UnitedHealth executive returns after COVID-19 vaccine work

UnitedHealth Group welcomed top executive Andrew Witty back to the company Tuesday after he spent more than seven months working with the World Health Organization on development of coronavirus vaccines.

Speaking at the company's annual investor conference on Tuesday, Chief Executive David Wichmann told Witty that progress on developing vaccines, including the roughly one dozen that are in third-stage trials, and plans for their distribution "is in part due to your efforts and the efforts of the WHO."

Witty, who for years was chief executive of the pharmaceutical giant GlaxoSmithKline, is returning to his job running UnitedHealth Group's fast-growing Optum division for health care services.

The experience watching national health care systems respond to the pandemic shows the need for UnitedHealth Group's focus on using data and technology to create the "best value-for-money health care system we can," Witty said Tuesday during the investor conference.

"It's a particularly dramatic moment in history in terms of all of these countries facing very similar challenges because of the pandemic," he said. "No country's health care system has ultimately been sufficiently robust to be able to withstand and react."

Witty was part of a WHO push to accelerate development and production of new vaccines, tests and treatments for COVID-19 while assuring equitable distribution worldwide.

UnitedHealth Group shares closed Tuesday at $341.19, up about 1.4%, after the company on Tuesday issued its 2021 earnings guidance in advance of the investor conference. The company, which is Minnesota's largest in terms of revenue, forecast sales of $277 billion to $280 billion next year and adjusted net earnings of $17.75 to $18.25 per share.

The 2021 projections include nearly $2 billion, or about $1.80 per share, in potential financial hits from COVID-19 including: the cost of treatment and testing; unemployment and broader economic weakness; and the impact of people deferring care this year.

"Many seniors haven't even seen a doctor this year," said John Rex, the UnitedHealth Group's chief financial officer, during the investor conference.

Health insurers including the company's UnitedHealthcare division are watching to see if delays in patients getting care during the pandemic will result in more serious and expensive treatment needs in the future.

Treatment costs for COVID-19 will be similar next year to this year, Rex said, but the company expects far less in terms of offsetting savings, since health systems will be able to provide most non-COVID services with fewer delays. More people likely will lose coverage next year as furloughed employees lose access to employer health plans, he said, and states resume checking more closely for eligibility in Medicaid programs, where UnitedHealthcare is a managed care provider.

Even so, Rex said: "We approach 2021 with a strengthened view regarding our underlying growth prospects."

For 2020, UnitedHealth Group is now forecasting full-year revenue of about $257 billion and adjusted net earnings per share approaching $16.75, a figure that excludes the after-tax noncash amortization expense pertaining to acquisition-related intangible assets.

The turbulent year impacted the timing of revenue and expense for the company, as well as the mix of business, but the final earnings results are largely consistent, Rex said, with forecasts offered a year ago.

Christopher Snowbeck • 612-673-4744

Twitter: @chrissnowbeck