Health insurers say they’ll do better … time will tell if they do

Brandon Edwards: ©Unlock Health

December 2024 was a tough month for health insurers. In the wake of Brian Thompson’s murder, public sentiment about insurers went from a low simmer of discontent to a full boil of fury. Insurance companies pulled executive bios and photos from their websites and increased security around key leaders. Frankly, the public response was frightening.

Anger toward the health insurance industry isn’t new. It’s been more than 20 years since Denzel Washington’s John Q sparked a wave of editorials about bad experiences with health plans. At the time the American Association of Health Insurance Plans (AHIP) took out a full-page ad that said, “Sometimes it seems like health plans are the only ones trying to make health care more affordable.” The only thing AHIP got right in the ad was when they said John Q’s violent response was the wrong one.

After Thompson’s murder, UnitedHealth Group CEO, Andrew Witty, wrote, “We need to improve how we explain what insurance covers and how decisions are made.” AHIP issued a statement that said, “Health plans are working to protect patients from the full impact of rising costs while connecting them to care that is safe, evidence-based and coordinated.” Both quotes imply that there’s nothing wrong with how health plans operate — the public just doesn’t get it. Yet the public does get it. They just don’t want it anymore.That’s why 69% of people under 30 years of age say Thompson’s actions warranted his murder – and 78% blamed the shooter.

What are insurers saying two months later?

In the days before the UnitedHealthcare earnings call, investors asked the company to look into how health plan business practices are impacting health outcomes of covered members. But on the call Witty blamed health care providers and pharmaceutical companies for health care costs. He said:

Fundamentally, health care costs more in the U.S. because the price of a single visit, visit or prescription is higher here than it is in other countries. The core fact is that price, more than utilization, drives system costs higher.

By the end of the call, Witty indicated that United will try to improve administrative efficiency and communicate better with members. A token nod at process improvement and a restatement that communication is a problem. At least he is consistent.

If Andrew Witty stood firm that no significant changes are needed, Elevance at least acknowledges that there is work to be done, whether they actually commit to do that work or not. In their fourth quarter earnings call, Elevance President and CEO, Gail Boudreaux, said:

For our members, we play a critical role in ensuring simple, affordable, and accessible care. We recognize that the health care ecosystem is grappling with significant challenges, including rising costs, administrative complexity, and disparities in access to care… Health insurers play a vital role in keeping health care affordable by ensuring our members have access to high-quality care at reasonable costs, and designing benefit structures that encourage preventative care and early intervention. Through the valued partnerships we have with care providers, we reduced inefficiencies, drive better health outcomes, and lower overall cost for members.

If you’re like me, you don’t dwell on phrases like “valued partnerships.” What does that mean?I think it depends on your definition of the word “valued” and your definition of the term “partnerships’.” But I digress.

Boudreaux went on to describe how Elevance is “making good progress” trying to ease administrative burdens on providers and improve data sharing. She said, “When health plans and care providers have access to the same information, we make the same decision.” Ummm, no.

Better data exchange and fewer administrative burdens are a good start. However, Elevance earned almost $6 billion in profit in 2024 while their valued care provider partners made modest, if any, profit — the system is unbalanced.How exactly does Boudreaux plan to lower health care costs?

Of all major carriers, Cigna has been most specific about how they plan to move forward. In their fourth quarter earnings call, Cigna CEO, David Cordani, told investors, “The past several weeks have further challenged us to even more intensely listen to the public narrative about our industry… We know that more can be done within our health plan offering.”

He went on to explain that Cigna will announce steps to lower costs, simplify the prior authorization process, improve pharmacy cost transparency, and expand access to patient advocates. The most interesting part of Cigna’s plan, though, is connected to executive compensation. Bonus awards have been based on metrics like financial performance and voluntary employee turnover rates in specific demographics. Starting in 2025, bonus calculations will include net promoter scores (NPS).

It’s unclear exactly how including NPS will work. The KFF Survey of Consumer Experiences with Health Insurance showed that 84% of people who rated their physical health as at least “good” were positive about their insurer. Yet only 68% of people who rated their health “fair” or “poor” — the people most likely to use their insurance — felt positively. And 58% of insured adults said they had a problem using their insurance in the 12 months before the survey. It's worth noting that in 2023 more than 90% of Cordani’s compensation was tied to company performance. And yet this looks like a fairly safe bet for Cigna executives.

It's hard to tell at this point what real changes health plans will make as a result of the intense public criticism and media attention. After all, John Q has faded into Hollywood history and real people still struggle to get health care coverage every day. However, it’s important that healthcare providers take note that the one note of consistency from insurer to insurer was “lower healthcare costs.” It looks like contract negotiations this year are shaping up to be contentious.

Brandon Edwards, CEO and Cofounder of Unlock Health, is a seasoned health care marketing communication strategist with expertise across the marketing spectrum and deep experience in crisis and reputation management. He has more than 25 years working in corporate and agency, with deep experience navigating the complex business relationships in health services. Brandon is also a frequent speaker at health care industry events and leader of groundbreaking practice focused on payor/provider relations and the relationships between health plans and hospitals, health systems, specialty providers, physician organizations, and health technology companies.