UnitedHealth Group CEO Sir Andrew Witty addressed the issues of the role that the company plays in the U.S. healthcare system while it released its first earnings report since the tragic murder of Brian Thompson, the head of the company’s insurance division. The results showed achievements and challenges as they highlighted the financial and political pressures the firm is facing.
During the earnings call, Sir Andrew defended UnitedHealth’s contribution to lowering healthcare costs by pointing to drug companies and healthcare providers as drivers of high prices. However, he also acknowledged the frustration many customers feel about the complexity and cost of the largely private healthcare system in the U.S.
“The system needs to be less confusing, less complex, and less costly,” Sir Andrew said. “These are key areas we are working to improve.”
He said the company was committed to passing on savings from drug prices to customers and that 100% of the negotiated savings would be shared with customers, an increase from the current 98%.
Record Revenue But Declining Profits
UnitedHealth reported a record $400 billion in revenue for 2024, an 8% increase from the previous year. The company expects revenue to grow over 12% in 2025, reaching $450 billion. Despite this growth, profits dropped significantly, falling by more than a third from $22.3 billion in 2023 to $14.4 billion in 2024.
The company’s medical care ratio—the percentage of premiums spent on healthcare—increased to 85.5% from 83.2% in 2023. UnitedHealth partly attributed the dynamic to less generous government reimbursement rates, which it hopes the Trump administration will reconsider.
UnitedHealth still has a lot to overcome. One of its business units was hacked in 2024, exposing the personal information of about 100 million people. Regulators have also accused the company of overcharging, which UnitedHealth has denied.
A class-action lawsuit has also emerged, alleging that the company knowingly used faulty software to review claims, allegedly prioritizing profits over accuracy. UnitedHealth denies these allegations, stating that the software does not determine claims outcomes.
Market Impact Of Brian Thompson Murder
The murder of Brian Thompson on December 4, 2024, in Manhattan cast a shadow over UnitedHealth’s recent performance. Thompson’s death drew public attention, with some customers sharing stories of denied medical claims. A suspect has been charged in his murder.
UnitedHealth shares dropped over 4% after the earnings report was released, triggering a sell-off in other healthcare stocks.
Despite these challenges, Sir Andrew has remained optimistic concerning the future of the company. “We see much-heightened energy to address these issues,” he said, again reiterating UnitedHealth’s focus on improvement and customer satisfaction.
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