UPDATED: 1:45 p.m. ET
Artificial intelligence is one of the tentpoles of UnitedHealth Group's turnaround effort, and the company's top brass offered a look Tuesday morning at where it's making key investments.
CEO Stephen Hemsley said on the company's earnings call that the healthcare giant is investing $1.5 billion into AI initiatives across the company. At OptumInsight, the company's main tech and data hub, that means taking time to decommission older products that were not built with AI.
Chief Financial Officer Wayne DeVeydt said that reflects a "slow rundown of those products in Q1" and then making the investments necessary to shift them to a more AI-based operation. He said the benefits of those investments are likely to show themselves in the back half of 2026.
Of that $1.5 billion, about a third is being put toward this effort at OptumInsight that focuses on making it a truly AI-first company, said Sandeep Dadlani, CEO of OptumInsight. The remaining funds are building out "signature end-to-end processes and functions" across the company, he said.
For example, this includes new development in member engagement and experience, like the launch of Avery, the company's new AI chatbot that is expected to be available for 20 million members by the end of 2026. It also includes work to simplify administrative tasks like prior authorization, Dadlani said.
These tools are also being developed with the goal of commercializing them beyond UnitedHealth Group, he added. The company projects a "conservative" 2:1 return on their investment in AI, with many of the tools expected to return that investment within 12 to 18 months.
Dadlani said that some of the platforms are already gaining traction in the market. OptumReal, the company's real-time claims tool, has processed about 500 million claims so far this year, and is expected to end 2026 with 2.5 billion transactions processed.
The company's new AI consulting firm, OptumAI, has signed its first clients, he said, and the digital prior authorization tool launched earlier this year has shown a 96% approval rate in its first months.
"We are going to be very measured in terms of how we go about this in terms of expectation because I think it's new for everybody," Hemsley said. "But definitely, we are leaning into this. We think it can be quite impactful to our enterprise and to this whole industry."
PUBLISHED: 7:45 a.m. ET
UnitedHealth Group is boosting its 2026 outlook after seeing some payoff to its efforts to control medical costs.
The healthcare giant reported a medical loss ratio of 83.9% in the first quarter, down from 84.8% in Q1 2025. UnitedHealth said in it earnings report, released Tuesday morning, that the lower MLR reflects "strong medical cost management and favorable reserve development," though elevated costs continue.
The company also posted $6.3 billion in profit for the quarter, on par with the results from the prior-year quarter. Revenues were $111.7 billion, up from $109.6 billion in Q1 2025.
These figures both surpassed Wall Street's expectations, according to analysts at Zacks Investment Research.
"We are continuing to help simplify and modernize healthcare for the people and care providers we serve, bringing greater value, affordability, transparency and connectivity," CEO Stephen Hemsley said in the press release."
On the back of these results, UnitedHealth said it now expects more than $18.25 in earnings per share this year. That's up from its previous guidance of $17.75 in EPS.
In the release, the company notes that it has entered into a deal to buy Alegeus Technologies, which is a health tech platform that offers benefits administration services for consumer-directed healthcare accounts. Terms were not disclosed, but UHG said it expects the deal to close in the back half of 2026 and be earnings neutral.
UnitedHealth also said it has divested Optum UK business, putting $400 million in proceeds from that sale toward the United Health Foundation. One of the company's strategic shifts amid rising costs pressures has been to exit international markets and focus on its core U.S.-based business.
At UnitedHealthcare, revenues were $86.3 billion in the first quarter, up from the $84.6 billion reported in the first quarter of 2025. The insurance arm boasted 49.1 million members, a decline of about 700,000 compared to the end of 2025.
This includes a decline of 965,000 seniors in its Medicare Advantage plans, UnitedHealth said, which was partially offset by an increase of 415,000 in its commercial segment. The company said that growth was largely attributable to self-funded plans, while it saw attrition in both group fully-insured and individual market coverage.
UHG also said there was a contraction of about 220,000 enrollees in Medicaid as it sees early impact from looming eligibility changes.
Meanwhile, at Optum, revenues were $63.7 billion, down slightly from $63.9 billion in Q1 2025. While this unit has historically been a growth engine for the company, UnitedHealth has put a focus on operational improvements in the current cost environment, especially as the Optum Health arm also feels the sting.
Revenues at Optum Health were down by 3%, the company said, reflecting a decline in value-based care members. Optum Rx's revenue, however, increased by 2% as it saw growth in specialty pharmacy even as membership decreased at UnitedHealthcare.