Every business decision follows a process, define the goal, gather the data, evaluate the options, and make an informed choice. Except, it seems, when it comes to health insurance. Why do companies that analyze every penny of their P&L turn around and renew multi-million-dollar health plans without a real evaluation? Today, we will break down how business decision-making is supposed to work and what goes wrong when the same logic isn’t applied to healthcare.
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Making Better Business Decisions In Health Insurance
The Decision Trap: How Smart Businesses Make Dumb Health Plan Decisions
First of all, welcome to the show where we expose the hidden forces driving up healthcare costs and show you how to take control. In this episode, we’re tackling the big problem. Why do smart CEOs and CFOs, people who make data-driven strategic decisions every day, make one of the most expensive and impactful business decisions of the year without any sort of real process?
That’s been my experience as a benefit advisor. I understand completely why that is usually the case. I am not going to say that’s exclusively the case. There are plans being run out there by smart CEOs and CFOs who have demanded actionable data to make smarter decisions, but the majority of the time, most of the benefits or business decisions are being made very differently than those folks make. We call this the decision trap.
If you stick with me for the next 30 minutes or so, I’ll walk you through a completely new way to think about your health plan. Hopefully, you enjoy the show. Hopefully, this topic seems relevant. It’s October 9th. We’re at the start of the fourth quarter of 2025. A lot of employers are about to or already in the process of making very big decisions that are going to affect their budget and their people for 2026. I’m talking about open enrollment, where health plans are evaluated and decisions are made.
Unfortunately, very often, the decision is made to water down benefits and pass more costs that the insurance plan is imposing on plan sponsors onto members. Watering down benefits means increasing out-of-pocket costs, deductibles, copays, and contributions that come out of compensation and payroll for the employees. That’s where the failure of the insurance industry and insurance brokers has come into play. Those are the strategies we’ve accepted for way too long.
Back in the early ‘90s, when copays were $2 and you were increasing them to $5, it didn’t seem like such a dramatic change, but those $2 copays that became $5 soon became $10, $20, $25, and $50. Deductibles got re-implemented into managed care and plan designs. You end up where you are with out-of-pocket costs in the $13,000 to $14,000 range and family deductibles exceeding $10,000. That’s not insurance. That’s real failure.
Those decisions were stamped. Those approvals to go with these plan changes have been approved by business leaders. Insurance companies can offer you change, and brokers can sit down and discuss spreadsheets, but ultimately, businesses agreed to make these changes. In 2025, so many people out there are walking around with excessively high out-of-pocket costs. $10,000 for a family that’s earning less than $100,000 a year is significant. It impacts the way they use healthcare and choose their benefits.
Identifying The Objective Of Your Health Insurance Plan
I want to talk about this decision trap and go over how businesses typically make decisions. Step one is identifying the objective. This is for benefit advisors and solution partners to understand as well. I know that there are some people in our audience from both of those worlds. I’m speaking to CEOs, CFOs, and HR leaders.
What is the objective of your health insurance plan? Every good decision starts with a clear objective. If you’re in sales, it might be, “We need to grow revenue 10% next quarter.” If you’re in operations, it might be to reduce waste by 5%. When it comes to health insurance, the objective often sounds like, “Let’s keep everyone happy and avoid disruption.” That’s not a goal. That’s survival.
I call it the machine. The healthcare and health insurance world is counting on you to be in survival mode, to think that the solutions that they’re providing you are saving you from even worse out-of-pocket costs. Unfortunately, most plan sponsors don’t see behind the scenes. They don’t see the way insurance carriers and the health systems are manipulating prices and steering people towards where it generates the most profit.
It’s vital to have a goal. What is the purpose of your organization offering insurance to begin with? That purpose is probably blurred over time. Going back decades, it was to attract talent. Is your health insurance plan helping you attract talent, or has it gotten to the point where it’s a detriment? It’s hurting your company where the benefits that you’re offering can’t seem to attract the ideal candidate or keep them long-term. If you don’t define success or the goal, then someone else will. Usually, that’s going to be your carrier or your broker. Ask yourself, “Are we trying to reduce spending, improve outcomes, or retain talent?” Until you define that success, you can’t measure it. It is possible to measure it.
Until you define success, you cannot measure it. Share on XWhen we sit down with business leaders and we’re fortunate to have a much more in-depth conversation than we’ve ever had in the past, we ask them these hard questions. There’s a discomfort usually in the beginning because the thought process is that you haven’t been able to see anything. You don’t know what’s happening behind the scenes, so how can you budget for it?
How can you make decisions that don’t seem possible when you’re in the world and the ecosystems, which I’m part of, with advisors that are doing amazing things with TPAs, pharmacy benefit managers, and other solution partners that are capable of using technology, data, and AI to help employers and their members make smart decisions? They’re benefit decisions, but ultimately, what I’m most passionate about is helping people make the smartest healthcare decision. That’s what we’re talking about here.
That’s why the goal and the success that surrounds your health insurance plan is more than just the dollars and cents that are on a spreadsheet. It affects families. It affects the message you’re sending to your employees. What type of plan are you offering? If you’re an employer that’s able to offer a plan with very low out-of-pocket costs, richer benefits, take less out of employees’ pay, and have lower contributions, you’re going to win that war for talent every time. That is possible. It’s happening.
A couple of months ago, I was out in Denver at the Rosetta Fest ‘25, hosted by Health Rosetta. It’s such an amazing conference. My first conference was in 2019. There were a few hundred attendees, mostly benefit brokers who were trying to figure out what the heck was going on. Six years later, there are over 1300 attendees, many of them plan sponsors, direct primary care doctors, and regular doctors. They’re all there to share what they’ve seen change in healthcare ecosystems. Plan sponsors who are adopting a better approach to healthcare and the impact it has made on their company and their people are winning in the sport for talent every day.
If you’re not sure what I’m talking about and you’re a plan sponsor out there, connect with me on LinkedIn. I’d be happy to talk to you. I am not going to talk about a broker record letter. I am going to talk about an ecosystem that exists that helps plan sponsors build a better health plan that’s going to be in line with your business goals, aligned with your employees and their own personal goals, and help you get to the next level.
Gathering The Right Information And Data
Once you’ve identified that objective, that goal, that mission, or the purpose for offering benefits, the next thing you have to do is gather the right information. That’s where the breakdown is and why employers don’t make informed decisions, because the information or the data has been kept from them for a very long time. Managed care was good with gag orders, confidentiality agreements, and reasoning and saying, “We can’t share our prices with you. If everybody saw our prices, everybody would want top dollar, and the cost of healthcare would go up.”
The data is out there, whether they like it or not. That’s because of relations. The Transparency Laws and Consolidated Appropriations Act have mandated the release of data. That information is helping employers win big. In every other part of business, decisions are usually driven by data. In healthcare, most employers don’t have access to their claims data. That’s by design. Insurers and PBMs profit by controlling information. Health systems don’t want you to see who the best doctors are. They don’t want you to know the price before you go. That’s like flying blind.
Here, we believe transparency and predictive analytics are the first step toward control. We have a lot of partners, a lot of companies that are standing by, waiting for us to have prospects and clients that are on board with this new world of benefits that is about to hit warp speed because of AI. We empower both the plan sponsors, CEOs, CFOs, HR leaders, and their members to make smarter healthcare decisions.
When you make a smarter healthcare decision, what does that mean? That means getting high-value care. It is having your employees easily be able to access not the cheapest doctors, but the best doctors who perform at the highest level, with the best outcomes and the most appropriate care to begin with. You can have great outcomes, but if you’re doing a surgery on every single one of your patients because you only get paid when you do it, that’s not a great doctor.
When you make smarter healthcare decisions, your employees get easy access to the best doctors who perform at the highest level with the best outcomes. Share on XGather the right information and know where to go and who to partner with. If your insurance company won’t share the information, or your current broker doesn’t even understand the value of that information or where to get it, you need to start talking to other people and other solution partners. Get involved with Health Rosetta and other ecosystems like that.
Start reading up on it and doing research because the data tells the tale. It’s not painting a great picture for what the health insurers and the health systems have done to the American healthcare consumer over the years. They’ve used a lack of information to take the CEOs and the CFOs out of the conversations to make arbitrary renewal decisions, like budgeting based on no information at all, making it impossible for HR leaders to make smart decisions.
When A CFO is budgeting 7% and a renewal is starting at 30%, the only way to make up that gap, if that is truly the best-case scenario that the insurer can offer, is to water benefits down, pass more onto the employees, and sacrifice in other ways, like lay people off and do without technology that can help your company run better. Gathering the information and knowing where to go is super critical.
Evaluating Alternatives To Get Better Results
Also, evaluate alternatives. In most industries, going to market means comparing real options. In healthcare, it usually means picking between the same managed care models. It is an apple-to-apple comparison between the largest insurers. Real alternatives exist in healthcare if you’re large enough. That means different things in different states, because ultimately, states run health insurance in their jurisdiction. Large groups and small groups differ from state to state. Typically, 50 or more is considered a large group. In states like New York, where I practice and most of my clients reside, a large group is 100-plus. Even the rating methodology for a small group is different from one state to another.
Real alternatives exist. Self-insurance and unbundled health plans are probably the most comprehensive solution. They’re not right for every client or prospect that’s over 100 lives, but they are right for a majority of them as long as you can get the stop-loss insurance. Stop-loss insurance is critical for small employers, especially because there is a great risk of large claims that can be unexpected.
For unbundling, what that means is taking what your insurance company packages together for you. Most people think that if they have that national insurance carrier with that one logo on their ID card, they’re working with one entity. That can’t be further from the truth. There was an analysis done on the United Health Group of companies. There are 2,700 affiliates under United Healthcare that have some role in the majority of commercial-sponsored benefit plans. You’re not dealing with one company. You’re dealing with a conglomerate of subsidiaries and third parties that are making decisions for you and your employees.
When you unbundle a health plan using an independent TPA, independent transparent pharmacy benefit manager, independent care navigators, nurse navigators, nurse coordinators, and other third-party solutions, what you’re doing is you’re building a best-in-class health plan that works for you. The reason why you need to have this with independent facilities is so that you can ultimately control to the best ability possible.
The plan document is gold. It’s the Bible. It’s where you can make planned decisions. It dictates what you can do, who you can do it with, and when you can do it. You are able to control costs for specialty medications, dialysis, and other very expensive components of the plan using your pharmacy benefit manager to the fullest extent possible. You can take advantage of MAP programs, or Manufacturers Assistance Programs, patient assistance programs, and international sourcing. These are all things that can be done within a health plan seamlessly.
I’m talking about a lot of things. If you’re a plan sponsor, you might say, “That sounds so complicated.” It’s not. It’s no more complicated than what you’re doing. The conversation is complex because most plan sponsors aren’t aware of how complex things are behind the scenes in the health and insurance world. It’s not important to fully understand how it works, like you can drive a car without understanding how the brakes work. You just need to know it works and why it’s a better solution.
These are things that can help you save significantly and reduce your health insurance costs by getting your employees the best healthcare. 20% or 30% isn’t impossible. For pharmacy spend, you can reduce it by 50% easily. If you’re in a bundled plan using a pharmacy benefit manager tied to a fully insured national insurance carrier program, you’re overpaying for care. There’s no question about that. It might not feel like it because they’re showing you the claims cost.
The claims cost is the building block of your health plan. What we’re talking about is being able to reduce the expected claims cost, and then when you start stacking the other things that are inevitably on top of that, to build your health insurance plan. That is going to take you to your total spend. When we can get the expected claims down by getting people to the best doctor and eliminating as much of the artificial cost as possible, that is what we’re attempting to do.
Making Better Business Decisions With Accountability
Ultimately, after you evaluate all those alternatives, make the decision with accountability. Most employers are not fully aware of the significant fiduciary responsibility they have in overseeing their health insurance plan. It’s no different than the fiduciary responsibility that they have on their 401(k) plans. The world that exists has changed very rapidly. It brought in co-fiduciaries, companies, and administrators that you could hire to oversee your program, independent of the administrator of the actual 401(k). The fiduciary will benchmark, test, and look at the fees.
Those same accountabilities do exist in the health insurance world, but benefits are often delegated. No one is accountable or understands their fiduciary responsibility. Under the ERISA plan, sponsors have a fiduciary duty to make informed, prudent decisions. When the C-Suite, the CEOs, and the CFOs are engaged in that conversation, the conversation shifts from cost increases to value creation.
Having the C-Suite present in these conversations to support HR to act as one unified team changes the outcome significantly. Benefit brokers and solution partners, including the insurance carriers, underwriters, and sales reps, act differently when there are different people in the room. When the C-Suite is still engaged in the conversation and actively involved in the conversation, outcomes change. Posture changes. Conversation changes. Equipping yourself with some basic questions that can expose the misaligned incentives that exist in this world is important.
When the C-suite is engaged in decision-making conversations, there is always a huge change in outcome and posture. Share on XUltimately, what’s happening out there is that the largest employers in the country are being sued by their own employees. There’s an attorney. I believe his last name is Schechter. They call it Being Schechtered, where they are going after the largest employers in the country. They’re soliciting the members of the health plans for class action lawsuits against their employers because they know these employers. They’re sitting ducks. They know where their health plan is. They know if they’re working with certain carriers and certain solution partners that they are likely not controlling costs. They are paying $100 for $2 medications. They’re paying $5,000 for $10 medications.
These things happen regularly. It’s the employer’s responsibility ultimately to understand what’s happening. At the end of the day, they are the ones who are hiring their insurance brokers, their insurance carriers, and everything that comes with it. Even though they may not feel like they have control of what’s happening behind the scenes with their plan, they are still responsible for having that control, removing gag orders, and understanding rebates and spread pricing.
Ultimately, that fiduciary process, whether it exists in reality or not, is something that’s real. When you look into it, decisions are made, whether they’re made very structured or unstructured. They’re being made by HR people, CFOs, CEOs, and the board of directors. Ultimately, someone signs off on it. How that decision is being made is being brought up in these lawsuits, so accountability is huge. We love this because this opens up the conversation to what we want to expose employers to, which is an alternative universe of healthcare and insurance that exists to serve people who become more informed.
Tracking Performance After A Business Decision
Let’s talk about step five in the decision-making process. These are things they do every day, whether it be office equipment, hiring of employees, or deciding to make a move on an acquisition. They are identifying the objective, gathering the information, and evaluating the alternatives. They’re making a decision with accountability, and then they’re implementing and monitoring that decision. These are things they’re doing every day, but are they implementing and monitoring their health insurance? In most cases, they’re not.
In most cases, employers can’t wait. HR leaders especially can’t wait for open enrollment to be done with. They can’t wait to put the book down, close the book on open enrollment, and wait until next year. That’s not the best way to do this. Smart organizations track performance when they make decisions. In healthcare, they hit auto-renew because it’s the safe move. It’s the least disruptive move in their mind.
Safe isn’t paying 20% more for health insurance, but it seems safe because they’ve been groomed to think that is safe. They’ve been groomed to think that working with that large national carrier is providing them discounts and providing them value. Oftentimes, that’s not the case. That’s part of the decision trap.
A high-performance plan, something that we want to build, and I know a lot of other advisors out there are trying to build, is designed, measured, optimized, and not removed blindly. It’s audited. It’s tested. It’s benchmarked against other plans. Identify opportunities to improve throughout the year, especially at open enrollment. Are we looking to change a component? Are we looking to add a new component? What’s going on with the health of our employees within the plan? Are enough of our employees getting their wellness visits so that we can have early detection of conditions? Is there a mental health issue within the plan? These are things that the plan can tell you when you have access to data, or when you’re partnered with the right people and use AI to identify different chronic conditions and different classes that might be open gaps in care, that eventually, if left unevaluated, will lead to high-cost claims in the future.
Planning with purpose, leveraging data, aligning incentives, and navigating healthcare are what we’re talking about here. We’re helping you and your members make smart healthcare decisions. I know that there are people in our audience from these solution partners who are capable of doing amazing things. They can’t believe that we’re not busier, in some cases, building these new plans.
Our own clients and prospects are still saying, “Self-insurance isn’t right for us,” but they’re making these decisions often blindly, without engaging with CFOs and CEOs. We understand that because in many ways, the consumer has been groomed over a long period of time to not have any access to data. They were led to believe that data doesn’t exist. They were groomed to think that the only way to reduce costs is to pass more on to employees and water down benefits. We call that the Pay More, Get Less Results, which insurance companies and too many brokers out there still believe is the only way to tackle this huge problem.
Episode Wrap-Up And Closing Words
I ask CEOs and CFOs this question. “Would you make a multimillion-dollar business decision without goals, data, or any sort of accountability? If you’re not doing it in other areas of business, why are you doing it when it comes to health insurance?” I talked about the answer to that, but the follow-up is, do you know that it’s available? In many ways, there’s too much data that there are technology companies that have augmented the data and put it into their AI-built decision support tools to make this data useful to the layperson.
You can apply business discipline to healthcare and turn your plan into a competitive advantage. It’s happening every day. If you’re not sure what I’m talking about, go to www.HealthRosetta.org or Google Health Rosetta ‘25. It was held in Denver, Colorado. What an amazing event it was, where plan sponsors came out and talked about their solutions. Many of them sat there and said, “We never knew this was possible, but we knew we had a problem.” If your company has a problem, you need to look into this.
I’m writing a book. I’m hoping it’s ready. I have a call with my business coach later on. I think it’s ready. It’s seven years, at least, in the making, talking about the great American healthcare heist. I am trying to demystify healthcare and insurance to a level that’s necessary for CEOs, CFOs, and HR leaders to understand that they’ve been taken advantage of, that there is a better world out there, and that they can turn benefits around. They can turn the cost around significantly. More importantly than the cost, the quality of the healthcare can be something that they can be proud of and something that they highlight in their talent acquisition goals. It can be something that will help you retain employees.
Keep in mind. Only about 20% of your population uses the healthcare plan. Ten percent use it very regularly. Five percent is crucial. It’s impacting their lives in ways that are more precious than you understand. When you take the best care of those most vulnerable employees, that’s what we’re talking about. Half of your employees could probably go without insurance in a given year, but with the risk of going without it, because you never know when something super important or super costly might come up in the blink of an eye, you would want to have insurance.
It’s impacting a small portion of your employees in a large way. Those employees are the ones who are driving the costs. We can help those employees, especially to get to the best doctors. We talk about truly the best doctors, the ones that perform at the highest level, get the best results from them, and provide the most appropriate care. That’s what a true healthcare plan is.
Health insurance impacts a small portion of your employees in a large way. Share on XEvaluate this decision. If you’d like to make smarter healthcare decisions, now is the time to start looking into that. Go to your brokers. Ask them, “Why are we paying so much? Is there a better option out there for us? Is there a way for us to control our costs better?” What you’re looking to do at the end of the day is get your expected claim cost down. Whether you are fully insured or you have self-insurance with stop loss, the building block of your health insurance cost is the expected claims.
A lot of times, people will tell us, “We have a lot of large claimants.” Large claimants aren’t always what they appear to be. They might be a large claimant, but they can be a zero-cost claimant. There are $250,000 medications that can be acquired for free if your drug formulary is put together in an appropriate way. $20,000 medications with the right partners can be $8,000 medications.
If you’re saving $10,000 a month, that’s $120,000 for each patient taking some popular medications that you’d be shocked if you knew what the true cost of it is. It could also be what you’re paying and maybe not the true cost, because the true cost could be far less than what you’re paying with insurance. I’m trying to keep these calls down to 30 minutes. We’re right on 30 minutes. Thanks for joining me. Enjoy the rest of your week. Thank you. Take care.
Important Links
- Health Rosetta
- Louis C. Bernardi on LinkedIn
- The Healthcare Heist – Rise of the American Healthcare Consumer on Apple Podcasts