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Former UnitedHealth CEO Andrew Witty testifies earlier the Senate Finance Committee successful May 2024, implicit a monolithic information breach astatine his company's Change Healthcare. UnitedHealth's concern and reputational problems person mounted since then, and Witty resigned "for idiosyncratic reasons" connected Tuesday. (Photo by Kent Nishimura/Getty Images) Kent Nishimura/Getty Images/Getty Images North America hide caption
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Kent Nishimura/Getty Images/Getty Images North America
UnitedHealth Group abruptly replaced CEO Andrew Witty connected Tuesday, arsenic the sweeping problems facing the institution and manufacture deepened.
Witty resigned "for idiosyncratic reasons," UnitedHealth said. He was replaced, effectual immediately, by the company's erstwhile CEO and existent chairman, Stephen J. Hemsley. A UnitedHealth spokesperson declined to remark further.
Shares successful UnitedHealth plunged much than 16% by precocious greeting Tuesday.
The monolithic wellness attraction conglomerate is 1 of the largest companies successful the satellite — and, recently, 1 of the astir publically troubled. It owns Change Healthcare, a payments processor utilized by hospitals, doctors and pharmacists. A massive cyberattack past year paralyzed swaths of the full U.S. wellness attraction system, affecting an estimated 100 cardinal people.
A sidesplitting that shocked the country
It besides owns UnitedHealthcare, the largest U.S. wellness insurer, whose CEO, Brian Thompson, was shot and killed successful Manhattan successful December.
The sidesplitting sparked a widespread user backlash implicit the precocious costs and denied claims of U.S. wellness care. The alleged shooter, Luigi Mangione, is facing the decease penalty and has pleaded not guilty to 4 national charges.
The fury against wellness insurers is truthful pervasive that immoderate radical view Mangione arsenic a vigilante people hero. An online fundraiser for his ineligible costs has raised much than $1 million.
Since December, Witty has tried to code immoderate of the choler against his institution and his industry. "We recognize and stock the tendency to physique a wellness attraction strategy that works amended for everyone," helium wrote in a New York Times op-ed successful December.
Big Health Care's fiscal problems are mounting
But ultimately, it was UnitedHealth's worsening fiscal problems that appeared to extremity Witty's four-year tenure. The institution and its competitors have been facing rising costs successful the Medicare Advantage businesses that let backstage insurers to cod authorities payments for managing the attraction of seniors. These programs were once wide seen arsenic money-makers for large wellness insurers.
But present Medicare-related problems look to person outgo aggregate large wellness attraction CEOs their jobs. CVS Health, the proprietor of Aetna and 1 of UnitedHealth's apical competitors, successful October abruptly replaced its CEO, Karen Lynch.
UnitedHealth connected Tuesday also said it was suspending its 2025 outlook, "as attraction enactment continued to accelerate." UnitedHealth besides said it was facing "higher than expected" aesculapian costs successful its Medicare Advantage business.
In different words: The elder citizens that UnitedHealth insures done its ample Medicare concern are going to the doc much than expected, expanding the company's costs of providing care.
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