Last week, UnitedHealth Group’s Chief Executive Officer, Andrew Witty, wrote an Opinion Guest Essay (link below) in The New York Times, titled “The Health Care System Is Flawed. Let’s Fix It.” His commentary, made in the wake of the tragic assassination of his colleague, UnitedHealthcare CEO Brian Thompson, called for healthcare reform.
In this heartfelt but ultimately unoriginal piece, Witty expressed his struggle to make sense of this “unconscionable act” and the vitriol directed at healthcare workers who have been “barraged by threats.” While we agree that no one working in or around patient care should fear for their safety, it is crucial to note that the providers are not the root of the problem.
During my tenure as an executive in the healthcare sector, I often shared with incoming medical students during their “white coat ceremony” that they should only enter the field with a genuine desire to help others, not driven by ego or a quest for wealth. The Dean was not thrilled, but as a Volunteer Board member and “Founder” of the College of Medicine, there was little he could do. I made this point because, after decades of being surrounded by healthcare providers, I understood that while I could go home and work reasonable hours, my doctors and case managers were often working evenings and weekends to save lives. As CEO, I too worked long hours, but that was a choice.
Throughout my career, I had conversations with doctors who warned me about practices that violated rules. This wasn’t a one-time issue; it happened hundreds of times. Doctors, knowing that insurance companies often delayed or denied necessary procedures, would sometimes escalate the diagnosis or severity of a case to ensure their patients received vital scans such as CT scans or MRIs. This often involved misrepresenting the severity of a condition to bypass insurance hurdles. It wasn’t ideal, but doctors felt compelled to act in the best interest of their patients’ health.
Later, when we owned both primary care practices and diagnostic equipment like CT and MRI machines, I worked with a large Managed Care Organization (MCO) to eliminate the need for prior authorization to use our own equipment for our own patients—something we didn’t charge for. The MCO anticipated a sharp increase in imaging procedures. However, the result was the opposite: a 10% drop in overall radiology use. Doctors, no longer having to navigate the bureaucratic maze of insurance approvals, could order tests freely, leading to better doctor and patient satisfaction. I wish we had formally documented and published these results.
Revisiting Mr. Witty’s Commentary
Witty writes:
“We know the health system does not work as well as it should, and we understand people’s frustrations with it. No one would design a system like the one we have. And no one did. It’s a patchwork built over decades.”
“We are willing to partner with anyone, as we always have — healthcare providers, employers, patients, pharmaceutical companies, governments, and others — to find ways to deliver high-quality care and lower costs.”
“Behind each decision lies a comprehensive and continually updated body of clinical evidence focused on achieving the best health outcomes and ensuring patient safety.”
“While the health system is not perfect, every corner of it is filled with people who try to do their best for those they serve.”
“The ideas he [referring to Mr. Thompson] advocated were aimed at making healthcare more affordable, more transparent, more intuitive, more compassionate — and more human.”
However, we know that UnitedHealthcare has one of the highest denial rates in the industry, and recent lawsuits reveal that a significant portion of those denials are being reversed—often to the tune of 90%. This indicates that artificial intelligence (AI) systems, which were used to review referrals, were less effective than human decision-making. This aligns with findings from the New England Journal of Medicine discussed in our previous blog post.
ChatGPT Experiment
I asked ChatGPT to review all SEC public filings of the largest U.S. healthcare insurance companies and provide their profit margins for the last available year. Below is the detailed answer and the links it provided. Feel free to review the data and do your own analysis:
Here is a summary of profit margins for some of the largest U.S. healthcare insurance companies based on their 2023 SEC filings and performance reviews:
- UnitedHealth Group (UNH)
- Profit margin: Approximately 5.7% for 2023.
- Key details: UnitedHealth achieved a strong performance with $324 billion in revenue and $18.5 billion in net income. Its medical care ratio for 2023 was 83.2%, reflecting effective cost management while growing enrollment in Medicare Advantage and other segments Insurance Business America Oliver Wyman
- Elevance Health (formerly Anthem)
- Profit margin: Approximately 4.1% for 2023.
- Key details: Elevance reported $156 billion in revenue and $6.4 billion in net income. They saw improvements in their medical expense ratio, which dropped to 81% in the employer segment due to premium adjustments AM Best News Mark Farrah Associates-Home.
- Cigna Group
- Profit margin: Around 4.9% for 2023.
- Key details: Cigna reported strong results, with revenue driven by its health services segment and a medical care ratio of 81.3%, showing better cost control than peers Oliver Wyman .
- CVS Health (Aetna)
- Profit margin: Estimated at 3.2%.
- Key details: CVS Health faced rising medical costs with a notable 15.5% increase in medical expenses in its Medicare Advantage plans, which slightly pressured overall marginsMark Farrah Associates-Home .
- Humana
- Profit margin: Approximately 4.5% for 2023.
- Key details: Humana’s focus on Medicare Advantage led to profitability despite high benefit expenses. They reported $100 billion in revenue and $4.5 billion in net income Insurance Business America Mark Farrah Associates-Home .
- Centene Corporation
- Profit margin: Around 2.8% for 2023.
- Key details: Centene, which primarily serves Medicaid populations, saw a medical expense ratio of 79.4%, one of the lowest among peers, despite cost pressures from redeterminations in Medicaid eligibility AM Best News Mark Farrah Associates-Home
Industry Insights
While profitability in the sector remained positive, it declined compared to 2022 as rising medical costs (e.g., drug prices, outpatient care) outpaced premium growth. Aggregate underwriting gains for all major insurers totaled $19 billion in 2023, down from $24.2 billion in 2022 Oliver Wyman
Source: ChatGPT on December 14, 2024
What Can Be Done?
The healthcare system is undeniably flawed, but it will not improve unless we change certain dynamics. One essential shift is empowering consumers. In his essay, Mr. Witty refers to the comprehensive and continuously updated body of clinical evidence that guides decision-making. While that sounds good, the sheer volume of research—estimated at 70 peer-reviewed medical studies published daily worldwide—makes it virtually impossible for anyone to keep up with it all. This amounts to over 20,000 new studies each year.
What if we gave consumers access to even a fraction of that research? They could then use this knowledge to better advocate for themselves in discussions with their providers and insurance companies. Most healthcare technology companies serve the industry—doctors, hospitals, insurance companies, researchers, and pharmaceutical firms—but very few focus solely on representing consumers.
What’s rare is a company that exclusively supports consumers in taking control of their own health data and provides them with tools, including AI, to improve their health and advocate for themselves with providers and insurers.
Read the full commentary here.
-Noel J. Guillama, Chairman
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