UnitedHealthcare Is Struggling To Recover From Luigi Mangione

Miami Herald

2 days ago

It was a personal and corporate tragedy that quickly became a national reckoning. When UnitedHealthcare CEO Brian Thompson was shot dead on a Manhattan sidewalk six months ago, minutes before a company investor conference, the crime sent tremors through the healthcare industry and society more widely—tremors that continue to reverberate.
The attack on the 50-year-old executive—allegedly by the now 27-year-old Luigi Mangione—immediately sparked an outpouring of public fury not at the gunman, but at UnitedHealthcare itself. Within hours, social media was awash with dark jokes. One viral comment said: "Thoughts and deductibles to the family. Unfortunately my condolences are out-of-network." Many expressed frustration over high costs and denied care from the industry.
UnitedHealthcare in particular has suffered a prolonged backlash, seen its stock plummet and has been threatened by multiple lawsuits.
The CEO who replaced Thompson, Andrew Witty, has also already stepped down from the role due to "personal reasons," adopting the position of adviser to the next appointed chief executive, Stephen Hemsley.
Mangione is facing federal and state murder charges, to which he has pleaded not guilty, but still receives sympathy or even praise from some Americans. A crowdfunding campaign for his legal fees has attracted over $1 million, with donors expressing concerns his trial had become "politicized." Bullet casings at the crime scene were etched with the words "deny," "defend," and "depose," an apparent reference to the "delay, deny, defend" mantra that critics use to describe how insurers handle claims.
Authorities were quick to attempt to dispel public sympathy for Mangione.
"We don't celebrate murderers, and we don't lionize the killing of anyone," New York Police Commissioner Jessica Tisch said. "Any attempt to rationalize this is vile, reckless and offensive to our deeply held principles of justice."
Investor confidence in UnitedHealthcare, once rock-solid in this blue-chip giant, has nonetheless been shaken. Executives have been in damage-control mode in public forums.
In an earnings call days before stepping down, Witty said: "The health system needs to function better."
"The mission of this company, why we exist, is to improve the system for everybody and help people live healthier lives," he added. "That means getting more people into high-quality value-based care and keeping them healthy in the first place."
In a statement announcing the change, Hemsley said: "We are grateful for Andrew's stewardship of UnitedHealth Group, especially during some of the most challenging times any company has ever faced. The Board and I have greatly valued his leadership and compassion as chief executive and as a director and wish him and his family the best."
While it is "impossible to say how much of the current challenges facing UnitedHealthcare are due, entirely, or even partly, to the murder of this executive," Dr. Howard P. Forman, a professor of radiology, economics and public health at Yale School of Management, told Newsweek, "it has changed some of the behaviors of the company and how they approach their work."
YouGov polling shows a steady decline in popularity for UnitedHealthcare, dropping from a rating of 48.4 percent approval in January to 34.8 percent in April, which was the lowest percentage rating recorded since YouGov started tracking public favor of the company in October 2020.
The shooting "tarnished UnitedHealthcare's reputation and disrupted its operational stability," Ge Bai, a professor of health policy and management at Johns Hopkins Bloomberg School of Public Health, Maryland, told Newsweek.
"The public increasingly views insurance companies as barriers to care, using tactics such as 'delay, deny, and depose,' especially given how expensive premiums are in the first place," she added.
In 2023, UHC dismissed roughly one in three claims, the highest denial rate of any major insurer, according to data from ValuePenguin, a consumer research organization.
Bai also said that many are frustrated that "after paying tens of thousands of dollars for insurance premiums, when they're sick they still cannot get the care they want or are left to shoulder hefty medical bills."
Richard Scheffler, a professor of health economics and public policy at University of California, Berkeley, told Newsweek: "The oversize profits at a time where health care is becoming even more unaffordable is a key factor in the negative view of company."
Dr. Howard P. Forman said there has been "a steady drumbeat of bad news over the last few years about UnitedHealthcare group and their competitors."
He pointed to the "federal investigations and charges, shareholder lawsuits, and press coverage of seemingly bad behavior by these companies, with UnitedHealthcare group drawing more attention than the others."
"I think many people are fed up with feeling like their most desperate, challenging, and personally upsetting moments are being toyed with by companies that are not trained to practice medicine or make such important decisions," Forman said.
However, while it's understandable for consumers to get angry at their health insurers, it is also important to remember "there is no easy answer" for such companies as they navigate costs and care, Jonathan Gruber, a professor of economics at Massachusetts Institute of Technology, told Newsweek.
As health insurers act as the middlemen between health care providers and patients, while they impose some costs, "the main driver of their spending is the underlying spending on health care providers," he said.
To lower premiums for consumers, health insurers may then to implement actions that are less favorable, Gruber said, such as "limiting which providers patients can see and denying claims that are deemed inappropriate."
These actions can impose "very high burdens" on consumers, he said, and patients "don't like this and would rather just get to use the care they and their doctors suggest."
But allowing consumers to do that would result in higher premiums, Gruber added, so it leaves insurers in a tricky position.
So, while insurers "are not blameless by any means," Gruber said, adding that "executives are overpaid and their methods are sometimes much too blunt," it's worth noting there aren't easy solutions to hand either.
Forman also said that "the system, itself, and its cost remains a major problem and pointing fingers without self-reflection is not going to end well."
UnitedHealthcare didn't become a household name overnight. It grew over decades into the nation's largest health insurer—a core division of UnitedHealth Group, a Minnesota-based healthcare conglomerate that ranks among the world's biggest companies.
The group today touches almost every aspect of American healthcare, from insurance plans to clinics and pharmacies. Under the UnitedHealthcare brand, it sells health coverage to employers, individuals, and government program beneficiaries. With roughly $400 billion in annual revenue and about 400,000 employees as of 2024, UnitedHealth Group wields immense influence.
However, in the months since the shooting, the stock price of UnitedHealth Group has significantly fallen.
On December 4, the day Thompson was killed, the company's stock price was at $610.79. The following day, its stock price went down to $578.97. After a week, it was dropping faster, falling to $533.53.
At the end of May, the stock price was less than $300—less than half what it was before the shooting. It is important to note, however, that in April the company's stock price sharply rose higher than before the shooting, so the decline has not been consistent.
"The shooting contributed to the stock price crash, but other factors are also at play," Bai said.
"Adverse financial results due to higher than expected claims" could also be a reason, Mark Pauly, a professor of health care management at Wharton School of the University of Pennsylvania told Newsweek.
UnitedHealth Group reported a higher-than-expected financial performance for fiscal 2024—an 8 percent year-over-year revenue increase to $400.3 billion.
Higher-than-expected financial performance in companies could also lead to a drop in stock price for a number of reasons, including that investors might become more cautious about buying shares in a company until the foundations of the performance have been investigated.
In the case of UnitedHealth Group, the fact the positive financial performance was released during a period of heightened scrutiny following the CEO's death may have added fuel to the fire.
In April 2025, UnitedHealth Group cut its earnings forecast for the year, citing rising medical costs and a spike in care usage, especially by seniors. The disclosure wiped out over $100 billion of market value in a single day—UnitedHealth's stock plummeted 22 percent, hitting a four-year low.
"We have paused guidance and in the next weeks and quarters we will take actions necessary to deliver the performance we are capable of while providing exceptional services and outcomes for customers, consumers, and care providers," a spokesperson for UnitedHealthcare told Newsweek.
In May, a proposed class action lawsuit was filed in the Southern District of New York against UnitedHealth Group. The suit, brought by investor Roberto Faller, accuses it of misleading shareholders by failing to disclose the impact of public backlash following the killing of Thompson. The complaint alleges that UnitedHealth continued to project strong financial results despite the growing controversy.
According to the lawsuit, UnitedHealth projected earnings per share of $29.50 to $30 in December 2024 and reaffirmed this forecast in January 2025. However, the suit claims these projections were misleading, as the company was internally struggling and facing mounting criticism for its high rate of insurance claim denials and its handling of the CEO's death. The failure to address these issues, the lawsuit claims, led to a loss of investor confidence and ultimately triggered the dramatic drop in the company's stock price on April 17.
The legal action seeks class certification and damages for investors who purchased UnitedHealth shares between December 3, 2024, and April 16, 2025. In addition to UnitedHealth Group, the lawsuit names Chief Executive Andrew Witty and Chief Financial Officer John Rex as co-defendants, alleging they were directly involved in the dissemination of misleading information to investors during the affected period.
Scheffler said the increased "scrutiny and investigation" of the company was also influencing public opinion.
Shares in UnitedHealth Group fell sharply again after The Wall Street Journal reported on May 14 this year that the company was facing a Department of Justice (DOJ) investigation for possible Medicare fraud, citing anonymous sources. Newsweek has not verified the details of this reporting. Neither the DOJ nor UnitedHealth Group has made any public announcement confirming it.
The WSJ report said that the investigation had been active since at least the summer of 2024, and is being led by the health care fraud unit of the DOJ's criminal division. The shares recovered substantially in the days following the report.
The company responded at the time with a statement, saying: "We have not been notified by the Department of Justice of the supposed criminal investigation reported, without official attribution, in The Wall Street Journal today.
"The WSJ's reporting is deeply irresponsible, as even it admits that the 'exact nature of the potential criminal allegations is unclear.' We stand by the integrity of our Medicare Advantage program."
A class-action lawsuit was brought against the company alleging it uses artificial intelligence to assess coverage for some elderly patients who are on a Medicare Advantage plan, but that 90 percent of denials by the algorithm are later reversed following an internal appeal process or legal proceedings.
The lawsuit was filed on November 14, 2023. It names UnitedHealth Group, UnitedHealthcare and NaviHealth as the defendants. It was brought by the families of two now-deceased patients who were denied coverage by UnitedHealthcare for stays at nursing homes.
The suit is ongoing, and its claims have not been proved in court.
"Claims that we use an AI algorithm to automatically deny claims are false," a UnitedHealthcare spokesperson said.
"All adverse clinical determinations are made by medical directors, in accordance with CMS Medical coverage criteria. The lawsuit is based on unfounded allegations and mischaracterizes the incredibly valuable work of our experienced and compassionate clinicians."
However, the last six months for UnitedHealthcare have clearly been rocky.
"The fall of UnitedHealthcare will be studied for years to understand the root cause of an American health care system that is increasingly unaffordable, of poor quality for many and whose costs are unsustainable," Scheffler said.
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