Subscribe to The Podcast by KevinMD. Watch on YouTube. Catch up on old episodes!

Health care executive Ashish Mandavia discusses his article “Why U.S. health care pricing is so confusing—and how to fix it.” Ashish explains how systemic misaligned incentives, opaque insurance practices, and weak enforcement drive up patient costs and mistrust in the health care system. He outlines the emotional and financial toll of surprise medical bills and argues for stronger accountability, technology-driven transparency, and shared responsibility across hospitals, insurers, providers, and patients. Ashish offers listeners practical takeaways, such as the role of digital tools in cost clarity, the need for enforcement that closes loopholes, and how patients can advocate for fairer, more predictable care.

Our presenting sponsor is Microsoft Dragon Copilot.

Microsoft Dragon Copilot, your AI assistant for clinical workflow, is transforming how clinicians work. Now you can streamline and customize documentation, surface information right at the point of care, and automate tasks with just a click.

Part of Microsoft Cloud for Healthcare, Dragon Copilot offers an extensible AI workspace and a single, integrated platform to help unlock new levels of efficiency. Plus, it’s backed by a proven track record and decades of clinical expertise, and it’s built on a foundation of trust.

It’s time to ease your administrative burdens and stay focused on what matters most with Dragon Copilot, your AI assistant for clinical workflow.

VISIT SPONSOR → https://aka.ms/kevinmd

SUBSCRIBE TO THE PODCAST → https://www.kevinmd.com/podcast

RECOMMENDED BY KEVINMD → https://www.kevinmd.com/recommended

Transcript

Kevin Pho: Hi, and welcome to the show. Subscribe at KevinMD.com/podcast. Today we welcome Ashish Mandavia. He is a health care executive. Today’s KevinMD article is “Why U.S. health care pricing is so confusing and how to fix it.” Ash, welcome to the show.

Ashish Mandavia: Thanks very much, Kevin. It is nice to meet you. I am Ash, a medical doctor by background, trained as a psychiatrist in the National Health Service in the U.K. before moving into Health Tech about ten years ago. I started in a startup environment, focusing on some of the hot topics at the time, particularly substance use disorder. I joined a company called Quit Genius, now known as Pelago, a Series C Healthtech startup, focusing on their commercial growth across the EMEA region and thereafter the U.S. I came across a lot of the pain points around revenue cycle management for health care organizations in the U.S. That is what led me to co-found a company called Sohar Health, which focuses on trying to automate a lot of the clinical operations around determining insurance eligibility for patients coming into a clinic.

Kevin Pho: You talk about some of the pain points in the U.S. health care pricing, which is of course one of them, and you talk about that in your KevinMD article. For those who did not get a chance to read your article, just tell us what it is about.

Ashish Mandavia: In this article, I touch upon some of the opacities in pricing within the U.S. health care system. I often make the analogy, as a naive European person looking with a fishbowl lens into the U.S. health care system, that you could turn up at a gas station thinking it is going to be one dollar per gallon, and by the end of filling your tank, it could be 100 dollars per gallon. That idea is alien to a lot of us over here on this side of the pond.

In a consumer environment, if you were going to the checkout on Amazon, for example, you would not expect your pricing to completely change. But that often happens in the health care system. The reasons for that are often a lot of opacity between the payers, the health care insurers, and the health care organizations themselves. The way pricing is set up tends to be on a volume basis, so pricing per service offered as opposed to more value-based pricing models. And a lot of folks do not seem to have the basic literacy in health insurance vernacular, so understanding what copay, co-insurance, and deductible may mean.

Do not get me wrong, I am three and a half years into this journey, and I still find those terms to be confusing, particularly with certain plans and certain payers. But without addressing a lot of these issues, it becomes really difficult for a patient to navigate the system and often results in a barrier to access to care.

Kevin Pho: And even myself as a physician in the U.S. health care system, if a patient asked me how much a diagnostic test would cost, I cannot give them a straight answer because the answer is, it would depend on so many different variables, like what kind of insurance they have. And the payments that the hospital system would receive from each insurer would be different. So I could imagine how frustrating that is to patients. And just given your perspective, being overseas, this system that we have in the United States is almost unique in the world, right?

Ashish Mandavia: Yeah, absolutely. Here in Europe, we are quite used to more uniform payer systems. You have one health care system that manages care for everyone and you typically pay into that system through your national insurance. That ultimately results in high expectations on care delivery but also fewer folks being able to slip through the cracks. The social system is there to pick up those who are most at risk and have the least equality in terms of access to care.

So yes, the U.S. health care system is very unique, but that is also where a lot of investment can take place, a lot of research can happen, and a lot of cutting-edge care can be delivered. I still love the idea that a lot of our customers, who are behavioral health providers working on a national scale, can get a patient who comes onto their website and have them in an appointment within around thirty minutes. That is still very unique compared to accessing care here in Europe. So, I certainly think that there are pros and cons to the system, but this area results in a lot of confusion and uncertainty. Ultimately, I think patients tend to question whether they should attend for care.

And that, for me, is the worrying element because the less you attend appointments with your primary care physician or perhaps a behavioral health physician, the more problems worsen, right? And then we have to spend even more money to try and fix the issues as they express themselves.

Kevin Pho: So before talking about some of the paths forward and the solutions, just give us more granular detail on the impacts patients are seeing. You wrote in your article that 18 percent of adults faced a surprise medical bill of over 1,000 dollars in the past year. So give us the types of scenarios that these patients find themselves in that would give them a surprise bill. Tell us about how routine or non-routine the types of treatments and visits are that they would have to go to to get these surprise bills.

Ashish Mandavia: There are multiple ways in which that can end up happening. If an eligibility check was not carried out at the beginning when the patient tried to access care, their insurance information perhaps was not correct on file, or they did not have their insurance information to hand. The provider organization, too inundated with requests at the time, just decided that if that patient said that they are with Aetna, they were going to take that on face value and see that patient. Ultimately, what that ends up with is, OK, maybe the patient did have an Aetna plan, but they were not eligible for this sort of care.

Number two, it could be that they were eligible, but that patient’s plan in particular was out-of-network with that provider organization or with the individual practitioner about to give care, in which case they would be deemed out-of-network. If they were charged in-network rates or that claim was processed as being in-network, that patient would end up with a surprise bill. And the worst, and I think the most challenging reason, which is one of the key reasons why my company Sohar exists, is around changes to insurance that take place.

Often people think that insurance is static; it stays the same throughout the year and may only change in January when you get January resets. But that is not quite the case. A lot of variables play into it. Your deductible is constantly changing depending on how much care you are accessing. It is very hard to be able to look that up and see that in real time. And what we see, particularly in the behavioral health space, is the issue and prevalence of carve-outs of payers. Not every payer or plan will have enough providers, particularly mental health practitioners in their network, in which case they contract out to a third party. And if your provider organization is not in-network with that third party, then they are out-of-network and it is very hard to determine this.

We do a lot of work in our technology in order to pick that information up, that subtle nuance. Some of the customers that we have and have spoken to are running off tens of millions of dollars of claims in order to not end up delivering a surprise bill to their patients. But of course not every organization has that luxury. In the end, they will probably end up having to come to the patient to ask for that money. Ultimately it is an administrative error on their side, and the patient unfortunately gets the brunt of that. They could go maybe six sessions without finding out that they are not in-network and therefore they have to pay out-of-network rates. That is a real travesty and results in mistrust in the system.

Kevin Pho: And that mistrust, as you said earlier, can lead patients not to seek out care when they really need it.

Ashish Mandavia: Yeah, exactly. There are pathways forward and we certainly think that technology can help in this space. As you can imagine, like every other industry we have seen, particularly as I alluded to online retail before, but in other spaces as well like the banking industry, more consumer-like experiences exist. Things are faster and happen quicker. They involve less administration.

And yes, there is a huge amount of opacity that exists there in terms of data exchange between payer organizations and provider organizations, but there are digital tools that can make life easier. An example of that is tooling like ours. We cut down a process that can take an administrator between twenty minutes and two hours to figure out, and we cut that down to twenty seconds to work out if that patient is eligible. If so, are they in-network? And if so, what is their obligation to pay upfront? As we shift the dialogue to not expecting a surprise bill to come later on, but actually saying, “No, we are pretty confident that it is going to cost you this much.”

Please proceed to provide a payment, and then we will see how the adjudication goes later online. But to have confidence of around 95 to 97 percent that the number that was quoted to the patient is actually going to be the number leads to a lot less attrition, a lot more trust, and a lot more credibility. But it is also good from a cashflow perspective. Providers typically have to wait two to three months to get paid. That is really difficult, especially if there is a big cyber outage that knocks out one of the big clearinghouses, one of the intermediaries between the provider organizations and payer organizations so that they cannot get paid. So anything that can be done to mitigate that I certainly think is beneficial.

It kind of leads me onto the other point that I alluded to in the article, which is that both provider organizations, whether that is hospital settings and clinics, as well as the insurance companies, have an obligation and a responsibility to try and exchange data using better mechanisms. And we are now starting to see this. There are new CMS regulations around prior authorization. I think eventually it will come to our space around eligibility determination and network status determination. There is still a long way to go there, but trying to bring down those barriers and create more transparency between those organizations will ultimately, hopefully, stop costs from spiraling out of control.

Lastly, it is accountability as well. There are very little penalization or measures taken for non-compliance with delivering transparent pricing in care delivery. Often what we are finding is that provider organizations say that they want to be transparent with their pricing, but either they do not have the technology to help them do that in a scalable way or they do not do it and risk any repercussions. But if there are not that many repercussions, then they are going to continue to operate in that way. So it really balances on both sides to act in the best interest of the patient.

Kevin Pho: In your article, you talk about patients’ health care literacy needing to be improved to help with this transparency. So what are some pathways forward from that transparency standpoint, from the patient perspective?

Ashish Mandavia: That is a very good question. I came across a statistic when I was first researching the area, which is that only 4 percent of Americans, and this does not go up much when we look at even the physician population, are aware of what the copay, co-insurance, and deductible actually mean, or which plan they are actually part of based on their health insurance card. Awareness is really important to understand what your insurance actually means.

Second, I think there is an obligation on providers to actually provide explanations around the numbers that they are presenting and not just assuming that the patient will understand. Thirdly, there has to be better ways for the patient to be able to check, monitor, and see these things happening. I do see change taking place in the industry around this. The existence of AI chatbots and voice AI agents may be daunting and frustrating at times. Yes, they are not perfect yet, but at some point they are going to be able to take the time to explain what these different values mean on the phone when someone dials in to get an appointment. I think that is going to be a very crucial element to leveling the playing field and allowing patients to understand more about what to expect.

Kevin Pho: Now it sounds like we have been talking about transparency for years now. So what makes your approach different and why do you think that it would work this time?

Ashish Mandavia: Yeah, absolutely. The element here is that there are two ways to think about pricing transparency. Having transparency such that you can say that generally speaking, these diagnostic tests or these sorts of interventions are going to cost X amount. Or having transparency to say that hospitals in this region typically charge or are contracted for this rate for this type of service, let us say it is a physical therapy service or an MRI scan, to then level the playing field between the provider organization and the payer.

However, we do not really operate so much there. Our technology operates really around the interaction between the provider and the patient. So the data that we surface up in seconds, in real time, allows the provider to say, “OK, this individual is eligible. This patient is in-network and this patient is therefore going to be charged this amount based on our contracted rates.” When you get to that level of confidence with the data coming back, which notoriously has been quite sporadic and not so accurate, then you can actually deliver that information directly to the patient.

Where we do things differently, of course, we try and use cutting-edge technology there. We use AI in the form of machine learning and LLMs to pick out the most accurate data possible that comes back from a payer organization when we make one of these digital fax requests on behalf of a patient. We use a lot of routing and industry knowledge about how the payers tend to operate to maintain and keep that up to date because it is ever evolving and ever changing.

Kevin Pho: We are talking to Ashish Mandavia. He is a health care executive. Today’s KevinMD article is “Why U.S. health care pricing is so confusing and how to fix it.” Ash, let us end with some take-home messages for the KevinMD audience.

Ashish Mandavia: Yeah, absolutely. On behalf of the audience, if you are in a position where you are working in a provider organization, I think one of the areas that tends to be overlooked is around clinical administration, doing the administrative work, and trying to align the clinical administration workflows and keep up with all the changes taking place in that space. Ultimately, I think there is often a lot of fear around the use of technology, whether that is from an information security or cybersecurity perspective, or whether there are worries about the budget spiraling out of control.

But I would say that my key take-home message is that technology now does exist there that is relatively affordable. It can empower clinical administrators and operations teams to be able to do the work that they used to do in hours in minutes or in seconds. And ultimately, it can result in much better patient satisfaction with their experience of accessing care. So my key takeaway message is that technology is here to help, and do not be afraid of using it in this setting.

Kevin Pho: Ash, thank you so much for sharing your perspective and insight. Thanks again for coming on the show.

Ashish Mandavia: Thank you.