Americans have long grappled with high health care costs. From 2000 to 2023, health care spending in the United States tripled, rising from $1.4 trillion in 2000 to about $3.8 trillion in 2019 (pre-COVID) and then to nearly $4.9 trillion in 2023, according to the Centers for Medicare & Medicaid Services. Health care now represents about 17% of the US economy — up significantly from 5% in 1960.
"A common misconception is that health insurers set the prices for care and prescription medications, but in fact hospitals, doctors, and pharmaceutical companies decide what to charge," said Tom Murray, chief affordability officer for UnitedHealthcare. "Health care is expensive in part because providers and pharmaceutical companies have been charging more. Those higher prices have a direct impact on both employers and consumers."
We sat down with Murray to learn more about the challenges around health care affordability, as well as the company's vision for a system that helps provide better care at lower costs for patients.
Q: What role do insurers play in lowering health care costs for consumers?
Tom Murray: Insurers' role in driving down health care costs is critical. In fact, insurers are the only party in the health care ecosystem incentivized to keep the cost of care as low as possible while still maintaining high-quality health outcomes for their members and helping people avoid getting sick in the first place.
At UnitedHealthcare, we view our role as being a steward of our members' and employer customers' health care dollars, which is why we believe that every health care dollar should be spent wisely.
One of the most important opportunities we have to operate in that role of steward is through the management of our network of providers. Each year, UnitedHealthcare negotiates thousands of provider contracts, and in every one of those negotiations, we focus on securing affordable prices and smarter ways to pay for care, like discounts, bundled payments, value-based arrangements, and reimbursing more for care in lower‑cost, but quality, settings. Those agreements help keep members' bills down while allowing providers to maintain steady and more predictable patient volume.
Another way we work to make care more affordable is by promoting the delivery of care in the most appropriate setting. The cost of care can vary widely depending on the care setting you choose, so we work to help ensure our members understand the cost implications of their decisions on where to get treatment. As one example, going to an urgent care center or using telehealth for a relatively mild health concern instead of visiting an ER can potentially save someone hundreds of dollars.
Our focus on payment integrity also helps us serve as stewards of health care dollars. Insurers' payment integrity strategies are similar to a bank's fraud prevention and transaction verification systems. Just as banks monitor transactions to protect account holders from errors or misuse, payment integrity teams work behind the scenes to help ensure that claims are paid correctly, efficiently, and in compliance with policies and regulations.
Q: Most people likely aren't familiar with payment integrity. Can you tell us more about that?
Murray: Payment integrity involves verifying that the services that are billed match those that are provided. It also helps to prevent duplicate or erroneous claims and to identify potential fraud, waste, and abuse.
How could a claim be erroneous? I'll give you some examples. Let's say a claim lists an MRI when the patient only had an X‑ray. This could happen if the staff inadvertently listed the wrong CPT code, or it could be the result of software autofilling the code incorrectly. That claim now overstates the cost of the care provided, so the insurer asks the provider to correct and resubmit the claim. The claim can then be reprocessed and paid at the proper amount, protecting members from overcharges.
Insurers refer to this work as payment integrity because it encompasses all of their efforts to protect the integrity of health care transactions. And this work is important because when claims are paid inaccurately, the consequences ripple across the system. Employers and plan sponsors see the cost of care for people enrolled in their plans go up, which may result in higher premiums. Members may pay more out-of-pocket. And providers may experience delays that erode trust with health insurers they work with.
We estimate that our payment integrity initiatives generated around $1.5 billion in cost savings for UnitedHealthcare members in 2025 — savings that help protect affordability for our members and customers.
Q: Why does the cost of medical care continue to rise?
Murray: The short answer is that doctors, hospitals, and pharmaceutical companies have been charging higher prices for the care and medications they provide. We are seeing increased medical costs across the board.
I want to stress that most physicians, health care professionals, and hospitals that we work with are contracted at fair, reasonable, and market-competitive rates, and we recognize that the past five years have been exceptionally challenging times for health care providers and our health care system.
However, a small number of providers, often backed by private equity, are driving up the cost of care for the people and customers we serve. We've seen numerous examples where, following acquisition by a private equity-backed company, provider groups dramatically increase their previously market-competitive rates to meet the profit expectations of their private equity partner.
The egregious billing practices that private equity-backed groups routinely use are especially concerning, given that many of these groups have grown substantially through acquisition in recent years. And ultimately, these practices can drive up the cost of care for consumers, small businesses, large employers, labor unions, and governments.
Another contributor to rising health care costs is large health systems expanding services into smaller communities and attempting to apply their big-city pricing.
Q: The cost of prescription drugs has been an issue getting a lot of attention for many years now. Why do so many people struggle to afford prescription drugs?
Murray: Pharmaceutical companies set the price of the drugs they manufacture, and virtually nothing has inflated at a faster rate over the last 15 to 20 years than prescription drug costs. A recent report from the Institute for Clinical and Economic Review found that the inflation-adjusted median annual launch price of drugs increased by 51% from 2022 to 2024, while the annual list price increased 24% during the same period. Even after accounting for the differences in the mix of drugs approved each year, the annual net launch price increased by 33% per year.
We know that prescription medications are critical to our members' health and wellbeing, so we use a variety of strategies to drive down the costs people pay for the drugs they need. For example, we place many commonly used generic drugs as well as select brand-name medications on the lowest-cost tier of our prescription drug lists (PDLs), so members pay little or nothing at the pharmacy. We also use copay assistance, such as savings cards and patient assistance programs where available, to keep out‑of‑pocket costs down for our members.
For our members enrolled in our group fully insured plans, we use what's called point-of-sale discounts to direct the savings from rebates pharmaceutical companies provide to consumers at the time of purchase. Essentially, this means the rebate from the drug maker leads to a discounted price for the consumer, which helps ensure people aren't deferring care because they're worried about their deductible and high drug costs. Our self-funded employer customers have the option to offer a similar discount to their employees. We also offer access to medications, including select insulins, for $0 cost share to over 8 million of our members.
Get the facts: Our commitment to building a better health care system | UnitedHealthcare
This post was created by UnitedHealthcare with Insider Studios.
The post How UnitedHealthcare is working to help consumers get better care at lower prices appeared first on Business Insider