Lessons for India from a failing US model

Profits cannot be allowed to drive the health sector where care should be currency. Is India watching?

The killing earlier this month of Brian Thompson, the CEO of a leading health insurance provider in the United States called UnitedHealthcare, has led to an outpouring from the American public. There is sympathy for the shooter, even praise for the act, and an embracing of the message of the killing in three words marked out on the bullets that took Thompson’s life: “delay”, “deny”, “defend”.

The three ‘d’s have become a shorthand, almost an anthem for critics who note that insurance companies are failing patients by denying or delaying claims and defending their actions with all their corporate might so that people in the midst of medical issues give up. This is part of the corporate strategy that drives profits of insurers, high salaries to employees and bonuses for CEOs like the late Brian Thompson. Teams reportedly work on denials at the backend while the frontend employs people with designations that paint a caring picture -- like a Chief Affordability Officer in the case of UnitedHealthcare.

This is the rough edge of a healthcare system that is overly complex, largely privatised and intensely competitive with profits that make it among the top two or three most profitable sectors in the US economy. Health and medical insurance and hospitals together had total profits of an estimated $267 billion in 2024, jointly making it the third most profitable industry in the US economy, according to the global research firm IBISWorld. McKinsey in a report put out in January 2024 estimated that “healthcare profit pools” would grow at a 7 per cent CAGR, from $583 billion in 2022 to $819 billion in 2027.

This is a system India and the world need to be wary of. An overly profit orientation in a sector where care should be the currency points to all the things that should not be the way the health sector operates. It is instructive that the rage that is now pouring out was under the surface and seen in bits and parts for a long time.

Consider that two years ago, the slain CEO posted a message on the platform LinkedIn that said: “Making health care more affordable… (is) more important than ever right now. Reducing drug prices and improving price transparency are two ways we are working to lower costs for UnitedHealthcare members.” The comments below that post were eye-popping. One wrote: “… I have stage four metastatic lung cancer. We’ve just left UHC because of all the denials for my meds. Every month there is a different reason for the denial. As of today, we are well over our max out-of-pocket for the year with having spent well over $20,000. Since we are in our 60s – we don’t have time to recoup that.” Many others echoed the anger though the post also recorded several “likes”.

Officially, UnitedHealthcare has dismissed reports that it has the highest denial rate of all insurers in the US. The company said it approves and pays about 90 per cent of medical claims upon submission. But other surveys and reports have pointed to frustration and worries over rising costs and growing denials, and of insurance companies in general turning the process into a roadblock that requires special efforts to cross. However, the group CEO Andrew Witty has now agreed that the system is “flawed”.

A broken system

The frustrations in the US on healthcare carry important lessons for India because of worries that we may be tilting to the US model. This will be (if it is not already) disastrous in India, where the healthcare system is even more broken. Here, claimed world class care and high standards with the best doctors deliver rising costs that bring care for the rich and leave out the rest. As such, the Indian system carries many more burdens than that seen in the US. According to India’s National Health Accounts Estimates 2021-22, the Out-of-Pocket Expenditure as a percentage of Total Health Expenditure is almost 40 per cent.

To be sure, the American system still works quite well for many. Medications are prescribed and paid for, unlike in the Indian system. No hospital can turn away an emergency, irrespective of insurance or the capacity to pay. Hospitals do not demand an advance as is actually the norm at almost all hospitals in India. In the US, it is entirely possible for an emergency case to be operated on, including critical or high-cost surgeries like cardiac interventions, with recovery of bills set for a later date.

None of this is the way it works in India. The frustration of Indians is first at the denial of care for those who cannot afford the high fees. For others, it is the inflation of doctor consultation charges, the rising room rents in hospitals and in many cases, the growing disenchantment with the profession itself and the way patients are treated. Insurance costs have grown dramatically, and the elderly are routinely denied coverage, or the coverage costs are prohibitive.

If an avowedly individualistic, free market, capitalistic order that obtains in the US can see a revolt the way it has this time, then at the very least India needs to be wary of going close to the US system. Consider Japan at the other end of the scale, where universal healthcare coverage arrived in the 1960s. Almost all treatments are covered, most services are inexpensive with a systematic long-term care insurance system.

There are lessons we must reject and new ones we need to learn in India when it comes to critical areas like health.

(The writer is a journalist and faculty member at SPJIMR; Syndicate: The Billion Press)