UnitedHealth (UNH) shareholders are demanding a review of the costs and public impact of its policy of limiting or delaying access to healthcare in the wake of the murder of a senior executive and a damning Senate report last year.
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They requested the UNH board of directors produce a report detailing “how company practices impact access to healthcare and patient outcomes, including analyses of how often prior authorization requirements or denials of coverage lead to delay or abandonment of medical treatment and serious adverse events for patients.”
The group of investors, organized by the Interfaith Center on Corporate Responsibility, plans to push for a vote at the company’s annual meeting, which is yet to be scheduled.
This comes after senior UNH executive Brian Thompson was fatally shot in Manhattan in December, a case that has highlighted widespread anger toward the insurance industry.
Brand Damage Hits UNH Stock
In a statement, shareholders argued that policies resulting in delayed or avoided medical care threaten the company’s brand name. They also warned these policies could harm the stock and investors’ portfolios by negatively impacting the overall health of U.S. workers.
However, in response to what it described as “misinformation” about its handling of insurance claims following Mr. Thompson’s murder, UNH stated that it approves 90% of claims.
Senate Report Casts Doubt on UNH Claims
The shareholder demand also follows a Senate report last year that found UNH denied post-acute care services for Medicare Advantage at three times the rate of its overall denials.
Adding to UNH’s challenges, Donald Trump has pledged to eliminate drug industry “middlemen.”
Meanwhile, a report in The Wall Street Journal alleged that doctors were helping UNH collect billions of dollars from Medicare.
Is UNH a Good Stock to Buy?
Overall, Wall Street has a Strong Buy consensus rating on UNH stock, based on 19 Buys, one Hold, and zero Sells. The average UNH price target implies a 22.7% upside potential from current levels. Shares of UNH have increased by 3% this year.
