“UnitedHealth Group should not be allowed to exist in the form that it currently does.”
That was late-night TV host John Oliver’s verdict in his Sept. 20 episode on the inner workings of UnitedHealth Group, digging into a dramatic multi-year saga for the company that’s included a massive cyberattack, a sharp earnings decline and the killing of UnitedHealthcare CEO Brian Thompson. The episode aired ahead of Luigi Mangione’s Dec. 18 federal sentencing.
And while everything from algorithmic care decisions and prior authorization to pharmacy benefit manager conduct and the opioid crisis was discussed (and made the butt of many jokes), the core of the segment centered on a topic that continues to hang over the wider health insurance industry: vertical integration.
It’s certainly not a new term or concept in healthcare; the idea of combining the insurer and the physician under one roof most notably traces back to the 1940s and Kaiser Permanente. But over the last two decades, the health insurance mega-conglomerate has emerged, combining insurance, providers, pharmacy and data services under one parent organization. National health spending roughly tripled over the same period to an estimated $5.7 trillion in 2025, according to CMS projections, and scrutiny of the business model has grown in tandem.
UnitedHealth is now the fourth-largest company in the world by revenue, having posted more than $447 billion last year, up 11.8% year over year. It reported just 10 “significant subsidiaries” to the federal government for 2025, down from thousands the year before, after a July 2025 report that pegged its overall corporate structure at nearly 2,700 companies spanning insurance, care delivery, pharmacy, technology and administrative assets across the two core divisions of UnitedHealthcare and Optum. Similarly, Cigna has Evernorth, CVS Health’s portfolio includes Aetna, Elevance owns Carelon, and Humana with CenterWell.
Take the January congressional hearings as an example of the growing scrutiny, where the CEOs of the nation’s largest insurers drew the ire of lawmakers on both sides of the aisle. At one, Rep. Greg Murphy, R-N.C., told the executives they “need to be broken up” and that he’d like to “turn all of you guys into dust.” Rep. Alexandria Ocasio-Cortez, D-N.Y., said, “I think corporate monopolies are a problem. And this vertical integration is destroying people’s ability to access care.”
For their parts, the leaders of UnitedHealth, CVS, Elevance, Cigna and Ascendiun defended their respective organizations and the role each plays within the wider healthcare system, pointing to things like improved care coordination, data usage and integration of expensive drugs and therapies.
UnitedHealth CEO Stephen Hemsley described the company’s structure as “a very substantial value dynamic in terms of bringing a better care experience and more value to the healthcare environment in total.”
Then in February, the two parties joined forces again when Sens. Elizabeth Warren, D-Mass., and Josh Hawley, R-Mo., introduced the Break Up Big Medicine Act, which would prevent companies from simultaneously owning a health insurer or pharmacy benefit manager and a provider or management services organization. The proposal won the endorsement of Cost Plus Drugs’ Mark Cuban, who publicly called for divestment from publicly-traded insurers in August.
Democrats have even reportedly discussed a healthcare policy agenda that could include breaking up large healthcare organizations should the party win back control of the House during November’s midterms. In Texas, Democratic Senate candidate James Talarico released a plan to break up what he called “Big Medicine monopolies.”
To level-set on the actual outcome of the hearings and the wider political rhetoric: no new consequential laws have passed, and the integrated business model is full steam ahead. In public, President Donald Trump has blasted “big, fat, rich insurance companies,” even as his administration’s annual Medicare Advantage rate-setting process produced a 2.48% increase in payments to insurers for 2027, worth more than $13 billion.
Still, federal regulators have continued scrutinizing individual transactions and business practices, with the Justice Department requiring UnitedHealth to divest more than 160 home health and hospice locations before approving its $3.3 billion Amedisys acquisition last year, along with the company previously disclosing that it was complying with criminal and civil DOJ requests tied to its MA business.
UnitedHealth has also taken additional steps to try and temper the negative environment, releasing the results of independent audits of its MA, utilization management and pharmacy practices in December and opening its headquarters to reporters for on-the-record access to senior leadership in June.
Complicating matters further is that a “vertically integrated healthcare company” is not an easy thing to define or explain in scope within a wider industry that has rapidly consolidated in recent years. While health insurers, and certainly UnitedHealth as the largest, consistently face the most heat, many large health systems have their own insurance company, and that typically flies more under the radar of lawmakers, media and the wider public.
Most workers with employer-sponsored health insurance (63% in 2024), are also in self-funded plans, meaning their company pays claims directly and decides what is and isn’t covered, while insurers like UnitedHealthcare are hired to administer those benefits. But as commercial premium costs have surged across nearly every market, the insurer names on the most benefits cards are understandably seeing the biggest pushback.
Recent research points in different directions, too. The OIG found in May that enrollees without financial assistance in vertically integrated Medicare Part D plans paid lower premiums but nearly 40% more in out-of-pocket costs for the drugs studied than those in other plans. A Health Affairs analysis published last September argued that insurers that own providers can use internal payments to meet medical loss ratio requirements under the ACA and shrink their rebate obligations. And a study published this month in Health Affairs found no decline in procedure volume or quality at the nearly 300 ASCs UnitedHealthcare acquired over the last decade. Researchers there also found slightly lower complication rates for colonoscopies and lower facility prices negotiated by UnitedHealthcare relative to other insurers following the acquisitions.
These complexities rarely make it into the wider public conversation, where frustration with insurers is notably running high. In his segment, Mr. Oliver cited a NORC poll taken shortly after Mr. Thompson’s killing, where 69% of respondents said coverage denials by health insurers bore a great deal or moderate amount of responsibility for it, compared with 78% who said the same of the person who committed the killing. Costs are also voters’ top healthcare concern heading into the midterms, with 51% calling the issue “extremely important” for candidates to discuss, according to a July KFF poll. The Last Week Tonight episode has tapped directly into that frustration and to date has drawn 3.5 million views on YouTube alone. Mr. Oliver closed the segment with his own much broader indictment of the industry’s structure.
“I know United may well continue to try to tune out the critical noise or argue that nobody designed this system. It simply evolved,” Mr. Oliver said. “But what is clear is that everybody but them wants it to work very differently, because right now, the way that companies like United exist — they are at best, pointless, time-wasting middlemen, and at worst, algorithmically-driven, ruthless arbiters of who lives and who dies.”
Becker’s has reached out to UnitedHealth for comment.
https://www.beckershospitalreview.com/finance/as-vertical-integration-scrutiny-grows-unitedhealth-takes-center-stage/
