United Healthcare 2014 Annual Report Download - page 38

Download and view the complete annual report

Please find page 38 of the 2014 United Healthcare annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 120

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120

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. 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 13 of Notes to the Consolidated Financial Statements included in Part II, Item 8, “Financial Statements.”
Business Trends
Our businesses participate in the U.S., Brazilian and certain other international health economies. In the U.S.,
health care spending comprises approximately 18% of gross domestic product and has grown consistently for
many years. 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, including enacted health reform
legislation in the United States, 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 new risk adjustment, risk corridor and reinsurance provisions that impact the small group and
individual markets. We will continue to balance growth and profitability across all of these dimensions. Overall,
we continue to be under pressure from ongoing market competition in commercial products and from
government payment rates.
36