UnitedHealth Group has projected that the cyberattack on its Change Healthcare unit will cost the company up to $1.6 billion this year. Despite this, the company maintained its earnings forecast for 2024, leading to a less severe impact of the hack than initially feared. The healthcare conglomerate exceeded first-quarter earnings estimates as a result of reduced medical costs, causing its shares to rise by 5.3%.
The disruption caused by the hack at Change Healthcare affected payments to healthcare facilities and doctors across the nation for a month, especially impacting community health centers that cater to millions of uninsured and impoverished patients. UnitedHealth relaxed certain authorization processes for claims following the breach, raising concerns about an increase in medical expenses. While the company has reinstated these processes, delays in claim submissions persisted as providers struggled with paperwork due to the inability to access the Change system.
Despite the significant challenges posed by the cyberattack, UnitedHealth has advanced over $6 billion in funding to healthcare providers and aims to restore Change Healthcare to its normal performance levels by next year. While the company booked costs related to the breach amounting to $872 million in the quarter, it is optimistic about attracting back customers who had to avail services from competitors during the outage. UnitedHealth remains committed to its 2024 adjusted profit forecast, with the business disruptions from the hack expected to impact earnings by $1.15 to $1.35 per share this year.