UnitedHealth Group’s Quarter 3 2024 earnings report revealed that the cost of Change Healthcare’s ransomware attack has gone up to $2.457 billion. Earnings in the Q3 ($100.8 billion) is bigger by 9% year-over-year.
UnitedHealth Group’s Q1 of 2024 earnings report approximated overall losses because of the cyberattack as $1.6 billion in 2024. By Q2 of 2024, the estimate had gone up to $2.3 to $2.45 billion, roughly 1 billion higher than the predicted in Q1. By September 30, 2024, UnitedHealth Group’s report indicated that the cyberattack resulted in $1.521 billion in direct response costs and $2.457 billion in total costs. So, the group changed the total expected cost of the Change Healthcare ransomware attack to $2.87 billion in 2024.
It’s not just HIPAA IT compliance that is affected by the ransomware attack. UnitedHealth Group’s earnings and profits are seriously impacted as well, though earnings are higher by $8.5 billion year-over-year. The group’s commercial domestic offerings had 2.4 million consumers served for the year to date. Q3 2024 earnings of the group is $7.15 per share compared to $6.56 per share last year. The adjusted revenue of $7.15 per share consists of $0.12 in business disruption impacts and doesn’t include the $0.28 cost of direct response.
The $8.7 billion third-quarter revenue from operations included the $0.3 billion in unfavorable effects of cyberattack. The $9.0 billion adjusted revenue from operations included the impact of Change Healthcare business disruption but excluded direct response costs of the cyberattack.
On October 15, 2024, CEO Andrew Witty of UnitedHealth Group mentioned that the business disruption costs for 2024 will be about $0.75 per share, higher by 10 cents from the previous midpoint. The new adjusted net revenue outlook by UnitedHealth Group is $27.50 to $27.75 per share.
Witty explained the company’s priorities after the cyberattack, which include investing resources to help some activities of care providers such as share repurchase. As a result, most care providers had normalized payments and claims flows. Settlement of these capital advances is ongoing. UnitedHealth Group released $8.9 billion in loans to companies badly impacted by the Change Healthcare ransomware attack and has retrieved $3.2 billion.
UnitedHealth Group stated it has made considerable development dealing with the ransomware attack with the majority of systems currently accessible online; nevertheless, the amount of transaction remains at pre-event levels. It is working with clients to have transaction levels back to pre-cyberattack and offer more advanced, safe, and competent offerings. The group expects to accomplish this in 2025.
