UnitedHealth Commits to ‘Consumerization’ While Managing February’s Ransomware Fallout

Cyberattacks can have a long impact, as UnitedHealth’s Tuesday (Oct. 15) earnings call revealed.

In February 2024, UnitedHealth Group Inc.’s Change Healthcare unit suffered a far-reaching cyberattack. Nearly eight months later, and the healthcare giant’s executives on Tuesday shared that the company is still being forced to cut its earnings guidance due to lingering disruptions from the ransomware attack whose fallout crippled the U.S. healthcare system.

Per United’s financials, the February hack has shaved off 25 cents from the upper end of its previous guidance, and the breach’s impact is expected to erode earnings by 75 cents per share, a 10-cent increase from the company’s previous estimate. Adjusted earnings for the fiscal year are now expected to be $27.50 to $27.75 a share.

“I want to thank the Change and Optum teams for all the great work they did recovering from the attack,” said Andrew Witty, chief executive officer of UnitedHealth Group. “We are focused on bringing back our clients … and we’ve made great progress in rebuilding our modern health platform.”

And it wasn’t all bad news for the healthcare firm’s third-quarter 2024 results.

UnitedHealth’s profit rose to $6.06 billion, or $6.51 a share, compared with $5.84 billion, or $6.24 a share, a year earlier, while revenue rose 9.2% to $100.82 billion, clearing analyst projections for $99.14 billion.

“You should expect us to be very, very disciplined around cost management,” said John Rex, UnitedHealth Group president and company CFO. “We have been relentless around how can we find sustainable cost savings across the organization.”

The company’s days claims payable of 47.4 was an acceleration compared to 45.2 in the second quarter of 2024 and 50.7 in the third quarter of 2023. The increase from the second quarter 2024 was due to a return to more normal claims submission patterns from care providers. The change from the year ago level reflected continued impact due to the accelerated claims payment timeframes.

Read more: AI Opportunities, Cyber Vulnerabilities Define UnitedHealth’s Latest Earnings

The Changing Healthcare Landscape

The 2020s have ushered in unprecedented transformations in healthcare, driven by advancements in digital tools such as artificial intelligence (AI), telemedicine, wearable technologies and predictive analytics. These innovations are not only improving patient outcomes but also reshaping the operational models of healthcare organizations. UnitedHealth Group, as one of the largest healthcare conglomerates in the world, is at the forefront of this digital revolution, leveraging technology across its businesses to stay competitive.

“You should expect us to challenge and push on how we can challenge and modernize the consumer experience, we want to be much more consumer-ist in the way things operate and the technology of the 2020’s can give us a big leg up in that sense,” said CEO Witty.

“Our continued growth, which positions us well for the coming years, is rooted in the innovative products and responsive service of our people that are embraced each day across the full range of health care participants,” he added.

The generative AI market for healthcare is projected to reach $22 billion by 2032, according to the PYMNTS Intelligence and AI-ID collaboration, “Generative AI Can Elevate Health and Revolutionize Healthcare.”

See also: Microsoft Unveils New Healthcare AI Models and AI Agent Service

Other executives stressed to investors on Tuesday’s call that UnitedHealth Group’s investment in machine learning and AI has allowed the company to increasingly streamline healthcare delivery. These capabilities extend beyond clinical applications to claims management, reducing payment errors and improving efficiency in care coordination between providers and payers. AI tools also enhance personalized care, a crucial component as healthcare shifts toward value-based models.

Still, the company’s medical loss ratio, or the share of premiums spent on patient care, was 85.2%, up from 82.3% a year earlier and missing analyst projections for 84.4%.

In related news, PYMNTS reported last week (Oct. 8) that the Office of the National Coordinator for Health Information Technology (ONC) has released its 2024-2030 Federal Health IT Strategic Plan, addressing the evolution of health IT, aiming to improve healthcare experiences, enhance care delivery, and promote health equity through the strategic implementation of technology.