Businessmodel of UnitedHealth Group

Customer Segments

UnitedHealth has a segmented market business model, with customer segments that have slightly different needs. The company targets its offerings at employers, governments, and individuals.

Value Proposition

UnitedHealth offers three primary value propositions: accessibility, innovation, and brand/status.

The company creates accessibility by making its services widely available. It provides its offerings to individuals, employers, military service members, retirees and their families, and Medicare and Medicaid beneficiaries.

The company embraces innovation as a part of its culture. It invests almost $2.9 billion annually on innovation and technology. It has also been cited by Fortune as the most innovative managed healthcare firm.

The company has established a powerful brand due to its success. It ranks in the top 10 of the Fortune 500. It contracts with over one million physicians and care professionals, and 6,000 hospitals and other care facilities nationwide. It provides its services to more than 70 million individuals in all 50 U.S. states and in over 125 other countries. It has high customer satisfaction levels. In 2011, J.D. Power & Associates gave it the highest employer satisfaction rating for self-insured health plans; and in 2010, it was named the “Readers Choice” winner in 2010 for “Best Health Plan Provider” in Business Insurance Magazine. Lastly, it has won many honors, including the following:

• Recognition as one of the “World’s Most Admired Companies”in the insurance and managed care sector by Fortune six years in a row
• Frost & Sullivan’s 2016 North America Company of the Year Award for the population health management market
• Ranking #1 on the Healthcare Informatics (HCI) 100, a list of the top health care IT companies based on U.S. revenues
• The award for Best Outsourcing Provider from the International Customer Management Institute
• Ranking as #1 in the health care industry section of The Civic 50 three years in a row ### Channels

UnitedHealth’s main channel is its direct sales team. The company promotes its offering through its website, social media pages, direct marketing, and attendance of conferences.

Customer Relationships

UnitedHealth’s customer relationship is primarily of a self-service, automated nature. Customers utilize its services while having limited interaction with employees. The company’s website provides answers to frequently asked questions. That said, there is a personal assistance component in the form of phone and e-mail support.

Key Activities

UnitedHealth’s business model entails designing, developing, and delivering its services to customers.

Key Partners

UnitedHealth’s key partners are the suppliers that provide it with the materials and services it needs to run its operations. It also collaborates with a diverse range of companies, non-profits, and other partners to develop solutions for a simpler and more cost-effective health care system.

Key Resources

UnitedHealth’s main resources are its human resources, who include over 18,500 nurses and physicians that provide healthcare services and the customer service employees that provide support.

Cost Structure

UnitedHealth has a cost-driven structure, aiming to minimize expenses through significant automation. Its biggest cost driver is medical costs. Other major drivers are in the areas of operating costs, a fixed expense, and cost of products sold, a variable expense.

Revenue Streams

UnitedHealth has four revenue streams: revenues it generates from premiums, from the sale of products, from the sale of services, and from investment and other income.