United Healthcare 2013 Annual Report Download - page 49

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Income Tax Rate
The increase in our effective income tax rate for 2012 was due to the favorable resolution of various tax matters
in 2011, which lowered the 2011 effective income tax rate.
Reportable Segments
UnitedHealthcare
UnitedHealthcare’s revenue growth in 2012 was primarily due to growth in the number of individuals served,
commercial premium rate increases related to expected increases in underlying medical cost trends and the
impact of lower premium rebates.
UnitedHealthcare’s earnings from operations for 2012 increased compared to the prior year primarily due to the
factors that increased revenues combined with an improvement in the medical care ratio that was driven by
effective management of medical costs and increased favorable medical reserve development. The favorable
development for 2012 was driven by lower than expected health system utilization levels and increased
efficiency in claims handling and processing.
Optum. Total revenues increased in 2012 due to business growth and 2011 acquisitions at OptumHealth, partially
offset by a reduction in pharmacy service revenues related to reduced levels of UnitedHealthcare Medicare Part
D prescription drug membership and related prescription volumes.
Optum’s earnings from operations and operating margin for 2012 increased compared to 2011 due to
improvements in operating cost structure stemming from advances in business simplification, integration and
overall efficiency and revenue growth in higher margin products.
The results by segment were as follows:
OptumHealth
Revenue increases at OptumHealth for 2012 were primarily due to market expansion, including growth related to
2011 acquisitions in integrated care delivery, and strong overall business growth.
Earnings from operations for 2012 and operating margins increased compared to 2011 primarily due to gains in
operating efficiency and cost management as well as increases in earnings from integrated care operations.
OptumInsight
Revenues at OptumInsight for 2012 increased primarily due to the impact of growth in compliance services for
care providers and payment integrity offerings for commercial payers, which was partially offset by the June
2011 divestiture of the clinical trials services business.
The increases in earnings from operations and operating margins for 2012 reflect an improved mix of services
and advances in operating efficiency and cost management.
OptumRx
The decreases in OptumRx revenues in 2012 were due to the reduction in UnitedHealthcare Medicare Part D plan
participants.
OptumRx earnings from operations and operating margins for 2012 decreased primarily due to decreased
prescription volume in the Medicare Part D business and investments to support growth initiatives, which were
partially offset by earnings contributions from specialty pharmacy growth and greater use of generic medications.
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