- INSIGHTS
The American healthcare system is failing employers, you, and American families.
In a country where medical debt is the number one cause of bankruptcy1, there’s no denying that something is wrong.
At the heart of the problem is a web of pharmaceutical corruption, lobbyist influence, and hidden costs that put profits over people’s lives.
It’s a system so broken that 600,000 Americans have died from opioid overdoses2, all while the same pharmaceutical companies responsible were running ads on prime-time TV.
Let’s break this down.
Healthcare in America: A Broken Market
Healthcare in the U.S. is no longer a system that serves its citizens.
Instead, it’s a market—a rigged one, to be more specific.
Hospitals and insurance companies have mastered the art of hiding prices.
Even though laws now require hospitals to be more transparent about their charges, in 2023, 1,300 out of 1,750 hospitals were warned for violating these transparency rules3.
It’s as if they want to keep patients in the dark. Imagine walking into a restaurant, ordering a meal, and getting billed weeks later for whatever amount they choose.
That’s what happens with medical bills. Hospitals hide prices using coding on their websites to prevent search engines from indexing this information, making it nearly impossible for patients to compare costs.
Furthermore, contracts between hospitals and insurers frequently include “gag clauses” prohibiting the disclosure of negotiated rates.
It’s more than frustrating; it’s extortion, as Theo Von pointed out in his podcast with Donald Trump14.
But there are more parties prioritizing profits over people.
The Role of Big Pharma and Lobbyists
The pharmaceutical industry holds power over health and politics.
With 18,000 pharma lobbyists—compared to 535 members of Congress—pharmaceutical companies have succeeded in shaping policies that prioritize their bottom line over people’s well-being.
These lobbyists influence everything from drug pricing to regulations that stifle competition.
These lobbyists influence everything from drug pricing to regulations that stifle competition.
It’s no wonder drug prices in the U.S. are higher than in other countries.
Pharmaceutical corruption drives up healthcare costs by manipulating drug prices through complex rebate systems that prioritize profit.
PBMs and healthcare providers structure their plans to maximize gains, often filling drugs for astronomical amounts while profiting through rebates or manufacturer revenue.
This corrupt system costs lives. People are dying because they can’t afford life-saving medications or because they’ve been caught in the web of addiction spun by profit-hungry pharmaceutical companies.
The opioid crisis, for example, has devastated communities, while big pharmaceutical companies continue to profit.
But they aren’t the only ones driving up healthcare costs—insurance companies play their part as well.
Insurance Companies Keep Employers in the Dark
In traditional insurance models, employers are blindsided by unknown claims. According to the Sun Life 2024 report, only 56% of claimants are reported through the renewal period, with 37% reported within 8 months.
This leads to unpredictability, leaving employers without a clear strategy to manage claims. Self-funding, on the other hand, provides transparency.
Employers gain access to real-time data and insights into their claims.
While they won’t know the personal identities of employees and patients—this information remains confidential to protect privacy—they will have access to anonymized claims data.
This allows them to see the treatments or conditions being covered, the costs, and any trends that arise.
With this, employers make informed decisions and take steps to manage healthcare costs.
How Employers and Brokers Can Reclaim Control
The first step is awareness, and the second is action.
Employers and brokers need to break free from the traditional insurance treadmill.
By exploring self-funding and private consortiums, it’s possible to regain control over healthcare costs.
The focus should be on risk management and cost containment, rather than allowing insurance companies, the pharmaceutical industry, hospitals, and lobbyists to dictate the terms.
This approach offers much-needed transparency and stability—qualities missing in traditional insurance models.
By avoiding misaligned partners that drive up costs, like big PBMs and carrier administrators, a controlled environment is created where employers can thrive, with features like no new lasers, rate caps, and flexible renewal options.
Virtue Health: A Path to Transparency and Lower Healthcare Costs
Virtue Health is reshaping the healthcare landscape with a focus on transparency, stability, and cost containment.
Unlike traditional insurance models plagued by corruption and hidden costs, Virtue Health offers a private pool with mandatory cost containment requirements, excluding misaligned partners like the big three PBMs.
This ensures better control over costs and claims.
Cost Containment at Its Core
Virtue Health enforces proven cost-containment measures:
- Independent TPAs: Transparent, fiduciary TPAs ensure employers’ needs are prioritized.
- Pharmacy Sourcing: Specialty medications are carefully sourced to control costs.
- Transparent PBMs: Elimination of inflated rebates and hidden fees lowers expenses.
By tackling high-dollar claims and maintaining program integrity, Virtue Health keeps premium increases to 5-6% in good years, far below the 15-18% in traditional market.
A Long-Term Solution
With features like no new lasers, rate caps, and flexible renewals, Virtue Health provides a sustainable, long-term strategy for lowering healthcare costs and increasing transparency.
This isn’t a short-term fix—it’s a way for employers to reclaim control of their healthcare spending.
Deliver Employers Transparency and Lower Healthcare Costs Today
As an adviser, if you don’t show employers the solution, someone else will.
Book a 30-minute strategy session today and learn how to offer your clients transparency and savings that beat the national average.
Virtue Health has helped 100+ employers spend 40% less than the national average.
Don’t let your clients face another year of hidden costs and inflated premiums—equip them with solutions that work.
References:
- https://www.foxbusiness.com/personal-finance/medical-debt-bankruptcy-hospital-bill-forgiveness
- https://www.who.int/news-room/fact-sheets/detail/opioid-overdose
- https://www.bloomberg.com/news/articles/2023-12-20/hospital-prices-medicare-warns-companies-on-price-transparency
- https://www.youtube.com/watch?v=vC5cHjcgt5g&t=1036s
John W. Sbrocco
@johnwsbrocco
IF YOU’RE A BROKER READY TO…
Elevate your clients’ healthcare strategy with a long-term, stable solution, it’s time to consider self-funding.
