United Healthcare 2015 Annual Report Download - page 37

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following discussion should be read together with the accompanying Consolidated Financial Statements and
Notes to the Consolidated Financial Statements thereto included in Item 8, “Financial Statements.” Readers are
cautioned that the statements, estimates, projections or outlook contained in this report, including discussions
regarding financial prospects, economic conditions, trends and uncertainties contained in this Item 7, may
constitute forward-looking statements within the meaning of the PSLRA. These forward-looking statements
involve risks and uncertainties that may cause our actual results to differ materially from the expectations
expressed or implied in the forward-looking statements. A description of some of the risks and uncertainties can
be found further below in this Item 7 and in Part I, Item 1A, “Risk Factors.”
EXECUTIVE OVERVIEW
General
UnitedHealth Group is a diversified health and well-being company dedicated to helping people live healthier
lives and making the health system work better for everyone. Through our diversified family of businesses, we
leverage core competencies in advanced, enabling technology; health care data; information and intelligence; and
clinical care management and coordination to help meet the demands of the health system. We offer a broad
spectrum of products and services through two distinct platforms: UnitedHealthcare, which provides health care
coverage and benefits services; and Optum, which provides information and technology-enabled health services.
We have four reportable segments across our two business platforms, UnitedHealthcare and Optum:
• UnitedHealthcare, which includes UnitedHealthcare Employer & Individual, UnitedHealthcare Medicare &
Retirement, UnitedHealthcare Community & State and UnitedHealthcare Global;
• OptumHealth;
• OptumInsight; and
• OptumRx.
Further information on our business and reportable segments is presented in Part I, Item 1, “Business” and in
Note 14 of Notes to the Consolidated Financial Statements included in Part II, Item 8, “Financial Statements.”
Business Trends
Our businesses participate in the United States, Brazilian and certain other international health economies. In the
United States, health care spending has grown consistently for many years and comprises approximately 18% of
gross domestic product. We expect overall spending on health care to continue to grow in the future, due to
inflation, medical technology and pharmaceutical advancement, regulatory requirements, demographic trends in
the population and national interest in health and well-being. The rate of market growth may be affected by a
variety of factors, including macro-economic conditions and regulatory changes, which have impacted and could
further impact our results of operations.
Pricing Trends. To price our health care benefit products, we start with our view of expected future costs. We
frequently evaluate and adjust our approach in each of the local markets we serve, considering all relevant
factors, such as product positioning, price competitiveness and environmental, competitive, legislative and
regulatory considerations. Our review of regulatory considerations involves a focus on minimum MLR
thresholds and the risk adjustment and reinsurance provisions that impact the small group and individual markets.
We will continue seeking to balance growth and profitability across all of these dimensions.
The commercial risk market remains highly competitive in both the small group and large group markets. We
expect broad-based competition to continue as the industry adapts to individual and employer needs amid reform
changes. Health Reform Legislation included an annual, nondeductible insurance industry tax (Health Insurance
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