Earlier this year, McKinsey and Company dropped a report that should have sent tremors through the healthcare industry. The report, titled “What to Expect in US Healthcare in 2025,” outlines what many already feel—that insurance behemoths are running the show—but with new data to back it up.
While the report received some recognition earlier this year, it was Dr. Eric Bricker’s recent 10-minute breakdown that caught the attention of Un-covered. He peels back the layers sector by sector, and what emerges is a story not just of dollars but of control, power, and misaligned incentives.
The data reveals where the money is truly flowing.
A Changing Profit Landscape
Providers saw modest growth in their profits, from $237B in 2019 to $299B in 2024—a 1.8% compound annual growth rate (CAGR). Insurers, however, experienced a decline during that same period from $55B to $52B (-1.2% CAGR). Meanwhile, health services technology surged from $46B to $70B (8.5% CAGR), and pharmacy services followed suit, growing from $49B to $70B (7.5% CAGR).
Insurance Giants: Losing One Battle, Winning the War
While it appears insurers’ profitability dropped slightly, the story doesn’t end there. The major players aren’t solely in the business of underwriting—they also own powerful subsidiaries like Change Healthcare, EviCore, Optum, and Accredo Health, to name a few. These adjacent segments in tech and pharmacy are now growing their profits more than four times faster than traditional provider services. What looks like a decline in one area masks strategic expansion into far more lucrative verticals.
A Ballooning Healthcare Economy
Total U.S. healthcare spending averaged a 6.1% annual increase. Yet even as spending increased, the profits were concentrated in the hands of service tech and pharmacy operations owned by insurers. So why these industry segments? Because insurers are shrewd. The Affordable Care Act caps their profits, but only on paper. That cap doesn’t extend to their wholly owned subsidiaries, which serve as a legal backdoor to profitability. By channeling revenue into these entities, insurers can stay technically compliant while sidestepping federal limits and amassing huge gains.
The Middleman Monopoly
In 2024, the US healthcare industry generated $491B in total profits. Of that, $192B—nearly 40%—was captured by the insurance sector and its related tech and pharmacy subsidiaries. In other words, just 60% of the earnings reached the providers actually delivering care. This isn’t a technicality—it’s a structural flaw. While insurers may seem compliant on the surface, they’re quietly taking money away from the entities on the frontlines of care.
A System at Risk
The imbalance is clear. If nearly half of the healthcare industry’s earnings are going to entities that don’t deliver care, something is deeply wrong.
This isn’t just a financial analysis; it’s a call to action. Providers have credibility and the moral authority to reshape the system.
Understand that insurers aren’t shrinking—they’re evolving. Be prepared to engage not just with payers, but with their tech and pharmacy arms that increasingly dictate how patients can access care. Furthermore, evaluate where your organization can vertically integrate, differentiate, or carve out new lanes that reduce dependence on traditional payers.
