U.S. health care is broken — and it’s getting worse : NPR

A year after UnitedHealthcare CEO was shot, US health crisis the situation has become even worse – both overt and hidden.

People are increasingly can't afford health insurance. Costs for both Obamacare And employer-sponsored insurance plans will rise sharply next year in a country where healthcare is already the most expensive in the developed world.

However, despite rising costs, companies and investors profiting from this business are also experiencing financial difficulties. Shares of UnitedHealth Group, the giant conglomerate that owns UnitedHealthcare and plays a key role in the larger stock market fell 44% from a year earlier. (The situation was even worse before Wednesday's rally in UnitedHealth shares.)

“UnitedHealth's reputation in the investment community prior to December 4 of last year was [as] a safe place to store money. And the whole thing was essentially blown out of proportion,” says Julie Utterback, a senior equity analyst who covers health care companies at Morningstar.

Then, on December 4, 2024, UnitedHealthcare CEO Brian Thompson was shot and killed on a Manhattan street on the way to an investor event. The shocking act of violence caused mass consumer protest over US healthcare costs and claims denialsand plunged UnitedHealth Group into a PR disaster.

But that was just the beginning of business troubles for the company and its entire industry, which faces regulatory scrutiny, declining profitability and investor skepticism. Shares of many of UnitedHealth's biggest competitors also suffered last year, while the stock market as a whole struggled. Technology-driven all-time highs. The S&P 500 healthcare index has lagged the broader market. And some Wall Street analysts are bracing for another challenging year in health care.

“We're going to see a lot more volatility in the near future,” said Michael Ha, a senior equity research analyst who covers healthcare companies at investment bank Baird.

December 4th began to reveal the depth of the US health problems

This widespread crisis, for both consumers and businesses, highlights the failure of the US health care system: when neither the people it is supposed to serve nor the people who make money from it are happy, does it even work?

“We really are at an inflection point,” says Katherine Hempstead, a senior policy fellow at the Robert Wood Johnson Foundation and the Robert Wood Johnson Foundation. author of the book about the insurance industry.

“Every segment of the health insurance business is under stress right now,” she adds.

These stresses became especially noticeable a year ago and continue to this day. Luigi Mangione, 27-year-old suspect in Thompson's murder. was in court this week at a pre-trial hearing.

But the US health crisis is much more serious than his case. Here are three major trends this year, from Main Street to Wall Street.

Prices are rising – and people are preparing to be left without medical care

No matter how you get health insurance, it will likely cost more next year.

For about 24 million people who get insurance through state health exchanges, Affordable Care Act subsidies expire at the end of the year – increase in premiums. Another 154 million people are insured through their employers—and premiums for those plans will also skyrocket.

Costs are rising for several reasons: Pharmaceutical companies have developed more effective cancer treatments and weight-loss drugs for which they can charge more. More people are returning to the doctor after the pandemic prevented them from doing so, creating more demand and allowing providers and hospitals to raise prices. And some hospitals, doctors' offices, insurance companies and other healthcare providers merged or consolidatedoften allowing the remaining businesses raise prices for their services.

The end result is that nearly half of US adults expect that they will not be able to afford the health care they need in the next year. according to a Gallup poll published last month.

Among them are Jennifer Blasis and her family.

“I'm always amazed at how much I have to consider the costs when something happens to children,” the 44-year-old nonprofit employee and mother of four told NPR in an interview for her magazine this fall. Series “Cost of Living”.

Blasis and her family live in Colorado Springs and obtain insurance through her husband's small property management business. She says she is postponing surgery on her leg to treat a condition that is causing her pain but which her doctors say is not yet an emergency.

“We wait to go to the doctor because we know if we do, we'll have a huge bill,” says Blazis. “And this is with… a really good health insurance plan that our [family] the company pays a lot of money for it.”

However, even the largest companies selling these services are struggling.

Some of these increased costs are also hitting insurers—even those that also control other parts of the healthcare ecosystem.

UnitedHealth Group is much more than just the owner of the largest health insurance company in the United States. It is one of the largest companies in the world and is involved in virtually every aspect of Americans' access to healthcare, from hire or supervise 10% of doctors they see processing about 20% recipes they carry out.

It is also one of the most influential stocks on Wall Street. UnitedHealth Group is one of 30 blue-chip companies in the Dow Jones Industrial Average – so what's going on with its stock? helps determine what is happening to the overall stock market.

The company had a bad year on both fronts. The reasons come down to profit, not PR: UnitedHealth and its competitors collided rising costs at Medicare Advantage companies, which allow private insurers to collect government payments for elder care.

These programs were once widely seen as revenue generators for large health insurers, but they have now embroiled UnitedHealth in financial and regulatory troubles, including a Justice Department investigation into its Medicare business. Company suddenly replaced the CEO in May, a few months before he admitted that he was facing a government investigation.

Now UnitedHealth is trying. get rid of about 1 million Medicare Advantage patients—and otherwise move away from many of the problems of the past year.

“We want to show that we can get back to the swagger that the company once had,” said Wayne DeWeidt, UnitedHealth's chief financial officer. told investors last month.

One famous investor is betting it can: Warren Buffett's Berkshire Hathaway in August revealed that she bought more than 5 million shares of UnitedHealth Group. The news helped lift the company's shares, but it still has a long way to go for both the share price and earnings to recover from this year's slump.

CEO Stephen Hemsley recognized as in October, promising investors “higher, more sustained, double-digit growth starting in 2027 and continuing from there.”

UnitedHealth officials declined to comment for this story.

Wall Street used to think healthcare was safe. He's waiting for the turn

Health care spending accounts for about a fifth of the U.S. economy, making the for-profit companies that make that money some of the most powerful in the world.

This has helped them attract investors who traditionally tend to view healthcare stocks as “defensive” or safe investments. That call sometimes outweighs the industry's current financial woes: Last month, as Wall Street began artificial intelligence bubblehealthcare stocks actually outperformed the overall market for a few weeks.

However, healthcare has significantly underperformed the market over the long term.

Morningstar's Utterback hopes the industry can eventually resolve its deeper financial, regulatory and reputational problems. She even calls most healthcare stocks “undervalued” at the moment, but warns that investors will have to be patient if they want bets on the sector to pay off.

“My clear forecast period is 10 years. It’s not three,” she says. “The outlook for at least the next couple of years is cloudy.”