This was drastic. This morning (13 May), UnitedHealth Group announced that CEO Andrew Witty is stepping down immediately “for personal reasons” which are not specified. Replacing him is former (2006-2017) Stephen (Steve) Hemsley, who will remain chairman of UHG’s board of directors. Mr. Witty has been named as “senior adviser to Hemsley” which is a typical resignation/separation workout for CEO/president departures, indicating continuity to soften the immediacy of the change.
The quotes in the release are also typical of these ‘friendly’ transitions. Mr. Witty: “Leading the people of UnitedHealth Group has been a tremendous honor as they work every day to improve the health system, and they will continue to inspire me.” Mr. Hemsley: “We are grateful for Andrew’s stewardship of UnitedHealth Group, especially during some of the most challenging times any company has ever faced. The Board and I have greatly valued his leadership and compassion as chief executive and as a director and wish him and his family the best.
Mr. Hemsley is 72. There is no mention in the release that he is interim or of an executive search.
Sir Andrew Witty, aged 60, is British, knighted in 2012 for his leadership of GlaxoSmithKline. He became CEO of UHG in February 2021 after three years as Optum CEO starting in 2018. Previously, he was CEO of GSK from 2008 to 2017. Witty led the National Health Service’s Accelerated Access Collaborative for a year after, 2017-2018, and had been chancellor of the University of Nottingham while heading GSK 2013-2017. Certainly he experienced many challenges during his UHG/Optum tenure that accelerated in the past two years: the Covid pandemic, the assassination of Brian Thompson, Change Healthcare’s massive cyberattack that disrupted the entire provider payment structure for months and exposed patient data, and the continuing Federal opposition to the Amedisys home health buy. Notably, Witty was one of the pioneers aggressively pursuing the ‘payvider’ structure. According to STAT News, by 2024 almost 10% or 90,000 US physicians were affiliated with Optum, either via 10,000 owned practices, or 80,000 affiliated through various value-based care arrangements.
At 8am EDT, UHG held an investor call, so there will be developing news from it. At the very bottom of the release is that UHG has now suspended its revised its 2025 outlook due to high utilization costs: accelerated care activity, more benefit offerings, and higher costs associated with Medicare Advantage beneficiaries. These primarily affect the UnitedHealthcare unit but also have knock-on affects on the non-insurance business (25% of the company) that presumably Mr. Hemsley and company are calculating. Also FierceHealthPayer
An exceedingly tart take on Mr. Witty’s tenure at UHG was posted today by Sergei Polevikov today in his ‘AI Health Uncut’ Substack, ‘UnitedHealth Bleeds, CEO Witty Steps Down’. In his view, Witty left a trail of damage during his tenure that includes far more than my challenges above, that include discrimination, claims denials, class action lawsuits around earnings manipulations, and the ever-popular insider trading–but UHG always seems to get away with minimal damage. Till today. UHG stock closed down today (Tuesday 13 May) 22% from its price on Monday.
A thought among many is that UHG should be broken up as a healthcare monopoly–the end game of integration. That seems to be a lead taken by Substack commenters and on other social media. MedCityNews takes a look at the impact today. And almost as an aside–what will be the future of top management identified as part of the Witty tenure? Exits done with prejudice at the top are usually the start.
Update 15 May: This Editor underestimated Mr. Market’s continued agita. The share price of UnitedHealth Group (UNH) has gone from one month ago at $585 (16 April 4pm close) to 11:07am today (15 May) at $258 and change. That is a slide of 56%. What is worse is since that the CEO changeover was announced on Tuesday, the price has continued to slide from $311 to today, a 17% drop. The management change did not stabilize the price even in a bouncy market. For some reason unknown to the general audience and certainly to us chickens, UNH is being pummelled. Hard. We will see what happens next week.
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