Rent Seeking PPOs

Do we need to pay a premium to access healthcare services? By premium, I mean do we place a financial value on the mere access of healthcare services? If we take this prima facie, how much margin is fair and who decides?

 In the largely opaque supply chain of healthcare in the U.S., we’ve developed the roles of (quite large) middle-men to facilitate everyday transactions. One of the most ubiquitous would be the advent of the PPO or Preferred Provider Organization. The idea that a third party would sit in between the patient and doctor to facilitate the cost of that care and the movement of money. PPOs develop contracts, hidden from view of the consumer, presumably at the benefit of the patient and employers that are by-large the funders of healthcare in the U.S. As we’ve moved away from the indemnity contracts of old, we’ve lost sight of what healthcare services should cost thus, allowing PPOs to tout incredible discounts off of prices that have ballooned to extraordinary levels.

For what good is a 60% discount if the retail price was inflated 6x or even 10x cost?

Alas, this is where PPOs have evolved and remain today. It is classic rent-seeking behavior. There is nothing productive about the PPO. They have made no improvements to the level of care provided nor have they simplified the flow of funds between the two parties. Yet due to their predominance in the marketplace and perceived brand-value, very little are they questioned or held accountable.

If the United States is to survive economically, disintermediation of the healthcare supply chain is the only solution. The good news is that common-sense solutions already exist and forward-thinking employers like Rosen Hotels, Walmart, and the state of Montana have been doing it for years with tremendous success. These companies are spending nearly half the cost on health care as everyone else which means more money back into R&D, restored wages, restored pensions and 401(k)s, and investment back into local communities.

We’re on a journey, along with Health Rosetta and the certified pros across the country, to restore wages and hope. We hope you join us.

Starting An Agency In Today’s Climate

Our founder, Adam Berkowitz, was recently featured on David Saltzman’s industry-leading podcast, “Shift Shapers.”

A personal encounter with the medical system led to a decision that making a difference required a different approach. So Adam Berkowitz launched an agency that takes a new-day perspective in its operations and interactions with clients.

What You’ll Learn From this Episode:

  • The personal experience that began the process.

  • Leveraging technology to control expense and enable scaling.

  • Focusing on being educational and consultative.

  • The St. Louis market and its influence.

  • Working with the shifting mindset of clients.

Breaking News: US Senate bill proposes Health Rosetta-style disclosure rules

Breaking News: US Senate bill proposes Health Rosetta-style disclosure rules

A key component of the Health Rosetta strategy is transparent advisor relationships. This week, legislation was introduced by the Senate HELP committee with Chair Lamar Alexander (R-TN) and ranking Democrat Patty Murray (WA) that, among other things, will require brokers & consultants to disclose all their sources of compensation.

Behind the Scenes, Health Insurers Use Cash and Gifts to Sway Which Benefits Employers Choose

Behind the Scenes, Health Insurers Use Cash and Gifts to Sway Which Benefits Employers Choose

This recent piece in ProPublica is the most important piece ever written on benefits. Not surprisingly, all 10 of the top benefits consultancies nationwide either declined to comment or didn’t respond.

The Curtain has been pulled back on brokers taking financial incentives from insurers. As a Health Rosetta certified advisor, pieces like this from Marshall Allen at ProPublica (in conjunction with NPR) are critical to build a more transparent healthcare system: https://www.propublica.org/article/health-insurance-brokers-cost-commissions-bonuses.

Even the Best PBM Can't Protect Against These

Knowledge is power, especially when it comes to price variations in healthcare. Many times, the best pricing exists outside of your health plan, but how to get this information in front of employees is the biggest challenge. Even the most transparent PBM arrangements, can’t protect against uninformed decisions.

Discounts off of what?

Dave Chase, co-founder of Health Rosetta, penned an article titled “Have PPO Networks Perpetrated The Greatest Heist In American History?” Originally published in Forbes in 2016, it is an eye opening account of the pervasive waste in our healthcare system.