One month after the killing of UnitedHealthcare CEO Brian Thompson, parent company UnitedHealth Group reported earnings above expectations, revenues below expectations, and defended the company’s mission in its earnings call.
Thursday’s call came after Thompson was shot dead on December 4, outside the New York Hilton Midtown in Manhattan, where the company was holding an investor day. Following his death, social media was flooded with complaints about the health insurance industry, particularly about insurance denials.
During the earnings call, UnitedHealth Group CEO Andrew Witty thanked all those who had offered support following Thompson’s death. He also acknowledged issues with the healthcare system and said the company is experiencing a “much-heightened energy across the organization” to solve issues like claim processing times and denials.
“If you look at the mission of the company, it’s all about trying to improve the health system for everybody…we recognize there’s still a lot of work to be done in that regard,” he said.
Earnings overview. Despite this turmoil—plus other challenges, like the Change Healthcare cyberattack, Medicaid redeterminations, and CMS rate cuts—the company reported 2024 revenues of $400.3 billion, which is up $28.7 billion, or 8% YoY, from $371.6 billion in 2023.
Q4 revenue rose $6.4 billion YoY to reach $100.8 billion, less than the $101.6 billion analysts had previously forecast, according to data firm FactSet, as reported by the Associated Press.
The quarter’s adjusted net earnings were $6.81 per share, higher than the $6.73 analysts had predicted, according to FactSet, as reported by the Wall Street Journal. Stocks fell after the 8:45am call, however, from $545 a share at market close on Wednesday to $531 when markets opened on Thursday.
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Looking forward, the company is sticking to 2025 earnings guidance released in December, including revenues of $450 billion to $455 billion and adjusted net earnings of $29.50 to $30.00 per share, according to the company’s earnings report.
PBM reform. At the same time that execs talked future profits, however, they also had to worry about future problems amid a Federal Trade Commission (FTC) report released two days before the call.
The report found that the country’s three largest pharmacy benefit managers (PBMs), including UnitedHealth Group’s Optum Rx, made over $7.3 billion in revenue by marking up specialty and generic drugs—some more than 1,000%—while patients and employers contended with rising costs, according to an FTC press release.
They also often reimbursed their company’s specialty pharmacies at higher rates than unaffiliated pharmacies.
The report was part of a multiyear FTC investigation into PBMs that began in 2022.
But Witty said the real problem is that pharmaceutical companies set drug prices in the US “too high” to begin with.
PBMs hold these companies accountable by negotiating rebates, he said, adding that UnitedHealth Group’s PBMs passed on 98% of the rebates they negotiated last year.
Nonetheless, Witty committed in the call that the system will work toward passing on “a full 100%” of rebates negotiated by PBMs to clients by 2028.
“We believe that takes away the excuse of who really is setting the price, and we would like to work with others across the system to relentlessly achieve the lowest net cost,” he said.