UnitedHealthcare Faces Scrutiny Amid CEO's Tragic Death, Industry Criticism

Zinger Key Points
  • UnitedHealthcare, covering 50 million people, faced a Senate investigation accusing it of denying care to boost profits.
  • Algorithms and questionable practices by its subsidiary NaviHealth led to lawsuits and allegations of prioritizing profits over patients.

On Tuesday, UnitedHealth Group’s UNH insurance division’s (UnitedHealthcare) CEO, Brian Thompson, was fatally shot in a reportedly targeted attack.

UnitedHealthcare is reportedly under scrutiny following the death of Thompson, though a direct link between his murder and tensions within the insurance industry has not been established.

Law enforcement reported that bullet casings at the crime scene carried inscriptions such as “deny” and “delay,” terms often associated with insurance claim practices.

UnitedHealthcare, one of the largest health insurers in the U.S. with over 50 million members, has faced ongoing criticism over its claim denial practices.

A Senate investigation earlier this year concluded that Medicare Advantage providers, including UnitedHealthcare, intentionally denied claims to increase profits.

The New York Times report added that UnitedHealthcare denied nursing care claims three times more frequently than other services, drawing criticism alongside competitors like Humana Inc HUM and CVS Health Corp CVS.

The report citing a StatNews investigation revealed that NaviHealth, a UnitedHealthcare subsidiary, used algorithms to deny necessary care for seniors, including limiting recovery time for stroke patients.

The company denied allegations that the algorithm was used to deny care and maintained that it adheres to clinical guidelines.

Insurance companies rarely publish denial data. Reports indicate denial rates are higher among private insurers than government plans, with appeals of denied claims occurring in only 1% of cases.

According to the NY Times, critics argue these denials often prioritize profits over patient care.

In the third quarter of 2024, UnitedHealthcare reported revenue of $74.9 billion, up from $69.9 billion a year ago, and operating earnings were $4.2 billion.

The healthcare giant expects 2025 sales of $450 billion—$455 billion, exceeding the consensus of $431.397 billion.

The guidance includes Optum sales of $277 billion-$280 billion and UnitedHealthcare sales of $337 billion-$340 billion.

The company’s pharmacy benefit segment, Optum, is already the subject of a Federal Trade Commission lawsuit for allegedly engaging in unfair and anti-competitive practices that have inflated the list price of insulin medications.

Price Action: UNH stock is down 3.5% at $558.21 at last check Friday.

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