We are witnessing a transformational epoch in U.S. healthcare.
The global pandemic of Sars-Cov-2 laid bare the fundamental cracks in our healthcare system that relies on volume, fee-for-service, and layers upon layers in the supply chain to transact money for the delivery of healthcare services and dispensing of medications.
Consider how it took such a pandemic for our doctors to figure out how to deliver virtual care to their own patients.
For the last four decades, US healthcare has been defined by 3rd party managed care companies, coding and billing systems, massive bureaucracy, higher and higher deductibles, and rising premiums outpacing both inflation and wage growth.
The largest transfer of wealth has taken place in this country due to the enormous bloat and inefficiencies in our healthcare system. You see this with those shocking news articles about patients being charges $400 for an Aspirin tablet at the hospital, or the fact that GoodRx can make so much money using the same exact infrastructure owned by the big 3 PBMs: Optum, Express Scripts, and CVS while seemingly delivering a better price at the pharmacy counter. It still amazes me that the cash pay price for many medical services in this country are far better than those heavily negotiated prices our beloved insurance companies secured for us with their incredible buying power.
The largest transfer of wealth has taken place in this country due to the enormous bloat and inefficiencies in our healthcare system.
Sunshine is the best disinfectant.
In early 2022 hospitals began publishing their negotiated rate schedules online for all to see. On July 1, every employer will have to do the same regarding their own sponsored health plans. Most of these files will be so big, new cottage industries are popping up to scrape the data and turn it consumable for the average patient. In the coming few months pharmacy benefit managers will have to do the same.
The entire industry is going to have to stand naked in front of every patient and consumer and display just how bad the rip-off has been. Most will see for example, that an MRI of the brain under their UHC health plan costs 4x the price of what a cash-paying patient would pay. Or conversely that the same hospital receives just 2.5x the price from a Blue Cross patient.
Pharmacy will be even more telling. The companies that we’ve hired to control the costs of our medications have been marking them up this whole time for their own gain. Centene got in trouble for this exact business practice and subsequently decided to sell off their entire PBM devisions.
FLAT HEALTHCARE
I predict a much more flat healthcare market in the US. Knowledge and the transfer of that knowledge empowers consumers. The power dynamic that has existed in healthcare and the ungodly amount of financial bloat has persisted precisely due to the opacity in this market. We can’t fix what we can’t see and the industry for many years has not wanted us to see what’s going on.
Healthcare is now a $4 trillion dollar industry – it didn’t get this big by accident but also it’s happened on the backs of every working American in this country – we’ve funded this whole thing.
It’s now our turn to take our healthcare back and with it the wealth that’s been stolen from us. A flat healthcare world means the end of PPO networks – the cost of an MRI at hospital A is the cost of an MRI at hospital A. A flat healthcare world means PBMs no longer determine medication price – ingredient cost is ingredient cost. Rebates become obsolete. Benefit brokers – as we know them today – will become a bygone industry.
The real winners: the patient, working Americans, taxpayers, local governments, our teachers, our children, our children’s children.
You’ll want to watch what happens next.
-Adam Berkowitz
Founder & President, Simpara
