Health

According to UnitedHealth, the Change Healthcare cyberattack cost $872 million

A cyberattack earlier this year against a subsidiary of UnitedHealth Group proved costly for one of the country’s largest employers.

The health insurance giant flagged an $872 million “unfavorable impact from cyberattacks” in its first-quarter annual report on Tuesday Merits. These adverse impacts relate to the February 21 cyberattack on Change Healthcare. which paralyzed operations in hospitals and pharmacies for more than a week. The $872 million includes “the impact of Change Healthcare’s business disruption and the costs of directly responding to cyberattacks,” which likely excludes any amounts UnitedHealth may have paid as ransom to hackers.

UnitedHealth confirmed Shortly after the security breach, it was discovered that the cybercriminals behind the attack were a Russia-based ransomware gang called ALPHV or BlackCat. The group itself took responsibility For the attack, authorities said they stole more than six terabytes of data, including “sensitive” medical records.

UnitedHealth has now revealed how much, if anything, the hackers paid to restore their systems. However, several media sources, including Wired Magazine, reported a ransom payment at the time for the amount of $22 million was sent to BlackCat in the form of Bitcoin.

UnitedHealth declined a request for comment from CBS MoneyWatch on Tuesday.

Chaos for healthcare companies

Ransomeware attacks that include the following Disabling a target’s computer systems and cause significant harm are nothing new and are becoming increasingly common in the healthcare system. A study published in December 2022 in the JAMA Health Forum found that the annual number of ransomware attacks against hospitals and other providers is increasing doubled from 2016 to 2021.


Doctor describes devastating impact of UnitedHealth cyberattack

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A study published in May 2023 in JAMA Network Open that examined the impact of an attack on a healthcare system found that wait times, mean length of stay, and instances of patients leaving against medical advice increased. An October 2023 preprint from researchers at the University of Minnesota found an almost 21% increase in mortality for patients in a hospital hit by ransomware.

The Change Healthcare incident was “a pure attack on the U.S. healthcare system and designed to cause maximum harm,” CEO Andrew Witty told analysts during a conference call Tuesday. The cyberattack is expected to cost UnitedHealth between $1.35 billion and $1.6 billion this year, the company predicted in its earnings report.

Despite first-quarter losses of $872 million from the cyberattack, UnitedHealth Group beat first-quarter expectations. UnitedHealth reported revenue of $99.8 billion and earnings per share of $6.91 in the first quarter of 2024 – beating the revenue of $99.2 billion and $6.6 billion forecast by analysts on FactSet $.61 per share.

“We came through this very well in terms of remediation and getting it back to (full) functionality,” Witty said.

About 80% of Change Healthcare’s pharmacy and payment computer systems have been fully restored since the cyberattack, Optum Insight CEO Roger Connor said during the analyst call.

– With reporting from the Associated Press.

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