First quarter 2010 Health Benefits revenues increased $965 million or 5 percent year-over-year to $21.6 billion. The revenue advance was driven by growth of 1.0 million people served across the public and senior markets in the past year and rate increases reflecting underlying medical cost trends, offset by a decrease of 0.9 million people served in the commercial benefits market, principally reflecting the significant decline in U.S. employment over the past year. Health Benefits earnings from operations for the first quarter of 2010 increased year-over-year to $1.7 billion. The first quarter operating margin improved to 7.8 percent due to continued operating cost discipline and appropriate medical cost management on behalf of government and commercial customers in the latter part of 2009 and the first quarter of 2010. The Company is moving to concentrate its marketing and product positioning in the benefits markets around its strongest benefits brand - UnitedHealthcare. Consumer branding has become increasingly important in health care, and there are opportunities to better leverage the widely recognized UnitedHealthcare brand. These actions align with efforts to increasingly share leverageable infrastructure across the benefits businesses to further improve performance and reduce operating costs. The Public and Senior Markets businesses of AmeriChoice and Ovations will retain their distinctive market-facing strategies, supported by the UnitedHealthcare brand. The Company expects the in-market transitions to UnitedHealthcare branding to occur over the next several quarters. UnitedHealthcare revenues of $10 billion decreased 3 percent year-over-year due to a decrease in consumers served. First quarter 2010 results included growth of 170,000 people in fee-based programs offset by a decrease of 275,000 people in risk-based benefit plans. Absent employment attrition at continuing clients, the business would have posted sequential growth in people served in the first quarter. UnitedHealthcare's medical care ratio of 79.1 percent decreased from 81.5 percent in the first quarter of 2009 due to a lighter-than-expected influenza season, the impact of adverse weather on patients' use of the health system for non-urgent care, a greater mix of higher deductible products - which typically incur greater medical expense later in the calendar year, increasingly effective clinical engagement programs and prior period favorable development reflecting lower medical costs incurred in the latter part of 2009. First quarter Ovations revenues of $9.3 billion grew $873 million or 10 percent year-over-year. This strong growth included notable revenue advances in the Medicare Advantage, Medicare Supplement and Part D prescription drug businesses. The Company's senior health business now serves nearly 9 million individuals in total, having increased its customer base in its primary offerings by 665,000 people in the past twelve months. In Medicare Advantage, the Company brought its services to 215,000 more seniors in first quarter 2010 and to 310,000 over the past twelve months, an 18 percent year-over-year increase. Growth in active Medicare Supplement products continued, with the number of seniors served increasing by 115,000 or 4 percent in the past twelve months, including 35,000 people in the first quarter of 2010. At March 31, 2010, 4.5 million people participated in the Company's stand-alone Part D prescription drug plans, an increase of 240,000 people in both the first quarter and over the past twelve months. First quarter 2010 AmeriChoice Medicaid revenues of $2.3 billion increased $425 million or 22 percent year-over-year, driven by strong membership growth. During the past twelve months, Medicaid programs grew by 350,000 people, including 145,000 in the first quarter, to a total of 3 million people. Year-over-year organic membership growth of 13 percent was driven by continued geographic expansion and an overall increase in Medicaid program participation due to the economic downturn.

Through its Health Services businesses, the Company provides consumer services, software, pharmaceutical and specialty benefit management, financial capabilities dedicated to health care, health data and analytics, consulting and other services to a broad variety of customers in the United States and international markets. Through these offerings, these businesses seek to improve health system performance for customers and their constituents.

First quarter 2010 Health Services combined revenues increased $762 million or 14 percent to $6 billion. The revenue advance was driven by growth in consumers served, particularly through pharmaceutical benefit management programs, as well as increasing revenues from public sector specialty benefit offerings and health care technology software and services. Health Services combined earnings from operations of $334 million decreased $13 million or 4 percent year-over-year in the first quarter. The operating margin decreased to 5.6 percent in the first quarter, due to growth in lower margin public sector business, changes in contract terms for Medicare Part D plan sponsors in the pharmacy benefit market, and investments in areas of expected future growth.

OptumHealth is a national leader in health and wellness services. Employers, payers and public sector organizations use OptumHealth behavioral benefit solutions, clinical care management, financial services and specialty benefits such as dental and vision. OptumHealth helps consumers navigate the health care system, finance their health care needs and better achieve their health and well-being goals.

OptumHealth revenues grew $85 million or 6 percent year-over-year to $1.4 billion in the first quarter of 2010, driven by growth from large scale public sector programs and external employer offerings. First quarter 2010 earnings from operations of $151 million decreased by $7 million or 4 percent year-over-year, and the operating margin declined by 120 basis points to 10.7 percent. These decreases reflect the impact of the economic downturn, including loss of higher margin UnitedHealthcare risk-based business, partially offset by earnings growth from expanding services in the public sector and external employer markets. OptumHealth Financial Services, the Company's dedicated health banking organization, ended the first quarter serving 2 million consumer accounts, up 10 percent year-over-year. Assets under management grew 28 percent to $1 billion at March 31, 2010. In the first quarter, OptumHealth Financial Services electronically transmitted more than $9 billion in medical payments for 46 million claims through its care provider connectivity network, an increase of 27 percent year-over-year. This health care modernization program simplifies the payment process and reduces costs.

Ingenix is a leader in the field of health care information, services and consulting, serving physicians, hospitals and other health care providers, large employers and governments, health insurers and other benefits payers and pharmaceutical companies.

Ingenix first quarter 2010 revenues increased $120 million or 31 percent to $505 million. Ingenix reported record sales bookings, driven by demand for its information technology, payment cycle management offerings and consulting services focused on cost management, regulatory compliance and innovation. The Ingenix contract revenue backlog grew $509 million or 29 percent year-over-year to $2.3 billion at March 31, 2010, led by growth in the government and payer sectors. Ingenix first quarter earnings from operations of $53 million increased $4 million or 8 percent year-over-year. The first quarter operating margin decreased to 10.5 percent, primarily due to business mix changes, continued pressure in the pharmaceutical services business, and investments in new growth areas.

Prescription Solutions offers a comprehensive array of pharmacy benefit management and specialty pharmacy management services to employer groups, union trusts, seniors and commercial health plans.

Prescription Solutions first quarter 2010 revenues grew $557 million or 16 percent year-over-year, driven by growth in people served and related higher prescription volumes. Earnings from operations of $130 million decreased by $10 million or 7 percent year-over-year and the operating margin decreased to 3.2 percent, which is generally consistent with 2008 results. Previously anticipated changes in performance-based pricing contracts with Medicare Part D plan sponsors impacted earnings and operating margin in the quarter, which were partially offset by membership growth, increased use of mail service and generics by consumers and effective operating cost management.

Source UnitedHealth Group