When Profit Shouldn't Be the Motive, Part 1: The Healthcare System
- Karen Kuykendall
- 3 hours ago
- 8 min read
This post is the first in a series on industries that, by their nature, best serve the people involved when it exists without a "profit first" motive. These industries include services that are monopolistic in nature and directly and impactfully affect wellbeing, and where prioritizing profit causes a conflict of interest and directly affects that wellbeing.
Killing the CEO
The reaction to Luigi Mangione's alleged killing of United Healthcare CEO Brian Thompson has been troubling. While the normal and expected denouncement of the murder was echoed by political leaders like Pennsylvania governor Josh Shapiro, a folk hero cult also sprouted up overnight and quickly grew into widespread support for this young man with a grievance against the healthcare giant.
Online reactions to the murder included newly created fan accounts that applauded Mangione and began fundraising for his legal defense. In contrast, the United Healthcare Facebook site was overwhelmed by 36,000+ laugh reactions to the news of Thompson's death, prompting the company to turn off comments on the post.
What about healthcare insurance would cause so many people to glorify the assassination of one of its leaders? You don't have to talk with many individuals to begin understanding why a large number of Americans feel this way. In just the last year alone, annual family premiums for employer-sponsored insurance have increased 6.1% to a whopping $26,993. The average employee's part of this cost is $6,850 annually ($570 per month), while the employer pays $1,679 monthly for services that, in many cases, will not be used.
For those without employer coverage and on Marketplace insurance (also called Obamacare), premiums have continued to rise as well. Even if you were not among the millions who were denied previously granted tax credits to help pay for 2026 premiums, the cost of plans has risen 4.5% on average, while the second lowest cost Silver plans have increased an astonishing 21.7%.
I can speak personally about these cost increases. My stepdaughter, who is an independent insurance agent, assists people with their coverage every year during the annual healthcare open enrollment period. This past year, the changes in both coverage and cost were impactful on her clients--a primarily lower income population that is either self-employed or has no employer-offered coverage.
For those clients who earn a sustainable income (i.e. more than $62,600 annually for a single person), the expiration of their tax credit means that most of them can no longer afford insurance. An example would be a single person's premium that went from a somewhat doable $423 per month in 2025 to $1,259, totaling $15,108 for 2026. For clients who still qualify for the tax credit, many have had to make the hard choice of changing from a Silver plan (with lower deductibles and max out-of-pocket costs) to a Bronze plan, despite the fact that annual deductibles are often over $7,000 and max out-of-pockets can be a daunting $10,600 for a single person.
I also want to point out that for both Marketplace and employer-sponsored insurance, the plan costs are set by private insurance companies, not the government. For an individual, these plan currently range from around $400 - 2,000 per month. The recent proposal of sending the equivalent of Marketplace tax credits in cash to individuals so they can shop for and buy their own insurance will not alter the cost of these private plans.
The Disease
Beyond making insurance unaffordable, what detrimental effects are caused by prioritizing profits in the healthcare space? They would include:
Profits Over Patients: For-profit models create incentives to reduce costs, which can jeopardize patient safety and lead to lower-quality care, such as reduced staffing or inadequate equipment.
Conflicts of Interest: The physician-patient relationship can be compromised when profit motives influence medical decisions, leading to unnecessary tests or procedures.
Inequality in Access: Such systems tend to "skim off" healthy or well-insured patients while leaving uninsured or underinsured individuals to public, non-profit systems, exacerbating disparities.
Higher Costs and Inefficiency: For-profit healthcare is often more expensive due to administrative overhead, marketing, and profit margins, resulting in higher overall spending with often worse, or merely similar, health outcomes.
Service Limitations: For-profit institutions are less likely to provide necessary but less profitable services, such as emergency care, psychiatric care, or public health initiatives.
Undermining Public Health: The focus on individual profit-driven treatment can undermine, or fail to invest in, broader public health, preventive care, and medical education.
The results of this mismanaged system are all too clear. The US spends twice the amount per capita on healthcare compared to any other wealthy country (see the 2024 chart below), yet has lower outcomes than most of them. If it weren't such a serious problem, the finger pointing for this situation by various parts of the industry on other parts would be comical. In researching for this post, I found articles from insurance carriers that blamed hospital systems and from big pharma that blamed the carriers.
While there is no single guilty party in the American healthcare debacle, outsized profits is the source that fuels it all. Currently, we are the only profit-motivated healthcare system in the industrialized world. YES! Please read that sentence again. Put plainly, what started out as a way to help people during their time of need quickly devolved into the monetization of services that people have to have to either work and/or live.
As I said, there is no one entity that is primarily guilty for the inflated costs of healthcare; rather, everyone, including the patient, bears some responsibility. Below is a chart from Garry Branning, a business owner and adjunct professor at Rutgers Graduate School of Business. In this chart, he points out the financially-driven contribution of the involved stakeholders:
Patient | Spends as little as possible out-of-pocket; relies on third-party payers for the majority of healthcare costs |
Provider | Earns income substantial enough to pay back student loans and justify the time and effort invested in patient care |
Health insurer | Generates more in revenue than the company will spend on medical care for members |
PBM* | Collects service fees and earns a percentage of savings generated on behalf of customers |
Government | Spends as little taxpayer money as possible while providing access to care for America's most vulnerable populations |
Pharmaceutical manufacturer | Generates enough income to earn a profit after recouping R&D and marketing costs |
*PBM indicates pharmacy benefit manager; R&D, research and development. Image Credit: Garry Branning
In addition, hospital systems have systematically taken over local individual provider practices throughout the country, until almost all of them are in a larger system's network. As you can see from the chart below, the percentage of total healthcare costs from these networks is 79%. These systems have contributed to rising costs through inflated administration and marketing departments, as well as through the reduction of competition so they can set prices that go unchallenged by insurance carriers. In the reverse situation, such as the recent fight between Prisma Health and United Healthcare in Upstate South Carolina, patients can suddenly find themselves out of network and potentially uncovered until the system and insurer reach an agreement. Either way, the patient is the loser.
Employer share, by healthcare services | As part of total health benefit, % |
Physicians | 30 |
Inpatient | 30 |
Outpatient | 19 |
Pharmacy | 17 |
Other | 4 |
The Cure
There are many other troubling circumstances that this post doesn't cover, and there is no one solution that will fix this complex problem. Since we have to start somewhere, though, let's go back to the premise that all parties supporting a for-profit system bear some responsibility and need to make changes. Here are some well-known problems and common sense solutions for the respective parties to start addressing. The solutions are here and if they aren't enacted it's because the moral vision and will are lacking:
Hospital systems
The problems: systems have become giant monopolies with bloated administration, marketing, and other departments; small hospitals in rural areas are underfunded and struggling to serve patients and stay open
The solutions: The removal of healthcare monopoly protections, mandatory department audits to identify waste, financial support for rural hospitals from larger systems and government
Pharmaceutical companies
The problems: lack of competition, price negotiation, and transparency; patents that are "evergreened"
The solutions: incentives to develop biosimilars, streamlining the approval process for generics, government-negotiated pricing for Medicaid, Medicare, and Marketplace programs, pricing disclosure, reforming the patent system
Pharmacy Benefit Managers (3rd party middlemen between insurers and pharmacies)
The problems: rebate-driven price hikes, spread pricing, preferred status for high-cost drugs, pharmacy steering and fees, lack of transparency
The solutions: transparency of pricing structures, regulatory reforms at state and federal levels, increased competition of PBMs, direct-to-consumer models, value-based pricing
Providers (Note: As providers are employees of hospital system, the solutions listed here would primarily fall to that system.)
The problems: defensive medicine, expensive new technology use, referral patterns
The solutions: price capping and negotiation, value-based care, provider competition, prioritizing preventative care
Insurance companies
The problems: high administrative costs, profit-driven vertical integration, profit margins for stockholders
The solutions: administrative cost reduction, applying anti-trust laws to monopolistic entities, capping profit margins
Government
The problems: prioritizing influential and wealthy healthcare companies' interests over those of the consumer
The solutions: lobbying reform, regulation that addresses problems
Patients
The problems: lack of knowledge, poor health habits
The solutions: research to find solutions, follow healthy diet and exercise routines, mandatory school-based education
This post has only scratched the surface of this critical issue, but even with this cursory look you can see that reforming American healthcare is both a pressing and surmountable challenge. The myriad of issues in this multi-pronged problem is the reason why so little has been accomplished to this point. Looking at this list of problems (which is not inclusive!) can appear daunting and cause people to throw their hands up in despair, allowing the system to continue rolling down its destructive path. But we can't let that continue.
The root of the problem is not complicated to see, however, and neither is the outcome if things continue as they are. The current short-term approach of making as much money as possible off of patient care is following an unsustainable trajectory. When we get to the point--and it's coming quickly--where healthcare is too expensive for most people, they will simply go without insurance and/or care. Doing so negatively affects the finances of every stakeholder in the system, as well as our ability as a nation to go to work, be productive, and take care of our responsibilities.
If these issues are addressed by people of courage and vision in the industry, the government, and also by consumers, we can start taking steps toward a better system. Doing so will ultimately benefit everyone in the long run, even those entities that currently make high profits since it means they will be able to continue into the future. It's both the smart thing to do, and the right thing to do, for all of us.
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