Title: UnitedHealth Group Surges to $14 Billion Profits in 2024 Despite Cyberthreats and Soaring Expenses
UnitedHealth Group reported a profit of $14.4 billion in 2024, including a $5.5 billion haul in the fourth quarter. Despite this, their annual net income took a dip, marking the lowest in five years. The figure dropped from a whopping $22 billion in 2023. The reasons behind this slide included battling a costly cyberattack on their Change Healthcare business and dealing with higher-than-usual medical expenses due to a surge of patients, particularly those enrolled in Medicare Advantage plans.
In 2024, UnitedHealth Group's revenue soared, jumping a impressive 8% - or over $28 billion - to hit $400.3 billion. The company, a significant player in the healthcare industry under the Optum umbrella and a provider of benefits through UnitedHealthcare health insurance plans, claimed the revenue boost was due to serving more people more comprehensively. The fourth quarter saw net income of $5.5 billion with revenue increasing to $100 billion from $94.4 billion in the previous year.
The earnings report, published on a Thursday, arrived a month after an unfortunate incident involving one of UnitedHealth's executives. Brian Thompson, UnitedHealthcare's CEO, met an untimely end in a shooting incident in New York City.
UnitedHealth confirmed their 2025 performance outlook, established earlier, which included projected revenues of $450 billion to $455 billion, net earnings of $28.15 to $28.65 per share, adjusted net earnings of $29.50 to $30.00 per share, and cash flow from operations of $32 billion to $33 billion.
In addition to the tragic incident and the cyberattack ordeal, UnitedHealth faced one of the nation's largest cyberattacks on a U.S. company. The cyberattack on their Change Healthcare subsidiary caused chaos among physicians and medical care providers across the country. The attack crippled Change Healthcare's billing and payment system, leaving doctors without the ability to secure insurance approval for patient services.
Besides these issues, the company, like other health insurers, faced rising medical costs in their health plans. UnitedHealth's earnings report showed the company was spending more on medical care, as its annual medical care ratio, or MCR, rose significantly - climbing from 83.2% in 2023 to 85.5% in 2024.
Health insurance companies saw profits surge following the pandemic's arrival in 2020. This surge happened due to people not seeking medical care in the midst of lockdowns, office closures, and limited doctor appointment windows. When people avoided seeing the doctor, insurance companies reaped the benefits as fewer claims resulted in larger profits.
UnitedHealth's net income for 2024 was the smallest annual income in five years. The company reported net income of $22.3 billion in 2023, had net income of $20.6 billion in 2022, and made $17.3 billion in 2021. Before the pandemic, UnitedHealth's net income was $13.8 billion in 2019.
At UnitedHealthcare, full-year revenue grew by 6% to reach $298.2 billion. The company added 2.4 million customers to its "domestic commercial benefits," making them health care providers for over 50 million people. Optum, a crucial part of UnitedHealth, witnessed full-year revenue growth of 26% to reach $253 billion. This burst was mainly driven by the performance of Optum Health, the company's medical care provider business, and OptumRx, its pharmacy benefit management unit.
Andrew Witty, UnitedHealth Group's CEO, expressed optimism in a statement accompanying the earnings report. He stated, "Our people at UnitedHealth Group remain focused on making high-quality, affordable health care more available to more people, making the health system easier to navigate for patients and providers. This strategy positions us well for growth in 2025."
[Enrichment Insight: The primary reasons for UnitedHealth Group's lower profits in 2024 were rising medical expenses and the aftermath of the historic cyberattack on their Change Healthcare subsidiary. The cyberattack resulted in over $2 billion in direct response costs and disrupted operations for medical providers nationwide. UnitedHealth also faced a revenue miss, potential PBM practices scrutiny, and higher medical costs in their health plans.]
In response to the historic cyberattack on their Change Healthcare subsidiary, UnitedHealth Group incurred over $2 billion in direct response costs. This cyberattack caused chaos among physicians and medical care providers, crippling Change Healthcare's billing and payment system, preventing doctors from securing insurance approval for patient services.
Despite battling the costly cyberattack and managing higher-than-usual medical expenses due to an increase in Medicare Advantage enrollees, Brian Thompson, UnitedHealthcare's CEO, played a crucial role in UnitedHealth Group's 2024 financial success.
