Could UnitedHealth Group’s Woes Ultimately Result in Improvements?

In the last seven months, UnitedHealth Group (UHG) has been racked by devastating events, from the massive cyberattack on Change Healthcare in October to the murder of UnitedHealthcare’s (UHC’s) CEO, Brian Thompson, in December. 

At the end of last month, after reporting a weaker-than-expected first quarter (despite posting $6.3 billion in profit during the same timeframe), UHG stock plummeted by more than 22 percent, faster than any drop seen by the company in the last 25 years. 

UHG’s CEO at the time, Andrew Witty, associated the poor performance with beneficiaries – especially those within their Medicare Advantage (MA) plans – utilizing more medical services than expected. This comment truly (and possibly, inadvertently) illustrated the point that health insurance companies make more money for their shareholders when their beneficiaries don’t seek out or receive healthcare services.

This comes as no surprise to case managers everywhere who try and secure skilled nursing facility (SNF) or inpatient rehabilitation facility (IRF) care for hospitalized patients and repetitively face stalling tactics (and ultimately, denials).

Then, on May 13, UHG stock dropped again, this time by more than 16 percent, in the hours after Witty abruptly resigned “for personal reasons.” Despite multiple lawsuits and threatened actions by private, state, and federal agencies across the country, UHG has been a longtime dominant force related to revenue cycle, provider staffing, utilization, and managed and commercial health insurance plans.

The owner of Aetna, CVS Health, as well as  Humana have also seen recent declines in their profitability, but to a lesser extent than that of UHG. This is likely a reflection of what historically has served UHG so well in the past – a profound presence in healthcare across the country.

Last year alone, UHG acquired or created over 250 subsidiaries, including acute surgery centers, home care companies, and pharmacies. The thousands and thousands of new beneficiaries that came along with these subsidiaries – many of whom are covered by UHC’s managed Medicare plans – possibly led to the unanticipated increase in costs of medical services. 

On May 15, UHG stock plunged yet again, by more than 15 percent, after the Wall Street Journal reported the U.S. Department of Justice (DOJ) has been conducting a criminal investigation since last summer into possible Medicare fraud carried out by UHG’s Medicare Advantage arm of the business. This is in addition to a DOJ civil investigation announced at the start of the year, looking into the possibility of UHG inappropriately assigning more significant diagnoses to beneficiaries to obtain larger or extra payments from Medicare.

While an official announcement from the DOJ has not yet been made, considering that UHG stock is down almost 50 percent since the start of 2025 and has lost over $300 billion of its $600 billion market value in one month, it’s clear recent events have taken their toll on the company and are not a simple blip on the radar. Since the road toward the astronomical profitability UHG has enjoyed in prior years was paved with narrow medical care access for beneficiaries, what could these recent events mean for hospitals and the patients they serve? Increased scrutiny of the medical necessity of emergency department care or hospitalizations? Escalated denials related to out-of-hospital continuation of care at SNFs, access to home nursing and therapy services, or coverage of medications and durable medical equipment (DME)?

Unfortunately, it’s very possible that beneficiaries and the health systems serving them will experience most of these frustrations.

On the other hand, should hospitals dare to dream that positive changes are on the horizon, concerning their dealings with UHC? In an effort of good faith, might UHC throttle back their aggressive tactics, involving an overwhelm-and-overcome strategy related to denials, and put less emphasis on shareholder dividends and more on patient care? 

While a possibility, it appears less likely now, given that Witty was quickly replaced by former UHG CEO Stephen Hemsley, who ran the organization from 2006–2017. 

References:

1. What UnitedHealth’s Stock Drop Reveals About Medicare Advantage, N. Adam Brown, MD, MBA, MedPage Today, April 29, 2025 
2. UnitedHealth Group Reports Third Quarter 2024 Results, BusinessWire, October 15, 2024
3. UnitedHealthcare stock takes massive hit after earning forecast cut, Fox 9 KMSP and Associated Press, April 17, 2025
4. UnitedHealth Group stock tumbles; Andrew Witty steps down as group CEO, Martin Baccardax, The Street, May 13, 2025
5. UnitedHealth Group shares plunge 13% on report of DOJ probe into possible Medicare fraud, Annika Kim Constantino, CNBC, May 15, 2025
6. UnitedHealth Responds to Fraud Investigation Report: ‘Deeply Irresponsible’, Newsweek, May 15, 2025