Can “For Profit” Healthcare Insurance Be Patient Centric?

Jar for prescription drugs stuffed with hundred dollar bill representing high cost health care

The issue of healthcare and its control by profit-motivated companies is a complex and contentious topic. There are differing perspectives on the role of private insurance companies in healthcare and whether they ultimately benefit taxpayers.

In 2022, UnitedHealth Group made over $20 billion in profit. Cigna made $6.7 billion, Elevance Health made $6 billion, and CVS Health made $4.2 billion. All told, America’s largest health insurers raked in more than $41 billion of profits in 2022.

That is a staggering sum of money. It is so much money that you might assume that Americans can receive high-quality, accessible care whenever they need it. Sadly, that is not the case.

One way health insurers try to get out of paying for care that patients need is by requiring pre-authorization for routine and even lifesaving care. UnitedHealth announced earlier this year that it would require prior authorization for colonoscopies, a critical way for doctors to detect colorectal cancer.

An American Medical Association survey found 94% of physicians surveyed said that prior authorizations lead to delays in receiving care and 80% stated that prior authorizations can lead to treatment abandonment. UnitedHealth was forced to alter its policy due to public outrage. However, it still requires “advance notification” for the procedure, which doctors fear could lead to bureaucratic delays and delayed care.

Proponents of private healthcare argue that competition among insurance companies can drive efficiency, innovation, and choice, potentially leading to better services for consumers. They also say private companies can better manage costs and allocate resources efficiently.

However, critics argue that the profit motive inherent in private insurance can lead to cost-cutting measures that compromise patient care and access to necessary treatments. They also point out that administrative overhead and profit margins can contribute to higher overall healthcare costs. Additionally, private insurance companies may deny coverage or raise premiums based on pre-existing conditions, leaving some individuals without adequate access to care.

Whether taxpayers directly benefit from private insurance companies depends on various factors, including the specific policies in place and the effectiveness of regulation. Some argue that taxpayers indirectly benefit from private insurance companies through reduced strain on government-funded healthcare programs, increased access to healthcare services, and innovations in medical technology. Others contend that the profit-driven nature of private insurance can lead to inflated costs and inequitable access to care, ultimately harming taxpayers and patients alike.

Ultimately, the debate over the role of private insurance in healthcare is multifaceted and requires careful consideration of the trade-offs involved in balancing access, quality, and cost. Countries and healthcare systems have taken varying approaches to this issue, reflecting differing values and priorities.