Every claim UnitedHealth processes, every prior authorization check, and every patient interaction it processes is now done through artificial intelligence (AI). The company is turning its internal overhaul into a commercial product line. “We think almost everything we’re doing is fundamentally the future operating infrastructure,” Chairman and CEO Stephen Hemsley said Wednesday (July 15) during the company’s second-quarter 2026 earnings call. “In fact, it’s happening in every area of our business.”
The results are visible in the numbers. With AI-powered pre-approvals, we have a 96% first-time approval rate. The company pledged this quarter to reduce prior authorizations by 30% by the end of the year and reduce pediatric medical prior authorization requirements by nearly two-thirds. These efficiencies are directly reflected in our bottom line, with operating income increasing 55% year-over-year in the second quarter.
Where AI does the work
At Optum Health, which provides direct care to 20 million patients, 70% of employed clinicians have access to ambient listening AI tools, with plans to reach 90% by the end of the year. This technology records patient interactions in real time, reducing the documentation burden that causes clinician burnout. Optum CEO Patrick Conway said during the conference call that clinicians using the tool have seen a 90% reduction in cognitive burnout.
Conway also said that AI allows nurses to summarize complex patient cases 40% faster. Increased care transition support has resulted in a 10% decline in hospitalizations in the West and South regions since late last year. Home health pilots reduced hospital readmissions and skilled nursing facility stays.
In claims processing, complex cases that once required manual review are now handled automatically and with greater precision. “Highly complex claims that we never thought could be automated are now automated and processed with greater precision,” said Tim Noel, CEO of UnitedHealthcare. AI-powered scheduling reduced wait times for specialist visits, increasing patient interaction time by nearly 200,000 hours in the first half of the year.
Sell your handbook to other industries
Optum Insight converts these in-house tools into commercial products that are sold to health systems and payers outside of UnitedHealth. Approximately one-third of Optum Insight’s technology investment this year will go toward its commercialization efforts.
The digital preauthorization product launched last quarter under the Optum Real branch processed approximately 500,000 preauthorizations and saved external clients 69,000 administrative hours. Value Connect, an AI insights platform built directly into providers’ electronic health records, has shown a 17% reduction in pharmacy costs in early client implementations.
Hemsley said all internal functions are being restructured around AI, including human resources, finance, legal and clinical operations. The efficiencies gained from that work become products that Optum Insight sells externally. Approximately one-third of Optum Insight’s investment this year will be dedicated to commercializing internal use cases for external clients. “This is a start, but as we make these investments, it will have a compounding effect,” Hemsley said.
Other notable points
- UnitedHealth is committed to processing 80% of prior authorizations in real-time by the end of 2027, eliminating much of the interaction between health plans and providers that currently slows care and increases administrative costs for both parties.
- Commercial insurance cost trends remain slightly above 11%, in part because UnitedHealth claims the arbitration process under the No-Surprises Act is being abused. About 60% of all arbitration cases are brought by just five organizations, and the average payout when arbitrators side with providers is currently 11 times what Medicare pays.
- Medicare Advantage cost trends are lower than original plan assumptions due to benefit design changes and network adjustments. Full-year Medicare margins are currently expected to end above 3%.
- Optum Health currently serves nearly 90% of U.S. counties and conducts approximately 2.5 million rural patient home visits annually, with plans to expand these programs to all of Optum Health’s operating areas by the end of the year.
Topline results and outlook
UnitedHealth reported second-quarter adjusted earnings per share of $6.38, compared with $4.08 in the year-ago period. Total revenue was $112 billion, essentially flat year-over-year. Operating income was $8 billion, an increase of 55% compared to the same period last year. The medical care ratio was 86.7%, which included $860 million of net favorable medical development in the prior period, compared to 89.4% in the second quarter of 2025.
Operating cash flow was approximately $11 billion, or 1.9 times net income. The debt-to-equity ratio was 41.2%, down from 44.1% in the same period last year. The company completed its acquisition of Alegeus Technologies on July 2nd.
