UnitedHealth Group CEO: US health care needs to be ‘less confusing, less complex and less costly’

By Tami Luhby, CNN

(CNN) — In its first financial results since its insurance unit CEO was fatally shot in New York City, UnitedHealth Group reported Thursday weaker-than-expected fourth-quarter revenue, prompting its shares to fall in early morning trading despite quarterly profit beating projections.

Andrew Witty, UnitedHealth Group’s CEO, defended the company’s commitment to its consumers following the murder of Brian Thompson, CEO of UnitedHealthcare, the company’s health insurance division. The attack provoked a withering public outcry, slamming UnitedHealth and other insurers for denying and delaying crucial patient care in the quest for increased profits.

Witty, who praised Thompson for striving to make the health system work better for people, cited the strengths of health care in the US, but also pointed out its flaws.

“It needs to be less confusing, less complex and less costly,” he said on the earnings call.

Witty also cast blame on drug makers and hospitals for high health care costs, specifically pointing to pricey GLP-1 medications used for diabetes and weight loss. He noted that one of those anti-obesity drugs costs $900 in the US but is one-tenth of that price in Europe.

“Ultimately, improving health care means addressing the root cause of health care costs,” he said. “Fundamentally, health care costs more in the US because the price of a single procedure, visit or prescription is higher here than it is in other countries.”

Rising medical costs continue to plague the company’s UnitedHealthcare division, as policyholders utilize more health care.

Witty also addressed consumers’ vocal complaints about claims denials and delayed care.
Less than one half of 1% of claims are ultimately rejected because they are deemed not to be safe or effective treatment options, he said.

But he acknowledged that other claims are “held up in the process,” saying that the “overwhelming majority of those claims which are held up are held up because they were either sent to the wrong company, they didn’t have the right information on them, the patient didn’t have the right benefits.”

Technology and a standardized approach across the industry can improve the process, he noted. At several points during the earnings call, Witty and other executives pointed to the company’s increasing use of artificial intelligence and other technology in an effort to enhance customer experiences and interactions.

The growing use of AI in health insurance decision making has come under criticism for leading to improper treatment denials.

Witty also cited several challenges in 2024, including the Biden administration’s Medicare rate cuts, reductions in Medicaid enrollment and a massive cyber attack that hit its Change Healthcare unit early last year.

UnitedHealth’s revenue grew nearly 7% to $100.8 billion for the fourth quarter from the same period a year prior, while its earnings inched up less than 2% to $5.5 billion. Adjusted quarterly earnings came in at $6.81 per share.

Analysts had expected quarterly earnings of $6.73 per share on $101.6 billion in earnings, according to FactSet.

The company affirmed its 2025 outlook.

Calls for change

Though the flurry of social media criticism has moderated in the weeks since the murder, the calls for change continued ahead of the company’s earnings announcement.

Luigi Mangione, 26, was arrested last month in connection with Thompson’s killing and is in federal prison in New York City. He has pleaded not guilty to state murder and terror charges but has yet to enter a plea on federal murder charges.

A group of institutional investors with the Interfaith Center on Corporate Responsibility last week filed a proxy proposal requesting that UnitedHealth Group’s board draft a report on the public health costs and economic risks created by the company’s practices that limit or delay access to care. The investors asked for an evaluation of how the practices affect patient outcomes, including how often denials of coverage or the need for authorization prior to treatment lead to delays or the forgoing of treatment with serious adverse effects.

“As the tragic murder of UNH’s Brian Thompson made evident, public outrage over the exorbitant costs and restricted access to healthcare has reached a dangerous level in our country,” Timnit Ghermay, director of the Northwest Coalition for Responsible Investment, a center member, said in a statement. “Our proposal suggests some introspection by UNH that will help the company and all its stakeholders thrive.”

On Thursday, a coalition of patients, doctors and advocates gathered outside the New York Stock Exchange to highlight the human impact of care denials by health insurers.

“Each year, private insurers like UnitedHealth deny care to millions, forcing individuals to face delayed treatments, financial ruin, and life-threatening uncertainty,” organizer People’s Action Institute said in an advisory. “This small, symbolic action on Wall Street is intentionally modest in scale but will send a powerful message, spotlighting the urgent need for reform.”

UnitedHealthcare last month said that it “approves and pays about 90% of medical claims upon submission,” noting that “around one-half of one percent are due to medical or clinical reasons.” However, the company did not return requests for information on its denial rate for authorization requests prior to treatment.

Not a perfect health system

Shortly after Thompson’s murder, Witty said the US health system “is not perfect” and acknowledged that the coverage decisions “are not well understood.”

“We know the health system does not work as well as it should, and we understand people’s frustrations with it,” Witty wrote in a guest essay in the New York Times last month. “No one would design a system like the one we have. And no one did. It’s a patchwork built over decades.”

Witty also defended UnitedHealthcare, though he acknowledged that it shares some of the responsibility for the lack of understanding about decisions on care.

“Together with employers, governments and others who pay for care, we need to improve how we explain what insurance covers and how decisions are made,” Witty wrote.
“Behind each decision lies a comprehensive and continually updated body of clinical evidence focused on achieving the best health outcomes and ensuring patient safety.”

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