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UnitedHealth says Change Healthcare cyberattack cost it $872 million
A cyberattack earlier against a UnitedHealth Group subsidiary this year has proved costly for one of the nation’s largest employers.
The health insurance giant on Tuesday noted $872 million in “unfavorable cyberattack effects” while reporting its first quarter operations earnings. Those unfavorable effects refer to the February 21 cyberattack on Change Healthcare, which shut down operations at hospitals and pharmacies for more than a week. The $872 million includes “the Change Healthcare business disruption impacts and exclude the cyberattack direct response costs,” which likely excludes any amount UnitedHealth may have paid to hackers as a ransom.
UnitedHealth confirmed at the time that the cybercriminals behind the attack was a Russia-based ransomware gang known as ALPHV or BlackCat. The group itself claimed responsibility for the attack, alleging it stole more than six terabytes of data, including “sensitive” medical records. UnitedHealth did now reveal how much — if at all — it paid the hackers to have their systems restored, though multiple media sources including Wired Magazine, reported at the time that a ransom payment for the amount of $22 million was made in the form of bitcoin.
UnitedHealth declined a request for comment by CBS MoneyWatch on Tuesday.
Havoc on health care companies
Ransomeware attacks, which involve disabling a target’s computer systems and cause considerable havoc, are nothing new and have become increasingly more common within the health care system. A study published in JAMA Health Forum in December 2022 found that the annual number of ransomware attacks against hospitals and other providers doubled from 2016 to 2021.
A study published in May 2023 in JAMA Network Open examining the effects of an attack on a health system found that waiting times, median length of stay, and incidents of patients leaving against medical advice all increased. An October 2023 preprint from researchers at the University of Minnesota found a nearly 21% increase in mortality for patients in a ransomware-stricken hospital.
The Change Healthcare incident was “straight out an attack on the U.S. health system and designed to create maximum damage,” CEO Andrew Witty told analysts during an earnings call Tuesday. The cyberattack will likely cost UnitedHealth between $1.35 billion and $1.6 billion this year, the company projected in its earnings report.
Despite the $872 million hit from it took in the first quarter as a result of the cyberattack, UnitedHealth Group trounced first-quarter expectations. UnitedHealth reported $99.8 billion in revenue during the first quarter of 2024, and a per-share profit of $6.91 — surpassing the $99.2 billion in revenue and $6.61 per share forecast by analysts on FactSet.
“We got through that very well in terms of remediation and building back to (full) function,” Witty said.
About 80% of Change Healthcare’s pharmacy claims and payment computer systems have been fully restored since the cyberattack, Roger Connor, CEO of Optum Insight said during the analysts’ call.
CBS News
Biden’s top hostage envoy Roger Carstens in Syria to ask for help in finding Austin Tice
Roger Carstens, the Biden administration’s top official for freeing Americans held overseas, on Friday arrived in Damascus, Syria, for a high-risk mission: making the first known face-to-face contact with the caretaker government and asking for help finding missing American journalist Austin Tice.
Tice was kidnapped in Syria 12 years ago during the civil war and brutal reign of now-deposed Syrian dictator Bashar al-Assad. For years, U.S. officials have said they do not know with certainty whether Tice is still alive, where he is being held or by whom.
The State Department’s top diplomat for the Middle East, Barbara Leaf, assistant secretary of state for Near Eastern Affairs, accompanied Carstens to Damascus as a gesture of broader outreach to Hay’at Tahrir al-Sham, known as HTS, the rebel group that recently overthrew Assad’s regime and is emerging as a leading power.
Near East Senior Adviser Daniel Rubinstein was also with the delegation. They are the first American diplomats to visit Damascus in over a decade, according to a State Department spokesperson.
They plan to meet with HTS representatives to discuss transition principles endorsed by the U.S. and regional partners in Aqaba, Jordan, the spokesperson said. Secretary of State Antony Blinken traveled to Aqaba last week to meet with Middle East leaders and discuss the situation in Syria.
While finding and freeing Tice and other American citizens who disappeared under the Assad regime is the ultimate goal, U.S. officials are downplaying expectations of a breakthrough on this trip. Multiple sources told CBS News that Carstens and Leaf’s intent is to convey U.S. interests to senior HTS leaders, and learn anything they can about Tice.
Rubinstein will lead the U.S. diplomacy in Syria, engaging directly with the Syrian people and key parties in Syria, the State Department spokesperson added.
Diplomatic outreach to HTS comes in a volatile, war-torn region at an uncertain moment. Two sources even compared the potential danger to the expeditionary diplomacy practiced by the late U.S. Ambassador Christopher Stevens, who led outreach to rebels in Benghazi, Libya, in 2012 and was killed in a terrorist attack on a U.S. diplomatic compound and intelligence post.
U.S. special operations forces known as JSOC provided security for the delegation as they traveled by vehicle across the Jordanian border and on the road to Damascus. The convoy was given assurances by HTS that it would be granted safe passage while in Syria, but there remains a threat of attacks by other terrorist groups, including ISIS.
CBS News withheld publication of this story for security concerns at the State Department’s request.
Sending high-level American diplomats to Damascus represents a significant step in reopening U.S.-Syria relations following the fall of the Assad regime less than two weeks ago. Operations at the U.S. embassy in Damascus have been suspended since 2012, shortly after the Assad regime brutally repressed an uprising that became a 14-year civil war and spawned 13 million Syrians to flee the country in one of the largest humanitarian disasters in the world.
The U.S. formally designated HTS, which had ties to al Qaeda, as a foreign terrorist organization in 2018. Its leader, Mohammed al Jolani, was designated as a terrorist by the US in 2013 and prior to that served time in a US prison in Iraq.
Since toppling Assad, HTS has publicly signaled interest in a new more moderate trajectory. Al Jolani even shed his nom de guerre and now uses his legal name, Ahmed al-Sharaa.
U.S. sanctions on HTS linked to those terrorist designations complicate outreach somewhat, but they haven’t prevented American officials from making direct contact with HTS at the direction of President Biden. Blinken recently confirmed that U.S. officials were in touch with HTS representatives prior to Carstens and Leaf’s visit.
“We’ve heard positive statements coming from Mr. Jolani, the leader of HTS,” Blinken told Bloomberg News on Thursday. “But what everyone is focused on is what’s actually happening on the ground, what are they doing? Are they working to build a transition in Syria that brings everyone in?”
In that same interview, Blinken also seemed to dangle the possibility that the U.S. could help lift sanctions on HTS and its leader imposed by the United Nations, if HTS builds what he called an inclusive nonsectarian government and eventually holds elections. The Biden administration is not expected to lift the U.S. terrorist designation before the end of the president’s term on January 20th.
Pentagon spokesperson Pat Ryder disclosed Thursday that the U.S. currently has approximately 2,000 US troops inside of Syria as part of the mission to defeat ISIS, a far higher number than the 900 troops the Biden administration had previously acknowledged. There are at least five U.S. military bases in the north and south of the country.
The Biden administration is concerned that thousands of ISIS prisoners held at a camp known as al-Hol could be freed. It is currently guarded by the Syrian Democratic forces, Kurdish allies of the U.S. who are wary of the newly-powerful HTS. The situation on the ground is rapidly changing since Russia and Iran withdrew military support from the Assad regime, which has reset the balance of power. Turkey, which has been a sometimes problematic U.S. ally, has been a conduit to HTS and is emerging as a power broker.
A high-risk mission like this is unusual for the typically risk averse Biden administration, which has exercised consistently restrained diplomacy. Blinken approved Carstens and Leaf’s trip and relevant congressional leaders were briefed on it days ago.
“I think it’s important to have direct communication, it’s important to speak as clearly as possible, to listen, to make sure that we understand as best we can where they’re going and where they want to go,” Blinken said Thursday.
At a news conference in Moscow Thursday, Russian President Vladimir Putin said he had not yet met with Assad, who fled to Russia when his regime fell earlier this month. Putin added that he would ask Assad about Austin Tice when they do meet.
Tice, a Marine Corps veteran, worked for multiple news organizations including CBS News.
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Delivering Tomorrow: talabat’s Evolution in the Middle East
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