Why 800lb Companies Like UnitedHealth Are Poisoning Capitalism (And What We Can Do About It)

Could the health insurance industry be good, actually?

Nicholas Roerich, The giant, 1943

This is the beginning — from "I" to "we." If you who own the things people must have could understand this, you might preserve yourself. If you could separate causes from results, if you could know Paine, Marx, Jefferson, Lenin, were results, not causes, you might survive. But that you cannot know. For the quality of owning freezes you forever into "I," and cuts you off forever from the "we."

- John Steinbeck, The Grapes of Wrath

On Wednesday morning, Brian Thompson, the CEO of health insurance company UnitedHealthcare, was assassinated on the streets of Manhattan. The killer remains unidentified and his motive is uncertain, but he left behind clues in the form of three words scratched into the casings of the bullets he used to murder Thompson: “Deny,” “Delay,” “Depose.” These words imply that the killer was motivated by frustration at UnitedHealthcare for its regular practice of delaying and denying healthcare claims for its customers, forcing some of them to go without life-saving treatments. He seems to have felt that it was his responsibility to complete a grim cycle — by deposing the insurance company’s leader.

Every death is a tragedy. Thompson left behind a wife and two children, and no doubt a community. He was a co-chair and advocate for the Special Olympics. In the photo of him that has circulated after his death, he looks kind, attentive, maybe a bit goofy. He looks like a dad.

And yet, the overwhelming response to Thompson’s death was not sympathy, but schadenfreude. The general tenor of the public response to the assassination is perhaps best illustrated in this observation by Zeynep Tufecki of the New York Times: “Even on Facebook, a platform where people do not commonly hide behind pseudonyms, the somber announcement by UnitedHealth Group that it was ‘deeply saddened and shocked at the passing of our dear friend and colleague’ was met with, as of this writing, 80,000 reactions; 75,000 of them were the “haha” emoji.”

Brian Thompson is not a household name. Nearly all those who heard of his murder were hearing of him for the first time, and came to know precisely one fact about him — that he was the CEO of UnitedHealthcare — before developing the apparent consensus opinion that he deserved to die.

How on earth did we get here? Why do the American people hate the health insurance industry so much that we are happy when its executives die? And more importantly, is there any way out of this mess other than more violence?

In short, the answers to these questions are: capitalism, capitalism, and yes (contributism). But more precision in our language leads to better understanding, and better understanding leads to better solutions, so let’s take a few minutes to understand exactly what has gone so wrong that has led people to become so angry, and what a better health insurance industry — one that doesn’t inspire the rage of the masses — could look like.

Efficient and effective?

One of the great misunderstandings of capitalism is that it naturally leads companies to become more efficient and effective, through market competition. While this is technically true, it is true only in the most unhelpful and unintuitive sense. Capitalism does naturally lead companies to be more efficient and effective — in their production of capital for their owners. It does not necessarily lead them to be more efficient and effective in their supply of goods and services for their customers.

In fact, there is a natural tension between these two goals, and the design of capitalism means that the former will always eventually win out over the latter. In other words, as capitalist companies naturally get better and better at producing capital for their owners, they naturally get worse and worse at producing value to society.

Nowhere is this capitalist tension more visible (or more consequential) than in the health insurance industry — which is why we all hate health insurers so much. For the health insurance industry, the goal of making profits is in direct tension with the goal of insuring health. Every paid claim is taken directly out of profits, so, from a capitalist perspective, a health insurance company can increase its efficiency and effectiveness by denying claims and raising deductibles and co-pays. Every time an insured customer must pay out-of-pocket for necessary (perhaps life-saving) healthcare, or forgo that healthcare entirely, the insurance company wins.

But surely it can’t be in a company’s best interest to provide a poor service to its customers, right? Won’t the customers just take their business to a competitor? As it unfortunately turns out, this often isn’t the case in economies of scale — when you’re a big enough business, customer acquisition is a problem that can be solved with the very capital that has been extracted from the consumer. The specific methods vary by industry, but the overall picture is always the same. This is why, in recent decades, the word “Big” has taken on new meaning — “Big Pharma,” “Big Media,” “Big Oil,” “Big Tech.” We intuitively understand that the interests of the largest companies are no longer aligned with the interests of their customers. As a capitalist industry matures, efficiency and effectiveness in producing capital for owners drifts further and further away from efficiency and effectiveness in providing value (giving) to society.

Within this context, the widespread societal apathy at Brian Thompson’s death is unsurprising. UnitedHealthcare, the company he ran, is perhaps the epitome of late capitalism. Under Thompson’s leadership since 2021, it has achieved record profits, and it has done so by being rabidly anti-consumer. The company has faced numerous scandals over the past two decades, including (among many others) state, federal, and class action lawsuits related to overbilling, underpaying, privacy violations, and even using AI to auto-deny claims. But somehow worse than all of that is the single statistic that defines the everyday reality of being a customer of UnitedHealthcare: 32%. That’s its industry-leading estimated claim denial rate, which essentially means that core to its business model is the systematic refusal to actually pay for the healthcare services that it ostensibly insures.

But here’s the thing: UnitedHealth Group (UnitedHealthcare’s parent company, which consists of UnitedHealthcare and Optum, its pharmacy and health services provider) is, by revenue, the ninth largest company in the world and the world’s largest health care company. In other words, if we are measuring by value provided to society, UnitedHealth may truly be the worst healthcare company of all. But if we are measuring by capital, UnitedHealth is the most successful healthcare company, and one of the ten most successful companies in the world.

UnitedHealth is not successful at capitalism despite the fact that it has abandoned all care for its customers — it is successful at capitalism because of it.

The 800lb company

This is why we need contributist models rather than capitalist ones. Instead of living in a world where companies and industries are becoming better and better at generating capital for their owners (capitalism), we want to live in a world where they are becoming better and better at providing value to their society (contributism).

But how do we get there? In the case of healthcare, as with many other industries, the shift from capitalism to contributism starts with a shift in our mindset and attitudes, which is followed by a shift in incentives and behavior. We must first understand what true corporate success is and isn’t. Only then can we develop a society that rewards and performs the sort of corporate behavior that leads to truly successful organizations — the kind which, among other things, don’t inspire the sort of rage which results in their CEOs being murdered in the street.

The most pernicious attitude that must be left behind if we are to build a better health insurance industry is the idea that capital accumulation is equivalent to success. I noted above that UnitedHealth is the largest health care company in the world by revenue. This is a neutral statement of fact. But the related idea that UnitedHealth is the most successful healthcare company in the world is not a statement of fact — it is a motivated claim. Size is not equivalent to success, and in many cases, we consider too much growth to instead be a sign of excess. While a man who weighs 160 pounds is seen as healthier than a man who weighs 80 pounds, a man who weighs 800 pounds is not considered, by virtue of his size, to be healthier than the 160lb man. In humans, excessive growth is a sign of imbalance — we would say that the 800lb man has become disordered in his thinking: he has put too much effort into the accumulation of calories and not enough effort into the productive use of his calories.

UnitedHealth is healthcare’s equivalent to the 800lb man. It has grown at all costs, abandoning true productivity (the conversion of capital into ensured health for its customers) in favor of endless capital accumulation. And as in the case of the 800lb man, this growth maximizes the company’s short term satisfaction, but has a number of dire consequences. The most obvious costs are the immediate burdens shouldered by everyone else around — the patients who are denied life-saving care, the employees whose retirement plans are raided, the competitors who must fight for shrinking market share. Theirs is the pain and labor necessary to feed the “successful” company’s all-consuming greed for capital. But there are also short term costs for the company leaders — in leeching from rather than contributing to society, they forfeit their dignity, and live less fulfilling lives. And there are long term consequences for the whole of society, which we are seeing all around us in slow motion, as inequality has led to the decline of democracy globally and climate change makes the world less habitable each year.

And on the long scale, death always comes for the glutton, after it has laid sufficient waste to the society around it. Thompson’s death is a shame and a tragedy, but it is also a warning. Mistaking capital accumulation for success has led us to a society full of 800lb companies, and although the rest of us have long worked hard to shoulder the consequences, it may not be long before the whole society buckles under their weight.

The Grapes of Wrath quote at the top of this essay is a timeless warning to the business leaders “who own the things people must have.” Here’s a longer quote from the novel which clarifies Steinbeck’s point:

And the great owners, who must lose their land in an upheaval, the great owners with access to history, with eyes to read history and to know the great fact: when property accumulates in too few hands it is taken away. And that companion fact: when a majority of the people are hungry and cold they will take by force what they need. And the little screaming fact that sounds through all history: repression works only to strengthen and knit the repressed. The great owners ignored the three cries of history. The land fell into fewer hands, the number of the dispossessed increased, and every effort of the great owners was directed at repression. The money was spent for arms, for gas to protect the great holdings, and spies were sent to catch the murmuring of revolt so that it might be stamped out. The changing economy was ignored, plans for the change ignored; and only means to destroy revolt were considered, while the causes of revolt went on.

- John Steinbeck, The Grapes of Wrath

This is not a picture of “success,” but one of insanity, and it is a picture that increasingly resembles modern capitalism. Notice that Steinbeck presents himself not as a prophet, but as a historian. This is a pattern we have seen repeatedly throughout history, and it never ends well for the “successful.” No one should be surprised that the phones of corporate security firms are now “ringing off the hook.”

Could the health insurance industry be good, actually?

But there is hope for the paranoid corporate executive, and for the rest of us too. Because when we come to understand the capitalist mindset as disordered, we implicitly also recognize that it can be healed. If we can see the difference between corporate success and corporate excess, we can redesign our companies and our industries towards health, and away from Steinbeck’s grim prognosis.

After all, despite our hatred of our health insurers, they do provide a much-needed service. By spreading the cost of healthcare across a pool of customers through premiums, health insurance makes healthcare affordable. This function — socializing the cost of healthcare for the benefit of all — is the ostensible goal of health insurers: it is how they contribute to society. To apply a contributist mindset to the health insurance industry is to simply recognize that a health insurance company’s success should be measured by how effectively it performs this contribution, rather than how much capital it accumulates in the process. From this simple recognition flows the opportunity for a number of shifts in behavior, from actors on all sides: customers, government, and businesses themselves.

First, the customer always has some say in the market, although in the case of health insurance, the customer is unfortunately not usually the individual consumer. In the US, health insurance is not purchased directly by individuals — instead, employers act as intermediaries for most consumers, and the government acts as an intermediary for the rest. Functionally, this means that most consumers don’t have a lot of freedom to choose their insurer; they can only choose whether or not to opt-in to one of the insurance plans that have already been preselected by their employer.

While this means that individual consumers have little say in this system, it also means that employers have significant power to influence the health outcomes of their employees. If these employers are themselves contributist, they take this responsibility seriously; they will choose plans that are likely to result in positive outcomes for their employees, and reject plans from companies like UnitedHealth, which are likely to do them harm. They will do this even if the alternative plans are slightly more expensive, because they want to help, not harm, the people they employ.

But it is not only the responsibility of customers to make the health insurance industry shift from capitalism to contributism, and in fact, they are usually far from the ones most empowered to do so. It is the responsibility of government to set market incentives, and the US government has long designed incentives to favor capitalism, and the generation of 800lb companies, over contributism.

This is as true in health insurance as it is in any industry. The Affordable Care Act of 2010 was originally designed to introduce a competitive state-run insurance company (the “public option”), which would not have put UnitedHealth out of business, but would certainly have forced it to be more consumer-friendly to be competitive. But that part of the bill was blocked by senators who were heavily funded by the health insurance industry, and was replaced by health insurance co-ops, a compromise alternative model that may have also proven competitive, except that it was hamstrung on arrival by a series of unfavorable government policy decisions. The consumer-hostile business model that UnitedHealth has perfected only works so well because the government chooses to protect it from meaningful competition.

This can change. The US healthcare system may incentivize profit-seeking over positive results today, but there is no reason it has to continue to do so. There are plenty of models of health insurance around the world that do the opposite. Some are government-run, while others, like the highly-successful insurance system in the Netherlands, are private markets. Notably, private health insurance companies in the Netherlands are virtually all non-profit organizations. The Dutch market is as real as any in the US; the difference is only what government incentivizes through policy and regulation — seeking profit or seeking true productivity.

Finally, the corporate executives themselves have the opportunity to choose contributism. They are not, despite popular belief, bound by shareholders to extract every possible dollar from their customer base, at the expense of providing a valuable product. Executives are generally given wide latitude to run their companies in the way that they believe will be most successful. Operating by way of harming and defrauding customers is a business choice, but it is not the only viable one. It is easy to make the argument that providing the best service for customers at the most affordable price is a better way to ensure a company’s long term health. Perhaps easier still, now that executives understand that it is not only their customers’ lives which are on their line, but maybe theirs as well. UnitedHealth and its competitors could choose today to begin to value metrics that correlate to true success like time-to-claim-completion, customer savings, and customer satisfaction. Perhaps they will even find that this saves them money on fines, legal fees, and resources spent contesting claims.

Maybe it’s unlikely that the leaders of the largest businesses will choose this path, but the reality is that they don’t have to for contributism to take hold in the industry. Just as local credit unions can provide better rates on loans than big banks do, smaller organizations can often compete with larger ones if they re-conceive their goals. Instead of trying to become their big competitors, they can forgo profit-seeking in favor of providing a necessary service to their community. They will never be as big as their 800lb competitors, but they’ll have achieved something better — the dignity of having given to society, rather than the anxiety of having harmed it. They’ll be able to sleep at night, without hiring a security detail.