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The recent killing of Brian Thompson, the CEO of United HealthCare, a major insurance industry player, has stunned Rochesterians and, more generally, Americans in two ways. First, there is the immediate shock about the brazenness with which the unidentified killer hunted and ultimately killed Mr. Thompson in broad daylight, apparently a clear case of a targeted assassination. Second, there is the shock about the fact that so many Americans seemingly sympathize with the killer’s motive—even though this is presently unknown—which must have, or so many believe, something to do with prior shabby treatment by United HealthCare and possibly other health insurance companies as well.
This unfortunate incident reminds us that the health insurance industry plays a crucial role in, inter alia, ensuring access to medical care. Yet its for-profit nature raises serious ethical and practical concerns. Even though the health insurance industry is highly concentrated, which is generally bad for consumers, it is also true that no single proposed solution can address the myriad policy challenges it presently confronts. Even so, it is worth considering whether making this industry nonprofit might be a desirable step in not only altering the mindset of this industry but also in addressing the frustrations and even the horror stories that so many Rochesterians and, indeed, Americans standardly encounter when dealing with health insurance providers.
Transforming the health insurance industry into a nonprofit model would mean that this industry would have to think of itself as not solely focused on revenues and costs but, more importantly, as an entity with the social purpose of keeping Americans healthy to the extent possible. After all, we all benefit when our neighbors and fellow employees are healthy, and, more generally, America benefits when its overall workforce is healthy because this means that we will spend less than the more than $4 trillion we spent on health care in 2022. Some savings can be used for other worthwhile projects, such as infrastructure improvement.
Here are four reasons for wanting the health insurance industry to be nonprofit in nature.
■ First, consider the focus on patient care rather than profits. The primary mission of health insurance should be to provide access to quality health care. However, in a for-profit model, companies are incentivized to prioritize financial gains over patient welfare. This can result in practices such as denying coverage, limiting benefits, or increasing premiums to boost shareholder returns. A nonprofit structure would eliminate the profit motive, allowing insurers to allocate resources toward improving patient care, expanding coverage, and reducing out-of-pocket costs for policyholders.
■ Second, there is the matter of lower administrative costs. For-profit health insurance companies often allocate a significant portion of their revenue to marketing, executive salaries, and shareholder dividends. According to studies, administrative costs in the U.S. health care system far exceed those in countries with non-profit or publicly-funded insurance systems. A non-profit model would streamline administrative expenses, directing more funds toward actual health care services. The savings from reduced overhead could be used to lower premiums, expand coverage, or invest in preventive care programs.
■ Third, ponder the issue of enhanced equity and access to health care. A for-profit system often exacerbates health care inequities, as companies focus on serving wealthier customers who can afford high premiums. This leaves low-income individuals and vulnerable populations with limited options or no coverage at all. A nonprofit health insurance system, free from the pressure to generate profits, could prioritize universal access to health care. By focusing on inclusivity rather than profitability, the system would ensure that everyone, regardless of income or employment status, has access to essential medical services.
■ Finally, think about the alignment with public health goals. Public health goals, such as reducing chronic disease rates and improving health outcomes, often conflict with the profit-driven objectives of for-profit insurers. Non-profit health insurance organizations could focus on long-term public health initiatives, such as funding preventive care programs, addressing the social determinants of health, and promoting healthier lifestyles. By aligning their mission with community well-being rather than profit margins, nonprofits can contribute to a healthier society.
In conclusion, transforming the health insurance industry into a nonprofit model is not just a moral imperative but also a practical necessity for improving health care outcomes and equity. By deemphasizing, if not eliminating, the profit motive, the industry could focus on what I have argued ought to be its basic raison d’etre: ensuring all individuals have access to affordable, high-quality medical care.
Amitrajeet A.Batabyal is a Distinguished Professor, the Arthur J. Gosnell professor of economics, and the Head of the Sustainability Department, all at RIT, but these views are his own.
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Brilliant. But few nonprofits are what they claim to be. President Trump, Dr. Ben Carson, RFK Jr., and a number of members of the U.S. Senate, Congress, and other branches of government at all levels and the medical profession should see this and then brainstorm. Heath care is a private matter and none of the govenment’s business, the insurance industry is an abomination and the cause of high health care costs, the pharmaceutical industry is an abomination, medicine is a profession, not a business, hospitals et al. are places of care, not businesses, and doctors are trained, and quite a few were raised, in a way that destroys the capacity for critical thinking and humanity so that many have their hats and their heads on backwards, plus this is a nation of Philistines when it comes to money, consumerism, intellect, moral character, and knowing the price of everything and the value of nothing. But the right thing to do is to try to straighten things out anyway, whether it’s possible or not.
Then there is this, UnitedHealth Group CEO Andrew Witty made this statement a few days ago, “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.’
Designing the airplane in flight usually doesn’t end well.
And…FYI… 🙂
“https://winstonchurchill.hillsdale.edu/americans-will-always-right-thing/
There is NO fixing our current health care mess. The entire system is on the verge of collapse due to the cost, poor health outcomes and complexity. I truly believe that the republican “concept” for health care will finally abort Obama care, that fine republican plan from the Heritage Foundation under Tricky Dick Nixon. Winston Churchill said that we Americans will finally do the right thing after they have tried everything else. I just hope we can stay healthy and alive until these stunads figure it out.
Is it more newsworthy? Yes, in that the consequences and rarity are factors. Certainly this killing has not only generated attention as a CEO is rarely gun downed in public, but also because it is generating discussion of the health care system. Just ten days ago the phrase deny, defend, dispose wasn’t well known. Today the phrase is well known. This morning NPR did a story on Morning Edition on the history of United Health’s practices. The idea that would have been a story last week is unlikely. The fact that this is political makes a difference. These are not moral judgements, but statements of fact. By definition yes assassination is the correct term. For better or worse he was a prominent person who influenced the lives of many people. That meets the definition. https://www.dictionary.com/browse/assassination
All of these killings are sad, yet some have greater effects. Is this OK? No. They are all signs of immoral behavior. Is one less moral than another? No. But they do have different consequences.
I have to strongly disagree with the Professor. A complete non-profit system may have been a step toward universal health care thirty years ago, but we are way past that point. Many of our health insurance companies, (and hospitals) are already non-profits such as Excellus Blue Cross. Health care among non-profits, like all American health care, is now considered substandard by nearly 75% of us, and bad and unaffordable by nearly half. Non-profits also eliminate or greatly reduce property/school taxes. The NY Comptroller’s Office will tell you about 30% of NY’s property is off the tax rolls, though most are religious organizations. Homeowners, renters, and businesses pick up their burden in higher taxes. A large majority now support a universal Medicare system. There are 32 out of 33 Democracies who have figured this out, at half the cost per person, many living years longer than working Americans. NONE of them want a system like ours. NONE. There is also a need for stronger non-profit regulations. I reviewed forms 991 for United Way and the Combined Federal Campaign, something all should do before making a donation. The number of non-profits where the majority of funds goes to large salaries is out of control, while those that serve the people in need are paid low wages and/or are volunteers. Non-profits will not cure our horrible health care system.
Much of the healthcare industry has long been “non-profit”. Non-profit status doesn’t change any of the fundamentally flawed incentives that have crept into our system. The industry now follows the money to provide a lot of expensive, high profit care that doesn’t create much health. Reimbursement is the same even if the patient dies. Don Berwick got it right in 2001- physician reimbursement must be linked to value creation, defined as good health outcomes created / cost of care. The entire industry will follow the money to create a true high value healthcare system. True value based purchasing was not possible with Berwick’s 2001 data infrastructure, so this great strategy never happened.
Rochester now has a highly capable and affordable health data infrastructure with granularity to the physician-patient level. It can inform at a cost Rochester can afford the nation’s first health value yardstick, allowing greater physician reimbursement for creating more for value as determined by the data, not by an insurer’s billing clerk. To get the bonus, your doctors must learn to keep you healthy while not spending too much. The yardstick will show them how to do both. Now, we can!
When it comes to high six figure and seven figure salaries going to insurance executives/shareholders, I could not agree more. We would have a much better health system if this health care revenue went to the Doctors, Nurses, and other direct health care workers.
Jim, how do we explain this?
https://www.statista.com/statistics/1094939/physician-earnings-worldwide/
https://worldpopulationreview.com/country-rankings/doctor-pay-by-country
It seems doctor’s pay is not related to outcomes?
Agreed, one of the misconceptions people have of nonprofits is that they are freed from making decisions based on a motive to generate wealth. The only difference is a profit business makes a profit for it’s owners, while a nonprofit is still incentivized to reduce costs and make a “profit” in order to sustain itself. Only when the monetary motive is removed will we get a health care system focused solely on the welfare of the patient. The closest we may get to the is universal single payer.
I agree Mr. Pudup. The current systems are designed to delay, reduce, and deny claims. Every dollar paid foe treatment is a dollar removed from revenue and profits.
A near total disincentive to deliver real health care, and we are not really even discussing the costs to patients of medicine from drug companies. Horrible.
How do we explain this?
https://worldpopulationreview.com/country-rankings/doctor-pay-by-country
https://www.statista.com/statistics/1094939/physician-earnings-worldwide/
We pay more than most yet our ranking isn’t reflective of quality of care.
Is there more to this?
In a city where shooting and killings seem to be a weekly, if not semi-weekly, occurance, I sincerely doubt that the out-of-town shooting of a man that few if any of us have ever heard of has “stunned” more than a very small handful of Rochesterians. And speculating on the killer’s motives at this time is a waste of effort and says more about the speculators than then the speculatee.
Perhaps the fact that many, if not most shootings, not only in Rochester but nationwide, are the results of gang warfare, turf disputes, and between known parties yet this is an assassination by a stranger for seemingly political reasons, makes a difference. It is another sign of the moral decay and civility.
In other words the shooting of a rich, white corporate CEO by a rich, white ivy leaguer is more newsworthy than the shooing of a poor, black kid by another poor, black kid? So newsworthy that the media are fixated on it day after day after day? Such journalistic ranking is indeed a sign of our society’s moral decay. Very well. That being the case, where in the Breaking News pecking order do we rank the shooting of a middle class white guy by another middle class white guy? How about the shooting of a middle class white guy by one of those gang members you seem to see everywhere? And isn’t it interesting that the Thompson shooting is an exciting “assassination” while the others are just boring murders?
There is so much to “chew on” here. This article is so illuminating and presents a refreshing new way forward, it should only come to pass……
Could this be the first step to single payer universal health care?