United Health

United Health was founded in 1977, after acquiring the Charter Med Incorporated firm, and subsequently, it became one of the largest health insurers in the U.S. The company went on to introduce the first network-based health plan for seniors in 1979, which brought about its transformation into a publicly traded company in 1984.

United Health flourished under the leadership of William McGuire, M.D., CEO from 1989 - 2005, who brought the company through both difficult and easy times. During his tenure, the annual revenue grew to just over 400 million in 1989, and by 2005, McGuire himself was earning $124 million a year in compensation. In December 2006, however, journalist allegations of backdating stock options led to his replacement by Stephen Hemsley, the new CEO in December 2006 (see Investigations section below).

The company acquired The MetraHealth Companies Inc in 1995 for $1.65 billion, which led to more major changes for the up-and-coming United Health. MetraHealth had become a privately held company after the group health care operations of The Travelers Insurance Company and Metropolitan Life Insurance Company were combined.

In July 2004, United Health acquired Oxford Health Plans, and all of United Health's small group contracts (2-49 lives) are now Oxford health plans products. The following year, in December 2005, United Health received final approval for its purchase of PacifiCare Health Systems. The $9.2 billion purchase included an agreement to withdraw parts of PacifiCare?s commercial health insurance business in Boulder, Colorado and Tucson, Arizona, to comply with antitrust regulations and concerns. At the same time, United Health agreed to end its network access agreement with Blue Shield of California, further solidifying its standing in the health care industry.

SEC Investigation

This development was a result of investigations on the part of the Securities and Exchange Commission, as well as the Internal Revenue Service and prosecutors of the U.S. Attorney?s office for the Southern District of New York. The firm subpoenaed documents from the company after a series of probing stories in the Wall Street Journal in May 2006, which discussed apparent backdating of hundreds of millions of dollars' worth of stock options by United Health management.

McGuire was among the directors accused of having knowledge of and approving the backdating within United Health. He was not only forced to resign on October 15, 2006, but also to relinquish hundreds of millions of dollars in stock options. Other major shareholders have filed lawsuits accusing former New Jersey governor Thomas Kean and United Health?s other directors of failing in their fiduciary duty.

More problems arose when the American Chiropractic Association filed a national class action lawsuit against United Health and its sub-branch ACN, (American Chiropractic Network). The claimants accused United Health of alleged practices in violation of the federal RICO act.

United Health has been through the thick and thin of the insurance world, seeing a dramatic advance in 2007. The most recent UH acquisition was that of Sierra Health Services in March, adding another 310,000 members in Nevada and another 320,000 to people in senior and government programs throughout the U.S.

The company was rewarded for its efforts in 2007, when United Health was named Business Insurance Readers Choice winner 2007 for Best Managed Care Organization.

More About United Health

The health care system isn?t healthy. At United Health, we?re committed to improving the health care system. We aim to take what?s wrong and make it right.

We've made a bold statement, but no one is more prepared to revolutionize the health care industry than we are at United Health. We have been through the best and worst of times, and have remained the strongest, most committed health care company in the U.S. Over twenty-six million individual consumers are served by United Health, a company that provides access to high quality care from more than 535,000 physicians and care professionals, and partners with more than 4,700 hospitals.

That's the strength of the United Health network.

Combine that with our diverse selection of consumer-oriented health benefit plans and services, as well as practical, user-friendly online tools for enrollees, employers, brokers, and physicians. We?re always available to help with around-the-clock access to customer support resources.

United Health has made a statement and a promise to provide you with simpler processes, smarter solutions, and better results.