UnitedHealth Group's second-quarter profit jumped to $6.6 billion -- double the earnings from the same period last year, and far beyond expectations -- as the nation's largest health insurer paid out far fewer claims with the temporary shutdown of elective procedures due to COVID-19.
The Minnetonka, Minn.-based health care giant said Wednesday that profits were substantially higher than normal because of the unprecedented delay in elective and nonemergency procedures, as hospitals and clinics prepared for and responded to the pandemic.
After leveling off in May, COVID-19 cases have begun to spike in several Sun Belt states, resulting in a surge of hospital use. Even so, UnitedHealth Group executives said Wednesday they don't expect another nationwide shutdown of elective health care, projecting instead above-average demand for services during the second half of the year.
As patients return to the health system, they might need more services than normal, said David Wichmann, UnitedHealth Group's chief executive.
"We currently expect care access patterns, while somewhat more volatile than in the past, to moderately exceed normal baselines in the second half (of the year), as people seek previously deferred care," Wichmann said during a call with investors.
"It's kind of hard to ignore the number of new diagnoses that dropped off," he said. "It's hard to ignore the drop-off in (care for) heart attacks, stroke. ... It may be speculative here, but I think the data that we see suggests that there will be some intensity in services that people receive."
At its lowest point in April, use of hospital services was about three-quarters of baseline, but it rebounded by the end of June to 95% of normal, said John Rex, the company's chief financial officer. Use of outpatient and physician services fell to 60% of normal, Rex said, but was above 90% of the baseline by the end of June.
With profits booming because of depressed demand for health care, the company's UnitedHealthcare health insurance division has pledged to address "imbalances" through a number of measures including premium rebates, cost-sharing waivers and grace periods for customer payments.
Overall, the company said it has provided $1.5 billion in direct customer and consumer support thus far, and pledged Wednesday another $1 billion in future rebates.
During the second quarter, enrollment in fully insured health plans at UnitedHealthcare declined by about 150,000 people, to just over 8 million. Most customers in this category are employers that hire UnitedHealthcare to assume financial risk for the medical cost of employee health plans.