As someone who personally experienced the 'too big to fail' fallacy (I'm looking at you AIG), this trend is very alarming. Claims of economy of scale and expanded customer choice have been largely fictional. Medical insurance premiums and prescription drug costs alone are rising at rates that far exceed inflation levels. So what is contributing to this outcome that contradicts all the benefits ascribed to these mergers? Perhaps, and stay with me, executives who have absolutely no ability (or interest?) in delivering effective cost control, fraud management, or non-vulturous drug pricing schemes seem to suffer no consequences. In fact, they get paid pretty darn well...
From a recent Fierce Healthcare report: "The CEOs of the six major national insurers earned a combined $122,970,614 in total compensation in 2023, according to a Fierce Healthcare analysis of annual proxy filings with the Securities and Exchange Commission. At the top of that list was UnitedHealth Group CEO Andrew Witty, who brought home about $23.5 million in compensation last year."
It isn't that they are paid too much, it is that they have produced precious little in return (except maybe to themselves and stockholders).
So when exactly will healthtech, insurtech, or just commonsensetech rise to the challenge of disintermediating these snollygosters? Because if I see one more auto quote comparison application touted as game-changing, someone is getting a swift kick in their formulary.
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