UnitedHealth Group Chief Financial Officer Wayne DeVeydt offered additional color on the company's turnaround efforts at an investor conference Tuesday.
DeVeydt spoke at the UBS Global Healthcare Conference, where he reaffirmed the company's broader expectations that its performance will improve in 2026 before its new strategic approach really pays off in 2027, particularly changes at Optum Health and Optum Insight.
DeVeydt took the CFO chair early September, succeeding John Rex. He said part of what lured him to take the role was CEO Stephen Hemsley's confidence that the company can make real progress in short order. He said the team is still early in the journey to recapture "the swagger the company once had."
"Having competed against this organization for years both as the CFO of Elevance and then on the board of Centene, the one thing that's very clear to me is the assets are as good as I thought they were," DeVeydt said. "The management team actually is quite deep, albeit we've made a number of changes along the way.
"And I do think Steve has got this company focused on all the right areas right now," he said.
UnitedHealth's challenges date back to the Change Healthcare cyberattack in February 2024, which ultimately impacted about 190 million Americans and froze payments for weeks. It was also stunned by the murder of a top executive, UnitedHealthcare CEO Brian Thompson, in December.
Starting in the first quarter of 2025, the company revealed that it was seeing significantly high utilization, especially in its Medicare Advantage (MA) and Optum Health segments. Since then, it's been focused on responding to those pressures, with Hemsley leading the charge after retaking the CEO chair in May.
To address rising MA costs, the team elected to exit certain markets and price its portfolio conservatively. DeVeydt said the pricing decisions likely place the insurer, which is the largest individual player in MA, as an "outlier."
He said the healthcare giant now expects to lose about 1 million members in its Medicare products, about 200,000 lives higher than its previous estimates. UnitedHealthcare estimates that it will lose about 600,000 members in MA PPO plans due to market exits and 200,000 in group MA.
The additional "delta," he said, is split between dual special needs (D-SNP) plans and non-D-SNPs. The estimates are based on an assumption that UnitedHealth would not regain any of the 600,000 lost MA members in other plans, DeVeydt said.
He added that there are competitors offering certain benefits, such as a food stipend, at lower prices, which are especially attractive to certain member groups like D-SNP enrollees.
UnitedHealthcare's repricing effort extends to all of its business divisions, and, in the Affordable Care Act market, the team baked an expectation that the enhanced premium tax credits would expire into its estimates. DeVeydt said the insurer anticipates that it will lose about two-thirds of its membership in the individual market, based in large part on the subsidies expiring.
The federal government remains shuttered under the longest-ever shutdown as Democrats pushed for an extension to the subsidies, however, moderate Dems in the Senate have caved on the demand and are set to reopen the government under a "clean" reconciliation bill, with an expectation to return to the subsidies afterward.
DeVeydt added that momentum around early plan renewals for employer-sponsored plans is positive, though he noted that the largest contracts are generally firmed up in the fourth quarter.
On Optum Health, he echoed comments from Optum CEO Patrick Conway that as the company grew through acquisition, it didn't do enough to integrate new providers into its model, meaning they weren't aligned well to be effective.
DeVeydt likened it to the company connecting the electricity and plumbing for a new building and stopping there.
"The majority of the investment here is the acquisitions that have been done over the last five years. The company went very integration-light," he said. "So, a lot of the investment you're going to see over the next 18 months is going beyond electricity and plumbing.
"And that's what should have been happening over the last five years, but that is not what had happened," he said. "And as a result, you lose sight of some of the membership and you lose sight of some of the care that's occurring because you're not on this single chassis."
As for Optum Insight, DeVeydt said the cyberattack led to the division losing a significant portion of its business as clients connected to competitors to manage their needs during the lengthy outage. And the focus on recovering from the hack prevents developers from digging deep into innovative solutions that could regain customers.
He said that over time the unit has regained stability and is seeing growth again in its customer base. Now, the focus is on innovating in product development to continue that expansion.
An example is the team's newly launched Optum Real platform, which leans on artificial intelligence for claims processing. Optum has sold the product to multiple clients in the early days, DeVeydt said.
However, he did caution that the team is being conservative in its projections of how many former clients return to the business. That's due in part to a key lesson from the hack: that it's risky for healthcare to have so much concentrated within a single provider.
"I'm a little less optimistic of how much of it comes back, but I am optimistic we will get some of it back," DeVeydt said.
Editor's note: A previous version of this article incorrectly described UHC as departing group MA.