UnitedHealth Group Inc’s (NYSE:UNH) CEO reassured a U.S. Senate panel that the company’s recent troubles do not threaten the broader economy.Â
CEO Andrew Witty made these remarks in response to concerns raised by senators regarding the potential systemic risk stemming from the size of the largest U.S. health insurer.
During the hearing, senators questioned Witty about the ramifications of a cyberattack on UnitedHealth’s technology unit, which had significant repercussions for patients and healthcare providers.
UnitedHealth, boasting a market capitalization of $445 billion and annual revenue of $372 billion, stands as one of the foremost companies in the U.S., Reuters stated.Â
Senators emphasized its global significance, noting that it ranks as the 11th largest company worldwide.
The gravity of the recent cyberattack was compounded by UnitedHealth’s dominant position in the healthcare sector.
“My point is, the size of United becomes an almost too big to fail and sure, because if it fails, it’s going to bring down far more than it ordinarily would,” Reuters noted, citing Sen. Bill Cassidy (R-La.).
The affected unit, Change Healthcare, is integral to processing approximately half of all medical claims in the U.S., serving a vast network comprising 900,000 physicians, 33,000 pharmacies, 5,500 hospitals and 600 laboratories.
“UnitedHealth Group has not revealed how many patients’ private medical records were stolen, how many providers went without reimbursement, and how many seniors are unable to pick up their prescriptions as a result of the hack,” said Senate Finance Committee Chairman Ron Wyden (D-Ore).
Witty disclosed during the hearing that the company acquiesced to the hackers’ demands, paying a ransom of $22 million to mitigate the fallout from the cyberattack.
The repercussions were far-reaching, with nearly all U.S. hospitals experiencing financial strain due to the incident.
According to a survey conducted by the American Hospital Association (AHA), 94% of hospitals reported disruptions to their cash flow, with more than half indicating significant or serious financial setbacks due to the inability of Change Healthcare to process claims.
The AHA sent a letter on Monday detailing the widespread financial impact endured by its member hospitals.
“While this event had disparate impacts on providers, all communities felt the effects in some way,” Reuters noted, citing the AHA wrote in a letter to the leadership of the U.S. Senate Finance and House Energy and Commerce committees.
In its first-quarter earnings, UnitedHealth said it had made $6.5 billion in accelerated payments and loans to providers, including hospitals, since the February attack.
UNH Price Action: UnitedHealth shares are up 0.28% at $484.76 at the last check Wednesday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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