Healthcare Financial Management

For too long, Medicare Advantage has treated brokers as transactional middlemen. That misses their real value. At SCAN, we’re launching a new model that reframes brokers as health navigators—trusted partners who help members actually access care, not just choose a plan. As recently covered by Fierce Healthcare, this program equips brokers to support things that truly move the needle: -Welcome calls that drive early engagement -Annual wellness visits -Preventive care like flu shots -Ongoing navigation of the healthcare system And importantly — compensation tied to real health actions, not just enrollment volume. This is what value-based thinking should look like. If Medicare Advantage is going to justify its role as a public-private partnership, it has to deliver: -Better experiences -Better outcomes -Not just better marketing Brokers already sit at the center of trust in many communities. The opportunity is to align that trust with health. This is one small but meaningful step toward an MA ecosystem focused less on transactions and more on impact. https://lnkd.in/gHs7epR2

The largest purchaser of healthcare in America isn't Medicare. It isn't Medicaid. It's employers — and they are more motivated than ever to join the fight for more affordable healthcare. In the New England Journal of Medicine (NEJM Group), Zirui Song and I discuss the evolving role of employers in US healthcare. America's companies provide healthcare coverage for well over half of Americans. (Howard Schultz famously said that Starbucks pays more for healthcare than it does for coffee beans.) Over the last 20 years, employer-sponsored health insurance costs grew by more than 300% — driven by price inflation, service use, and most recently, prescription drugs. How have employers traditionally handled these rising costs? 💲By shifting these costs onto workers in the form of higher premiums, higher cost sharing, and slower wage growth. ❗Data shows that suppressed wage growth from higher healthcare costs disproportionately hurts low-income and minority workers. But employers are increasingly taking a more active stance. We highlight several strategies that start with taking control of their own claims data (h/t Stacey Richter), ranging from collective bargaining to demanding transparent contracts that prohibit arbitrage, esp with PBMs (h/t Mark Cuban), where ERISA & fiduciary concerns are mounting. We call employers the sleeping giant of healthcare affordability. This was true in the past. Now, they're waking up.

The ward was busy… until everything went silent." A nurse came to collect the prescribed medicines. She prepared them and began administration — just like hundreds of times before. Minutes later, the alarms started. Blood pressure dropping. Pulse slowing. Then — silence. --- Senior staff rushed in. The pharmacist arrived, quickly scanning the IV line and the drip. But it was too late. The patient was gone. --- What happened? The investigation revealed: During administration, Ceftriaxone had been mixed with Ringer’s Lactate — an incompatible combination. The reaction was unseen, but the result was deadly. --- What now? Beforehand, when the medicines were dispensed, the pharmacist had not given any guidance. No reminder. No warning. Just medicines. This wasn’t about skill — it was about knowledge. --- No doubt, nurses are irreplaceable in healthcare ; Experts in patient monitoring, procedures, injections, and quick action in emergencies. They carry the weight of bedside care every second. But when it comes to drug interactions and incompatibilities, the pharmacist is the specialist. Pharmacists are the last checkpoint for medication safety ; Experts in drug compatibility, interactions, and safe administration. Their words can stop an error before it starts. -- This case was not about blame. It was about a missing link in communication. Patient safety isn’t just about treatment — it’s about teamwork. Because in healthcare, silence can be fatal. When handing over medicines like Ceftriaxone, always guide: “Do NOT mix with Ringer’s Lactate.” Because sometimes, the most powerful tool in saving a life… is just a few seconds of conversation. What safety reminder could you give today that might save a life tomorrow? #Pharmacy #PatientSafety #MedicationSafety #ClinicalPharmacy #Nursing #DrugInteractions #PharmacistRole #HealthcareSafety

48.86% of United Healthcare Premiums went to Optum... A few days ago, I came across an insightful post by Chris Deacon about the concept of eliminations in healthcare. Her explanation struck a chord with me: "At its core, eliminations reflect transactions between UnitedHealth’s insurance arm (United Healthcare Group) and its health services arm (Optum - which includes physician groups, OptumRx, Change Healthcare, etc). Technically speaking, eliminations are accounting adjustments made to remove internal transactions from consolidated financial statements to avoid double-counting revenue and expenses. In a highly vertically integrated healthcare organization like UnitedHealth Group, this technicality becomes a powerful tool to obscure how internal transactions inflate profits, consolidate market power, and ultimately drive up costs for patients and employers." Inspired by her post, I dug deeper into the 10-K SEC filings for FY 2023 from several major healthcare companies. Federal law mandates that health insurance companies spend 80%-85% of premiums on healthcare costs. However, based on conversations with insurance regulators, once funds are shown on paper as a cost of care and are no longer held by the insurer, they fall outside the jurisdiction of insurance oversight. Here’s the key finding: UnitedHealthcare’s insurance division reported over $279 billion in premiums for 2023. Of this, a staggering 48% was funneled to its own subsidiaries under Optum, including their PBM (Pharmacy Benefit Manager) and physician groups. This effectively shifts money from one pocket to another within the same organization, sidestepping regulatory scrutiny. The same pattern is evident at Aetna/CVS, another vertically integrated giant. Both of these organizations have a significant presence across Group, Medicare, Medicaid, and Individual markets, which means their practices directly shape the cost and quality of care for millions of Americans. It raises an important question: How do we ensure that regulatory frameworks evolve to address these complexities and protect patients and employers from the rising costs associated with this vertical integration? Let’s discuss. What are your thoughts?

This morning, I wrote about the rising cost of health coverage for employers -- surveys and benefits consultants are predicting increases of 9% or more for next year, the largest jumps in at least 15 years. And that would come on top of rapid growth over the last two years. The spike is driven by rising healthcare costs, with factors including higher prices for hospital services, more use of care by a population with rising incidence of conditions including cancer, and pricey drugs including the GLP-1s. One thing that struck me in the benefits consultant surveys, and in my interviews with employers, was their increased willingness to look at more-radical changes. That could include new types of plan designs that could incorporate restrictions on access to some healthcare providers, eyeing smaller vendors that compete with the big insurer/PBM companies, or, in the case of one company I interviewed, the possibility of moving to another country where healthcare is backed by the government, not private employers. As one source said, there seemed to be a mix of emotions from employers, from freaked-out, to resigned, to deeply frustrated that the cost of health coverage was rising so much faster than the prices they could charge for their own goods and services. However, I've been covering this beat for many years, and I've always found that employers tend to be pretty cautious and reluctant to make huge changes -- for good reason, since healthcare is so important to many workers, and disrupting access often draws enormous backlash. So when employers do make changes, it's often a slightly different flavor of what they were already doing. What do you think? Are significant numbers of employers ready to try something different? And, if so, what would that be?

A profit cap on insurers increased Medicare costs by $1.2 billion. New NBER research reveals how they did it. --- 💊The Affordable Care Act required Medicare Part D insurers to spend at least 85% of revenue on healthcare claims starting in 2014. ↳ This capped their profits at 15% through Medical Loss Ratio (MLR) requirements ↳ Payments to affiliated pharmacies count as healthcare costs in MLR calculations ↳ Pharmacy profits themselves remained unregulated For insurers who owned their own pharmacies, this created an opportunity to shift profit to other parts of the business. --- A new working paper (not peer reviewed yet) from the National Bureau of Economic Research provides us the data. The research compared what the same insurer paid affiliated vs. non-affiliated pharmacies for identical drugs. Vertically integrated insurers increased prices paid to affiliated pharmacies by 9.5% compared to non-affiliated pharmacies after MLR implementation. 🧢 For insurers most at risk of violating MLR requirements (those below 90%), the increases were even larger: ↳ 17.8% price increases to affiliated pharmacies ↳ Compare that to 2.9% for insurers with MLRs above 90% (i.e., they weren't worried about hitting the cap) --- Vertically integrated insurers shifted ~5% of their profits to affiliated pharmacies through this strategy. This increased Medicare Part D spending $1.2 billion from 2014-2016. 💸 25% of those inflated costs ($302 million) fell on parties outside the insurer parent company: ↳ Taxpayers (through Medicare): $259 million through higher federal reinsurance and subsidies   ↳ Patients: $22 million in increased out-of-pocket costs ↳ Drug manufacturers: $21 million in mandatory rebates --- This example highlights a regulatory challenge with vertical integration that I covered in a recent blog post https://drugch.nl/4mD8n3y When only one segment of a vertically integrated company is regulated, companies may shift profits to unregulated segments. The pattern applies beyond healthcare to any regulated industry with vertical integration. What's your response? 1️⃣ This is fine--no changes needed 2️⃣ Regulate the insurer and all vertically integrated segments 3️⃣ Remove regulation from insurers 4️⃣ Something else 📄 Working paper: https://lnkd.in/eC6DakSG ♻️ Repost to share the impacts of vertical integration. 🔔 Follow me for more insights on pharmacy economics and regulation (Bryce Platt, PharmD)

No one who actually works in healthcare is shocked by the The Wall Street Journal story about UnitedHealth Group's CEO making private investments in healthcare startups. Not the undisclosed investments. Not the affiliated entities. Not even the emails suggesting certain involvement was better kept out of writing, but could be communicated "verbally." Anyone who has spent time in this business knows none of this requires much imagination. Dinner and drinks with a payer executive, a startup CEO whose model depends on coverage expansion, a private equity sponsor looking for scale, and a policymaker in the room; all talking about where reimbursement is going, what policies are likely to move, which services are about to become “standard of care,” and what that means for business. They don't whisper. Its not a conspiracy. Just people with aligned incentives discussing the future of the market. There are so many versions of this dinner. Hospital mergers announced alongside extraordinary exit packages for retiring executives, sold as expanded access and efficiency. Coverage expansions framed as breakthroughs for patients that also happen to align perfectly with existing investments. Startups that succeed or fail based on access to distribution, reimbursement, or the right strategic relationship rather than clinical value. Walk someone through how healthcare business actually gets done - how access to the market is controlled, how claims move through layers of intermediaries taking their cut, how companies that call themselves competitors work together in order to keep the economics working. There’s usually a moment where they say, "Surely, this can' be legal?!" Its not, not legal. But when you hear it described plainly, it often sounds like it should be. UnitedHealth Group's Hemsley recently testified before Congress that his company's most important goal is to make healthcare "more accessible and more affordable."  He is now worth nearly a billion dollars, wealth built almost entirely from this company and this industry. I’m not opposed to people succeeding. But at some point we should be honest about what success in this industry reflects. It is rarely the result of making care more accessible or affordable. More often, it comes from understanding how the system works and benefiting from the complexity itself. Call it a market if you want. Many people who work inside it would use a different word. Peter HayesJustin LeaderPreston AlexanderShawn GremmingerCora OpsahlDoug AldeenMarsha SimonMarilyn BartlettJulia PosackiJulie SelesnickLee LewisNelson GriswoldAshleigh Gunter Thomas CampanellaGe BaiVivian HoJohn TozziPatient Rights Advocate https://lnkd.in/erk2kBPN

18-20% annual increase - that's the rate at which healthcare costs are rising. It's a number that should make every business leader pause and think. This surge in healthcare expenses isn't making headlines, yet it's a critical issue that's slowly eroding the value of our employee health insurance plans. If we're not increasing our Group Health Insurance (GHI) coverage every three years, we're effectively reducing our employees' health protection. Here's why: ➤ Technological Leap: The medical field is transforming. We've moved from X-rays to MRIs in what feels like a blink, and each leap brings better care but at a premium. ➤ Facility Upgrades: Even smaller hospitals now feature cutting-edge equipment, driving up expenses. ➤ Pharmaceutical Costs: New, life-saving drugs enter the market at high prices due to extensive R&D investments. ➤ Operational Expenses: Rising real estate costs for medical facilities and competitive salaries for healthcare professionals contribute to overall cost increases. The math is simple. Over three years, we're looking at a 50-60% increase in healthcare costs. Our GHI plans need to keep pace, or we're shortchanging our teams. I've seen the consequences firsthand: Employees facing crippling medical debts. Delayed treatments due to coverage gaps. Stress that impacts not just health, but productivity and loyalty. The solution isn't complex, but it requires commitment: ➤ Audit your GHI plans annually. ➤ Increase coverage limits every three years, aiming for at least a 50% bump. ➤ Educate your team on their coverage – awareness is half the battle. ➤ Partner with insurers who understand this new landscape. As leaders, we don't just manage businesses – we safeguard our people. In this era of skyrocketing healthcare costs, that means taking a hard look at our GHI plans and making sure they're not just good on paper, but good in practice. It's about that woman in operations who beat cancer without bankrupting her family, or the guy in IT whose child got the specialty care they needed. The companies that act now will set the standard for employee care in the years to come. The question is: Will you be one of them? #PolicybazaarforBusiness #HealthcareCrisis #Employeebenefit #grouphealthinsurance

Private equity is rapidly expanding into healthcare, but how does this affect which patients get care? Our new research letter in JAMA Network Open tackled this question by studying ophthalmology practices acquired by PE firms. The surprising finding: While patient visits increased across all insurance types after PE acquisition, the proportion of patients actually shifted toward Medicare and away from commercial insurance. This could mean commercial insurers are avoiding PE-backed practices, or that these practices want to retain Medicare FFS patients for stable reimbursement rates. Either way, it challenges assumptions about PE prioritizing only the highest-paying patients. As private equity's healthcare presence grows, we must continue to look at how it affects both access and quality. Read the full research letter, linked in the comments. #HealthcareonLinkedIn #PrivateEquityinHealthcare

I am happy to co-author this article with Beatrice WEDER DI MAURO, President of the CEPR - Centre for Economic Policy Research, reflecting on the urgent need to engage in collective thinking and action to adapt our response to the challenge of insurability in the face of escalating climate risks. This article, which captures key convictions from our joint workshop hosted at Collège de France by the AXA Research Fund and CEPR - Centre for Economic Policy Research, couldn't have been more timely.   Devastating floods in Valencia, the wildfires in Los Angeles, the typhoons in Mayotte and La Réunion... These recent climate catastrophes show a clear reality: climate risks are intensifying and the protection gap for local communities and economies are becoming evident. Global economic losses from extreme weather events reached $320 billion in 2024, while in Europe, only 25% of economic losses were insured - leaving individuals, businesses, and communities vulnerable.    To address this, we need to enhance risk-sharing mechanisms and promote partnerships between public institutions and private companies.   Ensuring insurance accessibility and effectiveness is crucial. This can be done through: ➡️ Hybrid models, combining market mechanisms with public-private partnerships, to help ensure broad coverage and affordability. France’s CatNat regime and Switzerland’s hybrid model offer valuable insights. These models can be adapted to regions facing extreme exposure, such as sea level risks. ➡️ Greater investment in prevention and risk-sharing mechanisms. Initiatives like local municipal risk assessments can help small municipalities assess and mitigate local climate risks. ➡️ Impact underwriting, where insurers incentivize policyholders to adopt risk-reducing measures in exchange for lower premiums. ➡️ Public education on climate risks and stronger coordination between insurers, governments, and consumers to ensure preventive measures are taken seriously.   As we move forward, it's clear that policymakers, insurers, and society must work together to strike a sustainable balance between affordability and fiscal viability. This is not just about who pays the bill. It is about how we manage risk in an increasingly uncertain climate landscape. Let's continue to foster collaboration and innovation to close the protection gap and build a resilient future. 👇 https://lnkd.in/er6BkrtZ