UnitedHealth (NYSE:UNH) has suspended its full-year financial forecast due to a bigger-than-anticipated spike in medical costs, while CEO Andrew Witty has decided to step down from the helm of the company.
Shares in UnitedHealth tumbled by more than 14% as of 10:40AM ET. The stock is down 36% year-to-date.
In a statement, UnitedHealth said Witty’s departure was due to personal reasons. Stephen Hemsley was appointed as Witty’s successor, effective immediately.
Hemsley, who previously served as CEO from 2006 to 2017, will also remain Chairman. Witty will be a senior adviser to Hemsley, UnitedHealth added.
"We see the replacement of [Witty] as a proactive step to address the combination of operational missteps and policy pressure," analysts at Bernstein said in a note to clients.
Witty had overseen a tumultuous time for the company, particularly after the shooting death late last year of Brian Thompson, who led its insurance arm. Earlier this month, UnitedHealth was sued by shareholders for allegedly covering up how the killing had impacted its operations.
The company has boosted spending on security for executives following Thompson’s death amid increased death threats. It is unclear if Witty’s departure is related.
Meanwhile, UnitedHealth said it had suspended its 2025 outlook, citing higher-than-estimated medical expenses related to many new beneficiaries from government-backed Medicare Advantage plans for older adults. Care activity has continued to accelerate and broaden out to "more types of benefit offerings than seen in the first quarter", the firm noted.
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.