Rise of UnitedHealth

Lisa A. Tomaszewski, James Russo

,
Michael Sheehan

Physician's Money Digest, March31 2004, Volume 11, Issue 6

BusinessWeek

The earnings of UnitedHealthGroup, Inc, have risen 26% annuallyover the past 10 years. William W.McGuire, MD, who took over as CEOof UnitedHealth in 1991, was recentlynamed a 2003 Managerof the Year. The former pulmonologisthas turned what was a regional healthmaintenance organization into one ofthe most diversified health service companies.Its goal is to offer something foreverybody and identify lucrative niches.A diverse portfolio of plans grew theircustomer base by almost 10% to 50 million,creating the nation's largest healthservice company. Members are able tosign up for a preferred-provider organizationif they don't like the restrictionsof an HMO plan. Members can also signup for a special drug discount card ifthey belong to AARP. UnitedHealth hasalso created a program that tracks theperformance of cardiology centers, givingpatients the ability to identify thebest places for treatment. The expectedearnings growth rate of 33% ($1.8 billion)for 2003 may slow to 22% in 2004due to growing cost containmentsamong its customers. Nevertheless,UnitedHealth Group is likely to remain amodel of success.