EP524: Beating Provider Network Pricing Games by Thinking About Buying Healthcare Like a Manufacturer Supply Chain, With John Quinn

John Quinn, founder and CEO of Wellnecity, joins Stacey Richter for an outtake from their conversation last fall on rethinking how self-insured employers build their provider networks. Rather than treating the network as one big, undifferentiated system, Quinn argues employers should think like a manufacturing supply chain: break healthcare into defined "subassemblies," or pods of care — pediatric care, a cancer journey, a kidney stone episode — and direct-contract for those pods whenever the price beats the fee-for-service average. If the boundaries of the pod are clear and the price comes in lower, Quinn says, the plan and the member both win, quality being equal. WHAT YOU'LL LEARN ✅ Why Stacey Richter says the provider-network debate could fill "a 20-hour show," and why networks still have real upsides — administrative infrastructure, claims coordination, guaranteed provider payment, and broad access — even as critics like Mark Cuban ask on LinkedIn, "Why do we need networks? It is just a way for insurers to play pricing games." ✅ A real example of network rigidity: a self-insured employer identified 40 physicians who cost the plan upwards of $15 million in a single plan year while patient harm was occurring, and their ASO couldn't figure out how to remove those doctors from network under the existing contract structure ✅ How John Quinn defines a "subassembly" or "pod of care" — a bounded, definable episode like pediatric care or a cancer journey — and why purchasing that pod for less than the fee-for-service average is a win for the plan and member, assuming quality stays neutral ✅ Quinn's kidney stone example: a physician who says he can now treat a kidney stone in a 48-hour to five-day episode for roughly $2,000 to $3,000, versus the typical six weeks of pain, overuse of pain medication, and a price north of $10,000 ✅ Why Quinn frames network optimization as a manufacturing supply-chain problem — the same way an automobile gets built from subassemblies sourced from specialized providers around the globe — because it's a mental model CFOs and senior leadership at self-insured employers already trust ✅ Quinn's bottom line: "We have the tech and we've got the tools to do this at this point. We just have to get ourselves out of" the fee-for-service hangover WHY THIS MATTERS Provider networks have real tradeoffs: broad access and guaranteed payment on one side, opaque pricing and rigid contracts on the other. John Quinn's pitch to self-insured employers isn't to blow up the network model, but to layer bounded, directly contracted "pods of care" on top of it wherever a clear price beats the fee-for-service average. Framing that as supply-chain sourcing, rather than a wholesale network overhaul, gives risk-averse finance and HR leaders a model they already understand — and, Quinn argues, the technology to act on it already exists. MENTIONED IN THIS EPISODE LinkedIn Post by Mark Cuban Article: Medical Economics, "An Idea Whose Time Has Gone: Healthcare Provider Networks," by Jim Jusko, JD EP457 with Cynthia Fisher: Apple Podcasts | Spotify | Other Apps EP433 with Justin Leader: Apple Podcasts | Spotify | Other Apps EP501 with Ivana Krajcinovic, PhD: Apple Podcasts | Spotify | Other Apps EP503 with Ryan Wells; Leo Spector, MD, MBA; and Adam Stavisky: Apple Podcasts | Spotify | Other Apps EP485 with Cristin Dickerson, MD: Apple Podcasts | Spotify | Other Apps EP486 with Stan Schwartz, MD: Apple Podcasts | Spotify | Other Apps EP493 with John Quinn: Apple Podcasts | Spotify | Other Apps EP495 with Mick Connors, MD: Apple Podcasts | Spotify | Other Apps EP505 with Ahilan Sivaganesan, MD: Apple Podcasts | Spotify | Other Apps === LINKS === 🔗 Show Notes with all mentioned links: Episode Page ✉️ Enjoy this podcast? Subscribe to the free weekly newsletter 🫙 Support the podcast with a small donation to the Tip Jar 📺 Subscribe to our YouTube channel 🎤 Listen on Apple Podcasts 🎤 Listen on Spotify === CONNECT WITH THE RHV TEAM === ✭ LinkedIn ✭ Threads ✭ Bluesky ✭ X 00:00 Introduction to this episode. 00:50 LinkedIn post by Mark Cuban. 01:16 EP457 with Cynthia Fisher. 01:20 EP433 with Justin Leader. 01:29 Medical Economics article by Jim Jusko, JD. 03:01 EP501 with Ivana Krajcinovic, PhD. 04:22 A breakdown of what's to come in today's conversation. 06:11 EP503 with Ryan Wells; Leo Spector, MD, MBA; and Adam Stavisky. 06:34 EP485 with Cristin Dickerson, MD. 06:49 EP486 with Stan Schwartz, MD. 07:07 EP493 with John Quinn. 07:57 The conversation with John Quinn. 10:06 Is calculating value realistic? 11:38 Looking at value calculation through an assembly lens. 14:54 The takeaway. 15:17 EP495 with Mick Connors, MD. 15:20 EP505 with Ahilan Sivaganesan, MD.

Why Self-Insured Employers and Clinicians Keep Missing Each Other, With Suhas Gondi, MD. The Sleeping Giants of Healthcare: Why Employers and Clinicians Keep Missing Each Other. Episode 523. Dr. Suhas Gondi, MD, MBA, chief medical officer at Health Strategy and an attending physician at Massachusetts General Hospital, co-wrote a New England Journal of Medicine article — "A Sleeping Giant of Health Care Affordability—Self-Insured Employers" — because most clinicians, he found, have little idea a self-insured employer, not an insurance carrier, is the one actually paying for their patients' care. Talking with Stacey Richter, Dr. Gondi argues that self-insured employers and clinicians are both "sleeping giants," each holding real power over cost and access, who rarely communicate directly — leaving patients caught in the gap. WHAT YOU'LL LEARN ✅ Why Dr. Suhas Gondi and his NEJM co-author, Zirui Song, MD, PhD, wrote for clinicians who, they found, have little sense that a self-insured employer — not the carrier name on the card — actually pays for a patient's care ✅ How a GLP-1 prescription can get denied at the pharmacy counter even after a clinician verifies coverage, because the employer has quietly moved GLP-1 coverage exclusively through a single third-party prescribing and coaching vendor ✅ Why GLP-1 spending alone can push a self-insured employer's pharmacy costs up 9% to 20% in a year, and why the roughly eight-year payback period employers are counting on assumes patients stay adherent far longer than most actually do ✅ How oncology site-of-care steering — an employer declining to pay a roughly 40% premium for infusion at a hospital-owned center instead of a physician's office — can look to the patient and oncologist like a denied cancer drug ✅ Why Dr. Gondi says EHRs like Epic are built to optimize revenue for hospital-system customers, not to surface a lower-cost site of care for patients or plan sponsors ✅ Dr. Gondi's advice for closing the gap: clinicians and employers should communicate directly, especially before a coverage change lands on patients, rather than assuming direct contracting is the only fix WHY THIS MATTERS Roughly half to 60% of the US population has commercial insurance, and nearly three-quarters of large employers self-insure that coverage — yet most clinicians have no visibility into the plan-level decisions those employers make, and most employers have no channel to explain those decisions to the doctors whose patients are affected. Both sides, Dr. Gondi says, usually believe they're doing the right thing — covering the GLP-1, covering the cancer drug — and the patient still gets lost in between. Closing that gap doesn't require full direct contracting, he argues, just employers and local provider groups actually talking to each other before a coverage change lands on a patient, not after. MENTIONED IN THIS EPISODE Study: New England Journal of Medicine article, "A Sleeping Giant of Health Care Affordability—Self-Insured Employers," by Suhas Gondi, MD, MBA, and Zirui Song, MD, PhD EP406 with Lauren Vela: Apple Podcasts | Spotify | Other Apps EP519 with Lisa Rosenbaum, MD: Apple Podcasts | Spotify | Other Apps EP509 with Patrick Nelli: Apple Podcasts | Spotify | Other Apps EP494 with Sarah Emond: Apple Podcasts | Spotify | Other Apps EP501 with Ivana Krajcinovic, PhD: Apple Podcasts | Spotify | Other Apps EP468 with Matt McQuide: Apple Podcasts | Spotify | Other Apps Article: Acquired's episode on how Epic quietly powers American healthcare === LINKS === 🔗 Show Notes with all mentioned links: Episode Page ✉️ Enjoy this podcast? Subscribe to the free weekly newsletter 🫙 Support the podcast with a small donation to the Tip Jar 📺 Subscribe to our YouTube channel 🎤 Listen on Apple Podcasts 🎤 Listen on Spotify === CONNECT WITH THE RHV TEAM === ✭ LinkedIn ✭ Threads ✭ Bluesky ✭ X 00:00 Introduction to this episode. 00:35 A big thank you. 06:22 The conversation with Dr. Suhas Gondi. 07:08 Why Dr. Suhas Gondi and his coauthor wrote their article. 09:24 Why the affordability of care and the decisions self-employers are making about coverage matter to clinicians. 12:12 What the term "sleeping giants" implies and how that reflects the reality of healthcare. 14:31 A case study. 21:24 How the patient can still get lost even when both the employer and clinician think they're doing the right thing. 22:52 An example from the oncology space. 28:47 Dr. Suhas Gondi's advice to clinicians. 30:55 The communication gap between clinicians and employers. 33:30 Why the presence of middlemen should not prevent communication between clinicians and employers.

Ask Me Anything: How Does GoodRx Actually Make Money, and Who Really Pays for the Discount? Episode 522. A listener asked Stacey Richter a deceptively simple question: how exactly does GoodRx make money? To answer it, this AMA episode revisits a 2021 conversation with Ge Bai, PhD, CPA, professor of accounting at the Johns Hopkins Carey Business School and of health policy and management at the Johns Hopkins Bloomberg School of Public Health, recently nominated to serve as Assistant Secretary at the Department of Health and Human Services (HHS). Ge Bai lays out exactly how GoodRx turns pharmacy-PBM contract dysfunction into a business, and Stacey updates listeners on what's changed—and what hasn't—in the years since. WHAT YOU'LL LEARN ✅ Why GoodRx is purely a pricing platform with no pharmacy of its own—unlike Amazon, which operates its own pharmacy ✅ How PBM contracts requiring pharmacies to offer insurers their "best price" force cash list prices artificially high, the exact dysfunction GoodRx monetizes ✅ How GoodRx's network of contracted PBMs—including Express Scripts and OptumRx—collects a per-dispense fee every time a patient uses a GoodRx card ✅ Why pharmacies lose out twice: they never collect their high list price, and they still owe a fee to the PBM that "referred" the cash-pay patient to them ✅ What's changed since 2021: a wave of new cash-pay competitors like Mark Cuban Cost Plus Drugs, GLP-1-driven cash-pay behavior, and proposed legislation targeting "Most Favored Nation" (lesser-of) clauses in PBM contracts ✅ Ge Bai's recent nomination to Assistant Secretary at HHS, building on research she has used to testify before Congress and shape healthcare policy WHY THIS MATTERS GoodRx's entire business model runs on a single structural quirk: PBM contracts require pharmacies to keep their list price higher than any insurer's negotiated rate, which pushes cash prices artificially high for anyone without a coupon. As Stacey Richter puts it, this dysfunction "is sadly pretty much the same" today as when Ge Bai first explained it in 2021, even as new cash-pay entrants and proposed "Most Favored Nation" contract restrictions start to reshape the landscape. MENTIONED IN THIS EPISODE EP520 with Stacey: Apple Podcasts | Spotify | Other Apps EP517 with Stacey: Apple Podcasts | Spotify | Other Apps EP516 with Ophelia Johnson: Apple Podcasts | Spotify | Other Apps EP439 with Luke Slindee, PharmD: Apple Podcasts | Spotify | Other Apps === LINKS === 🔗 Show Notes with all mentioned links: [Show Notes link — episode not yet live, add once published] ✉️ Enjoy this podcast? Subscribe to the free weekly newsletter: newsletter 🫙 Support the podcast with a small donation to the Tip Jar 🎤 Listen on Apple Podcasts 🎤 Listen on Spotify 📺 Subscribe to our YouTube channel === CONNECT WITH THE RHV TEAM === ✭ LinkedIn ✭ Threads ✭ Bluesky ✭ X 00:00 Introduction to this episode. 06:22 The conversation with Ge Bai. 06:28 The difference between GoodRx and Amazon Pharmacy? 06:53 The one thing GoodRx makes money from. 07:55 How is GoodRx getting paid? 08:18 Are there middlemen in GoodRx's financial model? 09:25 How PBMs play into the GoodRx model. 10:29 Where the pharmacy fits into the deals created by GoodRx. 11:59 What's changed since this conversation with Ge Bai.

RCM: Why Revenue Cycle Management Is Healthcare's $200B Hot Potato, With Andrew Tsang (EP521) How Revenue Cycle Management (RCM) Became an Over $200 Billion Healthcare Hot Potato. Episode 521. Revenue cycle management (RCM) sounds like the least sexy phrase in healthcare — a back-office spreadsheet problem. It isn't. Andrew Tsang, an independent healthcare analyst and writer of the Substack Health Is Other People, with 15+ years across providers, payers, consulting, and policy, joins Stacey Richter to unpack how RCM has grown into a $200-plus-billion industry that eats roughly a third of every healthcare dollar spent — not on care, but on the fight over who pays for it. Together they trace RCM's front end, middle, and back end, and the "hot potato" that lands on whoever has the least leverage to fight back. WHAT YOU'LL LEARN ✅ How revenue cycle management (RCM) grew into a $200-plus-billion industry — Andrew Tsang puts RCM-related market cap at roughly $217 billion, and estimates roughly a third of every healthcare dollar goes to the fight over payment, not to care ✅ The three phases of RCM (front-end eligibility and prior authorization, middle clinical coding, and back-end claims adjudication and appeals) and why the "hot potato" of financial responsibility lands on whoever has the least administrative leverage — patients, independent practices, or self-funded employers ✅ Why a routine screening colonoscopy can flip to a diagnostic procedure — and an unexpected bill — the moment a polyp is found, even though the ACA mandates the screening itself be free ✅ How the prior authorization burden (physicians average roughly 39 prior auths a week) forces independent practices to compete on administrative capacity rather than clinical outcomes, accelerating consolidation into larger health systems ✅ Why self-funded employers face their own version of the hot potato through stop-loss "lasering," where a stop-loss carrier can exclude a specific high-cost employee from coverage after a catastrophic claim ✅ Why direct contracting — agreeing on price upfront — is Andrew Tsang's proposed way to opt out of the RCM hot potato game entirely WHY THIS MATTERS Revenue cycle management isn't a niche back-office function — it's a $200-plus-billion economy built on claim-by-claim fights over who pays. As Stacey Richter puts it, this isn't a story about villains; it's a story about an industry built around claim-by-claim fistfights. Whoever has the least administrative leverage in any given moment — patient, independent practice, or self-funded employer — is the one who winds up eating the cost. MENTIONED IN THIS EPISODE LinkedIn Post by Andrew Tsang, featuring his Revenue Cycle Market Landscape interactive chart EP497 with Zack Kanter: Apple Podcasts | Spotify | Other Apps EP363 with David Scheinker, PhD: Apple Podcasts | Spotify | Other Apps LinkedIn Post by Sheri Mancini, MD, FACS EP494 with Sarah Emond: Apple Podcasts | Spotify | Other Apps === LINKS === 🔗 Show Notes with all mentioned links: Episode Page ✉️ Enjoy this podcast? Subscribe to the free weekly newsletter 🫙 Support the podcast with a small donation to the Tip Jar 📺 Subscribe to our YouTube channel 🎤 Listen on Apple Podcasts 🎤 Listen on Spotify === CONNECT WITH THE RHV TEAM === ✭ LinkedIn ✭ Threads ✭ Bluesky ✭ X 00:00 Introduction to this episode. 02:13 What revenue cycle management is. 03:22 How RCM is an endless game of hot potato. 07:10 The conversation with Andrew Tsang. 08:24 Is it actually a cycle? 08:54 How big the RCM industry actually is. 09:49 Defining revenue cycle management. 12:13 Why patients may spend more time doing revenue cycle tasks than with their doctor. 17:12 Who pays and why? 19:56 An example of RCM working within something like a colonoscopy. 22:55 The worst part about this whole revenue cycle. 24:49 How RCM affects independent doctors. 29:51 How RCM affects self-funded employers and stop-loss carriers.

Cash-Pay Generic Drugs and the PBM Spread Pricing Problem (EP520) Cash-pay generic drugs are one of the few corners of US healthcare where a real, functioning market already exists — which is why Stacey Richter argues policymakers need to tread carefully when trying to "fix" drug affordability. In this solo episode, Stacey explains why cash generic prices can run as low as $1 a prescription, then plays clips from four past guests — Ge Bai, PhD, CPA; Bryce Platt, PharmD; Benjamin Jolley, PharmD; and Luke Slindee, PharmD — showing how inserting a PBM extracts $41 out of every $100 spent, leaving patients paying more for the "privilege" of using their insurance. WHAT YOU'LL LEARN ✅ Why cash-pay generic drugs are one of the few genuinely functioning markets left in US healthcare, with multisource manufacturer competition keeping prices as low as $1 to $18 per prescription ✅ Why using insurance/PBM coverage makes the 20 most prescribed generics more expensive 43% of the time overall, and up to 79% of the time in the deductible phase, per Ge Bai, PhD, CPA's research in Annals of Internal Medicine ✅ How PBMs extract $41 out of every $100 spent on generic drugs that cost roughly 47 cents to manufacture, largely through the administrative overhead of risk pooling ✅ How Most Favored Nation "lesser of" clauses in PBM-pharmacy contracts punish pharmacies for lowering their cash prices, and why Luke Slindee, PharmD, argues removing that single clause could unlock a more robust cash-pay market without pulling generics from insurance entirely ✅ Why generic drug adoption has slowed from about one month to six months to reach peak uptake, which Bryce Platt, PharmD, ties to PBM formulary control rather than reduced competition or prescriber resistance ✅ Four policy ideas Stacey floats for keeping generics affordable without wrecking the underlying market: eliminating MFN clauses, funded wallets or prepaid cards, pre-funded cash-pay pharmacy relationships, and removing generics from PBM adjudication entirely WHY THIS MATTERS Generic drugs are one of the only truly functioning markets left in US healthcare, and cash prices are already low because of it. But policymakers trying to make medications more affordable often reach for the same lever — routing everything through insurance/PBM adjudication — which the data shows frequently raises what patients pay while handing PBMs a 41-cent cut of every dollar spent. As Stacey puts it, "you have to be really careful what levers you push because you can't see what they're attached to," and the wrong fix could break the one part of healthcare that's actually working. MENTIONED IN THIS EPISODE EP444 with Ann Kempski: Apple Podcasts | Spotify | Other Apps LinkedIn Post by Bryce Platt, PharmD EP495 with Mick Connors, MD: Apple Podcasts | Spotify | Other Apps EP420 with Ge Bai, PhD, CPA: Apple Podcasts | Spotify | Other Apps EP422 with Benjamin Jolley, PharmD: Apple Podcasts | Spotify | Other Apps EP517 with Stacey: Apple Podcasts | Spotify | Other Apps LinkedIn Post by Bryce Platt, PharmD EP439 with Luke Slindee, PharmD: Apple Podcasts | Spotify | Other Apps LinkedIn Post by Patrick Moore EP465 with Chris Crawford: Apple Podcasts | Spotify | Other Apps === LINKS === 🔗 Show Notes with all mentioned links: Show Notes ✉️ Enjoy this podcast? Subscribe to the free weekly newsletter 🫙 Support the podcast with a small donation to the Tip Jar 📺 Subscribe to our YouTube channel 🎤 Listen on Apple Podcasts 🎤 Listen on Spotify === CONNECT WITH THE RHV TEAM === ✭ LinkedIn ✭ Threads ✭ Bluesky ✭ X 00:00 Introduction to this episode. 03:48 Intermediaries versus functioning markets. 05:30 The use case for today's episode. 10:56 The reason why cash-pay generics are cheap right now. 11:42 The value proposition of PBMs versus cheap generics. 16:09 What risk pooling is and how it plays into all of this. 26:16 Solutions to keeping generics affordable.

Cognitive Atrophy and Referral Incentives Breaking Primary Care, With Lisa Rosenbaum, MD (EP519) Primary care physicians are leaving traditional practice for concierge medicine in visible numbers—and the question is whether that exodus is an unavoidable consequence of how the system is built, or something we've simply chosen not to fix. Stacey Richter talks with Dr. Lisa Rosenbaum, a cardiologist at Beth Israel Deaconess Medical Center (BIDMC) and national correspondent for the New England Journal of Medicine , who recently devoted an entire season of her NEJM podcast, Not Otherwise Specified , to the state of primary care. Together they test three forces reshaping the field—cognitive atrophy, referral incentives, and care fragmentation—against a single question: inevitable, or fixable? WHAT YOU'LL LEARN ✅ Why Dr. Lisa Rosenbaum calls the risk of "cognitive atrophy" among primary care physicians a generational threat rather than an individual one—and why she believes it is not inevitable ✅ How financial incentives that pay far more for a specialist visit than a primary care visit (roughly 5% of healthcare dollars for close to 35% of outpatient visits) structurally push referrals earlier and more often than necessary ✅ Why "relational expertise"—the judgment a doctor builds by knowing a patient over time—is, in Dr. Rosenbaum's view, primary care's real and undervalued skill set ✅ How care fragmentation, illustrated by Miriam Paramore's LinkedIn essay about her father's end-of-life care, leaves patients bouncing among specialists with no one taking ownership of the whole picture ✅ Why Dr. Rosenbaum argues that blaming everything on structural constraints "strip[s] ourselves of our own agency," and what she thinks physicians and healthcare buyers should each do about it WHY THIS MATTERS Roughly 70% of physicians are employed today, and about 5% of every healthcare dollar goes to primary care despite it covering close to 35% of all outpatient visits—numbers that, per Dr. Rosenbaum, reflect choices the system has made, not laws of nature. When primary care doctors lose the time and incentive to build relationships with patients, the system loses its quarterback, and patients end up fragmented across specialists with no one accountable for the whole picture. Dr. Rosenbaum's core argument is that none of this is inevitable, but fixing it requires both structural change and individual physicians and healthcare buyers reclaiming their own agency. MENTIONED IN THIS EPISODE EP504 with Ryan Jacobs: Apple Podcasts | Spotify | Other Apps EP473 with Kenny Cole, MD: Apple Podcasts | Spotify EP391 with Scott Conard, MD: Apple Podcasts | Spotify | Other Apps Article: "Ordinary Rural Death: My Father's End-of-Life Journey" by Miriam Paramore EP409 with Larry Bauer, MSW, MEd: Apple Podcasts | Spotify | Other Apps === LINKS === 🔗 Show Notes with all mentioned links: Show Notes ✉️ Enjoy this podcast? Subscribe to the free weekly newsletter 🫙 Support the podcast with a small donation to the Tip Jar 📺 Subscribe to our YouTube channel 🎤 Listen on Apple Podcasts 🎤 Listen on Spotify === CONNECT WITH THE RHV TEAM === ✭ LinkedIn ✭ Threads ✭ Bluesky ✭ X 00:00 Introduction to this episode. 03:47 Cognitive atrophy: what is it in terms of primary care providers? 08:56 Why Lisa Rosenbaum, MD, did an entire series on primary care. 11:32 Why physicians need to practice at the top of their license. 13:54 Why a good internist is a "quarterback." 16:23 How family medicine and procedures play into skill atrophy. 20:21 The majority versus the minority in primary care. 21:00 Is cognitive atrophy inevitable for primary care providers? 23:34 Full-spectrum clinical scope versus referrals in primary care. 25:51 The fix for too many referrals in primary care. 27:36 Why the solution is not an either/or. 30:08 Longitudinal relationships versus fragmentation. 36:07 Is this inevitable, or is this fixable? 39:02 What every listener in a position of power needs to ask themselves.

The ASO vs. TPA Decision That Quietly Costs Self-Funded Employers More What's the real difference between an ASO and a TPA — and why does it matter that self-insured employers working with an ASO pay, by one referenced estimate, about 4.7% more than the insured book of business for the same care? In this Ask Me Anything, Stacey Richter puts a listener question from Dr. Alex Sommers, MD, ABEM, DipABLM, president of Astia Health, to Claire Brockbank, newly appointed director of the 32BJ Health Fund, who breaks down how ASO and TPA models diverge on ownership, networks, and incentives. WHAT YOU'LL LEARN ✅ How an ASO (administrative services only) arrangement differs structurally from a TPA (third-party administrator) — in Claire Brockbank's words, an ASO is essentially "a TPA that's owned by one of the big insurance carriers" ✅ Why bringing your own network, doing carve-outs, or direct contracting is typically much easier with a TPA than with an ASO, since an ASO's network comes bundled in ✅ How ASO incentive structures can lead carriers to charge self-funded employers more to offset thinner margins on their insured book — and why a study referenced by Luke Prettol found self-insured ASO clients pay roughly 4.7% more on average ✅ Why many TPAs, as newer market entrants built around technology, can move faster on things like claims-audit integrations than legacy carrier systems that can take up to 18 months to implement changes ✅ A real-world example of how network rigidity under an ASO made it difficult for one employer to remove 40 identified unsafe physicians from its network ✅ Why reading a TPA contract carefully still matters, since aligned incentives are a structural possibility with a TPA, not a guarantee WHY THIS MATTERS ASO and TPA are routinely used interchangeably across the industry, but as Claire Brockbank lays out, the distinction isn't just terminology — it's what determines how much actual control a self-funded employer has over its own health plan. An ASO bundles in the carrier's network and legacy systems, often with built-in incentive misalignments that can show up as higher costs than the insured book of business pays. A TPA leaves more room to bring your own network, negotiate direct contracts, and move quickly when something needs to change. For any plan sponsor sorting out vendor options, knowing which model is actually on the table is foundational to getting the rights, rates, and flexibility they're after. MENTIONED IN THIS EPISODE Post by Luke Prettol EP453 with Claire Brockbank: Apple Podcasts | Spotify | Other Apps EP498 with Mark Noel: Apple Podcasts | Spotify | Other Apps === LINKS === 🔗 Show Notes with all mentioned links: Show Notes ✉️ Enjoy this podcast? Subscribe to the free weekly newsletter 🫙 Support the podcast with a small donation to the Tip Jar 🎤 Follow us on Apple Podcasts 🎤 Follow us on Spotify 📺 Subscribe to our YouTube channel === CONNECT WITH THE RHV TEAM === ✭ LinkedIn ✭ Threads ✭ Bluesky ✭ X 00:00 Introduction to this episode. 00:38 Dr. Alex Sommers' question. 04:05 Claire's answer to what differentiates a TPA and an ASO vendor. 04:25 What an ASO vendor is. 04:57 What a TPA is. 06:52 The pros and cons to choosing an ASO as a carrier. 09:05 The pros and cons to TPAs.

What if a prior authorization has less to do with your medical need than with how big a rebate check a PBM is collecting on a competing drug? In this solo deep dive — a direct follow-up to last week's conversation with Ophelia Johnson on GLP-1s and cash pay (EP516 link below) — host Stacey Richter walks through a "Brand Darling" vs. "Brand 2" case study showing how PBM/GPO rebate contracting and the Inflation Reduction Act's pressure on list prices can turn prior auths and step therapy into negotiating leverage rather than clinical guardrails. She also breaks down the GoodRx reverse-auction mechanic and why a growing number of pharma manufacturers are responding to rebate-driven formulary exclusion by going cash-pay direct to patients. WHAT YOU'LL LEARN ✅ How PBM/GPO rebate contracts create a "rebate cliff" that locks new or lower-cost drugs out of formulary, regardless of price or clinical efficacy ✅ Why prior authorizations and step therapy are often used as a financial negotiating lever to extract bigger rebates from a dominant "Brand Darling," rather than as a clinical-necessity check ✅ How the Inflation Reduction Act's list-price pressure is collapsing the rebate spread that funds the current PBM contracting model ✅ Why cash-pay and direct-to-patient strategies are becoming a more attractive option for pharma brands excluded from preferred formulary tiers ✅ How GoodRx's reverse-auction model actually generates its advertised cash prices, and how GoodRx profits from sponsored placement, copay-card integration, and data sales ✅ Why copay accumulators and maximizers can erase the value of a manufacturer's copay card even when a patient does get coverage WHY THIS MATTERS For self-insured employers and plan sponsors footing the bill, this episode is a reminder that a prior authorization or a formulary tier placement may be a financial calculation between a PBM and a manufacturer first, and a clinical determination second. Because coinsurance is calculated off an inflated list price, the same rebate-cliff dynamics that lock a lower-cost drug out of formulary can also push more cost directly onto plan members. And as the Inflation Reduction Act squeezes the rebate spread that funds this model, cash-pay and direct-to-patient strategies are emerging as an alternative worth watching — even though, as Stacey notes, the usual PBM players are often still involved behind the scenes. MENTIONED IN THIS EPISODE EP516 with Ophelia Johnson: Apple Podcasts | Spotify | Other Apps Post by Robyn Tikia AEE13 with Ge Bai, PhD, CPA: Apple Podcasts | Spotify | Other Apps === LINKS === 🔗 Show Notes with all mentioned links: Show Notes ✉️ Enjoy this podcast? Subscribe to the free weekly newsletter 🫙 Support the podcast with a small donation to the Tip Jar 🎤 Follow us on Apple Podcasts 🎤 Follow us on Spotify 📺 Subscribe to our YouTube channel === CONNECT WITH THE RHV TEAM === ✭ LinkedIn ✭ Threads ✭ Bluesky ✭ X 00:00 Introduction to this episode. 03:53 What needs to be true, no matter what your pharma brand is. 04:20 Why a PBM picks a brand "darling." 05:10 A message to PBM sales teams. 09:43 Clarifying a point about formulary decision making. 14:34 When might a cash-pay strategy start to look rational for a pharma brand? 16:25 Cash pay versus formulary from the patient perspective. 19:50 How PBMs feel about brands going cash pay. 20:56 Why GoodRx is allowed to sell non-formulary Rxs at cash prices on PBMs. 23:51 A clarification of points on GoodRx. 26:19 A point to ponder about discount coupons.

Only about half of new GLP-1 prescriptions got approved for coverage in 2023 — a gap Ophelia Johnson says is why pharma manufacturers started building cash-pay and direct-to-employer channels instead of waiting on PBMs. Johnson, who built new channels for the manufacturer behind the GLP-1 boom and now runs e-fi.works, walks Stacey Richter through how the money moves with GoodRx and telehealth, including the buydown math behind a $500 list-price drug becoming a $100 cash price. This is Episode 516 (EP516) of Relentless Health Value. WHAT YOU'LL LEARN ✅ Why IRA maximum fair price pressure, PBM reform lawsuits, and roughly 50% of new GLP-1 prescriptions going unapproved for coverage in 2023 pushed manufacturers to build cash-pay channels ✅ The buydown math behind cash pay: a manufacturer pays savings-coupon providers like GoodRx a flat fee instead of a PBM rebate to bring a $500 list-price drug down to a $100 cash price ✅ How telehealth and white-label or manufacturer-owned pharmacies add a second cash-pay channel, with new shipping and supply-chain costs once the PBM is cut out ✅ Why "direct-to-employer" GLP-1 deals are a misnomer — PBM exclusivity clauses bar manufacturers from selling straight to employers, routing them through third-party transparent administrators ✅ Ophelia Johnson's advice to plan sponsors: shift formulary conversations from rebate yields toward auditable medication abandonment rates and total cost of care WHY THIS MATTERS Stacey Richter's follow-the-dollar lens usually points at employers and patients as the ultimate purchasers — but the incentives driving pharma manufacturers matter just as much for collaboration to work. Legislative pressure on rebates, PBM reform litigation, and a GLP-1 boom that left half of new prescriptions unfilled in 2023 are pushing manufacturers toward cash-pay and direct-to-employer models that bypass PBM rebates entirely. That changes formulary math for plan sponsors and raises the stakes on gross-to-net accuracy for manufacturers. As Richter puts it, fair profit versus profiteering comes down to making more money when a patient does worse. MENTIONED IN THIS EPISODE Post by David Alderman Post by Ann Lewandowski Post by Madelaine Feldman, MD Post by Bryce Platt, PharmD AEE13 with Ge Bai, PhD, CPA: Apple Podcasts | Spotify | Other Apps EP439 with Luke Slindee, PharmD: Apple Podcasts | Spotify | Other Apps EP426 with Nina Lathia, RPh, MSc, PhD: Apple Podcasts | Spotify | Other Apps === LINKS === 🔗 Show Notes with all mentioned links: Show Notes ✉️ Enjoy this podcast? Subscribe to the free weekly newsletter 🫙 Support the podcast with a small donation to the Tip Jar 🎤 Follow us on Apple Podcasts 🎤 Follow us on Spotify 📺 Subscribe to our YouTube channel === CONNECT WITH THE RHV TEAM === ✭ LinkedIn ✭ Threads ✭ Bluesky ✭ X 00:00 Introduction to this episode. 08:07 The conversation with Ophelia Johnson. 08:14 What is cash pay? 08:59 Why is this a thing and how did we get here? 12:28 The different ways that a patient could go about receiving and paying for their drug. 13:22 What's going on behind the scenes between GoodRx and the pharma manufacturer. 17:02 What dispense fees are and how they work. 17:41 A sidenote about next week's episode. 20:03 A sidenote about the pharma manufacturer POV. 21:44 The pharma supply chain in telehealth. 25:27 Why claims validation has never been more important. 28:19 Where do employers fit in all of this? 32:45 Where does it make sense to consider these alternative business models in lieu of the risks? 35:04 Why mapping the incentives is important. 38:42 Ophelia's advice to pharma manufacturers. 40:41 Ophelia's advice to plan sponsors. 42:46 More of Ophelia's advice to payers.

Is it fraud — or is it just a perverse incentive? That question sits at the center of Hunterbrook Media's latest investigation into skilled nursing facilities (SNFs), and the answer, as Stacey Richter puts it, matters to self-insured employers and anyone else paying for healthcare. In this episode, Stacey speaks with Michelle Cera, PhD, investigative reporter at Hunterbrook Media, whose investigation — triggered by a tip from an overwhelmed elder abuse attorney — uncovered a pattern of systematic understaffing, self-reported CMS STAR rating manipulation, executive bonuses tied to expense-cutting, and related-party financial engineering that funnels Medicare and Medicaid dollars straight back to corporate, while the most vulnerable patients pay with their health and their lives. WHAT YOU'LL LEARN ✅ How for-profit SNF chains systematically recruit the sickest patients to maximize Medicare and Medicaid reimbursement, then staff below what those patients actually need — keeping the difference as profit and, in some cases, doubling executive bonuses in a single year ✅ How Hunterbrook analyzed millions of publicly available CMS data points across roughly 14,000 skilled nursing facilities, applying a UCSF-developed expected-hours formula tied to patient acuity, to quantify the gap between staffing hours billed and care hours actually provided ✅ Why CMS STAR ratings — the primary tool consumers use to choose nursing homes for loved ones — are largely informed by self-reported, unaudited facility data, and how former employees described manipulation of those ratings as rampant ✅ How related-party transactions allow SNF chains to route Medicare and Medicaid dollars through owned subsidiaries for goods and services like pharmacy, equipment, and insurance — with CMS flagging the overcharges as disallowed costs but lacking any mechanism to recoup them ✅ How a 2024 CMS final rule establishing a federal minimum of 3.48 HPRD (hours per resident day) and a 24/7 on-site registered nurse requirement was ultimately rescinded after industry lobbying — and what that rescission reveals about regulatory capture in the SNF sector ✅ Four concrete policy fixes: codify federal minimum staffing hours adjusted for patient acuity, strengthen reporting standards and auditing so no quality metric is entirely self-reported, create a recoupment mechanism for flagged related-party overcharges, and reform STAR ratings so consumers can distinguish independently verified data from self-reported data WHY THIS MATTERS Right now, Stacey argues, we are endlessly trying to keep up with thousands of profit-extracting geniuses and creating mazes of complexity to regulate actors who have no societal construct keeping them in check. The SNF sector is a case study in what happens when there is no agreed-upon definition of harm — when perverse incentives are just incentives. These are taxpayer, employer, and patient co-insurance dollars potentially going into someone's pocket while a patient is simultaneously being hurt. The 65-plus population is growing, the market is expanding, and — as Hunterbrook's research shows — the model that works from a profit perspective is to take sicker patients, cut the highest-paid staff first, and grade your own homework so no one notices. That playbook, once proven, spreads fast. MENTIONED IN THIS EPISODE EP511 with Dr. Siva and Monica Lypson, MD, MHPE: Apple Podcasts | Spotify | Other Apps EP509 with Patrick Nelli: Apple Podcasts | Spotify | Other Apps Article: Hunterbrook Media's full SNF investigation Study: University of Pennsylvania analysis on repealing the CMS minimum staffing rule EP482 with Preston Alexander: Apple Podcasts | Spotify | Other Apps === LINKS === 🔗 Show Notes with all mentioned links: Show Notes ✉️ Enjoy this podcast? Subscribe to the free weekly newsletter 🫙 Support the podcast with a small donation to the Tip Jar 🎤 Follow us on Apple Podcasts 🎤 Follow us on Spotify 📺 Subscribe to our YouTube channel === CONNECT WITH THE RHV TEAM === ✭ LinkedIn ✭ Threads ✭ Bluesky ✭ X 00:00 Introduction to this episode. 00:40 Fixing the root cause problems with the American healthcare system. 01:50 Today's root problem topic. 05:12 Introducing today's guest and her latest investigation. 07:43 The conversation with Michelle Cera, PhD. 08:35 How Hunterbrook Media's latest investigation into skilled nursing facilities got started. 13:20 How inadequate staffing creates neglect in SNFs. 14:03 Connecting the dots between staffing and resident needs. 15:33 Why skilled nursing facility chains are extremely profitable to the detriment of patients. 17:15 How star ratings on CMS can be skewed in the favor of these SNF chains. 21:56 The perverse incentives playbook. 23:20 An example of how executive bonuses are tied to perverse incentives. 27:53 How lobbying walked back the CMS minimum staffing regulation for SNFs. 29:05 Another note in the perverse incentives playbook. 30:59 How much of these chain SNFs' funding is from taxpayer dollars. 33:16 Another perverse incentive: overpaying sister companies. 35:07 Why CMS can flag overcharging, but they don't have a cost recoup structure. 38:10 The case to be made about how current business dealings within SNFs is fraudulent. 39:30 How to fix the perverse incentives happening in skilled nursing facilities.