Health care in the U.S. is almost twice as expensive as other developed countries. The higher cost is due to higher prices … not due to inadequate insurance coverage.
By the numbers: Health care is 20% of our GDP. Providers, pharmacy, governments or a single-payer won't fix that alone, it will require the system and parties to work together.
- Yes, but: Higher spend has not translated to improved health outcomes. Six in 10 adults have at least one chronic disease, many of which are preventable and linked to lifestyle factors.
Who decides what is covered by insurance?
Employers and governments set benefit coverage and payment rules. Coverage levels can vary widely based on plan design.
In some specific cases insurers have flexibility to innovate and add on additional benefits. U.S. government-sponsored insurance vehicles are cross-subsidized by employers.
- Also unique to the U.S., we have prioritized unfettered supply and access to services over cost. This is a stark contrast to many countries with government-sponsored insurance that limits supply.
What role do health insurers play in the broader health system?
The pooling of risk is vital to maintain broad, affordable access to care. The number of Americans with health coverage has grown by ~25 million over the last decade.
Governments and employers turn to insurers to administer the benefits, manage cost through negotiated network discounts (~60%), pay claims (635 million), and reduce fraud ($400 million).
- Notably, we are the only part of health care that is incentivized to keep consumers healthy and make care more affordable – actually supporting health care vs. sick care.
How many claims are approved and paid vs. denied?
We approve 88% of claims.
- 10% are invalid and/or have administrative issues that require only provider attention; 2% are not aligned to industry clinical guidelines or client coverage criteria.
Yes, and: Our prior authorization programs are narrowly targeted (~2% of claims) and ensure that the right care is delivered in the right setting at the right time. It's basic patient safety and clinical efficacy.
- However, we recognize members may experience abrasion due to the coverage criteria and limits set by employers and government.
- We have plans to help address this and are the only one who can.
How much money do health insurers make?
In exchange for this important and challenging work, we make pennies on the dollar. Insurance margins are regulated (unlike providers and pharmacy), and we pay clients back if we make more.
- Our 5% profit is modest compared to others. While capped, it’s also required to deliver a return on capital and maintain billions of dollars of reserves to pay for care at all times.
- ~75% of UnitedHealth Group is owned by American households and retirees.
How can we make the system work better?
- Lead the market for value-based consumerism (3.0).
- Enable the full potential of value-based care at scale.
- Shift left.
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