United Health & Johnson & Johnson beat Q1 predictions

By Catherine Sturman
US health insurer, United Health has posted positive first quarter results, where its total revenue rose by 13.3% to over $55bn. Keeping medical costs...

US health insurer, United Health has posted positive first quarter results, where its total revenue rose by 13.3% to over $55bn.

Keeping medical costs under control despite rampant demand, the company has undertaken a number of mergers and acquisitions to further its offerings to consumers, such as its $4.9bn acquisition of the DaVita Medical Group.

The incorporation of new technologies and development of its health unit, Optum, has also provided a 29% rise in earnings, where the company is looking to launch several clinics and medical centres long-term.

"If you look forward to the future, I think you're going to see the real strong implications of technology on helping to curtail health care costs," UnitedHealth Group's CEO, David Wichmann: informed CNBC.

"I think the systems of the benefits and the health systems broadly going to more value-based mechanisms will drive greater efficiency and effectiveness in health care," he said.

Regarding the company’s Optum unit, Wichmann added: "Optum has data of around 200mn people on the administrative side, and then another 100mn or so in terms of medical records."

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"That is used by us for AI, machine learning, advancing ... technologies broadly in health care and making a difference on the predictive values of understanding who may get sick and under what circumstances we need to help them with their care.”

Johnson and Johnson have announced similar successes, with sales of $20bn in the first quarter of 2018, an increase of 12.6% in the same period last year.

Operational sales results increased 8.4%, domestic sales by 6.1% and international sales by 19.9%.

"Our Pharmaceutical business continues to deliver robust growth and we are pleased with the improvement in our Consumer business,” explained Alex Gorsky, Johnson & Johnson Chairman and Chief Executive Officer.

“In our Medical Devices businesses, we continue to make investments to improve performance."

With strong performance across a number of pharmaceutical brands, with worldwide pharmaceutical sales reaching $9.8bn, new US tax laws have also positively impacted both companies’ capabilities within its research and development operations and invest more in the development of new health products.


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