In the midst of a challenging period for UnitedHealthcare, the health insurer on July 31 announced a rotation of senior executives, moving its CFO into a strategic planning position and elevating a different executive to the CFO title. As Yahoo!Finance’s Jake Conley and Anjalee Khemlani reported on Friday morning, August 1, “After a year that has seen its share price collapse by more than 50 percent, UnitedHealth Group (UNH) has swapped out its chief financial officer. Wayne DeVeydt will take over as CFO of UnitedHealth effective Sept. 2, according to securities filings. He replaces John Rex, who has been in the role since 2016. The move, announced Thursday night, follows UnitedHealth founder and executive chairman Stephen Hemsley taking back the reins following CEO Andrew Witty's sudden departure in May. Rex will transition from CFO to strategic adviser to the CEO, a move that UnitedHealth said in filings was arranged in Rex's 2016 employment contract,” they wrote.

DeVeydt, 55, was most recently managing director and operating partner at Bain Capital, and was also the finance chief of UnitedHealth's rival Elevance (ELV.N), opens new tab, then called Anthem, between 2007 and 2016.

This latest executive change follows on the heels of other major changes, as a staff-written Reuters report published onThursday noted. “During his tenure at Anthem, DeVeydt oversaw the company's $4.9 billion acquisition of Amerigroup in 2012 and was involved in the attempted $54 billion acquisition of Cigna (CI.N), opens new tab, which was ultimately blocked by regulators,” Reuters noted. “DeVeydt will get an annual base salary of $1 million and other benefits such as equity awards and a $2 million life insurance policy, UnitedHealth said. The largest U.S. health insurer had seen an abrupt departure of Andrew Witty as CEO in May, with Stephen Hemsley replacing him. Hemsley, who led UnitedHealth for more than a decade until 2017, has re-taken the reins following several setbacks for the company, including a cyberattack last year, federal investigations, soaring medical costs and a top executive's murder.”

"Given the downward revisions to estimates in the past six months, the return of CEO Stephen Hemsley, and the extensive management changes made across UNH, we appreciate the desire to make a change at CFO," JPMorgan analyst Lisa Gill wrote in a note, as reported by Yahoo!Finance.

Thursday’s press release announcing the change quoted Stephen J. Hemsley, chairman and CEO of parent UnitedHealth Group as stating that “Wayne DeVeydt combines deep financial acumen and operating experience with the mission-oriented and compassionate approach to health care that is a perfect fit for UnitedHealth Group,” and adding that “John Rex has been an exceptional leader, having helped guide our company through substantial change with both strategic vision and strong commitment to our mission. I look forward to his continued insights as UnitedHealth Group moves forward.”

The press release noted that “DeVeydt, 55, most recently has been a managing director and operating partner at Bain Capital, working with client leaders on operational improvement and growth acceleration. From 2018-2020, he was chairman and CEO of Surgery Partners, Inc. in Nashville, expanding the operational scale and financial performance of the surgical services firm. He joined Anthem, Inc. (now Elevance) in 2005 and served as its chief financial officer from 2007 to 2016. Prior to joining Anthem, DeVeydt served as a partner with PricewaterhouseCoopers LLP, with a focus on the health care sector.” And it quoted DeVeydt as stating that  “There is no organization besides UnitedHealth Group that presents the kinds of opportunities to make a difference in health care, from individual patient care to broad system efficiency, so I am eagerly looking forward to joining the team. I’ve been fortunate to know John Rex for over two decades and am honored to follow a leader of his caliber.”

Meanwhile, the Minneapolis Star-Tribune’s Christopher Snowbeck wrote on Thursday that “Wayne DeVeydt, 55, served from 2022 until recently as a managing director of the portfolio group at Bain Capital, a prominent private equity firm based in Boston. Previously, he was the long-time CFO at Indiana-based Elevance, the health insurance giant formerly known as Anthem. The company runs for-profit health insurance businesses across the country that use the Blue Cross and Blue Shield brands. DeVeydt becomes CFO at Eden Prairie-based UnitedHealth effective Sept. 2. He will take over for John Rex, who has served as CFO at UnitedHealth since 2016. Rex will become a strategic advisor to chief executive Stephen Hemsley.”

Snowbeck noted that “The company’s massive UnitedHealthcare health insurance business announced Tuesday it would drop Medicare Advantage health plans, covering more than 600,000 people as one of several strategies to shore up finances. The company also disclosed this week just how badly it underpriced its health insurance products for 2025.” And it quoted UnitedHealthcare CEO Tim Notel as telling investors on Tuesday that “Our current view for 2025 reflects $6.5 billion more in medical costs than we anticipated in our initial outlook.” Snowbeck wrote that, “In Medicare Advantage, where UnitedHealthcare is the nation’s largest provider with nearly 8.5 million enrollees, the company significantly underestimated the accelerating medical trend and did not sufficiently modify benefits or plan offerings, Noel said. The problem was compounded, he said, because rival companies in Medicare Advantage, which is a privatized version of the government benefits program, exited from a number of local market across the country. DeVeydt served as a partner with the accounting firm PricewaterhouseCoopers with a focus on the health care sector prior to joining Anthem in 2005. He served as the CFO at Anthem from 2007 to 2016,” Snowbeck wrote.

As Snowbeck had reported on Tuesday, July 29, “UnitedHealth Group’s massive health insurance business will drop Medicare Advantage health plans covering more than 600,000 people as it tries to reverse its financial decline. It’s one of several strategies to shore up finances that executives detailed for investors Tuesday. The company’s insurance arm, UnitedHealthcare, is the nation’s largest provider of Medicare Advantage health plans, a privatized version of the original government health insurance program. The Eden Prairie-based health care giant next year may also exit portions of the ‘Obamacare’ market where individuals use Affordable Care Act (ACA) tax credits to buy coverage. Overall, shareholders seemed unimpressed by UnitedHealth’s big financial reset, which was widely anticipated by investors and pundits, including many on social media. UnitedHealth shares closed down about 7% on the company’s new forecast for the year,” he wrote.

Further, Snowbeck reported, “The Medicare Advantage pullback will come primarily in health plans where seniors have a broad choice of providers. A UnitedHealth spokesman couldn’t predict the impact in Minnesota, where about 94,000 people carry Medicare Advantage coverage with the company. Medicare Advantage patients have received far more medical care than projected — including more testing, services by medical specialists and care in emergency rooms — said Tim Noel, chief executive at UnitedHealthcare, during a call with investors.”