Biotech
Monday, April 15th, 2024 3:40 pm EDT
Key Points
- UnitedHealth Group’s first-quarter earnings report is anticipated as the company’s first major public communication following a cyberattack on its Change Healthcare subsidiary in February, causing significant disruption in the U.S. healthcare sector.
- The cyberattack forced Change Healthcare to suspend its billing and payment processing service, impacting healthcare providers nationwide, although services for pharmacies have been restored.
- Analysts are closely monitoring how UnitedHealth will address the costs associated with the cyberattack and its impact on other operations within its Optum division, which includes Optum Care and OptumRx. Additionally, larger providers like Option Care Health have warned that the outage may affect their quarterly results.
UnitedHealth Group is set to report its first-quarter earnings, the first major public statement since a cyberattack hit its subsidiary, Change Healthcare, in February. This breach, labeled the largest disruption in U.S. health care since Covid, has brought scrutiny to UnitedHealth’s operations. The incident affected its billing and payment processing service, impacting health-care providers nationwide. Analysts are keen on understanding the costs associated with the cyberattack and its effects on Optum’s various businesses, including Optum Care and OptumRx. UnitedHealth provided $4.7 billion in no-interest loans to providers, but reports suggest physicians like dermatologist James Allred resorted to personal loans due to delayed claims processing. This incident prompts questions about the risks of consolidation in the health-care industry. Additionally, larger providers, like Option Care Health, foresee the outage impacting their quarterly results. On the health insurance front, the timing of the hack increases uncertainty, particularly for Medicare Advantage insurers. With the outage affecting real-time tracking of medical utilization costs, insurers may need to report adjusted or estimated numbers. This situation complicates the preparation of 2025 Medicare Plan bids amid disappointing government payment rate increases. Analysts anticipate a clearer picture in the second quarter regarding medical cost trends and the competitive market landscape for UnitedHealth and its peers.
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/04/15/unitedhealth-q1-results-change-cyberattack-in-focus.html
