United Healthcare

Company Overview:

Company History: UnitedHealth Group is a publicly traded company that offers health related products and services to about 70 million people through 4 business segments and approximately 100 subsidiaries. The company has about 58,000 employees. The Health Care Services segment of UnitedHealth Group includes the lead insurance company (United Healthcare Insurance Company) which is headquartered in Hartford, Connecticut, as well as Ovations (a company that specializes in health care for people age 50 and over) and AmeriChoice (which provides health services to state Medicaid, Children’s Health Insurance Programs (CHIP) and other government-sponsored health care programs.UnitedHealthcare offers a comprehensive array of consumer-oriented health benefit plans and services for the public sector, small and mid-sized employers, and individuals nationwide. For some of its products UnitedHealth assumes risk as an insurance company, for others it performs administrative services, but the risk stays with the customer. Small employer groups are more likely to purchase risk-based products because they are generally unable or unwilling to bear a greater potential liability for health care expenditures whereas many large groups prefer the Administrative Services Only option. UnitedHealthcare also offers a variety of non-employer based insurance options for purchase by individuals, which are designed to meet the health coverage needs of consumers and their families. UnitedHealthcare offers its products through affiliates that are usually licensed as insurance companies or as health maintenance organizations, depending upon a variety of factors, including state regulations. UnitedHealthcare’s product strategy attempts to promote consumer choice, broad access to health professionals, use of data and science to promote better outcomes. UnitedHealthcare arranges for discounted access to care through more than 520,000 physicians and other care providers, and 4,700 hospitals across the United States. UnitedHealthcare’s distribution system consists primarily of insurance representatives and direct sales and Internet sales for the individual market; insurance representatives are used in the small employer group market; and representatives and other consultant-based or direct sales are employed for large employer and public sector groups. Direct distribution efforts are generally limited to the individual market, portions of the large employer group and public sector markets, and cross-selling of specialty products to existing customers. Ovations provides health and well-being services for individuals age 50 and older, addressing their needs for preventive and acute health care services as well as for services dealing with chronic disease and other specialized issues for older individuals. Ovations uses distribution methods that include direct marketing to consumers on behalf of its key clients — including AARP, the nation’s largest membership organization dedicated to the needs of people age 50 and over, state and U.S. government agencies and employer groups. In 1998, UnitedHealth signed a 10 year contract with AARP to provide supplemental Medicare supplement and other supplemental coverage to AARP members. AmeriChoice, through its affiliates, provides network-based health and well-being services to beneficiaries of state Medicaid, Children’s Health Insurance Programs (CHIP), and other government-sponsored health care programs. The Uniprise segment of the business delivers health care and well-being services nationwide to large national employers, individual consumers and other health care organizations through three related business units: Uniprise Strategic Solutions (USS), Definity Health and Exante Financial Services (Exante). USS delivers its services to large national employers. Definity Health provides consumer-driven health plans to employers and their employees. At the end of 2006, USS and Definity Health served approximately eleven million individuals. Exante (a banking subsidiary) delivers health-care-focused financial services for consumers, employers and providers of health care. Uniprise also offers its transaction processing services to various intermediaries and health care entities. Most Uniprise products and services are delivered through Uniprise affiliates. Uniprise specializes in management of large-volume transactions, large-scale benefit design and innovative technology solutions. Uniprise processes approximately 270 million medical benefit claims each year and responds to about 50 million service calls each year. Uniprise provides its services for independent health plans and third-party administrators, as well as for most of the commercial health plan consumers served by UnitedHealthcare. Uniprise also maintains Internet-based administrative and financial systems for customers, physicians and employers. At the end of 2006, USS served approximately 405 employers (including about 180 of the Fortune 500 companies). Definity Health’s products include high-deductible consumer-driven benefit plans coupled with health reimbursement accounts (HRAs) or health savings accounts (HSAs), and are offered on a self-funded and fully insured basis. Definity Health is a national leader in consumer-driven health benefit programs and at the end of 2006, its products were provided to more than 18,000 group health plans. Exante Financial Services provides health-based financial services for consumers, employers and providers. These financial services are delivered through Exante Bank, a Utah-chartered industrial bank. These financial services include HSAs that consumers can access using a debit card. Exante’s health benefit card programs include electronic systems for verification of benefit coverage and eligibility and administration of Flexible Spending Accounts (FSAs), HRAs and HSAs. Exante also provides extensive electronic payment and statement services for health care providers and payers. The Specialized Care Services (SCS) companies offer specialty health and wellness services and resources to specific customer markets nationwide. These products and services include employee benefit offerings, provider networks and related resources focusing on behavioral health and substance abuse, dental, vision, disease management, complex and chronic illness and care facilitation. SCS’s products are marketed under several different brands through three strategic markets: the employer market for both UnitedHealth Group customers and unaffiliated parties; the payer market for UnitedHealth Group health plans, independent health plans, third-party administrators and reinsurers; and the public sector segment for Medicare and state Medicaid offerings. The Ingenix segment offers database and data management services, software products, publications, consulting services, outsourced services and pharmaceutical development and consulting services on a nationwide and international basis. Ingenix’s customers include more than 5,000 hospitals, 250,000 physicians, 1,500 payers and intermediaries, more than 200 Fortune 500 companies, and more than 150 life sciences companies, as well as other UnitedHealth Group businesses. Ingenix is engaged in the simplification of health care administration with information and technology that helps customers accurately and efficiently document, code and bill for the delivery of care services. Ingenix’s products and services are sold primarily through a direct sales force focused on specific customers and market segments across the pharmaceutical, biotechnology, employer, government, hospital, physician and payer market segments. Ingenix’s products are also supported and distributed through an array of alliance and business partnerships with other technology vendors. The Ingenix companies are divided into two operating groups: information services (that help with health care administration) and pharmaceutical services (that assist with the collection and analysis of data) for clinical trials and regulatory processes. During 2006, the company managed approximately $92 billion in aggregate health care spending on behalf of the constituents and consumers served. A primary focus of the company is on improving health care systems by simplifying the administration of health care delivery, and providing relevant, actionable data that physicians, other health care providers, consumers, employers and additional participants in health care can use to make more informed decisions. A key company goal is to UnitedHealth’s core competencies in technology to improve to health care and make it more affordable. UnitedHealth derives its revenues from premiums on risk-based products; from fees it collects for its management, administrative, technology and consulting services; from sales of a wide variety of products and services related to the broad health and well-being industry; and investment and from other income it generates from its various business activities. The UnitedHealth Group, INC. was incorporated in Minnesota in 1977 and the current name was adopted in 2000. The United Healthcare Insurance Company was incorporated in 1972 in Illinois. After several transactions, it adopted its current name and became a Connecticut company. UnitedHealth Group has grown through a large number of acquisitions since its origination. Currently questions about the company’s stock option pricing in a number of past years are being investigated by the SEC and other regulatory agents.
Principle Sales Methods: UnitedHealthcare’s distribution system consists primarily of insurance representatives and direct sales and Internet sales for the individual market; insurance representatives are used in the small employer group market; and representatives and other consultant-based or direct sales are employed for large employer and public sector groups. Direct distribution efforts are generally limited to the individual market, portions of the large employer group and public sector markets, and cross-selling of specialty products to existing customers.

Health Business: UnitedHealthcare offers a comprehensive array of consumer-oriented health benefit plans and services for the public sector, small and mid-sized employers, and individuals nationwide. For some of its products UnitedHealth assumes risk as an insurance company, for others it performs administrative services, but the risk stays with the customer. Small employer groups are more likely to purchase risk-based products because they are generally unable or unwilling to bear a greater potential liability for health care expenditures whereas many large groups prefer the Administrative Services Only option. UnitedHealthcare also offers a variety of non-employer based insurance options for purchase by individuals, which are designed to meet the health coverage needs of consumers and their families. UnitedHealthcare offers its products through affiliates that are usually licensed as insurance companies or as health maintenance organizations, depending upon a variety of factors, including state regulations. UnitedHealthcare’s product strategy attempts to promote consumer choice, broad access to health professionals, use of data and science to promote better outcomes. UnitedHealthcare arranges for discounted access to care through more than 520,000 physicians and other care providers, and 4,700 hospitals across the United States. UnitedHealthcare’s distribution system consists primarily of insurance representatives and direct sales and Internet sales for the individual market; insurance representatives are used in the small employer group market; and representatives and other consultant-based or direct sales are employed for large employer and public sector groups. Direct distribution efforts are generally limited to the individual market, portions of the large employer group and public sector markets, and cross-selling of specialty products to existing customers. Ovations provides health and well-being services for individuals age 50 and older, addressing their needs for preventive and acute health care services as well as for services dealing with chronic disease and other specialized issues for older individuals. Ovations uses distribution methods that include direct marketing to consumers on behalf of its key clients — including AARP, the nation’s largest membership organization dedicated to the needs of people age 50 and over, state and U.S. government agencies and employer groups. In 1998, UnitedHealth signed a 10 year contract with AARP to provide supplemental Medicare supplement and other supplemental coverage to AARP members. AmeriChoice, through its affiliates, provides network-based health and well-being services to beneficiaries of state Medicaid, Children’s Health Insurance Programs (CHIP), and other government-sponsored health care programs.