Monday, December 19, 2011

UnitedHealth Group, Inc. Overview

UnitedHealth Group Inc. (UNH) is a healthcare service provider in the United States.  Founded in 1974 the company offers health benefit plans to public sector employers, mid-sized employers, national employers, and individuals.  Optum UNH's Health Services platform, has three informational and technological based services businesses.  OptumHealth concentrates on financial services and health management. OptumRx is among the biggest pharmacy benefit management organizations and OptumInsight concentrates in technology consulting & actuarial services as well as software products.

In 2010 UNH's revenue grew by 8% reaching $94 billion compared to $87 billion in 2009.  The company's revenue has steadily increased since 2006.  The company's broad health services will allow it to advance its international growth.  The company is well positioned for growth in the coming years, as the need for benefit coverage increases as well as government monitoring and new legislation. 

UnitedHealth Group is collaborating with Cisco (CSCO) with the introduction of a high-resolution teleconferencing technology to give us the first telehealth network which enables doctors to see patients face-to-face when patients are not able to access a doctor or clinic.  NowClinic allows individuals with internet access to chat with doctors and with the use of a web cam you can get the feel as if you were in a doctor's office, DocGPS is one of the first smart phone applications that gives people the ability to locate nearby UnitedHealthcare providers.

As we enter a paperless society UNH OptumInsight working collaboratively with the AMA is aiding in the smooth transition of transforming paper records into electronic health records for those small physician practices.  Small physician practices is where most of the population receives primary care. 

The company has more than 20 distinct businesses and serves more than 6,000 hospital facilities as well as more then 75 million individuals.  UnitedHealthcare Medicare provides benefits to 9 million seniors together with AARP which is vital in an environment that consists of a large amount of baby boomers.  UnitedHealthcare Community and State caters to more than 3 million individuals of which more than half are children, these individuals get coverage via Medicaid, CHIP and Medicare.

When the market bottomed out in March 2009 UNH was priced at $17.90 from which it has recovered quite nicely it is currently priced at $48.97.  UnitedHealth Group is currently paying a 1.30% dividend.
The 52 week average has ranged from $35.05 - $53.50 with a beta of 0.78 yet the stock was not immune to the August drop.  UNH dropped close to 10 points from July to August. 

Providing medical care to the U.S. makes up about 17% of our GDP and costs more than $2.4 trillion, the inflation rate for healthcare was about 9% in 2010.  The Center for Medicare and Medicaid Services (CMS) predicts that the U.S. total health expenditure will grow to more than $4.1 trillion by 2016 and $4.6 trillion by 2019.  Moving forward UnitedHealthcare Group appears well positioned for the changing technological and legislative healthcare market. 

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