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UnitedHealth Group Inc. (UNH) is gearing up to release its second-quarter results before the market opens on Tuesday, July 17, and one of the areas analysts will be focusing on is the company's medical loss ratio, or the percentage of premium dollars spent on claims and activities to improve the quality of healthcare.

In an interview, Jefferies LLC analyst David Windley said he thinks that UnitedHealth will report a medical loss ratio that is in line with or better than expectations. Windley estimates a medical loss ratio of 81.7% for the Minnetonka, Minn.-based company. Lower MLRs are better for payers.

He noted that in the first quarter, publicly traded hospitals reported accelerating revenue per adjusted admission, which is good for hospitals but should have been bad for payers such as UnitedHealth, because if hospital costs rise for payers, their profit margins potentially go down.

"We didn't really see evidence of that the [first-quarter] results for payers," Windley said. He said he is looking for evidence that the anecdotal metrics from the publicly traded hospitals "are not widespread."

Windley projected UnitedHealth would report adjusted earnings per share of $3.01 on revenue of $56 billion for the three months ended June 30. Analysts, on average, are expecting adjusted EPS of $3.04 on revenue of $56.1 billion, according to Bloomberg.

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UnitedHealth Group includes healthcare benefits provider UnitedHealthcare and health services business Optum. Among Optum's units is pharmacy care services company OptumRx.

Windley said he will be looking for commentary during the earnings call on the competitive landscape in light of Inc.'s (AMZN) deal to buy online pharmacy PillPack and how OptumRx is preparing for competition from a new entrant such as Amazon.

Amazon on June 28 said it was buying PillPack, which delivers medications in presorted-dose packaging and coordinates refills and renewals. The companies did not disclose terms of the deal, but The Wall Street Journal reported the price tag was about $1 billion.

Shares of UnitedHealth were trading at $257.23 on Monday afternoon, down 0.6%. The stock is up 16.7% in 2018 and u37.6% over the past 12 months. --Katherine Ross contributed to this article

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