AI Takes Center Stage at UNH: Will It Fix Administrative Waste?

For UnitedHealth Group UNH, artificial intelligence (AI) has evolved from a concept to a crucial part of its strategy. The healthcare industry’s heavy administrative tasks, like handling claims manually, data fragmentation and complex billing processes, have squeezed profit margins for a long time. AI offers a pathway to streamline these processes, to boost efficiency and reduce costs, while maintaining the quality of care.

UNH is harnessing the power of AI to streamline various processes like claims handling, prior authorizations, fraud detection and customer support. These tasks often involve a lot of repetitive, rule-based work that leads to delays and errors. By automating decision-making and data checks, AI can help speed up processing times, boost accuracy and reduce friction among providers, payers and patients.

From a strategic standpoint, UNH’s scale gives it an advantage. Having access to extensive datasets from insurance, pharmacy and care delivery opens opportunities to develop more effective models and standardize processes at scale. However, AI adoption is not without challenges. Regulatory scrutiny around data privacy, algorithmic bias and transparency is intensifying, particularly in healthcare. UNH must balance innovation with compliance, ensuring AI tools support informed decision-making while maintaining the trust of regulators, providers and members.

AI is not going to eliminate administrative waste at UNH overnight. Its effectiveness will depend on how thoughtfully it is integrated into existing workflows and governed over time. If deployed with clear oversight, strong data discipline, and measurable efficiency goals, AI could gradually ease operational hurdles and boost the company’s capacity to handle the growing complexities of the healthcare landscape.

How Are Competitors Faring?

Some of UNH’s major competitors in the AI-enabled healthcare solutions are Elevance Health, Inc. ELV and Humana Inc. HUM.

Elevance Health’s AI tool speeds up the prior authorization process by aligning necessary documentation with medical policies, helping patients receive faster approvals. ELV’s system undergoes thorough evaluations to check for bias and performance. At the same time, Humana is embracing AI to reduce administrative hurdles and enhance care coordination. By automating processes like claims, risk scoring and workflow decisions, HUM is focused on boosting efficiency while ensuring that care delivery remains seamless.

UnitedHealth’s Price Performance, Valuation & Estimates

Shares of UNH have declined 35.8% in the past year compared with the industry’s fall of 29.6%.

From a valuation standpoint, UnitedHealth trades at a forward price-to-earnings ratio of 18.63, above the industry average of 15.48. UNH carries a Value Score of A.

The Zacks Consensus Estimate for UnitedHealth’s 2025 earnings is pegged at $16.30 per share, implying a 41.1% drop from the year-ago period.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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