Managed care giant UnitedHealth Group Inc. (NYSE: UNH) is making a push into AI, aiming for significant cost savings and efficiency gains starting this year.
During the fourth-quarter earnings call on Tuesday, UnitedHealth Group's CEO, Stephen Hemsley, said that the company plans to "participate carefully and fully" in the rising tide of AI, while positioning itself as a leader in this space, within the healthcare industry.
Much of the company's AI strategy centers around productivity, automation, and a reconfiguration of its core service operations.
According to UnitedHealthcare CEO Timothy Noel, the company is anticipating "operating cost reductions of nearly $1 billion in 2026," with many of them being "AI-enabled."
The company is already seeing tangible results from its AI rollout, particularly in customer service operations, with Noel saying, "over 80% of calls from members leverage AI tools to help answer members' questions faster and more accurately," a shift that is reshaping how the company deploys its workforce.
As automation takes on more routine interactions, Noel said it allows human representatives to "focus more time on a better service experience for individuals," highlighting AI's role not just in cutting costs, but in reallocating labor toward higher-value engagement.
The company plans to back its AI strategy with significant capital, investing nearly $1.5 billion in 2026 and targeting a similar level in 2027 to support enterprise-wide initiatives.
These investments are aimed at accelerating AI-first product development at OptumInsight while expanding automation across OptumRx and UnitedHealthcare.
Stock Plunges Following Q4 Results
Shares of UnitedHealth Group dropped 19.6% on Tuesday, closing at $282.70, following the company's fourth-quarter results.
The company reported $113.21 billion in revenue, up 12% year-over-year, which fell short of consensus estimates of $113.81 billion. Adjusted earnings during the quarter stood at $2.11 per share, down significantly from $6.81 a year ago, but were ahead of analyst estimates at $2.10.
The stock also came under pressure due to the surprisingly low Medicare rate proposal for 2027, by the Centers for Medicare & Medicaid Services, at 0.09%.