People protesting against the health care industry stand outside Federal Criminal Court as Luigi Mangione, suspect in the shooting death of UnitedHealthcare CEO Brian Thompson, appears during an arraignment hearing on December 19, 2024 in New York.
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John Lamparski/Getty Images
Healthcare Companies End 2024 in the hot seat. Yet some of the pressures they face have intensified throughout the year, if not more.
This month murder of UnitedHealthcare CEO Brian Thompson has pushed his company and its industryin the spotlight. This also triggered a vast consumer assessment on denied claims and high costs of care in the United States, where health care is the more expensive in the world. Now lawmakers both sides from the political aisle are intensifying their surveillance of the industry.
But even before Thompson’s shocking death on a New York street and its ongoing aftermath, Big Health Care’s business was having a rough year. Costs are rising, profits are falling, top executives have lost their jobs, and investors are selling their stocks.
This industry, which affects the life and well-being of the entire country, is increasingly ever bigger for years. Industry executives say this growth allows larger companies to offer a wider range of low-cost health services to more people, while critics and consumer advocates say the size and the scale of these companies makes them opaque and expensive, and ultimately leads to worse. patient outcomes.
Authorities say Thompson murder suspect Luigi Mangione, 26, seemed to share those criticisms; he was found in possession of a notebook that “contained several handwritten pages expressing hostility toward the health insurance industry and wealthy executives in particular,” according to the federal charging document filed by the FBI.
For better or worse, the size and scale of the for-profit sector appears to be here to stay. Healthcare spending was $4.9 trillion last year – or almost 20% of the American economy – as well as some of the world’s economies the biggest companies. Thompson led America’s largest health insurer, UnitedHealthcare, for an even larger parent company: UnitedHealth Group’s overall parent company is also the nation’s parent company. leading employer of doctors and the fourth largest American company by turnover.
“These massive organizations do almost everything under the sun when it comes to healthcare. They have their tentacles everywhere,” says Lovisa Gustafsson of Commonwealth Funda nonprofit health care research organization.
Yet for all the power they wield and all the money they make, these companies – and their investors – also have their discontents. CVS Health, the conglomerate that owns Aetna and is the 10th largest company in the world, abruptly replaced CEO Karen Lynch in October. The same month, UnitedHealth unveiled a weaker than expected activity forecasts for 2025. Bothcompaniesand their competitorsare facing increasing costs in Medicare Advantage businesses that were once seen as money generators.
These businesses are still profitable. But because their profits aren’t growing, their investors aren’t happy: Shares of UnitedHealth, CVS Health and other major health care conglomerates have fallen this year, while the market as a whole is prospering.
“It’s been a tough year,” says Julie Utterback, a healthcare analyst at Morningstar.
Congress and President-elect Trump focus on big health care
Next year could be more difficult – including in Washington. Last week, Democratic Sen. Elizabeth Warren of Massachusetts and Republican Sen. Josh Hawley of Missouri introduced legislation that would allow break large health care conglomerates, including UnitedHealth, the parent company of which Brian Thompson was a director.
President-elect Donald Trump said this week: criticize pharmaceutical benefit managers belonging to these large conglomerates.
These controversial companies essentially control what Americans pay for their prescriptions. The three largest employee benefits managers are owned by UnitedHealth, CVS and Cigna – and together they process 80% American regulations.
“They don’t do anything except they’re middlemen,” Trump said at a news conference Monday. “We’re going to cut out the middlemen.”
UnitedHealth and Cigna declined to comment for this article. A CVS Health spokesperson said via email that “we believe in the integrated value our business delivers” and that, regarding lawmakers’ recent comments on pharmacy benefit managers, “we are proud of our continued work to make prescription drugs more affordable in the United States. States.”
Pharmaceutical benefit managers were widelycritical – and scrutinized by the US government – for years. This fall, the Federal Trade Commission continued the three greatest managers, alleging that they engaged in “anti-competitive and unfair discounting practices that have artificially inflated the list price of insulin medications.” (The PBMs then countersuit the FTC.)
And it remains to be seen what actions the next Trump administration or the next Congress might actually take.
But Morningstar’s Utterback said increased regulatory scrutiny, fueled by this month’s public backlash, is a growing concern for healthcare investors.
“About a month ago, I wasn’t really worried,” she said. But “what people and most investors are really focused on is what might happen under regulation.”
Everyone agrees: America’s healthcare system is broken
Investors obviously have very different motivations – and complaints – than the tens of millions of patients who do not qualify or cannot afford health care in the United States.
But it’s striking how even those who make money from this big and powerful business are becoming increasingly unhappy with it.
Even the industry’s top executives recognize this systemic dysfunction – to a point.
“We understand and share the desire to build a health system that works better for everyone,” Andrew Witty, CEO of UnitedHealth, wrote in a statement. New York Times opinion article last week.
Its title? “The health care system is broken. Let’s fix it.”