Latest news with #medical costs
Reuters
2 days ago
- Business
- Reuters
UnitedHealth's downbeat annual forecast, quarterly profit miss hit shares
July 29 (Reuters) - UnitedHealth (UNH.N), opens new tab on Tuesday restored its full-year profit forecast that it suspended months ago, with a new outlook that highlighted the challenges the U.S. insurer faced, including rising medical costs. The company projected full-year earnings per share of at least $16, well short of analysts' lowered estimates, while second-quarter profit fell short of expectations. Its shares were trading about 5% down premarket, set to add to the more than 40% slump this year. UnitedHealth and other insurers have been hit hard this year by elevated medical costs. The company's underperformance led to the abrupt departure of CEO Andrew Witty in May. New CEO Stephen Hemsley is under pressure to regain investor trust amid company's financial issues and reputational damage. The company posted its first earnings miss in over a decade in the first quarter and is facing criminal and civil investigation by the U.S. Department of Justice over its Medicare Advantage billing practices. Morningstar analyst Julie Utterback said given the new outlook is roughly half of UnitedHealth's initial guidance for 2025, investors will be looking at management to allay fears over the longer-term earnings power of the business. UnitedHealth in December had initially forecast adjusted profit for 2025 to be between $29.50 and $30.00 per share. In 2024, its adjusted profit stood at $27.66 per share. The company said its new forecast reflects expectations for higher realized and anticipated care trends. The company suspended its 2025 forecast in May, a historic first for the insurer, citing higher-than-anticipated medical expenditures, which have also rattled its peers. The company's quarterly medical loss ratio - the percentage of premiums spent on medical care - stood at 89.4%, higher than analysts' expectation of 88.58%. The rise was mainly due to medical cost trends that significantly exceeded pricing trends, and the ongoing effects of Medicare funding reductions, UnitedHealth said. Still, the company remained optimistic and reiterated that it expects to return to profit growth in 2026. "While we face challenges across our lines of business, we believe we can resolve these issues and recapture our earnings growth potential," said Tim Noel, chief executive officer of the health insurance unit UnitedHealthcare. The company's adjusted second-quarter profit of $4.08 per share missed analysts' average estimate of $4.48.
Yahoo
23-07-2025
- Health
- Yahoo
Many Think Doctors Are Overpaid And That's Why Healthcare Is So Pricey, But One U.S. Surgeon Actually Ran The Numbers Against Global Peers
A common complaint in the American healthcare debate is that physicians make too much money, and that their pay is a major reason healthcare is so expensive. But a U.S. surgeon recently spent an administrative day crunching the numbers, and he argues the reality doesn't match the outrage. 'Physician salaries account for roughly 8.6% of total healthcare costs [in the U.S.],' the surgeon wrote in a Reddit post on r/Salary. 'It's around 10% in Canada, 15% in Germany, 11% in France, 11.6% in Australia, and 9.7% in the UK.' Don't Miss: Deloitte's fastest-growing software company partners with Amazon, Walmart & Target – Many are rushing to grab $100k+ in investable assets? – no cost, no obligation. A Closer Look At The Numbers He also did his own calculations using Canadian healthcare spending figures. Canada spent $372 billion on healthcare last year. With an average physician salary of $384,000 and 97,384 physicians nationwide, the total salary cost works out to about $37.4 billion—roughly 10% of total healthcare spending. That figure aligns closely with the U.S., suggesting that doctors' share of healthcare spending isn't uniquely bloated in America. 'This just means that our healthcare system as a whole is riddled by parasites such as insurance companies and admin,' he added. Critics often argue that U.S. physicians earn much more than their international peers. But when the Reddit poster compared salaries of engineers, teachers, lawyers and plumbers in the U.S., Canada, Germany, and France, he found similar ratios to physician salaries across all professions. Trending: This AI-Powered Trading Platform Has 5,000+ Users, 27 Pending Patents, and a $43.97M Valuation — For example, the ratio of physician to engineer pay was 2.7 in the U.S., compared to 3.2 in Canada and 1.9 in Germany. When it came to teachers, the ratio was 4.1 in the U.S. and 4.7 in Canada. 'It seems like Germany underpays teachers relative to physicians, but the USA is very close to France and Canada,' he noted. So What's Actually Driving Costs? Commenters overwhelmingly agreed that doctors aren't the problem. 'Healthcare is now the largest employer in the country and it's got very little to do with doctors, nurses and surgeons,' one person wrote. 'It's admin. It's always been admin,' said another. 'There are, what, a dozen administrators per doctor in the average hospital?' Medical equipment sales, pharmaceutical pricing, and insurance company practices were also frequently blamed. 'Stryker (NYSE:SYK) generated +$20 billion in 2024,' one commenter said. Another added, 'We're paying double what we should for care, not 6% more.' The thread also dug into why training more doctors isn't as simple as it sounds. Opening more residency spots requires adequate patient volume and teaching staff resources that aren't easy to scale overnight. 'You need to do X number of Y procedures to be competent,' the surgeon explained. 'It's not as easy as just 'training more doctors'. There are many moving parts.'Meanwhile, some emphasized the optics: the public sees doctors making six or seven figures and assumes they are to blame, even though health insurance CEOs routinely earn $20 million or more. 'Physicians are easy targets,' one longtime medical professional wrote. 'We are much more poorly organized than big pharma or the hospital lobby.' Others chimed in from outside medicine. 'Make a button on an app more responsive and get $500K, no one cares. Save lives and make $300K, pitchforks,' one person joked. A dentist said their patients wrongly assume they keep the entire cost of a procedure. 'For a cancer procedure that costs over $20,000 before insurance, I take home $1,600. But laypeople think I take home all $20,000.' One user summed it up plainly: 'Anyone who thinks physicians make too much money is an idiot. I'm not a physician, I work in tech. But I'd rather fire every insurance company admin and funnel that money back into pay for doctors, nurses and other people doing the actual useful jobs.' Read Next: Here's what Americans think you need to be considered 5 NEW TRADES EVERY WEEK. Click now to get top trade ideas daily, plus unlimited access to cutting-edge tools and strategies to gain an edge in the markets. Get the latest stock analysis from Benzinga? STRYKER (SYK): Free Stock Analysis Report This article Many Think Doctors Are Overpaid And That's Why Healthcare Is So Pricey, But One U.S. Surgeon Actually Ran The Numbers Against Global Peers originally appeared on © 2025 Benzinga does not provide investment advice. All rights reserved. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
