UnitedHealthGroup Profits Increase 21% for the 4th Quarter of 2011– Business Intelligence Algorithms Continue to Create La
Posted Jan 19 2012 12:55pm
One more the mergers and acquisitions speak out again on how health insurance companies have diversified their portfolios and are no longer “just an insurance company” with numerous subsidiaries both in the Health IT area and even others in what you might consider “unrelated” businesses. Here’s one example below with a diversified interest with a new division created to distribute hearing aids and offer incentives for those in certain areas of the us to sign up for insurance plans. I sometimes wonder how other insurers view this?
Here’s another example of what one might consider a business outside of what we might normally consider a related business with low incoming housing investments in New Mexico. One thing to keep in mind today is all the aggregated data that flows and the algorithms and SQL statements that bring some of this together. Data is big business.
Just a couple weeks ago we read about the investment with mobile health and again we venture down into the data business here again as the Optum division which has many subsidiaries has a huge focus on data, and part of the renamed group was the old “Ingenix” company that has consulted and provided data services for years and last year settled their case with the AMA with short paying providers for out of network services.
This kind of brings me around again to what I call the “Alternative Millionaire’s Tax” with companies that buy and sell data and this seems to be a good place for a mention here as the Optum Division has been making money for years with aggregating and selling prescription and other data. With big profits as such we certainly could entertain a license and tax situation for those making billions on the data selling business. As a short comparison from another Healthcare company, Walgreens has estimated their data selling business to be valued at just under $800 million, so again something to give some thought to as hospitals, providers, and patients struggle to afford medical care today.
Another good article to read about the over sell and naïve and gullible nature of the US with both government and consumers,read what Nanex has to say as they are the folks that monitor and study rogue algorithms in the stock market and look for indicators of the “next flash crash”. A couple paragraphs are below and will the SEC be suckered in to this huge expense of programmers who want to make big dollars writing code convince a naïve and gullible SEC? It’s all over the place with digital illiteracy, steroid marketing and algorithms for huge profits only and they have teeth. At a certain point in time we might need to REALLY think about the value of some of the data we analyze today and the cost and this is worth a mention as this is the big growth area for United, algorithms and software analytics via consulting services. It is also worth a note that United last year hired the former Assistant Attorney General for the State of Minnesota for their general counsel.
Below is one example of the algorithm/software business as the company created a clearinghouse business and collaborated with an medical records company to integrate the services with Epic and of course this means more data revenue for the company and puts a bit of stress on other smaller existing clearinghouse businesses in the US as well.
One more thing too is let’s not forget that they also own a bank with over $1 billion on deposit with health savings accounts and I would guess this also leaves them open to lend money on monies held here and somewhat compete with other banks. As you can read in the quote below the funds are largely generated by employers, in other words large US corporations so they seem to go hand in hand, right?
“OptumHealth offers three types of HSAs, as well as tax-advantaged health care savings and spending accounts, debit-card services, benefits administration services, and payment products. About three-quarters of the bank’s 1.6 million accounts are employer-generated, while the other quarter are individual accounts.”
There’s also the Chinese investment the company bought early in 2010.
If you were to stop and look you might also notice one more subsidiary that can consult with biotech and device companies to introduce new products to the FDA and you know when you think about it they might just have a subsidiary to handle the entire process from FDA approval all the way down to provider reimbursement too.
One other related item too is the purchase of physicians groups which is growing and the acquisition of Monarch in Orange County is one big example of buying a huge managed care group.
Again, in summary with such large profits and a lot coming from the data end of the business, this looks like one company where licensing and taxing the data sold for huge profits could fit and there are many more as Hedge Funds, Facebook and tons of other companies are cashing in royally and this all leads to bottom line profits for running algorithms on servers 24/7 that you can’t see, touch or talk to as far as the consumer is concerned, but automated algorithms for data mining and selling are yielding huge profits for corporate USA while as consumers we are becoming “data chasers” to fix a lot of the flawed data that is out there today. It’s a good idea today to read up and see how the corporate USA scene has changed tremendously due to the huge array of mergers and acquisitions as companies are not the same ones they were 2 to 3 years ago by any means. BD
UnitedHealth Group (NYSE:UNH) today reported fourth quarter and full year 2011 results, highlighted by strong enrollment and revenue growth in each of UnitedHealthcare’s benefits businesses and strong revenue growth at all Optum business units. Full year and fourth quarter 2011 net earnings were $4.73 per share and $1.17 per share, respectively. Cash flows from operations were $7 billion in 2011.
The Company continues to estimate 2012 revenues in the range of $107 billion to $108 billion and net earnings in the range of $4.55 to $4.75 per share.