You Say You Wanna Fire Your Insurance Carrier?
How to Ditch the Bigs Without Wrecking Your Health Plan
I was about to fire another vendor.
They weren’t delivering for my client - a group of Catholic nuns who were my very first client, and still dear to my heart. (I spent two years as one of them during a phase of my Senate career that made me want to fake my own death, run away to the nunnery and never speak to another lobbyist. So… I pretty much did.)
I eventually learned what everyone who’d ever met me already knew: I am not cut out for a life of asceticism and obedience.
But when I realized I could help the sisters stop getting mugged in broad daylight by double-digit Blue Cross rate hikes year after year, I figured I could at least rack up some points on the ol’ heavenly ledger (where the deficit was starting to show).
The Holy Trinity of Vendor Firings
I helped the sisters:
Fire Blue Cross and replace with an independent plan administrator,
Fire ExpressScripts (one of the corrupt “Big-3 PBMs”) and replace with a transparent, fiduciary PBM,
Fire their conflicted, commissioned broker, and replace with, well, me.
Then we launched my first - and last - reference-based pricing plan.
For the non-biz readers, here’s what that means: instead of using a network where prices are set in secret contracts between carriers and providers, we set a rate that was a percentage above Medicare’s rates. Providers sent sticker-price bills, we paid the Medicare-based amount, and then we negotiated if they refused.
Result: the sisters saved 30 percent in year one, and they’ve continued saving every year.
Also: I gained a permanent twitch in my left eye.
The Part They Don’t Put On The Sales Slide
Reference-based pricing can work. It can also be… how do I say this delicately… a liturgical reenactment of the Passion.
Doctors and hospitals don’t love “take it or leave it” pricing. And if the sister can even get an appointment (major friction point), providers often bill her for the difference between the plan payment and the sticker price.
Which means the success of this kind of plan is almost entirely dependent on whether your vendor stack can actually execute the unglamorous, unsexy, “someone has to do it” work:
Help providers understand the plan (that they’ve never heard of) and accept it — so the sister can even get in the door
Confirm eligibility/coverage when providers call
Get prior auths done quickly and correctly
Negotiate one-off or group agreements and reprice bills to contracted rates
Receive bills and reprice them against Medicare-based terms
Fight balance bills fast, erase them when appropriate, and still protect against being fleeced
Pay the repriced amount and any negotiated resolution amount
In a normal carrier plan, all of that happens inside the carrier borg. It feels seamless to the patient, even as the hidden kickbacks, profit-shifting, and even illegal fiduciary violations abound.
In an unbundled plan design, it’s spread across multiple vendors - plan administrator (TPA), PBM, prior-auth team, repricer, negotiators, lawyers - and now, rented networks. Yes, I’m done with reference-based pricing plans because of all the pain points. We rent a network now for our plans, and then work hard to steer patients around it and within it to highest-quality sites of care.
Regardless, network or no-network, these unbundled plans require intense oversight.
And that changes things, whether you’re a benefits advisor like me, an employer like my clients, a health care provider, or a vendor that serves these plans.
Congratulations, You’re Now The Quarterback (And The Offensive Line)
Most benefits advisors are basically messenger/middlemen between the client and the carrier. In practice? Often the carrier’s sales force wearing a “trusted advisor” costume.
In an unbundled plan, the advisor has to put in way more effort, in order to quarterback:
running procurement,
negotiating contracts,
integrating vendors,
building workflows,
enforcing performance,
and catching grenades at 9:47pm on a Sunday.
When it works, you save money and improve quality. Of course, when it doesn’t, everyone wants to fire everyone.
We All Need an Honest Coach
After the White House, I looked at the usual post-government career options for someone with my resume.
It wasn’t pretty: industry shillery.
No chance.
I’d met Health Rosetta - part nonprofit, part vendor, part revolution - while I was on the inside. They are a community of advisors building self-funded plans that ditch the carrier “bonus and commission” machine and actually act like fiduciaries. They helped me build my practice without having to sell my soul or pretend I didn’t notice the incentive rot.
A Health Rosetta leader - a seasoned plan administration veteran - called me when I was mid-rage, ready to fire a vendor.
She listened. Patiently.
Then she said:
“The problem is you.”
She was probably more diplomatic than that, but that’s what I heard.
Not because I was personally failing on balance bill resolution or overcoming scheduling friction. But because my job was to design and oversee client-specific workflows so tight that the gaps couldn’t swallow people whole.
She stepped in and worked with the plan vendors and me, modeling what this looks like, and we got years more out of that vendor without a disruptive replacement.
Generous mentors are gold in this business.
And over time, I learned something else: it’s often easier to blame people than it is to fix process, incentives, contracts, and workflow design. The demagoguery and “othering” of various parties - that had occasionally helped drive my policy agenda in government - weren’t as useful in the real world of mostly good people serving these unbundled, independent health plans.
I’ve picked up more strategies over the years. This post is about how to avoid unnecessary vendor divorces - and how to vet partners like a ninja.
Because in unbundled plans, you’re quarterbacking what feels like an army. It’s never perfect. But I’d still take this chaos over the status-quo pillagery of off-the-shelf, non-fiduciary, high-cost, sick-care plans.
I like sleeping at night.
If you use this step-by-step guide, you’ll stand out as ten times better than your competitors and peers, whether you’re a plan sponsor, an advisor, regulator or plan partner/vendor.
You’ll spot the landmines early and avoid them. Paid subscribers get the full ninja training.
And while there’s plenty of time to make your own mistakes - can you really afford to repeat mine?
Vendor Vetting Like A Ninja (So You Don’t Get Stabbed By Your Own Stack)
