Now to shift from the vibrant, albeit corporatized, world of live music to the even more foundational, and perhaps more troubling, realm of American healthcare. Indeed, the narrative of Live Nation and Ticketmaster, which we explored previously, serves as a stark prelude to the story of United Healthcare, illustrating a pervasive trend in our modern economy: the consolidation of power in the hands of a few dominant players, often at the expense of both the providers and the consumers within an industry. This is not merely a chronicle of business success; it is a critical examination of how market forces, often unchecked, can redefine fundamental access to essential services and reshape the very fabric of our society.
United Healthcare, now America’s largest insurer, began its journey in Minneapolis in 1977. Its initial strategy, pioneering a new kind of insurance, centered on treating people within “closed networks of providers” known as Health Maintenance Organizations, or HMOs. These HMOs gained significant traction after the 1973 Health Maintenance Organization Act, which provided federal grants and mandated employers offer an HMO option, making them both popular and profitable. Early on, however, there were troubling signs of potential conflicts of interest. For instance, a non-profit HMO called Physicians Health Plan in Minneapolis, a network of doctors, hired United Healthcare to manage its operations. The doctors in this non-profit were so dissatisfied, alleging underpayment that barely covered their overhead, that there was national news coverage of their threats to unionize. The chair of this non-profit, Richard Burke, also ran the for-profit United Healthcare, creating a clear “conflict of interest” where “this man who is running a non-profit had hired his for-profit company to manage this non-profit tax-exempt organization”. The very origins of this giant are shrouded in an unsettling lack of transparency, as information about Burke himself is remarkably difficult to find online, a stark contrast to the readily available histories of other major company founders.
Much of United’s early expansion was fueled by the HMO Act and the “$300 million dollars in Grants from the government”. Burke and United systematically “snapped up all these federally subsidized insurers,” effectively “stealing entire taxpayer-funded organizations”. This consolidation continued with a “wave of murders and Acquisitions” in the 1990s, wiping out numerous regional non-profit insurers and absorbing them into for-profit empires. Despite the industry’s repeated promises that their growth would lead to better negotiations with providers and lower costs for consumers, these benefits largely “did not happen”. Instead, healthcare costs continued to rise.
The company’s efficiency, it turns out, lay in a far less beneficial practice: “rationing your health care”. For years, only a small fraction of claims were denied because human review was not cost-effective. Today, however, “nearly one in five claims are denied,” amounting to “nearly 50 million instances of Americans being told no we won’t pay for that thing you need to live a healthy life” in 2021 alone. Appealing these denials is deliberately made difficult, with only one in 500 cases appealed, and 59% of those failing. This process generates “billions of dollars for insurers”. This aggressive denial or underpayment of claims has led to “tons of lawsuits,” with United losing many cases where “gross underpayment at Mass denial of claims” was alleged. While large hospitals might have the resources to chase down insurers, “most small practices don’t have that luxury”.
This brings us to a particularly disturbing facet of United’s strategy: its foray into what amounts to predatory lending for medical providers. The company’s constant claim denials are highly profitable for payday loan lenders, a convenience for United because “of course they own one,” Optum. Optum not only expedites claim processing for United and other insurers but also offers “Optum Pay Advance,” now rebranded as “Capital loan”. When these loans are insufficient, United Healthcare, now the largest employer of physicians in America with “seventy thousand of them,” steps in to acquire struggling providers directly. This strategy is termed “vertical integration,” allowing United Healthcare to get “a cut of every single step of the healthcare process”. In the vision of CEO Andrew Witty, every part of the healthcare journey—from pharmacy to doctor to loan provider to insurance—is “run by the same company”.
This level of control creates an environment where insurers claim to save money while creating a “personal health dictator” that has a “legal responsibility to make as much money as possible”. United’s value soared from around $35 billion in 2010 to “more than 450 billion” today. Their immense profits, nearly $70 billion in 2022 across seven major insurers, are often used to “enrich their shareholders” through “stock BuyBacks”. Despite claims of “Fire walls” between business branches to prevent conflicts of interest, United Health Group has been charged by New York’s attorney general for “using a research firm the company itself owns to manipulate reimbursement rates”. This firm, Ingenix, simply rebranded as Optum Insight after being shut down. Envision, another healthcare group, alleges that United “uses its negotiating power to lower reimbursements for practices or to kick them out of network,” deliberately creating financial distress that allows Optum to acquire them “for dirt cheap”.
The Department of Justice attempted to block United’s acquisition of Change, Optum’s competitor that facilitates the exchange of claims information, but the judge “took CEO Andrew witty’s word that sharing of competitor info would be against quote everything we stand for in the organization”. This merger grants United “access to a trove of data on what other insurers are paying and what they’ve negotiated with doctors in hospitals,” potentially allowing them to “unfairly undermine the competition” and further entrench their “Healthcare Monopoly”. It’s worth noting that before leading United Healthcare, Andrew Witty was CEO of GlaxoSmithKline, which paid “$3 billion dollars for fraud including but not limited to bribing doctors and quote encouraging the prescription of unsuitable antidepressants to children”.
The narrative of United Healthcare demonstrates how corporations can “profit even more off of the Havoc that they wreak”. If practices go bankrupt, United can loan them money or acquire them cheaply. If a medical provider disputes a denial, they find themselves arguing with their “employer” or “owner”. Vertical integration, as United employs it, has become a “convenient way to escape Anti-Trust measures for insurers,” as regulators traditionally scrutinize acquisitions that remove direct competition within the same space. This model is not unique to United; it is “spreading across the industry”.
This comprehensive strategy, from leveraging HMOs and denying claims to aggressively vertically integrating through Optum, has transformed healthcare from an accessible service into a luxury good, mirroring the concentration we’ve observed in other industries like live entertainment. The relentless rationing of healthcare, despite promises of efficiency and savings, underscores a system where corporate growth and shareholder enrichment appear to override the fundamental needs of patients and providers. The ongoing struggle against such pervasive monopolization in “Corporate America” is not just about a single company; it is about the accessibility and quality of essential services for all Americans, and the ability of our regulatory systems to genuinely protect the public interest.