United Healthcare 2004 Annual Report Download - page 28

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26 UNITEDHEALTH GROUP
Uniprise earnings from operations in 2004 were $677 million, representing an increase of 11% over
2003. Operating margin for 2004 improved to 20.1% from 19.6% in 2003. Uniprise has expanded its
operating margin through operating cost efficiencies derived from process improvements, technology
deployment and cost management initiatives that have reduced labor and occupancy costs in its
transaction processing and customer service, billing and enrollment functions. Additionally, Uniprise’s
infrastructure can be scaled efficiently, allowing its business to grow revenues at a proportionately higher
rate than the associated growth in operating expenses.
Specialized Care Services
Specialized Care Services is a portfolio of specialty health and wellness companies, each serving a
specialized market need with a unique offering of benefits, networks, services and resources. Specialized
Care Services revenues during 2004 of $2.3 billion increased by $417 million, or 22%, over 2003. This
increase was principally driven by an increase in the number of individuals served by United Behavioral
Health, its behavioral health benefits business, Dental Benefit Providers, its dental services business,
and Spectera, its vision care benefits business; rate increases related to these businesses; and incremental
revenues related to businesses acquired since the beginning of 2003 of approximately $100 million.
Earnings from operations in 2004 of $485 million increased $100 million, or 26%, over 2003.
Specialized Care Services’ operating margin increased to 21.1% in 2004, up from 20.5% in 2003. This
increase was driven primarily by operational and productivity improvements within Specialized Care
Services’ businesses and consolidation of the production and service operation infrastructure to enhance
productivity and efficiency and to improve the quality and consistency of service, partially offset by a
business mix shift toward higher revenue, lower margin products.
Ingenix
Ingenix is a leader in the field of health care data analysis and application, serving pharmaceutical
companies, health insurers and other payers, physicians and other health care providers, large employers,
and governments. Ingenix revenues in 2004 of $670 million increased by $96 million, or 17%, over 2003.
This was driven primarily by new business growth in the health information and clinical research
businesses.
Earnings from operations in 2004 were $129 million, up $54 million, or 72%, from 2003. Operating
margin was 19.3% in 2004, up from 13.1% in 2003. The increase in earnings from operations and
operating margin was primarily due to growth and improving gross margins in the health information
and clinical research businesses.