How decades of policy failures led to the everpowerful UnitedHealth Group
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28 PROSPECT.ORG AUGUST 2023
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ILLUSTRATIONS BY
BLAIR KELLY
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“Do I enjoy being king? Yes, that’s fun,” said to PHP audits. The doctors countersued, Richard Burke in 1987. He had spent over accusing PHP of financial impropriety. It ten years running a health care nonprofit in culminated with a state-appointed mediaMinneapolis called Physicians Health Plan tor and settlement in 1987. (PHP), and also UnitedHealth, the for-profit The controversy was enough to dislodge company that was managing it. In 1986, the Burke from both PHP and United. Yet docnonprofit paid him $267,823; the for-profit, tors still had the feeling that “Burke will be $418,342, not including stock options. The behind the curtains, pulling the levers.” And average income for the highest-earning doc- in many ways, they were right. Because up tors at the time (orthopedic surgeons) was until last year, Burke chaired the board of just 16 percent of that. But Burke’s salaries directors of UnitedHealth Group, the largweren’t what caused doctors at PHP to rebel. est and most powerful health care company In 1984, UnitedHealth used PHP to pay in our country’s history. $600,000 toward United’s terminaToday, United is the fifth-largest H O N EU.S., bigtion costs inSa delayed stock offerpublic company S T E F • U inI the S B S H PHP had B ing. At Ethe same time, ger than JPMorgan Chase. Its E quietly agreed to pay United 15 insurance products serve 50 to 17 percent of its revenue for million members, more than the next 25 years in exchange the population of Spain, and for future United stock. Docits $186 billion health services tors at PHP immediately prodivision, Optum, has 103 miltested, pointing at the conflicts lion patients, more than Vietnam’s population. Earnings came introduced by interlocking boards to $28.4 billion last year, putting it in the that were both under Burke’s thumb. United went public with a shorter PHP man- top 30 of companies worldwide. agement contract, but doctors had to pull We think of United as an insurance comthe SEC documents to learn that, despite pany, but it has never really been exactly that. being salaried workers, there would be a 20 It began as a health management company, percent pay cut to cover PHP “bills.” The war and it is now also the largest employer of waged on, with United filing suit against physicians in the country, with 70,000 docthe outspoken doctors for defamation, and tors across 2,200 locations. Underneath its trying unsuccessfully to block their access corporate umbrella are pharmacies, primary
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BY KRISTA BROWN AND SARA SIROTA
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s ’ e r a C h t l Hea d e n i w t r e Int Colossus
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