UnitedHealth Group (Minnetonka, MN) has posted blow-out third-quarter financial results. But the big news is the company lowered its full-year 2012 medical cost trend projection to between 5% and 6%–a 50 basis point reduction from its prior expectation. UnitedHealth chief financial officer Dan Schumacher summed it up during a conference call with investors.
Stepping into 2012, we did have an expectation of higher utilization as compared to 2011. We are actually seeing that, although I will tell you it is more moderate than we thought. We saw a surge in the first quarter utilization, and then that moderated from the second quarter forward….We are seeing a little better inpatient….We are seeing a little bit more moderate pharmacy utilization, particularly in the space of Hep C….Outpatient is actually a little bit higher than our expectation.
The company continues to expect commercial risk membership to be down as it maintains pricing discipline in a competitive marketplace, officials say. Commercial risk gross margin will also feel the squeeze.