The United States House Energy & Commerce Committee Subcommittee on Oversight & Investigations - United Healthcare

On Saturday, May 4, 2024, I was surfing the television channels and I saw that the Subcommittee Hearing of May 1st, dealing with the Cyberattack at United Healthcare’s Change Healthcare operation was being repeated on C-Span at 1:00 P.M.

Having previously been a co-founder of AmeriChoice, a Medicaid Managed Care Company, that we sold in 2002 to United Healthcare, I was obviously interested.

United Healthcare is a behemoth in today’s healthcare arena. It was in 2002, but today it is one of the largest, if not the largest. Today, it is an insurer, a provider of healthcare services and an intermediary, processing claims for other healthcare companies. Revenues in 2023 totaled over $371.6 billion, and net Income amounted to $22.3 billion. Cash and investments at the end of 2023 amounted to $29.6 billion.

Some believe that United is too big and that steps need to be taken to break the company up. I believe that is a difficult hurdle to make happen.

Change Healthcare was acquired by United in 2022. The acquisition was challenged by the Department of Justice but was not successful. Change Healthcare, among other things, processes claims for many other healthcare providers and insurers.

The cyberattack put at risk personal information on many individuals, and has caused significant disruption in payments to providers. Apparently, someone obtained information that enabled them to sign in to Change’s computer system and place a bug that corrupted the information stored there. There was inadequate security safeguards that allowed this. Apparently, multifactor authentication, an industry standard, was not in effect by Change.

The C.E.O. of United, Andrew Witty, has indicated that they have made advance payments to providers in an attempt to ease the financial burden that the providers are experiencing. Additionally, United has paid $22 million, in bitcoin, as ransom to the attackers.

The healthcare system in the United States is a complex and daunting business. It is complicated, and many times, difficult to navigate. There are insurers, providers, such as Doctors, hospitals, pharmacies, and many other specialties. The industry is not well regulated, and in many cases it is like the “wild, wild, west.” You have private insurance, Medicare, Medicaid, and then the Affordable Care Act. Each provider negotiates prices with a multiple number of insurers. Each insurer also has different requirements as to what they pay and don’t pay for, a very complex business. Pre-authorization is required for many procedures.

In 1972, I was Chief Financial Officer at Kaman Aerospace. Kaman was a major sub-contractor to other aerospace companies. They were also a manufacturer of helicopters for the U.S. Navy. One of the sub-contracts that Kaman had was with Grumman Corporation, a Long Island manufacturer of the F-14 for the Navy. Kaman was under contract to produce the flaps, spoilers and ailerons for the F-14. This program was a profitable venture for Kaman because we had established an affective process for bidding programs such as this, and our manufacturing organization was executing to plan.

Grumman, however, was experiencing significant cost overruns on the program and had advised the Navy that they could not continue the program without a significant increase in funding. Defense Department Programs might be multi-year, based upon options, however funding was annually.

In late March 1972, the Navy indicated that they were considering paying Grumman additional funds for the loss of a test vehicle and that they were also considering modifying the Grumman contract upward.

Senator Howard Cannon, of Nevada, was Chairman of the Armed Services Subcommittee. He was a significant member of congress with expertise in government military funding. He did not see eye to eye with the admirals of the Navy, and he decided to hold public hearings on the matter. Congressional investigators were sent to Grumman and to a number of Grumman’s major subcontractor’s facilities to analyze all aspects of the F-14 program. They found that we were not looking to have our subcontract renegotiated. We were satisfied and prepared to proceed with our pricing. As a result, we were served with a subpoena and required to appear at a congressional hearing to be held in June 1972. Their plan was to use us as a wedge against Grumman.

Jack Anderson, President of Kaman Aerospace, and myself, attended the hearings and testified as to why we weren’t asking for an increase in our contract with Grumman. We were concerned about the impact that this might have with our relationship with Grumman. However, in the end It didn’t affect our relationship and Grumman received a contract increase. As a result of this experience, my view on congressional hearings wasn’t positive.

As an aside, during the hearings, we stayed at the Watergate Hotel in Washington, D.C., and were there when the Watergate break in occurred on June 17, 1972.

As you can see, the United Healthcare Congressional Hearing interested me from two ways. I have been a direct participant in a hearing, and secondly, I had experience with United Healthcare.

At one o’clock, I tuned in to the hearing. Andrew Witty, C.E.O. of United read a 5 minute statement concerning the cyberattack. He sat at a table that appeared to be at least 15 feet in length. He was alone. This appeared strange to me because one normally has counsel and staff aides next to them when testifying. They are normally there to provide assistance to questions from the committee, if needed.

The next thing that was odd to me was the small number of members of the subcommittee in attendance. There are 17 members of Congress on the subcommittee, but it appeared to me that only approximately ten were in attendance, with members of their staff sitting behind them.

The Chairman of the Subcommittee is Congressman Morgan Griffith of Virginia. The stated purpose of this subcommittee “ is to provide oversight of agencies, departments, and programs within the jurisdiction of the full committee, and for conducting investigations within such jurisdiction.” That is a mouthful, but is there a real purpose? In my mind, most, if not all of the Committees and Subcommittees are for show only. Their hearings allow the members to have their day “in the sun.”

As I watched the hearing begin, it was obvious that this was the case here. Each member was allotted 5 minutes to ask questions of Andrew Witty. Most of the time, the members pontificated and maybe asked one question. However, in my opinion, none of the questions were significant or meaningful. It was obvious that there was a lack of understanding, by the members, of the healthcare system.

When it was time for Congresswoman Jan Schakowsky of Illinois to ask her questions, it was particularly sad. She has been a member of congress since 1998 from the 9th Congressional District of Illinois. She was not prepared or her age was an issue (she will be 80 in May 2024). She indicated that she had three questions that she wanted to ask. She was reading from a piece of paper but she continued to have difficulty finding the questions. When it came to her third question she was really lost. An aide attempted to show her where it was on the paper, but she was still unable to articulate the question coherently. Maybe there should be age requirements or term limits for Representatives and Senators.

At this point in the hearing I had enough. The questions didn’t appear to be serious and the whole thing was a waste of time. It was obvious that nothing was to come from this.

It was also obvious, from the questions being asked, the representatives on the committee were not operating at full capacity. If they are representative of our Congress, heaven help us! Shame on us for electing them! We cannot afford the divisiveness that exists in Congress if we want our Nation to be respected in the world arena. We have the power but will we execute it.

Jess Sweely

Madison, Va.

May 6, 2024