There's a lot of money in health care, and it shows in the growth at UnitedHealth Group.

In 1992, when the Star Tribune published its first list of the largest publicly traded firms in Minnesota, the roster included 100 companies that collectively generated $102.4 billion in sales.

Last year, UnitedHealth Group handily beat the tally on its own, with $157.1 billion in revenue. In terms of profit and market capitalization, today's United also is bigger than the 25-year-old list of companies.

Analysts cite scores of acquisitions, an early jump on the high-deductible bandwagon and two reorganizations as key chapters in United's growth story. The moves helped make United both the nation's largest health insurer and a company that's increasingly focused on its fast-growing health care services business.

"Its size is reflective of the market space that it operates in, which is health care," said John Penshorn, senior vice president at UnitedHealth Group. "The U.S. health economy is $3 trillion."

In the early 1990s, the predecessor company to UnitedHealth Group was growing quickly through acquisitions of regional health insurers, said Sheryl Skolnick, an analyst with Mizuho Securities USA. The company is now known for health insurance, but growth as a health plan at the time was a bit of a departure from United's origins.

Initially, United was a health IT company that developed software that other HMOs could use to run their operations. When the firm went public with its stock in 1984, not a penny of its prior-year revenue of about $7 million came from premiums, Penshorn said.

By the late 1980s, United launched a pharmaceutical benefits management (PBM) business that included a network of mail-order and retail pharmacies plus health plan designs for pharmacy benefits. The sale of the division in 1994 was pivotal, because it set up United's acquisition of MetraHealth Companies Inc. for $1.65 billion.

With the deal, United became a national player in the health insurance market.

"Selling the PBM allows you to pivot and become national on the benefits side, because it created the capital you were able to use," Penshorn said.

Skolnick called the deal "pretty close to a disaster" in the short-term because premiums across the industry declined, precisely as medical use shot upward. But she said it positioned United for a bigger and better future.

In 1998, United restructured into five units focused on distinct customer groups: small to midsize employers; national employers; Medicare; technology; and health and wellness services.

"That was a fundamental change in how the company operated," said Gail Wilensky, a member of the United board of directors. The change "put the company in a position where it could take advantage of some of the growth potential that was out there."

The restructuring was implemented by future Chief Executive Stephen Hemsley, who had been recruited by then-CEO William McGuire from United's accounting firm, Arthur Andersen.

In 2002, United made an acquisition that pushed the insurer further into the market for Medicaid, the state-federal health insurance program for low-income Americans. Over the years, more states have hired insurers to manage care for Medicaid beneficiaries, and United has grown in tandem.

All along, United had a big business serving Medicare beneficiaries, spurred in part by an 18-year-old marketing arrangement with AARP, the lobbying group for older Americans.

Medicare became an even bigger deal around 2005 with the acquisition of PacifiCare Health Systems, which also had a big Medicare business. Plus, the deal positioned United to grow with the 2006 launch of the federal government's new Medicare Part D program, which provides prescription drug benefits through private insurers.

Skolnick, the stock analyst, credits United with being early to the development of high deductible health plans that could be paired with health savings accounts. The plans have been important making health insurance "more affordable to employers, and to provide real financial incentives for beneficiaries to choose wisely," she said.

In October 2006, McGuire was out as CEO at UnitedHealth Group following months of controversy over favorably timed stock options. Hemsley was named as McGuire's replacement, and guided the company's reorganization into the two key businesses it operates today — the health benefits business called UnitedHealthcare, and the health services business called Optum.

"They grew their way through organic growth, but more importantly they made very particular strategic acquisitions and divestitures," Skolnick said. "And they always had from very early on an understanding of the need for data and analytics and technology."

Christopher Snowbeck • 612-673-4744