17 Apr

Medicare: Key Growth Driver for UNH in Q1

WRITTEN BY Margaret Patrick

UnitedHealthcare’s Medicare and Retirement business

UnitedHealthcare’s Medicare and Retirement business reported revenues of $21.10 billion in the first quarter—a rise of $2.2 billion YoY (year-over-year). According to UnitedHealth Group’s (UNHfirst-quarter earnings press release, the performance was driven by a strong YoY rise of 405,000 members served by the company’s MA (Medicare Advantage) products.

According to the company’s first-quarter earnings conference call, UnitedHealth Group’s spending on MA members is ~30% lower than the spending reported for original Medicare and 10%–15% lower than the spending reported by most MA plans.

Medicare: Key Growth Driver for UNH in Q1

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MA membership

In the first quarter, UnitedHealth Group reported MA membership of 5.16 million—a rise of 8.5% YoY and 4.45% sequentially.

In the first-quarter earnings conference call, UnitedHealth Group listed the various benefits derived by its MA members from its personalized holistic care service, Navigate4Me. The service is designed to cater mainly to the senior population. The service involves ~1,000 experts who are a single point of contact for MA members. The experts address MA members’ administrative and clinical queries, help them follow their personalized care plans, and coordinate overall care. The experts are supported by UnitedHealth Group’s strong technology and data analytic capabilities.

UnitedHealth Group has managed to reduce hospitalizations for its MA members with congestive heart failure by 14%. The company has also managed to significantly reduce the number of doctor visits for its MA members compared to original Medicare members.

Medicare Part D members

In the first quarter, UnitedHealth Group served 4.48 million members through its Medicare Part D standalone programs—a decline of 6.08% YoY.

In its first quarter earnings conference call, UnitedHealth Group confirmed its participation in the Part D Payment Modernization Model announced by CMS (Centers for Medicare & Medicaid Services), which will be effective from January 1, 2020. In January, CMS issued a press release announcing the Part D Payment Modernization Model, which aims to reduce Medicare spending and improve the overall quality of care.

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