Breaking the Legacy Cycle
- Moving to Value Alliance
- Mar 31
- 2 min read
The American healthcare system is currently facing profound market failure driven by a decades-long shift toward profit-driven consolidation. Wendell Potter, a former insurance executive turned whistleblower, joined a recent episode of Moving to Value Unscripted to discuss ways to curb industry profiteering and restore true value to patient care.
The roots of the current crisis lie in the transition of insurers into publicly traded entities that prioritize quarterly earnings over health outcomes. This structure incentivizes rising costs as carriers often benefit from higher spending by passing premiums on to employers. Employers then pass this on to employees as increased out-of-pocket costs. As a result, patients often can’t afford the deductibles and coinsurance required to actually access care.
High-impact strategies to reclaim a system built on actual value include:
1. Asserting Fiduciary Control
For self-insured employers, the most immediate solution is to stop delegating the management of their healthcare supply chain to legacy BUCAH (Blue Cross, United, Cigna, Aetna, Humana) plans.
Broker Alignment: Many brokers and consultants operate as distribution channels for carriers and "double agents," receiving undisclosed compensation from insurers to maintain the status quo.
Transparency Tools: Plan sponsors are beginning to use tools like the Compensation Integrity Index to analyze 408 financial disclosures and ensure their advisors are legally and financially aligned with the company’s interests.
Data Visibility: Employers are moving away from opaque Third-Party Administrator contracts to gain full visibility into where every healthcare dollar is actually spent.
2. Supporting Independent Clinicians
A sustainable future depends on preserving independent provider systems, which are currently being squeezed (and employed) by private equity, hospital systems and insurance-owned conglomerates.
Direct Contracting: Many clinicians are bypassing traditional insurance barriers by moving toward Direct Primary Care or direct payment models.
Outcome Excellence: Evidence shows that independent practices often deliver better population-level health outcomes compared to large, vertically integrated systems.
3. Structural and Legislative Reform
There is growing bipartisan momentum to address the "oligarchy" of healthcare through targeted federal action.
Decoupling Vertical Integration: Proposed legislation, such as the Break Up Big Medicine Act recently introduced by Senators Josh Hawley and Elizabeth Warren, seeks to prevent insurance companies from owning the entire healthcare supply chain.
PBM Transparency: Lawmakers are increasingly focused on three companies that control more than 80 percent of the pharmacy benefit market, and could work to end hidden profiteering by Pharmacy Benefit Managers (PBMs).
The Tipping Point
The financial burden on employers and the clinical burden on providers is no longer sustainable. By "calling BS" on co-opted industry terms like “value-based care” and demanding transparency, Wendell sees an opportunity to transition away from legacy carriers toward more ethical models that prioritize human health over shareholder returns.
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