How will United’s struggles impact healthcare providers?

Over the years, I have written several blog posts about a uniquely German word, schadenfreude, with means “to take pleasure in the misery of others.” It’s hard not to watch the meltdown at UnitedHealthcare, the fifth largest corporation in the world and an outsized influence over the U.S. healthcare system, and feel a sense of schadenfreude.

At the same time, we have to ask ourselves — will United’s meltdown make things easier or harder for hospitals and physician groups and other healthcare providers that make up United’s provider networks?

There are two arguments to consider here.

One, maybe United responds to the public scrutiny and federal investigations by taking a more reasonable posture in provider contract negotiations. Maybe they want to minimize public disputes and issues and settle quietly to keep the peace.

Two, maybe United responds to the public scrutiny and federal investigations by taking a very aggressive posture, showing strength rather than weakness. Maybe they want to protect the reputation they’ve worked to develop over the last 15-20 years as the junkyard dog of the healthcare system.

There is little precedent for this situation. I cannot think of another health plan that has lost almost 40% of its enterprise value in a few short weeks and seen the executive turmoil United has experienced. Yet we have seen analogous situations — when the Anthem/Cigna merger fell apart, or when a big Blue plan loses a state health benefit contract or other large employer. Yet no payor in recent memory has gone through the radical drop in stock price and financial performance that United has endured.

In most cases, payors under duress respond with aggression. Base instinct.  

As hospitals, health systems, and other provider groups prepare to absorb Medicaid cuts, deteriorating payor mix as a result of ACA premium decreases, and higher costs driven by inflation, more and more contracts will be renegotiated in an increasingly difficult environment.  With United’s market share in commercial and Medicare Advantage, many of those negotiations will involve a payor who is either leaning-in to conflict or leaning-in to quiet resolution. Forewarned is forearmed.

The safe bet is to expect conflict and be pleasantly surprised if it doesn’t happen. We have a playbook for every payor, constantly updated with the latest data and learnings. This is the expertise and experience necessary to navigate today’s complex and fast-changing landscape.