UnitedHealth Group Outline
As Health care industry continue to evolve and change due to growing demands, many health care organizations have taken several strategic approaches to address health care issues and challenges. These approaches include factors that impact efficiency, costs, health quality, accessibility, competency, and sustainability to improved health outcomes. According to a recent article, “By 2025, some US$1.5 trillion in annual revenue will change hands across the U.S. healthcare industry, with a corresponding shift of nearly $400 billion in profit.” (Subramanian, Godla, Dankert, 2016). UnitedHealth Group is the nation’s largest health insurance provider that provides managed health care in a technology-driven health care system. Their approach to innovation creates numerous opportunities for improving health care and accessibility as well as sustaining their revenue and profitability in the market. Though challenges arise from emerging trends in the industry, UnitedHealth Group continues to overcome these issues. In this outline, we will analyze history and position of UnitedHealth Group along with its current innovation efforts, competition, and risks in the industry.
Analysis
UnitedHealth Group Incorporated is one of the nation’s top leading health organization that provides health and well-being health care across all 50 states and 130 other countries. Focusing on diversified efforts, they operate between two business platforms which consists of United Healthcare and Optum Services. United Healthcare is the largest insurance carrier in America providing health care coverage and benefits. Optum is a leading collaborative care segment that provides information and technology enabled health services between OptumRx, Optum Health, and OptumInsight. Their top three competitors include Humana, Aetna, and Cigna. UnitedHealth group pursues a consistent path towards innovation and technology. Their investments in research and development costs “more than $3.3 billion in technology and innovation” to address health care cost, quality, and access. (UnitedHealth Group, 2018). Their strategic approach when it comes to innovation is highly prioritized when it comes to improving the health care system which realigns with their company’s brand vision to valuing ingenuity in problem solving. According to Magretta, Porter’s second test of strategy is when “distinctive value proposition is meaningful if activities are different from rivals.” (2012). This is most applicable when it comes to competitor’s advantage. Dealing with such competition entails risks and challenges that can take affect into promoting value-based care. These risks include mergers, regulations, and enrollment participation all in which connects to a lack of creative problem solving. As a global health provider, UnitedHealth group strongly enforces their Anticorruption policy that also includes U.S. Foreign Corrupt Practices Act which applies to their business partners, vendors, and employees to be in strong compliance with laws and regulations.
Personal History of Creativity
As a child growing up, imagination was a big part of utilizing creativity to overcome personal problems and challenges in daily life. After being able to understand how to apply imagination into generating new ideas, it was clear that it could be applied to different aspects of strategic planning and innovation. As Isaksen, et.al mentions, “using creative process is imperative to create momentum”, or in other words the utilization of personal imagination can lead to different stages of creative problem solving. (2011). Aside from imagination, there are numerous ways in which organizations can apply creative problem solving to their risks assessments and potential challenges. According to Magretta, ““strategy is about making choices along many dimensions, not just one.” (2012). As trends continue to emerge in the marketplace, organizations have to come up with strategic approaches that will keep up with oncoming changes. Different ways such as brainstorming, understanding challenges, or even understanding and applying people’s interpersonal skills when it comes to problem solving. When it comes to Health Services industry, creative problem solving is very vital to constant change in supply and demand. This is especially important when it comes to improving health outcomes and overall well-being in a persisting aging population.
History and position of the business within the industry
UnitedHealthcare initially founded in 1977 was later named UnitedHealth Group in 1998. The company’s headquarters located in Minnetonka, Minnesota with their CEO David S. Wichmann and serves about 85 million people in the U.S including its global locations. Their global footprint has provided integrated health benefits, services, and support to international workforce employers along with strengthening their health care systems. These locations include Brazil, India, Ireland, Philippines, United Kingdom, and as well as virtually online. The company stands at an annual revenue worth $207.6 billion and owns about 15.5% of market share. Currently, UnitedHealth Group is the top largest health company in revenue. According to Brumley, UnitedHealth Group remarkably turned $55.2 billion worth of revenue into per-share profit of $3.04 and increase of 13.3% top line year-over-year with a growth of 28% operational earnings in the last quarter of March (2018). They continue to remain in a strong position in the health care industry showing increasing numbers in stock growth. Their key suppliers include Ariba Platform, Health Information Trust Alliance, Enterprise Governance, Risk & Compliance, and Delegated Entity Compliance Program.
Their top three competitors include Humana, Aetna, and Cigna. Humana is a health and well-being company that was founded in Louisville, Kentucky in 1961. The company includes segments such as group and specialty, retail, and healthcare services. Under each segment consists of insurance benefits tied particularly into each category. Their current market share stands at 4.25% and generating about $55 billion in annual revenue. Humana’s competitive advantage in innovation includes B-Cycle, Stay Smart Stay Healthy, Availity, Inc. and Healthcare Budget Planner. On the other hand, Aetna is another top healthcare benefits company that was founded in Hartford, Connecticut in 1853. Its longstanding company has operated with three segments including Health Care, Group Insurance, and large case pensions. Similar to Humana, all segments offer health insurance products related to medical, dental, pharmacy, group life, behavioral management, etc. Their current market share stands at 4.47% and generating about $60.7 billion in annual revenue. Their current subsidiaries include ActiveHealth Management, Aetna Student Health Agency, Cofinity, Medicity, and Meritain Health. Aetna’s approach to innovation includes deploying their Innovation Lab to focus on patient outcomes. Lastly, Cigna is a health services company that promotes being more than just a health insurance company. They were formed in 1982 through INA Corporation and Connecticut General Corporation. Together with its insurance subsidiaries they provide medical, dental, disability, and accident insurance through segments such as Global Health care and supplemental benefits, group disability and life, and other operations and corporate. Their current market share stands at 2.53% while generating about $43.8 billion in annual revenue. One of Cigna’s innovation approach include their claiming project to develop an easier claiming digital experience for customers.
UnitedHealth Group strives to remain as a top leading health organization that will drive practical innovation in the health care industry. They continue to build upon their three core foundational competencies which include Clinical Insight, Technology, Data & Information. Their innovative approach allows them to attack and face biggest challenges in health care today.
History of Innovation
UnitedHealth Group has invested in a huge amount of money directly towards the innovation department. They were ranked No. 1 in innovation for nine consecutive years along with being top-ranking company in FORTUNE’s 2018 World’s Most Admired Companies. (UnitedHealth Group, 2018). In efforts towards continuous experiment, research, and development of products and services, they have various opportunities at hand that demonstrates meaningful solutions to improved health outcomes. These innovative approaches include my Claims Manager, Link, Rally, Block chain technology, PreCheck MyScript, New Prenatal Care model, Telehealth Visits, and many more. One approach to their growth strategy is by partnering with Quest Diagnostics to focus on collaboration of value-based programs. According to UnitedHealth Group (2018), “working together will strategically change support through real-time data sharing”. They are expected to deploy their services as of January 1, 2019. UnitedHealth Group is committed towards developing forward-thinking solutions in a modernized health care system.
Risk Analysis
As a top leading health company, UnitedHealth Group actively tackles and overcomes and difficulties and challenges that comes its way. But nevertheless, risks remain within their reach as trends and changes continue to emerge in today’s generation. Risks such as mergers, regulations, and enrollment participation can impact UnitedHealth Groups effort to solving current problems. This can include barriers to funding innovation such as changes in health reforms and regulations. According to a report, “decreasing rate of Medicare Advantage threatens the revenue growth of UnitedHealth Group.” (Zhu,2013). In addition, UnitedHealth Group pulled out from selling individual coverage on public health exchanges that is part of ACA in 2016. This led competitors to have advantage to a broader network of trusted doctors and providers as consumers seek for insurance coverage in the market that is based on their needs. Competitors have begun mergers with companies such as CVS, Walmart, and Express Scripts Holding to take advantage of Affordable Care Act changes and increase profit and revenue. As a result, UnitedHealth Group face risks in losing market share and loss of enrollments.
Recommendations/Conclusion
In conclusion, UnitedHealth Group proves to be a longstanding and successful company when it comes to facing issues in the modernization of health care system. UnitedHealth group prioritizes its efforts in improving health outcomes through innovative technology and expansion of services. In efforts to realign with patient-centered outcomes, UnitedHealth Group is focused on value-based programs to shift away from fee-for-service medicine. According to Morse, “operational growth was driven by a strong performance in the Medicare Advantage and Medicaid markets.” (2018, para. 1). They continue to grow past their top competitors and consistently improve health care quality, accessibility, and affordability through their core competencies. Given current issues and challenges in the health care industry, UnitedHealth Group continues to overcome any obstacles that come their way. Recommendation for action to go beyond their current capabilities is to understand their challenges when it comes to re-entering the public insurance market. The aging population is growing rapidly and people are gaining more access to information online leading them to be more precise in their decision-making process. By exploring this avenue, UnitedHealth Group may have the advantage of growing its market share and more enrollment participants. Although UnitedHealth Group may withstand withdrawal from Obamacare public exchange, a different perspective to the potential outcome for the market can change in their benefit.
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