Weekly Health Tech Reads | 5/18/25

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UHG CHALLENGES

UHG stock falls 23% on the week as it withdraws 2025 guidance and replaces its CEO

UnitedHealth Group was the story of the week in healthcare and the broader business world this week as it saw its last five years of stock gains evaporate. It ended the week trading at $291 — almost exactly where it was five years ago — while at one point on Thursday morning trading at a five-year low as it hovered around $250. The 5-year stock chart puts the decline in context:

The major news of the week came on Tuesday, as UHG’s stock tumbled by 15%+ after it suspended its 2025 financial guidance and announced that Steve Hemsley would be returning as CEO, replacing Andrew Witty. Hemsley hosted a brief investor call Tuesday morning explaining the rationale for withdrawing guidance. It didn’t go into much detail, but it did make clear a couple things:

• UHG is facing both “external and internal challenges.” Hemsley noted that many of the issues the business faces are within UHG’s control. It’s pretty clear that this isn’t just from external headwinds like v28.

• There are three challenges that UHG has seen arise since April that caused it to pull guidance:

  1. Greater-than-expected impact of the health status of new members

  2. Accelerating utilization within Medicare Advantage

  3. Care activity levels above expectations in other lines of business, particularly in individuals with complex conditions

• UHG thinks it can incorporate this trend data into Medicare Advantage bids for 2026 and return to target 3% - 5% margin next year.

Given this update came on the heels of a Q1 earnings season where seemingly every payor outside of UHG reported positive results, it would certainly appear that UHG is facing challenges similar to what other payors have faced over the last few years in terms of attracting a challenging book of new membership that is shining a light on internal operational challenges. The question will now be how quickly UHG can work through these issues and right the ship.

The stock then took another 10%+ tumble on Thursday, after the WSJ reported that the DOJ is investigating UHG for possible criminal fraud. UHG posted a three sentence response to the WSJ article, saying they have not been notified by the DOJ of the criminal investigation while calling the reporting deeply irresponsible.

The next few quarters for UHG will be critical as it seeks to restore confidence with investors in demonstrating that the thesis behind an integrated healthcare platform like UHG remains a viable one in the face of so many headwinds, both externally and internally. Hemsley has proven to be potentially the smartest businessperson in American healthcare, so it’ll be a fascinating journey to watch from here.

CMMI STRATEGY

CMMI releases new strategy to Make America Healthy Again, walks back goal of 100% of Medicare beneficiaries in ACO relationships by 2030

CMMI released a strategy refresh this week, centered around the MAHA philosophy of prevention, individual empowerment, choice, and compettion. While it doesn’t go into the specifics of existing program, the strategy does lay out three key pillars, while calling out a foundational principle underneath them: protecting the federal taxpayer (by driving cost savings). A brief description of those four focus areas (three pillars + one principle):

• Promote evidence-based prevention. Existing models will be modified and new models will be designed to increase access to and uptake of prevention, including incentives for both people and providers.

• Empower people to achieve their health goals. There is a heavy emphasis on making healthcare data accessible and usable for individuals, and how CMMI models can push for more data transparency. CMMI will also seek to align financial incentives to promote health, including testing specialty-focused longitudinal care in MA and Medicaid.

• Drive choice and competition for people. CMMI will seek to level the playing field for independent providers, making it easier for them to participate in CMMI models, including supporting upfront investments in patient care and collecting losses over longer time periods. Lastly, CMMI will seek to improve the administration of VBC models, reducing the burden for providers of participating.

• Protecting the Federal Taxpayer. CMMI indicates it may require all models to involve downside risk and move more Medicare and Medicaid into global downside risk, while also requiring that providers hold some downside risk, not allowing conveners to hold all financial risk.

Within all of that, you can start to see the outlines of bold strategy for moving CMMI forward. One of the things that wasn’t mentioned in the CMMI release — but was mentioned in a Modern Healthcare article earlier in the week — is that CMMI appears set to walk back the previously established goal of 100% of Medicare beneficiaries being in an ACO relationship by 2030.

The Modern Healthcare article also features some other interesting insights, with some additional details on specific ideas in the works — it will look to modify risk scoring in MA and revise MA Star Ratings to emphasize prevention, it will not revive the Value-Based Insurance Design Model due to high costs, and noted the aim to maximize the number of participants in VBC models with downside risk.

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Vice President, UHG Enterprise Partnerships at UnitedHealth Group, a large healthcare organization. Learn more.
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Director of Product Management (Medicare Advantage), Remote at Aledade, a provider enablement platform. Learn more.
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