Senators are right to scrutinize UnitedHealth, Minnesota’s most powerful company

I hope Minnesotans read about the testimony of UnitedHealth Group CEO Andrew Witty at the U.S. Senate Committee on Finance Wednesday. It’s an eye-opener about the corporate practices of our Eden Prairie health insurance/big data/whatever behemoth. 

Witty was on the receiving end of scathing comments from a bipartisan group of senators — and justifiably so. 

The health insurer — which keeps growing like a voracious weed, encompassing physician groups, pharmacy benefits management and payments technology — has become too big to fail, evidenced recently by a major hack of it’s Change Healthcare systems. 

The hack disabled a network that handles $2 trillion (not a typo) in insurance claims annually. The fallout has been especially harmful for small medical providers because they had no alternative way to get paid. 

“That has real impact on access to care that people need,” Emily Gee, a vice president of the Center for American Progress, told me during the worst of the meltdown. 

Bloomberg reported that “pharmacy computer systems used to check insurance coverage and process prescriptions went down. While large chains found workarounds, the outage roiled others, and interrupted dispensing at military facilities.” 

Gee highlighted the tiny margin for error when it comes to health care. “It’s not like buying a couch,” she said.  

The company has extended billions in interest free loans to try to keep the American health care system from collapsing, but that’s hardly comforting. As American Prospect noted during the hack, health insurers were in a perverse way benefitting from the chaos because they were not sending out the huge sums they reimburse medical providers on a typical day.  

“Every dollar in revenue that has disappeared from hospitals, medical practices, and pharmacies in the aftermath of the outage corresponds to an extra dollar sitting in the coffers of the nation’s health insurers, so UnitedHealth, which pays out roughly $662 million in medical claims each day, is presumably sitting on a mountain of unexpected cash.” 

And guess who is going around the country buying medical practices? That’s right: UnitedHealth. 

The hack also likely exposed the personal information of “a substantial portion of people in America,” according to the company.  

What was the security weakness? The hackers got through a portal that didn’t use multi-factor authentication — meaning they didn’t use the, uhh, sophisticated technology that you and I use for our bank and social media accounts. 

Witty told the Senate Finance Committee he’s “deeply, deeply sorry,” which is an easy thing to say when you made $25 million last year. 

And the Change Healthcare debacle is just one tentacle of the sprawling, $450 billion company that deserves serious examination. 

The Justice Department has opened an antitrust investigation of UnitedHealth. 

Given the company’s size and influence, the feds could be investigating any number of issues, but Bloomberg gives a potential hint. Optum, a UnitedHealth company, has “clinics, home-care services, drug plans and pharmacies (that) frequently provide services to UnitedHealthcare members, allowing the company to turn expenses in its insurance business into revenue for Optum… But it has also drawn criticism from antitrust regulators.” 

Spencer Waller, director of the Institute for Consumer Antitrust Studies at Loyola School of Law, told me we’re now seeing “a small number of highly vertically integrated companies with strong incentives to favor their own corporate chain members over the interests of the users of the system.” 

Meanwhile, UnitedHealth still excels in an old standby: denying health care they deem unnecessary to their policy holders. A 2023 investigative report by ProPublica revealed a trove of internal correspondence showing the company “relentlessly fought to reduce spending on care, even as its profits rose to record levels.”

In addition to being skilled in business, UnitedHealth top brass are apparently very lucky when it comes to timing stock sales, as Bloomberg reported recently: “UnitedHealth Group Inc. Chairman Stephen Hemsley and three senior executives netted a combined $101.5 million from stock sales made over four months leading up to when the public became aware of a federal antitrust investigation.”

Where does all this end? 

“Antitrust has not been asleep but has been a caged tiger for 40 years,” said Waller, the antitrust legal scholar, citing conservative legal theory that served as the padlock on the cage. 

As a result, “You have companies with great power, with huge impact on important things in our lives, like medical care, insurance, drug benefits,” he said. 

President Joe Biden and his appointees seems to have let the tiger out of the cage, and that’s a good start. 

Closer to home, Minnesotans should try to educate ourselves about the leviathan in the west metro and demand accountability from our most powerful corporate citizen.