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For "personal reasons", we don't need to introduce the lack of details of Andrew Witty's resignation as CEO of Undhealth (UNH). There are many public reasons to change a business that has become a political lightning rod and Wall Street disappointment.
The announcement of leadership changes is another: The company canceled its financial guidance for 2025, citing high fees associated with the benefits of Medicare. The company said growth won’t return to UnitedHealth until 2026.
As our colleague Anjalee Khemlani reported, the company's cost of offering increased in the first quarter of last month. The cost of once confident reevaluating the rest of the time suddenly collapsed into a hard reset and the highest change.
The company suffered hardships, from large cyber attacks to killing executives, to subsequent public opposition to the practices of the healthcare industry. In April, the company cuts guidance for a full year, shocking Wall Street and stocks fell. Stocks fell nearly 40% in a year.
"There is a trust and emotional issue here that has to be addressed, and I think that's the main reason they changed the CEO," Whit Mayo, a senior research analyst at Leerink Partners, said in an interview with Yahoo Finance on Tuesday.
And that's the key to who the company is wrong and where it should be.
Witty, 60, was replaced by his predecessor, Stephen Hemsley, 72, for crediting the construction of UnitedHealth to a vertically integrated giant, a large health insurance company with a network of doctor groups and a network of pharmaceutical welfare managers. From 2006 to 2017, he operated the company for more than a decade.
American companies provide us with many examples of trusted entities returning to the service ship. Think of Bob Iger, Steve Jobs, Howard Schultz twice - Even the resurrection of HBO Max.
Administrative transfers can be consistent with the new stage of the economic cycle. According to a report from global substitute Challenger, Gray & Christmas in April, 646 CEOs left positions in the first quarter of this year, up 4% from the same period last year and up the previous record.
UnitedHealth changes have taken place amid intensified government scrutiny. Earlier this week, Trump issued an executive order aimed at cutting the high prescription drug prices paid by notorious American consumers, a move that was disturbing and sent shares in UnitedHealth, CVS and Cigna Lower. (These companies operate their own pharmacy welfare managers: Optum RX, Caremark and Express scripts respectively.)