Evan Ramstad
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Twenty years ago, Apple made computers and iPods and Google had a search engine and a few extra services.

But Apple's fast success with the iPhone in 2007 made executives at both companies realize that mobile devices were the future of computing. Google bought a smartphone operating system and the companies have competed ever since, becoming the poles around which all other tech firms orbit.

Today, UnitedHealth Group, Minnesota's largest company, and CVS Health are vying to become the iOS and Android of American health care.

The analogy isn't perfect, of course. Though constantly consolidating, it's not certain the health care industry will become as polarized as tech. Minnetonka-based UnitedHealth still competes with hundreds of companies in insurance, data and financial services, pharmaceutical benefits and clinics.

With nearly 10,000 retail stores, CVS is seen by investors to be more closely battling Walgreens Boots Alliance. Though CVS and UnitedHealth are nearly equal in revenue, investors give UnitedHealth a market value more than four times greater than CVS.

But from strikingly different starting points — UnitedHealth in insurance and CVS in drugstores — they've become more like each other in recent years, both racing to where the puck is going in health care.

CVS bought UnitedHealth's biggest insurance rival, Aetna, in 2018. UnitedHealth has developed a small retail presence through its Optum clinics.

They both had around $320 billion in 2022 revenue. Only four U.S. companies are larger: Walmart, Amazon, Apple and ExxonMobil.

Companies tend to grow slowly when their annual revenue is in the multihundred-billion-dollar stratosphere. But by buying their way into so many segments of the health care system, UnitedHealth and CVS are still growing strongly.

UnitedHealth executives told analysts in November to expect 11% revenue growth in 2023. "In most cases, we're really now, despite our size, only scratching the surface of the opportunities that lay ahead," Andrew Witty, the company's chief executive, said at the event.

He also told analysts that UnitedHealth must become a "pre-eminent consumer organization."

His justification was clear, though the specifics were few. "In every scenario, the American consumer, the American patient has more influence in the future than today. We need to build and respond to that," Witty said.

UnitedHealth says it now serves 149 million Americans in one way or another, about 50 million through its insurance plans. Its executives want to nab the remaining 200 million.

CVS, of course, has focused on consumers from the start. Its logo is a heart, its cash register receipts a longtime punchline of comedians.

Both are intensely focused on what's called value-based care. It's the idea that fee-for-service care will be supplanted by something that's more efficient and has incentives focused on outcomes that, in part, show there's equity across a broad population. At-home and virtual offerings are key to delivering it.

Rivals and skeptics say the two companies, along with Amazon and some others, aim to provide the easiest and most lucrative care. The difficult, long-term care that's financially challenging would be left to traditional health systems, they say.

Last summer, the two companies, along with Amazon and Option Care, reportedly all explored bidding for Signify Health, a home-health and technology-services company that employs about 7,000 doctors.

News accounts varied over what transpired. A UnitedHealth spokesman said it didn't make an offer. CVS walked away the winner, striking an $8 billion deal. One analyst, Steve Valiquette at Barclays, called it a "nice strategic victory" for CVS as it gets deeper into the business of delivering health care.

The convergence began in 2011 when UnitedHealth renamed its data-systems business Optum and started providing services to other insurers. It later built a direct-care business that now employs or aligns with about 70,000 doctors.

CVS began dozens of acquisitions of drugstores in the 1980s, including Minneapolis-based MinuteClinic in 2006 and Target's pharmacies in 2015. It only moved beyond retail for the first time in 2014.

Today, each new deal UnitedHealth and CVS make receives government scrutiny for competitive implications. The Justice Department is still reviewing the CVS-Signify deal. It also recently appealed a ruling against its desire to halt UnitedHealth's recent $13 billion purchase of Change Healthcare, a data-service provider for insurers.

Antitrust enforcers fear the companies are building so-called vertical monopolies, operating in so many parts of American health care that competitors and consumers have no choice but to deal with them. But it's a difficult thing to prove.

One of the first questions CVS executives got from an analyst about the Signify deal was whether they were worried that Signify would lose some of its customers that compete with Aetna.

A CVS executive replied they did expect to lose some of Signify's customers for that reason. He added they didn't have "high degree of worry or anything like that about that."