Where UnitedHealth is making its money

UnitedHealth Group is mostly known as one of the country's largest health insurance carriers, but the massive conglomerate is increasingly making its money from things that have nothing to do with health insurance.

The bottom line: UnitedHealth doesn't just want to be your health insurer. It wants to be your doctor, your outpatient surgery center, your mail-order pharmacy and your drug price negotiator.

By the numbers: UnitedHealthcare is still UnitedHealth's most profitable unit, generating more than $10 billion in operating earnings in 2019 as a major carrier of employer and Medicare Advantage plans.

• But UnitedHealth's Optum subsidiaries are close behind. Optum collected more profit in the fourth quarter of 2019 ($3 billion) than UnitedHealthcare ($2.1 billion). And that's not new: Optum has had a stronger Q4 than UnitedHealthcare in each of the past five years.
• The last three months of the calendar year are usually the worst for health insurers. They pay out more for medical claims as more people reach their deductibles and out-of-pocket maximums.

Between the lines: The most profitable segment within Optum is OptumRx, which is part of the pharmacy benefit manager oligopoly that controls how drugs are paid for and which drugs are covered.

• Rebates negotiated from drug companies, and other behind-the-scenes fees, have turned OptumRx into a cash cow — often at the expense of employers and their workers.
• Optum's other units also are growing. They include a bank for health savings accounts, physician practices, urgent care clinics, surgery centers and almost any conceivable piece of technology and consulting used in health care.

Go deeper: UnitedHealth's political and financial heft just keeps growing