UnitedHealth: Bernstein lists 3 top priorities for the new CEO
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Investing.com -- In a note to clients on Wednesday, Bernstein identified three critical priorities for UnitedHealth’s new CEO, Steve Hemsley, following the company’s annual shareholder meeting, with pricing discipline emerging as the most immediate focus.
“We expect the top three tasks for the new CEO are: 1) resetting the underwriting culture of the company; 2) establishing the long-term management team for UNH; and 3) determining if this is the opportunity to make a major strategic decision for the company,” Bernstein analysts wrote.
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Hemsley, who returned as CEO earlier this year, addressed shareholders on these issues, stressing the importance of pricing discipline, particularly around forecasting medical care and financial activity such as Medicare Advantage bids and commercial pricing.
Bernstein noted that 2026 will likely be a “reset year” for pricing discipline, with an internal focus on “no growth at the expense of margin” and “intense central oversight of management processes.”
Hemsley also signaled moves toward reconfiguring leadership across UnitedHealthcare (UHC) and Optum, with Bernstein stating that he said “they have started to realign [the] management team and management process to ensure UHC and Optum have right leadership going forward.”
A key strategic question raised by Bernstein is whether the time is right to split UHC and Optum into separate businesses.
Hemsley reportedly did not comment directly on this, but did express confidence in Optum Health’s potential, describing it as being “in formative stages” of leading the transition to value-based care.
Hemsley also introduced new transparency initiatives, including a “comprehensive review of all the company policies, practices, and performance measure of risk assessment coding, managed care practices, and pharmacy services.”
Bernstein maintained its Outperform rating on UnitedHealth (NYSE:UNH) with a $377 price target.
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