UnitedHealth Group CEO: America’s health care system is poorly designed

CNN
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In his first public response to consumer outcry following the fatal shooting of one of his top executives, UnitedHealth Group CEO Andrew Witty said Friday that the U.S. health care system “is not perfect” and that coverage decisions “are not well understood.”

“We know that the health care system is not working as well as it should, and we understand people’s frustrations about it,” Witty wrote in a guest essay in the New York Times. “No one would design a system like the one we have. And no one did. It’s a patchwork built over decades.”

Witty also defended UnitedHealthcare, the company’s health insurance arm, although he acknowledged that it shares some of the responsibility for the lack of understanding of care decisions.

“Together with employers, governments and others who pay for care, we need to improve how we explain what insurance covers and how decisions are made,” Witty wrote. “Behind every decision is a comprehensive and continuously updated collection of clinical evidence focused on achieving the best health outcomes and ensuring patient safety.”

Witty also praised UnitedHealthcare CEO Brian Thompson, who was killed in Midtown Manhattan last week, writing that Thompson “fought for preventive health and quality health outcomes instead of just adding more and more tests and procedures.”

In a statement Friday, UnitedHealthcare said that “highly inaccurate and grossly misleading information has been circulated about our company’s processing of insurance claims” and that it “authorizes and pays approximately 90% of medical claims upon submission,” noting that ” about half of one percent are due to medical or clinical reasons.”

Thompson’s fatal shooting thrust Americans’ dissatisfaction with their health insurance into the spotlight. Many have made their frustrations clear on social media.

Journalists have also reproduced the efforts of insurance companies to twist the system in their favor. STATEa news website focused on health care has published a series of investigative stories about UnitedHealth, including articles about how the nation’s largest health insurer is using a computer algorithm to cut off rehabilitation care for Medicare enrollees, limiting the discretion of clinical case managers.

Whether the public outcry prompts UnitedHealthcare and other insurers to adjust their practices — particularly the much-maligned denials of treatment and claims — or pressure lawmakers to force the industry to make changes remains to be seen. That depends in part on whether patients continue to make their voices heard, experts say.

Angry consumers have had success in auditing the health insurance industry in the past. They protested the restrictions on health maintenance organizations, or HMOs, in the 1990s, as captured in the 1997 movie “As Good As It Gets.” That helped spur insurers to offer more preferred provider organizations, or PPOs, which have fewer restrictions , but is more expensive.

However, any changes in the country’s complex healthcare system will not come easily or quickly, experts say. There are many actors involved, each with their own concerns about patient care, financial interests, and lobbying to influence legislators.

While many patients and their advocates argue that insurance companies are denying care to pad their profits, the industry maintains that it protects consumers from high prices and unnecessary care.

Shortly after Thompson’s murder, Witty pledged in an internal message to employees to continue the insurance company’s mission to help “the system get better.”

“Our role is a critical one, making sure care is safe, appropriate and delivered when people need it,” Witty said in a video message obtained by CNN. “And we guard against the pressure for unsafe care or for unnecessary care to be delivered in a way that makes the whole system too complex and ultimately unsustainable. So we will continue to make that case.”

“What we know to be true is that the health care system needs a company like UnitedHealth Group,” he continued.

Asked Thursday whether it will make changes in response to consumers’ public complaints, UnitedHealthcare referred CNN to Witty’s video. Other major insurers either did not return requests for comment or declined to comment, but a leading industry association said hospitals, providers and employers all have “a direct impact on the cost and availability of medical services.”

“In the fragmented and highly regulated health care system, health plans, providers and drug manufacturers share a responsibility to make high-quality care as affordable as possible and easier to navigate for the people we collectively serve,” said AHIP, the trade group. 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.”

But recent events may prompt insurers to examine their practices and make some changes, Julie Utterback, senior equity analyst at Morningstar, wrote in an email to CNN. This is especially likely if they see risks to their businesses, such as if employers threaten to leave because coverage decisions are too burdensome for their workers.

On the other hand, “the main reason for not changing their practices is to maintain their profitability while keeping costs broadly reasonable for their customers and end users,” Utterback wrote.

Although former President Bill Clinton failed to reform health care in the early 1990s, his administration’s efforts spurred increased concern over the cost of care. That spurred the growth of the HMO model, which allowed policyholders to see only certain doctors and required referrals from primary care physicians to see specialists and get certain tests and procedures. But HMOs also typically had low premiums, low or no copayments, and no deductibles.

Policyholders revolted because they felt they couldn’t get the care they needed, said Larry Levitt, executive vice president for health policy at KFF, a nonprofit health policy research group.

Their anxiety was captured in extensive media coverage and in the 1997 film “As Good As It Gets,” when a young boy’s mother (played by Helen Hunt) tells a doctor (played by Harold Ramis) that her insurance company would not cover an allergy test for his son’s asthma.

“F**king HMO, bastard piece of shit,” says Hunt, before apologizing.

“It’s okay. Actually, I think that’s their technical name,” Ramis replies.

Many states responded to the complaints by enacting patients’ rights that limited HMO cost-control practices in state-regulated plans. Employers, hearing from angry workers, began switching to PPOs, which generally provide coverage for a wider range of doctors but have much higher premiums, deductibles and out-of-pocket costs. PPOs have now largely eclipsed the managed care model.

But as health care costs continue to skyrocket, PPOs are adopting practices similar to HMOs, notably requiring approval of care in advance, known as prior authorization, Levitt said.

“If you think health care costs are tough now, imagine them without limits,” said Rodney Whitlock, vice president at McDermott+, a health consulting group, and a former health policy adviser on the Senate Finance Committee under Republican Sen. Chuck Grassley of Iowa.

However, health insurance companies sometimes back down when faced with an intense setback. Earlier this month, Anthem Blue Cross Blue Shield halted its plan to limit the time it would cover anesthesia used in surgeries and procedures after criticism from doctors and politicians. The policy was designed to reduce overbilling and make care more affordable, the insurer had said.

Congress has tried for years to improve access to care and contain costs, which are far higher in the United States than in its peers, even though it ranks last in health care. Lawmakers have held hearings and introduced bills, but no sweeping reforms have been enacted since the Affordable Care Act was passed in 2010 — except for several significant Medicare drug cost provisions in the 2022 Inflation Reduction Act.

An effort to improve the prior approval process in Medicare Advantage plans failed in the Senate in 2022 after the Congressional Budget Office estimated it would cost about $16 billion over a decade.

But there is now more bipartisan appetite on Capitol Hill to enact reforms, said Wendell Potter, a former Cigna executive and vocal critic of the health care industry. Lawmakers reintroduced the prior authorization bill, which now comes with a zero-cost estimate, and released a framework to establish so-called site-neutral payments in Medicare, where Medicare would pay the same rate for a service provided in a hospital outpatient department, an ambulatory surgical center or doctor’s office.

Plus, lawmakers are looking at reforms to the pharmacy benefit manager industry, which acts as an intermediary between health insurers, pharmacies and drugmakers.

Republicans, who will control Congress starting in January, will look for cost savings to offset the extension of the 2017 Tax Cuts and Jobs Act, Whitlock said. It could pressure them to adopt measures that would save the government money, such as site-neutral payments.

Meanwhile, the murder of UnitedHealthcare’s CEO will remain in the news as the case against the suspect, Luigi Mangione, winds its way through the court system. That will keep public frustration with health insurers in the spotlight — and could help advance legislation on Capitol Hill, Potter said.

“It’s going to be a year-long battle, but it’s going to happen,” he said. “Some kind of reform is inevitable.”