UnitedHealth Group reported Thursday that it earned less than expected last quarter, citing rising medical costs and pressure on its insurance division at a time when the company is still reeling from the shocking killing of top executives last month.
UnitedHealth Group’s revenue was $100.8 billion for the fourth quarter, lower than what analysts expected but still 6.8 percent higher than the same quarter a year earlier. The company’s full-year revenue for 2024 rose to $400.3 billion. For UnitedHealthCare, its insurance division, full-year revenue rose to $298.2 billion, up 6 percent from 2023.
The results were the first for the company since UnitedHealthcare CEO Brian Thompson was shot in front of a Midtown Manhattan hotel.
The murder unleashed public outrage aimed at large health insurance companies and at the lack of access to health care Denial of coverage and insurance claims.
Some shareholders urged UnitedHealth to issue a report on its practices that “limit or delay access to health care.”
Frustrations with claims, including delays in receiving care and coverage, were “key areas for us to work hard to improve,” UnitedHealth Group CEO Andrew Whitty said on a call with analysts Thursday.
Khalifa L Mr. Thompson Not named yet. Mr. Whitty did not share details about filling out the post, nor did he directly address the recent shareholder campaign.
But he and other executives discussed the loss of Mr. Thompson at the top of the call.
“He has dedicated his time to helping make the health system work better for all the people who oversee the service,” Mr Whitty said.
UnitedHealth’s results, which disappointed Wall Street, in many ways reflect broader trends and ongoing issues for the industry. For several quarters, U.S. health insurers have taken a hit to their profits from rising medical expenses and tightening government payment policies.
John Ricks, the company’s chief financial officer, pointed to government rate cuts in the payment system for Medicare Advantage, the private insurance arm for federal coverage for people 65 and older. UnitedHealth has a big business in these Medicare plans.
Medicare Advantage’s performance across the industry has declined recently, in part due to regulatory changes aimed at preventing overcharging and following increased health spending among some older populations.
Mr. Whitty also said there are costs associated with changes to Medicaid, the federal insurance program for the poor.
The company’s medical cost ratio, a measure of the cost of providing care, was higher than expected last quarter, which could add fuel to investor concerns that rising costs of providing care may remain, said John Boylan, an analyst. At Edward Jones, an investment firm.
However, UnitedHealth kept its full-year guidance for 2025 intact, unchanged by the latest press. Analysts at Morgan Stanley said in a research note that the company has set “reasonably prudent targets” for the year.
“Overall, our view is that United is well positioned to navigate the evolving healthcare landscape because of its diversified business model,” Mr. Boylan said.
UnitedHealth stock fell 6 percent on Thursday as investors digested weaker-than-expected results. UnitedHealth’s results, often seen as a bell for performance across the industry, have sent shares of its rivals lower, including CVS Health, parent of insurance company Aetna.
UnitedHealth Group also owns Optum RX, one of the nation’s largest pharmacy benefit managers, which employers and government programs hire to oversee prescription drug benefits.
Optum RX has faced scrutiny from regulators over concerns that it raised drug prices, prioritizing its own interests above those of patients, employers and taxpayers. Just this week, the Federal Trade Commission issued a a report Detailing how PBMS can inflate drug costs.
The agency criticized Optum RX and two other major players — CVS Health’s Caremark and Cigna’s Express Scripts — for raising prices on generic drugs for cancer, heart disease and other diseases that amounted to 1,000 percent of the national average costs.
Mr. Whitty, CEO of UnitedHealth Group, defended Optum’s practices, stressing that 98 percent of the rebates were passed on to customers. He said that by 2028, all rebates will be passed on. Drug prices in the United States, Mr. Whitty argued, are “extremely high de novo relative to any other price in the world,” shifting the blame to drug companies.
“The PBM acts on behalf of the ultimate payer — the employer, the union, and the state,” Mr. Whitty told analysts.
Mr. Whitty did not address the investigations by the Department of Justice or… Lawsuits It seeks to block its proposed acquisition of Amedsys, a large home care and analgesics company.
Along with rising medical costs and increased use of health care services, UnitedHealth executives have pointed to a large-scale ransomware attack in 2024 that eats into the company’s full-year earnings. Cyber attack Forced closure From the sprawling billing and payment system, transform healthcare. The company estimated that the data breach of health and privacy information affected more than 100 million people, and He said this week that the review The personal information involved in the incident is “complete.”
Luigi Mangione, 26, has been charged with state and multi-state murder as well as weapons and stalking offenses. He pleaded not guilty.
United Neither he nor his parents had medical insurance through UnitedHealth, police said.
