United Healthcare 2014 Annual Report Download - page 29

As we expand and operate our business outside of the United States, we are presented with challenges that differ
from those presented by acquisitions of domestic businesses, including challenges in adapting to new markets,
business, labor and cultural practices and regulatory environments. Adapting to these challenges could require us
to devote significant senior management and other resources to the acquired businesses before we realize
anticipated synergies or other benefits from the acquired businesses. These challenges vary widely by country
and may include political instability, government intervention, discriminatory regulation, and currency exchange
controls or other restrictions that could prevent us from transferring funds from these operations out of the
countries in which our acquired businesses operate or converting local currencies that we hold into U.S. dollars
or other currencies. If we are unable to manage successfully our non-U.S. acquisitions, our business, prospects,
results of operations and financial position could be materially and adversely affected.
Foreign currency exchange rates and fluctuations may have an impact on our shareholders’ equity from period to
period, which could adversely affect our debt to debt-plus-equity ratio, and our future revenues, costs and cash
flows from international operations. Any measures we may implement to reduce the effect of volatile currencies
may be costly or ineffective.
Our sales performance will suffer if we do not adequately attract, retain and provide support to a network
of independent producers and consultants.
Our products and services are sold in part through independent producers and consultants with whom we do not
have exclusive contracts and for whose services and allegiance we must compete intensely. Our sales would be
materially and adversely affected if we were unable to attract, retain and support such independent producers and
consultants or if our sales strategy is not appropriately aligned across distribution channels. Our relationships
with producers could be materially and adversely impacted by changes in our business practices and the nature of
our relationships to address these pressures, including potential reductions in commissions.
A number of investigations have been conducted regarding the marketing practices of producers selling health
care products and the payments they receive and have resulted in enforcement actions against companies in our
industry and producers marketing and selling those companies’ products. These investigations and enforcement
actions could result in penalties and the imposition of corrective action plans, which could materially and
adversely impact our ability to market our products.
Unfavorable economic conditions could materially and adversely affect our revenues and our results of
operations.
Unfavorable economic conditions may impact demand for certain of our products and services. For example,
high unemployment can cause lower enrollment or lower rates of renewal in our employer group plans and our
non-employer individual plans. Unfavorable economic conditions have also caused and could continue to cause
employers to stop offering certain health care coverage as an employee benefit or elect to offer this coverage on a
voluntary, employee-funded basis as a means to reduce their operating costs. In addition, unfavorable economic
conditions could adversely impact our ability to increase premiums or result in the cancellation by certain
customers of our products and services. These conditions could lead to a decrease in our membership levels and
premium and fee revenues and could materially and adversely affect our results of operations, financial position
and cash flows.
During a prolonged unfavorable economic environment, state and federal budgets could be materially and
adversely affected, resulting in reduced reimbursements or payments in our federal and state government health
care coverage programs, including Medicare, Medicaid and CHIP. A reduction in state Medicaid reimbursement
rates could be implemented retrospectively to apply to payments already negotiated or received from the
government and could materially and adversely affect our results of operations, financial position and cash flows.
In addition, state and federal budgetary pressures could cause the affected governments to impose new or a
higher level of taxes or assessments for our commercial programs, such as premium taxes on insurance
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