Nothing lasts forever! And coronavirus is no exception. According to UnitedHealth Group Chief Executive Officer Andrew Witty, much of the negative impact of the Covid-19 pandemic would fade by next year.
- Optimistic expectations: UnitedHealth, which owns the largest U.S. insurer and a growing portfolio of care delivery businesses, has told investors it expects a net negative impact of $1.80 per share from Covid-19 this year. Witty said he expects “the bulk” of that impact will be gone by next year, although he said it was too early to quantify how much and he couldn’t rule out surprises.
- UnitedHealth’s Q1 sales: U.S. health insurers mostly reported robust earnings for the first quarter yet were conservative with guidance for the rest of 2021, citing uncertainty amid the pandemic. “Our Plan A assumption is that Covid-19 impacts start to recede in 2022,” Witty said in an appearance at the Bank of America Securities 2021 Virtual Health Care Conference.
- Contribution towards society: UnitedHealth and other insurers waived some cost-sharing last year and rebated money to customers as typical medical care use dropped steeply early in the pandemic. Insurers have cautioned that they may see patients return to care with more advanced diseases because of the deferrals.
- Unfavorable situations: Before the start of 2021, UnitedHealth said it expected net earnings of $16.90 to $17.40 per share this year, which included about $1.80 per share in potentially unfavorable effects from increased COVID-19 treatment and testing costs, the residual effect of patients deferring care in 2020 and unemployment.
- A ray of silver lining: Among the effects of the pandemic, the company has cited increased Covid-19 testing and treatment costs, offset by deferral of other care. UnitedHealth has previously said the majority of the negative impact this year would be seen in the second half. “Obviously in the last 18 months, the whole system’s been a little distorted by the Covid-19 situation,” Witty said.