UnitedHealth Group Faces Financial Hit After Cyberattack
Financial Impact of Cyberattack
UnitedHealth Group revealed a significant blow to its first-quarter profit due to a cyberattack at its Change Healthcare unit, resulting in a $872 million loss. The disruptions are anticipated to affect profit by up to $1.35 per share throughout the year, the company disclosed.
Healthcare Disruptions
In the aftermath of the data breach, services at various healthcare facilities in the United States were disrupted, including pharmacies, hospitals, doctors’ offices, and community health centers. Health insurers had to adjust prior authorization processes for claims, raising concerns about increased costs. Moreover, delays in claim submissions occurred as medical providers grappled with paperwork.
Aid to Healthcare Providers
UnitedHealth has already offered more than $6 billion in advance funding to certain healthcare providers. While some major services have resumed, many others are still reeling from the impact of the cyberattack.
Financial Losses
The company reported a net loss of $1.53 per share, primarily due to a $7 billion charge related to the sale of its Brazil unit Amil. The sale was made to entrepreneur Jose Seripieri Filho, the founder of health insurance firm Qualicorp.
Financial Outlook
UnitedHealth anticipates a net profit of $17.60 to $18.20 per share, factoring in the Brazil sale and the estimated direct response costs of the cyberattack. Despite the challenges, the company’s shares surged by 4.35% to $465.55 in premarket trading.
