The U.S. Department of Justice has launched an antitrust investigation into UnitedHealth Group Inc., marking a new wave of scrutiny over the country’s largest health insurer that has businesses across pharmacy benefits, medical care, technology, and ancillary services. The investigation has stemmed from worries concerning UnitedHealth’s acquisitions of health-care providers and data outfits, as reported by anonymous sources privy to the matter. It is worth noting that details of this investigation are still undisclosed to the public, with both the company and the Justice Department declining to comment on it.
Upon the announced investigation, UnitedHealth’s shares reportedly dropped by up to 5% in the New York market when trading opened the following Wednesday, marking the most substantial intraday drop in a month.
Over the years, UnitedHealth has faced increasing criticism as its footprint across the health-care system has broadened. While the company is widely recognised for its UnitedHealthcare insurance unit that covers over 47 million Americans, a growing share of its revenue and profits comes from its health services firm, Optum. Services provided by Optum, which include clinics, home-care services, drug plans, and pharmacies, often cater to UnitedHealthcare members.
This blend of services has fuelled UnitedHealth’s growth—a tactic other competitors have attempted to emulate. Nonetheless, it has also drawn the attention of antitrust regulators. The Justice Department is currently reviewing UnitedHealth’s planned $3.3 billion purchase of home health-care provider Amedisys Inc. This is after the acquisition of LHC Group last year—a rival firm. Previously, the department had unsuccessfully tried to block the health-care behemoth from acquiring Change Healthcare.
Despite the criticisms and ongoing investigations, UnitedHealth executives maintain that the company implements a rigid separation between its insurance activities and Optum services. They note that Optum also services many other insurance companies that compete with UnitedHealthcare.
The antitrust probe first caught public attention when it was reported by a local New York outlet, the Examiner News, on Monday. According to the publication, internal company emails indicate that the company became aware of the investigation in October. Further reports show that UnitedHealth is presently subject to investigations, audits, or reviews by over a dozen U.S. bodies, which includes the Department of Justice.