UnitedHealth Group Made $5.5 Billion Last Quarter, Even Though (or Maybe Because) Insurance Keeps Getting Worse

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So UnitedHealth Group made about $5.5 billion in pure profit last quarter, with revenues nearing $100 billion. A huge chunk of that came from its Optum unit. The company’s PBM saw revenue grow more than 16% in 2023. 

In some ways, that’s hardly news. I mean, it’s pretty much what was expected. (Technically, the company beat expectations, but shares fell because the company is spending more than expected on patient care, and Wall Street hates it when insurance companies spend money on patients.)

But this is my quarterly opportunity to pause and ask the question: what, exactly, did UnitedHealth Group do to earn that $22 billion in profit it generated in 2023? Health care is getting demonstrably worse for consumers but more and more profitable for vertically integrated insurers. 

That’s not how things are supposed to work. Sure, Lilly and Novo are going to have boffo profits this year. But they’ve also invested in the space for decades and delivered some generational wonder drugs. 

What has United done for anyone lately? 

Final Thoughts (Maybe) on #JPM24

Here are my three takeaways on what the conventional wisdom is coming out of the meeting: 

• Deals mean happy days are here again. It’s not that there was one meeting defining mega-deal, or even that there was a huge volume of micro-deals. But I got the sense that the deals that were announced were the kind of takeouts that give the rest of the biotech industry hope. And hope is one hell of a drug. 

• Everyone’s eye is on the future. JPM is a time to talk about the pipeline and what’s next. For some companies, that horizon is further away. For some, it’s today. It makes for a great meeting, and I came away jazzed by what I’ve seen. We remain in a golden age of medicine, and the near future looks bright. 

• Obesity, obesity, obesity. It’s going to be huge. The health benefits are going to get even better defined, and the cost-effectiveness of the medicines will only look better with every new outcomes study. You don’t need me to tell you that. But it’s also clear that folks are finally getting around to asking the big questions: who will pay, and where will that money come from?

But here are the three takeaways that might be as important, but which required a little more reading between the lines:

• It’s really hard to commercialize nowadays. Gene therapy is struggling. No secret there. Alzheimer’s is off to a slow start, which isn’t surprising, but still says something about the market. The same is true of Humira biosimilars. And it felt like even “successful” launches aren’t automatically driving revenue quickly enough. All of these are, at their root, market access issues, and there just wasn’t a lot said about the current market access environment. 

• No one is taking the political environment seriously, at least in public. Right now, both of the leading candidates for president are supporting regulations on the pharmaceutical industry that would be substantially worse than the IRA. But that wasn’t remotely a battle anyone seemed interested in addressing, at least from behind the podium. (Policy wonks, outside of the spotlight, were less sanguine, especially about the prospect of political change altering the policy environment. On wag suggested that booting Biden to get Trump’s pharma policies would be “like changing your shirt after you've shit your pants.”)

• It’s time for a new coalition. It’s easy for me to be cynical about the gaps in the conversation, but -- in hallways, in diners, over drinks -- I heard again and again that there is an inchoate coalition out there all tied together by a desire for the same outcomes: Value-driven care. Broad access. Faith in, and support, for innovation. It’s where patients are. Employers are getting there. Biopharma has the pieces. The question is whether this is a group that can coalesce to drive policy change. (I mean, I think the answer is clearly “yes,” but it’s not going to happen without a catalyst.)

So much to catch up on, and I fear that I missed something at the end of next week. Hold me accountable if I unintentionally skipped something worth flagging. 

• Arnold Ventures is going to be less transparent. STAT scoops that they’re taking down their grants database, which was a great way of seeing who was doing what. The information will still be available -- though somewhat delayed and much harder to parse -- via their IRS filings. The STAT story has a worthless quote that doesn’t get at the fundamental question: why backpedal on transparency? What possible benefit does that convey to the public? 

• This is a solid WSJ piece on the Part D copay cap and month-to-month OOP smoothing. Still, it’s kind of weird that industry -- which has been pushing for this far longer than anyone else -- is excluded from the story. But is there an Arnold grantee quoted? You bet there is. 

• Arnold-funded fingerprints are all over this STAT piece on new targeting patent thickets, too. I point that out, not in the interest of conspiracy-mongering, but rather to make the point that these guys have an outsized impact on the policy environment. Again, that would suggest that the group should err on the side of more transparency rather than less, but … 

• HIV+Hepatitis Policy Institute is going after alternative funding programs, which are maybe the most egregious abuse of the “insurance” going. The piece names names, too, highlighting the employers that are happy to leave their employees functionally (if partially) uninsured so that the AFPs can grift off of charity programs. 

• I’m over the Florida reimportation thing -- there’s other coverage out there if that’s your cup of tea but -- damn -- this is a great column by Andre Picard at the Globe and Mail. Picard might be the best health reporter in Canada, so come for the argument, stay for the rhetoric. KFF Health News also has a scoop on the connection between Alex Azar, who got the importation ball rolling while at HHS, and a company with a huge contract to run Florida’s importation program.