It’s time to restructure the influence of the six largest US healthcare enterprises

An Open letter to the Chair of the US Federal Trade Commission

The Honorable Lina Khan
Chair, Federal Trade Commission
600 Pennsylvania Avenue
Washington, D.C. 20580

Madam Chairperson,

According to the Centers for Medicare and Medicaid (CMS), the United States spent $4.5 trillion on healthcare in 2022, the equivalent of 17.3% of the US gross domestic product (GDP). The national health expenditure estimate for 2023 is $4.7 trillion. These extraordinary sums of money have not resulted in commensurate outcomes, be it life expectancy, prevalence of chronic conditions, cost of care, and more across the quadruple aim of care seen in Exhibit 2.

In that context, it is significant to understand how America’s six largest healthcare enterprises—UnitedHealth Group, CVS Health, Cigna Group, Elevance Health, Centene Corp., and Humana—contribute to the state of the US healthcare system. The combined revenues of these six enterprises in 2022 were $1.2 trillion, or about 27% of the total national expenditure (see Exhibit 1). In 2023, their combined revenues grew by two basis points to $1.3 trillion, or 29% of the national health expenditure. This financial strength was built by the companies providing health services to nearly 200 million US consumers—more than 60% of the nation’s population. There are 4 four key questions the FTC must consider in fulfilling its responsibility to address this malady of enterprise growth at the cost of our health.

Exhibit 1: Six healthcare corporations control ~30% of the national health expenditure, exerting unprecedented control over US lives

Source: CMS, Company 10K filings, HFS Research, 2024

Are poor outcomes across the quadruple aim of care acceptable?

The quadruple aim of care focuses on four critical performance metrics—cost of care, care experience, health outcomes, and health equities. The US is doing poorly across all those metrics, as reflected in Exhibit 2.

Exhibit 2: Outcomes across the different attributes of the quadruple aim of care are heading away from a healthy society

Source: CMS, CDC, OECD, Kaiser Family Foundation, HFS Research

While multiple ways exist to measure performance across these critical metrics, a sample of the most obvious ones indicates a material deterioration of outcomes over time. Life expectancies have regressed to 2004. Six in 10 individuals have a chronic condition, per capita healthcare cost is 2.5x that of the average for OECD (Organisation for Economic Co-operation and Development) countries and growing at a rate of 2 to 2.5x nominal inflation, experience seen through a Medicare and Medicaid lens has been static for several years. Despite a record low number of uninsured people, minorities remain uninsured at rates several times higher than their white counterparts, which impacts their access to care.

In effect, the nation’s population is sick, and there is no cure unless we take drastic measures to disrupt some aspects of the status quo, such as funding care, delivering care, and addressing health equities.

Do the six largest healthcare enterprises own part of the responsibility for the state of the nation’s healthcare?

The combined revenues of the Big 6 (UnitedHealth Group, CVS Health, Cigna Group, Elevance Health, Centene Corp., and Humana) in 2023 were $1.3 trillion or 29% of the national health expenditure of $4.7 trillion. That is a direct impact of more than 5% of the US gross domestic product (GDP).

The Big 6 touched more than 200 million lives as members of their plans, patients at their care delivery facilities, or customers at their pharmacies, representing more than 60% of the US population.

It is impressive that six US enterprises have such an enormous influence over large swaths of the nation’s economy, its people’s health, and its healthcare policy. This also indicates that the Big 6 own part of the responsibility for driving up the cost of care, delivering sub-optimal health outcomes, and delivering sub-par experiences while ignoring health equities given those attributes are not how the market rewards them in terms of market capitalization, stock price, and access to credit.

Is it acceptable for the Big 6 to only improve their financials and not improve the health of America?

Over the last three years, the Big 6 have indulged in significant mergers with and acquisitions of non-similar businesses to drive vertical integration. These vertical integrations have helped grow the companies’ revenues, expand their footprint across the healthcare ecosystem, and increase their influence over the healthcare economy. Consequently, they also have exacerbated the challenges across the quadruple aim of care by perpetuating the status quo. Some high-profile and high-priced acquisitions since 2020 include Change Healthcare ($7.8B) and LHC ($5.4B) by UnitedHealth, MD Live by Cigna, Kindred at Home ($5.7B) by Humana, Magellan Health ($2.2B) by Centene, and Oak Street Health ($10.6B) by CVS.

In addition to acquisitions, the Big 6 carved out some of their technology and clinical assets and created new lines of business. Cigna did this with Evernorth in 2020 to address health services, including pharmacy. In 2022, Elevance created Carelon to deliver pharmacy, behavioral health, care delivery, medical benefits management, payment integrity, and other services. The creation of these services-focused businesses (similar to UnitedHealth’s Optum) has significantly broadened the scope and reach of healthcare enterprises, reaching deep into care delivery (ambulatory and acute), para-clinical, pharmacy, consumer goods, and administrative services.

The Big 6’s end-to-end capabilities and services directly touch up to 60% of the US population, making them central to our health. However, they do not have commensurate accountability for our health outcomes.

Is it acceptable to create another “Too-Big-To-Fail” crisis impacting our health and lives?

The current oligopolistic environment in healthcare driven by the Big 6 is analogous to the 2008 environment that drove a multigenerational financial crisis, except in the current situation, it will be our lives and health at stake, not the roofs over our heads or the balances in our retirement accounts.

A set of critical challenges can upend healthcare as we know it. Consider the most recent example of the cyberattack against Change Healthcare (acquired by UnitedHealth in 2022) that took systems offline and prevented claims processing. This impacted an estimated 70% of all US healthcare providers, putting many at financial risk, thereby putting significant health consumers at risk for lack of access to care. It has also been estimated that 1 in 3 Americans’ personal information was compromised and is being trafficked on the dark web from this attack. The impact of Change Healthcare’s hack likely will be huge over time as bad actors discover new ways to leverage the treasure trove of data they now have.

Another key risk driver is the shifting profile of the Big 6 from being health insurers to services enterprises (see Exhibit 3). As the Big 6’s high-margin commercial underwriting has declined over time with the growth of government-sponsored programs (Medicare and Medicaid) and enrollment in self-insured employer programs, the Big 6 have diversified rapidly to overcome the declines. While it is a perfectly rational and responsible behavior to address the needs of their investors, it has, however, created a vast and complex web of interests. The level of diversification is a collage of investments (real estate, venture funding), services (care delivery, administrative), partnerships, etc., in a complex network of growth and influence instruments. This structure is rife with risk for health consumers who depend upon the Big 6 for underwriting medical risk, care delivery, medication, and a variety of services. Failure of any of the attributes in the Big 6’s portfolio could have undetermined yet potentially serious consequences for health consumers and businesses that depend upon these healthcare giants.

Exhibit 3: The Big 6 are diversified healthcare enterprises with wide-ranging business interests that obfuscate the actual risk they pose for our healthcare

Data: Company 10K reports
Source: HFS Research, 2024

The Bottom Line: Health outcomes matter, and the Big 6 healthcare enterprise scale threatens the viability of human life.

Health and care delivery must be a human right and not a privilege. This should not be a point of debate in any civilized society. We must align our resources to become creative in optimizing limited resources to reach the maximum number of citizens and achieve the best outcomes across the quadruple aim of care. As shown by financial and health outcomes data, it has become clear over time that the current paradigm of allowing healthcare enterprises to grow larger, gain more control over our health, and hold citizens’ lives hostage is unacceptable.

In this context, I urge the FTC to consider options to reorganize the Big 6 US healthcare enterprises. For a viable and sustainable solution, the FTC should include independent, knowledgeable entities invested in improving our healthcare—such as industry analysts, academic institutions, and unaffiliated leaders—instead of only organizations seeking financial benefit above all else. We must ensure we do not allow other healthcare enterprises to continue merging and growing as they gain outsized control over our health.