UnitedHealth Group hits $400.3 billion in revenue, credits OptumRx


Photo courtesy of UnitedHealth Group
UnitedHealth Group’s 2024 revenues hit $400.3 billion in 2024 – a 6% year-over-year increase – and full-year earnings from operations were $32.3 billion.
CEO Andrew Witty attributed much of this performance to a strong showing from pharmacy benefit manager OptumRx.
“Pharmacy benefit managers play a vital role in keeping those prices down,” said Witty during Thursday’s Q4 earnings call. “OptumRx alone delivers tens of billions of dollars in savings annually.
During the call, Witty promised to pass through 100% of drug rebates to consumers and said he wanted to see other companies do the same. UnitedHealth currently passes through 98%.
“Last year, our PBM passed through more than 98% of the rebates negotiated with drug companies to our clients,” Witty said. “We want 100% of rebates to go to customers by 2028 at the latest. We will fully encourage all of our clients to pass these savings onto their clients at the point of sale. This will help make more transparent who is really responsible for drug prices in this country – the drug companies themselves.”
Healthcare costs more in the U.S. because the price of a single visit or prescription is higher than in other countries, Witty said. Costs, more than utilization, drive prices higher, he said.
WHY THIS MATTERS
Optum’s revenues reached $253 billion in 2024, a $26.2, or 12% year-over-year improvement. Operating earnings were $16.7 billion and adjusted operating earnings were $18.2 billion, with UHG highlighting OptumRx and Optum Health as the primary drivers of this performance.
Optum Health revenues grew to $105.4 billion, driven by growth in patients served under value-based care arrangements. OptumRx revenues, meanwhile, increased 15% in 2024 due to growth in new clients, as well as expanded relationships with existing clients. Adjusted scripts grew to 1.62 billion, compared to 1.54 billion last year.
Despite this, the results indicate a rare quarterly revenue miss, though earnings did better than expected in the face of rising medical expenses, according to Seeking Alpha. UnitedHealth Group’s shares fell about 5% in the premarket after earnings were released, the report said.
UHG chief financial officer John Rex acknowledged that there were some challenges in 2024; specifically, he pointed to Medicare rate cuts, a lag on the part of some states in reporting Medicaid redeterminations and the Change Healthcare cyberattack. The latter is estimated to cost the company $1 billion.
Also, United Health”s medical care ratio, which indicates the proportion of premiums paid out for medical care, reached 85.5% in 2024, up from 83.2% in 2023. UHG attributed the cost increase to Medicare funding reductions and other factors, including member mix.
In total UnitedHealth Group started out with a $6 billion gap prior to the Medicare rate cuts.
Another hit came from the more rapid than expected acceleration of high cost medicines as companies took advantage of the Inflation Reduction Act’s reduced prices.
The full-year 2024 operating cost ratio was 13.2% compared to 14.7% in 2023, while cash flows from operations for the full year were $24.2 billion, or 1.6 times net income.
Healthcare benefits subsidiary UnitedHealthcare saw full-year revenues of $298.2 billion, a 6% year-over-year increase, while operating earnings were $15.6 billion. The number of consumers served with domestic commercial benefits grew by 2.4 million in 2024, while the number of people served by the company’s offerings for seniors and people with complex needs grew to 9.4 million.
People served by the company’s state-based community offerings lowered to 7.4 million, which the company attributed to the now-completed Medicaid eligibility redeterminations process.
THE LARGER TREND
This was the first earnings call following the fatal shooting UnitedHealth CEO Brian Thompson on December 4, 2024, as he was about to enter a Midtown Manhattan hotel for an Investors Conference.
Witty thanked the support UnitedHealth has received in the wake of Thompson’s passing.
Luigi Mangione has been indicted on a first degree murder charge, among other charges.
Jeff Lagasse is editor of Healthcare Finance News.
Email: jlagasse@himss.org
Healthcare Finance News is a HIMSS Media publication.