UnitedHealth turns to public sector for profits
UnitedHealth Profit Rises on Government Medical Plans
By Avram Goldstein
Bloomberg.com
July 19,2007
UnitedHealth Group Inc., the largest U.S. health insurer, said profit rose 22 percent on gains from government-sponsored medical programs.
The costs of paying health claims from employer-sponsored plans rose to 81.8 percent of revenue, from 81.2 percent a year earlier. These expenses may offset the boon UnitedHealth has seen from increasing the profitability of its Medicare programs for the elderly and adding 290,000 members in state Medicaid programs for the poor in the 12 months through June 30.
Because commercial enrollment is unlikely to go up for the health insurance industry, the company is turning to publicly financed programs for growth, (Chief Executive Officer Stephen) Hemsley said.
“Some 100 million Americans are expected to participate in some government program by 2016, and we’re exceptionally well positioned to serve them,” he said.
Medicare Advantage was a “bright spot” for UnitedHealth in the quarter, said Carl McDonald, an analyst with CIBC World Markets in New York, in a note to clients today.
“This is likely a function of the benefit changes UnitedHealth made to its Medicare Advantage product this year, as it raised premiums, cut benefits and exited unprofitable counties,” McDonald said.
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aPZqBSLNWSy8
Comment:
By Don McCanne, MD
Those who still insist that health care reform cannot be achieved without continuing to include private insurers should take a closer look at this report.
UnitedHealth, the largest private health insurer, is having problems servicing the private commercial market and so is turning to our publicly financed programs.
And what are they doing for patients in the publicly-funded Medicare Advantage program? They are increasing out-of-pocket spending through higher premiums, cutting benefits covered, and abandoning patients in less lucrative markets! And for this the Bush administration has granted them an extra subsidy over the costs in the traditional Medicare program.
Haven’t we been exposed to enough negative studies and reports on this parasitical industry? Have you seen ANY objective reports of redeeming values that would effectively offset the profound waste and gross injustices that this industry advances?
We really do have to rid ourselves of the private insurance industry if we honestly want to provide affordable, efficient, comprehensive coverage for everyone. But it looks like we’ll first have to rid ourselves of the policymakers who insist that political expediency mandates that we continue to support the private insurers in spite of their adverse impact on patients. Talk about Sicko!