Unit­edHealth bets on Op­tum

Daily Freeman (Kingston, NY) - - BUSINESS -

Unit­edHealth built its rep­u­ta­tion sell­ing in­surance, but its fu­ture growth will de­pend more on a busi­ness seg­ment that strays well be­yond that core.

Op­er­at­ing earn­ings for the com­pany’s Op­tum seg­ment surged 28 per­cent to nearly $1.5 bil­lion in the third quar­ter. That’s ac­tu­ally pedes­trian com­pared to growth of more than 40 per­cent in pre­vi­ous quar­ters, thanks to a roughly $12-bil­lion ac­qui­si­tion com­pleted in 2015 to bol­ster its Op­tumRx phar­macy ben­e­fits man­age­ment busi­ness.

Op­tumRx com­petes with na­tional play­ers like Ex­press Scripts in a hot mar­ket filled with em­ploy­ers and in­sur­ers seek­ing help con­trol­ling soar­ing pre­scrip­tion costs. It does that in part by ne­go­ti­at­ing drug prices and pro­vid­ing pro­grams that help cus­tomers stick with their pre­scrip­tions. Unit­edHealth has said it ex­pects Op­tumRx to man­age nearly $80 bil­lion in phar­ma­ceu­ti­cal spend­ing this year. Op­tum also runs ur­gent care cen­ters and doc­tor of­fices, an­a­lyzes data and pro­vides rev­enue man­age­ment ser­vices, among other prod­ucts.

Health in­surance is still Unit­edHealth Group’s main busi­ness, and the com­pany uses Op­tum to make those in­surance prod­ucts bet­ter as well as bring in out­side busi­ness, said Mizuho Se­cu­ri­ties USA an­a­lyst Sh­eryl Skol­nick.

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