Cash Pay From the Pharma Manufacturer Point of View, With Ophelia Johnson

The PBM Rebate Math That Turns Prior Auths Into a Pharma Negotiating Tool 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 ✉️ 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 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.

How the Sutter Health Antitrust Case Opened the Door for Employers and Members to Recover Hospital Overcharge Damages What happens when a self-insured employer or health plan member finally says enough is enough and takes a consolidated hospital system to court over anticompetitive contracting practices? That's exactly what antitrust attorney Matthew Cantor did — and after 13 years of litigation, three trips to the Ninth Circuit Court of Appeals, and a first trial, he and his team secured a landmark $228.5 million settlement in Sidibe v. Sutter Health. In this episode, Stacey Richter speaks with Matthew Cantor, founding partner of Shinder Cantor Lerner LLP, about one of the most significant antitrust victories in healthcare history — and what it means for self-insured employers, plan sponsors, and everyday members who have been paying inflated premiums because of hospital market power. WHAT YOU'LL LEARN ✅ How all-or-nothing clauses and anti-steering/anti-tiering provisions allow dominant hospital systems to lock up local geographies and block members from accessing lower-cost, higher-quality care ✅ Why holding large, consolidated health systems legally accountable is so difficult — including the halo effect, the FTC's lack of jurisdiction over nonprofits, and the challenges of unsympathetic witnesses ✅ How Sidibe v. Sutter Health established a groundbreaking precedent allowing indirect purchasers — employers and plan members paying inflated premiums — to recover damages from hospital overcharges ✅ Why the DOJ is already pursuing similar anti-steering litigation against health systems like OhioHealth and NewYork-Presbyterian ✅ Four concrete options for employers ready to stop being passive price takers: federal legislation, state legislation, engaging the DOJ and state attorneys general, and direct litigation WHY THIS MATTERS Hospital charges make up roughly 50% of underlying medical costs, which in turn represent 80–85% of health insurance premiums. When consolidated systems operate in local markets with little competition, everyone — employers and members alike — pays more. Sidibe v. Sutter Health shows that accountability is possible. === LINKS === 🔗  Show Notes with all mentioned links:  https://cc-lnk.com/EP514 ✉️  Enjoy this podcast? Subscribe to the free weekly newsletter: https://relentlesshealthvalue.com/join-the-relentless-tribe 🫙  Support the podcast with a small donation to the Tip Jar: https://relentlesshealthvalue.com/join-the-relentless-tribe 🎤  Listen on Apple Podcasts  https://podcasts.apple.com/us/podcast/feed/id892082003?ls=1 🎤  Listen on Spotify  https://open.spotify.com/show/6UjgzI7bScDrWvZEk2f46b 📺  Subscribe to our YouTube channel   https://www.youtube.com/@RelentlessHealthValue === CONNECT WITH THE RHV TEAM === ✭ LinkedIn   https://www.linkedin.com/company/relentless-health-value/ ✭ Threads  https://www.threads.net/@relentlesshealthvalue/ ✭ Bluesky   https://bsky.app/profile/relentleshealth.bsky.social ✭ X   https://twitter.com/relentleshealth/ 00:00 Episode Setup 03:06 Why Hospitals Drive Premiums 05:47 Sutter Case Overview 09:36 Matt Cantor Background 12:57 Local Market Power 17:50 Why Litigation Matters 22:03 Indirect Purchaser Breakthrough 28:11 Why Sutter And Winning Evidence 35:53 What Employers Can Do Now 41:46 Closing And Resources

Stacey Richter introduces Episode 513 of Relentless Health Value as a primer on anti-competitive hospital contracting with Brennan Bilberry of Fairmark Partners, setting up next week's interview with Matt Cantor, lead litigator in the Sutter Health antitrust class action that led to a $575 million settlement over alleged price inflation using market power. Bilberry explains how hospital consolidation enables higher commercial rates and outlines a four-part contracting playbook: all-or-nothing contracting requiring inclusion of all system facilities at high prices; anti-steering and anti-tiering clauses blocking lower-cost benefit designs; price gag clauses limiting disclosure of negotiated rates despite transparency rules; and pressure on ostensibly independent providers to sell or align pricing with the dominant system. The episode links these patterns to DOJ actions against OhioHealth and New York Presbyterian and emphasizes collective action, regulation, and litigation to address them. === LINKS === 🔗 Show Notes with all mentioned links: https://cc-lnk.com/EP513 ✉️ Enjoy this podcast? Subscribe to the free weekly newsletter: https://relentlesshealthvalue.com/join-the-relentless-tribe 🫙 Support the podcast with a small donation to the Tip Jar: https://relentlesshealthvalue.com/join-the-relentless-tribe  🎤 Listen on Apple Podcasts https://podcasts.apple.com/us/podcast/feed/id892082003?ls=1 🎤 Listen on Spotify https://open.spotify.com/show/6UjgzI7bScDrWvZEk2f46b 📺 Subscribe to our YouTube channel https://www.youtube.com/@RelentlessHealthValue === CONNECT WITH THE RHV TEAM === ✭ LinkedIn https://www.linkedin.com/company/relentless-health-value/ ✭ Threads https://www.threads.net/@relentlesshealthvalue/ ✭ Bluesky https://bsky.app/profile/relentleshealth.bsky.social ✭ X https://twitter.com/relentleshealth/ 00:00 Episode Setup 00:38 Why This Matters 04:41 Hospital Playbook 06:59 Consolidation Effects 11:41 All Or Nothing 15:24 Anti Steering Tiers 22:12 Price Gag Clauses 26:22 Squeezing Independents 31:15 Fixing The System 35:15 Wrap Up Sponsors

What does it look like when a broker or employee benefit consultant is circling your plan like it's a gold mine? Doug Aldeen, a well-known attorney who has spent many years in the self-insured space, has seen exactly what falls all the way down to the level of legal action — and in this episode he breaks down the top categories of broker and EBC compensation arrangements that wind up costing plans millions. In one documented example, a balance-billing vendor collected $2.2 million in fees over three plan years to cover a risk of just $94,320 — for a service the plan didn't even need. In this episode, Stacey Richter speaks with Doug Aldeen, JD, a self-insured space attorney, about how rent-seeking broker and EBC payment models work, how they hide in plain sight, and what plan sponsors can do right now to find out if they're the ones holding the bag. WHAT YOU'LL LEARN ✅ How reference-based pricing vendors using a "cost of savings" fee model — where broker and vendor fees both increase as hospital charges rise — can result in the vendor and broker combined getting paid more than the hospital itself ✅ Why a plan paid $2.2 million to a balance-billing vendor over three plan years to address only $94,320 in actual risk — and why the Texas District Hospital statute made that service completely unnecessary in the first place ✅ How voluntary benefits with first-year commission structures running 70 to 90% function as a near-direct pass-through to the broker, not a benefit to plan members ✅ How undisclosed vendor-to-broker payments — structured as "marketing services" or "discounts" at the book-of-business level, including per-script PBM payments — can legally avoid Consolidated Appropriations Act disclosure requirements while still biasing plan recommendations ✅ Why complexity in a compensation agreement is itself a red flag — and what the CAA actually requires in terms of a plan sponsor being able to "reasonably conclude" what a broker fee is ✅ A six-step roadmap for plan sponsors: ask why five times, calculate ROI, assess downstream risk, demystify the commission structure, run an independent broker RFP, and audit your plan documents and stop-loss agreements for gaps WHY THIS MATTERS Where there's mystery, there is margin — and broker and EBC compensation arrangements can be layered in ways that make the math nearly impossible to follow without a NASA scientist, as Doug puts it. The Consolidated Appropriations Act was supposed to bring transparency to these arrangements, but enforcement is spotty and the gray areas are real. Plans that have had the same broker for years may trust them precisely because of the long relationship — but as this episode makes clear, long tenure is not the same as trustworthy, and the dollars at stake are in the millions. The honest brokers and EBCs are out there, and they're adding real value. Telling the difference just takes some diligence. === LINKS === 🔗  Show Notes with all mentioned links:   https://cc-lnk.com/EP512 ✉️  Enjoy this podcast? Subscribe to the free weekly newsletter: https://relentlesshealthvalue.com/join-the-relentless-tribe 🫙  Support the podcast with a small donation to the Tip Jar: https://relentlesshealthvalue.com/join-the-relentless-tribe 🎤  Listen on Apple Podcasts   https://podcasts.apple.com/us/podcast/feed/id892082003?ls= 🎤  Listen on Spotify   https://open.spotify.com/show/6UjgzI7bScDrWvZEk2f46b 📺  Subscribe to our YouTube channel   https://www.youtube.com/@RelentlessHealthValue === CONNECT WITH THE RHV TEAM === ✭ LinkedIn   https://www.linkedin.com/company/relentless-health-value/ ✭ Threads  https://www.threads.net/@relentlesshealthvalue/ ✭ Bluesky   https://bsky.app/profile/relentleshealth.bsky.social ✭ X   https://twitter.com/relentleshealth/ 00:00 Introduction to this episode. 00:59 A caveat for the record on this episode. 02:11 The first problematic payment model discussed in this week's episode. 03:27 The second problematic payment model discussed in this week's episode. 06:16 The conversation with Doug Aldeen. 06:27 Why is reviewing broker/EBC compensation so important? 08:05 The Ohio Potato Company anecdote. 10:28 The first way brokers/EBCs might get paid. 11:45 What "cost of savings" means. 12:31 EP457 with Cynthia Fisher. 14:07 A rent-seeking solution that requires a cost-benefit analysis. 19:16 Why the broker/EBC is sometimes in the dark about vendor kickbacks. 21:46 Where the CAA is unclear. 22:23 EP508 with Lee Lewis. 22:58 EP379 with AJ Loiacono. 24:04 Actionable advice for plan sponsors. 24:57 The second piece of actionable advice for plan sponsors. 25:22 The third piece of actionable advice for plan sponsors. 26:08 Demystifying the commission structure. 27:35 Using a broker RFP from an open source. 27:54 EP484 with Dave Chase. 28:31 Why you should be auditing data and claims. 29:29 EP478 (Part 1) and EP479 (Part 2) with Andreas Mang and Jon Camire. 31:29 The importance of having an "out." 33:11 Why the broker community may be at substantial risk. 35:30 EP419 with Andreas Mang.

If we want clinical teams to take on risk, we have to reckon with what that risk-taking actually incentivizes. In this episode, Stacey Richter weaves together conversations with two physicians to surface a tension she argues hasn't been said directly enough: the very mechanism we're counting on to fix healthcare — providers going at risk — has cherry picking and lemon dropping baked right into it. And the same organizations we're asking to take risk are the ones we already know are upcoding every ER visit to level four complexity. In this episode, Stacey Richter speaks with Dr. Ahilan Sivaganesan, MD (Dr. Siva), a spine surgeon and researcher whose work on time-driven activity-based costing and the Operative Value Index appeared in EP505, and Dr. Monica Lypson, MD, MHPE, a physician and medical educator whose prior conversation with Stacey on this topic from EP322 has become, unfortunately, more relevant than ever. WHAT YOU'LL LEARN ✅ Why physicians cannot responsibly go at risk for outcomes and costs without first knowing their own costs — and why time-driven activity-based costing (TDABC) is, as Dr. Siva puts it, existential for surgeons navigating procedural bundles ✅ How sliding scale bundled payments, where payment adjusts to the complexity of the patient and the surgery, could address cherry picking and lemon dropping — but only if the cost data underlying that scale is transparent and independently validated ✅ Why handing health systems a sliding scale risk adjustment framework is, in practice, handing them their own version of a Medicare Advantage RAF — and how we know exactly what happens next, because we've watched Medicare Advantage upcoding and commercial down coding play out simultaneously ✅ How the whole person health model — as practiced in independent advanced primary care, the VA, FQHCs, and some community health plans — reframes the economics: when care is genuinely comprehensive, many of the current upcoded profit centers become cost centers ✅ Why the solution to gaming risk adjustment frameworks may be the same as the solution to gaming credit scores: a neutral, detached third party scoring patient complexity using ground truths that cannot be manipulated by the parties with a financial stake in the outcome ✅ How structural barriers — misaligned funding streams, office hours that exclude working patients, the absence of robust quality measurement in most network contracts — can produce cherry picking and lemon dropping even without any overt intent to discriminate WHY THIS MATTERS We are deep into the value-based care era and the perverse incentive problem has not been solved — it has been relocated. Fee-for-service incents volume. Risk-based models incent patient selection. As Stacey frames it, the holy grail we are promoting has the very same conflicts of interest baked into it that we say we can't trust doctors to handle. What this episode surfaces is a conundrum worth naming plainly: you can't ask biased parties to grade their own homework, and right now that's exactly what we're doing every time we hand a large, corporatized health system a risk adjustment framework and expect them not to put a finger on the scale.   === LINKS === 🔗  Show Notes with all mentioned links:   https://cc-lnk.com/EP511 ✉️  Enjoy this podcast? Subscribe to the free weekly newsletter: https://relentlesshealthvalue.com/join-the-relentless-tribe 🫙  Support the podcast with a small donation to the Tip Jar: https://relentlesshealthvalue.com/join-the-relentless-tribe 🎤  Listen on Spotify  https://open.spotify.com/show/6UjgzI7bScDrWvZEk2f46b 📺  Subscribe to our YouTube channel   https://www.youtube.com/@RelentlessHealthValue 🎤  Listen on Apple Podcasts  https://podcasts.apple.com/us/podcast/feed/id892082003?ls=1 === CONNECT WITH THE RHV TEAM === ✭ LinkedIn   https://www.linkedin.com/company/relentless-health-value/ ✭ Threads  https://www.threads.net/@relentlesshealthvalue/ ✭ Bluesky   https://bsky.app/profile/relentleshealth.bsky.social ✭ X   https://twitter.com/relentleshealth/ 00:00 Introduction to this episode. 01:53 Upcoding problems: a previously unpublished clip from EP505 with Dr. Siva. 05:22 What is the minimum requirement for physicians to go at risk? 07:22 How sliding scale bundle payments can reduce risk for physicians. 10:43 The question covered in the upcoming episode. 13:19 Is value-based care good for underserved communities? 15:01 "If you create perverse incentives, you actually might make known healthcare disparities worse … to meet the demand's value." —Dr. Lypson 16:18 "There actually might be systematic and structural ways that the healthcare system might say … we're not interested in taking care of you." —Dr. Lypson 16:51 "The incentive to have a good outcome is not there; the incentive to have another visit is there." —Dr. Lypson 17:15 EP485 with Cristin Dickerson, MD. 17:49 "The only indictment I have on the fee-for-service system is that it's gotten us to where we are right now." —Dr. Lypson 18:41 "If you don't have any connection in that system, even the provider trying to … provide a good outcome might be disconnected because the system is not in place to … connect the dots." —Dr. Lypson 19:15 EP436, EP491, and SUMS9 with Elizabeth Mitchell. 19:28 What are the must-haves for a value-based system that create the patient outcomes we need? 19:51 What is a whole health model? 22:00 EP462 (Scott Conard, MD), EP319 (Grace Terrell, MD), EP431 (Kenny Cole, MD), EP409 (Larry Bauer, MSW, MEd), and EP495 (Mick Connors, MD). 22:23 LinkedIn post by Mark Weber. 25:05 EP484 with Dave Chase. 25:31 Why we need to fix the structural issues if we want to fix health. 26:00 Why a patient's bias is the one we want in the room. 27:36 Stacey's conclusion on this week's episode.  

If someone makes more money when the patients or members they serve are worse off, call that profiteering. That's Stacey Richter's working definition heading into this conversation — and it's exactly the lens she applies to Medicare Advantage in 2026, a program she argues touches everyone, not just seniors. When big vertically integrated carriers negotiate their own Medicare Advantage rates and shift the difference to commercial employers through ASO contracts, research has put that markup at 4.7% above what employers would otherwise pay. In this episode, Stacey Richter speaks with Betsy Seals, co-founder of Rebellis Group and former CEO of its parent company Alerion Advisors, and now a board member and startup advisor in the Medicare Advantage space, about where the program stands heading into 2027 — and what a back-to-basics, non-profiteering playbook actually looks like on the ground. WHAT YOU'LL LEARN ✅ Why Medicare Advantage is currently in a stabilization and retraction phase — including market exits, benefit pullbacks, and an underwriting loss in the first three quarters of 2025 — and what that means for beneficiaries depending on whether plans cut flashy enrollment perks or outcomes-focused care ✅ How vertically integrated carriers use their full book of business to negotiate lower Medicare Advantage rates for themselves while cost-shifting to self-insured commercial employers through ASO contracts — and why health systems account for roughly 50% of most employers' total health spend ✅ Why a newly published prior authorization data report showed denial overturn rates of 95% or more upon appeal — with only 11% of denials ever appealed — and what the downstream incentives of AI-driven prior authorization actually look like when a clinician's eyes are removed from the file ✅ How Goodhart's Law applies to STARS quality measures: once a measure becomes a target, it ceases to be a good measure — and what distinguishes plans that lift STARS scores through genuine health outcome improvement versus box-checking for bonus payments ✅ Why chronic Special Needs Plans (chronic SNPs) saw nearly 50% growth in beneficiary enrollment and how they represent a legitimate back-to-basics strategy for plans that can identify and serve specific chronic condition populations well ✅ What independent primary care practices need to understand about how their own coding and prior authorization practices flow upstream into MA plan finances — including the perverse incentive that drives some PCPs to route patients to the ER rather than navigate an arduous prior auth process WHY THIS MATTERS Medicare Advantage is not just a seniors' issue. It shapes tax dollar stewardship, it shapes what happens to our family members and grandparents, and as Stacey spells out directly, it shapes what commercial employers pay for hospital care. Betsy Seals has spent decades watching executives make short-term decisions — upcoding, AI-driven prior auth denials, STARS box-checking — knowing they won't be around for the long-term consequences. Her message, and Stacey's, is that there are ample ways to make a fair profit in Medicare Advantage without any of that. Go back to basics. Do it right. Because sooner or later, you're gonna get caught with your hand in the cookie jar. === LINKS === 🔗  Show Notes with all mentioned links:   https://cc-lnk.com/EP510 ✉️  Enjoy this podcast? Subscribe to the free weekly newsletter: https://relentlesshealthvalue.com/join-the-relentless-tribe 🫙  Support the podcast with a small donation to the Tip Jar: https://relentlesshealthvalue.com/join-the-relentless-tribe 🎤  Listen on Apple Podcasts  https://podcasts.apple.com/us/podcast/feed/id892082003?ls=1 🎤  Listen on Spotify  https://open.spotify.com/show/6UjgzI7bScDrWvZEk2f46b 📺  Subscribe to our YouTube channel   https://www.youtube.com/@RelentlessHealthValue === CONNECT WITH THE RHV TEAM === ✭ LinkedIn   https://www.linkedin.com/company/relentless-health-value/ ✭ Threads  https://www.threads.net/@relentlesshealthvalue/ ✭ Bluesky   https://bsky.app/profile/relentleshealth.bsky.social ✭ X   https://twitter.com/relentleshealth/ 00:00 Introduction to this episode. 00:43 Past episodes on profiteering: EP481 with Benjamin Schwartz, MD, MBA, and EP495 with Mick Connors, MD. 01:25 How Medicare Advantage is relevant to everyone. 06:15 A preview of today's conversation. 07:49 The "state of the state" of Medicare Advantage plans. 08:49 Video by Eric Bricker, MD, on the financial performance of the U.S. healthcare system. 09:32 Does Medicare Advantage's losses matter to the patients? 10:29 A recap of Betsy's insights so far. 11:19 The underlying strategic through line that needs to be considered. 13:04 The impact of Goodhart's Law. 14:12 What the players that are succeeding right now are doing. 14:22 The first pillar of a back-to-basics strategy: Don't get caught with your hand in the cookie jar. 16:07 EP463 with Betsy Seals. 16:50 Why short-term strategies don't work. 18:26 Stats report on prior authorizations serving the beneficiary. 19:32 EP482 with Preston Alexander. 19:38 Why prior authorization needs change. 21:28 The better strategy to use. 21:43 EP462 with Scott Conard, MD. 23:17 The second pillar of a back-to-basics strategy: Focus on the beneficiaries you actually serve well. 24:37 What it looks like to implement this focus on the beneficiaries you serve well. 25:29 How special needs plans play into this. 27:43 The third pillar of a back-to-basics strategy: Think about how STARS in clinical programs improve health. 30:04 The ethical component to implementing a Medicare Advantage program. 31:04 Betsy's advice for independent practices dealing with prior authorizations. 33:37 STAT article by Bob Herman about the effectiveness of Medicare Advantage lobbying on policy. 34:08 Betsy's final notes for all players impacted by what's currently happening.

Employer medical inflation has averaged 7.7% annually over the last 20 years — and that was in a historically low inflation environment, so the near-term number is likely closer to 8.5%. If your finance team is forecasting health benefits at CPI, you are already behind. That single number, put into an out-year model and left to compound, makes the case for bold action faster than any benefits presentation ever could. In this episode, Stacey Richter speaks with Patrick Nelli, CEO of Aligned Marketplace and a former CFO, about a seven-step roadmap for how benefits teams can align with CFOs and finance teams to move away from passive price-taking — and toward a health plan that actually bends the cost curve. WHAT YOU'LL LEARN ✅ Why employer medical inflation is structurally set up to outpace CPI by two to three percentage points — driven by Baumol's Cost Disease, the absence of a functioning market to constrain prices, and Medicare cost-shifting to the commercial population — and why 7.7% annually should be the status-quo baseline in any out-year forecast ✅ How the physician employment shift of the last 20 years — from 80% independently employed to 80% hospital or corporate-employed — created a fundamental conflict of interest, because hospitals primarily make their gross profit on inpatient commercial surgeries and cannot simultaneously optimize for keeping people healthy and out of the hospital ✅ The three specific mechanisms by which independent advanced primary care drives savings for self-insured employers: unit price reductions from steering to lower-cost independent labs and imaging, reduced downstream utilization including ER visits and specialist referrals, and prevention of future high-cost claimants — backed by a Milbank study showing access to primary care increases timely cancer screenings by 20 to 50% ✅ Why a skeptical CFO should require counterparties to put their fees at risk in an aligned payment model — and why that alignment test is more persuasive than any published study ✅ How to structure a steering and tiering strategy by risk-stratifying members and disproportionately engaging those with high and rising risk, since less than 10% of low-cost members with identifiable risk today will drive over 40% of total plan spend next year ✅ How regulatory changes in the One Big Beautiful Bill Act now give employers more flexibility to offer advanced direct primary care and virtual care options at no cost to members — and why that creates a positive feedback loop between engagement, savings, and further benefit design improvement WHY THIS MATTERS The status quo is not neutral. It is a choice to accept 7.7% annual medical inflation in perpetuity, and as Stacey puts it, financial toxicity is increasingly clinical toxicity — when members can't afford their medications or land in financial ruin after an illness, that is also disruption, just experienced on the back end. The question Patrick poses is whether employers want some upfront disruption or the guaranteed disruption of a compounding cost curve. The roadmap here is not theoretical — it is a step-by-step translation of the benefits case into the language that finance teams actually use, with the goal of turning the CFO from a skeptic into an ally. === LINKS === 🔗  Show Notes with all mentioned links:   https://cc-lnk.com/EP509 ✉️  Enjoy this podcast? Subscribe to the free weekly newsletter: https://relentlesshealthvalue.com/join-the-relentless-tribe 🫙  Support the podcast with a small donation to the Tip Jar: https://relentlesshealthvalue.com/join-the-relentless-tribe 🎤  Listen on Apple Podcasts  https://podcasts.apple.com/us/podcast/feed/id892082003?ls=1 🎤  Listen on Spotify  https://open.spotify.com/show/6UjgzI7bScDrWvZEk2f46b 📺  Subscribe to our YouTube channel   https://www.youtube.com/@RelentlessHealthValue === CONNECT WITH THE RHV TEAM === ✭ LinkedIn   https://www.linkedin.com/company/relentless-health-value/ ✭ Threads  https://www.threads.net/@relentlesshealthvalue/ ✭ Bluesky   https://bsky.app/profile/relentleshealth.bsky.social ✭ X   https://twitter.com/relentleshealth/ 00:00 Introduction to this episode. 02:48 Roadmap Step 1 highlights. 03:07 Roadmap Step 2 highlights. 03:49 Roadmap Step 3 highlights. 04:15 Roadmap Step 4 highlights. 04:27 Roadmap Step 5 highlights. 04:58 Roadmap Step 6 highlights. 05:19 EP504 with Ryan Jacobs. 05:37 Roadmap Step 7 highlights. 06:28 Introduction to the conversation with Patrick Nelli. 06:36 Step 1 to Patrick's roadmap: Open the conversation. 07:57 What Patrick thinks is sometimes missing in health benefits. 09:07 What finance teams need in order to change their behaviors. 09:53 What Baumol's cost disease is. 10:58 EP341 with Gary Campbell. 11:14 EP492 with Sam Flanders, MD, and Shane Cerone. 12:18 The second item stacked against employers: Being price "takers." 13:49 The percent inflation employers should expect if they follow the status quo. 15:39 INBW46 with Stacey. 16:54 Proven strategies to bend the health benefits finance curve. 18:42 EP391 with Scott Conard, MD. 19:37 SUMS11 with Stan Schwartz, MD. 20:18 How employers and plan sponsors can bend the cost curve. 21:47 The two distinct business models that finance teams need to consider when setting up their health benefits model. 24:11 Milbank study on the role of primary care. 24:53 A quick reminder of high-cost spending within health plans. 25:00 EP466 with Vivian Ho, PhD. 25:10 EP464 with Al Lewis. 25:59 What finance teams need to hear right now to understand why disrupting their health benefits plan is worth it. 27:45 The next step when an employer recognizes that they should seek out an advanced primary care option for their members. 28:41 EP503 with Ryan Wells; Leo Spector, MD, MBA; and Adam Stavisky. 30:27 Next steps after an employer enlists an advanced primary care system and aligns values and incentives in their benefits plan. 34:26 A last word to benefit teams working with finance teams. 34:55 EP430 with Barbara Wachsman. 35:08 How Aligned Marketplace fits into this entire conversation.

One company at the Health Transformation Alliance managed their health benefits well enough that when they were acquired, the acquiring company looked at the plans and found $2,300 less expense per employee — with better benefits. Moving 2,500 employees onto that plan, at a PE ratio north of 40, created over a quarter billion dollars of instant equity value that nobody had priced into the deal. Nobody had even thought to look. That story is where this conversation starts. In this episode — the first-ever Ask Me Anything installment of Relentless Health Value — Stacey Richter takes a question from benefits procurement leader Sarah Monroe about why executives rarely take bold action on health benefits, and answers it with Lee Lewis, Chief Strategy Officer and GM Medical Solutions at the Health Transformation Alliance (HTA) and host of the Broken Benefits podcast. WHAT YOU'LL LEARN ✅ The three false C-suite dogmas that Lee Lewis says lead to a "stay in the herd and keep it quiet" approach to benefits: that healthcare costs are a fixed expense you can't manage, that saving money necessarily hurts people through cost shifting, low quality, or narrow networks, and that fixing healthcare is never worth the effort or the disruption ✅ How those dogmas manifest in practice — including a company spending $700 million annually on benefits that turned down a roadmap to save $50 million because no one's bonus was tied to plan performance, and a culture that self-selects for complacent HR teams over mission-driven ones ✅ Four external forces that may keep C-suites locked in place: the social circles CEOs travel in that include health system leaders, balance-of-trade threats from large carriers and vendors who hold commercial business as leverage, personal incentives offered to key decision-makers by status quo vendors, and executives who don't feel the weight of a $5,000 deductible the way a $25-an-hour employee does ✅ Why the competitive stakes are rising — because healthcare is now nine to 14% of total employee compensation, transparency data lets anyone look up what rival employers are paying, and companies that mismanage this expense face both shareholder and fiduciary risk while falling behind competitors who don't ✅ De-risking tactics for benefits teams operating inside conservative cultures, including same-network TPA changes, carrier-enabled vendor additions, narrow pilots, and mid-year tests that move the plan forward without requiring C-suite sign-off on a full transformation ✅ Direct advice for any CEOs in the building: encourage bold action explicitly, tie bonuses to health plan performance, and staff benefits teams with the diverse financial and clinical skills the role actually requires WHY THIS MATTERS Health benefits are the second largest line item after payroll in most industries, and the companies that are minding this business carefully are accumulating real competitive advantage over those that aren't — quarter billion dollar M&A surprises notwithstanding. The three dogmas Lee describes are false, but they are sincerely held, and that makes them stubborn. As Stacey frames it, financial toxicity is clinical toxicity: when employees are functionally uninsured because their deductible exceeds what they can afford, the ER becomes the only option. That is disruption too — it just shows up on the back end. The question isn't whether to accept disruption. It's which kind you're choosing. === LINKS === 🔗  Show Notes with all mentioned links:   https://cc-lnk.com/EP508 📺  Visit Lee's YouTube Channel https://www.youtube.com/@brokenbenefits ✉️  Enjoy this podcast? Subscribe to the free weekly newsletter: https://relentlesshealthvalue.com/join-the-relentless-tribe 🫙  Support the podcast with a small donation to the Tip Jar: https://relentlesshealthvalue.com/join-the-relentless-tribe 🎤  Listen on Apple Podcasts  https://podcasts.apple.com/us/podcast/feed/id892082003?ls= 🎤  Listen on Spotify  https://open.spotify.com/show/6UjgzI7bScDrWvZEk2f46b 📺  Subscribe to our YouTube channel   https://www.youtube.com/@RelentlessHealthValue === CONNECT WITH THE RHV TEAM === ✭ LinkedIn   https://www.linkedin.com/company/relentless-health-value/ ✭ Threads  https://www.threads.net/@relentlesshealthvalue/ ✭ Bluesky   https://bsky.app/profile/relentleshealth.bsky.social ✭ X   https://twitter.com/relentleshealth/ 00:00 Introduction to this episode. 00:43 Ask Me Anything Question 1: Why don't more self-insured executives take bold action toward their benefits strategy? 03:09 A summary of the three dogmas covered in the following conversation. 05:53 A look ahead at next week's episode. 06:36 An introduction to today's guest, Lee Lewis. 08:23 Why there is an aversion to digging into health benefits for some executives. 09:43 The first dogma: Healthcare costs are fixed expenses. 09:56 The second dogma: Saving money in healthcare hurts people. 12:01 The third dogma: Fixing healthcare is never worth the effort. 12:26 How these dogmas trickle down to HR teams. 13:47 Anecdote: One company that turned down saving $50 million and why. 16:28 A quick reminder about the context behind where CEOs' mindsets are. 17:10 The kinds of employers HTA seeks out. 19:20 EP500 with Stacey. 20:03 The power of C-suites in health systems. 21:33 EP466 with Vivian Ho, PhD. 21:36 EP404 with Suhas Gondi, MD, MBA. 21:42 Why a CEO may pull the plug on health plan/health benefit improvements. 22:37 An anecdote about Lilly cancelling their health plan. 23:21 Items that CEOs need to be thinking about. 24:33 EP506 with Jerry DiMaso. 26:07 EP501 with Ivana Krajcinovic, PhD. 26:32 A summary of why CEOs should care about their health benefits costs now. 29:02 How do personal incentives play into CEOs' decisions about health benefits? 30:44 Another quick reminder about C-suites. 31:53 Why perverse incentives make it difficult for C-suites to accept change. 33:11 LinkedIn post by Patrick Moore. 33:28 Why the salary gap plays into health benefit decisions in a perverse way. 34:58 EP488 with Mark Cuban and Cora Opsahl. 36:13 Lee Lewis's advice to people in benefits who are aligned to the mission. 40:06 Lee Lewis's advice for CEOs.   Lee Lewis of @HTACOOP discusses #benefitsstrategy for #selfinsuredemployers on our #healthcarepodcast. #healthcare #podcast #financialhealth #commercialpayermarketplace #digitalhealth #healthcareleadership #healthcaretransformation #healthcareinnovation   Recent past interviews: Click a guest's name for their latest RHV episode! Stacey Richter with 15 experts (EP507); Jerry DiMaso; Dr Ahilan Sivaganesan; Ryan Jacobs; Stacey Richter (INBW46); Ryan Wells, Dr Leo Spector, and Adam Stavisky; Brian Machut; Ivana Krajcinovic