Perry Haan: CEO’s killing raises questions about health insurance


By Perry Haan,
Business columnist

The recent gunning down of Brian Thompson, CEO of UnitedHealthcare, on a street in New York City, generated a national discussion of one of the most confusing and important products for consumers — health insurance. It is a product most people own either by having it paid for by their employer or paying for it on their own. For those on Medicare and Medicaid it is provided by the government. Yet most people know very little about the product or how it works.

Insurance has created a situation where healthcare is one of, if not the only, product consumers acquire without knowing its cost. One frustration associated with health insurance is the increasing cost of healthcare. Medical technology is enabling people to live longer but those drugs and procedures are expensive.

Insurance companies denying claims consumers believe should be paid is another concern. Consumers pay premiums so when they are sick or injured, they will be covered. Legitimate or not, consumers often feel like they have been scammed when their claims are denied. Increasing customer deductibles and co-pays that are used to reduce the premium consumers pay also contribute to this dissatisfaction.

While CEOs like Thompson earn high salaries, health insurance companies themselves are not any more profitable than most big companies. UnitedHealth Group, the company of which Thompson’s UnitedHealthcare is a subsidiary, has the largest market share, but its net profit margin is just over 6%. The average net profit margin for firms on the Dow Jones Industrial Average was just over 10% in 2023.

Consumers are not the only ones frustrated with the health insurance industry. Doctors complain about how difficult it is to get paid on claims they submit. They also object to insurers making decisions about which procedures or medications will be covered.

Nearly one in four doctors say the practice of prior authorization has led to serious issues for patients. Originally intended to control the costs of certain medications and treatments, the frequency of prior authorization requirements has risen in recent years, and they now apply to common and inexpensive care.

Studies show that most Americans are satisfied with their own health insurance plan but are not happy with constant increases in the premiums they pay and the fact that many Americans are not insured. The uninsured rate for Americans ages 19 to 64 in 2023 was 11.1%, a decrease from 11.3% in 2022.

One of the solutions some, especially politicians like Sens. Bernie Sanders and Elizabeth Warren propose, is government-provided healthcare. A recent study showed that over 60 percent of U.S. adults, the highest percentage in more than a decade, say it is the federal government’s responsibility to ensure all Americans have healthcare coverage. The figure had slipped to as low as 42% in 2013 during the rollout of the Affordable Care Act’s (Obamacare) healthcare implementation.

The same study showed 46% Americans saying the U.S. should have a government-run healthcare system, while 49% are in favor of a system based mostly on private health insurance. In most years, majorities as high as 61% favored a system based on private insurance.

While government-run healthcare is common in other countries, these plans have flaws as well. A report by the Canadian government reported long wait times for procedures, limited access to family doctors, and overwhelmed emergency rooms. A recent story in the Wall Street Journal concerning the United Kingdom’s National Health Service described a situation where a 90 year old woman in London waited four hours for an ambulance and then waited another nine hours in a hospital being treated while in the hallway for a fall she took in her home.

As populations age in developed counties, most agree there are major problems with healthcare. Unfortunately, there are many more questions than answers to fixing these problems.

Dr. Perry Haan, a Watertown native, is a professor of marketing at Tiffin University in Ohio. He can be reached at haanpc@tiffin.edu.