Just as big, last week UnitedHealth Group named Dr. This after the surprise resignation of CEO Andrew Witty, and accompanied by a suspension of its 2025 earnings outlook. This decision follows closely on the heels of the company’s first earnings miss since 2008—which they announced in April. The healthcare behemoth cut its full-year forecast after skyrocketing expenses for treating patients. Unexpected shifts under its Optum business have weighed on what its members, and thus plans, reimburse for 2025 too.
In a Senate Finance Committee hearing on May 1, 2024, Andrew Witty faced scrutiny regarding the company’s financial performance and operational challenges. UnitedHealth Group’s shares dropped 8% in premarket trading following the announcement of Witty’s departure. This downward pressure affected all health insurers, including fellow Medicare Advantage-centric health insurers Humana, CVS, and Elevance, echoing troubling sentiments across the industry.
Stephen Hemsley, who had been CEO from 2006 through 2017, will take over for Witty. Hemsley’s time at UnitedHealth Group Hemsley started at UHG in 1997 as chief operating officer. He advanced rapidly through the ranks and became president in 1999. Now, he returns to the helm as the company copes with increasing expenses. These costs, which were born out of the growing demand for care that expanded government-backed Medicare Advantage plans began generating since launching in mid-2023.
The recent fiscal challenges went well beyond leadership transitions. Specifically, UnitedHealth Group’s actions have now been made criminally indictable. They’ve been sued for continuing to conceal how the backlash of Brian Thompson’s killing has disrupted their line of business. This lawsuit paints a more complicated picture for the company, which is already on shaky ground.
Like these business disadvantages, UnitedHealth Group still believes it can get back on a path to growth by 2026. The company aims to stabilize its operational strategy and address the underlying issues affecting its financial outlook. Analysts are closely tracking Hemsley’s strategy as it unfolds during this transitional period. They’re interested to know what it will mean for the company’s overall long-term recovery trajectory.