UnitedHealth Group: Intentions with the ACA (2010-2014)

Background

UnitedHealth Group Co. Logo

UnitedHealth Group is one of the largest health care companies in America. It is a publicly traded company on the New York Stock Exchange. The company was founded in 1977 by Richard Burke and was known as UnitedHealth Care until 1998. They offer health insurance for families and individuals under the age of 64. They also offer Medicare Advantage plans, Medicare supplement insurance, Medicare prescription drug plans, and Special Needs Plans most with the association of AARP. They also offer Palliative and Hospice Care for those with long-term or serious illness and their caregivers. UnitedHealth group also offers medical databases through their subsidiaries. They are an innovative company consistently coming up with new ideas to improve their services.
Anthony Welters was President and CEO of Americhoice, which was a public health insurance provider, meaning they were funded by taxpayer money. The company was investigated for fraudulent activity. It was found that Welters and associates had paid themselves millions in management fees and received large yearly bonuses through back doors. They would send the money to other businesses which they owned marking it off as expenses for the company. They were also investigated for the poor quality of their facilities. It was found that most of these facilities were staffed solely by nurse practitioners and physician assistants both of whom require the supervision of a physician. After the investigation was complete the company was fined $2 million to be paid to Medicaid.

Timeline

·2002: Acquired AmeriChoice (including Anthony Welters)

·2010: United spent $2.5 million lobbying for President Obama’s Affordable Health Care Act

·October 2011: QSSI (Quality Software Services Inc.) was contracted by the federal government to work on the data hub for the federal healthcare exchange [Affordable Care Act website]

·September 2012: UnitedHealth Group purchased QSSI. This information was never disclosed to the public

·2012 Presidential Campaign: Welters donated over $500,000 to President Obama’s campaign

·October 2013: QSSI was re-contracted by the federal government to fix the mistakes with the federal healthcare exchange. This meant that UnitedHealth Group now had access to the database. Welters put in charge of overseeing project

·November 2013: $150 million compensation received thus far

·October 2014: UnitedHealth Group announces entry as an insurance provider for the Affordable Care Act

Summary
Well QSSI was under contract with the federal government to work on the federal health exchange website UnitedHealth Group, a major health insurance company, purchased the company. They failed to reveal this to the public or the federal government. This gave them access to the federal health data hub in which no other company had access to. This made United millions. UnitedHealth Group had also donated millions in order to get the Affordable Health Care Act approved making the website necessary to begin with. When the 2012 presidential campaign rolled around the Executive Vice President, Anthony Welters, donated over $500,000 to President Obama’s campaign, for which he won. When the government realized there were problems with the website they called upon QSSI again to fix the mistakes they had made. Then UnitedHealth Group announced they would be joining the other members in offering public health insurance on the website they created causing many people to question United’s true intentions.

Stakeholders

Anthony Welters, former CEO of Americhoice

The stakeholders involved are UnitedHealth Group and Anthony Welters because they face any consequences associated with their own actions of which Welters has experience with. They also face the possibility of a bad reputation due to their involvement with the website. Another group included would be the employees because whatever happens to the company can put their job on the line or improve where they stand in the company. Other stakeholders include UnitedHealth Groups current clients because they may benefit or suffer from United’s involvement. The competition and the federal government are both stakeholders because United has the possibility to dominate federal health care insurance with their increased knowledge. Another important stakeholder is the people of the public who will be purchasing through the federal health exchange in which United designed. Lastly stockholders are always included as stakeholders because they own part of the company and are affected by any action the company makes, good or bad.

Individualism
The individualism model of ethics focuses on benefiting the business. The idea of spending money on anything that will not incur a profit, including on employees and resources, is considered “wrong because it is essentially stealing from the owner or owners of the company.” The idea of corporate social responsibility is seen as unethical through this view because these actions will not definitively increase profits. But every action, even in this viewpoint, must be done within the limitations of the law. UnitedHealth Group did not meet the expectations of this ethical theory. It seemed as if the company was following it when they purchased QSSI. They were in search of profit gain which they knew would come from the current contract. In fact over the next couple of years their stock price increased about $24, with a stock price of $74 at the start of 2014. But if they were only after profit gain why donate so much to political campaigns? The donations by UnitedHealth Group and Anthony Welters gave no definitive profit to the company. The company did not follow the legal aspect of this theory either because they essentially participated in bribery of the federal government. They were not prosecuted for it though because it was in the form of a political donation which means there is no direct link indicating that the money was given for promise of anything in return. UnitedHealth Group’s actions have hurt their reputation though. There are many people who have begun to question United’s intentions of their actions. They have begun to make the connections between the events discussed in the timeline realizing that they cannot be coincidental. Before these events United’s integrity was not under question and although it is not clear how this has affected their profits it makes people wary of trusting them with such an important aspect of their life.

Utilitarianism
The utilitarian ethics model is based on the concept of maximizing the happiness of all involved in the long term. The focus is on the most likely outcomes of an action, where the long term costs and benefits are analyzed for each potential course of action. Looking at those involved it appears that happiness was maximized. The stockholders were pleased with the increase in stock prices as was the company as a whole. The increased profits increases the potential happiness of UnitedHealth Group customer base because it gives the company an opportunity to offer more benefits and services.
The federal government’s happiness is increased because the necessary repairs to the website were completed, and on time. Now UnitedHealth Group’s decision to be one of the providers on the Affordable Care Act website brings a different view of the ethicalness. Another group to look at that is impacted by this decision is the public. The people who are purchasing through this website may not be happy to know that Anthony Welters is involved. His past with fraud was concerning public health care and this makes the public nervous because he is a key decision maker at UnitedHealth Group. Many people are already disturbed by his involvement. Another group that is affected by United’s decision is the competition. When speaking of business the competition isn’t usually taken into consideration but in the health insurance business I believe it is important to. Since United worked on the federal health care data hub they had access to all information contained in it. This gives them an unfair advantage over the competition which could lead to the domination of the insurance industry. This is also bad news for consumers because when one company dominates it takes away variety offered which is huge in insurance.

Kantianism

UnitedHealth Group headquarters in Minnetonka, MN

The ethical model of Kantianism is based on the ideas of rational decision making, honesty, and freedom. It is the fundamental concepts we are brought up with as children, “don’t lie, cheat, manipulate or harm others to get your way.” Kantianism also works off of the idea of the formula of humanity also known as the categorical imperative. It treats humanity as the end result where determination of ethical actions is determined by the intentions of the actions. So a company could be doing something such as donate money to a charity but if they donated it for personal gain it would still be considered ethically wrong according to the formula of humanity. The concept summed up says that it is wrong to use people to get what you want. UnitedHealth Group lied and cheated in order to get the better outcome for themselves. They failed to inform the public of the acquisition of QSSI even though they are a publicly owned company. The federal government was unaware of this purchase as well. They kept the information from the government to keep their involvement with the website quiet. Their intentions of purchasing this company were unethical in themselves. They did so to have access to the federal health database in order to gain a competitive advantage over the competition. The other fundamental concept they broke is do not cheat. Although they did not bribe the president according to legal terms they donated money to his cause and campaign in order to receive a benefit. Donating the money it is still a form of manipulation because it is human instinct to feel obligated to pay back for the generous things others do for us. In other words they could guilt trip President Obama into giving a new contract to QSSI even though they were now owned by UnitedHealth Group. Their intentions are considered unethical because they used the President as a means to get what they wanted, another contract. There intentions are proved through their decision to enter into the public health care market in 2015 through the website they designed. They have access to all the information before they enter the market and so have a huge advantage over the competition. If they had decided to enter the market solely to benefit the public they would be considered ethical but UnitedHealth Group, as shown, is motivated by profits, not ethicalness. Although they cannot take it back now the company and affiliates should have refrained from donating money for profitable returns because it gives the negative appearance of manipulation to the public. If they want to appear as an ethical company they should be donating money to organizations that have no affiliation with the health care system such as a food shelter.

Virtue Theory Virtue theory is based on characteristics that “promote wellness or flourishing of Individuals within a society.” In the business context there are four virtues focused on which are courage, honesty, temperance, and justice. The business and affiliates should act so as to embody these virtues, or character traits. The people who need to possess these virtues would be the company’s decision makers, which includes Anthony Welters. A company, though, should embody these virtues as whole unit. So the following analysis is discussed in reference to the company’s decision makers as a whole. Justice is the idea of “hard work, quality products, good ideas, and fair practices.” UnitedHealth Group did not follow this virtue. They purchased a subsidy that was currently being contracted by the federal government in order to gain access to federal health care information, which is the market they are in. This information is unavailable to health insurance competitors which gives them an unfair advantage. Another virtue discussed is honesty which encompasses “honesty in agreements, hiring and treatment of employees, customers, and other companies.” by not revealing the purchase of QSSI to the public, their customers, they are keeping critical information from them. This information could sway consumer’s decisions whether to do business with the company. So without this information they are not able to make a decision based off of all relevant information. While discussing honesty the unfair advantage United gains over the competition applies. It is unfair for the information they obtained to be kept from the competition. Federal government information shared with one party should be shared to all parties because the government is essentially owned by the people. Another virtue is the concept of courage which is the idea of “risk taking and willingness to stand up for what is right.” United fails to do this in the specific situation. They knew the offer for the second contract was not right and they should have denied the government’s request knowing it gave them this advantage.


References

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