In the waning days of 2024, the healthcare sector finds itself under unprecedented scrutiny. The assassination of Brian Thompson, CEO of UnitedHealthcare, in New York City on December 19th has brought long-standing issues within the industry to the forefront. This tragic event has sparked widespread public outrage over denied insurance claims and exorbitant healthcare costs in the U.S., which are among the highest globally. Lawmakers from both parties have intensified their oversight of the healthcare industry, reflecting growing concerns about its practices and impact on American lives.

The Assassination and Its Aftermath: A Turning Point for Healthcare

In a dramatic scene outside the Federal Criminal Court in New York City, Luigi Mangione, the suspect in the shooting death of Brian Thompson, made his first appearance. The incident occurred during a period when the healthcare industry was already facing significant challenges. Costs were rising, profits declining, and several top executives had been ousted. Thompson's death added fuel to the fire, leading to increased public scrutiny and legislative action.

The suspect, Mangione, reportedly harbored deep-seated grievances against the healthcare system, as evidenced by a notebook found in his possession that contained scathing critiques of health insurance companies and wealthy executives. This revelation further fueled public debate about the role of large healthcare conglomerates in the U.S. economy and society.

UnitedHealthcare, part of the broader UnitedHealth Group, is one of the largest healthcare providers in the country, with extensive operations ranging from insurance to pharmaceuticals. The company’s influence extends to being the top employer of doctors and ranking fourth in U.S. revenues. Despite its size and reach, the company, like others in the sector, has faced mounting criticism for opaque practices and high costs.

In recent months, other major players such as CVS Health and Cigna have also experienced leadership changes and financial setbacks. CVS Health replaced its CEO in October, while UnitedHealth issued a less-than-optimistic forecast for 2025. Both companies, along with their competitors, are grappling with rising costs in Medicare Advantage programs, once seen as profitable ventures.

Investors have not been spared from the turmoil. Shares of major healthcare conglomerates have fallen this year, even as the broader market thrives. Analysts attribute this decline to stagnating profit growth and increasing regulatory scrutiny.

A Call for Reform: Congressional and Presidential Actions

The political landscape is shifting, with both Congress and the incoming Trump administration focusing on healthcare reform. Senators Elizabeth Warren and Josh Hawley introduced legislation aimed at breaking up large healthcare conglomerates, including UnitedHealth. President-elect Donald Trump has also weighed in, criticizing pharmacy benefit managers (PBMs) owned by these conglomerates for inflating prescription drug prices.

PBMs, controlled by companies like UnitedHealth, CVS, and Cigna, process a majority of U.S. prescriptions. Critics argue that these intermediaries contribute to higher drug costs without adding value. The Federal Trade Commission (FTC) has taken legal action against the three largest PBMs, accusing them of anticompetitive practices. The PBMs have responded with lawsuits of their own, setting the stage for an ongoing legal battle.

Industry representatives maintain that their integrated business models provide valuable services. However, the increased regulatory scrutiny and public backlash have raised concerns among investors. Morningstar analyst Julie Utterback notes that the potential for new regulations is now a significant worry for the healthcare sector.

A Broken System: Acknowledging Flaws and Seeking Solutions

Even those profiting from the healthcare industry recognize its flaws. Top executives, including Andrew Witty of UnitedHealth, have acknowledged the need for systemic reforms. In a recent op-ed, Witty called for a healthcare system that works better for everyone, signaling a willingness to address long-standing issues.

As the healthcare debate intensifies, it is clear that the status quo is unsustainable. The tragic death of Brian Thompson has highlighted the urgent need for change, prompting stakeholders to reconsider the direction of this vital industry. Whether through legislative action or internal reforms, the path forward will require collaboration and innovation to create a more equitable and affordable healthcare system for all Americans.