A cyberattack earlier in the year against UnitedHealth Group’s subsidiary resulted in $872 million in unfavorable effects for the health insurance giant in their first-quarter operations earnings report. The cyberattack targeted Change Healthcare, causing a disruption in operations at hospitals and pharmacies for over a week. The $872 million in costs excludes any direct response costs to the cyberattack, which likely includes any ransom paid to the hackers. The ransomware gang responsible for the attack, known as ALPHV or BlackCat, claimed to have stolen sensitive medical records.
UnitedHealth has not disclosed the amount paid to the hackers for system restoration, but media reports indicate a ransom payment of $22 million in bitcoin was made to BlackCat. Ransomware attacks, which disable computer systems and wreak havoc, have become more prevalent, particularly within the healthcare system. A study found that the annual number of ransomware attacks against hospitals and providers doubled from 2016 to 2021. These attacks have severe consequences, including increased waiting times, mortality rates, and incidents of patients leaving against medical advice.
The cyberattack on Change Healthcare was described as an assault on the U.S. healthcare system designed to cause maximum damage by CEO Andrew Witty during an earnings call. The estimated cost of the cyberattack to UnitedHealth for the year is projected to be between $1.35 billion and $1.6 billion. Despite the $872 million hit in the first quarter, UnitedHealth exceeded expectations with $99.8 billion in revenue and a per-share profit of $6.91. About 80% of Change Healthcare’s pharmacy claims and payment systems have been fully restored since the cyberattack, according to CEO Roger Connor.
UnitedHealth’s response and remediation efforts to the cyberattack were highlighted as successful during the earnings call. The company has been rebuilding its systems and functions to return to full operation. While the cyberattack had significant financial implications, UnitedHealth managed to surpass analyst forecasts for the first quarter. The health insurance giant remains resilient despite the challenges posed by the cyberattack. Khristopher J. Brooks, a reporter for CBS MoneyWatch, provided additional reporting on the cyberattack incident and its impact on UnitedHealth Group.
