United Healthcare 2010 Annual Report Download - page 46

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Health Benefits
The revenue growth in Health Benefits for 2010 was primarily due to growth in the number of individuals served
by our public and senior markets businesses and commercial premium rate increases reflecting underlying
medical cost trends, partially offset by Medicare Advantage premium rate decreases. In 2010, revenues were
$41.2 billion for UnitedHealthcare Employer & Individual; $35.9 billion for UnitedHealthcare Medicare &
Retirement; and $10.4 billion for UnitedHealthcare Community & State. In 2009, revenues were $40.8 billion for
UnitedHealthcare Employer & Individual; $32.1 billion for UnitedHealthcare Medicare & Retirement; and $8.4
billion for UnitedHealthcare Community & State.
Health Benefits earnings from operations and operating margins for 2010 increased over the prior year due to
factors that increased revenues described above, continued cost management disciplines on behalf of our
commercial and governmental customers, a general moderation in year-over-year growth in demand for medical
services and the effect of increased net favorable development in prior period medical costs.
OptumHealth
Increased revenues in OptumHealth for 2010 were driven by new business development in large scale public
sector programs and increased sales of benefits and services to external employer markets, partially offset by a
loss of some smaller specialty benefits customers.
The operating margin for 2010 decreased due to growth in lower margin public sector business, new market
development and startup costs and costs related to the implementation of the Mental Health Parity Act.
Ingenix
Increased revenues in Ingenix for 2010 were primarily due to the impact of acquisitions and growth in health
information technology offerings and services focused on cost and data management and regulatory compliance.
The decrease in operating margin for 2010 was primarily due to a goodwill impairment and charges for a
business line disposition of certain i3-branded clinical trial service businesses. In addition, increases in the mix of
lower margin business, continued margin pressure in the pharmaceutical services business and continued
investments in new growth areas also contributed to the decrease in operating margin in 2010. See Note 6 of
Notes to the Consolidated Financial Statements for further detail on the goodwill impairment.
Prescription Solutions
The increased Prescription Solutions revenues for 2010 were primarily due to growth in customers served
through Medicare Part D prescription drug plans by our UnitedHealthcare Medicare & Retirement business and
higher prescription volumes. Intersegment revenues eliminated in consolidation were $14.5 billion and $12.6
billion for 2010 and 2009, respectively.
Prescription Solutions operating margin for 2010 decreased due to changes in performance-based pricing
contracts with Medicare Part D plan sponsors, which were partially offset by prescription volume growth,
increased usage of mail service and generic drugs by consumers and effective operating cost management.
2009 RESULTS OF OPERATIONS COMPARED TO 2008 RESULTS
Consolidated Financial Results
Revenues
Consolidated revenues for 2009 increased primarily due to the increase in premium revenues in the Health
Benefits reporting segment. The increase in premium revenues was primarily due to strong organic growth in
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