On Dec. 4, 2024, the killing of UnitedHealthcare CEO Brian Thompson sparked public outrage and highlighted systemic issues within the U.S health insurance industry. When the UnitedHealth Group expressed their sadness for Thompson's death in a Facebook post, the post received 62,000 reactions--- and ironically, 57,000 of which were laughing emojis.
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| Credit: KARE 11 |
So why were people reacting the way they were? Was this a minority v elite power struggle? Though the gunman's identity and motive has not yet been identified, Thompson's widow revealed that there had been "some threats potentially related to a lack of coverage" targeted at her husband. These threats were not exclusively targeted at the CEO, but the corporation itself.
The problem
Interestingly, the bullet casting was marked with phrases like "deny" and "defend," which implies a connection to systemic issues in insurance industry. The public backlash reflects widespread frustration with the private insurance sector. These issues include insurers using practices like prior authorizations and AI-driven claim denials to control costs; and this is often at the expense of patient health, specifically those facing high-cost care. For example, the 2023 KFF survey revealed that nearly one in five insured adults experienced claim denials in a 12-month period. On top of that, 1 in 4 of these individuals faced significant delays or were ultimately unable to receive care. For UnitedHealthcare specifically, a senate report found that its denial rate for post-acute care doubled from 10.9% in 2020 to 22.7% in 2022, and while some of the increase is caused by the spike in demand due to covid, part of it can also be attributed to the company's increased reliance of automation in claims processing.
Although reports show that 81% of insured adults rate their insurance as "excellent" or "good," there's still a significant gap in consumer protection. Only 43% of adults challenged a denial of care, and 50% of which were successful in their appeal. This demonstrates the arbitrary nature of the system's algorithms and their denials. Having personally gone through the healthcare coverage registration process for myself and my family, it's definitely a hassle: making over 20 phone calls back and forth with three different corporate and governmental entities that are somehow connected to each other; registering on two different websites, and uploading a number of documents multiple times--I can see how this process can be extremely frustrating for many, especially those who are less proficient with technology. While it was a matter of whether I get cleared in time for sports tryouts, for other patients, the delay in coverage can greatly impact the decisions made by their families, especially on continuing with costly medications and medical trials for long-term treatment. In turn, this causes mental health strain among the impacted communities. For instance, 80% of adults reported anxiety or worry about delays in care, according to the Commonwealth Fund survey.
This ultimately exposes deep flaws in the US health care system. While private insurers struggle constantly with cases where clients are left with millions in unpaid medical bills, they are also blamed for prioritizing profits over patients. It's a systematic issue that private corporations cannot fix alone; and for this sector to keep running, public trust needs to be restored.
Are private insurers the ones to blame?
The underlying frustrations with the health insurance industry are also caused by market concentration issues, which are often caused by government policies/regulations. Federal programs like Medicare and Medicaid, essential for millions of Americans, unintentionally consolidate market power by favoring large insurers, which shuns out competitors and drive up costs. Some policies like restrictions on cross-state insurance sales fosters monopolistic behaviors and limits consumer choice. This can ultimately allow dominant insurers to slow down innovation/efficiencies to increase profit margin over patient care. As the social media reactions show earlier, Americans are increasingly aware of how systemic flaws in the system exacerbate their challenges with accessing accountable and affordable insurance providers. To make reforms, bureaucratic agencies have to step up and potentially deregulate the industry. Because by enabling greater participation from diverse competitors, the industry can shift toward prioritizing patient care, as more patients will be accounted for, not just by the dominant players in the market.
Sources:
https://www.theatlantic.com/ideas/archive/2024/12/unitedhealthcare-ceo-assassination-investigation/680903/
https://www.nytimes.com/2024/12/05/nyregion/social-media-insurance-industry-brian-thompson.html
https://www.cnn.com/2024/12/06/business/insurance-claim-denials-unitedhealthcare-ceo/index.html
https://www.cato.org/briefing-paper/market-concentration-health-care-government-problem-not-solution#repeal-or-overhaul-federal-policies-encourage-market-concentration
https://www.economist.com/business/2023/10/08/who-profits-most-from-americas-baffling-health-care-system
