UnitedHealth Group is trying to overthrow the non-binding shareholder proposal, which asks the company to prepare a report on delayed and denied healthcare costs.
The proposal, submitted by members of the Inter-Indigenous Centre for Corporate Responsibility (ICCR), represents a new frontier that calls for insurers to be held responsible for the “macroeconomic costs” of care that has been rejected.
The proposal asks UnitedHealth Group to produce a report on “public health-related costs and macroeconomic risks created by company practices that limit or delay access to health care.”
“The investors we work with are interested in creating long-term value,” said Meg Jones-Monteiro, senior director of health equity at ICCR. Unions represent primarily institutional investors, such as pensions and foundations.
“When you think about the investment portfolio that our members have, they're very diverse,” Jones Monteiro said. “What happens in one sector affects another.”
The proposal is not binding, but the UnitedHealth Group is still fighting to stop it. In a January filing with the Securities and Exchange Commission, UnitedHealth Group attempted to exclude the proposal from its proxy statement on technical basis. This argues that the terms “public health-related costs” and “macroeconomic risk” are vague and subject to interpretation. .
As members of the coalition want more “transparency,” shareholders can understand the “externalities” created by UnitedHealth Group.
“I have been tracking shareholder proposals for many years,” said Shirley Westcott, senior vice president of Alliance Advisors, Corporate Governance Group. “I've never seen anything like this before.”
UnitedHealth Group is the largest health insurance company in the United States and the 19th largest company in the world by market capitalization, the largest employer of the US physician. According to one industry analysis, more than 5% of the US gross domestic product flows through the company every day.
The allegation is that the company is so large that there is a delay in care caused by prior approval, which means that patients must seek permission from the insurance company before treatment, and the denial ultimately makes the worker sick. They argue that benefits can damage the broader US economy.
“Overall performance of financial markets determines 75-94% of portfolio returns,” the investors argued about the proposal. “Given the size and wide reach of UHG, shareholders fear that UHG's practices could undermine the value of their portfolio.”
Even if the SEC supports the inclusion of shareholder proposals, we may be excluded from our proxy if we agree to terms that qualify the investors. Investors usually withdraw the proposal.
The allegations come after the murder of United Healthcare CEO Brian Thompson, who was shot and killed before a company meeting in Manhattan in December. His murder sparked a national debate about health care after many responded publicly to his death with indifference and politics.
UnitedHealth Group did not respond to requests for comment.
