The ethics of health insurance

Miscellaneous and Personal Stuff I Must Share
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Continuing the discussion from UnitedHealthcare CEO fatally shot in Manhattan [2024-12-04]:

So … United healthcare has a very bad reputation, and perhaps that’s true of it. But as best as i can tell, the people who invented the HMO (which i think was related to Kaiser Permanente , the health insurance company) really believed they were going to improve people’s health and save money doing it, by preventing expensive complications. And i kinda think the folks who founded the Blues (the large number of blue cross/blue shield companies) did it because they thought they were making catastrophic health care affordable.

Are there issues with both of those companies? Yes. But i really don’t think it’s intrinsically wrong to sell health insurance, especially in a place like the United States that doesn’t have a public option.

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I’ve had one of the Blues as a client for the past decade. Originally, all Blue Cross and Blue Shield companies had to be independent from each other, and not-for-profit. The BCBS national association changed those rules a few decades ago, and now, a lot of the Blues are for-profit, and/or operate in multiple states. My client, at least, is still a not-for-profit, which I feel is at least somewhat more ethical.

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Yes, it feels like it ought to be a not for profit things. I go to a not for profit hospital, too, and my PCP is salaried, not paid based on how much he can bill.

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Wow – and by a wide margin, too! Exactly twice the industry average!

As you say, the CEO does represent the major aspects of corporate culture. Whether or not it “started” with him, the rate of claims denial is an absolutely central aspect of the business that he must have recognized and condoned, if not encouraged.

I don’t think there’s any getting away from the fact that he personally put “shareholder value” above the thousands of lost lives and the suffering that this caused.

So how does one reconcile the fiduciary responsibility of a publicly held corporation to maximize profits with the ethical responsibility to fund the medical care to which policyholders are not only legally entitled, but morally entitled? The simple answer is that when such a fundamental conflict exists between business interests and fundamental human rights, then the business model is fundamentally the wrong model. This really is the basic problem with private health insurance for medically essential health care.

I’m not an expert on these things, but my impression over the years from reading about the outcomes of various health care funding systems is that while non-profit insurers are theoretically better than for-profits (and non-profit hospitals demonstrably better than for-profits) that non-profit insurers tend to gravitate to being as self-interested as for-profits. Ultimately, there’s no substitute for either direct government funding of universal health care, or private insurance that is so tightly regulated (as in the statutory health insurance in Germany – Gesetzliche Krankenversicherung) that there’s no practical difference between that and single-payer.

I don’t believe this is a major factor, as long as the fundamental funding model I cited above is addressed. In Canada, with universal health care, the vast majority of physicians are either independent or working as small LLP type partnerships. All the ones I know have independent practices and work on the basis of fee-for-service (FFS). Here in Ontario there are some hybrid models based on block payments for patient enrollment, but in my personal experience almost all physicians work on FFS.

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It may be theoretically possible for health insurance to be run in an ethical fashion. However, in the real world:

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Inside UnitedHealth’s Playbook for Limiting Mental Health Coverage — ProPublica.

Skimming through this, it sounds like some of the employees of UHC were abused as well. Maybe we need to add them to the list of suspects

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The profit motive will consistently lead to a bad result when the profit incentive is to not do your job.

I mean just apply it to any other business; if somebody is paid more to stay home and watch cat videos instead of going to the office for work, would anyone be surprised if workers stay home? Of course not. Insurance companies (health or otherwise) make more money the less they pay out, so naturally they find every way they can to not pay out, and pay as little as possible as they can.

It’s the platonic ideal of a perverse incentive.

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Health Insurance companies are a major reason we DON’T have a public option in the US. They’ve fought against it. They didn’t even want the ACA and ran ads against it while simultaneously demanding changes as it was formulated, spending over $270 million on lobbying efforts. They went boo-hooing to Congress and the White House claiming that it would cause massive unemployment. They did everything but send crying orphans door-to-door.

I have battle scars from many, many battles with insurance companies for necessary eye surgeries, which they hate covering. They’re not here to provide coverage, as they make their money denying it and collecting premiums. The old adage says insurance companies are betting you’ll stay healthy, and you’re betting you won’t, but it’s not quite true. They’re betting they won’t have to pay for your treatment.

It’s a dirty, dirty business.

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So dirty, in fact, that it should be either legislated out of existence as it was in Canada for medically necessary procedures, or so tightly regulated that it amounts to the same thing as single-payer. The health insurers can then do one of the two things they did in Canada – get the hell out of the country, or limit themselves to ancillary coverages. Or they could get in a more respectable and less harmful line of business, like loan-sharking or pimping prostitutes.

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We switched to BCBS of Texas at work.in 2023. They initially denied my first chemo session after switching over. Chemo! We’re not talking a hang nail or optional Botox.

The oncology office had to call and harangue them into covering my chemo.

We’re switching to UHC in January. I see more arguments ahead.

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Yes. Whatever anyone’s intentions to establish and operate an ethical healthcare company and offer coverage in a for-profit environment, it will be quickly swamped by the need for Line to Go Up. It’s inevitable and it’s unavoidable.

Watching the reaction to the assassination of the CEO, I’m struck by the perception that the average American sees the situation pretty much backwards to reality. They look at a statistic like UHC’s rate of claim denial, much higher than the industry norm, and they assume this guy is a bad actor, that he deserved death for being a bean-counting sociopath. He may have been a friendly face at home, treating his family with warmth and generosity, but then he went to the office and he looked at spreadsheets representing thousands of suffering people and he enacted policies and practices designed to extract additional money out of those people without any consideration for their lives as individuals. Now that he’s dead, people seem to be saying, maybe they can get someone better in there, and the company can be a little less shitty.

This is delusional. It’s not this one guy, and it’s not this one company. Sure, maybe he was a little worse, maybe his company was a little nastier, but it’s the whole system. If he weren’t running UHC, a different sociopath would be in office. Now that he’s gone, the next sociopath in line will take over. Nothing will change. It’s the whole system. It’s entirely rotten.

Yet the average American seems unwilling or unable to properly grapple with that. Systemic villainy is almost impossible for people to really wrap their brains around. We prefer the personal, individual antagonist. We cheer when Robocop blasts the dastardly executive out the window of the high-rise and we leave the theater believing justice was done. Too many of us are absolutely blind to systemic injustices, distracted by stories of crime as symbolically individual acts. (This thread, I should mention, is an exception. People here do seem to see the problem pretty clearly. I’m talking about the average American who’s been propagandized and gaslit into fearing the specter of “socialized healthcare,” and who vote against reforms and support politicians who promise to “protect” American medicine from that “threat.”)

The people cheering this guy’s assassination are, in my view, wrong to do so — not because murder is or isn’t justifiable, and not because the guy was or wasn’t a problem. No, they’re wrong because the guy, individually, is largely irrelevant. He was an interchangeable CEO in a system that, from top to bottom, whether by evolution or design, grinds people into paste in pursuit of profit. Feeling positive about his murder is a distraction from that fundamental reality. That’s what I mean when I perceive the celebratory reaction as being basically backward: they applaud the individual death, but don’t go past it to really dig into the context. Yes, people hate the health insurance industry, but it’s bizarre to cheer this one guy’s murder as if it’ll make even the slightest amount of difference. Whatever symbolic positivity one might feel, the practical impact will be exactly and precisely zero.

Over the last several decades, the United States has conclusively proven that it’s grotesque, unethical, and socially damaging to allow people to enrich themselves in the field of healthcare delivery. They accumulate wealth which translates to power which allows them to skew the whole industry for the sole purpose of facilitating their ability to continue feeding like bloated ticks.

Squashing one tick is neither a triumph nor a tragedy, because the next parasitical monster will nestle comfortably into the spot he vacated. The whole thing needs to be burned down to bedrock.

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Sadly, that’s true. The even more corrupt prescription benefit management companies have somehow gotten highly entrenched and i didn’t see any way to get rid of them, either.

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We had a chance for universal health care like many other civilized nations have, but the AMA helped derail that movement during the Truman administration. What we have now is the logical evolution of health insurance in the free market system. Efforts to move toward UHC are met with fierce resistance and cries of “socialism!”, but OTOH when insurance companies do what they’re gonna do (manage a risk pool), people hate that, too. It’s like we want UHC-like coverage, or everything for free, but we want health care companies to provide it all, and not the government. Companies, for- and non-profit, cannot exist by handing out free services to all. The system we have here now is the one built specifically by us, for us, and it gives us the health insurance we deserve, good and hard.

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There’s no money in healthy people.
There’s no money in dead people.
All the money is in the middle.

–The American healthcare industry

I was a corporate VP at a couple of publicly-traded companies. The sort of craven, cynical, avaricious shit you imagine is said on Mahogany Row in Corporate America … is being said, daily.

A dear friend is a retired surgeon. I likened the business of healthcare to private prisons, telling my friend that – if that were the industry in which I was a VP, my primary job would be trying to: make more things crimes, make sentences longer, reduce the cost of running our facility.

Wash. Rinse. Repeat.

The degree to which the US leans on perverse incentives (ie, profiting off of misery), IMHO, is the main thing that defines “American Exceptionalism.”

“The spreadsheet belies the humanity.”

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I know this story is likely out of bounds. I just recently learned something from my first ever ambulance trip and ER visit. I looked up the insurance company form to apply for a discount. Of course I had to list and attach copies of my paystubs, bank account statements and IRA statement. They didn’t ask about my 401k balance though. I was fascinated because I have had to accumulate retirement in both IRA and 401k since I was 16 in the 90s. I had an IRA-to 401k transfer in mind but found it not practical and likely illegal.

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There are countries that do that. Healthcare is provided by competing non-profit companies, whose fees are paid by the government.

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I’m sorry, but I’m not following.

Why is that information relevant to getting health care? :thinking:

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Not to sound like an apologist, but…

We don’t know what’s behind those statistics. UHC has a lot of business in Medicare and in Medicaid. We all know that there is a lot of fraud in both of those. If UHC has a higher percentage of their business in Medicare and Medicaid than, say, HCSC (I think they’re the biggest BCBS group), then they’re going to have more denials because they found more fraud. Yes, statistics like that are jarring, but at such a broad level, they do not tell the complete story. I’m sure they’re directionally correct (UHC has more denials than average), but not sure about exact numbers (twice the rate for the same situation?)

I worked for 20 years as an Actuary in small insurance companies, working in group life and health insurance. I have long said “Insurance companies don’t make money by paying claims; they make money by not paying claims.”

Unfortunately, healthcare in the US is and has been in a vicious cycle. Practitioners (doctors, hospitals) know that insurance will pay, so they charge more. Insurance needs to charge their clients less, so they put restrictions on coverage, create narrow networks, etc. Put on that each state legislature puts its own spin on what must be covered, what can and cannot be restricted, it’s an extremely complicated business. (As an example - in the late 1990s, Texas finally said that any insurance policy covering medical must include mental health. Before that, most insurance policies in Texas did not cover mental health or substance abuse at all.)

You can’t blame the insurance companies entirely. Many of the restrictions are there to prevent fraud; many are there to make sure the less-costly option is tried first. Do you need the laser surgery (to prevent visible scarring), or is conventional surgery acceptable? Before they prescribe Ozempic to you for weight loss (at $1500 per month!), they want to make sure you’ve actually tried methods like exercise. My SIL is going through that right now. No, she is not diabetic (strike one). Her medical statistics (blood pressure, cholesterol) are reasonable (probably because she works out 2-3 times a week and has a low sodium diet, but still strike two), and her weight is not critical (I’m guessing 225lbs or 100kg for you living in logical countries), so the insurance won’t pay for it, and she certainly doesn’t have enough money to pay for it herself.

Yes, many of the local BCBS organizations have merged with others, and there now may be competing BCBS programs in a location, but most are still all technically “non-profit”. For example, HCSC (BCBS for Illinois, Texas, Montana, Oklahoma, New Mexico) is a mutual company, meaning the members own the company. All that means is that rather than having the bottom line be “Profit!” it’s “Change in Reserves”; I don’t think the “owners” (i.e. members) actually get any benefit from that other than the company has a shitload of money and can pay their claims. I will admit to not being a financial wizard, and I don’t even pretend to understand all of the financials, but the actual BCBS plans are technically non-profit (per Wiki, 501(m) organizations), but can be run by for-profit organizations. Yeah, probably involves a lot of slight-of-hand in moving moneys, but still technically…

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Here’s where I’m coming. I’ve read this thread and find ‘the ethics of health insurance’ fascinating. For me the ethics of my own actions also can conceivably go under this topic.