In February, UnitedHealth Group Inc.’s Change Healthcare unit suffered a far-reaching cyberattack.
Per remarks by UnitedHealth’s executives on Tuesday’s (July 16) second-quarter earnings call, the impact of the Change Healthcare attack is still ongoing, with its related costs continuing to snowball to over a billion dollars to date, with expectations of the attack’s fallout on UnitedHealth’s bottom line for the full fiscal year topping $2.3 billion.
Change provides technology used to submit insurance claims, and the attack disrupted payments and claims processing around country, with industry observers believing it to be the worst cyberattack to ever hit the U.S. healthcare industry. During the most recent quarter, UnitedHealth prioritized financial resources to support care providers disrupted by the cyberattack, executives told investors.
The company said that its second-quarter earnings from operations were $7.9 billion, a number which included “$1.1 billion in unfavorable cyberattack effects.”
Still, despite the risks exposed by the Change Healthcare breach, UnitedHealth emphasized on Tuesday’s call that it remains fully committed to — and invested in — the opportunities that the ongoing digital transformation of connected healthcare represents.
“United strives to help reduce the fragmentation and lack of standardization within the healthcare industry that drives up costs,” said Andrew Witty, chief executive officer of UnitedHealth Group. “We expect technological innovation to become an increasingly core driver of growth over the next few years.”
Read more: UnitedHealth Still ‘Trying to Dig Through’ Cause of Cyberattack
UnitedHealth has restored the majority of the affected Change Healthcare services while continuing to provide financial support to the tune of over $9 billion in advance funding and interest-free loans to support remaining care providers in need.
Year to date, the number of consumers served domestically with the company’s commercial offerings grew by 2.3 million to 29.6 million, and UnitedHealth’s second-quarter 2024 revenues grew nearly $6 billion to $98.9 billion, led by strong expansion in people served domestically at Optum and UnitedHealthcare, per its financial results.
Operating earnings were $4 billion, and adjusted operating earnings were $4.4 billion.
“The diversified, durable growth across UnitedHealth Group stems from our colleagues’ commitment to ensuring high-quality, affordable care is available to the people we serve, and positions us well for the near and long-term,” said CEO Witty.
“Investments in modern technology are enabling our consumer-centric advancement of healthcare,” Witty added.
UnitedHealth’s days claims payable for the most recent fiscal quarter were 45.2, compared to 47.1 in the first quarter of 2024, and 48.2 in the second quarter of 2023. Within this, the return to more normal claims submission patterns from care providers and, to a lesser extent, the impact of the South American actions, decreased days claims payable from the first quarter, UnitedHealth CFO John Rex told investors.
The acceleration of claims payments to care providers decreased days claims payable from the prior year, he added.
See also: 79% of Consumers Want to Pay All Medical Bills From Single Digital Platform
PYMNTS has been tracking the impact of artificial intelligence (AI) across healthcare operations and workflows, with PYMNTS Intelligence finding the generative AI healthcare market is projected to reach $22 billion by 2032, offering a number of possibilities for better patient care, diagnosis accuracy and treatment outcomes.
And UnitedHealth’s leadership stressed to investors that the company sees AI as a crucial growth engine in its long-term roadmap.
“Our growing AI portfolio made up of practical use cases will generate billions of dollars of efficiencies over the next few years … allowing us to do things much more quickly and reliably than humans, finding answers within complex datasets,” said UnitedHealth CEO Witty, noting that AI represents “a fundamental reimagination of business processes.”
The company’s CFO, Rex, added that the company is spending “9% less on onboarding” due to the impact of digitization and AI.
As PYMNTS’ Karen Webster wrote at the beginning of the year, AI’s greatest potential is in creating the knowledge base needed to equip the workforce — any worker in any industry — with the tools to deliver a consistent, high-quality level of service, quickly and at scale. This is particularly true within healthcare, as tailoring AI solutions by industry is increasingly proving to be key to scalability.
The post AI Opportunities, Cyber Vulnerabilities Define UnitedHealth’s Latest Earnings appeared first on PYMNTS.com.
