Becker's Hospital Review

12 CFO / FINANCE UnitedHealth's earnings double in Q2 as patients deferred elective procedures By Morgan Haefner U nitedHealth Group saw its earnings increase significantly during the sec- ond quarter of fiscal year 2020 as pa- tients deferred elective procedures due to the COVID-19 pandemic. Five things to know from UnitedHealth's sec- ond-quarter results released July 15: 1. UnitedHealth recorded $9.2 billion in earn- ings from operations in the second quarter ended June 30, nearly double the $4.7 billion it posted in the same period last year. United- Health said the spike is "due primarily to the unprecedented, temporary deferral of care." e company said the results will be offset in future quarters as patients resume deferred care and future COVID-19 costs arise, as well as through assistance measures the company has already taken. 2. UnitedHealth's revenue grew about 2.5 per- cent to $62.1 billion in the second quarter of this year, but its operating costs fell more than 5 percent in the same period. UnitedHealth said revenue gains reflected growth in its Op- tum health services and UnitedHealthcare health insurance businesses. 3. e company's UnitedHealthcare health insurance unit saw notable revenue gains in its Medicare and Medicaid businesses in the second quarter, which were up 7 percent year over year. Year to date, UnitedHealthcare has served an additional 600,000 members in gov- ernment-sponsored programs. 4. OptumHealth, which focuses on care de- livery, served 97 million people in the second quarter of this year, up 2 million from the pre- vious year. Revenue per consumer served grew 25 percent year over year, which UnitedHealth said was driven by continued growth in val- ue-based care arrangements. 5. UnitedHealth ended the second quarter with $6.6 billion in net earnings, double the $3.3 bil- lion it posted in the same period last year. n Fitch: Nonprofit hospital margins unlikely to recover until COVID-19 vaccine By Ayla Ellison M edian financial ratios for nonprofit hospitals and health systems im- proved before the COVID-19 pandemic, which will provide some fi- nancial cushion to withstand financial pressures, according to a July 16 report from Fitch Ratings. The medians for 2019, based on 2018 data, showed the nonprofit hospital and health system sector stabilized after a period of operational softness. The medians for 2020, based on 2019 audited data, are expected to show im- provement in operating margins driven by higher revenues, cost reductions and increased cash flow, Fitch said. "We expect the 2020 medians will represent peak performance levels until the sector is able to recover from the effects of the pandemic on operations," Fitch said. The credit rating agency said the nonprofit healthcare sector is unlikely to stabilize until a COVID-19 vaccine is widely available. "The sector has shown considerable resiliency over the years, weathering significant events such as the Great Recession and legislative changes to funding," Fitch said. "However, the coronavirus presents entirely new and fundamental challenges for the sector in the short term in the form of volume and revenue disruption, and over the medium to longer term with expected deterioration of individual provider payor mixes and possible changes in the behavior of healthcare consumers." n 7 hospitals buying land for expansions By Alia Paavola H ere are seven hospitals or health systems that purchased or an- nounced plans to buy land from Jan. 1 to June 30. 1. Fort Lauderdale, Fla.-based Broward Health purchased 7 acres of land in Parkland, Fla., for $14 million. It is exploring its expansion options. 2. Altamonte Springs, Fla.-based AdventHealth purchased 22 acres of land in South Hillsborough County for a new hospital and medical offices. In early January, the health system also purchased 103 acres for a future expansion in New Smyrna Beach, Fla. 3. Duarte, Calif.-based City of Hope purchased a 190,000-square-foot build- ing and 11 acres of land as part of a $1 billion investment in a new hospital and cancer research center in Irvine, Calif. 4. Ohio State University's Wexner Medical Center purchased in February a 2.5-acre site in Columbus, Ohio, to support an expansion. 5. The Medical University of South Carolina in Charleston purchased 87 acres of land near the North Carolina border to build a hospital. 6. Livingston (Mont.) HealthCare purchased 100 acres of land next to its campus. Officials said the land could be used to expand its medical presence or provide much-needed housing in the area to help recruit and retain staff. 7. Orlando (Fla.) Health bought 80 acres of land in Lakeland, Fla., to build a medical campus with a 360-bed hospital. n

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