MW UnitedHealth Group CEO says healthcare needs fixing. Start with these 3 problems in claims and patient costs, experts say.
Andrew Keshner
'Everything is buried under layers of everything else' said one patient advocate.
The healthcare system needs to work better to defuse Americans' frustrations and address their medical needs, UnitedHealth Group $(UNH)$ CEO Andrew Witty said Friday, addressing the widespread resentment over health insurance that bubbled to the surface following the murder of a top executive in his company.
Days after police arrested a 26-year-old suspect in the murder of UnitedHealthcare CEO Brian Thompson, Witty wrote in a New York Times opinion piece that he's still struggling to understand the "unconscionable act and the vitriol that has been directed at our colleagues who have been barraged by threats."
But Witty also acknowledged in the op-ed that there's blame to go around, appearing to signal sympathy to consumer fury over bills and benefits. "Together with employers, governments and others who pay for care, we need to improve how we explain what insurance covers and how decisions are made," Witty wrote.
That sentence jumped out to Caitlin Donovan, senior director of the Patient Advocate Foundation, an organization that helps patients navigate the healthcare system, particularly in the areas of coverage and bill problems. "There's no acknowledgement that insurance should cover more," said Donovan, of the Witty op-ed. "It's just saying you didn't understand why we made this decision."
The lack of transparency, though, is one reason behind the anger directed at the health-insurance industry and its array of players. "Everything is buried under layers of everything else," Donovan said. "We have built this leviathan of a system."
Meanwhile, Donovan said, an ailing person or a loved one has to figure it all out - or just give up trying. "They lose money, they lose care, they lose faith in the system," she said.
The shooting death on Dec. 5 of Thompson, chief executive of the UnitedHealthcare unit of UnitedHealth Group, comes at a time when more than nine in 10 Americans have health insurance, according to the latest Census Bureau statistics. That's close to a record-high coverage rate, but it may also expose more people to strains and problems in the healthcare system.
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Nearly half of insured, working Americans said they received an insurance bill or a copayment charge for a service or procedure they thought was covered by their plan in 2023, according to a survey released this summer from the Commonwealth Fund.
There are two things that can be true at the same time, Donovan said: "Murder is wrong, and we, as a society, should examine how we are treating each other."
If healthcare-industry leaders like Witty want to improve the system, where can they start? When it comes to health insurance and the explanation of coverage, the following are some of the key issues for patients.
It takes more time and energy to dispute medical bills and insurance-claim denials
Donovan sees the maze from up close. When clients came to the Patient Advocate Foundation in 2018, it took an average of 16 calls to insurance companies, doctors, agencies, pharmacies and the like to get to the bottom of an issue. Last year, it took an average of 27 calls and messages, according to Donovan. That's a nearly 69% increase in contacts and an even larger expenditure of time and focus.
"These are getting much more complicated, even for professionals," Donovan told MarketWatch. "The average person is having a very hard time."
Comprehensive, industrywide claim-denial rates can be hard to come by. But some data offer a glimpse. For example, insurers denied around 17% of claims in 2021 on healthcare plans offered through the Affordable Care Act's healthcare exchange, according to the health-research nonprofit KFF. Appeals challenging those claims were rare, the analysis said.
Meanwhile, health-insurance premium costs keep climbing. The average price of a family premium through a job increased to $25,572, including a nearly $6,300 worker contribution, according to KFF analysis. Premiums have increased 24% in the past five years, according to the organization's research.
Health insurance has been the type of insurance drawing the most consumer complaints to state insurance regulators, according to the National Association of Insurance Commissioners. From 2021 to 2023, the number of complaints based on health insurance increased, climbing from over 26,000 complaints in 2021 to over 37,500 last year.
People are supposed to get advance notice on what's covered by insurance - but they don't
In the waning days of his first presidential term, Donald Trump signed legislation called the No Surprises Act aimed at preventing surprise medical bills. Many parts of the law have taken effect since 2022 to block people from getting blindsided by out-of-network medical bills and prevent them from getting in over their heads on insurance costs.
As a result of the law, hospitals and medical facilities now provide written "good-faith estimates" to uninsured consumers as to the price of planned care if asked, said Patricia Kelmar, senior director of healthcare campaigns at the consumer-advocacy group U.S. PIRG. There's also supposed to be an advance cost estimate that medical providers send to insurance companies, which then send the coverage estimate to the patient, she said.
But that hasn't yet happened because federal agencies are still writing the rules for the process, said Kelmar. "We would want to see those rules done and done well to give the patient the information they need in advance to know their financial obligations," she said.
The Centers for Medicare & Medicaid Services told MarketWatch it wouldn't speculate on the timetable for the rules surrounding advance notice. But the agency said it "agrees that this policy is a critical part of reforming the health care system to ensure that consumers have access to cost information before they get care."
Through a spokesperson, the agency said it's been doing its research and "engaging with industry and consumer advocacy organizations, and developing policy to advance this important consumer protection."
The rise of AI appears to be fueling health-insurance-claim denials
Insurers are increasingly incorporating artificial intelligence into their approaches to claim coverage, said Kelmar. "The trouble is we don't know how much AI is being used in our claim denials. Because of that, it's more complicated to fight a claim denial."
Hospitals are facing "skyrocketing" administrative costs, according to the American Hospital Association. There's a tangle of federal and state rules and "increasingly burdensome insurer policies," the organization said.
Artificial-intelligence and machine-learning tools are contributors to an increasing amount of care denials for patients with commercial health plans and Medicare Advantage plans, according to the organization's September report.
"Poor applications of these technologies can result in automatic denials of care without consideration of a patient's individual clinical circumstances or review from a clinician or plan medical director as required," the report said.
Though greater efficiency would be a positive development for insurers, Kelmar said patients still need a human touch when confronted by a mass of healthcare-provider and insurer paperwork. "People might think an actual real doctor looked and said this was inappropriate care, but it may not be a human-being doctor that looked through their records."
Read on:
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-Andrew Keshner
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December 14, 2024 08:30 ET (13:30 GMT)
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