Not only was the justification for the targeting of Brian Thompson stupid, but the targeting itself was stupid. While it’s true that UnitedHealthcare has the highest denial rate for medical claims, the CEO doesn’t set the approval rate of a health insurance company’s payouts — that’s done by the actuaries, who themselves are constrained by various considerations, such as the need to keep costs low, including for policyholders. But even if Thompson did have carte blanche to set his company’s approval rates, it wouldn’t have made a big difference.
Health insurance companies don’t get rich by denying payouts for claims. As the economics blogger Noah Smith points out, UnitedHealthcare’s net profit margin is just 6.11%, which is only about half of the average profit margin of companies in the S&P 500. If UnitedHealth Group decided to donate every single dollar of its profit to buying Americans more healthcare, it would only be able to pay for about 9.3% more healthcare than it’s already paying for.
Does healthcare in the US cost more than it needs to? Sure. But, according to the Harvard economist David Cutler, who has written extensively about the US healthcare system, the main reason healthcare costs in the US are high is because of administrative inefficiencies. Insurance companies and organizations that deal with them, such as hospitals, have become bureaucratically bloated to administrate a wildly unstandardized healthcare system, and this bloat now accounts for one-third of every dollar spent on healthcare in the US.
The ultimate point here is that Brian Thompson was not the problem. He was a normal, flawed, guy trying to keep costs low both for his company and his policyholders, while keeping his fiduciary duty to shareholders, whose investment his company depended on. He was a tiny cog in a vast and unfair system that’s controlled by no single person but by the cumulative actions of millions of people operating in their own immediate interests. Ted Kaczynski called such decentralized problems “self-propagating systems,” recognizing that they weren’t the result of human coordination, but rather, a lack of it.
If Kaczynski’s bombs and 35,000-word manifesto couldn’t destroy such a system, then a 3D-printed pistol and shoddy 262-word minifesto certainly won’t. You can’t kill your way out of a problem that’s ultimately no one’s fault.
Interesting perspective.