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UnitedHealth overcharged cancer patients for drugs by over 1,000%

360 points by this_weekend 2y ago

sleepybrett 2y ago
.. and think of how much of that money went right into their lobbying/bribing on the hill to make sure they don't get regulated.
affinepplan 2y ago
shocked, shocked I tell you
BugsJustFindMe 2y ago
https://archive.ph/cg4we https://archive.ph/cg4we I do not like UnitedHealth, I do not like our existing crop of health insurance executives, and I might even be viscerally glad at some level that the UnitedHealth CEO was killed in a world where justice clearly takes a back seat to greed, but I wish the headline didn't say "overcharged", because there's no established amount of markup that is the correct amount of markup other than what people end up paying. Is that shitty? Yes. Does it violate a social contract? I think so. But tell me how much the right amount to charge is first. Is that cost? Cost+percentage? They've chosen their percentage. What's the correct one instead? The article body presents the story in a more meaningful way, "UnitedHealth Group is charging patients a markup for key life-saving drugs that could easily exceed their cost by a factor of ten or more".
- itishappy 2y ago
  They've chosen 90% margin (cost + 1000%). Semicon tool builders (my industry) have margins around 50% (cost + 100%). This is considered high margin manufacturing work. To match United Health's margins we'd need to raise prices by 5x.
  - BugsJustFindMe 2y ago
    I agree, but we can't talk about "over" without talking about where the line is.
    - itishappy 2y ago
      I agree as well, just drawing some lines!
    - xp84 2y ago
      Fundamentally, you have a pretty good point here, since the system we have has two halves that are fundamentally at odds: One part "free market -- maximize your profits as much as you can and get rewarded by a skyrocketing share price!" And one part, unspoken except in the PR BS put out by the insurance companies, "Try to improve the health of patients and have them not die!" The only way the two can coexist at all is if someone draws some lines like you are suggesting. I know that there are some (probably easily manipulated) laws stating that X% of premiums have to be "spent on care" and if they get too high overall margins on your group, they have to give your employer a rebate. Of course, who knows whether you'll see that money. If we just say "maximize your profits" (and indeed, shareholders 'should' sue them if they don't) then it's obvious that morally bankrupt scum that runs all these insurers would 100% extort people for 1000% profits on lifesaving drugs. It's the most logical course of action! People will pay infinity dollars to save their own lives/their loved ones, so let's soak them! If it's not obvious, I believe that overall the "free market" part of this system is a failed experiment that should be abolished immediately, and not just because I want all of these companies' sickening, greedy executives to go straight to hell (where Brian Thompson is burning today).
      - throwway120385 2y ago
        It ceased to be a free market when we enshrined employer-provided plans into the law. If it were more like auto insurance where I can fire my insurance company and receive a pro-rated refund or renegotiate coverage in the middle of the year then it would be more free. But my employer negotiates for me on my behalf, and their needs are often at odds with my needs. And the whole "open enrollment" period thing creates a situation where the insurance company gets to be absolutely terrible for an entire year and there's no recourse. And especially there's no recourse if my employer is generally satisfied, because my alternative is to take a massive pay cut to get good coverage.
- Nifty3929 2y ago
  This is exactly it. They are charging that price because that price will be paid, and this maximizes their overall profit. In other similar situations this would spur competition, which would ultimately drive down prices to a reasonable level. But in the healthcare industry competition is often prohibited or made very difficult by law. You can cite the patent system as an example of this, but another horrible one is the "certificate of need" laws, which should infuriate you.
  - BugsJustFindMe 2y ago
    > which should infuriate you Oh it does!
- throwway120385 2y ago
  All I'm going to say is that Optum Specialty Pharmacy is the sole source that UHC will accept for a lot of special drugs. For example UHC offers insurance for IVF including a separate cap for medications, but if you use their insurance you have to order through their subsidiary Optum Specialty Pharmacy and the prices triple or quadruple over MSRP if you buy from OSP using insurance versus if you pay cash. They also won't tell you this until you're in the middle of a cycle and an order gets held up because you're out of insurance, but since they billed insurance you're on the hook for the remaining several-thousand dollars because if you stop the drugs you're just out the money and the medication and have to wait another month. I don't know if I can give them the benefit of the doubt on the cancer drugs because of this.
  - BugsJustFindMe 2y ago
    I don't want you to give them the benefit of the doubt. I certainly don't think they deserve it. I do think, however, that a conversation about "overcharging" goes nowhere until people talk about exactly where charging ends and overcharging begins.
    - throwway120385 2y ago
      I'd be fine with a 20-50% markup on MSRP to cover billing and administration costs but when the insurer owns the pharmacy they can "negotiate" whatever rate they want and you have to pay it. I don't see it directly in the article, but I suspect they do the same thing with cancer drugs as with IVF drugs and require you to go through their pharmacy for insurance coverage. Insurance plans often have lifetime maximums, and when they set their own prices and collect money from themselves for the medication they sell you they can basically dictate how much actual coverage you get versus someone paying cash. And because you chose "bill insurance" when you ordered the medication, you're now on the hook for whatever additional cost there was versus the cash price. And also they won't tell you what the cost is until after the medication has already shipped. So it's at least plausible that they're abusing their position as the company that owns the pharmacy and the insurance plan to charge you a lot of money and provide very little coverage and also to gouge you at the very end of your coverage, because that's exactly what they did to my partner and I.
- jampekka 2y ago
  There are many models used in different jurisdictions. Typically it's a government body for negotiation, assessment and sometimes price caps.
- landryraccoon 2y ago
  I take issue with the claim that in order to say something is too expensive that you must be able to precisely propose an alternative price. I have no idea what the correct margin for essential cancer drugs is. I don’t think it should be a 10x markup. Intuitively, it seems that there’s something wrong with price gouging dying cancer patients. If you have an argument why my intuition is wrong, please share it.
  - BugsJustFindMe 2y ago
    > I have no idea what the correct margin for essential cancer drugs is. So let's talk about it and think about it and form an idea. There's no universally right or wrong answer, but you should at least be able to decide what answer is right to you. > I don’t think it should be a 10x markup. What about 1x markup? > Intuitively, it seems that there’s something wrong with price gouging There is, but you're relying on the word "gouging", and without identifying what price you think is gouging vs reasonable profit, stopping at the point where you express that "too much is too much" doesn't get us any closer to having actionable goals.
    - johnnyanmac 2y ago
      So, important question: What problem are we trying to solve here? Is there any benefit to the overall populace for us in HN to debate what we feel is "overcharged"? ---- But to go along with your exercise, I take a look at current market dynamics and compare it from there. Apparently, the typical wholesale markup is 20-40%, and stores will typically markup another 20-50% on top of that. So we're talking roughly a 125% markup on the higher ends from the factory into the consumer's hands as a very rough average (VERY rough, markups vary a lot per product and industry). That's with two chains of markup, so clearly 1000% feels absurd from one part of such a chain. Outside of factors like drinks (which are easy to scale and can have markups well into the hundreds), it's pretty hard to find any part of the chain as not "overcharged" once we go past 100% markups in any given place. on the most generous side, Costco famously has markups limited to 14% (albeit they rely on bulk purchases to mitigate that). and subsidized vehicles used to generally be a 10-15% markup price. So I'd say 15% is about the bare bottom of what to expect markups without some kind of twist. e.g. printers selling at a loss, making up for it with high markups for ink (another product that's easy to scale and marked up into the hundreds). or previously, a video game console in order to sell games (software, whose markup is hard to really determine since it's infinitely scalable and costs are more to make up for R&D).
- deleted 2y ago
  [deleted]
- swatcoder 2y ago
  The article is about UnitedHealth's PBM, which negotiates rates and then earns revenue from drug manufacturers through rebates. Remember that insurance is part of Big Finance and involves a lot of clever instruments to shuffle around money, risk, and accountability. PBM's are one of those instruments. Our intuitive Econ 101 models of the industry don't always go far enough into the weeds when we're just reacting to headlines. This is one of those occasions. https://content.naic.org/insurance-topics/pharmacy-benefit-managers https://content.naic.org/insurance-topics/pharmacy-benefit-m...
  - nradov 2y ago
    For those who want to really understand the impact that PMBs play on the overall US healthcare system I highly recommend reading the "The Price We Pay: What Broke American Health Care--and How to Fix It" by Marty Makary, MD. The system of legalized kickbacks that they use isn't widely recognized but it will have to be reformed if we ever want to bring down prescription drug spending. https://www.bloomsbury.com/us/price-we-pay-9781635575910/ https://www.bloomsbury.com/us/price-we-pay-9781635575910/
- croes 2y ago
  https://en.wikipedia.org/wiki/Price_gouging https://en.wikipedia.org/wiki/Price_gouging
- deleted 2y ago
  [deleted]
- idhegeu 2y ago
  Health insurance profit margins are regulated, so UHC earning higher margins does seem like overcharging. Perhaps we need antitrust action in healthcare.
- johnnyanmac 2y ago
  > there's no established amount of markup that is the correct amount of markup other than what people end up paying. Of course it's all subjective, but I cannot think of a single other industry that can get away with a 1000% markup on anything and expect to get away with it. In proper capitalism, that just means any competitor worth a dime can massively cut you with a 300% markup that is insane but a steal in comparison. Then it just stabilizes to some point between where competitors need more saavy to compete and more than some minimum markup to function. I'd say overcharge is correct given the monopolistic structure of healthcare. You don't have too many choices to begin with and it's very hard to switch.
porcoda 2y ago
Nothing is shocking about the insurance industry anymore since they’ve been pulling this kind of thing for years. To me the most shocking thing is the people who defend them. I understand the drive to make money and build huge businesses: what confuses me is that we treat human health the same as things that don’t directly impact the health of people. It seems to me that there are endless opportunities to get insanely rich: I’ve never understood why we don’t set aside certain areas and just agree that they are not the place to do that. (I know, leaving potential profit on the table is sacrilegious to those who worship at the altar of the almighty dollar…)
- acchow 2y ago
  How do you respond to people that say the profit motive is what drives innovation, and in the long term we’d rather have better, novel treatments sooner
  - jsheard 2y ago
    Even if that's true for the actual pharmas, how are insurance companies like UHC innovating? They're just middlemen.
    - prettyStandard 2y ago
      They prevent unnecessary treatments! /s
    - nozzlegear 2y ago
      I'm not sure about UHC specifically, but insurance companies do innovate. Some insurers have invested pretty heavily in biotech and wearables, and they're also a big driver behind telehealth/remote health monitoring tech. We can cynically say that they're just in it because they want to reduce costs – and that's probably true – but it'd be simplistic to say investing to reduce costs is purely selfish.
      - franktankbank 2y ago
yalogin 2y ago
I don’t understand how an insurance company can overcharge consumers. Isn’t their job to pay what pharmacies and hospitals charge? Do insurance companies get money if they approve the overcharged prices? If so how? I thought their revenue was the premiums which are fixed. Is the extra money because people are forced to pay everything after the little the insurance company pays?
- jrflowers 2y ago
  UnitedHealth is not an insurance company. They own an insurance company as well as OptumRx, a pharmacy benefit manager, which is described at the very top of this article.
  - NickC25 2y ago
    Correct - they aren't an insurance company, they are a racketeering organization committing fraud under the guise of being a "healthcare" company that is vertically integrated with every facet of the healthcare supply chain. All this on top of being a for-profit corporation whose mission is quite literally to enrich shareholders, instead of helping patients navigate the healthcare system. RICO them.
  - criddell 2y ago
    Can you explain how discount cards (like GoodRx) work?
    - jrflowers 2y ago
      No but I understand that Friskies and Lean Cuisine are not the same products despite both being owned by Nestle.
      - criddell 2y ago
        It's my understanding that the discount cards somehow work with pharmacy benefits managers (which the person I responded to mentioned). How and why they work has never made much sense to me.
olliej 2y ago
[flagged]
- jamiequint 2y ago
  [flagged]
arrty88 2y ago
Some day our regulators at the fda, ftc, doj, etc should clean house and get some folks who can actually go after these greedy companies. Today they don’t because of the revolving door system.
- lenerdenator 2y ago
  They're not going to for at least the next four years. "What is good for the shareholders is good for society" will be the order of the day.
  - whatwhaaaaat 2y ago
    Don’t you think it’s possible if drug advertising is banned then perhaps some of our media organizations may be at least slightly more inclined to investigate some of these hostile practices?
    - NickC25 2y ago
      Sadly, no. Our media organizations are still dependent on politicians, who themselves take billions in "donations" from healthcare corporations. Those same media organizations also have workers who are probably partially invested into pensions or other long-term safety nets who themselves are invested into healthcare companies.
      - whatwhaaaaat 2y ago
        Well we will get to find out. Interesting red5 gets the ban after 30 years - days before RFK is on the menu.
jklinger410 2y ago
A storm is brewing and its heading right at the insurance industry.
- antisthenes 2y ago
  Is the storm going to be just as impotent and worthless as the ACA was? Ultimately ACA resulted in high-deductible plans and the current situation, despite temporarily insuring a higher percentage of the population. The next solution needs to account for these factors. Will it?
chis 2y ago
I think some critiques of American health insurance are simplistic, but this truly seems very bad. From the report: > "Higher markups can also result in larger internal transfer payments from health plans to affiliated pharmacies, which may allow vertically integrated PBM-pharmacy-insurer entities to retain revenue and profits while formally satisfying the insurers' medical loss ratio ("MLR" ) requirements, but without providing the clinical care and quality improvements that the MLR rule seeks to promote. In addition, higher markups can result in significant patient cost sharing requirements because reimbursement rates are often correlated with point-of-sale prices, which can influence how much patients are required to pay." In other words. Health insurance firms have capped profits in the US. But in this case one conglomerate can own both an insurer and a PBM, so it can just overcharge consumers for insurance and then launder its profits through the PBM.
- NickC25 2y ago
  >In other words. Health insurance firms have capped profits in the US. But in this case one conglomerate can own both an insurer and a PBM, so it can just overcharge consumers for insurance and then launder its profits through the PBM. Most insightful comment in this thread. THIS is the crux of the issue, and we've allowed the likes of UHC to buy PBMs and other pieces of the supply chain / customer lifecycle because UHC lobbyists claim it would reduce costs across the board and also improve efficiency. Load of absolute bullshit obviously but here we are.
  - 100ideas 2y ago
    You just answered my question: Is it the case that UnitedHealth and Cigna each own (or control) one of the "big three" PBMs? If so, that is a just crazy - the control insurance premium pricing, benefit decisions, AND the pricing of covered medications? yadaebo wrote below "Medical Loss Ratio (MLR) is capped at 85% in the US which means 85% of revenue must go to patients". Does controlling a big PBM allow an insurance company a loophole?
    - bugglebeetle 2y ago
      It gets even better (quoting from ceejayoz down-thread): >UHC is the largest single employer of doctors in the US. https://www.statnews.com/2024/07/25/united-health-group-medi https://www.statnews.com/2024/07/25/united-health-group-medi... > It’s no secret that UnitedHealth is a colossus: It’s the country’s largest health insurer and the fourth-largest company of any type by revenue, just behind Apple. And thanks to a series of stealthy deals, almost 1 in 10 U.S. doctors — some 90,000 clinicians — now either work for UnitedHealth or are under its influence, more than any major clinic chain or hospital system. >They purchase physician groups... and then pay themselves higher rates. https://www.statnews.com/2024/11/25/unitedhealth-higher-paym https://www.statnews.com/2024/11/25/unitedhealth-higher-paym... > 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. https://news.ycombinator.com/item?id=42717812 https://news.ycombinator.com/item?id=42717812
jmyeet 2y ago
Just look at the per-capita spending on healthcare by OECD countries, basically all of which have universal healthcare except for the US [1]. So the US pays almost twice as much as #2 (Switzerland) for significantly worse outcomes and less coverage. The US healthcare system is an unmitigated disaster that is a cautionary tale in how capitalism only promotes rent-seeking and regulatory capture. It's done with a service with inelastic demand, meaning the threat of violence since we are quite intentionally withholding lifesaving healthcare for the sake of the profits of completely unnecessary intermediaries. [1]: https://www.oecd.org/en/data/indicators/health-spending.html https://www.oecd.org/en/data/indicators/health-spending.html
- gruez 2y ago
  "cautionary tale in how capitalism only promotes rent-seeking and regulatory capture" is a weird takeaway from this when the same applies to government-run healthcare. medicare, medicaid, veteran's affairs combined almost approaches OECD levels, but only covers a fraction of the population.
  - MandieD 2y ago
    Medicare chooses the oldest (over 65), Medicaid chooses the poorest (who are more likely to have issues that went untreated and got worse) and most severely disabled, and Veterans' affairs chooses the ones who gave their bodies to Uncle Sam to be pushed out of planes, deafened in tanks, and have their backs wrecked with giant packs marched for several hours a day. In other words, all patients that private insurers are likely delighted not to have on their books.
  - jmyeet 2y ago
    Welcome to the concept of "selection bias". As another commenter put it, the government covers those with the highest cost of healthcare: veterans with varying degrees of disability, the elderly and the poor. Another way to look at that is that insurance companies offload the highest cost people to the government so they can profit from the younger and healthier. How does that make sense? You see this everywhere too, like with the push for privatization of education through charter schools and/or school vouchers. Some will point to the lower cost per student and completely ignore that the government education system doesn't get to be selective about students. State education caters to those with high-needs who are, just like with Medicare and the elderly, those that cost the most.
drawkward 2y ago
Why is my insurer (Aetna) allowed to own the only pharmacy (CVS) it covers? That seems like it should be some kind of violation of antitrust law, no?
- FireBeyond 2y ago
  And for a while, for fun, they also varied pharmacy coverage by state. I live in WA, was traveling in CA for a holiday, and needed to visit urgent care in a town I didn't know well. All good, and then they asked what pharmacy. "Oh, CVS should work if there's one nearby", because that's what I used with my insurer in Washington. Roll up to the CVS in the Target, and they tell me "Aetna doesn't cover CVS in California at this time"...
btbuildem 2y ago
[flagged]
- SpicyLemonZest 2y ago
  It's hard to imagine anything more toxic to the cause of healthcare reform than tying it to support for vigilante murder.
  - regularization 2y ago
    People have wanted health care reform in the US for over a century and it is farther away from ever. This carrot you are waving does not exist, which is why CEO Brian Thompson has filed his last claim denial.
    - SpicyLemonZest 2y ago
      Of course it exists! Most other countries in the world have it. I don't know exactly what the path towards a good healthcare system looks like in the US, but I do know and regret heavily that my uncompromising anti-murder stance will prevent me from endorsing any reform proposal that's associated with Luigi memes. I'm sorry that your frustrations with the healthcare system have driven you to embrace evil and I really hope the day will come when you reconsider.
      - btbuildem 2y ago
        I think this kind of moral highhorsery is no longer reasonable when facing a malicious adversary that commands multiple orders of magnitude more resources. This is more of an "anything goes" territory, merited by the instinct of self-preservation. I'd argue that the word "murder" doesn't really apply here -- the thing in a suit that morning was not a human being, it was some kind of a carnivorous ghoul, a biological hybrid of ruthless corporate profit-seeking mandate and what used to be a person long time ago.
jsherwani 2y ago
Yes, this is an issue! And, zooming out a little more, free market healthcare is just part of the problem. We have a system where we’re only treating people once they have a disease, and not working to prevent the disease, so it would be helpful to look at the effects of for-profit companies on making healthy people sicker. Fast food, snacks, alcohol, there are so many industries that are incentivized to succeed by making people sick. This is the system “working” according to the current rule set. It’s time to look for a better algorithm than a purely profit maximizing one.
hn_throwaway_99 2y ago
I think one of the things that deserves discussion here is the whole concept of pharmacy benefit managers in the first place. To start, can anyone give some good resources that really explain clearly what the role is that PBMs actually serve, and how the whole system even functions? I've tried to understand in the past but have always thought "Why do you exist???". Like the whole way companies like GoodRX can have a viable business: if I don't use you, my prescription medication is, say, $1000, but if I do use you, it's $60. One of the pharmacies I used to go to even had a keychain with random prescription discount codes on it that the cashier would scan. I.e. I'd go to check out, and the cashier would scan the price and it would come up as $X, then she'd say "Hold on a sec", and scan the discount code on her keychain and then would say "That's better, your price is now $0.1*X". Like how can any of that possibly make any sense?
- mattgreenrocks 2y ago
  Or the fact that you can mail order some name brand prescription drugs from Canada for a fraction of what you'd pay here. Grift all the way down.
  - hn_throwaway_99 2y ago
    Well, at least that one I understand. That is, other countries have much stricter pricing controls on medications, while the US does not. So pharmaceutical companies argue that it's essentially the US that makes drug discovery worth it - they basically say that if the US had strict price controls too, then it means that drugs research wouldn't be viable to invest in in the first place. Not at all arguing that's true (I don't know), and even if it is true it just means the American customer for those medications is carrying the load for everyone else, which besides just being unfair doesn't seem sustainable in the long term. But again, at least that one I theoretically understand. PBMs make no sense to me whatsoever.
- nradov 2y ago
  The PBM industry originally started with noble intentions, even if some of them have now morphed into something closer to parasites. They helped to hold down drug costs for consumers and employers by negotiating with pharmaceutical companies and retail pharmacies on behalf of multiple buyers. And they created formularies and clinical guidelines to encourage use of most cost effective drugs (generics and step therapy). A lot of doctors tend to write prescriptions for certain drugs out of habit without carefully considering what's best for and individual patient, both clinically and financially. And before federal laws were tightened up, it was common for drug companies to essentially bribe doctors to prescribe their expensive branded products through loopholes like paying them "speaking fees" to show up at company meetings held at 5-star resorts. So PBMs were a way to counteract that. But then some of the PBMs started taking kickbacks themselves and making money on pharmacy price spreads so it has all become a big mess.
blackeyeblitzar 2y ago
The only solution is to regulate. But if we had politicians with spine, they would enact retroactive fines and jail time, and pierce the veil to go after the executives and owners who profited to recoup these unjustifiable costs that can only come due to anti competitive practices. And let’s not forget, United Healthcare’s subsidiary Change Healthcare held the breach notifications for MONTHS from affected people. They only got sent out recently, and the company not only refuses to compensate victims in any useful way, but won’t even tell them what information of theirs was compromised (hint: medical records). This affected 100 million patients, many of whom have NEVER been customers of Change or United: https://techcrunch.com/2025/01/15/unitedhealth-hid-its-change-healthcare-data-breach-notice-for-months/ https://techcrunch.com/2025/01/15/unitedhealth-hid-its-chang...
legitster 2y ago
> CVS Caremark, by comparison, argued the FTC was guilty of “cherry picking” its analysis by focusing on generics, which represent a tiny fraction of client spending over branded specialty drugs in an attempt to mislead. So it sounds like the report may be a bit misleading - what is being alleged here is that PBMs overpriced over the generics. So it's like if Coca-Cola set the price of their can at $50, and NoName at $0.50. So you be are being "overcharged" at the grocery store when you buy the Coke and not the NoName. It's not actually clear from the report that the PBMs actually profited from overcharging. Furthermore, if the doctor prescribes a name brand drug, it's not always the prerogative of the PBM to switch the prescription on behalf of the customer.
- lotsofpulp 2y ago
  >It's not actually clear from the report that the PBMs actually profited from overcharging. Even if they did profit, it is clear from their 10-Q and 10-K that the managed care organizations (MCO) did not tremendously profit. https://www.macrotrends.net/stocks/charts/UNH/unitedhealth-group/profit-margins https://www.macrotrends.net/stocks/charts/UNH/unitedhealth-g... This kind of profit margin (<6%) would get executives in many other businesses fired. All the other MCOs actually have a sub 3% profit margin. UNH has a higher profit margin because it sells healthcare, not just managed care. On the other hand, here are the profit margins for the companies that make medicine (20%+): https://www.macrotrends.net/stocks/charts/LLY/eli-lilly/profit-margins https://www.macrotrends.net/stocks/charts/LLY/eli-lilly/prof... https://www.macrotrends.net/stocks/charts/NVO/novo-nordisk/profit-margins https://www.macrotrends.net/stocks/charts/NVO/novo-nordisk/p... https://www.macrotrends.net/stocks/charts/NVS/novartis-ag/profit-margins https://www.macrotrends.net/stocks/charts/NVS/novartis-ag/pr... https://www.macrotrends.net/stocks/charts/PFE/pfizer/profit-margins https://www.macrotrends.net/stocks/charts/PFE/pfizer/profit-... https://www.macrotrends.net/stocks/charts/MRK/merck/profit-margins https://www.macrotrends.net/stocks/charts/MRK/merck/profit-m... Finally, search for the difference in rankings in market cap between pharmaceutical companies versus managed care organizations. There are at least 7 pharmaceutical companies in the top 100, and only 1 managed care organization. The next biggest MCO is #189. https://companiesmarketcap.com https://companiesmarketcap.com Edit to respond to below: It does not matter if UNH or any other MCO moves money from their right pocket to their left pocket, the SEC filed 10-Q and 10-K will reflect all revenue and expenses. Their low profit margin is evidence that the money is flowing out of the organization and away from the shareholders. If this business was as profitable as people claim, then its stock returns would indicate it, but they don't.
kilyam 2y ago
[flagged]
mikeweiss 2y ago
There are only three things that keep companies from doing bad things. criminal liability, civil liability and brand risk(PR). companies will do what our society has designed them to do, which is to generate profit while navigating those three risks. Negative PR is not enough to dissuade health insurance companies from doing bad things because it's generally not consumers who choose their insurance, it's their employers. Clearly we cannot rely on brand risk to keep these companies in check..we need more laws and regulation.
neonate 2y ago
https://archive.ph/7vHah https://archive.ph/7vHah
kenjackson 2y ago
Why is insurance charging anyone for drugs? Shouldn't the pharmacy/doctor/hospital charge the patient and the insurance company pay some percentage of the cost (maybe negotiating the price of the drugs downward)? It seems we've overcomplicated a system that should be much simpler.
- legitster 2y ago
  The report is misleading. What is being alleged here is that PBMs overpriced over the generics. So it's like if Coca-Cola set the price of their can at $50, and NoName at $0.50. So you be are being "overcharged" at the grocery store when you buy the Coke and not the NoName. It's not actually clear from the report that the PBMs actually profited from overcharging. Furthermore, if the doctor prescribes a name brand drug, it's not always the prerogative of the PBM to switch the prescription on behalf of the customer.
  - kenjackson 2y ago
    Thank you. That makes sense. Why are you being downvoted? I'd love if someone could say why they're downvoting you, because it seems like you addressed my question -- unless you just fabricated an answer -- but it would be nice if they said that.
    - boroboro4 2y ago
      Because in reality PBM and insurance company owned by the same corporation, in this case: UnitedHealthcare, UnitedHealthcare Insurance, Optum. This makes it possible for PBM & instance work out any price they want, loophole cap on profit for insurances required by law (15%), and bring cost of healthcare up. Pure fraud it is.
robbiewxyz 2y ago
There's such obviously fucked up incentives in this industry. - When employers select insurance, providers will 100% of the time tend toward ignoring the interests of those who are insured: the incentives to do so are just too strong. - When an insurance company also owns a pharmacy, it will 100% of the time tend toward overcharging: again all the incentives encourage this. Unfortunately it seems most folks have little or no experience analyzing incentive structures when looking for levers to pull to improve outcomes. It'd be great to see popular discourse focus more on the environmental factors that incentivise these kinds of corporate abuse.
Ekaros 2y ago
I find it amazing that people complain about paying more than some other countries, while they cannot even solve this sort of insanity. Just maybe first making this one sensible, next step could be to have some competition and free market...
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henry_bone 2y ago
I wonder a lot about this argument of private health care vs state funded health care. I have libertarian leanings and so would prefer a truly free market, because I would like to believe it would lead to affordable levels of health care for everyone. But I don't know that it's true. My questions regarding the US system and health insurance: Is it a truly free market or does the state regulate in ways that make it difficult for competition? In Australia we have heavily subsidized healthcare, but it's not great. If you've got something life threatening then you'll be OK. If it's not life threatening, but just really difficult to live with then you'll wait. Sometimes years. No choice of specialist or hospital either. So many of us get private health insurance of one level or another, in order to have more choice and better, more prompt care. So, how free is the US system? Also, here's an X post from a guy called Devon Eriksen on the topic of socialized healthcare and free markets. [https://x.com/Devon_Eriksen_/status/1865932424376377833 https://x.com/Devon_Eriksen_/status/1865932424376377833] PS: Devon wrote a great debut Sci Fi novel called "Theft Of Fire" (Orbital Space #1). It's a great read, with endorsements from John Carmack, "Uncle" Bob Martin and ESR, among others.
- ruthmarx 2y ago
  > I have libertarian leanings and so would prefer a truly free market, because I would like to believe it would lead to affordable levels of health care for everyone. Without regulation it just leads to predation.
adamredwoods 2y ago
We have UnitedHealth, and my wife died of cancer. They denied a lot of things, but ultimately, they covered a lot when we rapidly soared past our deductible. We kept a running list of EVERY bill paid. It's a shame they put so much onus onto the family dealing with tragedy. So while it was a pain to fight them on every bill, they did shell out for us. Some of the biggest battles were with the hospital bill collectors.
- theGnuMe 2y ago
  So sorry for your loss. It is crazy that cancer treatments are so criminally expensive. The analysis in the comments suggests that UHC pricing is high due to cartel like price fixing. So while they “shell out” it seems like they are playing a shell game to loophole the 85% rule.
sweeter 2y ago
the only option to fix healthcare is to decommodify it and implement a public option where the risk pool includes everyone. There is 0 reason that the wealthiest country on the planet needs to operate at a worse level than so called "3rd world countries" even from a purely neo-Liberal capitalist sense, this completely violates the shared fantasy of the "free market" and yet we still have people going on Joe Rogan saying stuff like "we need to deregulate the market further because this is all due to innovation being stifled through regulation" which is an absurd notion. Every other country is eating our lunch when it comes to medical discovery and novel chemical compound discovery while the US spends all of its time and money evergreening medical patents to extend them indefinitely so they can maintain monopolistic control. I honestly just don't see a way out of this.
sizzle 2y ago
This goes without saying but I hope they free Luigi.
hnburnsy 2y ago
Companies who signup for these plans on behalf of their employees are finally getting on onboard that PBMs are hiding these markups and making backdoor deals with the drug companies. The best thing you can do is put pressure on your employer if you run into this. https://www.fiercehealthcare.com/payers/industry-voices-why-great-unraveling-pbms-will-accelerate-2025 https://www.fiercehealthcare.com/payers/industry-voices-why-... >This past year saw a wave of mid-sized employers, unions, and health plans exploring alternatives to the Big Three, a trend that will only continue to gain momentum in 2025. In fact, a recent report found that 52% of employers are considering changing their PBM in the next 1-3 years. While 72% of employers still primarily contract with a Big Three PBM, 12% have already embraced a transparent PBM.
medicalquack 2y ago
[dead]

360 points by this_weekend 2y ago

.. and think of how much of that money went right into their lobbying/bribing on the hill to make sure they don't get regulated.

affinepplan 2y ago

shocked, shocked I tell you

BugsJustFindMe 2y ago

https://archive.ph/cg4we https://archive.ph/cg4we I do not like UnitedHealth, I do not like our existing crop of health insurance executives, and I might even be viscerally glad at some level that the UnitedHealth CEO was killed in a world where justice clearly takes a back seat to greed, but I wish the headline didn't say "overcharged", because there's no established amount of markup that is the correct amount of markup other than what people end up paying. Is that shitty? Yes. Does it violate a social contract? I think so. But tell me how much the right amount to charge is first. Is that cost? Cost+percentage? They've chosen their percentage. What's the correct one instead? The article body presents the story in a more meaningful way, "UnitedHealth Group is charging patients a markup for key life-saving drugs that could easily exceed their cost by a factor of ten or more".

itishappy 2y ago
They've chosen 90% margin (cost + 1000%). Semicon tool builders (my industry) have margins around 50% (cost + 100%). This is considered high margin manufacturing work. To match United Health's margins we'd need to raise prices by 5x.
- BugsJustFindMe 2y ago
  I agree, but we can't talk about "over" without talking about where the line is.
  - itishappy 2y ago
    I agree as well, just drawing some lines!
  - xp84 2y ago
    Fundamentally, you have a pretty good point here, since the system we have has two halves that are fundamentally at odds: One part "free market -- maximize your profits as much as you can and get rewarded by a skyrocketing share price!" And one part, unspoken except in the PR BS put out by the insurance companies, "Try to improve the health of patients and have them not die!" The only way the two can coexist at all is if someone draws some lines like you are suggesting. I know that there are some (probably easily manipulated) laws stating that X% of premiums have to be "spent on care" and if they get too high overall margins on your group, they have to give your employer a rebate. Of course, who knows whether you'll see that money. If we just say "maximize your profits" (and indeed, shareholders 'should' sue them if they don't) then it's obvious that morally bankrupt scum that runs all these insurers would 100% extort people for 1000% profits on lifesaving drugs. It's the most logical course of action! People will pay infinity dollars to save their own lives/their loved ones, so let's soak them! If it's not obvious, I believe that overall the "free market" part of this system is a failed experiment that should be abolished immediately, and not just because I want all of these companies' sickening, greedy executives to go straight to hell (where Brian Thompson is burning today).
    - throwway120385 2y ago
      It ceased to be a free market when we enshrined employer-provided plans into the law. If it were more like auto insurance where I can fire my insurance company and receive a pro-rated refund or renegotiate coverage in the middle of the year then it would be more free. But my employer negotiates for me on my behalf, and their needs are often at odds with my needs. And the whole "open enrollment" period thing creates a situation where the insurance company gets to be absolutely terrible for an entire year and there's no recourse. And especially there's no recourse if my employer is generally satisfied, because my alternative is to take a massive pay cut to get good coverage.
Nifty3929 2y ago
This is exactly it. They are charging that price because that price will be paid, and this maximizes their overall profit. In other similar situations this would spur competition, which would ultimately drive down prices to a reasonable level. But in the healthcare industry competition is often prohibited or made very difficult by law. You can cite the patent system as an example of this, but another horrible one is the "certificate of need" laws, which should infuriate you.
- BugsJustFindMe 2y ago
  > which should infuriate you Oh it does!
throwway120385 2y ago
All I'm going to say is that Optum Specialty Pharmacy is the sole source that UHC will accept for a lot of special drugs. For example UHC offers insurance for IVF including a separate cap for medications, but if you use their insurance you have to order through their subsidiary Optum Specialty Pharmacy and the prices triple or quadruple over MSRP if you buy from OSP using insurance versus if you pay cash. They also won't tell you this until you're in the middle of a cycle and an order gets held up because you're out of insurance, but since they billed insurance you're on the hook for the remaining several-thousand dollars because if you stop the drugs you're just out the money and the medication and have to wait another month. I don't know if I can give them the benefit of the doubt on the cancer drugs because of this.
- BugsJustFindMe 2y ago
  I don't want you to give them the benefit of the doubt. I certainly don't think they deserve it. I do think, however, that a conversation about "overcharging" goes nowhere until people talk about exactly where charging ends and overcharging begins.
  - throwway120385 2y ago
    I'd be fine with a 20-50% markup on MSRP to cover billing and administration costs but when the insurer owns the pharmacy they can "negotiate" whatever rate they want and you have to pay it. I don't see it directly in the article, but I suspect they do the same thing with cancer drugs as with IVF drugs and require you to go through their pharmacy for insurance coverage. Insurance plans often have lifetime maximums, and when they set their own prices and collect money from themselves for the medication they sell you they can basically dictate how much actual coverage you get versus someone paying cash. And because you chose "bill insurance" when you ordered the medication, you're now on the hook for whatever additional cost there was versus the cash price. And also they won't tell you what the cost is until after the medication has already shipped. So it's at least plausible that they're abusing their position as the company that owns the pharmacy and the insurance plan to charge you a lot of money and provide very little coverage and also to gouge you at the very end of your coverage, because that's exactly what they did to my partner and I.
jampekka 2y ago
There are many models used in different jurisdictions. Typically it's a government body for negotiation, assessment and sometimes price caps.
landryraccoon 2y ago
I take issue with the claim that in order to say something is too expensive that you must be able to precisely propose an alternative price. I have no idea what the correct margin for essential cancer drugs is. I don’t think it should be a 10x markup. Intuitively, it seems that there’s something wrong with price gouging dying cancer patients. If you have an argument why my intuition is wrong, please share it.
- BugsJustFindMe 2y ago
  > I have no idea what the correct margin for essential cancer drugs is. So let's talk about it and think about it and form an idea. There's no universally right or wrong answer, but you should at least be able to decide what answer is right to you. > I don’t think it should be a 10x markup. What about 1x markup? > Intuitively, it seems that there’s something wrong with price gouging There is, but you're relying on the word "gouging", and without identifying what price you think is gouging vs reasonable profit, stopping at the point where you express that "too much is too much" doesn't get us any closer to having actionable goals.
  - johnnyanmac 2y ago
    So, important question: What problem are we trying to solve here? Is there any benefit to the overall populace for us in HN to debate what we feel is "overcharged"? ---- But to go along with your exercise, I take a look at current market dynamics and compare it from there. Apparently, the typical wholesale markup is 20-40%, and stores will typically markup another 20-50% on top of that. So we're talking roughly a 125% markup on the higher ends from the factory into the consumer's hands as a very rough average (VERY rough, markups vary a lot per product and industry). That's with two chains of markup, so clearly 1000% feels absurd from one part of such a chain. Outside of factors like drinks (which are easy to scale and can have markups well into the hundreds), it's pretty hard to find any part of the chain as not "overcharged" once we go past 100% markups in any given place. on the most generous side, Costco famously has markups limited to 14% (albeit they rely on bulk purchases to mitigate that). and subsidized vehicles used to generally be a 10-15% markup price. So I'd say 15% is about the bare bottom of what to expect markups without some kind of twist. e.g. printers selling at a loss, making up for it with high markups for ink (another product that's easy to scale and marked up into the hundreds). or previously, a video game console in order to sell games (software, whose markup is hard to really determine since it's infinitely scalable and costs are more to make up for R&D).
deleted 2y ago
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swatcoder 2y ago
The article is about UnitedHealth's PBM, which negotiates rates and then earns revenue from drug manufacturers through rebates. Remember that insurance is part of Big Finance and involves a lot of clever instruments to shuffle around money, risk, and accountability. PBM's are one of those instruments. Our intuitive Econ 101 models of the industry don't always go far enough into the weeds when we're just reacting to headlines. This is one of those occasions. https://content.naic.org/insurance-topics/pharmacy-benefit-managers https://content.naic.org/insurance-topics/pharmacy-benefit-m...
- nradov 2y ago
  For those who want to really understand the impact that PMBs play on the overall US healthcare system I highly recommend reading the "The Price We Pay: What Broke American Health Care--and How to Fix It" by Marty Makary, MD. The system of legalized kickbacks that they use isn't widely recognized but it will have to be reformed if we ever want to bring down prescription drug spending. https://www.bloomsbury.com/us/price-we-pay-9781635575910/ https://www.bloomsbury.com/us/price-we-pay-9781635575910/
croes 2y ago
https://en.wikipedia.org/wiki/Price_gouging https://en.wikipedia.org/wiki/Price_gouging
deleted 2y ago
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idhegeu 2y ago
Health insurance profit margins are regulated, so UHC earning higher margins does seem like overcharging. Perhaps we need antitrust action in healthcare.
johnnyanmac 2y ago
> there's no established amount of markup that is the correct amount of markup other than what people end up paying. Of course it's all subjective, but I cannot think of a single other industry that can get away with a 1000% markup on anything and expect to get away with it. In proper capitalism, that just means any competitor worth a dime can massively cut you with a 300% markup that is insane but a steal in comparison. Then it just stabilizes to some point between where competitors need more saavy to compete and more than some minimum markup to function. I'd say overcharge is correct given the monopolistic structure of healthcare. You don't have too many choices to begin with and it's very hard to switch.

porcoda 2y ago

Nothing is shocking about the insurance industry anymore since they’ve been pulling this kind of thing for years. To me the most shocking thing is the people who defend them. I understand the drive to make money and build huge businesses: what confuses me is that we treat human health the same as things that don’t directly impact the health of people. It seems to me that there are endless opportunities to get insanely rich: I’ve never understood why we don’t set aside certain areas and just agree that they are not the place to do that. (I know, leaving potential profit on the table is sacrilegious to those who worship at the altar of the almighty dollar…)

acchow 2y ago
How do you respond to people that say the profit motive is what drives innovation, and in the long term we’d rather have better, novel treatments sooner
- jsheard 2y ago
  Even if that's true for the actual pharmas, how are insurance companies like UHC innovating? They're just middlemen.
  - prettyStandard 2y ago
    They prevent unnecessary treatments! /s
  - nozzlegear 2y ago
    I'm not sure about UHC specifically, but insurance companies do innovate. Some insurers have invested pretty heavily in biotech and wearables, and they're also a big driver behind telehealth/remote health monitoring tech. We can cynically say that they're just in it because they want to reduce costs – and that's probably true – but it'd be simplistic to say investing to reduce costs is purely selfish.
    - franktankbank 2y ago

yalogin 2y ago

I don’t understand how an insurance company can overcharge consumers. Isn’t their job to pay what pharmacies and hospitals charge? Do insurance companies get money if they approve the overcharged prices? If so how? I thought their revenue was the premiums which are fixed. Is the extra money because people are forced to pay everything after the little the insurance company pays?

jrflowers 2y ago
UnitedHealth is not an insurance company. They own an insurance company as well as OptumRx, a pharmacy benefit manager, which is described at the very top of this article.
- NickC25 2y ago
  Correct - they aren't an insurance company, they are a racketeering organization committing fraud under the guise of being a "healthcare" company that is vertically integrated with every facet of the healthcare supply chain. All this on top of being a for-profit corporation whose mission is quite literally to enrich shareholders, instead of helping patients navigate the healthcare system. RICO them.
- criddell 2y ago
  Can you explain how discount cards (like GoodRx) work?
  - jrflowers 2y ago
    No but I understand that Friskies and Lean Cuisine are not the same products despite both being owned by Nestle.
    - criddell 2y ago
      It's my understanding that the discount cards somehow work with pharmacy benefits managers (which the person I responded to mentioned). How and why they work has never made much sense to me.

olliej 2y ago

[flagged]

jamiequint 2y ago
[flagged]

arrty88 2y ago

Some day our regulators at the fda, ftc, doj, etc should clean house and get some folks who can actually go after these greedy companies. Today they don’t because of the revolving door system.

lenerdenator 2y ago
They're not going to for at least the next four years. "What is good for the shareholders is good for society" will be the order of the day.
- whatwhaaaaat 2y ago
  Don’t you think it’s possible if drug advertising is banned then perhaps some of our media organizations may be at least slightly more inclined to investigate some of these hostile practices?
  - NickC25 2y ago
    Sadly, no. Our media organizations are still dependent on politicians, who themselves take billions in "donations" from healthcare corporations. Those same media organizations also have workers who are probably partially invested into pensions or other long-term safety nets who themselves are invested into healthcare companies.
    - whatwhaaaaat 2y ago
      Well we will get to find out. Interesting red5 gets the ban after 30 years - days before RFK is on the menu.

jklinger410 2y ago

A storm is brewing and its heading right at the insurance industry.

antisthenes 2y ago
Is the storm going to be just as impotent and worthless as the ACA was? Ultimately ACA resulted in high-deductible plans and the current situation, despite temporarily insuring a higher percentage of the population. The next solution needs to account for these factors. Will it?

chis 2y ago

I think some critiques of American health insurance are simplistic, but this truly seems very bad. From the report: > "Higher markups can also result in larger internal transfer payments from health plans to affiliated pharmacies, which may allow vertically integrated PBM-pharmacy-insurer entities to retain revenue and profits while formally satisfying the insurers' medical loss ratio ("MLR" ) requirements, but without providing the clinical care and quality improvements that the MLR rule seeks to promote. In addition, higher markups can result in significant patient cost sharing requirements because reimbursement rates are often correlated with point-of-sale prices, which can influence how much patients are required to pay." In other words. Health insurance firms have capped profits in the US. But in this case one conglomerate can own both an insurer and a PBM, so it can just overcharge consumers for insurance and then launder its profits through the PBM.

NickC25 2y ago
>In other words. Health insurance firms have capped profits in the US. But in this case one conglomerate can own both an insurer and a PBM, so it can just overcharge consumers for insurance and then launder its profits through the PBM. Most insightful comment in this thread. THIS is the crux of the issue, and we've allowed the likes of UHC to buy PBMs and other pieces of the supply chain / customer lifecycle because UHC lobbyists claim it would reduce costs across the board and also improve efficiency. Load of absolute bullshit obviously but here we are.
- 100ideas 2y ago
  You just answered my question: Is it the case that UnitedHealth and Cigna each own (or control) one of the "big three" PBMs? If so, that is a just crazy - the control insurance premium pricing, benefit decisions, AND the pricing of covered medications? yadaebo wrote below "Medical Loss Ratio (MLR) is capped at 85% in the US which means 85% of revenue must go to patients". Does controlling a big PBM allow an insurance company a loophole?
  - bugglebeetle 2y ago
    It gets even better (quoting from ceejayoz down-thread): >UHC is the largest single employer of doctors in the US. https://www.statnews.com/2024/07/25/united-health-group-medi https://www.statnews.com/2024/07/25/united-health-group-medi... > It’s no secret that UnitedHealth is a colossus: It’s the country’s largest health insurer and the fourth-largest company of any type by revenue, just behind Apple. And thanks to a series of stealthy deals, almost 1 in 10 U.S. doctors — some 90,000 clinicians — now either work for UnitedHealth or are under its influence, more than any major clinic chain or hospital system. >They purchase physician groups... and then pay themselves higher rates. https://www.statnews.com/2024/11/25/unitedhealth-higher-paym https://www.statnews.com/2024/11/25/unitedhealth-higher-paym... > 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. https://news.ycombinator.com/item?id=42717812 https://news.ycombinator.com/item?id=42717812

jmyeet 2y ago

Just look at the per-capita spending on healthcare by OECD countries, basically all of which have universal healthcare except for the US [1]. So the US pays almost twice as much as #2 (Switzerland) for significantly worse outcomes and less coverage. The US healthcare system is an unmitigated disaster that is a cautionary tale in how capitalism only promotes rent-seeking and regulatory capture. It's done with a service with inelastic demand, meaning the threat of violence since we are quite intentionally withholding lifesaving healthcare for the sake of the profits of completely unnecessary intermediaries. [1]: https://www.oecd.org/en/data/indicators/health-spending.html https://www.oecd.org/en/data/indicators/health-spending.html

gruez 2y ago
"cautionary tale in how capitalism only promotes rent-seeking and regulatory capture" is a weird takeaway from this when the same applies to government-run healthcare. medicare, medicaid, veteran's affairs combined almost approaches OECD levels, but only covers a fraction of the population.
- MandieD 2y ago
  Medicare chooses the oldest (over 65), Medicaid chooses the poorest (who are more likely to have issues that went untreated and got worse) and most severely disabled, and Veterans' affairs chooses the ones who gave their bodies to Uncle Sam to be pushed out of planes, deafened in tanks, and have their backs wrecked with giant packs marched for several hours a day. In other words, all patients that private insurers are likely delighted not to have on their books.
- jmyeet 2y ago
  Welcome to the concept of "selection bias". As another commenter put it, the government covers those with the highest cost of healthcare: veterans with varying degrees of disability, the elderly and the poor. Another way to look at that is that insurance companies offload the highest cost people to the government so they can profit from the younger and healthier. How does that make sense? You see this everywhere too, like with the push for privatization of education through charter schools and/or school vouchers. Some will point to the lower cost per student and completely ignore that the government education system doesn't get to be selective about students. State education caters to those with high-needs who are, just like with Medicare and the elderly, those that cost the most.

drawkward 2y ago

Why is my insurer (Aetna) allowed to own the only pharmacy (CVS) it covers? That seems like it should be some kind of violation of antitrust law, no?

FireBeyond 2y ago
And for a while, for fun, they also varied pharmacy coverage by state. I live in WA, was traveling in CA for a holiday, and needed to visit urgent care in a town I didn't know well. All good, and then they asked what pharmacy. "Oh, CVS should work if there's one nearby", because that's what I used with my insurer in Washington. Roll up to the CVS in the Target, and they tell me "Aetna doesn't cover CVS in California at this time"...

btbuildem 2y ago

[flagged]

SpicyLemonZest 2y ago
It's hard to imagine anything more toxic to the cause of healthcare reform than tying it to support for vigilante murder.
- regularization 2y ago
  People have wanted health care reform in the US for over a century and it is farther away from ever. This carrot you are waving does not exist, which is why CEO Brian Thompson has filed his last claim denial.
  - SpicyLemonZest 2y ago
    Of course it exists! Most other countries in the world have it. I don't know exactly what the path towards a good healthcare system looks like in the US, but I do know and regret heavily that my uncompromising anti-murder stance will prevent me from endorsing any reform proposal that's associated with Luigi memes. I'm sorry that your frustrations with the healthcare system have driven you to embrace evil and I really hope the day will come when you reconsider.
    - btbuildem 2y ago
      I think this kind of moral highhorsery is no longer reasonable when facing a malicious adversary that commands multiple orders of magnitude more resources. This is more of an "anything goes" territory, merited by the instinct of self-preservation. I'd argue that the word "murder" doesn't really apply here -- the thing in a suit that morning was not a human being, it was some kind of a carnivorous ghoul, a biological hybrid of ruthless corporate profit-seeking mandate and what used to be a person long time ago.

jsherwani 2y ago

Yes, this is an issue! And, zooming out a little more, free market healthcare is just part of the problem. We have a system where we’re only treating people once they have a disease, and not working to prevent the disease, so it would be helpful to look at the effects of for-profit companies on making healthy people sicker. Fast food, snacks, alcohol, there are so many industries that are incentivized to succeed by making people sick. This is the system “working” according to the current rule set. It’s time to look for a better algorithm than a purely profit maximizing one.

hn_throwaway_99 2y ago

I think one of the things that deserves discussion here is the whole concept of pharmacy benefit managers in the first place. To start, can anyone give some good resources that really explain clearly what the role is that PBMs actually serve, and how the whole system even functions? I've tried to understand in the past but have always thought "Why do you exist???". Like the whole way companies like GoodRX can have a viable business: if I don't use you, my prescription medication is, say, $1000, but if I do use you, it's $60. One of the pharmacies I used to go to even had a keychain with random prescription discount codes on it that the cashier would scan. I.e. I'd go to check out, and the cashier would scan the price and it would come up as $X, then she'd say "Hold on a sec", and scan the discount code on her keychain and then would say "That's better, your price is now $0.1*X". Like how can any of that possibly make any sense?

mattgreenrocks 2y ago
Or the fact that you can mail order some name brand prescription drugs from Canada for a fraction of what you'd pay here. Grift all the way down.
- hn_throwaway_99 2y ago
  Well, at least that one I understand. That is, other countries have much stricter pricing controls on medications, while the US does not. So pharmaceutical companies argue that it's essentially the US that makes drug discovery worth it - they basically say that if the US had strict price controls too, then it means that drugs research wouldn't be viable to invest in in the first place. Not at all arguing that's true (I don't know), and even if it is true it just means the American customer for those medications is carrying the load for everyone else, which besides just being unfair doesn't seem sustainable in the long term. But again, at least that one I theoretically understand. PBMs make no sense to me whatsoever.
nradov 2y ago
The PBM industry originally started with noble intentions, even if some of them have now morphed into something closer to parasites. They helped to hold down drug costs for consumers and employers by negotiating with pharmaceutical companies and retail pharmacies on behalf of multiple buyers. And they created formularies and clinical guidelines to encourage use of most cost effective drugs (generics and step therapy). A lot of doctors tend to write prescriptions for certain drugs out of habit without carefully considering what's best for and individual patient, both clinically and financially. And before federal laws were tightened up, it was common for drug companies to essentially bribe doctors to prescribe their expensive branded products through loopholes like paying them "speaking fees" to show up at company meetings held at 5-star resorts. So PBMs were a way to counteract that. But then some of the PBMs started taking kickbacks themselves and making money on pharmacy price spreads so it has all become a big mess.

blackeyeblitzar 2y ago

The only solution is to regulate. But if we had politicians with spine, they would enact retroactive fines and jail time, and pierce the veil to go after the executives and owners who profited to recoup these unjustifiable costs that can only come due to anti competitive practices. And let’s not forget, United Healthcare’s subsidiary Change Healthcare held the breach notifications for MONTHS from affected people. They only got sent out recently, and the company not only refuses to compensate victims in any useful way, but won’t even tell them what information of theirs was compromised (hint: medical records). This affected 100 million patients, many of whom have NEVER been customers of Change or United: https://techcrunch.com/2025/01/15/unitedhealth-hid-its-change-healthcare-data-breach-notice-for-months/ https://techcrunch.com/2025/01/15/unitedhealth-hid-its-chang...

legitster 2y ago

> CVS Caremark, by comparison, argued the FTC was guilty of “cherry picking” its analysis by focusing on generics, which represent a tiny fraction of client spending over branded specialty drugs in an attempt to mislead. So it sounds like the report may be a bit misleading - what is being alleged here is that PBMs overpriced over the generics. So it's like if Coca-Cola set the price of their can at $50, and NoName at $0.50. So you be are being "overcharged" at the grocery store when you buy the Coke and not the NoName. It's not actually clear from the report that the PBMs actually profited from overcharging. Furthermore, if the doctor prescribes a name brand drug, it's not always the prerogative of the PBM to switch the prescription on behalf of the customer.

lotsofpulp 2y ago
>It's not actually clear from the report that the PBMs actually profited from overcharging. Even if they did profit, it is clear from their 10-Q and 10-K that the managed care organizations (MCO) did not tremendously profit. https://www.macrotrends.net/stocks/charts/UNH/unitedhealth-group/profit-margins https://www.macrotrends.net/stocks/charts/UNH/unitedhealth-g... This kind of profit margin (<6%) would get executives in many other businesses fired. All the other MCOs actually have a sub 3% profit margin. UNH has a higher profit margin because it sells healthcare, not just managed care. On the other hand, here are the profit margins for the companies that make medicine (20%+): https://www.macrotrends.net/stocks/charts/LLY/eli-lilly/profit-margins https://www.macrotrends.net/stocks/charts/LLY/eli-lilly/prof... https://www.macrotrends.net/stocks/charts/NVO/novo-nordisk/profit-margins https://www.macrotrends.net/stocks/charts/NVO/novo-nordisk/p... https://www.macrotrends.net/stocks/charts/NVS/novartis-ag/profit-margins https://www.macrotrends.net/stocks/charts/NVS/novartis-ag/pr... https://www.macrotrends.net/stocks/charts/PFE/pfizer/profit-margins https://www.macrotrends.net/stocks/charts/PFE/pfizer/profit-... https://www.macrotrends.net/stocks/charts/MRK/merck/profit-margins https://www.macrotrends.net/stocks/charts/MRK/merck/profit-m... Finally, search for the difference in rankings in market cap between pharmaceutical companies versus managed care organizations. There are at least 7 pharmaceutical companies in the top 100, and only 1 managed care organization. The next biggest MCO is #189. https://companiesmarketcap.com https://companiesmarketcap.com Edit to respond to below: It does not matter if UNH or any other MCO moves money from their right pocket to their left pocket, the SEC filed 10-Q and 10-K will reflect all revenue and expenses. Their low profit margin is evidence that the money is flowing out of the organization and away from the shareholders. If this business was as profitable as people claim, then its stock returns would indicate it, but they don't.

kilyam 2y ago

[flagged]

mikeweiss 2y ago

There are only three things that keep companies from doing bad things. criminal liability, civil liability and brand risk(PR). companies will do what our society has designed them to do, which is to generate profit while navigating those three risks. Negative PR is not enough to dissuade health insurance companies from doing bad things because it's generally not consumers who choose their insurance, it's their employers. Clearly we cannot rely on brand risk to keep these companies in check..we need more laws and regulation.

neonate 2y ago

https://archive.ph/7vHah https://archive.ph/7vHah

kenjackson 2y ago

Why is insurance charging anyone for drugs? Shouldn't the pharmacy/doctor/hospital charge the patient and the insurance company pay some percentage of the cost (maybe negotiating the price of the drugs downward)? It seems we've overcomplicated a system that should be much simpler.

legitster 2y ago
The report is misleading. What is being alleged here is that PBMs overpriced over the generics. So it's like if Coca-Cola set the price of their can at $50, and NoName at $0.50. So you be are being "overcharged" at the grocery store when you buy the Coke and not the NoName. It's not actually clear from the report that the PBMs actually profited from overcharging. Furthermore, if the doctor prescribes a name brand drug, it's not always the prerogative of the PBM to switch the prescription on behalf of the customer.
- kenjackson 2y ago
  Thank you. That makes sense. Why are you being downvoted? I'd love if someone could say why they're downvoting you, because it seems like you addressed my question -- unless you just fabricated an answer -- but it would be nice if they said that.
  - boroboro4 2y ago
    Because in reality PBM and insurance company owned by the same corporation, in this case: UnitedHealthcare, UnitedHealthcare Insurance, Optum. This makes it possible for PBM & instance work out any price they want, loophole cap on profit for insurances required by law (15%), and bring cost of healthcare up. Pure fraud it is.

robbiewxyz 2y ago

There's such obviously fucked up incentives in this industry. - When employers select insurance, providers will 100% of the time tend toward ignoring the interests of those who are insured: the incentives to do so are just too strong. - When an insurance company also owns a pharmacy, it will 100% of the time tend toward overcharging: again all the incentives encourage this. Unfortunately it seems most folks have little or no experience analyzing incentive structures when looking for levers to pull to improve outcomes. It'd be great to see popular discourse focus more on the environmental factors that incentivise these kinds of corporate abuse.

Ekaros 2y ago

I find it amazing that people complain about paying more than some other countries, while they cannot even solve this sort of insanity. Just maybe first making this one sensible, next step could be to have some competition and free market...

deleted 2y ago

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henry_bone 2y ago

I wonder a lot about this argument of private health care vs state funded health care. I have libertarian leanings and so would prefer a truly free market, because I would like to believe it would lead to affordable levels of health care for everyone. But I don't know that it's true. My questions regarding the US system and health insurance: Is it a truly free market or does the state regulate in ways that make it difficult for competition? In Australia we have heavily subsidized healthcare, but it's not great. If you've got something life threatening then you'll be OK. If it's not life threatening, but just really difficult to live with then you'll wait. Sometimes years. No choice of specialist or hospital either. So many of us get private health insurance of one level or another, in order to have more choice and better, more prompt care. So, how free is the US system? Also, here's an X post from a guy called Devon Eriksen on the topic of socialized healthcare and free markets. [https://x.com/Devon_Eriksen_/status/1865932424376377833 https://x.com/Devon_Eriksen_/status/1865932424376377833] PS: Devon wrote a great debut Sci Fi novel called "Theft Of Fire" (Orbital Space #1). It's a great read, with endorsements from John Carmack, "Uncle" Bob Martin and ESR, among others.

ruthmarx 2y ago
> I have libertarian leanings and so would prefer a truly free market, because I would like to believe it would lead to affordable levels of health care for everyone. Without regulation it just leads to predation.

adamredwoods 2y ago

We have UnitedHealth, and my wife died of cancer. They denied a lot of things, but ultimately, they covered a lot when we rapidly soared past our deductible. We kept a running list of EVERY bill paid. It's a shame they put so much onus onto the family dealing with tragedy. So while it was a pain to fight them on every bill, they did shell out for us. Some of the biggest battles were with the hospital bill collectors.

theGnuMe 2y ago
So sorry for your loss. It is crazy that cancer treatments are so criminally expensive. The analysis in the comments suggests that UHC pricing is high due to cartel like price fixing. So while they “shell out” it seems like they are playing a shell game to loophole the 85% rule.

sweeter 2y ago

the only option to fix healthcare is to decommodify it and implement a public option where the risk pool includes everyone. There is 0 reason that the wealthiest country on the planet needs to operate at a worse level than so called "3rd world countries" even from a purely neo-Liberal capitalist sense, this completely violates the shared fantasy of the "free market" and yet we still have people going on Joe Rogan saying stuff like "we need to deregulate the market further because this is all due to innovation being stifled through regulation" which is an absurd notion. Every other country is eating our lunch when it comes to medical discovery and novel chemical compound discovery while the US spends all of its time and money evergreening medical patents to extend them indefinitely so they can maintain monopolistic control. I honestly just don't see a way out of this.

sizzle 2y ago

This goes without saying but I hope they free Luigi.

hnburnsy 2y ago

Companies who signup for these plans on behalf of their employees are finally getting on onboard that PBMs are hiding these markups and making backdoor deals with the drug companies. The best thing you can do is put pressure on your employer if you run into this. https://www.fiercehealthcare.com/payers/industry-voices-why-great-unraveling-pbms-will-accelerate-2025 https://www.fiercehealthcare.com/payers/industry-voices-why-... >This past year saw a wave of mid-sized employers, unions, and health plans exploring alternatives to the Big Three, a trend that will only continue to gain momentum in 2025. In fact, a recent report found that 52% of employers are considering changing their PBM in the next 1-3 years. While 72% of employers still primarily contract with a Big Three PBM, 12% have already embraced a transparent PBM.

medicalquack 2y ago

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