Analysis of United Health Care Group - Report Example

Analysis of UnitedHealthCare Group & Section Number of Introduction UnitedHealthcare is known as one of the leading and largest healthcare group that has been operating in the United States to serve the people of US. As the group has been serving millions of Americans, therefore it attempts to ensure that all products and services are provided within the best interest of all the people in US. A part from this the group also focuses on enhancing the access that can enable the Americans to take advantages of all the benefits offered by the group. Furthermore, the group has also been highly involved in creating and developing the products and services that can allow the patients and Americans to afford the offered services and products more easily. Moreover, the innovative technologies, innovation and advanced techniques are also being adopted by the group to serve the Americans for the betterment of their health. The management paper below tends to discus and analyse all the key facts and figures about the UnitedHealthcare Group in detail. The main areas and aspects that will be included in the below report will include the facts of the group’s history, its products and services, its organizational functions and management, the number of enrolled physicians, doctors, specialists and hospital and the financial performance. This will allow understanding of how the UnitedHealthcare Group has been operating and what are the key and critical success factors on which the group is based on. United Healthcare Group In the year of 1977, the United Healthcare Corporation was established as a single owner company. But during the period of time, the company managed to acquire other Health Maintenance Organization (HMOs) within the United Sates. The positive attitude of the owner and dedication of team members allowed the United Healthcare to expand its operations over the time and drive smoothly towards the growth and vision of the company. Within the period of 7 years, the company managed to acquire 11 but running Health Management Organizations (UHC, 1994). Sooner it was realized that to manage, maintain and expand the organizational operation more quickly and efficiently, the company will have to go public. In the year of 1984, the company finally listed as the public company in the stock exchange. This enabled the company to move quicker towards the expansion of its operations and acquire more Health Management Organizations within the US. In the year of 1985, the company as public limited made its first acquisition and bought the shares of Share Development Corporation which was based in Indiana. This acquisition enabled the company to expand its membership of total enrolees by 167,000. At the other end, the total value of the company’s stock reached to $60 million in total. By the end of the 1985, the United Healthcare managed to partnership with the total of 22 subsidiaries in 22 states which were managing the total member of 822,400. In the following year of 1986, the company acquired the Peak Health Care Inc which was based on Colorado and paid the total of $83 million towards the acquisition. By the end of 1987, the total revenue of the group was recorded over $440 million but the other end the expenses of the group was noted as higher than the total revenue which left the group with the loss of $15.8 million. Based on in efficiency of the Peak Health Care Inc, the group decided to sell the newly acquired corporation and sold it for $41.5 million. Approximately 1.5 members were successfully enrolled with the United Healthcare Group by the end of 1990. At that point the United Healthcare was known as the leading and beigest organization in the United States that was serving the millions of patients across the country. Also, the members of the United Healthcare group included that were based in the major and biggest states i.e. Des Moines, Salt Lake City, Atlanta and Chicago etc. In the initial year of 1990s the group acquired the Physicians Health with the total of $84 million which was based on Ohio. In the same year of 1992, the group acquired the assets of another Health Management Organization called HealthPro Inc (UHC, 1994). While looking at the growth rate of the organization, the management in 1993 decided to reconstruct and manage its product and services portfolios. According to the executives and directors of the organization, this will allow the organization to become more competitive and enhance its efficiencies and capabilities within the best interest of all the stakeholders. The movement of reconfiguring the products and services portfolio was also to target the programs that were being offered by the governments of the different states and federals and public sector organizations too. In the month of May 1993, the United Healthcare again made acquisition of HMO America Inc with the value of $370 million. It is observed that the HMO was one of the largest HMO’s in the Chicago with the total members of 300,000. Later it was decided that the health plan that was based on Des Moines should be sold out which was managing the members of 26,000 (UHC, 1994). At this stage, the United Healthcare was observed to be strongest market players in terms of market shares, revenue and profitability. And this was all due to the demand of the services offered by the company which were not available anywhere in the country and the lowest and competitive prices of all the medications and treatments. And by the end of 1993, the United Healthcare started hitting the national spotlight as it was highlighted by the local and international media. This also helped the group to keep improving its efficiency and keep driving towards the expansion of its operations across the country. The fastest growth in the healthcare industry made the United Healthcare Group the leader of the industry. Since the company initially started its operations till today, the Group has been at the right at all times. Although during its lifecycle, the group had to go through from some bad patches but the right decision at right and dedication of the team members enabled the group to become one of the largest and leading health care organizations in the United States of America (UHC, 1994). It is noted that currently the United Healthcare serves approximately 70 million people across the country. And in order to serve the millions of people every year, the group has created huge network which includes approximately 5,147 hospitals, 80,000 dentists and 661,257 healthcare professionals and physicians. The pharmaceutical management program that has being offered by the group is to design and implemented to ensure that the people across the country and all states take the benefits of it. According to the group statistics, this program helps around 13 million Americans to afford the drugs (UHS, 2011). Financial Analysis While analysing the financial aspects of the United Healthcare Group over the period from 2008 to 2010, it has been noted as compared to the 2008, the total revenue of the group increase by almost 16% but the most important element that has been observed that the gross profit margin of the group boosted with very high rate. In the year of 2008, the total gross profit was recorded as the $6,244,000,000 which increased by 405% with two years and reached to $25,314,000,000. It seems that during the period of time, the group efficiently managed all the costs of revenue. But when it comes to the operating expenses, it increased by 49.24% with two years, and this is understood that if the revenues are increasing, the operating expenses will increase too. The control of all the expenses paid off in the end and the net income of the group also increased by just over 55% with two years of time period (YahooFin, 2011). Also, when it comes to the financial health of the group, it has been noted that the total assets of the group also increased by significant rate within the same financial period. As compared to 2008, the total of assets of 2010 increased by nearly 13%. At the other end, the total liabilities increased by 6.28%. And as compared to the total assets of the group, the total debts of the group are recorded as the total of 60%. And this clearly shows that in long run, the group will be able to sustain itself (YahooFin, 2011). The strong financial position of the group has also enabled it to increase its share prices over the period. Every acquisition was increasing the share prices of the United Healthcare. And this can be noted from the fact that in the February of 1990, the stock prices of the group was recorded as $10.75 per shares, which shoot to $49.74 in the same month of 2011 (YahooFin, 2011). Conclusion While constructing the above management report, it has been observed that the United Healthcare group has become the leader of the health care industry in US. It past performance, the current potentiality and future plans clearly shows that in future, the group will go larger. From every single aspect, the organization performances have been observed to be outstanding. Since its first operation till today, the growth rate of the group has been outstanding and the results and outcomes are surely within the best interest of all the stakeholders. References UHC. (1994). United Healthcare Corporation. Retrieved May 21, 2011, from http://www.fundinguniverse.com/company-histories/United-HealthCare-Corporation-Company-History.html UHS. (2011). About Us. Retrieved May 21, 2011, from http://www.uhc.com/about_us.htm YahooFin. (2011). Income Statement. Retrieved May 21, 2011, from http://finance.yahoo.com/q/is?s=UNH+Income+Statement&annual YahooFin. (2011). Balance Sheet. Retrieved May 21, 2011, from http://finance.yahoo.com/q/bs?s=UNH+Balance+Sheet&annual YahooFin. (2011). Historical Prices. Retrieved May 21, 2011, From http://finance.yahoo.com/q/hp?s=UNH&a=02&b=26&c=1990&d=04&e=21&f=2011&g=m Read More