UnitedHealth Group is the biggest health-care conglomerate in the U.S. based on market cap and revenue. It’s even bigger than JPMorgan Chase, the nation’s largest bank. Annual revenue has nearly doubled over the past decade when adjusted for inflation, from $144 billion in 2012 to $250 billion in 2022. The company’s growth was fueled by an acquisition strategy that has been largely free of regulatory scrutiny.

And it is a Wall Street darling, with experts optimistic about the company’s future: 22 of 25 analysts currently label it a buy.

“If I had to pick one stock, only one stock to buy, I’d buy United[Health],” said Ana Gupte, principal at AG Health Advisors.

UnitedHealth “has had superior stock performance over everybody else for two reasons,” said Lance Wilkes, managing director and senior research analyst at Bernstein Research. “One would be strategic vision and the other is strategic capital management.”

UnitedHealth has increased its annual revenue since 2012 by more than $100 billion, when adjusted for inflation. It achieved this by engaging in a unique acquisition strategy. It started with smaller deals that have grown while many of UnitedHealth’s competitors such as Aetna and Humana or Anthem and Cigna tried to broker much larger ones, only to be stopped by regulators.

Conversely, UnitedHealth leaned into a vertical-integration strategy, buying up smaller companies and building them into its growing health-care business.

UnitedHealth’s size makes it “relatively immune to economic cycles” due to the company’s wide diversity, Gupte said. “It makes it very attractive from an economic cycle and a macro environment perspective.”

Until recently, its acquisition strategy allowed it to grow without catching too much scrutiny from regulators. But in January 2021, UnitedHealth and Change Healthcare announced a nearly $8 billion all-cash deal that was challenged by the Department of Justice due to antitrust concerns.

Health-care companies “are becoming more and more [like] utilities,” Wilkes said. “Consequently, I think they’re going to have very large market shares because ... you wouldn’t want redundant services through the system.”

“I think at this point you we would consider UnitedHealth Group just kind of like ... core health infrastructure at this point in America,” said Matt Stoller, director of research at the American Economic Liberties Project and author of ″Goliath: The Hundred Year War Between Monopoly Power and Democracy.” “It’s too big to manage.”

“UnitedHealth Group is committed to improving the health system for everyone, advancing evidence-based practice and aligning incentives across the system to ensure people get the right care at the right time in the right place,” UnitedHealth Group told CNBC.

“Because we serve people throughout every aspect of the health system, we have a unique ability to identify opportunities to better integrate care and benefits, develop solutions and deploy them at scale to improve access, lower costs and make the experience better for patients and providers,” it said.

Watch the video above to learn how UnitedHealth Group grew so big and what that means for the U.S. health-care system.

Chapters:
0:00 Introduction
1:45 Growth strategy
4:57 Antitrust concerns
8:28 Becoming a utility?

Produced and Shot by: Charlotte Morabito
Additional Reporting by: Bertha Coombs
Additional Camera by: Mark Licea
Edited by: Nora Rappaport
Graphics by: Jason Reginato, Christina Locopo
Supervising Producer: Lindsey Jacobson
Additional Footage: Getty Images

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How UnitedHealth Grew Larger Than The Biggest U.S. Bank

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