Every claim UnitedHealth processes, every prior authorization it reviews and every patient interaction it handles now runs through artificial intelligence (AI). The company is turning that internal overhaul into a commercial product line. “Virtually everything that we do, we see it basically as the operating infrastructure of the future,” Chairman and CEO Stephen Hemsley said Wednesday (July 15) on the company’s second-quarter 2026 earnings call. “It really is occurring across the spectrum of our businesses.”
The results are showing up in the numbers. AI-powered prior authorization is achieving a 96% first-pass approval rate. The company committed this quarter to eliminating 30% of prior authorization volume by year-end and nearly two-thirds of prior authorization requirements for pediatric care. Those efficiencies are flowing straight to the bottom line, with second-quarter operating earnings up 55% year over year.
Where AI Is Doing the Work
At Optum Health, which delivers care directly to 20 million patients, ambient listening AI tools are available to 70% of employed clinicians and are on track to reach 90% by year end. The technology transcribes patient encounters in real time, removing the documentation burden that drives clinician burnout. Optum CEO Patrick Conway said during the call that the tool has produced a 90% reduction in cognitive burnout among clinicians who use it.
Conway also noted that AI is helping nurses summarize complex patient cases 40% faster. Enhanced care transition support has driven a 10% reduction in hospitalizations in the Western and Southern regions since late last year. Home health pilots have cut readmissions and reduced skilled nursing facility stays.
In claims processing, complex cases that once required manual review are now processed automatically and with higher accuracy. “Very complex claims that we never before thought we would be able to automate, we’re able to automate those and process those with higher accuracy,” said Tim Noel, CEO of UnitedHealthcare. Patient-facing hours expanded by nearly 200,000 in the first half of the year as AI-assisted scheduling cut wait times for specialist appointments.
Selling the Playbook to the Rest of the Industry
Optum Insight is converting those internal tools into commercial products sold to health systems and payers outside UnitedHealth. About a third of Optum Insight’s technology investment this year is going toward that commercialization effort.
A digital prior authorization product launched last quarter under the Optum Real branch has processed roughly half a million prior authorizations and saved 69,000 administrative hours for external clients. Value Connect, an AI insights platform embedded directly in provider electronic health records, is showing a 17% reduction in pharmacy costs in early client deployments.
Hemsley said every internal function, including HR, finance, legal and clinical operations, is being rebuilt around AI. The efficiency gains from that work will become the product Optum Insight sells externally. About a third of Optum Insight’s investment this year is going toward commercializing internal use cases for outside clients. “This is the beginning,” Hemsley said, “but it will have compounding effects as we make these investments.”
What Else Stood Out
- UnitedHealth committed to processing 80% of prior authorizations in real time by end of 2027, eliminating most of the back-and-forth between health plans and providers that currently delays care and drives administrative cost on both sides.
- Commercial insurance cost trends are running modestly above 11%, driven partly by an arbitration process under the No Surprises Act that UnitedHealth says is being exploited. Roughly 60% of all arbitration cases are brought by just five entities, and average payouts when arbitrators side with providers now run 11 times what Medicare would pay.
- Medicare Advantage cost trends are coming in below original planning assumptions, driven by benefit design changes and network adjustments. Full-year Medicare margins are now expected to finish above 3%.
- Optum Health now reaches nearly 90% of U.S. counties and conducts approximately 2.5 million rural patient home visits annually, with plans to expand those programs across the full Optum Health footprint by year-end.
Topline Results and Outlook
UnitedHealth reported second-quarter adjusted earnings per share of $6.38, compared with $4.08 in the prior year. Total revenues were $112 billion, largely flat year over year. Operating earnings of $8 billion grew 55% year over year. The medical care ratio was 86.7%, including $860 million of net favorable prior period medical development, compared to 89.4% in the second quarter of 2025.
Operating cash flows were approximately $11 billion, or 1.9 times net income. The debt-to-capital ratio fell to 41.2%, down from 44.1% a year ago. The company closed its acquisition of Alegeus Technologies on July 2.
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