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Why Murdering a CEO Will Not Fix Healthcare Costs in the United States
Health insurance is misunderstood, and collective anger is misplaced.
I was shocked when I heard about the murder of United Healthcare CEO Bryan Thompson last Wednesday. I was saddened to see the general public's almost immediate lack of sympathy. As a former 22-year employee at Aetna, who is now a mental health care provider, I have unique insight into this issue, and I don't believe health insurers should bear the blame for our broken healthcare system.
I have gained this insight over the last thirty years, so I don't expect the average healthcare consumer to understand it by reading one article. Health insurance is a very complex topic, so I am including links to resources with more detail. The following is a summary of my knowledge. Any opinions I share are mine alone, as I am not authorized to speak on behalf of Aetna or any other entities.
Healthcare is a business
Most people feel that healthcare is a right, which is understandable given the importance of our health and that of the people we love. However, insurance companies are not charities. Although they frequently administer government programs such as Medicare and Medicaid, they do not receive government funding. They are for-profit companies that answer to their shareholders and must be profitable to stay in business.
Since health insurers provide a service rather than a product, they have very low-profit margins. In 2023, the US health insurance industry had a profit margin of 3.3%. By comparison, Apple's profit margin in 2023 was 25.16%.
In the healthcare system, there are consumers, providers, and payers. The payers include employers and insurance companies. Insurance companies must meet the needs of various constituents, including consumers, providers, employers, government bodies, and shareholders. As a healthcare consumer, I always hope my insurance company will pay for my needed services without hassle. As a provider, I want to be fairly compensated for my services. When I worked for a payer, I knew we had to keep all of our constituents happy.
