The fatal shooting of the chief executive of UnitedHealth Group's insurance division on Wednesday continues to take a toll on UNH and other managed-care stocks. The group is sliding for the second straight session on Friday, a day after a public backlash prompted Anthem Blue Cross Blue Shield, part of Elevance Health, to reverse a policy that would have limited reimbursements for anesthesia.
Despite the timing, the extent to which the slaying of Brian Thompson, CEO of the UnitedHealthcare managed care division, influenced Anthem's decision isn't clear.
UnitedHealth Exec Faced Threats
Thompson had received "some threats," wife Paulette told NBC News. She wasn't clear on the reason for the threats, but gave a sense that they were related to his role leading the nation's largest provider of health coverage.
"Basically, I don't know, a lack of coverage? I don't know details. I just know that he said there were some people that had been threatening him."
Anthem Backpedals
The American Society of Anesthesia had blasted the insurer in a news release on Nov. 14 for its "unprecedented move" to put an "arbitrary time limit" on use of anesthesia, based on Centers for Medicare and Medicaid Services guidelines for the lengths of certain procedures.
"With this new policy, Anthem will not pay anesthesiologists for delivering safe and effective anesthesia care to patients who may need extra attention because their surgery is difficult, unusual or because a complication arises," the group wrote.
In the news release, Donald Arnold, president of the American Society of Anesthesiologists, called the policy "the latest in a long line of appalling behavior by commercial health insurers looking to drive their profits up at the expense of patients and physicians providing essential care."
Criticism of the Anthem policy mounted on Wednesday, after Thompson's murder. Sen. Chris Murphy, D-Conn., demanded in a social media post that Anthem reverse the policy immediately. He wrote: "Saddling patients with thousands of dollars in surprise additional medical debt. And for what? Just to boost corporate profits?"
Anthem said it wouldn't proceed with the policy, blaming misinformation and saying it would never refuse to pay for medically necessary anesthesia services."
Tragedy Cut Short UNH Investor Day
Thompson was fatally shot outside of his hotel in midtown Manhattan at 6:46 a.m. by a masked man. The killing is being investigated as a possible targeted attack. He was in New York for UnitedHealth's investor day conference, which was cut short after news reports of Thompson's death were published.
Thompson has been CEO of UnitedHealthcare since April 2021, overseeing more than 100,000 employees. Previously, he led UNH's government programs business.
Despite the tragedy, UNH stock initially rose 0.9% on Wednesday, as investors reacted favorably to the company's new earnings outlook for 2025 and updated outlook for 2024 that were issued late Tuesday.
Attack On Managed Care?
The New York Post reported that the bullets and shell casings used in the slaying had messages written on them, including "deny" and "defend."
The newspaper further noted the killer's apparent reference to a 2010 book: "Delay, Deny, Defend: Why Insurance Companies Don't Pay Claims and What You Can Do About It."
Other reports indicated progress in the case, including a possibility that police know where the gun was purchased.
The targeting of managed-care executives is now being perceived as a threat. UnitedHealth appears to have removed bios and pictures of top executives from its investor relations site.
UnitedHealth Outlook
UnitedHealth said 2024 adjusted earnings per share will range from $27.50 to $27.75, with the midpoint just above the $27.61 FactSet consensus. For 2025, adjusted EPS will range from $29.50 to $30, compared to an analyst consensus of $29.92. Next year's revenue should range from $450 billion to $455 billion. Analysts were expecting about $432 billion.
Based on the earnings outlook, Stephens analysts hiked their price target for UNH stock to 675 from 605, keeping an overweight rating.
However, UNH stock tumbled 5.2% on Thursday, then sank another 5.1% on Friday. UNH stock lost 9.9% for the week, making it the worst week for the health care giant since the pandemic shutdown in March 2020. While UNH bore the brunt of the selling, other managed care stocks also lost a lot of ground. For the week, Humana fell 4.9%, Centene 5.4%, Cigna 5.9% and Elevance 6.1%. CVS Health, which participates in Medicare Advantage and manages prescription benefits, slid 7.6%.
In a Wednesday note, CFRA Research kept a hold rating on UNH. Analyst Daniel Rich wrote, "Thompson's murder is another setback in a difficult moment for UNH, which continues to deal with fallout from the Change Healthcare cyberattack, legal challenges against the Amedisys (home health) acquisition, and higher medical utilization levels."
