Healthcare Economics and Policy

When is $30 less than $22? Apparently at the pharmacy. I once went to a pharmacy intending to pay cash for a 90-day supply of medication, which cost me $22. The front desk worker suggested I use my insurance instead, noting that my copay for a 30-day supply was just $10. On the surface, it seemed like I’d save money with insurance, but paying for three 30-day supplies would cost me $30, more than the cash price for a 90-day supply. This transaction highlights a deeper issue in our healthcare system: the misalignment of economic incentives between patients and pharmacies. Pharmacies often have complex relationships with insurance companies and pharmacy benefit managers (PBMs) that distort pricing and dispensing practices in ways that aren't aligned with patient interests. First, 90-day fills are not just more economical but are also more convenient for the patient. Studies show that longer prescription fills improve medication adherence, leading to better health outcomes. This convenience translates to fewer trips to the pharmacy, reducing the likelihood of missed doses and helping patients stick to their treatment plans. Second, pharmacies typically receive a dispensing fee for every prescription they fill. These fees can vary but often favor more frequent refills. As a result, pharmacies might encourage 30-day supplies over 90-day supplies to maximize their dispensing fees, even if this isn't the most cost-effective option for the patient. Not only that, but pharmacy contracts with PBMs might offer better reimbursement rates for insured prescriptions than received with cash pay. This means that pharmacies could be incented to encourage patients to use insurance even if they would end up paying more out of pocket (as in my example). This misalignment means that patients often face higher costs and more inconvenience. In my case, I could have easily paid over 35% more by following the advice to use my insurance. And for a less convenient and less clinically effective fill. #Healthcare #Pharmacy #PBM #HealthcareCosts #HealthInsurance #MedicationAdherence #BetterOutcomes

Jeff Immelt once told me that he thought, from his experience as CEO of GE, that one of the huge problems with health care in the U.S. was the consolidation. This article does two things that ought to be of interest to people interested in why health care in the U.S. is so expensive: 1) it reports on the concentration of health benefits administrators (which is, as Immelt thought, high), and 2) it raises the issue of problems with vertical integration. Health insurers were, by law, required to pay out 85% (or 80%, depending on various factors) of premiums collected in either medical benefits or documented efforts to improve performance. BUT, it turns out the easiest, and most profitable, way to meet the medical loss ratio payout numbers is simply to, if an entity owns providers, have the providers increase their prices. Which is precisely what is happening. This is yet another example of how the failure to pursue a vigorous antitrust policy, which should be of interest to conservatives who believe in markets and liberals who believe in lower prices, has left our health system unduly concentrated, overly expensive, and ripe for self-dealing. #healthinsurance #healthcare #concentration #prices #selfdealing https://lnkd.in/eBwefgiE

The biggest shakeup in India’s insurance sector is coming. And honestly it’s overdue. The Insurance Laws (Amendment) Bill 2025 is expected to pass this Winter Session, and if it goes through, the insurance industry we know today won’t look the same by 2027. Here’s what’s changing (and why it matters way more than you think): -> The bill proposes a jump of FDI ownership from 74% to 100%. It puts the industry directly into the global grade competition with more players, capital and innovation entering the domestic industry that can give consumers better choices. -> Agents can now work with multiple insurers. Until now, if you were an individual agent, you could only tie up with one life, general and health insurer. The new amendments aim to remove this. And personally, I think it makes the market healthier because when people have options, companies behave better. -> Now Life, general and health all can be clubbed under one roof. This is the Netflix bundle moment for insurers. Right now, you need separate licences. Separate capital. Separate structure which is highly inefficient. A composite licensing framework solves that and opens doors for global players who are used to -> Lower entry barriers for new insurers. For years, entering the insurance industry has been expensive and over-regulated. Only large corporations or legacy players could afford to enter and now the government wants to lower these thresholds. Reducing the entry barriers like lower minimum capital requirements makes room for younger players and makes insurance more accessible. This could be the foundation for the next wave of insurance innovation in India but that unfortunately could also lead to a massive mis-selling to the consumers. -> Now finally there can be a merger between insurers and non insurer companies, which earlier used to be a locked door (Section 35 made sure of it). Additionally the IRDAI also gets sharper with higher penalty powers and approval thresholds. Regulators who can act fast build industries that grow fast. If I had to summarise it in one line: India wants insurance to start becoming a high-growth, high-competition market, the way it should’ve been years ago. As someone who’s spent the last few years in this space I genuinely think this might be the biggest unlock for insurance in decades.

I've watched 3 "revolutionary" healthcare technologies fail spectacularly. Each time, the technology was perfect. The implementation was disastrous. Google Health (shut down twice). Microsoft HealthVault (lasted 12 years, then folded). IBM Watson for Oncology (massively overpromised). Billions invested. Solid technology. Total failure. Not because the vision was wrong, but because healthcare adoption follows different rules than consumer tech. Here's what I learned building healthcare tech for 15 years: 1/ Healthcare moves at the speed of trust, not innovation ↳ Lives are at stake, so skepticism is protective ↳ Regulatory approval takes years usually for good reason ↳ Doctors need extensive validation before adoption ↳ Patients want proven solutions, not beta testing 2/ Integration trumps innovation every time ↳ The best tool that no one uses is worthless ↳ Workflow integration matters more than features ↳ EMR compatibility determines adoption rates ↳ Training time is always underestimated 3/ The "cool factor" doesn't predict success ↳ Flashy demos rarely translate to daily use ↳ Simple solutions often outperform complex ones ↳ User interface design beats artificial intelligence ↳ Reliability matters more than cutting-edge features 4/ Reimbursement determines everything ↳ No CPT code = no sustainable business model ↳ Insurance coverage drives provider adoption ↳ Value-based care is changing this slowly ↳ Free trials don't create lasting change 5/ Clinical champions make or break technology ↳ One enthusiastic doctor can drive adoption ↳ Early adopters must see immediate benefits ↳ Word-of-mouth beats marketing every time ↳ Resistance from key stakeholders kills innovations The pattern I've seen: companies build technology for the healthcare system they wish existed, not the one that actually exists. They optimize for TechCrunch headlines instead of clinic workflows. They design for Silicon Valley investors instead of 65-year-old physicians. A successful healthcare technology I've implemented? A simple visit summarization app that saved me time and let me focus on the patient. No fancy interface, very lightweight, integrated into my clinical workflow, effortless to use. Just solved an problem that users had. Healthcare doesn't need more revolutionary technology. It needs evolutionary technology that works within existing systems. ⁉️ What's the simplest technology that's made the biggest difference in your healthcare experience? Sometimes basic beats brilliant. ♻️ Repost if you believe implementation beats innovation in healthcare 👉 Follow me (Reza Hosseini Ghomi, MD, MSE) for realistic perspectives on healthcare technology

Working with an interdisciplinary team, we have developed a website to communicate how the White House's proposed cuts to health research would cause losses of $16B and 68,500 jobs. Find out how your community may be impacted at SCIMaP: https://scienceimpacts.org As context, on Feb. 7th, 2025, the White House ordered across-the-board cuts to NIH funded research. The order drastically reduces the amount that universities/hospitals/institutes receive for essential facilities, services, and staff required for health research. Nearly two dozen states and allied institutions sued leading to a temporary injunction to across-the-board cuts nationwide. The NIH distributes approximately $37B in external grants/awards in FY 2024. These grants/awards have a force-magnifying effect, generating $2.56 of economic activity for each $1 supported, i.e., more than $94B in activity and more than 400K jobs (source: United for Medical Research). But this impact is hard to see and interpret. You might wonder: perhaps the impacts are focused only on a few, potentially 'elite' institutions? The answer is far different. Soon after the executive order was released, it became apparent that these across the board cuts would have damaging & consequential effects in communities across the United States, in places like State College, PA, Birmingham, AL, and across the medical research infrastructure of Texas. Led by the efforts of Allie Sinclair joint with Emily Falk, Clio Andris and more, we have developed an interactive visualization of the impact of federal cuts to health research in communities nationally. In practice, we take anticipated reductions in NIH supported grants and then leverage US census data on commuting to project the impact of these cuts across and within communities. Through interactive, data-driven visualizations, we aim to help Americans explore how research fuels the economy, supports jobs, and improves health outcomes. This website and interactive visualization is a step in that direction, with more to come joint with Alyssa (Allie) Sinclair (now at UPenn), Emily Falk (UPenn), Clio Andris (GT) + others in The Science and Community Impacts Mapping Project: https://scienceimpacts.org

We know that private equity (PE) in healthcare is increasingly coming under fire, and with good reason. But vilifying PE in healthcare for the sake of villifying PE, without actually backing up criticisms with real data and concrete examples of the harm caused, is not necessarily valuable. So, here is some data as well as concrete examples. In 2023 alone, a shocking 21% of healthcare company bankruptcies were tied to these financial predators. PE bankruptcies in healthcare have exploded 112% in five years. PE firms buy healthcare companies, saddle them with unsustainable debt, strip their assets, and when these companies inevitably collapse under financial strain, they leave chaos in their wake—job losses, diminished care, and shuttered facilities. These are not victimless crimes. Envision Healthcare, owned by KKR, crumbled into bankruptcy, displacing thousands of employees and compromising crucial medical services. The Center for Autism and Related Disorders, swallowed up by Blackstone, went bankrupt, abruptly cutting off services for countless vulnerable patients. PE ownership was linked to 20,000 premature deaths in nursing homes over 12 years, according to the National Bureau of Economic Research. These are not isolated incidents but patterns of a systematic onslaught on healthcare by PEs relentless rapacity. The infuriating reality is that while healthcare companies buckle under excessive debt, PE moguls make billions by exploiting various financial strategies to maximize their profits. Dividend recapitalizations (loading companies with debt to fund dividends back to the PE firm), increases returns but also company debt. They also exploit interest deductibility to lower taxable income by deducting interest on borrowed funds. Management and monitoring fees are extracted as additional revenue streams, often prioritizing them over other company needs. PE firms asset strip, often leasing back valuable assets in order to extract cash while saddling the company with ongoing lease payments. Lastly, they use the step-up in basis tax provision to reduce capital gains taxes on assets sold, by resetting their tax value at the time of purchase. These maneuvers illustrate how PE firms legally manipulate financial and tax rules, often to the detriment of the companies they acquire. Abuse of the bankruptcy system isa the final exploit, a calculated escape hatch that allows them to walk away unscathed while the companies, employees, and patients they've burdened suffer the consequences. In many cases, and in increasing frequency, PE firms profit from their financial engineering while leaving behind a trail of human and economic devastation.

💡 When healthcare finance breaks down, it’s the patient who pays the price!   From September 1, 2025, over 15,200 hospitals will suspend cashless treatment for Bajaj Allianz policyholders. This move, led by AHPI, is more than just a company-hospital standoff — it’s a wake-up call for India’s healthcare financing ecosystem. The core issues? ✅ Rising healthcare costs (7–8% annually) vs. outdated reimbursement rates ✅ Delayed payments & arbitrary claim deductions ✅ Hospitals feeling squeezed, insurers trying to keep premiums affordable For patients, the impact is immediate and painful — cashless is the very promise of health insurance. For hospitals, it’s about financial sustainability. For insurers, it’s about managing risk and fraud. 👉 The bigger question: How do we build a healthcare model where patients, providers and insurers don’t see each other as adversaries but as partners in health? India needs a reset in the way tariffs, claims and transparency are managed — with trust and fairness at the center. 🌍 As Ayushman Bharat has shown, access and affordability are possible but true sustainability requires balancing the triangle of patients–hospitals–insurers. ✍️ I believe this moment calls for collaboration over confrontation —regulators, insurers and healthcare providers must come together to redesign a sustainable, patient-centric system. 💬 What changes — policy reforms, digital health innovations or regulatory frameworks — do you think can bridge this trust gap? For complete details: https://lnkd.in/db3xVi63 #Healthcare #HealthInsurance #CashlessCare #BajajAllianz #Hospitals #PatientsFirst #InsuranceReform #AyushmanBharat #HealthcareInnovation 

Leaving the hospital C-suite at 40 years old wasn’t really part of the plan. On paper, everything was lining up for a stable and successful next 20 years for my career. I had worked my way from a small rural hospital to a mid-sized metropolitan facility, then into a system-wide Vice President role, and finally to one of the largest and most complex hospitals in the region. There wasn’t a single moment that pushed me out - no dramatic exit. It was a series of realizations and experiences that began to add up. The U.S. healthcare system is fundamentally MISALIGNED. It’s designed to: 🔹 Treat illness after it occurs, rather than prevent it through nutrition, movement, and lifestyle 🔹Financially reward volume over outcomes, procedures over prevention 🔹Confuse patients with layers of bureaucracy, forcing them to navigate a fragmented system without guidance or support 🔹Burn out clinicians under the weight of red tape, EMR clicks, and administrative burden I recently recorded a podcast and look forward to sharing more of that conversation in the coming weeks. We discussed how reimbursement structures, coding systems with 10,000+ billing codes, and a maze of private and government payor rules have created a system that’s unsustainable - and at times, nearly impossible to understand even for those of us inside it. We now spend over $4.5 TRILLION - nearly 20% of U.S. GDP- on healthcare. And yet, our key outcomes tell this story: 🔹Life expectancy is declining 🔹Chronic disease is rising 🔹Access to care remains a struggle for millions Nearly 90% of healthcare spending is tied to chronic conditions - many of which are preventable or manageable with early intervention, functional approaches, and a return to relationship-based care. I believe the future of healthcare must be proactive, personalized, and deeply relational. The current model isn’t inevitable. We have the power to choose differently and it is time we expect more.  

I’ve been tracking India’s health insurance space for years. A 41% jump in grievances to 1,37,361 complaints in FY25 tells me something more fundamental - claim experience is becoming the industry’s biggest risk. Nearly 69% of complaints are linked to claims. That tells me the real problem isn’t selling policies. It’s honoring them when it matters most. I believe insurance is tested at the hospital desk, not at the sales pitch. If claims become friction points and exclusions become surprises, trust weakens regardless of how fast premiums grow. How can insurers improve this? In my view: 1. Fix incentives - link sales compensation to persistency, grievance ratios and claim TATs, not just premium growth. 2. Simplify products - fewer sub-limits, clearer waiting periods, and a one-page exclusion summary in plain language. 3. Make claims trackable - real-time status updates, defined turnaround times, and clear written reasons for any rejection. 4. Use data proactively - audit rejection patterns by hospital, agent or product before complaints escalate. 5. Publish experience metrics - not just claim settlement ratios, but actual average settlement timelines. To me, this isn’t just about tighter regulation. It’s about aligning growth with accountability. Because in health insurance, the real product isn’t the policy document. It’s clarity and certainty when someone needs it most. What do you think? Data source : Economic Times.

How PE is Driving Healthcare into the Ground, and How to Fix It A couple of months ago, I wrote about Private Equity’s (PE) impact on healthcare: https://shorturl.at/GAbKR. The Federal Trade Commission, Department of Justice, and U.S. Department of Health and Human Services (HHS) have now released their findings, and I want to summarize some of them and reiterate my suggestions for how to improve private investment in healthcare. For decades, the cost of healthcare has outpaced wage growth, creating an unsustainable financial burden on both public and private budgets while limiting access to care. While healthcare consolidation can realize efficiencies in theory, the financial benefits of this have mostly accrued to PE investors rather than to reduction in the cost of healthcare. Over the last 30 years, healthcare consolidation has reached an all-time high, with PE playing a large role: 🔺 90% of metro areas are now highly concentrated in hospital services, up from 65% in 1990 🔺From 2017 to 2021, hospital system concentration rose in 70% of major markets, with prices increasing in 98% of those cases 🔺Physician markets are consolidating – by 2022, half of all physicians were employed by large health systems, up from 40% in 2012 🔺Over the past 15 years, PE has aggressively expanded into healthcare, making 937 healthcare acquisitions in 2020 alone across hospitals, outpatient services, elder care, and emergency rooms (of which PE now controls over 40%) And unfortunately the report finds that: 🔺Hospital prices increase by 6-65% after mergers 🔺 Physician services rise by 14% when acquired by hospital systems 🔺 Employer-sponsored premiums jump 48% over 8 years in consolidated markets 🔺 Hospital prices rise by 7-16%, while PE-backed physician practices increase costs by 4-20% 🔺 Staffing cuts increase patient risks – nursing home deaths rose by 10% after PE takeovers 🔺 Bankruptcies are soaring – 21% of healthcare companies that filed for bankruptcy in 2023 were PE-owned, despite PE controlling only 4% of provider revenues These alarming financial findings, alongside some of the quality reduction blunders discussed in my previous article, have led the FTC, DOJ, and HHS to intensify efforts to curb PE’s unchecked expansion. Federal agencies are formally investigating PE acquisitions. State laws are increasing oversight – 15 states now require pre-transaction review of healthcare deals. This type of regulatory oversight just adds cost to the infusion of private capital into healthcare, which is, after all, much needed. Rather than fall into that trap, PE must urgently invest in fundamental innovations like AI, home care, remote-patient monitoring, value-based arrangements, etc., that enable simultaneous reduction of cost and improvement of quality, as well as transparently share the outcomes good news with the public and key governing bodies. Check out the report here: https://shorturl.at/EU2Qo