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Globe and Mail
14 hours ago
- Business
- Globe and Mail
Is AI the Key to UnitedHealth's Market Growth and Cost Control?
As the HMO industry navigates regulatory reforms, rising costs and public scrutiny, UnitedHealth Group Incorporated UNH is intensifying efforts to streamline operations, lower expenses and expand its market presence by targeting tech-savvy consumers. A key part of this strategy involves strengthening AI literacy and ethical training programs for its clinicians and data analysts to ensure responsible use of emerging technologies. According to a May 2025 report from The Wall Street Journal, UNH has now deployed more than 1,000 AI-driven solutions across its insurance, clinical and pharmacy segments. These tools handle a wide range of tasks, from transcribing and summarizing clinical visits to automating claims processing and powering customer service chatbots. The company also revealed that approximately 20,000 of its engineers actively leverage AI to aid in software development. UnitedHealth's chief digital & technology officer, Sandeep Dadlani, emphasized in a late May 2025 interview with Fortune that the company's aggressive AI investments aim to address broad structural flaws in U.S. healthcare. He noted that around 90% of claims are now auto-adjudicated, signifying a major shift from manual to AI-driven workflows, and hinted at new AI-based products rolling out later this year. Despite these advancements, UNH faces legal challenges over its AI use. A 2023 class action lawsuit alleged misuse of an AI algorithm in claims evaluation. Although several claims were dismissed, the court allowed the case to proceed on key counts. Overall, UNH's AI strategy signals a decisive shift toward automation and digital transformation across its entire operation. How Are Other Health Insurers Leveraging AI? Humana Inc. 's HUM CenterWell is testing about 20 AI solutions aimed at enhancing clinical workflows and easing provider workload. Humana's ambient AI records doctor-patient conversations, reducing cognitive strain, with 90,000 minutes captured so far. AI also supports pharmacy reminders, shipping optimization and call center prompts to improve Humana's patient service quality. Elevance Health, Inc. ELV uses AI for predictive analytics to identify high-risk members and tailor treatment plans based on clinical and genetic data. Elevance's AI-powered chatbots assist customers, while fraud detection and care coordination tools enhance operations. The Health OS platform and smart claims engine streamline processes, improve accuracy and reduce Elevance's training time. UnitedHealth's Price Performance, Valuation and Estimates Shares of UNH have lost 40.6% in the year-to-date period compared with the industry's decline of 29.4%. Image Source: Zacks Investment Research From a valuation standpoint, UnitedHealth trades at a forward price-to-earnings ratio of 12.60, up from the industry average of 11.62. UNH carries a Value Score of B. The Zacks Consensus Estimate for UnitedHealth's 2025 earnings is pegged at $22.28 per share, implying a 19.5% drop from the year-ago period. Image Source: Zacks Investment Research The stock currently carries a Zacks Rank #5 (Strong Sell). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Zacks Names #1 Semiconductor Stock It's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom. With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028. See This Stock Now for Free >> Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report UnitedHealth Group Incorporated (UNH): Free Stock Analysis Report Humana Inc. (HUM): Free Stock Analysis Report Elevance Health, Inc. (ELV): Free Stock Analysis Report
Yahoo
28-05-2025
- Business
- Yahoo
UnitedHealth CTO says AI investments can help a health care system that needs to be fixed
Around $5 trillion is spent on U.S. health care each year, a system that many Americans rate poorly, and one which will confront even greater challenges in the years ahead as annual expenses continue to rise, the population ages, and clinical workforce shortages persist. Pharmaceutical companies, hospital systems, insurers, and pharmacy benefits managers operate in a complex industry that's earned a reputation for siloing data and badly lagging other sectors like banking and telecom when it comes to deploying new technological advancements. Greater investments in artificial intelligence are lauded as a key treatment for the health care system's most serious problems, though most in the industry report they still lack sufficient resources and planning in AI and other digital investments. Sandeep Dadlani, the chief digital and technology officer at insurance giant UnitedHealth Group, says he understands that the system is broken. 'I empathize with everybody who has a grievance towards health care,' says Dadlani. 'The system has to be fixed by many players, not just by us.' UnitedHealth, ranked fourth on the Fortune 500, says it is seeing some big productivity gains and adoption from the company's 1,000 AI use cases already in production. These applications, a mix of generative and traditional forms of AI, include more than 60 million lines of AI-written software code that has already been accepted by around 20,000 engineers, 65 million customer calls that were initially answered by an AI chatbot in 2024, and 18 million AI-enabled searches to help customers find a doctor that were conducted in the first quarter of 2025 alone. Another generative AI tool expected to launch later this year in the UnitedHealthcare and Optum subsidiary apps is a consumer-facing conversational bot that will help customers find a doctor, schedule appointments, or review their lab results. That tool was initially tested with UnitedHealth's employees before it will debut externally. 'It's a maze,' says Dadlani, of the labyrinth that customers face when dealing with health care providers, insurers, and laboratory services. 'So something that helps navigate through that and provides great end-to-end access, that's the dream.' Dadlani spoke to Fortune in early May, before the surprise announcement that CEO Andrew Witty had resigned. Dadlani's efforts overseeing the company's AI evolution come as UnitedHealth, which serves more than 52 million consumers, undergoes a difficult period. In December, UnitedHealthcare CEO Brian Thompson was murdered in Manhattan and in April, the company's first financial results since the killing, UnitedHealth reported earnings that missed Wall Street expectations and cut its bottom-line target for the full year. The company is also reportedly facing a Justice Department probe for possible criminal Medicare fraud. There is also a class-action lawsuit in the courts that alleges UnitedHealth has used AI to illegally deny claims. Dadlani refutes this. 'AI is never used to deny a claim,' he says. 'If a claim is not eligible to be approved, it goes up to a human agent,' who, he says, then makes the final determination. Dadlani says around 90% of claims are auto adjudicated, the process in which software is able to manually review a claim. Of the 10% of claims that go through an extra step for review, most of the issues are clerical, meaning there are missing details or the information wasn't input into the system properly. After that manual review, Dadlani says 98% of claims are approved and for the remaining 2%, denials tend to be attributed to either ineligible benefits or because of clinical or medical safety determinations. Later this year, Dadlani says he intends to launch new AI products that will make auto approval for claims even higher. 'We are already seeing in our early experimentation that AI can help fill some of the missing information for these claims,' he says. UnitedHealth's vast AI portfolio is reviewed on a monthly basis by every business unit. On a quarterly basis, chief information officers come together to monitor how AI is being used across the enterprise. The company has also established a responsible AI board that is a mix of internal and external technologists, clinicians, legal experts, and others who review hundreds of AI use cases each month before authorizing what can go into production. Dadlani says UnitedHealth monitors AI use cases for safety, bias, fairness, and legal compliance. He stresses that AI is not being used to perform a clinical diagnosis. 'We don't see AI replacing doctors or clinicians,' he says. 'We want AI to be a tool.' To bring the workforce along, UnitedHealth launched an advanced AI learning course in early March that saw more than 10,000 enrollees. The company has also set up a dedicated platform, called United AI Studio, that allows employees to securely access the large language models offered by large AI hyperscalers, as well as the small language models that UnitedHealth developed on its own based on proprietary datasets. The company also had about half-a-dozen use cases in production based on agentic AI, which is designed to more autonomously complete complex tasks—ideally with limited or no human supervision. Most of the agentic AI use cases have been for repetitive, administrative tasks. The technology will need to mature more before it expands to other parts of the business. 'We will be very cautious when we get into more clinical use cases and the use of agents,' says Dadlani. John Kell Send thoughts or suggestions to CIO Intelligence here. This story was originally featured on Sign in to access your portfolio
