The CEO of United Healthcare Group was assassinated in Manhattan a few days ago. A masked gunman shot him down outside of a conference. Why was he killed?
According to many reports, this CEO deserved to die for running an insurance company that denied care too often to its customers.
Is that true though? It is actually surprisingly easy to check United Healthcare’s financials to see if they are greedy bad guys:
https://finance.yahoo.com/quote/UNH/financials/
Total revenue (all money brought in) – $389b
All money paid out in claims – $303b
Money left over for running the business $85b
Cost of running the business – $69b
Profit – $14b
So it basically appears that for every $1 us customers pay to United Healthcare, $0.75 goes to medical providers, $.21 to running the business, and $.04 to profit.
Those numbers don’t seem like gouging to me, what do you think?
So where does all of our healthcare money go? Why is health insurance so expensive?
https://www.valuepenguin.com/hospital-bill-costs-study
The average hospital stay cost roughly $3,000 per day and lasted four days. The average US worker has to work 384 hours (10 full weeks of work) to pay for that. An average nice hotel room costs $150 for comparison or only 5 hours of work (half of one day). Overregulation in hospital institutions limits new beds and competition, which allows hospitals to overcharge. A hospital bed should cost maybe $300 a night, not 10x that.
The average doctor earns $350,000 per year. (Source Washington Post but paywalled so here is the Reddit link https://www.reddit.com/r/medicine/comments/15ljjt3/analysis_the_average_doctor_in_the_us_makes/). Many more people would like to be doctors, but the number of seats in medical school are artificially limited each year, keeping the supply tight and thus prices very high.
Another problem is that pharmaceutical companies are twice as profitable on average as regular companies. https://pmc.ncbi.nlm.nih.gov/articles/PMC7054843/#:~:text=001)%20(Table%201).,CI%2C%2010.2%25%2D17.4%25). This is because of patents… Get rid of patent law and all the medicines will still be invented, but prices will be far lower because there will be lots of competition and lots of companies making each medicine. The other major issue is the extremely high costs of regulation and getting medications approved. Cut that red tape and costs will go down.
The medical devices industry has the same problems with patent law and overregulation that the pharmaceutical industry does.
Ultimately, the regulatory capture of healthcare means that more than a quarter of the entire US GDP ends up in the pockets of people there.
People are greedy everywhere, why are they so successful in taking so much money in healthcare? Regulatory capture is when government regulators of an industry make decisions to help protect industry incumbents at the expense of that industry’s customers. Fast food companies are greedy, but there are very few regulations there, so competition keeps prices very low.