How U.S. Healthcare Spending Fails Patients

The murder of a high profile healthcare executive highlights issues surrounding the U.S. healthcare system, particularly its high costs and poor outcomes. Frustrated by healthcare inefficiencies, patients and doctors criticize the profit-driven insurance industry, believing significant administrative expenses hinder patient care. It has provoked a hard look at a problem that needs a solution if we want to improve health outcomes and lower costs.

Like you, I have been following the news stories of Brian Thompson and Luigi Mangione. I can’t remember another time when an alleged killer received more understanding and sympathy than the victim. (Although it has probably happened.)

Based on what is known now, the murder was connected to one man’s occupation, healthcare insurance executive, and the other man’s grievance, healthcare cost and delivery. I am sharing this post from Minnesota Reformer, slightly edited to focus on the healthcare issue, not the crime.

This story won’t be going away anytime soon, and shouldn’t. I hope this tragedy prompts a serious review and changes in how we provide and fund healthcare in the United States.

I also believe whoever is proven to be Mr. Thompson’s killer should be brought to justice. And I want Mr Mangione to receive attention to and treatment for his obviously significant medical issues.

(photos for illustration only)

The original title of this article is

A man radicalized by statistics

by Christopher Ingraham, Minnesota Reformer
December 12, 2024

In a note he was carrying when he was arrested, Luigi Mangione paints himself as a man radicalized by statistics.

“The US has the #1 most expensive health care system in the world, yet we rank roughly #42 in life expectancy,” wrote the alleged killer of Brian Thompson, the late CEO of Eden-Prairie-based UnitedHealthcare.

“United is the [indecipherable] largest company in the US by market cap, behind only Apple, Google, Walmart. It has grown and grown, but [h]as our life expectancy?”

Mangione is a scion of a rich, connected Maryland real estate family who recently withdrew from friends and family following severe medical issues. The numbers he cites are, in broad strokes, accurate.

Photo by Karolina Grabowska on Pexels.com

Healthcare by the dollars

On life expectancy, the U.S. ranks somewhere in the 60s among the world’s countries, according to data from the United Nations, falling in between Panama and Estonia. Among the wealthy subset of countries that are part of the Organization for Economic Cooperation and Development, we rate 32nd out of 38.

The U.S. also spends far more on health care than any other country in the world: around $12,000 per person each year, thousands of dollars more than the next-highest spenders. 

The discrepancy between the staggering amount of health care spending and our relatively short lives has been perennial fodder for commentary and political debate: Where is all that money going?

The answer, to a significant degree, is that it’s being skimmed off by the private health insurance industry.

“The largest component of higher U.S. medical spending is the cost of health care administration,” according to an analysis by Harvard health economist David Cutler. “About one-third of health care dollars spent in the United States pays for administration.” 

Peer countries, even those that have similar systems with multiple private insurers, pay just a fraction as much.

“Whole occupations exist in U.S. medical care that are found nowhere else in the world, from medical-record coding to claim-submission specialists,” Cutler writes.

That excess spending adds up to something like half a trillion dollars each year, according to a recent analysis of Congressional Budget Office data by Matt Bruenig of the People’s Policy Project. For every $100 spent on health care, $16 goes directly to private insurance companies and another $16 goes to hospitals to cover the cost of administering care.

Only about $68 goes toward actually paying for medical services.

Under a single-payer system, on the other hand, the CBO estimates that the public insurer would need just $1.60 of that hundred bucks to cover its costs, while the hospitals would only need $11.80 to cover administration, because they no longer have to deal with the hassle of multiple private health insurers.

Under that system, $86.60 would go toward paying for care.

Photo by Olya Kobruseva on Pexels.com

UnitedHealth Group

As the nation’s top health insurer and the fourth-largest company by revenue, UnitedHealth Group — the parent company of UnitedHealthcare — is also the chief beneficiary of all those billions in essentially wasted spending. In 2023 the company socked away $22 billion in profits on $371 billion in total revenue, adding up to a return for investors of $25 per share.

Think of it this way: A person who owned a single $500 share of UnitedHealth Group stock at the start of the year would get rewarded, at the year’s end, with $25 of America’s health care spending, despite contributing precisely nothing to American health care.

Those profits, it should be noted, don’t simply generate themselves. UnitedHealthcare has developed a reputation for being especially ruthless in its pursuit of shareholder value. The company “relentlessly fought to reduce spending on care, even as its profits rose to record levels,” ProPublica reported last year.

A U.S. Senate committee concluded UnitedHealthcare, along with other insurers, intentionally denied critical nursing care to stroke patients in order to increase profits. The company has been accused of using rigid algorithms to determine when to cut off payments, regardless of whether or not patients still needed care. 

Thompson had been accused of dumping stock before the company alerted shareholders that UnitedHealth Group was being targeted by a federal antitrust investigation.

What happens to patients?

Virtually every American has their own horror story to tell of the Kafka-esque indignities of fighting with insurers over billing codes, prior authorizations, pre-approvals, in-network providers, and the like. This likely explains the organic outpouring of condemnation launched at the health insurance industry in the wake of Thompson’s killing, which spanned the political spectrum, even as elites of both parties scolded the vigilante apologists. 

Doctors say the delays caused by those barriers between patients and their care, which are set up largely to protect insurance company profits, can make patients sicker and in some cases kill them.

Photo by Andrea Piacquadio on Pexels.com

In his manifesto, Mangione lamented that so little has been done to solve the profit-driven dysfunction of the health insurance system. “Many have illuminated the corruption and greed (e.g.: [Elisabeth] Rosenthal, [Michael] Moore), decades ago and the problems simply remain,” he wrote. “It is not an issue of awareness at this point.”

The note makes no mention of any personal struggles with the insurance system, despite evidence that Mangione suffered from chronic back pain and underwent major surgery for it.

But at some point — whether driven primarily by personal experience, systemic frustration, or the sheer force of a mental breakdown — Mangione decided to take things into his own hands.

republished under Creative Commons license from

Minnesota Reformer -part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Minnesota Reformer maintains editorial independence. Contact Editor J. Patrick Coolican for questions: info@minnesotareformer.com.

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