UnitedHealth Group, America’s largest health care company, shocked investors Tuesday by reporting unexpectedly awful financial performance. It’s the second consecutive quarter the company has committed that sin. As a result, UHG is no longer just a company that missed its numbers. It’s something much more rare: a huge enterprise—No. 3 on the Fortune 500—confessing fundamental, long-standing problems endemic throughout the organization that may take years to remedy.
The crisis first manifested in April. UHG was emerging from the trauma of executive Brian Thompson’s high-profile murder in December when the company released first-quarter profits far below Wall Street’s expectations. The stock plunged, slashing over $100 billion from market value within hours. A month later, CEO Andrew Witty abruptly resigned for unspecified personal reasons, and former CEO Stephen Hemsley returned to the job. The stock plummeted again. The next day, the Wall Street Journal reported that the Department of Justice was investigating UHG for possible criminal Medicare fraud. The company said it hadn’t been notified of any such investigation. The stock nose-dived yet again.
