Introduction

At the age of twenty-nine, I was named one of the youngest vice presidents in the history of the seventh-largest health insurance company in the country—so young that they had to rewrite the job description because I didn’t have enough experience on paper to qualify. I was responsible for managing a cross-functional team architecting an enterprise-wide initiative to align patient and provider incentives around value-based care, which, to date, has saved more than one billion dollars in medical and pharmaceutical spending. This achievement required much of our matrixed enterprise, which made the success that much sweeter, and showcased just how powerful we could be as a unified force. In recognition of this achievement, I was named one of “30 Under 30” by the Pittsburgh Business Times and surrounded by many leaders from our enterprise as we celebrated at the awards banquet.

My career was flying high.

I’d never felt worse in my professional life.

In hindsight, the value-based initiatives I led were essentially Band-Aids for a metastasizing tumor. Sexy, shiny little Band-Aids, but Band-Aids nonetheless—just one in a long line of industry self-reforms that have essentially failed to address the cancer at its source.

The results were great for the company. That year—and the year after and the year after that—were banner financial years, supported by initiatives like the one I led. Our profits ran in the hundreds of millions in each of those years.

We were a well-oiled machine led by some of the industry’s brightest minds. We reinvested our margins back into the machine, using that money to buy or partner with strategic health systems, digitize many archaic and manual systems, invest in alternative revenue streams, and truly double down on our differentiators, fortifying our position as a dominant market player.

We weren’t alone in this. Health insurers across the country have been operating in this fashion for years. And don’t get me wrong; it wasn’t a bad thing. We would employ more people, serve more patients, modernize patient and provider experiences, and increase access in more geographies as we grew. We had righteous goals to improve the quality of care, increase preventive services, address social determinants of health, and negotiate the most competitive value-based reimbursement rates with our providers—after all, a healthier and cheaper beneficiary is good for business!

But did the tangible value we created truly warrant those banner financial years? Did we actually see the needle move on delivering higher quality care at an affordable price?

I didn’t see it, and I had a pit in my stomach that I couldn’t shake. I came to a realization that I believe many noble people in the industry reach years later than I did, often when they’ve grown too settled and too comfortable to rock the boat. We all know the saying “Don’t bite the hand that feeds you.” Age and breadth of experience often bring wisdom and enlightenment, but that also comes with a family, a mortgage, and other daily comforts that are dependent on the status quo and create little incentive to truly reshape the system at its very foundation.

That’s exactly where we have to begin—at the foundation.

I used to joke that I was just one date away from marrying a woman in Pittsburgh, buying a home, and aging comfortably, turning into another senior executive who won’t be around long enough to see the system into its next chapter anyways.

As you may have already guessed, I didn’t meet that woman in Pittsburgh. So I’m here to rock the boat. I know I’m not alone in my thinking; perhaps you have a pit in your stomach too. I hope what I have to say will encourage you to take a leap of faith and join me in rocking the boat.

The System Isn’t Broken

We’ve created a booming subindustry within healthcare dedicated to fixing the broken system. Everywhere you look, there are jobs and careers popping up around “fixing the problem.” Shit, this book will join a litany of other publications focused on this exact topic—although I have an idea on how to make it different.

The thing is, there’s a catch; it’s not really a broken system. It’s the perfect system—a system reacting perfectly to the market forces at play, human-made forces that are contributing to much of our nation’s economic stability. It’s even been described as recession-proof, with really only one thing capable of slowing it down: a global pandemic. Even so, as the pandemic passes, I predict growth will return in short order. In fact, the pandemic has ignited new arenas of digital and virtual health, which will amplify new verticals for spending and investment.

That said, I also think our perfect system has a hard-to-digest fixed variable: we need to keep spending at a high level on healthcare, because if we don’t, our economy simply won’t grow. It’s like a bizarre form of Keynesian economics: put money in healthcare and watch the country’s entire economic machine come to life. The healthcare sector is the country’s largest employer. In order for our economy to survive, we need healthcare to employ millions upon millions of people. It’s a machine that feeds off our economy while simultaneously driving it forward. (Perhaps Hank Paulson, the treasury secretary who gave us “too big to fail,” should have figured this out back in 2008—but I digress.)

People need jobs, and healthcare provides great ones. But it is still a healthcare system, which must also deliver affordable, high-quality care. That’s where the breakdown begins. The system we’ve built can’t deliver that. In broad strokes, it is not efficient, it is not affordable, and it certainly isn’t high quality.

I’m not going to talk about the “broken” system in this book. It’s the perfect system, given what it’s structured to produce. I want to reframe the conversation. I hope to help you look at the system’s issues in a new light, because that will make you think differently about the needed next steps.

Think of it as a house with an unstable foundation. I don’t care if you move the sofa from one side of the living room to the other. I don’t care if you install a new roof, solar panels, or even a state-of-the-art home security system. The foundation is faulty; nothing else matters until that is resolved.

Talk of reform tends to point at physicians, hospital systems, or (you guessed it) pharmaceutical companies, because we think of them together as healthcare. Instead, I’m going to focus on the economy that’s governing the system, which is the work of the health insurance industry.

This is not often talked about, and for a good reason. It’s convoluted, hard to follow, and simply not that sexy. There are no Grey’s Anatomy prime-time dramas featuring health insurance executives. The multibillion-dollar insurance lawsuits the industry generates don’t often make it beyond trade journals and websites. And when they do make the front page of the newspaper, no one can make sense of it. What average American knows what it means to artificially inflate an RAF score?

Only our inner nerds can solve this problem. We need to hone in on the health insurance industry because it’s where the money comes from, once it’s been extracted from individuals, the federal government, and employers who purchase coverage for their employees and their dependents. The single largest block of insured Americans—over 180 million people—gets coverage through an employer-based benefit.

The vast remainder gain coverage through the federal government, but let’s be honest, more times than not, these federal lines of business are publicly counted as loss leaders by providers, with much of a provider’s margins cross-subsidized from commercial rates. That is not to say that an efficient provider can’t remain solvent on Medicare rates. I’ve seen firsthand how efficiently a health system can be run, and commercial cross-subsidization is certainly not required; unfortunately this is still the exception and not the rule. This leaves employers paying for Medicare benefits twice: once through taxes and again through the cross-subsidy required to cover the government’s underpayment. It’s simply not sustainable. We’re bound for collapse.

In the chapters to come, I’ll be deliberate and detailed in examining the insurance system as it exists now and the reasons efforts to reform from within have failed. I’ll examine the two poles of the political debate—the free-market approach from the right, the...