Health Insurance Companies Thrive While the Pandemic Ravages America 1

Crises often highlight both the best and the worst of humanity. Coronavirus is no exception. It has brought out the best in America’s health-care workforce. Public support for nurses, doctors, and other frontline workers is overwhelming. Doctors, nurses, respiratory therapists, food service workers, janitors, and administrators, among countless others have risen to the challenges of high intensity work in the setting of a novel virus, without preventative strategies or treatment options, limited testing, little PPE, and not enough ventilators. Doctors are going to work in some cases not knowing whether we will be paid, and in all cases not knowing whether we will survive. By May, about 60,000 health-care workers had tested positive, and about 300 have died.

But just as we are going to work regardless of our employers’ ability to pay us, all patients—all—are being cared for regardless of their ability to pay the hospital. Most of the health-care ecosystem is sacrificing a great deal during this pandemic to do what is right, which is to take the best care of patients, to the limits of the resources available. Clinicians swore oaths to put our patients first and we honor that despite our risk. Hospitals are being good community partners caring for all who walk through their doors, sharing information and resources while facing serious financial risk. Scientists are working around the clock, sharing knowledge and research. Administrators are scrambling to find PPE and to devise clever strategies to prevent its diversion during delivery. None of us does this work primarily for money. It is too hard and too risky for a paycheck to balance the scales. We do it because it’s a calling, a promise, and a moral imperative to those in our communities.

But coronavirus has revealed one segment of health care as a plague unto itself: the for-profit health insurance industry. As the rest of healthcare was thrown into financial turmoil, preparing space, acquiring more ventilators and PPE, and hiring scores of temporary staff, health insurers saw their balance sheets improve. Paradoxically, during the greatest threat to U.S. health in a century, the earnings of the largest for-profit health insurer remained ahead of last year’s figures. The persistently rising stock price of UnitedHealth Group (the parent company of the largest private health insurer in the U.S.) has not wavered, increasing more than tenfold from the date the Affordable Healthcare Act was enacted in 2010 through May 28, 2020. Moreover, amidst word of widespread clinician pay cuts, UnitedHealth’s Executive Chairman Stephen Hemsley and CEO David Wichmann each received exceptional compensation—more than $50 million for their work in 2019 alone.

How can health insurers thrive in the midst of a pandemic threatening every other aspect of healthcare? Simple: Insurance premiums keep coming in, but fewer claims are being paid out. In March, as the virus approached, high-priced elective procedures were cancelled to protect patients and to conserve PPE. Insurers, then, saved a fortune because they were not paying claims. But Americans in lockdown continued to pay their health insurance premiums knowing that without insurance they could risk financial ruin should they need hospitalization.

Even in the populations hardest hit by COVID-19—those who are older or in lower income groups—the insurance companies escaped relatively unscathed, because most of those over 65 and those in low-income groups are at least partially insured by Medicare and Medicaid.

Coronavirus is a terrible tragedy. But it is also a great opportunity, in several ways:

1)   It has brought into stark relief the immorality of our for-profit insurance system. Private health-care insurers do well when people do not receive healthcare. It is good business for them to sit on the sidelines of the pandemic, while hospitals founder, clinician salaries are cut, and patients worry whether their testing or hospitalization will be covered. That private insurers employ an army of billing adjusters to minimize claims and thereby to maximize shareholder profits is at odds with patient expectations for why they carry health insurance. It also runs counter to the oaths clinicians took to provide the best care possible to their patients. That insurers should be acting based on shareholder value, rather than the insured’s best interest is unthinkable to the average American. It’s the extraction of wealth, not the creation of health.

“For-profit health insurance does best when individuals—often at their most vulnerable—do not receive care.”

2)   It has clarified how some inequities result from our splintered health-care system. Coronavirus has overwhelmingly affected the poor. Lack of access to health care predicts infection and death rates even better than having an underlying health condition. Margaret Mead believed the first archaeological evidence of civilization was a healed femur fracture, evidence that a society valued caring for vulnerable citizens. It is unconscionable that low-income communities are left without sufficient access to care because there is insufficient opportunity for profit. Public health is on a ventilator. Will we stand by while for-profit health insurance decides whether or not they will pay to keep it alive?

3)   There is an election in five months. Two major issues for Americans are 1) healthcare, and 2) inequity, which are essentially inseparable. We have seen how poorly our system responds to a pandemic, how inequity exacts a greater toll on the vulnerable in a crisis, and how profits have trumped common sense and good healthcare.

We need change in the wake of COVID-19. We have seen the moral bankruptcy of for-profit health insurance laid bare: They do best when individuals—often at their most vulnerable—do not receive care. It is clear they have no incentive to leave the sidelines while communities wage war against the worst healthcare enemy in a century.

Now that we know this truth, we have a responsibility to act on that knowledge and to work to change the system. The time is right to align the incentives for patients, clinicians, hospitals, and insurers to focus on caring for patients. We build herd immunity by collectively refusing to continue on as before and by demanding an end to profit from vulnerability.

The vaccine for greed is already here. Let’s start using it.

Samuel Shem, M.D. is the author of the novels The House of God and Man’s 4th Best Hospital.

Wendy Dean, M.D., is co-founder of Moral Injury of Healthcare

Simon Talbot, M.D., is Associate Professor of Surgery, Harvard Medical School, and co-founder of Moral Injury of Healthcare.