a health insurance company. Good! It is past time that the health insurance industry is called out on the fact that an insurer tries to manage the medical practices of doctors. I don’t go to an insurer when I am ill, I go to a doctor. The insurance companies have inserted themselves between doctors and patients in the mantra of “managed care.”

  14. Citizen says:

    I will add that the “comments awaiting moderation” on this website says a lot about freedom of speech in the United States when that speech takes on big pharma and insurance. It also says a lot about the corporate sponsorship and ownership of the media. So, ‘CCO, I will be watching to see what you do with my comments, and then I will decide whether I should keep commenting and helping your hit count for advertising revenue.

    1. Center of Left and Right says:

      This is a private blog site Citizen. This is not your platform to spout your beliefs to the rest of the world. If you are flagged enough, WCCO should monitor your comments. You are quite the prolific commentor, thus monopolizing this site and this topic. If WCCHoe wants to portray to be independent on the topics presented here and a news organization, they should not allow any one poster to monopolize the topic and allow everyone to post. Obviously you do not like to be questioned. too bad, in past you appeared to be a moderate and independent thinker, apparently my impression was wrong .

      1. Citizen says:

        @Center. It is a ‘CCO blog site and there are rules. Advocating violence, physical harm, abusive language, etc. are not allowed, but pretty much all other comments are. I have been in touch with WCCO so I know how this works. I actually comment very little except when I feel the need to explain my views when I am personally attacked, called names, etc. by CONservatives who wish to control the commentary and the WCCO site. All I have to do to get your comments removed is flag them from multiple IPO addresses and they will be gone. And I certainly have as much right to “spout my beliefs” as the rest of commenters. It just seems that you CONservatives like to hog the site. Don’t worry I will keep letting WCCO know how I feel.

        1. Center of Left and Right says:

          Citizen, You just made an ASSUmption out of yourself. I am not a conservative, but since I do not agree with you, I know you will not believe me. Good luck in your pathetic attempts to get others to think DEMOcrat.

  15. Citizen says:

    For all you delusional right-wing fa$cist posters on this website, I am done with you. You can take over WCCO’s comment sections and play with yourselves. Socialize medicine will eventually come to the U.S. , and I predict that the age limit will eventually be taken off Medicare and the premiums adjusted. For all of you who can’t stand that idea, too bad, then don’t apply for Medicare when you’re 65 or social security either. Put your actions where your big flapping mouths are. So many of your comments sounds just like the cr@p peddled by the new media in Germany just before WWII, and you are too ignorant to even realize it. I’m outta here! Enjoy yourselves!

    1. Reality sucks says:

      Hey, now. Get back here. I’m putting my vote in to keep you here. I don’t even post on this BINGO playing site anymore due to it’s nazi style censor and ignorant posters but I do get on here to read you.

      1. Citizen says:

        Hey, Reality, I will miss you, but I can’t in all good conscience post on the website of a media that is so twisted as to allow the CONservative posters to hijack it. I am going to delete my cookies from CBS, and eliminate their tracking. I have a lot of tech knowledge and a lot of friends with tech knowledge, and we could daily start multiple flagging of the CONservative comments and do to them what they do to others, but it just isn’t worth my time or my friends’ time. I will read other news sites, and you should read the Dismal Political Economist; he is pithy and funny. Join as a user. I am the 1949fed. See you in cyberspace, my friend.

        1. Reality sucks says:

          Wow! They even censored my low key response to you. Yeah, it’s time to flush this site. Okay, I’ll sign on and sign up at the Dismal. Hope you have your fists flyin’ over there too!

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