Relentless Health Value

RCM: Why Revenue Cycle Management Is Healthcare's $200B Hot Potato, With Andrew Tsang (EP521)

How Revenue Cycle Management (RCM) Became an Over $200 Billion Healthcare Hot Potato. Episode 521.

Revenue cycle management (RCM) sounds like the least sexy phrase in healthcare — a back-office spreadsheet problem. It isn't. Andrew Tsang, an independent healthcare analyst and writer of the Substack Health Is Other People, with 15+ years across providers, payers, consulting, and policy, joins Stacey Richter to unpack how RCM has grown into a $200-plus-billion industry that eats roughly a third of every healthcare dollar spent — not on care, but on the fight over who pays for it. Together they trace RCM's front end, middle, and back end, and the "hot potato" that lands on whoever has the least leverage to fight back.

WHAT YOU'LL LEARN

✅ How revenue cycle management (RCM) grew into a $200-plus-billion industry — Andrew Tsang puts RCM-related market cap at roughly $217 billion, and estimates roughly a third of every healthcare dollar goes to the fight over payment, not to care

✅ The three phases of RCM (front-end eligibility and prior authorization, middle clinical coding, and back-end claims adjudication and appeals) and why the "hot potato" of financial responsibility lands on whoever has the least administrative leverage — patients, independent practices, or self-funded employers

✅ Why a routine screening colonoscopy can flip to a diagnostic procedure — and an unexpected bill — the moment a polyp is found, even though the ACA mandates the screening itself be free

✅ How the prior authorization burden (physicians average roughly 39 prior auths a week) forces independent practices to compete on administrative capacity rather than clinical outcomes, accelerating consolidation into larger health systems

✅ Why self-funded employers face their own version of the hot potato through stop-loss "lasering," where a stop-loss carrier can exclude a specific high-cost employee from coverage after a catastrophic claim

✅ Why direct contracting — agreeing on price upfront — is Andrew Tsang's proposed way to opt out of the RCM hot potato game entirely

WHY THIS MATTERS

Revenue cycle management isn't a niche back-office function — it's a $200-plus-billion economy built on claim-by-claim fights over who pays. As Stacey Richter puts it, this isn't a story about villains; it's a story about an industry built around claim-by-claim fistfights. Whoever has the least administrative leverage in any given moment — patient, independent practice, or self-funded employer — is the one who winds up eating the cost.

MENTIONED IN THIS EPISODE

LinkedIn Post by Andrew Tsang, featuring his Revenue Cycle Market Landscape interactive chart

EP497 with Zack Kanter: Apple Podcasts | Spotify | Other Apps

EP363 with David Scheinker, PhD: Apple Podcasts | Spotify | Other Apps

LinkedIn Post by Sheri Mancini, MD, FACS

EP494 with Sarah Emond: Apple Podcasts | Spotify | Other Apps

=== LINKS ===

🔗 Show Notes with all mentioned links: Episode Page

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🎤 Listen on Apple Podcasts

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✭ LinkedIn ✭ Threads ✭ Bluesky ✭ X

00:00 Introduction to this episode.

02:13 What revenue cycle management is.

03:22 How RCM is an endless game of hot potato.

07:10 The conversation with Andrew Tsang.

08:24 Is it actually a cycle?

08:54 How big the RCM industry actually is.

09:49 Defining revenue cycle management.

12:13 Why patients may spend more time doing revenue cycle tasks than with their doctor.

17:12 Who pays and why?

19:56 An example of RCM working within something like a colonoscopy.

22:55 The worst part about this whole revenue cycle.

24:49 How RCM affects independent doctors.

29:51 How RCM affects self-funded employers and stop-loss carriers.

Cash-Pay Generic Drugs and the PBM Spread Pricing Problem (EP520)

Cash-pay generic drugs are one of the few corners of US healthcare where a real, functioning market already exists — which is why Stacey Richter argues policymakers need to tread carefully when trying to "fix" drug affordability. In this solo episode, Stacey explains why cash generic prices can run as low as $1 a prescription, then plays clips from four past guests — Ge Bai, PhD, CPA; Bryce Platt, PharmD; Benjamin Jolley, PharmD; and Luke Slindee, PharmD — showing how inserting a PBM extracts $41 out of every $100 spent, leaving patients paying more for the "privilege" of using their insurance.

WHAT YOU'LL LEARN

✅ Why cash-pay generic drugs are one of the few genuinely functioning markets left in US healthcare, with multisource manufacturer competition keeping prices as low as $1 to $18 per prescription

✅ Why using insurance/PBM coverage makes the 20 most prescribed generics more expensive 43% of the time overall, and up to 79% of the time in the deductible phase, per Ge Bai, PhD, CPA's research in Annals of Internal Medicine

✅ How PBMs extract $41 out of every $100 spent on generic drugs that cost roughly 47 cents to manufacture, largely through the administrative overhead of risk pooling

✅ How Most Favored Nation "lesser of" clauses in PBM-pharmacy contracts punish pharmacies for lowering their cash prices, and why Luke Slindee, PharmD, argues removing that single clause could unlock a more robust cash-pay market without pulling generics from insurance entirely

✅ Why generic drug adoption has slowed from about one month to six months to reach peak uptake, which Bryce Platt, PharmD, ties to PBM formulary control rather than reduced competition or prescriber resistance

✅ Four policy ideas Stacey floats for keeping generics affordable without wrecking the underlying market: eliminating MFN clauses, funded wallets or prepaid cards, pre-funded cash-pay pharmacy relationships, and removing generics from PBM adjudication entirely

WHY THIS MATTERS

Generic drugs are one of the only truly functioning markets left in US healthcare, and cash prices are already low because of it. But policymakers trying to make medications more affordable often reach for the same lever — routing everything through insurance/PBM adjudication — which the data shows frequently raises what patients pay while handing PBMs a 41-cent cut of every dollar spent. As Stacey puts it, "you have to be really careful what levers you push because you can't see what they're attached to," and the wrong fix could break the one part of healthcare that's actually working.

MENTIONED IN THIS EPISODE

EP444 with Ann Kempski: Apple Podcasts | Spotify | Other Apps

LinkedIn Post by Bryce Platt, PharmD

EP495 with Mick Connors, MD: Apple Podcasts | Spotify | Other Apps

EP420 with Ge Bai, PhD, CPA: Apple Podcasts | Spotify | Other Apps

EP422 with Benjamin Jolley, PharmD: Apple Podcasts | Spotify | Other Apps

EP517 with Stacey: Apple Podcasts | Spotify | Other Apps

LinkedIn Post by Bryce Platt, PharmD

EP439 with Luke Slindee, PharmD: Apple Podcasts | Spotify | Other Apps

LinkedIn Post by Patrick Moore

EP465 with Chris Crawford: Apple Podcasts | Spotify | Other Apps

=== LINKS ===

🔗 Show Notes with all mentioned links: Show Notes

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🫙 Support the podcast with a small donation to the Tip Jar

📺 Subscribe to our YouTube channel

🎤 Listen on Apple Podcasts

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=== CONNECT WITH THE RHV TEAM ===

✭ LinkedIn ✭ Threads ✭ Bluesky ✭ X

00:00 Introduction to this episode.

03:48 Intermediaries versus functioning markets.

05:30 The use case for today's episode.

10:56 The reason why cash-pay generics are cheap right now.

11:42 The value proposition of PBMs versus cheap generics.

16:09 What risk pooling is and how it plays into all of this.

26:16 Solutions to keeping generics affordable.

Cognitive Atrophy and Referral Incentives Breaking Primary Care, With Lisa Rosenbaum, MD (EP519)

Primary care physicians are leaving traditional practice for concierge medicine in visible numbers—and the question is whether that exodus is an unavoidable consequence of how the system is built, or something we've simply chosen not to fix. Stacey Richter talks with Dr. Lisa Rosenbaum, a cardiologist at Beth Israel Deaconess Medical Center (BIDMC) and national correspondent for the New England Journal of Medicine , who recently devoted an entire season of her NEJM podcast, Not Otherwise Specified , to the state of primary care. Together they test three forces reshaping the field—cognitive atrophy, referral incentives, and care fragmentation—against a single question: inevitable, or fixable?

WHAT YOU'LL LEARN

✅ Why Dr. Lisa Rosenbaum calls the risk of "cognitive atrophy" among primary care physicians a generational threat rather than an individual one—and why she believes it is not inevitable

✅ How financial incentives that pay far more for a specialist visit than a primary care visit (roughly 5% of healthcare dollars for close to 35% of outpatient visits) structurally push referrals earlier and more often than necessary

✅ Why "relational expertise"—the judgment a doctor builds by knowing a patient over time—is, in Dr. Rosenbaum's view, primary care's real and undervalued skill set

✅ How care fragmentation, illustrated by Miriam Paramore's LinkedIn essay about her father's end-of-life care, leaves patients bouncing among specialists with no one taking ownership of the whole picture

✅ Why Dr. Rosenbaum argues that blaming everything on structural constraints "strip[s] ourselves of our own agency," and what she thinks physicians and healthcare buyers should each do about it

WHY THIS MATTERS

Roughly 70% of physicians are employed today, and about 5% of every healthcare dollar goes to primary care despite it covering close to 35% of all outpatient visits—numbers that, per Dr. Rosenbaum, reflect choices the system has made, not laws of nature. When primary care doctors lose the time and incentive to build relationships with patients, the system loses its quarterback, and patients end up fragmented across specialists with no one accountable for the whole picture. Dr. Rosenbaum's core argument is that none of this is inevitable, but fixing it requires both structural change and individual physicians and healthcare buyers reclaiming their own agency.

MENTIONED IN THIS EPISODE

EP504 with Ryan Jacobs: Apple Podcasts | Spotify | Other Apps

EP473 with Kenny Cole, MD: Apple Podcasts | Spotify

EP391 with Scott Conard, MD: Apple Podcasts | Spotify | Other Apps

Article: "Ordinary Rural Death: My Father's End-of-Life Journey" by Miriam Paramore

EP409 with Larry Bauer, MSW, MEd: Apple Podcasts | Spotify | Other Apps

=== LINKS ===

🔗 Show Notes with all mentioned links: Show Notes

✉️ Enjoy this podcast? Subscribe to the free weekly newsletter

🫙 Support the podcast with a small donation to the Tip Jar

📺 Subscribe to our YouTube channel

🎤 Listen on Apple Podcasts

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=== CONNECT WITH THE RHV TEAM ===

✭ LinkedIn ✭ Threads ✭ Bluesky ✭ X

00:00 Introduction to this episode.

03:47 Cognitive atrophy: what is it in terms of primary care providers?

08:56 Why Lisa Rosenbaum, MD, did an entire series on primary care.

11:32 Why physicians need to practice at the top of their license.

13:54 Why a good internist is a "quarterback."

16:23 How family medicine and procedures play into skill atrophy.

20:21 The majority versus the minority in primary care.

21:00 Is cognitive atrophy inevitable for primary care providers?

23:34 Full-spectrum clinical scope versus referrals in primary care.

25:51 The fix for too many referrals in primary care.

27:36 Why the solution is not an either/or.

30:08 Longitudinal relationships versus fragmentation.

36:07 Is this inevitable, or is this fixable?

39:02 What every listener in a position of power needs to ask themselves.

The ASO vs. TPA Decision That Quietly Costs Self-Funded Employers More

What's the real difference between an ASO and a TPA — and why does it matter that self-insured employers working with an ASO pay, by one referenced estimate, about 4.7% more than the insured book of business for the same care? In this Ask Me Anything, Stacey Richter puts a listener question from Dr. Alex Sommers, MD, ABEM, DipABLM, president of Astia Health, to Claire Brockbank, newly appointed director of the 32BJ Health Fund, who breaks down how ASO and TPA models diverge on ownership, networks, and incentives.

WHAT YOU'LL LEARN

✅ How an ASO (administrative services only) arrangement differs structurally from a TPA (third-party administrator) — in Claire Brockbank's words, an ASO is essentially "a TPA that's owned by one of the big insurance carriers"

✅ Why bringing your own network, doing carve-outs, or direct contracting is typically much easier with a TPA than with an ASO, since an ASO's network comes bundled in

✅ How ASO incentive structures can lead carriers to charge self-funded employers more to offset thinner margins on their insured book — and why a study referenced by Luke Prettol found self-insured ASO clients pay roughly 4.7% more on average

✅ Why many TPAs, as newer market entrants built around technology, can move faster on things like claims-audit integrations than legacy carrier systems that can take up to 18 months to implement changes

✅ A real-world example of how network rigidity under an ASO made it difficult for one employer to remove 40 identified unsafe physicians from its network

✅ Why reading a TPA contract carefully still matters, since aligned incentives are a structural possibility with a TPA, not a guarantee

WHY THIS MATTERS

ASO and TPA are routinely used interchangeably across the industry, but as Claire Brockbank lays out, the distinction isn't just terminology — it's what determines how much actual control a self-funded employer has over its own health plan. An ASO bundles in the carrier's network and legacy systems, often with built-in incentive misalignments that can show up as higher costs than the insured book of business pays. A TPA leaves more room to bring your own network, negotiate direct contracts, and move quickly when something needs to change. For any plan sponsor sorting out vendor options, knowing which model is actually on the table is foundational to getting the rights, rates, and flexibility they're after.

MENTIONED IN THIS EPISODE

Post by Luke Prettol

EP453 with Claire Brockbank: Apple Podcasts | Spotify | Other Apps

EP498 with Mark Noel: Apple Podcasts | Spotify | Other Apps

=== LINKS ===

🔗 Show Notes with all mentioned links: Show Notes

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🫙 Support the podcast with a small donation to the Tip Jar

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=== CONNECT WITH THE RHV TEAM ===

✭ LinkedIn ✭ Threads ✭ Bluesky ✭ X

00:00 Introduction to this episode.

00:38 Dr. Alex Sommers' question.

04:05 Claire's answer to what differentiates a TPA and an ASO vendor.

04:25 What an ASO vendor is.

04:57 What a TPA is.

06:52 The pros and cons to choosing an ASO as a carrier.

09:05 The pros and cons to TPAs.

What if a prior authorization has less to do with your medical need than with how big a rebate check a PBM is collecting on a competing drug? In this solo deep dive — a direct follow-up to last week's conversation with Ophelia Johnson on GLP-1s and cash pay (EP516 link below) — host Stacey Richter walks through a "Brand Darling" vs. "Brand 2" case study showing how PBM/GPO rebate contracting and the Inflation Reduction Act's pressure on list prices can turn prior auths and step therapy into negotiating leverage rather than clinical guardrails. She also breaks down the GoodRx reverse-auction mechanic and why a growing number of pharma manufacturers are responding to rebate-driven formulary exclusion by going cash-pay direct to patients.

WHAT YOU'LL LEARN

✅ How PBM/GPO rebate contracts create a "rebate cliff" that locks new or lower-cost drugs out of formulary, regardless of price or clinical efficacy

✅ Why prior authorizations and step therapy are often used as a financial negotiating lever to extract bigger rebates from a dominant "Brand Darling," rather than as a clinical-necessity check

✅ How the Inflation Reduction Act's list-price pressure is collapsing the rebate spread that funds the current PBM contracting model

✅ Why cash-pay and direct-to-patient strategies are becoming a more attractive option for pharma brands excluded from preferred formulary tiers

✅ How GoodRx's reverse-auction model actually generates its advertised cash prices, and how GoodRx profits from sponsored placement, copay-card integration, and data sales

✅ Why copay accumulators and maximizers can erase the value of a manufacturer's copay card even when a patient does get coverage

WHY THIS MATTERS

For self-insured employers and plan sponsors footing the bill, this episode is a reminder that a prior authorization or a formulary tier placement may be a financial calculation between a PBM and a manufacturer first, and a clinical determination second. Because coinsurance is calculated off an inflated list price, the same rebate-cliff dynamics that lock a lower-cost drug out of formulary can also push more cost directly onto plan members. And as the Inflation Reduction Act squeezes the rebate spread that funds this model, cash-pay and direct-to-patient strategies are emerging as an alternative worth watching — even though, as Stacey notes, the usual PBM players are often still involved behind the scenes.

MENTIONED IN THIS EPISODE

EP516 with Ophelia Johnson: Apple Podcasts | Spotify | Other Apps

Post by Robyn Tikia

AEE13 with Ge Bai, PhD, CPA: Apple Podcasts | Spotify | Other Apps

=== LINKS ===

🔗 Show Notes with all mentioned links: Show Notes

✉️ Enjoy this podcast? Subscribe to the free weekly newsletter

🫙 Support the podcast with a small donation to the Tip Jar

🎤 Follow us on Apple Podcasts

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=== CONNECT WITH THE RHV TEAM ===

✭ LinkedIn ✭ Threads ✭ Bluesky ✭ X

00:00 Introduction to this episode.

03:53 What needs to be true, no matter what your pharma brand is.

04:20 Why a PBM picks a brand "darling."

05:10 A message to PBM sales teams.

09:43 Clarifying a point about formulary decision making.

14:34 When might a cash-pay strategy start to look rational for a pharma brand?

16:25 Cash pay versus formulary from the patient perspective.

19:50 How PBMs feel about brands going cash pay.

20:56 Why GoodRx is allowed to sell non-formulary Rxs at cash prices on PBMs.

23:51 A clarification of points on GoodRx.

26:19 A point to ponder about discount coupons.

Only about half of new GLP-1 prescriptions got approved for coverage in 2023 — a gap Ophelia Johnson says is why pharma manufacturers started building cash-pay and direct-to-employer channels instead of waiting on PBMs. Johnson, who built new channels for the manufacturer behind the GLP-1 boom and now runs e-fi.works, walks Stacey Richter through how the money moves with GoodRx and telehealth, including the buydown math behind a $500 list-price drug becoming a $100 cash price. This is Episode 516 (EP516) of Relentless Health Value.

WHAT YOU'LL LEARN

✅ Why IRA maximum fair price pressure, PBM reform lawsuits, and roughly 50% of new GLP-1 prescriptions going unapproved for coverage in 2023 pushed manufacturers to build cash-pay channels

✅ The buydown math behind cash pay: a manufacturer pays savings-coupon providers like GoodRx a flat fee instead of a PBM rebate to bring a $500 list-price drug down to a $100 cash price

✅ How telehealth and white-label or manufacturer-owned pharmacies add a second cash-pay channel, with new shipping and supply-chain costs once the PBM is cut out

✅ Why "direct-to-employer" GLP-1 deals are a misnomer — PBM exclusivity clauses bar manufacturers from selling straight to employers, routing them through third-party transparent administrators

✅ Ophelia Johnson's advice to plan sponsors: shift formulary conversations from rebate yields toward auditable medication abandonment rates and total cost of care

WHY THIS MATTERS

Stacey Richter's follow-the-dollar lens usually points at employers and patients as the ultimate purchasers — but the incentives driving pharma manufacturers matter just as much for collaboration to work. Legislative pressure on rebates, PBM reform litigation, and a GLP-1 boom that left half of new prescriptions unfilled in 2023 are pushing manufacturers toward cash-pay and direct-to-employer models that bypass PBM rebates entirely. That changes formulary math for plan sponsors and raises the stakes on gross-to-net accuracy for manufacturers. As Richter puts it, fair profit versus profiteering comes down to making more money when a patient does worse.

MENTIONED IN THIS EPISODE

Post by David Alderman

Post by Ann Lewandowski

Post by Madelaine Feldman, MD

Post by Bryce Platt, PharmD

AEE13 with Ge Bai, PhD, CPA: Apple Podcasts | Spotify | Other Apps

EP439 with Luke Slindee, PharmD: Apple Podcasts | Spotify | Other Apps

EP426 with Nina Lathia, RPh, MSc, PhD: Apple Podcasts | Spotify | Other Apps

=== LINKS ===

🔗 Show Notes with all mentioned links: Show Notes

✉️ Enjoy this podcast? Subscribe to the free weekly newsletter

🫙 Support the podcast with a small donation to the Tip Jar

🎤 Follow us on Apple Podcasts

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📺 Subscribe to our YouTube channel

=== CONNECT WITH THE RHV TEAM ===

✭ LinkedIn ✭ Threads ✭ Bluesky ✭ X

00:00 Introduction to this episode.

08:07 The conversation with Ophelia Johnson.

08:14 What is cash pay?

08:59 Why is this a thing and how did we get here?

12:28 The different ways that a patient could go about receiving and paying for their drug.

13:22 What's going on behind the scenes between GoodRx and the pharma manufacturer.

17:02 What dispense fees are and how they work.

17:41 A sidenote about next week's episode.

20:03 A sidenote about the pharma manufacturer POV.

21:44 The pharma supply chain in telehealth.

25:27 Why claims validation has never been more important.

28:19 Where do employers fit in all of this?

32:45 Where does it make sense to consider these alternative business models in lieu of the risks?

35:04 Why mapping the incentives is important.

38:42 Ophelia's advice to pharma manufacturers.

40:41 Ophelia's advice to plan sponsors.

42:46 More of Ophelia's advice to payers.

Is it fraud — or is it just a perverse incentive? That question sits at the center of Hunterbrook Media's latest investigation into skilled nursing facilities (SNFs), and the answer, as Stacey Richter puts it, matters to self-insured employers and anyone else paying for healthcare. In this episode, Stacey speaks with Michelle Cera, PhD, investigative reporter at Hunterbrook Media, whose investigation — triggered by a tip from an overwhelmed elder abuse attorney — uncovered a pattern of systematic understaffing, self-reported CMS STAR rating manipulation, executive bonuses tied to expense-cutting, and related-party financial engineering that funnels Medicare and Medicaid dollars straight back to corporate, while the most vulnerable patients pay with their health and their lives.

WHAT YOU'LL LEARN

✅ How for-profit SNF chains systematically recruit the sickest patients to maximize Medicare and Medicaid reimbursement, then staff below what those patients actually need — keeping the difference as profit and, in some cases, doubling executive bonuses in a single year

✅ How Hunterbrook analyzed millions of publicly available CMS data points across roughly 14,000 skilled nursing facilities, applying a UCSF-developed expected-hours formula tied to patient acuity, to quantify the gap between staffing hours billed and care hours actually provided

✅ Why CMS STAR ratings — the primary tool consumers use to choose nursing homes for loved ones — are largely informed by self-reported, unaudited facility data, and how former employees described manipulation of those ratings as rampant

✅ How related-party transactions allow SNF chains to route Medicare and Medicaid dollars through owned subsidiaries for goods and services like pharmacy, equipment, and insurance — with CMS flagging the overcharges as disallowed costs but lacking any mechanism to recoup them

✅ How a 2024 CMS final rule establishing a federal minimum of 3.48 HPRD (hours per resident day) and a 24/7 on-site registered nurse requirement was ultimately rescinded after industry lobbying — and what that rescission reveals about regulatory capture in the SNF sector

✅ Four concrete policy fixes: codify federal minimum staffing hours adjusted for patient acuity, strengthen reporting standards and auditing so no quality metric is entirely self-reported, create a recoupment mechanism for flagged related-party overcharges, and reform STAR ratings so consumers can distinguish independently verified data from self-reported data

WHY THIS MATTERS

Right now, Stacey argues, we are endlessly trying to keep up with thousands of profit-extracting geniuses and creating mazes of complexity to regulate actors who have no societal construct keeping them in check. The SNF sector is a case study in what happens when there is no agreed-upon definition of harm — when perverse incentives are just incentives. These are taxpayer, employer, and patient co-insurance dollars potentially going into someone's pocket while a patient is simultaneously being hurt. The 65-plus population is growing, the market is expanding, and — as Hunterbrook's research shows — the model that works from a profit perspective is to take sicker patients, cut the highest-paid staff first, and grade your own homework so no one notices. That playbook, once proven, spreads fast.

MENTIONED IN THIS EPISODE

EP511 with Dr. Siva and Monica Lypson, MD, MHPE: Apple Podcasts | Spotify | Other Apps

EP509 with Patrick Nelli: Apple Podcasts | Spotify | Other Apps

Article: Hunterbrook Media's full SNF investigation

Study: University of Pennsylvania analysis on repealing the CMS minimum staffing rule

EP482 with Preston Alexander: Apple Podcasts | Spotify | Other Apps

=== LINKS ===

🔗 Show Notes with all mentioned links: Show Notes

✉️ Enjoy this podcast? Subscribe to the free weekly newsletter

🫙 Support the podcast with a small donation to the Tip Jar

🎤 Follow us on Apple Podcasts

🎤 Follow us on Spotify

📺 Subscribe to our YouTube channel

=== CONNECT WITH THE RHV TEAM ===

✭ LinkedIn ✭ Threads ✭ Bluesky ✭ X

00:00 Introduction to this episode.

00:40 Fixing the root cause problems with the American healthcare system.

01:50 Today's root problem topic.

05:12 Introducing today's guest and her latest investigation.

07:43 The conversation with Michelle Cera, PhD.

08:35 How Hunterbrook Media's latest investigation into skilled nursing facilities got started.

13:20 How inadequate staffing creates neglect in SNFs.

14:03 Connecting the dots between staffing and resident needs.

15:33 Why skilled nursing facility chains are extremely profitable to the detriment of patients.

17:15 How star ratings on CMS can be skewed in the favor of these SNF chains.

21:56 The perverse incentives playbook.

23:20 An example of how executive bonuses are tied to perverse incentives.

27:53 How lobbying walked back the CMS minimum staffing regulation for SNFs.

29:05 Another note in the perverse incentives playbook.

30:59 How much of these chain SNFs' funding is from taxpayer dollars.

33:16 Another perverse incentive: overpaying sister companies.

35:07 Why CMS can flag overcharging, but they don't have a cost recoup structure.

38:10 The case to be made about how current business dealings within SNFs is fraudulent.

39:30 How to fix the perverse incentives happening in skilled nursing facilities.

How the Sutter Health Antitrust Case Opened the Door for Employers and Members to Recover Hospital Overcharge Damages

This is Episode 514 (EP514) of Relentless Health Value.

What happens when a self-insured employer or health plan member finally says enough is enough and takes a consolidated hospital system to court over anticompetitive contracting practices? That's exactly what antitrust attorney Matthew Cantor did — and after 13 years of litigation, three trips to the Ninth Circuit Court of Appeals, and a first trial, he and his team secured a landmark $228.5 million settlement in Sidibe v. Sutter Health.

In this episode, Stacey Richter speaks with Matthew Cantor, JD, founding partner of Shinder Cantor Lerner LLP, about one of the most significant antitrust victories in healthcare history — and what it means for self-insured employers, plan sponsors, and everyday members who have been paying inflated premiums because of hospital market power.

WHAT YOU'LL LEARN

✅ How all-or-nothing clauses and anti-steering/anti-tiering provisions allow dominant hospital systems to lock up local geographies and block members from accessing lower-cost, higher-quality care

✅ Why holding large, consolidated health systems legally accountable is so difficult — including the halo effect, the FTC's lack of jurisdiction over nonprofits, and the challenges of unsympathetic witnesses

✅ How Sidibe v. Sutter Health established a groundbreaking precedent allowing indirect purchasers — employers and plan members paying inflated premiums — to recover damages from hospital overcharges

✅ Why the DOJ is already pursuing similar anti-steering litigation against health systems like OhioHealth and NewYork-Presbyterian

✅ Four concrete options for employers ready to stop being passive price takers: federal legislation, state legislation, engaging the DOJ and state attorneys general, and direct litigation

WHY THIS MATTERS

Hospital charges make up roughly 50% of underlying medical costs, which in turn represent 80–85% of health insurance premiums. When consolidated systems operate in local markets with little competition, everyone — employers and members alike — pays more. Sidibe v. Sutter Health shows that accountability is possible.

MENTIONED IN THIS EPISODE

EP512 with Doug Aldeen: Apple Podcasts | Spotify | Other Apps

EP452 with Cora Opsahl: Apple Podcasts | Spotify | Other Apps

EP458 with Komal Bajaj, MD: Apple Podcasts | Spotify | Other Apps

EP466 with Vivian Ho, PhD: Apple Podcasts | Spotify | Other Apps

EP513 with Brennan Bilberry: Apple Podcasts | Spotify | Other Apps

Post by Kimberly Carleson

Comment by Daron Pitts

Comment by Thomas Frangione

EP501 with Ivana Krajcinovic, PhD: Apple Podcasts | Spotify | Other Apps

EP436 with Elizabeth Mitchell: Apple Podcasts | Spotify | Other Apps

EP491 with Elizabeth Mitchell: Apple Podcasts | Spotify | Other Apps

EP509 with Patrick Nelli: Apple Podcasts | Spotify | Other Apps

=== LINKS ===

🔗 Show Notes with all mentioned links: Show Notes

✉️ Enjoy this podcast? Subscribe to the free weekly newsletter

🫙 Support the podcast with a small donation to the Tip Jar

🎤 Follow us on Apple Podcasts

🎤 Follow us on Spotify

📺 Subscribe to our YouTube channel

=== CONNECT WITH THE RHV TEAM ===

✭ LinkedIn ✭ Threads ✭ Bluesky ✭ X

TIMESTAMPS

00:00 Introduction to this episode.

04:26 Why does the halo effect make it difficult to hold hospitals accountable?

06:16 Why the case around this episode matters.

09:31 The conversation with Matt Cantor.

09:36 The brief background of how we got here.

10:55 The Sutter litigation: an overview.

12:57 Local geography versus local market.

17:50 Why litigation?

23:50 Why are these cases so difficult?

27:36 What Matt Cantor thinks will be the future of litigation against these hospital systems.

28:11 Why Sutter?

31:21 What led to the ultimate victory in the Sutter case.

37:52 What is possible for employers now?

40:54 Antitrust enforcers that employers should consider.

41:49 The greatest challenge in fighting healthcare costs and medical spend.

The Hospital Contract Playbook: Four Clauses That Turn Market Power Into Higher Prices

Across the country, hospital systems have used their growing market power to write four specific contract terms into their deals with insurers — terms that all but guarantee higher prices for employers, unions, and patients, regardless of quality or competition nearby. In this episode, Stacey Richter speaks with Brennan Bilberry, founding partner of Fairmark Partners, an antitrust law firm that has sued multiple dominant hospital systems, about exactly how those four contract terms work, clause by clause, and why they set the stage for the litigation explored in next week's episode with Matt Cantor.

WHAT YOU'LL LEARN

✅ How all-or-nothing contracting forces insurers and employers to accept every facility in a hospital system's network — including overpriced urban hospitals — just to get access to a single must-have rural facility, a tactic central to Sutter Health's $575 million antitrust settlement in one of two cases brought against it

✅ How anti-steering and anti-tiering clauses block health plans from directing members to lower-cost, equal-quality care — illustrated by a market where a C-section costs $44,000 at one hospital and $21,000 two miles away, and by the government's case against Atrium Health in North Carolina

✅ How price gag clauses prevent insurers and TPAs from telling self-funded employers what they're actually paying for care, even after recent transparency rules — including a case where North Carolina's state treasurer received hundreds of redacted pages when he requested UNC Healthcare's prices

✅ How dominant hospital systems squeeze nominally independent physician practices into charging hospital-level prices without ever buying them outright — in one North Texas market, this drove prices up $100 million in a single year

✅ Why these four contract terms reinforce each other — block steering and a plan can't build narrow networks; restrict independent providers and there's nowhere cheaper left to steer to — making each successive workaround harder for plan sponsors to use

WHY THIS MATTERS

From 1998 to 2015 there were 1,500 hospital mergers, and the pace has only accelerated since — today, most physicians no longer own the practices where they work. Anticompetitive contract terms are what let that consolidation translate directly into higher prices for employers and patients. Understanding the playbook clause by clause, as laid out here, is the first step toward fighting it.

MENTIONED IN THIS EPISODE

EP373 with Cora Opsahl: Apple Podcasts | Spotify | Other Apps

EP452 with Cora Opsahl: Apple Podcasts | Spotify | Other Apps

Post by Tricia Schildhouse

EP249 with Dale Folwell: Apple Podcasts | Spotify | Other Apps

EP391 with Scott Conard, MD: Apple Podcasts | Spotify | Other Apps

EP389 with Mike Thompson: Apple Podcasts | Spotify | Other Apps

EP390 with Gloria Sachdev, PharmD, and Chris Skisak, PhD: Apple Podcasts | Spotify | Other Apps

=== LINKS ===

🔗 Show Notes with all mentioned links: Show Notes

✉️ Enjoy this podcast? Subscribe to the free weekly newsletter

🫙 Support the podcast with a small donation to the Tip Jar

🎤 Follow us on Apple Podcasts

🎤 Follow us on Spotify

📺 Subscribe to our YouTube channel

=== CONNECT WITH THE RHV TEAM ===

✭ LinkedIn ✭ Threads ✭ Bluesky ✭ X

TIMESTAMPS

00:00 Introduction to this episode.

06:55 The conversation with Brennan Bilberry.

06:59 What happens after a hospital consolidates?

08:05 What an anticompetitive system looks like when a hospital consolidates.

11:12 Some anticompetitive "tricks" that hospitals employ.

13:13 Example: the Sutter case in northern California.

15:36 What to do if you're forced to engage in an all-or-nothing contract with a hospital system.

19:17 Example: the Atrium case in North Carolina.

22:12 Explaining price gag clauses.

23:48 How legacy gag clauses are designed to prevent scrutiny in litigation.

26:21 How hospital restrictions on other providers create an anticompetitive environment.

A Lawyer's Field Guide to Rent-Seeking Broker and EBC Payment Models

Brokers and employee benefit consultants often get compensated in ways health plans never fully see — and even when the dollars are technically disclosed, the math can hide an enormous overcharge. In this episode, Stacey Richter speaks with Doug Aldeen, JD, an ERISA healthcare attorney who has spent decades in the self-funded space, about the legal danger zones where broker and EBC payment models go wrong: rent-seeking solution recommendations, undisclosed vendor payments, and front-loaded voluntary-benefits commissions — and the practical roadmap any plan sponsor can use to catch them before they cost millions.

WHAT YOU'LL LEARN

✅ How a level-funded plan's broker was paid more than $2 million in fees while the plan itself ended up roughly $600,000 in deficit — a cautionary tale Stacey and Doug call the Ohio Potato Company story

✅ How reference-based pricing vendors using a "cost of savings" fee model can be incentivized by rising hospital prices — illustrated by a $10,000 CT scan repriced to $1,000, netting the vendor $1,800 on a $9,000 "savings," on top of underlying facility markups that can run as high as 17,000%

✅ How a balance-billing vendor collected $2.2 million in fees over three plan years to protect against just $94,320 in disputed claims — even in a state where the hospital had no legal authority to balance bill in the first place

✅ Why voluntary benefits commissions, often front-loaded at 70% to 90% in the first year, can make a product more profitable for the broker than useful for members

✅ A practical roadmap for plan sponsors to catch rent-seeking arrangements before they cost millions: ask why repeatedly, demystify the commission structure, run an independent broker RFP, audit plan and stop-loss documents for gaps, and build a real contract "out"

WHY THIS MATTERS

Self-funded employers often assume their broker or EBC's incentives are aligned with the plan's. But when compensation is tied to cost-of-savings formulas, undisclosed vendor relationships, or front-loaded commissions, the incentive can quietly flip — rewarding higher healthcare prices and unnecessary point solutions instead of genuine savings. Knowing where to look, and which questions to ask, is what separates a fiduciary from a rent-seeking target.

MENTIONED IN THIS EPISODE

EP457 with Cynthia Fisher: Apple Podcasts | Spotify | Other Apps

EP508 with Lee Lewis: Apple Podcasts | Spotify | Other Apps

EP379 with AJ Loiacono: Apple Podcasts | Spotify | Other Apps

EP484 with Dave Chase: Apple Podcasts | Spotify | Other Apps

EP478 with Andreas Mang and Jon Camire (Part 1): Apple Podcasts | Spotify | Other Apps

EP479 with Andreas Mang and Jon Camire (Part 2): Apple Podcasts | Spotify | Other Apps

EP419 with Andreas Mang: Apple Podcasts | Spotify | Other Apps

=== LINKS ===

🔗 Show Notes with all mentioned links: Show Notes

✉️ Enjoy this podcast? Subscribe to the free weekly newsletter

🫙 Support the podcast with a small donation to the Tip Jar

🎤 Follow us on Apple Podcasts

🎤 Follow us on Spotify

📺 Subscribe to our YouTube channel

=== CONNECT WITH THE RHV TEAM ===

✭ LinkedIn ✭ Threads ✭ Bluesky ✭ X

TIMESTAMPS

00:00 Introduction to this episode.

00:59 A caveat for the record on this episode.

02:11 The first problematic payment model discussed in this week's episode.

03:27 The second problematic payment model discussed in this week's episode.

06:16 The conversation with Doug Aldeen.

06:27 Why is reviewing broker/EBC compensation so important?

08:05 The Ohio Potato Company anecdote.

10:28 The first way brokers/EBCs might get paid.

11:45 What "cost of savings" means.

14:07 A rent-seeking solution that requires a cost-benefit analysis.

19:16 Why the broker/EBC is sometimes in the dark about vendor kickbacks.

21:46 Where the CAA is unclear.

24:04 Actionable advice for plan sponsors.

24:57 The second piece of actionable advice for plan sponsors.

25:22 The third piece of actionable advice for plan sponsors.

26:08 Demystifying the commission structure.

27:35 Using a broker RFP from an open source.

28:31 Why you should be auditing data and claims.

31:29 The importance of having an "out."

33:11 Why the broker community may be at substantial risk.