UnitedHealth (UNH) Counting On Optum For Long-Term Growth
Zacks Investment Research | Sep 21, 2016 05:03AM ET
UnitedHealth Group Inc. (NYSE:UNH) is now banking on its health services business Optum for growth. This decision follows stringent regulatory restrictions imposed by the health care reform in 2010 that hit its health benefits business which provides health insurance products.
Optum is a health services business serving the broad health care marketplace and a major part of the company’s diversification strategy. It incepted from the joining of the company’s health services business into one segment in 2011 and comprises OptumHealth, OptumInsight and OptumRx.
UnitedHealth’s fast growing health services business will fuel long-term growth and be a key differentiator.
Since 2011, Optum has compounded revenues at 23% per year and operating earnings at 34% every year. In 2015, Optum grew its revenues by 42% (including the acquisition of Catamaran in July) and its contract backlog by more than 20%. We expect OptumHealth, OptumInsight and OptumRx to continue producing strong, sustainable growth across the board in 2016 and beyond, as a leader in the U.S. and international health services markets estimated at $1.0 trillion in the aggregate.
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