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The coronavirus has proven to be good for the U.S. healthcare industry. Health insurers, despite initial concerns, ended up posting shattering record profits throughout 2020, as hospitals swelled with coronavirus patients, forcing policyholders to postpone expensive elective and elective procedures. Less usage and fewer claims have become an unprecedented financial boon for insurers as they have reaped exorbitant premiums without having to provide much actual health care. For 2020, insurance giant Humana reported a profit of $ 4.6 billion, a 31% increase from the company’s 2019 figures. Cigna, meanwhile, made $ 8.5 billion in profits, up 67% year-over-year. And UnitedHealth Group, the country’s largest insurer, reported an astonishing annual profit of $ 15.4 billion in 2020, after making a profit of $ 13.8 billion in a record 2019.
The pharmaceutical giants have also reaped huge profits throughout the pandemic. Vaccine makers like Pfizer and Johnson & Johnson greatly benefited vaccine development, and make investors salivate over the potential profitability of future booster injections and global deployments. And even normal pharmaceutical sales have proven to be extremely profitable, with companies raising drug prices in 2020 even more aggressively than the year before. According to BonRX, 857 of the most popular brand and generic drugs in the United States saw their prices increase an average of 6.8% from January 1 to June 30, 2020, and 67 other drugs saw an additional price increase of more than 3 % in July 2020, a higher clip than the previous year.
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Beyond the bumper profit crop, insurance and pharmaceutical companies have enjoyed a year of relatively loving sentiment from the American public, a public relations boon that has relieved some of the heat from both industries in the world. fiercely maligned economy. The ability of the pharmaceutical industry to produce multiple functional vaccines has redefined them in a heroic light, even though the federal government has paid for the overwhelming majority of research and distribution; the willingness of insurers to pay for COVID tests, treatments and vaccines has also dropped them from the list of public enemies.
This polite reputation came in tandem with the Biden administration showing a total reluctance to commit even minor regulations the private health care sector, completely abandoning the public option of their legislative proposals and signaling to Congressional Democrats that they are happy to complete an infrastructure package without even a narrow drug price reform, although it It has been a top priority for House Democrats for at least the past four years and hugely popular with voters on both sides of the aisle.
UnitedHealth Group, the country’s largest insurer, reported an astonishing 2020 annual profit of $ 15.4 billion.
Riding this wave of positive sentiment and reformist abdication, the healthcare industry is now looking to blatantly lock in an even larger share of the profits.
Last week the FDA approved a new Alzheimer’s disease drug called Aduhelm, from a biotechnology company called Biogen. Aduhelm represents the first major new drug against Alzheimer’s disease in almost 20 years, which may look promising. That would be the case, were it not for the fact that experts say that despite FDA approval, there isn’t a lot of hard evidence that it actually works. In fact, three advisory board members who voted against the approval resigned from the panel, after being rejected and Aduhelm was given the green light.
As alarming as the questionable effectiveness of Aduhelm – which could give millions of families false hopes that their loved ones will be free from dementia – is the fact that Biogen can charge whatever it wants for the drug, due to the notoriously lax price controls that dominate the US market. health care experience. The number Biogen arrived at: $ 56,000 per year for a complete treatment. And because Alzheimer’s disease is so common, and 80 percent of the country’s six million Alzheimer’s patients are on Medicare, that one drug – which, again, might not even work – could ruin the whole program.
“If 1 million Medicare beneficiaries receive Aduhelm, which might even fall short of Biogen’s expectations, spending on Aduhelm alone would exceed $ 57 billion” per year, one reads in one analysis of the Kaiser Family Foundation, “far exceeding everyone else’s expenses. [Medicare] Medicines covered by Part B combined. If nearly a third of U.S. Alzheimer’s patients received Aduhelm, medical spending would increase by $ 112 billion in one year, more than the $ 90 billion Medicare spent on drugs for the $ 46 million. people under its Part D program in 2020.
These kinds of decisions are not subject to Congress voting or even public debate. And because the Biden administration has repeatedly pointed out that drug price controls, such as encouraging Medicare to negotiate prices more aggressively with drug companies like Biogen, are irrelevant, the drug makers have no reason. not to charge astronomical prices, even if their only product could take all the public health apparatus of this country.
Private health care quickly takes advantage of a perfect storm to eat into profits to a whole new level.
Perhaps a more powerful and robust Food and Drug Administration could have prevented something like this from happening, but as private healthcare and pharmaceutical companies have been inundated with praise during the pandemic, the FDA , already operating in a weakened state like so many other public-health services, has been the subject of a vicious year public attacks, led by the Trump administration. President Biden has not chosen a candidate to lead the agency, almost six months after starting his presidency.
Meanwhile, not wanting to miss adding to its nearly $ 16 billion in annual profit, UnitedHealth announced a New policy during emergency room visits. It will now retroactively determine whether a trip to the emergency room was necessary; otherwise, he will not pay for the trip at all. “Claims determined to be non-urgent will not be subject to any coverage or limited coverage in accordance with the member’s certificate of coverage,” is the wording of the new policy. If an emergency room visit does not meet UnitedHealth’s own “emergency” standards, the patient will no longer be covered and will therefore be responsible, out of pocket, for all costs incurred.
Remember that under the Emergency Medical Treatment and Active Work Act (EMTALA), anyone who presents to the emergency room, according to the law, must be treated and cannot be refused treatment. . The existence of this program has long served as a topic of discussion for the private health care sector to excuse its most egregious excesses. Sure the line goes, millions of Americans are uninsured, and millions more can’t even afford to use the insurance they have, but underneath all this cruelty and nonsense lies a constant commitment to treat people, no matter what, in times of distress. .
Well, UnitedHealth doesn’t want to pay for it anymore. And that denied coverage will turn into unpaid care (possibly paid for by the federal government) or a flurry of bills for people who can’t cover their emergency room visit. And if these UnitedHealth customers respond by avoiding emergencies for fear of sticker shock, it will lead to more untreated medical problems, illness and death.
The announcement sparked a public outcry, forcing UnitedHealth to withdraw, but only slightly. He generously stated that he would wait after the pandemic is over to enact this change.
Already one of America’s most rapacious industries, private health care is quickly seizing a perfect storm – positive public sentiments in the wake of our year-and-a-half-year health crisis, and an inexplicably public sector shy and weakened, spearheaded by President Biden, unwilling to even risk minimal reforms – eating away at profits to a whole new level. After surviving the 2020 Democratic primary without the regulatory policies of Bernie Sanders’ campaign on the Democratic platform, and stifling all talk about Medicare for All, these companies are more emboldened than ever, knowing that the most powerful people in the world the government will not say no to them.
There are a handful of House Democrats, as worried about what two more years of failed drug price reforms will do to their re-election chances as they are about rising industry prices, which have continued to rise. fight so that regulations are hidden. regardless of the agreed infrastructure bill. But the cost of Biden’s no-engagement policy and his fear of preying on the private health care sector are already showing. It costs a lot, a lot too much to do nothing.
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