Somehow the overall failings of the healthcare system are the fault of health plan executives
I wade into this debate with some anxiety, but I am frankly astonished by the online vitriol since the blatant assassination of UnitedHealthcare CEO Brian Thompson. Law enforcement believes the killing was clearly targeted, especially given the inscriptions on shell casings which said “delay, deny and defend.” Terribly, some have celebrated Thompson’s death or argued that he deserved to die given his business’ practices. Others have used the tragedy to attack health plans as evil entities that seek simply to deny or delay care. The social media comments single health insurers out as the sole bogeyman in the national healthcare debate. Far-left groups’ posts speculate about soon-to-be-unearthed sinister plots and treachery that are at the heart of the assassination.
To me, all the comments are unfortunate and lack important perspective. Bruce Japsen, a writer for Forbes (link to article at end), has some of it right. One cannot look only to insurers for practices in the American healthcare system. Japsen argues that health insurers are simply doing the bidding of employers or the government program when denying care or scrutinizing claims. His point is that premiums sent to insurers to administer care are finite and therefore health plans have to live within that budget and swing some sort of profit. These employers and government entities often set the benefits and rules for authorization and what is ultimately covered. As Japsen notes: “These coverage decisions are never made by the insurance company alone.”
Japsen notes, too, that politicians have signaled their support for private healthcare, whether employer coverage or government programs like Medicare and Medicaid. Support for Medicare for All and other government takeovers of healthcare has waned. States have backed private Medicaid managed care. More than a majority of seniors and the disabled are now in private Medicare Advantage. The Exchange program under the Affordable Care Act (ACA) is also solely based on private plans.
Japsen’s article actually has been attacked in social media as well. How dare he defend the greedy health insurers seeking to deny care. But I would go a bit farther than Japsen and perhaps invite even more ire from opponents. My take is that health plans are a great whipping boy or scapegoat for a system that is rotting more and more by the day. In essence, health plans are forced to carry out various forms of rationing to bring some control to outrageous expense in the system.
America already is a huge outlier in terms of healthcare spending. At the same time, it is a huge outlier in terms of quality. In the case of spending, we spend far more; in terms of quality, we get far less. Left to their own devices, providers, backed by well-funded hospital and doctor lobbies, would further spend us into oblivion. As much as our healthcare system is unaffordable now, it would be even more so without health insurers enforcing some modicum of prior authorization and utilization management into the system.
This is not to say that some health plans don’t have inappropriate prior authorization protocols or claim denials. They do and that needs to change. But I would argue that all things being equal, managed care could and should save even more in the areas of waste, fraud, abuse, and over-utilization. Citing a Kaiser Family Foundation (KFF) data analysis, the American Medical Association (AMA), the doc lobby, screams that 7.4% of all prior authorizations were denied or partially denied in 2022. That is up from less than 6% of requests denied annually from 2019–2021. But latest studies seem to show that American healthcare is so inefficient that as much as 25% of all expenditures constitute waste, fraud, and abuse.
As provider lobbies attack heath plan prior authorization and claims payment decisions (and government has begun reining in managed care’s discretion here), the hospital lobby stands against sensible reforms such as site neutral payments in Medicare and commercial coverage. Hospitals now directly own more than half of all physicians and have begun changing practice patterns to ensure services are provided at high-cost places of service. The hospital takeover of doctors has decimated primary care in favor of lucrative specialty and high-cost services. Hospitals, providers, and brand drug makers set obscene prices with no regard for the consumers they serve. Even with health plans driving some discounts, this creates unaffordability, barriers to access, and massive misalignment in the healthcare system.
All of the above creates huge premiums, questionable benefit designs, and the sometimes extreme prior authorizations, claims denials, and withholding of care we hear about. Yes, health plans could use additional reform, but they are actors in a broader system that desperately needs reform. Hundreds of billions, if not as much as $1 trillion of our over $4 trillion annual healthcare spend, could be saved if not for vested special interests fighting reform.
Now for those who argue that socialized medicine or single payer would be the cure for nasty health plan executives withholding care, I would argue that those systems have similar if not more far-reaching problems of rationing. Even as other developed nations with these systems spend much less on healthcare, most of these systems either explicitly (through not covering services or drugs) or implicitly (through global budgets and wait lists and times) ration care.
Most of all, my thoughts and prayers to Brian Thompson and his family at this trying time.
Bruce Japsen article in Forbes: https://www.forbes.com/sites/brucejapsen/2024/12/08/if-you-want-unitedhealthcare-to-cover-everything-talk-to-trump-or-your-employer/
#healthcare #healthcarereform #healthplans #insurers #unitedhealthcare
— Marc S. Ryan
