New York, US – UnitedHealth Group experienced a significant drop in its shares on Wednesday, losing approximately 5% of its value. This decline followed reports of the U.S. Department of Justice launching an antitrust investigation into the healthcare conglomerate. Investigators have been engaging with representatives from various sectors within the healthcare industry to assess the potential impacts of UnitedHealth’s acquisitions through its health services arm, Optum.
The reported investigation has heightened concerns among investors, particularly amidst ongoing issues stemming from a cybersecurity attack at UnitedHealth’s Change Healthcare unit, which has resulted in an eight-day outage. Analyst Scott Fidel from Stephens described the past week as challenging for UnitedHealth, with the company facing continuous negative headlines.
With a market value of $485.98, UnitedHealth stood to lose over $25 billion following the news, compounding losses of approximately $11 billion the previous day in response to the report published by The Wall Street Journal. The company’s shares became the leading drag on the Dow Jones Industrial Average on Wednesday.
The potential implications of the investigation on UnitedHealth’s competitors, such as Humana and CVS Health, are also being closely monitored. Both rival companies experienced slight declines in their stock prices in morning trading. Analyst Julie Utterback from Morningstar highlighted that CVS and Humana’s involvement in caregiving could expose them to similar scrutiny if the investigation expands further.
According to The Wall Street Journal, investigators are focusing on certain relationships between UnitedHealth’s insurance unit, UnitedHealthcare, and its health services arm, Optum, which includes ownership of physician groups among other assets. Meanwhile, Change Healthcare provided an update stating that disruptions from the cyber attack were expected to persist throughout the day, impacting various pharmacy chains including CVS Health.
The reported antitrust probe has added an additional layer of uncertainty for UnitedHealth and other health insurers, who have been grappling with rising medical costs as demand for care among older adults continues to grow. Despite challenges, analysts remain vigilant as the investigation unfolds, monitoring potential implications for the broader healthcare industry landscape.