November 26, 2020

Encore! EP206: Turns Out, High‑Deductible Plans Do Not Drive High‑Quality, Cost‑Effective Care, With Ashok Subramanian, CEO and Founder of Centivo

32 minutes

There’s lots going on these days with transparency. Three cost transparency rules, as a matter of fact, just came out of CMS, for example. These rules demand that hospitals and payers make available cost information so patients can shop and employers can also shop. That last part there, about employers and/or payers being able to shop … that might wind up actually being the part of these transparency rules that has the most impact.

It all goes back to kind of a first-principle assumption that many made—including me, by the way—which is turning out to be arguable. It’s the great hope for consumerism through high-deductible health plans. The thought originally was that by pushing the burden onto patients/employees to find high-quality care at a fair price, we assumed that health care delivery would level up. We assumed that prices would come down, driven by the weight of consumer demands.

But anybody seeking to validate this hypothesis would be pretty hard pressed to claim any sort of broad-stroke success beyond cost shifting by brute force. The vast majority of patients don’t have medical degrees. This is why they went to a doctor to begin with. So, it’s unsurprising to learn that providers wield a lot of influence. If a doctor tells a patient to go here for an MRI or there for surgery, patients have a tendency to go, without questioning.

So, logically, if we want to create a high-value health care system and high-value health care—high quality at a fair price—we need to contemplate the recommendations that providers are making. These recommendations especially matter because a patient’s entry point into the health system—where they go first—can make all the difference. This is also a particularly relevant point these days with all the discussion about digital front doors.

Earlier, I spoke with Ashok Subramanian, CEO and founder over at Centivo. Centivo is a novel self-funded health plan centered around robust primary care. And I thought this episode had particular relevance given what is going on in the health care industry today.

You can learn more at centivo.com.

Ashok Subramanian founded Centivo in 2017 after observing the inefficiency in the health care system and the pain that has resulted for employers and employees.

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By Stacey Richter