UnitedHealth Group plans this month to open its 500th pharmacy that's focused on the behavioral health care needs of certain clinic patients.
The pharmacy is part of a business that UnitedHealth Group acquired last year and exemplifies how the Minnetonka-based health care giant has diversified beyond UnitedHealthcare, the core health insurance business that remains the largest carrier in the county.
During an investor conference Tuesday, UnitedHealth Group officials focused on growth prospects with the health services business, which is called Optum, as the company becomes more of a force in providing health care through pharmacies and clinics. Executives also stressed positive signs with the health insurance business, despite a few problems such as stagnant enrollment trends among commercial customers.
"UnitedHealth Group is a fundamentally different company than the commercial insurance company I joined 22 years ago," said David Wichmann, the company's chief executive. "With more than 50% of earnings coming from Optum in 2020, it's a good time to reflect on the accelerating impact diversification has had on the capacities of UnitedHealth Group, now a broad-based health care company."
UnitedHealth Group is Minnesota's largest company by revenue. It employs about 325,000 people, including about 18,000 in the company's home state.
The investor day presentation generally highlighted growth prospects, with Wichmann noting the company's track record of providing annual earnings growth in the range of 13 to 16%. Even so, he told investors there were three areas where "we should have performed better for you."
One was weak spot has been Brazil, where UnitedHealth Group in 2012 paid $4.9 billion to acquire a large health insurance company that also operates hospital and clinics in the country. UnitedHealthcare enrollment in health plans in South America fell by about 510,000 people between 2018 and 2019, according to data released Tuesday, but membership is expected to start growing again next year.
Financial performance also has been weak, Wichmann said, in the business that provides managed care plans to state Medicaid programs. In the past year or so, the company has dropped out of some state programs where UnitedHealthcare feels reimbursement rates are insufficient. Company officials on Tuesday noted several recent contract wins for the business, and prospects for the coming year.