Following the fatal shooting of a company leader, could health insurance providers alter their approaches?
The public outburst might inspire insurance companies to modify their operations – specifically addressing the criticized denials of treatment and insurance claims – or urge lawmakers to compel the industry to implement changes, is yet to be determined. The outcome hinges on whether patients continue to voice their concerns, according to experts.
Consumers have successfully transformed the health insurance industry in the past by vocalizing their discontent. In the 1990s, they protested against Health Maintenance Organizations (HMOs), as depicted in the 1997 film "As Good As It Gets." This led insurers to offer more Preferred Provider Organizations (PPOs), which have fewer restrictions but are more expensive.
Overhauling the intricate healthcare system, however, will not be an easy or swift process, experts state. Numerous stakeholders are involved, each having their own patient care concerns, financial interests, and political influence.
## UnitedHealthcare's Objective
While patients and their supporters claim that insurance providers deny care to boost profits, the industry defends its actions by stating that it safeguards consumers from exorbitant prices and unnecessary care.
Shortly after Thompson's murder, Andrew Witty, CEO of parent company UnitedHealth Group, pledged to the employees to continue UnitedHealthcare's mission of improving the system.
"Our role is pivotal, and we ensure that care is safe, appropriate, and delivered when required," Witty stated in a video message obtained by CNN. "We guard against pressures that exist for unsafe or unnecessary care to be delivered, making the system overly complex and ultimately unsustainable. Therefore, we'll keep making this case."
"What we know to be true is that the healthcare system necessitates a company like UnitedHealth Group," he added.
In a letter sent to employees this week, Witty stated, "We owe it to Brian to keep our promise to enhance healthcare for everyone, in every way."
When requested to comment on possible changes in response to public complaints, UnitedHealthcare, the nation's largest private health insurer, referred CNN to Witty's video and letter. Other significant insurers either did not respond to requests for comment or declined to comment, but a prominent industry association noted that hospitals, providers, and employers all have an impact on the cost and accessibility of medical services.
"In the fragmented and heavily regulated healthcare system, health plans, providers, and drugmakers share the responsibility to make high-quality care as affordable as possible and easier to navigate for the people we collectively serve," AHIP, the trade group, stated in a statement. "Health plans are working to protect patients from the full impact of rising costs while connecting them to care that is safe, evidence-based, and coordinated."
However, the recent events may encourage insurance providers to examine their practices and implement adjustments, according to Julie Utterback, senior equity analyst at Morningstar. This is particularly probable if they perceive risks to their businesses, such as if employers threaten to leave due to excessive claims handling difficulties for their employees.
On the contrary, "the main reason not to modify their practices is to preserve profitability while maintaining reasonably priced coverage for clients and end-users," Utterback wrote.
## The HMO Backlash
Though former President Bill Clinton failed to reform healthcare in the early 1990s, his administration's attempts sparked concerns over the cost of care. This led to the growth of the HMO model, which permitted policyholders to see only certain doctors and required referrals from primary care physicians to see specialists and receive certain tests and procedures. Nevertheless, HMOs typically offered low premiums, low or no co-pays, and no deductibles.
Policyholders protested because they felt they couldn't access the necessary care, said Larry Levitt, executive vice president for health policy at KFF, a nonprofit healthcare policy research group.
Their dissatisfaction was depicted extensively in media coverage and in the 1997 film "As Good As It Gets," when a young boy's mother (played by Helen Hunt) informed a doctor (played by Harold Ramis) that her insurer would not cover an allergy test for her son's asthma.
"F**king HMO, bastard pieces of sh*t," Hunt said, before apologizing.
"That's ok. Actually, I think that's their technical name," Ramis replied.
Many states responded to the complaints by enacting patients' bills of rights that limited HMO cost-control practices in state-regulated plans. Employers, who heard from upset workers, began transitioning to PPOs, which generally provided coverage for a broader range of doctors but had much higher premiums, deductibles, and out-of-pocket costs. PPOs have now effectively replaced the managed care model.
However, as healthcare costs continue to escalate, PPOs are implementing practices alike to those of HMOs, in particular requiring preapproval for care, known as prior authorization, Levitt stated.
"If you think healthcare costs are troublesome now, imagine them without constraints," said Rodney Whitlock, vice president at McDermott+, a healthcare consulting firm, and a former health policy adviser on the Senate Finance Committee under Republican Sen. Chuck Grassley of Iowa.
For decades, the U.S. Congress has been striving to enhance healthcare access and reduce expenses, which are considerably higher than in comparable nations, despite ranking bottom on essential health indicators. Various hearings and bills have been conducted, but substantial reforms haven't been implemented beyond the Affordable Care Act (2010) and certain Medicare drug cost provisions in the 2022 Inflation Reduction Act.
The attempt to modernize the Medicare Advantage prior authorization process failed to progress in the Senate in 2022, as per the Congressional Budget Office's estimate of a $16 billion cost over a decade.
However, there is currently more political consent on Capitol Hill for enacting changes, according to Wendell Potter, a former Cigna executive and outspoken critic of the healthcare industry. The prior authorization bill has been revived and now carries a no-cost assessment, and a blueprint has been released to introduce "site-neutral payments" in Medicare, ensuring equal reimbursement for services delivered in hospitals, ambulatory surgical centers, or physicians' offices.
Moreover, lawmakers are exploring reforms within the pharmacy benefit manager sector, which acts as a mediator between health insurers, pharmacies, and drug manufacturers.
With Republicans taking control of Congress starting in January, they will likely seek cost reductions to offset extending the 2017 Tax Cuts and Jobs Act. This could encourage them to pass measures that would reduce government expenditures, such as "site-neutral payments."
Meanwhile, the homicide of UnitedHealthcare's CEO continues to make headlines as the investigation against the main suspect, Luigi Mangione, unfolds through the court system. This ongoing saga will keep public frustration towards healthcare in the spotlight and put the insurance industry on the defensive – potentially aiding in the advancement of legislative initiatives on Capitol Hill, as per Potter's viewpoint.
"It will be a lengthy battle, but reform is imminent," Potter concluded. "Some type of change is unavoidable."
The public outcry over insurance denials could encourage UnitedHealthcare to reassess its business practices, as the company's CEO, Andrew Witty, has pledged to continuously improve the healthcare system.
The continued public discontent with healthcare insurance practices, as evidenced by the recent events and the HMO backlash in the 1990s, has shown that consumers have the power to significantly influence the industry.
