DDD
issue 275, 21st December, 2024
by Dan Harvey
Gunshots are still echoing in the national conversation on healthcare in America.
The Murder
On December 4th at 6:44 am Brian Thompson, the CEO of UnitedHealthcare, was fatally wounded by gunshots to the back outside of the hotel where he was scheduled to attend an investor day conference. Within 4 minutes the assailant had already fled by bicycle to Central Park and discarded a gray backpack. By 7:30 am he fled NYC by bus from the George Washington Bridge bus station.
People across the Internet were transfixed. All the more so when it was revealed that the words “deny, defend, depose” had been scrawled on the bullet casings. And that the backpack was full of monopoly money.
It was like we were watching the lovechild of The Riddler and Robin Hood getting away with murder in real time.
The Memes
This first meme is how I found out about the assassination.
Independent journalist Taylor Lorenz chronicled the online vitriol directed not at the murder but at the CEO victim.
Within seconds of the news breaking, people online began celebrating. A Facebook post by UnitedHealthcare about the CEO's passing was met with over 23,000 laughing emojis before it was taken down. "Health insurance companies are parasites siphoning blood money from the sick, dying and injured,” one user posted. “I'm only surprised it hasn't happened sooner.”
Unlike many in the mainstream media she keenly understood why people were jubilant.
People have very justified hatred toward insurance company CEOs because these executives are responsible for an unfathomable amount of death and suffering. I think it’s good to call out this broken system and the people in power who enable it. Again, not so they can be murdered, but so that we can change the system and start holding people in power accountable for their actions.
Whoever the shooter was, it was clear he was becoming a star. And once someone was accused it didn’t take long for the murderer to be turned into merchandise.
The Murderer
Many on the right were quick to assume the shooter was a leftist. And if I’m being completely honest with myself, I did too.
As Branko Marcetic rightly puts it Luigi Mangione’s anger wasn’t neatly ideological.
But a scouring of Mangione’s digital footprint shows the reality is very different, and much more interesting. Far from a stereotype of a Zoomer leftist radicalized to violence by BreadTube and Sanders that obsesses the conservative imagination, Mangione appears to have been, like many Americans, someone with a hodgepodge of views and political beliefs that don’t neatly map onto any one category on the political spectrum.
Robert Evans arrived at a similar perspective
Luigi is certainly not the idealized leftist icon some had hoped. But he doesn’t easily fit into any other box we have. His interest in Gray Tribe-adjacent thinkers and self-help books written by productivity hackers like Tim Ferriss is incredibly common among young men. Much has been made of the four star review he gave Industrial Society and Its Future, the manifesto by Ted Kaczynski, but as with the rest of his media diet he did not view Ted through a simple lens of hero worship
Politically, ideologically he was kind of all over the place which makes him a very regular kind of dudebro who happened to come from wealth and privilege. As Evans further states:
This is a man who had options. He could have been almost anything he wanted to be. And the thing he ultimately chose to do with his life, after suffering a debilitating injury, was to shoot the CEO of United Healthcare.
Luigi Mangione was radicalized by pain.
The Manifesto
Independent journalist Ken Klippestein was the first to publish Mangione’s manifesto.
“To the Feds, I'll keep this short, because I do respect what you do for our country. To save you a lengthy investigation, I state plainly that I wasn't working with anyone. This was fairly trivial: some elementary social engineering, basic CAD, a lot of patience. The spiral notebook, if present, has some straggling notes and To Do lists that illuminate the gist of it. My tech is pretty locked down because I work in engineering so probably not much info there. I do apologize for any strife of traumas but it had to be done. Frankly, these parasites simply had it coming. A reminder: the US has the #1 most expensive healthcare system in the world, yet we rank roughly #42 in life expectancy. United is the [indecipherable] largest company in the US by market cap, behind only Apple, Google, Walmart. It has grown and grown, but as our life expectancy? No the reality is, these [indecipherable] have simply gotten too powerful, and they continue to abuse our country for immense profit because the American public has allwed them to get away with it. Obviously the problem is more complex, but I do not have space, and frankly I do not pretend to be the most qualified person to lay out the full argument. But many have illuminated the corruption and greed (e.g.: Rosenthal, Moore), decades ago and the problems simply remain. It is not an issue of awareness at this point, but clearly power games at play. Evidently I am the first to face it with such brutal honesty.”
The Models
The majority of American healthcare exists under what’s called a fee-for-service business model. Under this model patients pay for services individually so the healthcare industry is incentivized to over-prescribe treatments. When you hear people complain about getting nickel-and-dimed to bankruptcy over every single aspirin tablet, bandage, ambulance ride, or x-ray, this is why.
Value-based healthcare is an alternative model that’s been gaining traction since 2006. Under this model healthcare providers are obligated to work with patients to determine and agree a treatment plan and measure the outcomes over the course of said treatment. Providers get paid more if their patients have better results.
On the surface that’s a win-win for patients and providers as incentives should be aligned around quality of care instead of quantity of care. Unfortunately studies have shown that implementations have been incoherent, that standards vary state-by-state, and that variance leads to increased administrative overhead and financial waste. As Matt Stoller mentions:
But even putting aside the conflicts, value-based care itself increases administrative costs by an enormous margin. There are entire industries devoted to coming up with metrics (NQF, PQA, etc), there’s a ton of coding inside of electronic health records to be able to measure those metrics (which creates a health record monopoly called Epic Systems), and there’s staff inside hospitals and clinics and insurers to track everything. Value based care’s administrative complexity also makes it impossible to have a small practice, you have to be part of a large enough group that the measurements can be statistically meaningful, so you get “clinically integrated networks” of bigger doctor practices.
The Monopolies
Mangione was right in his manifesto. UnitedHealth Group is the largest company by market cap behind Apple, Amazon, and Walmart. But if the problem is much worse than just one fat cat company. 7 of the top 20 companies are healthcare companies. The two largest healthcare conglomerates are worth more than Exxon and Google which is mind-boggling.
More from Stoller:
This model is new. In the 2000s, we used to have health insurers, pharmacy benefit managers, pharmaceutical companies, hospitals, doctor’s practices, software firms, and payment networks, and they were all independent and traded with one another as need be. There were a few exceptions - Kaiser was both an insurer and hospital network, but for the most part, a health insurer made money selling health insurance, a doctor made money selling his services, et al. Today, we have UnitedHealth Group and CVS, which are trying to take a piece in every part of the health business.
The mashing together of health lines of business is something prompted by the Bush-era changes in Medicare in the early 2000s, and then the creation of Obamacare, which, in addition to the value-based care reforms, capped profits for insurers but still allowed those insurers to buy providers. Because of this profit cap, known as the “medical loss ratio,” insurers could only make a certain amount of money through health insurance, but they could take their patient money and spend it on doctors they employ using software they sold financed by a bank they owned. And now, they do. I wrote this up in a piece about how Obamacare created big medicine.
That means there’s no such thing anymore as a simple “insurance company.” Instead they’ve all turned into vertically integrated platforms with unregulated incentives to self-deal. If you think that sounds like the definition of anti-competitive to you then you’d be right.
UnitedHealth Group is paying many of its own physician practices significantly more than it pays other doctor groups in the same markets for similar services, undermining competition and driving up costs for consumers and businesses, a STAT investigation reveals.
The findings, drawn from a sample of practices across the country, expose the effects of a deepening conflict of interest: Rather than use its size and market power to drive down the cost of care, UnitedHealth, as the corporate parent of both a dominant insurance company and health care provider, can capture larger profits by paying itself higher prices for basic checkups, surgeries, and procedures.
And that’s why the first and last antitrust cases from the Biden administration involved UnitedHealth. Again from Stoller:
To understand why this view doesn’t make sense, it helps to start with some antitrust cases. The Biden Antitrust Division’s first merger challenge was UHG buying payment network Change Health in an $8 billion dollar deal. As I noted, that merger was a catastrophe; a year after the DOJ lost and the deal closed, Change got hacked and hospitals, doctors, and pharmacists lost access to cash flow, allowing UHG to buy up some of the providers it had crippled.
But that’s not the only challenge. In mid-November, the Antitrust Division sued UHG over its $3.3 billion dollar attempted acquisition of home health care and hospice provider Amedisys. So the first and last merger cases by Biden were both against UHG. And that’s not all, the Federal Trade Commission also sued UHG over its manipulation of drug pricing through its pharmacy benefit manager arm. Here’s a report released just before the lawsuit showing what these PBM subsidiaries did, according to one high-level executive.
Brian Thompson himself was embroiled in a lawsuit over insider trading as a result of the antitrust cases which he failed to disclose to investors or the public.
In May, the Hollywood Firefighters’ Pension Fund had filed a lawsuit against Thompson, alleging he had sold over $15 million of UnitedHealth stock despite being aware of an active Justice Department antitrust investigation into the health insurance company that he did not disclose to investors or the public.
That’s not the only time Thompson and his peers engaged in this unlawful behavior. Several executives within UnitedHealth Group took advantage of a ransomware attack to line their own pockets:
On February 21, the same day that a ransomware attack began to wreak havoc throughout UnitedHealth Group and the U.S. health care system, five of UnitedHealth’s C-suite executives, including CEO Andrew Witty and the company’s chief legal officer, sold $17.7 million worth of their stock in the company. Witty alone accounted for $5.6 million of those sales.
Major media outlets and personalities are often not providing this sort of context. Instead they’re grief washing, pearl clutching, and scolding Americans across political lines.
The Machine
One of Thompson’s legacies within UnitedHealth was his push into artificial intelligence and its use of algorithms to reduce costs and deny care to patients. Even when compared to monopolistic peers like Cigna, the difference is staggering.
Beth Mole at Ars Technica did some great reporting on a lawsuit brought by the estates of two deceased patients denied coverage by UnitedHealth:
UnitedHealthcare, the largest health insurance company in the US, is allegedly using a deeply flawed AI algorithm to override doctors' judgments and wrongfully deny critical health coverage to elderly patients. This has resulted in patients being kicked out of rehabilitation programs and care facilities far too early, forcing them to drain their life savings to obtain needed care that should be covered under their government-funded Medicare Advantage Plan.
The lawsuit argues that UnitedHealth should have been well aware of the "blatant inaccuracy" of nH Predict's estimates based on its error rate. Though few patients appeal coverage denials generally, when UnitedHealth members appeal denials based on nH Predict estimates—through internal appeals processes or through the federal Administrative Law Judge proceedings—over 90 percent of the denials are reversed, the lawsuit claims. This makes it obvious that the algorithm is wrongly denying coverage, it argues.
Emphasis mine.
It's not clear how much UnitedHealth saves as a result of this algorithm but some predict it to be hundreds of millions of dollars every year. What is clear is that’s certainly not going back to patients. Instead CEOs like Witty and Thompson received $20.9 million and $10 million respectively.
The Metamorphosis
Bullets, it turns out, can affect change.
A day after Thompson’s execution, Anthem Blue Cross Blue Shield reversed its unpopular and maligned decision to cap anesthesia coverage.
Friends within the healthcare sector have personally told me that inside their companies reviews have kicked off regarding claims denials. I’m struggling to find any companies formally making announcements to prove that out. Only time will tell I suppose.
A pair of bipartisan bills in Congress are now calling for the breakup of the healthcare monopolies–specifically the sell-off of their pharmacy benefit manager arms of business.
Corporate and congressional shifts are obscenely slow to happen so do I think these things all rapidly happened within the last two weeks? No. Very probably not.
But it's certainly clear that they’re being publicized as they are because of the assassination. As Elizabeth Warren, one of the co-sponsors of the Senate bill, said in an interview:
"The visceral response from people across this country who feel cheated, ripped off, and threatened by the vile practices of their insurance companies should be a warning to everyone in the health care system," the former presidential candidate said.
Political will is a hard thing to come by in Washington. Clearly some politicians are starting to read the room and see an opportunity (for their own political gain but also for change). As Brian Merchant says in his excellent piece on the matter:
There were some predictable attempts at tsk-tsking the unwashed masses in august publications, but the fury was and is ultimately irrepressible. Almost everyone understands on a gut level the awfulness of the modern insurance industry, its perverse financial incentives, and that its executives profit while ordinary Americans are routinely denied coverage and care and get sick and go bankrupt and die. Too many have personal horror stories. Few in the schadenfreude-filled comment boards support actual organized murder of executives, but almost everyone can feel the pain and the reasoning behind it. The rage transcends politics, and coalesces around injustice.
Americans on both the left and the right of the political spectrum and up and down the class divide are hungry for a change. Hopefully we can harness this fury into an actual movement to transform the healthcare system.