Revenue Growth: Total revenues reached $400.3 billion in 2024, reflecting an 8% year-over-year increase. While driven by UnitedHealthcare and Optum, revenues fell short of some expectations, highlighting challenges in Medicaid and Medicare adjustments.
Operational Efficiency: The operating cost ratio improved to 13.2% (from 14.7% in 2023), demonstrating strong management execution. However, industry-wide pressures on costs tempered the overall results.
Medical Cost Challenges: The medical cost ratio rose to 87.6%, exceeding industry benchmarks (~80%) and reflecting ongoing issues in Medicare plans and state Medicaid payment reductions. This weighed heavily on profitability.
Consumer Growth: UnitedHealthcare added 2.1 million domestic consumers, and Optum expanded value-based care patients by 600,000. This underscores solid demand and long-term growth potential despite short-term cost challenges.
Market Reaction: Meeting 2024 targets failed to excite investors, as shares dropped 4% amid concerns over missed revenue expectations and persistent cost issues. The muted response reflects the market’s high expectations.
Outlook: For 2025, revenues are projected at $450-455 billion, with adjusted net earnings per share of $29.50-$30.00 and medical costs remaining elevated at 86%-87%. Management aims to address systemic cost challenges, signaling cautious optimism.
