In 2026, the movement in health care toward accountability has begun. A future press release will mark this year as the crescendo that put transparency on price and fiduciary responsibility back into health care. It starts with self-insured employers who have funded health benefits for their workforce under the latest provisions of ERISA, the Employee Retirement Income and Security Act. At long last, the black box that held the secrets for the Big Players in health care has been opened. What we do with the information matters to the future of American health care.
Untangling the mess that is American health care can’t be done overnight. Larry Hightower, CEO of Vxtra Health, has spent years honing his skills for building relationships among physicians and the administrative apparatus that supports them in delivering the best care possible to patients. But Hightower has not succumbed to the siren’s song of “Medicare for All” or other schemes that would bankrupt the nation due to inefficiency and profit extraction by the Big Players in health care. Instead, Vxtra Health will capitalize on early victories in the self-insured space as proof of concept that the model is accountable to all of the participants in health benefits, including employers, employees and their families, and the physicians who care for them.
Knowing where the money goes, and the benchmarks for what are reasonable fees, will provide the impetus for change. The signposts are clear for the target businesses that have suffered cost-shifting from health insurance plans, pharmacy benefits managers and hospital systems over decades. The perfect storm of increased fees, mounting plan premiums, high deductibles and co-pays has made the current system unsustainable. Vxtra Health offers a lifeline to self-insured employers in middle markets (100 to 1,000 employees) where the Big Players will find it hard to compete.
Follow the money. In the U.S., a large percentage of the gross domestic product is spent on health care, roughly $5.3 trillion. Due to the Affordable Care Act and the U.S. Supreme Court ruling in support of the concept of medical loss ratio, health insurance companies extract between 15 and 20 percent of premium dollars for overhead. It doesn’t take a math genius, or a Nobel economist, to understand that when premiums go up, so do profits to the health insurance company. There is no incentive to reduce costs for premiums. However, Congress recognized that hidden fees are baked into the formulas used by both health insurance companies and pharmacy benefits managers (PBMs). The result of legislation is that opaque schemes for profit extraction through discounts and rebates become visible. Spread pricing on the cost of drugs is now prohibited. And the best news for the consumer is that the era of enforcement of the laws has begun. Prices for services, from hospital procedures to the fees offered to brokers as retention bonuses, are now subject to audits. Employers who self-fund health benefits must act as fiduciaries, operating for the sole benefit of their employees.
Real physician voices, twice a week
Free, and one click to unsubscribe.
The legislative actions and posted guidelines for transparency have changed the game for the Big Players and the legions of brokers who have heretofore perpetuated the profit extraction formula that was essential to their businesses. Brokers have effectively been working for the health insurance company, or the private equity firm that absorbed them, not the employer-client. The new rules have created a seismic shift to a clean slate for the client. Where conflict of interest had dominated the health care landscape, the self-insured employer can now determine what prices and fees are reasonable because they have access to the data. Through Vxtra’s Managing Operating Partnership with employers, the entire process of securing the best deals for the benefit of employees is not just possible but required. Employers are subject to personal legal liability for failure to govern plan assets as fiduciaries. Accountability has arrived in health care, residing in the enforcement of the laws by federal agencies and the threat from the plaintiffs’ bar for non-compliance. The cost of non-compliance with the new rules comes with major penalties, and ignorance of the rules is no longer defensible.
What about the impact of the new rules on physicians? In middle markets in the American South, the personal brand of independent physicians remains strong. These physicians form the nucleus for Our Town Healthcare. Physicians have experienced the dysfunction in health care from both sides of the provider equation, as employers in their medical practices, and as caregivers to their patients. A model that removes prior authorization and its associated expense provides relief from administrative burden and restores agency to physicians. With authority for decision-making comes accountability for best medical practices, established by physicians. Arrangements for direct primary care with independent physicians reduce avoidable cost. Distant preferred provider organizations no longer hold sway for smaller communities. The care remains in local networks, as do the dollars spent on care. Our Town is the only model that aligns financial and care incentives across all parties.
The question for investors is whether Our Town can grow beyond the middle market. The answer comes from the synergy of purpose with A.J. Loiacono, CEO of Judi Health. His embrace of integrated claims processing for medical and pharmacy claims is the driving force for growth and expansion to new markets. When silos have been broken and data become integrated across health benefits, waste will be removed from the system. Having Judi Health as a partner going forward will enhance Vxtra Health’s credibility among employers, large and small.
The movement has begun. The clinical trials of the new model of care are ongoing. The path to better health care has been outlined, much as the early maps of the New World aided explorers centuries ago. The relationships formed will gain strength with experience. And organizations and participants will be held accountable for the health care people deserve.
Paul Pender practiced clinical ophthalmology for 38 years, specializing in the medical and surgical treatment of eye diseases. He completed his residency at the world-renowned Wills Eye Hospital. His honors include a lecture series in his name by the New England Ophthalmological Society and the Secretariat Award from the American Academy of Ophthalmology for his work on webinars for clinicians.
Pender is passionate about patient-centered care. He believes that the patient-physician relationship should serve as the fundamental building block for health care reform. He is an advisor to Vxtra Health, a company committed to collaborating with physicians to earn trust and to reduce health care costs. By limiting the drain on health benefits budgets by intermediaries (health insurance companies, pharmacy benefits managers, and hospital systems), Vxtra Health establishes a path toward a new model of care, based on price transparency and fiduciary responsibility, starting with self-insured middle market employers.
He writes on timely medical issues on his website, his KevinMD author’s page, and other popular social media. He is the author of Rebuilding Trust in Health Care: A Doctor’s Prescription for a Post-Pandemic America (2020) and the ebook Standing Up and Speaking Out for Patients and Doctors: First Steps Toward Focused Health Care Solutions (2023).
