The stock of UnitedHealth Group continues to struggle, trading near $326 and reflecting a year-to-date decline of approximately 35%. This downward pressure coincides with the release of a mixed external review of business practices and a new round of job cuts within its Optum division.
Workforce Reductions at Optum
In a move parallel to its strategic overhaul, the healthcare giant is eliminating dozens of positions at Optum. The cuts primarily affect employees in healthcare technology and marketing roles who work remotely. The layoffs span several states across the East Coast and Midwest.
This decision comes against a backdrop of rising administrative costs and increasing industry scrutiny. Despite these cuts, Optum remains a core revenue driver for UnitedHealth, with the efficiency drive appearing to be part of a broader corporate restructuring effort.
External Review Prompts 23-Point Action Plan
An independent examination conducted by FTI Consulting and Analysis Group has led to a detailed corrective strategy. The review focused on Medicare Advantage risk assessment and medical service authorization procedures. While it found many policies to be “robust,” it identified shortcomings in consistency and coordination in specific areas.
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In response, UnitedHealth has committed to a 23-point action plan:
– More than half of the measures are targeted for implementation by the end of 2025.
– Full completion is scheduled for the first quarter of 2026.
– The plan emphasizes enhanced governance and stricter control mechanisms.
Market skepticism persists, with investors questioning whether these steps will be sufficient to restore confidence.
Cautious Outlook Despite Earnings Beat
The company’s forward guidance remains cautious for 2025, even after reporting a better-than-expected adjusted third-quarter earnings per share of $2.92. Management cites rising medical costs that are pressuring margins as a key concern.
Company executives describe the current period as one of transition, with the goal of stabilizing growth by 2026. The extent to which the 23-point plan can meaningfully improve the medical loss ratio is likely to be a critical factor for the stock’s future trajectory.
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