UnitedHealth Group reported Thursday that it earned less than expected in the latest quarter, citing higher medical costs and pressure on its insurance division at a time when the company is still reeling from the loss of a top executive last month. is plagued by shocking murders.
UnitedHealth Group’s revenue was $100.8 billion for the fourth quarter, which was better than analysts had predicted but still up 6.8 percent from the same quarter last year. For 2024, the company’s full-year revenue rises to $400.3 billion. For UnitedHealthcare, the insurance division, full-year revenue rose 6 percent to $298.2 billion from 2023.
These were the first findings from the company after UnitedHealthcare Chief Executive Brian Thompson was shot and killed outside a midtown Manhattan hotel.
The killing sparked public outrage aimed at major health insurers, lack of access to health care and Denial of coverage and insurance claims.
Some shareholders have urged UnitedHealth to issue a report on its practices that “limit or delay access to health care.”
Frustration about claims, including delays in getting care and coverage, are “key areas for us to work hard on improving,” UnitedHealth Group Chief Executive Andrew Witty said on a call with analysts Thursday.
Successor to Mr. Thompson Has not been named yet. Mr. Vitti did not share details about filling the post, nor did he address recent shareholder concerns.
UnitedHealth’s results, which disappointed Wall Street, in many ways reflect broader industry trends and lingering problems. For several quarters, U.S. health insurers have seen their earnings hurt by high medical costs and tough government reimbursement policies.
John Rex, the company’s chief financial officer, pointed to the reduction in government rates in the payment system for the Medicare Advantage program, which is private insurance with federal coverage for people age 65 and older. UnitedHealth has substantial business in these Medicare private plans.
Medicare Advantage performance has recently declined across the industry, partly due to regulatory changes aimed at curbing overcharging and increasing health costs in some older populations.
Mr. Witty also said there are costs associated with changes to Medicaid, the federal state insurance program for the poor.
John Boylan, an analyst, said the company’s medical expense ratio, a measure of the cost of providing care, came in higher than expected in the most recent quarter, which could add to investor concerns that care Delivery costs may increase further. At Edward Jones, an investment firm.
However, UnitedHealth maintained its full-year guidance for 2025, unchanged from recent pressures. Morgan Stanley analysts said in a research note that the company has set “reasonably conservative targets” for this 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 more than 4 percent in early morning trading Thursday as investors digested weaker-than-expected results. UnitedHealth’s results, often seen as a bellwether for performance across the industry, pushed down shares of its rivals, including CVS Health, the parent of insurer Aetna.
UnitedHealth Group also owns Optum Rx, one of the nation’s largest pharmacy benefit managers, hired by employers and government programs to oversee their prescription drug benefits. Optum Rx has faced scrutiny from regulators over concerns that it inflated drug prices by prioritizing its own interests over those of patients, employers and taxpayers. Just this week, the Federal Trade Commission released one. Report Explain how PBMs can increase drug prices.
Mr. Witty, the chief executive of UnitedHealth Group, defended Optum’s practices, stressing that 98 percent of the rebates were passed on to consumers. He said that all concessions will be approved by 2028.
“The PBM acts on behalf of the ultimate payer — the employer, the union, the state,” Mr. Vitti told analysts.
Mr. Witty did not address the investigation by the Justice Department. Cases Trying to block its proposed acquisition of home care and hospice giant Amedsys.
In addition to rising medical costs and increased use of healthcare services, UnitedHealth executives pointed to a massive ransomware attack in 2024 weighing on the company’s full-year profits. Cyber attack Forced to close Transform healthcare, company-wide billing and payment systems. The company estimates that the health and privacy information data breach affected more than 100 million people, and A review said this week The personal information involved in the incident was “substantially complete”.
Luigi Mangione, 26, has been charged with multiple state and federal counts of murder, as well as weapons and stalking charges. He has pleaded not guilty.
United Health And police said neither he nor his parents had medical insurance through UnitedHealth.