United’s $14 billion year

https://docs.google.com/spreadsheets/d/1X7-NPrOJXPMt2i2dIMkMFTrQ0208wvCyuEk84RJebRk/edit#gid=1436564969

https://www.axios.com/newsletters/axios-vitals-40a9c349-fbf1-434b-96d4-fee0598d1254.html?utm_source=newsletter&utm_medium=email&utm_campaign=newsletter_axiosvitals&stream=top

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UnitedHealth Group blew the doors off the opening of earnings season this week, reporting a better-than-expected fourth quarter, Bob writes.

  • Its health insurance unit kept more of the premium dollars, and its pharmacy benefit manager, OptumRx, anchored all of the Optum companies.

By the numbers: United reported a $13.8 billion profit on $242 billion of revenue in the full-year 2019.

  • The only other health care company that posts higher annual profits, in absolute numbers, is Johnson & Johnson. J&J reports next week.

Follow along: Our earnings tracker is updated. Tell Bob (bob@axios.com) what you’re seeing and thinking about.

 

9 health systems with strong finances

https://www.beckershospitalreview.com/finance/9-health-systems-with-strong-finances-120919.html

Here are nine health systems with strong operational metrics and solid financial positions, according to recent reports from Fitch Ratings, Moody’s Investors Service and S&P Global Ratings.

Note: This is not an exhaustive list. Health system names were compiled from recent credit rating reports and are listed in alphabetical order.

1. Advocate Aurora Health, a 27-hospital system with dual headquarters in Downers Grove, Ill., and Milwaukee, has an “Aa3” rating and positive outlook with Moody’s. The health system has a favorable liquidity position, low leverage, and healthy margins, according to Moody’s. The credit rating agency expects the health system to continue to benefit from its position as a market leader within two large service areas.

2. Morristown, N.J.-based Atlantic Health System has an “Aa3” rating and stable outlook with Moody’s. The five-hospital system has healthy liquidity and solid operating margins, according to Moody’s. The credit rating agency expects strong patient volume, low reliance on governmental funding and other factors to continue to support Atlantic Health System’s financial metrics.

3. Fountain Valley, Calif.-based MemorialCare has an “AA-” rating and stable outlook with Fitch and S&P. The health system has a strong balance sheet and financial profile, according to Fitch. The credit rating agency expects MemorialCare’s cash flow to improve due to its market strategy, which focuses on revenue diversification.

4. Portland-based Oregon Health & Science University has an “Aa3” rating and stable outlook with Moody’s and an “AA-” rating and stable outlook with S&P. OHSU, which is the only academic medical center in Oregon, has favorable operating performance, strong philanthropy and its clinical offerings draw patients from across Oregon and neighboring states, according to Moody’s. The credit rating agency expects OHSU’s revenue to continue to grow.

5. Albuquerque, N.M.-based Presbyterian Healthcare Services has an “Aa3” rating and stable outlook with Moody’s. The health system has strong revenue growth, good market share for acute care services and a favorable balance sheet. The credit rating agency expects the health system’s insurance plan, which is already a dominant health plan in New Mexico, to continue to grow.

6. Appleton, Wis.-based ThedaCare has an “AA-” rating and stable outlook with Fitch. The health system has solid cash flow and a leading market position in a stable service area, according to Fitch. The credit rating agency expects ThedaCare’s operating performance to continue to improve.

7. Livonia, Mich.-based Trinity Health has an “AA-” rating and stable outlook with Fitch and S&P. The health system has a significant market presence in several states and a strong financial profile, according to Fitch. The credit rating agency expects the health system’s operating margins to continue to improve.

8. Chapel Hill-based University of North Carolina Hospitals has an “Aa3” rating and stable outlook with Moody’s. UNC Hospitals, part of UNC Health Care System, has an excellent market position and strong financial performance, according to Moody’s. The credit rating agency expects UNC Hospitals to continue to grow patient volumes and maintain strong financial performance.

9. Philadelphia-based University of Pennsylvania Health System has an “Aa3” rating and stable outlook with Moody’s. The health system has a strong market position, and substantial investments in facilities will allow the health system to capitalize on its prominent reputation and wide patient draw, according to Moody’s.

 

Lehigh Valley Health Network’s net income more than triples to $115M

https://www.beckershospitalreview.com/finance/lehigh-valley-health-network-s-net-income-more-than-triples-to-115m.html

Image result for lehigh valley health network headquarters

Allentown, Pa.-based Lehigh Valley Health Network saw its net income more than triple from $35.1 million in fiscal year 2018 to $115.3 million in fiscal year 2019, according to financial documents released Dec. 4. 

The health system saw its revenue increase year over year to $2.96 billion in the 12 months ended June 30. In the same period in 2018, the system reported revenue of $2.73 billion.

In fiscal year 2019, Lehigh Valley Health reported expenses of $2.86 billion, up from $2.68 billion in 2018.

Expense growth resulted from several factors, including an increase in salaries and wages and supply costs.

Lehigh Valley Health System attributed the net income increase to cutting back on contract workers and overtime and reducing costs on readmissions and contracts, according to The Morning Call. 

 

UnitedHealth projects major revenue boost in 2020 on the back of continued Optum growth

https://www.fiercehealthcare.com/payer/unitedhealth-projects-242b-2019-revenue-offers-2020-guidance-262b-revenue?mkt_tok=eyJpIjoiWkdObE5HRTJNMlptT0RkayIsInQiOiJiaFk3K2s2TDl5OGNrMmJ5XC9EWWEyb3VacEVjUGpOUVhrdE5wQmxkaTN6TUNTbkVJaUJlTnl3eldXcmRaVU1nN3k4UUhKRFEzb1B3XC9pYWNJaHVcL0NqS29QSmI4RFR1aWEwWlNNRUE2QmdqaVJINkNIa090XC9lUzMxUUpUbG1yY24ifQ%3D%3D&mrkid=959610

The outside of Optum's headquarters

UnitedHealth Group projected it will generate $242 billion in revenue in 2019 and expects to report another 7% to 8% increase in top-line growth in 2020.

The insurance group presented updated figures during its investor conference that kicked off Tuesday with officials saying they expect to increase the company’s 2020 revenue to between $260 billion and $262 billion.

They project between $21 billion and $22 billion in operating earnings in 2020.

In comparison, UnitedHealth Group generated $17.3 billion in profits on $226 billion in revenue in 2018. The company is projecting to report $19 billion in profits in 2019.

The biggest driver of growth this year has been UnitedHealth’s Optum, the company’s pharmacy benefit management and care services group. Optum revenue is projected to have increased by 11% from 2018 to 2019, earning UnitedHealth $112 billion in revenue compared to $101 billion in 2018.Optum is expected to continue to be a major growth driver for the company in its 2020 earnings projection, with UnitedHealth pegging growth to increase again between 13% and 14%. UnitedHealth executives said that Optum is expected to make up 50.5% of the company’s total after tax operating earnings this year.. 

Optum could also be the key for UnitedHealth to improve its Medicare Advantage business.

“We don’t like being third, that’s fundamentally where we landed for the year,” said UnitedHealth Group CEO David Wichmann, “Over time I think we will continue to grow and outpace the market.”

Executives said that the key to growth is to keep its networks consistent as well as pharmacists and pharmacies consistent for seniors. 

“We believe we maintain in the Medicare market a strategic cost advantage because of the capacities we have as an organization,” Wichmann said.

UnitedHealth pointed to the success of OptumCare, the company’s primary and specialty care provider.  The highest performing Medicare Advantage plans were in markets that had an OptumCare presence. Wichmann said that growing the OptumCare platform is a majority priority for UnitedHealth over the next seven years.

 

 

 

 

7 health systems with strong finances

https://www.beckershospitalreview.com/finance/7-health-systems-with-strong-finances-090919.html?oly_enc_id=2893H2397267F7G

Here are seven health systems with strong operational metrics and solid financial positions, according to recent reports from Moody’s Investors Service, Fitch Ratings and S&P Global Ratings.

Note: This is not an exhaustive list. Hospital and health system names were compiled from recent credit rating reports and are listed in alphabetical order.

1. St. Louis-based BJC Health System has an “Aa2” rating and stable outlook with Moody’s. The health system has good margins and a favorable market position, according to Moody’s.

2. Hollywood, Fla.-based Memorial Healthcare System has an “Aa3” rating and stable outlook with Moody’s. The health system has a dominant market position in the southern portion of South Broward County and above average balance sheet liquidity, according to Moody’s.

3. Broomfield, Colo.-based SCL Health has an “Aa3” rating and stable outlook with Moody’s and an “AA-” rating and stable outlook with S&P. The health system has strong operating performance and solid balance sheet measures, according to Moody’s. The credit rating agency expects the health system’s cash flow to continue to grow.

4. Seattle Children’s Healthcare System has an “Aa2” rating and stable outlook with Moody’s. The health system has consistently strong operating performance, solid liquidity measures, and a favorable reputation within a broad service area, according to Moody’s.

5 Norfolk, Va.-based Sentara Healthcare has an “Aa2” rating and stable outlook with Moody’s. The health system has a leading market position in its service area, robust balance sheet metrics and solid margins, according to Moody’s.

6. St. Louis-based SSM Health has an “AA-” rating and stable outlook with Fitch. The health system has a strong financial profile and a growing health plan, according to Fitch. The credit rating agency expects SSM to continue to grow unrestricted liquidity and sustain improved operating performance.

7. Arlington-based Texas Health Resources has an “Aa2” rating and stable outlook with Moody’s. The health system has solid financial performance, a leading market position, good coverage of moderate debt levels, and a strong cash position, according to Moody’s.

 

A Wave of Layoffs Loom for Wall Street

https://www.crainsnewyork.com/markets/wave-layoffs-looms-wall-street?utm_source=breaking-news&utm_medium=email&utm_campaign=20190909&utm_content=hero-readmore

 

 

 

Hospital profitability up after significant declines in June, Kaufman Hall finds

https://www.beckershospitalreview.com/finance/hospital-profitability-up-after-significant-declines-in-june-kaufman-hall-finds.html

Hospitals recorded profit improvements in July after posting significant year-over-year decreases in June, according to a report from financial advisory firm Kaufman Hall.

The firm found hospitals’ EBITDA margin rose 77.5 basis points month over month. Hospitals also saw their operating margins climb 105 basis points. Both measures marked the sixth month of improved hospital profitability out of the past seven months.

“While these trends generally are good news for the industry, the improvements do not necessarily mean that hospitals are achieving sufficient margins,” according to Kaufman Hall. “Also, margins of individual hospitals do not necessarily reflect those of overall health systems.”

Kaufman Hall noted that hospitals did see their volumes increase in July compared to June, which saw declines in patient volumes.

Read the full report here