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UnitedHealth Group expects the hack of its Change Healthcare unit to cost the company up to $1.6 billion this year but maintains its 2024 earnings forecast, suggesting a less severe impact than anticipated.
Quick Facts:
- UnitedHealth Group anticipates up to $1.6 billion impact from Change Healthcare hack.
- Despite the cyberattack, the company beat estimates for first-quarter earnings.
- Medical costs dropped as a result of the cyberattack.
UnitedHealth reported a rise in medical care ratio to 84.3% from 82.2% a year earlier, attributing the increase in part to older Americans seeking respiratory syncytial virus (RSV) vaccines and additional medical services.
The healthcare conglomerate’s upbeat results drove up the Dow Jones Industrial Average, and shares of rival health insurers, including Elevance, CVS Health, and Humana, also surged. The cyberattack disrupted payments to doctors and healthcare facilities nationwide for a month and took a harsh toll on community health centers serving over 30 million poor and uninsured patients.
Change’s pharmacy claims and payment management businesses are 80% functional, with plans to bring more products online in the coming weeks. UnitedHealth has provided advance funding worth over $6 billion to certain healthcare providers, and while several of its major services have resumed operations, many more continue to reel from the impact of the outage.
UnitedHealth remains confident in Change’s ability to regain customers who had to seek alternatives due to the outage. The company has yet to disclose the amount of personal data breached in the hack, which it must report within 60 days as required by federal law.
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