NU Online News Service, April 18, 7:12 p.m. – The UnitedHealth Group Inc. offered little hope for rate-shocked employers and brokers today at its first-quarter earnings conference.
The Minnetonka, Minn., health services company pleased Wall Street by reporting $295 million in net income for the quarter on $6 billion in revenue, up from $212 million in net income on $5.7 billion in revenue for the first quarter of 2001.
Overall earnings per share increased 30%, to 92 cents.
At the core Health Care Services unit, which includes the managed care operations, operating earnings increased to $278 million on $5.2 billion in revenue, from $226 million on $5 billion in revenue. Average unit revenue per insured member increased 14%, to $1,048.
But UnitedHealth has no intention of easing pressure on customers by accepting a lower rate of earnings growth from the managed care operations.
Instead, UnitedHealth will be trying to widen Health Care Services profit margins by about 5%, according to Dr. William McGuire, the company’s chairman.
“We’re going to remain committed to pricing discipline and appropriate product placement,” McGuire said.
Prices for insured commercial coverage are going up about 13%, with only a “prospect for modest slowing in the future,” McGuire said.