UnitedHealth Group shake-up: CEO steps down, guidance suspended

Tue, May 13, 2025, 6:52 AM 3 min read

UnitedHealth Group (UNH) CEO Andrew Witty stepped down from his role for "personal reasons," and the company is suspending its 2025 guidance. Former CEO Stephen Hemsley is taking the helm.

UnitedHealth stock sank 10% in premarket trading, marking the company's latest negative day in the past two years.

UnitedHealth has been hammered in a number of ways: increased costs, political pressure over its size, and scrutiny by the Federal Trade Commission and Department of Justice. Congress has also put the spotlight on its market power as a large pharmacy benefits manager (PBM). Furthermore, the company has faced questions about its use of artificial intelligence in claims processing and a large cybersecurity attack on its Change Healthcare subsidiary.

The cyberattack has recently been the focal point of a lawsuit by investors who claim the company underestimated the attack's impact and caused investor losses.

The company also suffered significant public backlash following the killing of former executive Brian Thompson in December. Questions about claim denials and fury about overall insurance industry practices were directed at UnitedHealth in the aftermath.

Hemsley indicated he will focus on fixing the company's increased cost pressures and the negative environment in which the company finds itself.

"I'm deeply disappointed in, and apologize for, the performance setbacks we have encountered, from both external and internal challenges. Many of the issues standing in the way of achieving our goals, as well as our opportunities, are largely within our control," he said on a call with investors early Tuesday.

CFO John Rex, who has been in his role since 2024, said the company is currently looking at cost pressures from Medicare Advantage, new members to UnitedHealthcare, and the potential of increasing costs outside those buckets of covered individuals. That includes the commercial space and Medicaid and is a result of increased utilization in health services across the board.

Still, the company reiterated its goal of returning to profitability in 2026. Long-term, that would be 13% to 16% growth, according to Hemsley in a statement Tuesday.

Experts and insiders had mixed reactions to the news. Some felt it was the right move for the company, and others wondered if a breakup of the healthcare giant is in the cards.

Hemsley addressed the latter on the call Tuesday, saying, "Our strategy and structure are the right ones for this era. They are designed to help more people more comprehensively through value-based care approaches that are integrated and holistic in response to a health system that can be frustratingly disconnected, inconsistent in its quality, and inequitable in access."