UnitedHealth Hits Panic Button: Ex-CEO Hemsley Reinstalled Amid Tumult

A BLAST FROM THE PAST: As its stock plunges and federal investigators close in, the health care juggernaut bets on its old architect to salvage a deeply troubled empire.

Stephen Hemsley

The largest health care conglomerate in the world, UnitedHealth Group, stunned investors this morning with an abrupt leadership shakeup: CEO Sir Andrew Witty is out, and former chief executive Stephen Hemsley is back. The news — first reported by The Wall Street Journal — sent the company’s stock tanking more than 10% in premarket trading and triggered a sell-off among its competitors, including Humana, CVS/Aetna and Elevance. The carnage continued throughout the morning.

At one point, UnitedHealth’s share price reached a low of $316.50. That means the company’s stock price has fallen 50% since reaching a high of $630.73 just six months ago. 

The timing couldn’t be more fraught for UnitedHealth. It is facing a storm of scrutiny, mounting medical costs, and intensifying federal investigations. As the company’s board seeks stability in Hemsley’s return, the real question is whether this leadership change can reverse the fortune of a $400 billion behemoth whose core business model — and immense power over our health system — is under siege.

A Crisis of Confidence — and Leadership

Sir Andrew Witty’s departure comes just weeks after UnitedHealth delivered a brutal first-quarter earnings report, its first miss since the 2008 financial crisis. As Reuters reported, the company also suspended its already-reduced 2025 outlook, citing a troubling spike in care utilization — particularly in its Medicare Advantage business, which covers millions of America’s seniors. That alarmed investors even more today.

That same Medicare Advantage program is now the subject of multiple federal investigations. As The Wall Street Journal revealed earlier this year, the Department of Justice is examining both antitrust concerns and allegations of improper billing by UnitedHealth’s physician groups tied to Medicare Advantage.

Witty joined UnitedHealth’s Optum subsidiary in 2018 before becoming CEO of the parent company in 2021. His tenure also coincided with a massive cyber attack in 2024 and the tragic murder of Brian Thompson, the head of UnitedHealthcare, the insurance division, later that year. The latter ignited a wave of negative attention on the company, especially on social media, and preceded an unusual lawsuit filed by some of the company’s investors who alleged the company concealed the fallout from Thompson’s killing.

Back to the Future

If Hemsley’s name rings a bell, it should. He previously led UnitedHealth for over a decade until stepping down in 2017. His return is a move straight from the corporate crisis playbook — a strategy we’ve seen before with companies like Starbucks (Howard Schultz) and Disney (Bob Iger).

Wall Street remembers Hemsley fondly. During his tenure, UnitedHealth transformed from a large insurer into a vertically integrated colossus. Under his leadership, the company aggressively acquired physician practices, clinics, and pharmacy benefit managers, creating an internal supply chain that enables UnitedHealth to pay itself to deliver care to people enrolled in its health plans.

Hemsley presided over a period of seemingly endless growth and was hailed by investors for delivering consistent earnings gains. Much to my (and other advocates) chagrin, Hemsley’s integration strategy turned UnitedHealth into the ultimate health care middleman — controlling everything from the doctors we see to the drugs we need to the data our providers use.

That same strategy, however, is now under intense government scrutiny. The Justice Department’s antitrust division is reportedly investigating whether UnitedHealth’s acquisitions have given it too much control over both the financing and delivery of care — a concern critics, including myself, have raised for years.

A Model Under Pressure

While all major insurers have struggled with higher care utilization since 2023, UnitedHealth appears to be uniquely exposed. Medicare Advantage — once its crown jewel — is now its Achilles’ heel (even after their recent lobbying blitz).

Unlike its rivals, UnitedHealth shocked analysts by revealing deeper-than-expected cost problems in the first three months of this year. Witty blamed changes in government reimbursement and rising medical expenses from new Medicare enrollees. But that explanation fell flat when other insurers didn’t report similar problems during the quarter.

Witty had previously reassured investors in January that the company had a “strong outlook for the year.” But just three months later, he was forced to issue one of the biggest earnings guidance cuts in the company’s history — slashing the forecast by nearly $4 a share. That announcement alone wiped out $119 billion in market value in a single day. The stock has since continued to slide.

What Comes Next?

Hemsley’s reappointment sends a clear signal: UnitedHealth intends to double down on the model he built. That means continuing to vertically integrate, expanding Optum, and investing in Medicare Advantage — despite the mounting red flags.

Whether that’s a savvy move or a dangerous bet remains to be seen. The challenges UnitedHealth faces today — Justice Department probes, Medicare billing scrutiny, investor skepticism, and a credibility crisis — aren’t going away.

The fact that one of the most powerful corporations in American health care just pulled its annual forecast entirely should be deeply unsettling to patients, providers, and policymakers alike. This is no ordinary company. UnitedHealth doesn’t just insure tens of millions of people — it owns doctors, processes payments, controls pharmacy benefits, and shapes the prices we all pay.

The company’s board clearly hoped the leadership change would calm the markets, and in the long term, that might happen. But make no mistake: it’s the model that’s under fire—regardless of whether UnitedHealth acknowledges it or not.