UnitedHealth Group is attempting to swat down a non-binding shareholder proposal that asked the company to prepare reports on the costs of delayed and denied healthcare.
The proposal, filed by members of the Interfaith Center on Corporate Responsibility (ICCR), represents a new frontier in seeking to hold insurance companies accountable for the “macroeconomic costs” of denied care – arguing they eventually hurt the bottom line of large investors.
The proposal asks UnitedHealth Group to prepare reports on the “public health-related costs and macroeconomic risks created by the company’s practices that limit or delay access to healthcare”.
“The investors we work with are interested in long-term value creation,” said Meg Jones-Monteiro, senior director of health equity at ICCR. The coalition represents primarily institutional investors, such as pensions and foundations.
“When you think about the investment portfolios our members have, they are very diverse,” Jones-Monteiro. “What happens in one sector impacts another.”
The proposal is non-binding, but UnitedHealth Group is nevertheless fighting to stop it. In a filing with the Securities and Exchange Commission in January, UnitedHealth Group attempted to exclude the proposal from proxy statements on technical grounds, arguing in part that the terms “public-health related costs” and “macroeconomic risks” are vague and subject to interpretation.
Members of the coalition are seeking more “transparency” so shareholders can understand the “externalities” created by UnitedHealth Group – a behemoth by any measure.
“I’ve been tracking shareholder proposals for many years,” said Shirley Westcott, senior vice-president at Alliance Advisors in the corporate governance group. “I have not seen anything like this before.”
UnitedHealth Group is the 19th-largest company in the world by market capitalization, the largest US health insurer and the largest US employer of doctors. More than 5% of US gross domestic product flows through the company each day, according to one industry analysis.
The motion argues that the company is so large that care delays caused by prior authorizations, by which patients are required to ask their insurer for permission before a treatment, and denials could ultimately hurt the broader US economy by keeping workers sick and indebted.
“Overall performance of financial markets determines 75-94% of portfolio returns,” investors argued in their proposal. “Given UHG’s size and broad reach … shareholders fear UHG’s practices may impair the value of their portfolios.”
Even if the SEC rules in favor of including the shareholder proposal, it may still be excluded from proxy statements if the company agrees to terms that satisfy the investors. Investors would then typically withdraw their proposal.
The motion comes after the murder of the UnitedHealthcare CEO, Brian Thompson, who was shot and killed before a company meeting in Manhattan in December. His killing sparked a national debate about healthcare, after many publicly responded to his death with apathy and derision.
UnitedHealth Group did not respond to a request for comment.
