UnitedHealth Group’s first-quarter earnings report on Tuesday will be the company’s first significant public statement since the cyberattack on its Change Healthcare billing and payments subsidiary in February. This incident has caused the most significant disruption in U.S. health care since the Covid pandemic.
“Everybody looks to United as the bellwether of all of health-care services. This will be different,” said Lisa Gill, managing director and health care analyst at JPMorgan.
Impact to UnitedHealth of the Data Breach
The data breach at the Change Healthcare unit forced the company to shut down its extensive billing and payment processing service. Although the company has restored services for pharmacies, the outage continues to disrupt operations for health-care providers across the country.
Change Healthcare is a subsidiary of UnitedHealth’s vast Optum division, which includes 90,000 doctors under the Optum Care unit and one of the nation’s largest pharmacy benefits managers, OptumRx.
Analysts will be keen to see how the company accounts for the costs associated with the cyberattack and the impact of the outage on other operations within Optum’s businesses.
Financial Implications and Future Outlook
“We will be very interested in the charge that they’re going to be incurring … in terms of how they’re estimating either lost revenue or additional expenses,” said Scott Fidel, managing director and health-care analyst at Stephens.
UnitedHealth has provided $4.7 billion in no-interest loans to providers, although the American Medical Association stated that more than half of physician groups surveyed in early April had to use personal loans to maintain operations.
The delayed outlook on medical costs will also raise the stakes for the health insurers as they prepare 2025 Medicare Plan bids, due in early June. It comes after disappointing government payment rate increases for 2025, announced earlier this month, which are expected to pose a profit headwind.
“We’ve got elevated cost trends. We’ve got still … a pretty competitive market,” said Gill. “So, they have to work through that.”
