By sriparna roy and sneha Sk
(Reuters) – UNITEDHEALTH GROUP said its CEO Andrew Oitti has resigned from Tuesday and the company has stopped its annual forecast due to increasing medical expenses, sending shares immersing nearly 16% to four years.
Chairman Stephen Hemsley, 72 -year -old, who was CEO, before retiring in 2017, will again take over the title of the Executive Director.
He refused to leave for personal reasons, the company said without being developed. Its outcome comes just a few weeks after UNITEDHEALTH reduced its annual forecast and reported its first gap after the 2008 financial crisis, noting a major failure under the guidance of Witty.
“Many of the problems that prevent our goals, as well as our opportunities, are largely under our control,” Hemsley said when calling with investors.
UNITEDHEALTH has dealt with several major challenges in the last 12 months, including cyberattack in its technological unit, which has affected about 190 million people, a report to investigate its Medicare invoicing practices and an unexpected medical expense that it harmed at the bottom.
The company was also catapulted in the public consciousness in December, when Brian Thompson, CEO of its insurance unit, was killed in New York just before its investor conference.
Kevin Gaed, Chief Operations Officer of United Hayraalth Investor Bahl & Gaynor, said the sharpness of Witty’s release “is certainly a surprise”, but noted that UNITEDHEALT has faced unique struggles in recent months.
“We are unlikely to hear more about Andrew’s departure, but it is fair to offer the recent murder of his colleague, the constant fear of the family and his safety and the operational pressure of the recent probable (in) part of that decision,” Gade said.
UNITEDHEALTH’s shares fell 20% on April 17, when it reduced its forecast and will be recovering. The shares of other health insurers were also injured after United’s financial hit aroused fears that high costs could overflow other companies, but these shares were recovered.
In recent weeks, the rivals Humana and Elevance Health have said they have not observed unusually high demand in their insurance and care for the operations and that medical expenses have remained in accordance with their expectations.
These revelations prompted some analysts to say that United’s problems may be specific to the company. UNITEDHEALTH said during the investor on Tuesday that there is more demand for medical attention than new members and people with complex conditions, which increases costs.