Leadership changes are afoot at Optum, with parent company UnitedHealth Group announcing that Dr. Patrick Conway will become CEO of the division.
Currently the CEO of Optum Rx, Conway has also held a senior leadership role at Optum Health and has a background as a public and private healthcare leader and practicing pediatrician, UHG said. He is the former head of the Center for Medicare and Medicaid Innovation at CMS.
Heather Cianfrocco, current Optum CEO, has been appointed UnitedHealth Group's executive vice president of Governance, Compliance and Information Security.
"Heather's deep knowledge of our business from her experience in senior leadership roles across UnitedHealthcare and Optum, coupled with a decade working as a lawyer, will continue the company's commitment to strong governance and ethical oversight of our operations," UHG said.
The changes will become effective on May 6.
WHAT'S THE IMPACT
The changes come on the heels of a disappointing first quarter for UHG. While the insurer pulled in $6.29 billion in profit during Q1 – a dramatic turnaround from the $1.41 billion loss it reported in Q1 2024 – "heightened care activity indications" in its Medicare Advantage business cropped up, particularly in physician and outpatient services. This led the company to cut its outlook to net earnings of $24.65 to $25.15 per share for the year, and adjusted earnings of $26 to $26.50 per share (down from $28.15 to $28.65 and $29.50 to $30, respectively).
The lower-than-expected performance sent UnitedHealth stocks tumbling 23.1% last week, briefly touching a low of $448, its weakest level since Feb. 21, according to Seeking Alpha.
UHG also attributed the mixed performance to unexpected changes in Optum Health's member profiles, which will affect reimbursement this year "due to unexpectedly minimal 2024 beneficiary engagement by plans exiting markets."
THE LARGER TREND
Optum's first-quarter revenues were $63.9 billion, a $2.8 billion increase that UHG attributed to Optum Rx. Operating earnings were $3.9 billion. Optum Health revenues were $25.3 billion, driven by membership growth and profile changes.
Optum Insight revenues were $4.6 billion, and the revenue backlog was $32.9 billion. Optum Rx revenues were $35.1 billion, and adjusted scripts grew to 408 million from 395 million last year.
UnitedHealth Group CEO Andrew Witty said in an earnings call that "unanticipated changes" in Optum Medicare membership affected revenue for the year.
Jeff Lagasse is editor of Healthcare Finance News.
Email: jlagasse@himss.org
Healthcare Finance News is a HIMSS Media publication.