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UnitedHealth says Change Healthcare cyberattack cost it $872 million

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

The health insurance giant noted $872 million in “adverse effects from cyberattacks” when it reported its first-quarter operating results on Tuesday. These adverse effects refer to the February 21 cyberattack against Change Healthcare, who stopped operations in hospitals and pharmacies for more than a week. The $872 million includes “impacts from the disruption of Change Healthcare’s business and excludes direct response costs to the cyberattack,” which likely excludes any amount UnitedHealth may have paid the hackers as ransom.

UnitedHealth confirmed shortly after the breach that the cybercriminals behind the attack were a Russia-based ransomware gang known as ALPHV or BlackCat. The group itself claimed responsibility for the attack, alleging that it stole more than six terabytes of data, including “sensitive” medical records.

UnitedHealth has now revealed how much – if at all – it paid the hackers to restore their systems. However, several media outlets at the time, including Wired Magazine, reported that a ransom had been paid. for an amount of 22 million dollars was contributed to BlackCat in the form of bitcoin.

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

Havoc in healthcare companies

Ransomeware attacks, which involve disable a target’s computer systems and cause considerable havoc, are not new and have become increasingly common within the healthcare system. A study published in the JAMA Health Forum in December 2022 found that the annual number of ransomware attacks against hospitals and other providers doubled between 2016 and 2021.


Doctor describes devastating effects of UnitedHealth cyberattack

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

The Change Healthcare incident was “a direct attack on the U.S. healthcare system and designed to create maximum damage,” CEO Andrew Witty told analysts on an earnings conference call Tuesday. The cyberattack will likely cost UnitedHealth between $1.35 billion and $1.6 billion this year, the company forecast in its earnings report.

Despite losing $872 million in the first quarter as a result of the cyberattack, UnitedHealth Group exceeded first-quarter expectations. UnitedHealth reported first-quarter 2024 revenue of $99.8 billion and earnings per share of $6.91, surpassing $99.2 billion in revenue and $6.61 per share. action predicted by FactSet analysts.

“We overcame this situation very well in terms of remediation and rebuilding (full) functionality,” Witty said.

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

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