Is anyone actually satisfied with the health business?: NPR

Healthcare companies will end 2024 in a difficult situation. But some of the pressures they face have been building all year long, or even longer.

The murder of UnitedHealthcare CEO Brian Thompson this month put his company and its industry in the spotlight. It also sparked widespread consumer sentiment around claim denials and high medical costs in the United States, the world's most expensive country. Lawmakers on both sides of the political spectrum are now increasing scrutiny of the industry.

But even before Mr. Thompson's shocking death on the streets of New York City and the aftermath, Big Healthcare's business was undergoing a difficult year. Costs are rising, profits are falling, executives are losing their jobs, and investors are selling their stocks.

This industry, which affects the lives and well-being of entire countries, has continued to grow in size inexorably over the years. While industry executives argue that this growth has allowed large companies to provide a wide range of low-cost health care services to more people, critics and consumer advocates argue that the size and scale of these companies They argue that this makes services opaque and expensive, ultimately making matters worse. Outcomes for patients.

Authorities say the suspect in Thompson's murder, Luigi Mangione, 26, appears to have held similar criticisms. He was found in possession of a notebook that “contained several handwritten pages expressing hostility toward the health insurance industry and wealthy executives, among other things,” according to federal indictment documents filed by the FBI.

For better or worse, the size and scope of commercial industries appears to be here to stay. Healthcare spending last year accounted for $4.9 trillion (almost 20% of the U.S. economy), and so did the world's biggest companies. Mr. Thompson ran United Healthcare, the largest health insurance company in the United States, for an even larger parent company. The parent company for the entire UnitedHealth Group is the nation's largest employer of physicians and the fourth largest company in the United States by revenue.

“These giant organizations do pretty much everything under the sun when it comes to health care. They have tentacles everywhere,” said Lovisa of the Commonwealth Fund, a health care research nonprofit. Gustafsson says.

But even as these companies and their investors wield power and make money, they are also frustrated. CVS Health, the conglomerate that owns Aetna and is the world's 10th largest company, abruptly replaced CEO Karen Lynch in October. That same month, UnitedHealth announced lower-than-expected earnings forecasts for 2025. Both companies and their competitors are facing rising costs in the Medicare Advantage business, which was once seen as a lucrative business.

These companies are still profitable. However, investors are not satisfied as profits are not growing. While the stock prices of UnitedHealth, CVS Health and other large healthcare conglomerates have fallen this year, the overall market is thriving.

“This has been a tough year,” said Julie Utterback, a healthcare analyst at Morningstar.

Congress and President-elect Trump focus on Big Healthcare

The situation may be even tougher next year, including in Washington. Last week, Sen. Elizabeth Warren, Democrat of Massachusetts, and Sen. Josh Hawley, Republican of Missouri, introduced a bill to break up major health care conglomerates, including parent company UnitedHealth, where Brian Thompson was an executive.

President-elect Donald Trump this week criticized pharmacy benefit managers owned by these large conglomerates.

These controversial businesses essentially control how much Americans pay for prescriptions. The three largest benefit management companies are owned by UnitedHealth, CVS, and Cigna, which together process 80% of prescriptions in the United States.

“They're not doing anything except being an intermediary,” President Trump said at a news conference Monday. “We're going to knock out the middleman.”

UnitedHealth and Cigna declined to comment for this article. “We believe in the overall value our business provides,” a CVS Health spokesperson said in an email, referring to recent comments from lawmakers about pharmacy benefit managers. We are proud of our continued efforts to make the world more affordable.” state. ”

Pharmacy benefit managers have been widely criticized and come under intense scrutiny by the U.S. government for years. This fall, the Federal Trade Commission charged three of the largest companies with “anticompetitive and unfair kickback practices that artificially inflate the list price of insulin drugs.” (The PBM subsequently filed a countersuit with the FTC.)

And it remains to be seen what actions the incoming Trump administration and the next Congress will actually take.

But Morningstar's Utterback said increased regulatory scrutiny following this month's public backlash is a growing concern for health care investors.

“About a month ago, I wasn’t that worried,” she said. But “what people and most investors are really focused on is what happens in the regulatory pipeline.”

Everyone agrees: US healthcare is broken.

Investors clearly have very different motivations, and grievances, than the tens of millions of patients in the United States who cannot access or afford health care.

But it is surprising that even those who profit from this large and powerful business are becoming increasingly dissatisfied with it.

Even top industry executives acknowledge this systemic dysfunction to some degree.

“We understand and share the desire to build a health care system that works better for everyone,” UnitedHealth CEO Andrew Whitty said in a New York Times op-ed last week. ” he said.

His headline? “The health care system is flawed. Let's fix it.”