How UnitedHealth Grew Larger Than The Biggest U.S. Bank

UnitedHealth Group is the biggest health-care conglomerate in the U.S. based on market cap and revenue. It’s even bigger than JPMorgan Chase, the nation’s largest bank. Annual revenue has nearly doubled over the past decade when adjusted for inflation, from $144 billion in 2012 to $250 billion in 2022. The company’s growth was fueled by an acquisition strategy that has been largely free of regulatory scrutiny.

And it is a Wall Street darling, with experts optimistic about the company’s future: 22 of 25 analysts currently label it a buy.

“If I had to pick one stock, only one stock to buy, I’d buy United[Health],” said Ana Gupte, principal at AG Health Advisors.

UnitedHealth “has had superior stock performance over everybody else for two reasons,” said Lance Wilkes, managing director and senior research analyst at Bernstein Research. “One would be strategic vision and the other is strategic capital management.”

UnitedHealth has increased its annual revenue since 2012 by more than $100 billion, when adjusted for inflation. It achieved this by engaging in a unique acquisition strategy. It started with smaller deals that have grown while many of UnitedHealth’s competitors such as Aetna and Humana or Anthem and Cigna tried to broker much larger ones, only to be stopped by regulators.

Conversely, UnitedHealth leaned into a vertical-integration strategy, buying up smaller companies and building them into its growing health-care business.

UnitedHealth’s size makes it “relatively immune to economic cycles” due to the company’s wide diversity, Gupte said. “It makes it very attractive from an economic cycle and a macro environment perspective.”

Until recently, its acquisition strategy allowed it to grow without catching too much scrutiny from regulators. But in January 2021, UnitedHealth and Change Healthcare announced a nearly $8 billion all-cash deal that was challenged by the Department of Justice due to antitrust concerns.

Health-care companies “are becoming more and more [like] utilities,” Wilkes said. “Consequently, I think they’re going to have very large market shares because ... you wouldn’t want redundant services through the system.”

“I think at this point you we would consider UnitedHealth Group just kind of like ... core health infrastructure at this point in America,” said Matt Stoller, director of research at the American Economic Liberties Project and author of ″Goliath: The Hundred Year War Between Monopoly Power and Democracy.” “It’s too big to manage.”

“UnitedHealth Group is committed to improving the health system for everyone, advancing evidence-based practice and aligning incentives across the system to ensure people get the right care at the right time in the right place,” UnitedHealth Group told CNBC.

“Because we serve people throughout every aspect of the health system, we have a unique ability to identify opportunities to better integrate care and benefits, develop solutions and deploy them at scale to improve access, lower costs and make the experience better for patients and providers,” it said.

Watch the video above to learn how UnitedHealth Group grew so big and what that means for the U.S. health-care system.

Chapters:
0:00 Introduction
1:45 Growth strategy
4:57 Antitrust concerns
8:28 Becoming a utility?

Produced and Shot by: Charlotte Morabito
Additional Reporting by: Bertha Coombs
Additional Camera by: Mark Licea
Edited by: Nora Rappaport
Graphics by: Jason Reginato, Christina Locopo
Supervising Producer: Lindsey Jacobson
Additional Footage: Getty Images

About CNBC: From 'Wall Street' to 'Main Street' to award winning original documentaries and Reality TV series, CNBC has you covered. Experience special sneak peeks of your favorite shows, exclusive video and more.

Connect with CNBC News Online

#CNBC

How UnitedHealth Grew Larger Than The Biggest U.S. Bank

[Ghostintheshell]

i worked in the medical field for 8 years and during those 8 years i noticed that the billers always hated working with united health care claims, they would just find way of not paying for services

[TakenTook]

The fact that a health insurance company can be "attractive to investors" in the first place is the main problem. This should not be a profit-driven industry.

[Xenon-]

"People will get healthier because it's all tied together" under one company... yeah right ok.

[vibebreaker]

When you have a huge healthcare conglomerate like UNH, you have a huge a huge conglomerate lobbying against universal healthcare.

[darkwoodmovies]

This is disgusting. Break them up. I guarantee you they spend a pretty penny to own half of Congress and they're probably a key reason our healthcare is getting so terrible and overpriced.

[WarneD]

I work for a small doctors office as the biller. More often that not I see claims being paid by UHC then “reprocessed, ” by UHC and then retroactively denied leaving me and the patient to appeal the retroactive denial.

[chadnoneo]

This may sound crazy, but what if we buy out the health insurance companies and then the government takes over insurance as single payer?

[abircocci]

Hey guys, how are you doing with your investments? I know the market has been crazy lately.

[NASAistheway]

I had UHC... I quit it after they billed me twice the payment month. I called to request a refund or apply it for the following month... spoke with a rep and she asked me how to subtract the current year from my birth year then asked me how old I am.

If you can't do simple math then don't work where numbers are important like "randomly" billing people twice.

[Gychen]

It is really scary what is happening in US healthcare

[Cap]

If you have UHC health insurance, good luck finding providers that are in the UHC network. The hospital that I worked at prior to retirement would not take UHC. UHC just would not pay for services.

[EEETH]

Really easy to make money hand over fist when you take in premiums and then refuse to cover anything

[ThejOH]

I work at UnitedHealth Group and I can say wholeheartedly it is a beyond massive organization.

Waiting for them to buy a fitness centers like a Planet Fitness or Esporta to add to their collection.

[jaames]

I worked for United Health Care briefly and there's one thing I cannot forget, we spent DAYS discussing the whole company understanding each separate department and entity and I can tell you, days are not enough to fully grasp the extent of how big this company is. People would be calling in and asking for help about a specific service from a company I've never heard of, so I tell them that it's not us, until the end of the day when I talk to my manager and learn that that company is under United Healthcare. LOL

[jtjdffo]

I work for UHC. When I asked for a raise after one year I was told by my supervisor that I may get a dollar increase in my hourly wage at the end of the year. Let that sink in.

[hpham]

Healthcare should not be this profitable. It needs to be broken up

[davekrueger]

UHC is good at only one thing: efficiently moving wealth from healthcare consumers and taxpayers into its own pockets. To suggest it cares about people's health or the quality of healthcare in the US is laughable. And, they own the politicians and regulatory apparatus that supposedly keeps them in check, so it is just going to get worse. Ultimately, as the quality of care declines, the cost of healthcare in the US will become a crisis because borrowing from future generations to pay for today's perpetual skyrocketing costs just isn't sustainable, but that won't stop parasitic UHC executives from milking it for all they can get. Healthcare and health insurance is the new organized crime and this time, the government is its friend.

[zyrohnmng]

UHG doesn't have the customer's health in mind. They just have their pocketbook in mind. That's why they want it to be an ecosystem you can't escape - so you're always forced to pay them from birth to death. That's also why they go out of their way to avoid allowing their insured to do business with so many healthcare providers. Disgusting.

[sujitkadam]

You have disclosed SSN of the patient in the video. It’s sensitive information and can cause identify theft. Please blur the image asap at 3:26 mins.

[Savvyann]

I loathe United. It's the insurance I get through my company. I have to be on a serious maintenance medicine for life. The side effects of this medicine can be fatal, so my doctor has me visit monthly for blood work in order to get my prescription filled. United refuses to pay anything for my medicine. Their reason? They only pay for 3 month supplies of maintenance medicine. My doctor contacted them insisting it wasn't safe to fill a 3 month script. United didn't care. A 3 month supply would cost me $17 but since I can't get that, a 1 month non covered supply cost me $80. It's outrageous.