It is no secret that 2020 was a good—no, make that great—year for UnitedHealth Group. As we covered previously, even a “bad” quarter for this company was still leaps and bounds ahead of what many others experienced this year.
All indications pointed to big profits in 2020, but you may be wondering exactly how well the healthcare behemoth rounded out the year, so let’s review. While the last two quarters of the year were a decrease compared to previous years, the extremely large profits from the first half of the year balanced the scales, leaving United with a healthy $15.4B in profits for 2020. To put this in perspective, the automotive industry dipped roughly 15%, the restaurant industry experienced over a $200B loss, and the retail industry dropped almost 11% overall.
We have expressed concerns on numerous occasions that health insurers—specifically United—are quite literally profiting from this pandemic. At the same time, their narrative has stayed the same. “We will see a decline as care utilization returns to normal rates,” is the repeated refrain. If this is true, though, why/how is United already projecting $16.75B in profits for 2021? Shouldn’t the number be going down, not up?
We have a hypothesis… growing their cash cow (Optum Health, which includes OptumRx), could help them drive massive profits this year. As always, we will keep an eye on them and report back as the year goes on.