We all love a good heist movie, just like the Ocean’s Trilogy or The Inside Man. But what if it happens in real life and puts your wellbeing at risk – an actual healthcare heist? Louis Bernardi delves into this system built on misaligned incentives, hidden costs, and deliberate complexity that quietly drains capital from businesses while delivering less value to employees. He breaks down the “Machine” that profits from confusion and inaction on healthcare, as well as the “Crew” who operates behind the scenes. Discover why healthcare has become one of the largest and least understood expenses in an organization – and how employers should take back control instead of simply accepting rising costs as inevitable.
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Inside The Healthcare Heist Chapter 1
Inside The Greatest Transfer Of Corporate Wealth You Never Approved
For years, 30 years or more since managed care entered the system, business leaders have been told that rising healthcare costs are just part of doing business. Something you budget for, absorb, and move on from. Do not ask for information. They will not share it with you. Want to know what you are paying for? That is a no-no. What if that was all false?
What if what you are experiencing is not inflation, a medical trend, bad luck, or an aging population? What if it is the result of a system deliberately engineered to extract capital from your business while keeping leadership distracted, misinformed, and disengaged? I want to introduce you specifically to what I call the healthcare heist. I have been working the last eight years on my book, which is a good reason why I took about a six-month hiatus from this show. I am happy to say my book, Inside the Healthcare Heist: An Insider’s Guide to Beating the System and Reclaiming Millions, is ready.
Not printed, but ready. Now it is the hard part. Exit strategies, checklist resources for employers and HR leaders, so they can actually put what they learn in the book to good use. What happens? CEOs are not fully comfortable with it. HR leaders dread open enrollment. It is not as if all of their other responsibilities that they have all year round disappeared during open enrollment season. It is no wonder they want to give it as little attention as possible, close the books on open enrollment, make final decisions, conduct open enrollment, shut the door, and move on. Why would they not?
Year after year after year, open enrollment usually ends with bad news for employees, disgruntled employees. Pay more, get less. Higher out-of-pocket costs, more coming out of your pay. CEOs step back unless something breaks. They rarely get involved anymore because there is no data, there is no information for them to crunch. Nothing to get them excited about. Why should they make a change? What happens? We accept it. We accept the increases. We accept the confusion.
Understanding How The “Machine” Works
We accept the frustration. We take the path of least resistance year after year after year. Over time, we start to believe this is just how it works. If that sounds like what is going on with you and your business, I really hope you enjoy the rest of this show. Every company is looking for capital. Let us be honest and invest in people, technology, growth, and AI. Most think their only options are to borrow, cut, or delay. There is another option. I feel it is the most impactful option. Reclaiming money that never should have left your business in the first place. Healthcare is one of your largest expenses, and often 20% to 30% of it is waste. Not better care, just distorted pricing, misaligned incentives, and opacity.
You do not need to find new money. You need to stop losing the money you already have. What is the size of the problem, to put this in perspective? Across the US, hundreds of billions of dollars are wasted in healthcare every year, close to a quarter of the entire system. For you, this shows up as higher premiums, confusing benefits, employees who delay care get sicker, and frustration every year at open enrollment. It is not abstract. It is happening inside your plan right now.
You do not need to find new money. You need to stop losing the money you already have. Share on X0What is behind us? I call it the machine. You have to understand the machine. The machine is not a company. It is an engine created long ago and now out of control. It is built on misaligned incentives, monopolies, mergers, and acquisitions horizontally and vertically across healthcare and health insurance. It is built on complexity and information that is just out of reach for you, the consumer. It grows stronger the more you spend. It profits from confusion, and it depends on silence.
Here is what makes it so effective. It understands human behavior. It understands how businesses make decisions. It understands that the path of least resistance is the one path most often traveled. It knows HR is overwhelmed. It knows CFOs are uncomfortable with healthcare. It knows leadership teams are busy and will take the path of least resistance, and also knows that most benefit brokers are incentivized and earn more money when your costs go up. Unless you are asking for something better, for a second opinion, for outside-the-box solutions, they too, your benefit brokers, will take the path of least resistance.
The “Crew” That Operates The Machine
If you are okay with a 5% or 10% increase, they are, because they get a 5% or 10 % raise. Not hiding anything. That should be fully transparent to you in the compensation disclosures that you, by law, are required to get from your benefit partners. Let us talk about the crew, because there is a crew. Every system has a structure. It has players. There is a mastermind. The large insurance carriers and vertically integrated organizations are designing the system, controlling the contracts, the pricing, and the flow of money.
Your insurance company is not who you think they are. They are not just paying your claims. They are setting the prices. They are negotiating the prescriptions. They are constructing your drug formularies. They are the doctors. The money flows in and out of your insurance company, in and out of your payroll, in and out of your employees’ wallets, to and from insurance companies, behind the scenes often, unreportable to you, the plan sponsor. There are the insiders, hospitals, health systems, pharmacy benefit managers, steering care and prescriptions towards what is most profitable, not necessarily what is best. One of the biggest fallacies is that insurance companies profit by paying fewer claims.
Unfortunately, since 2010, when the Affordable Care Act was passed, that is simply not true. The incentive is for insurance companies to pay more. They can only increase profits by charging higher premiums, and they can only justify higher premiums by paying higher claims. They are not negotiating discounts. They are negotiating multiples. Multiples for just about everything that you are paying for within your health insurance plan. There are the muscle, the intermediaries, the brokers, the administrators, the vendors, keeping everything moving, often without full transparency themselves.
Insurance companies can only increase profits by charging higher premiums, and they can only justify higher premiums by paying higher claims. Share on XIt involves how they get paid. I was the muscle. I made sense of the changes insurance companies made. They did not tell us why they stopped calling prescription drug levels on the formulary. It used to be called generic brand, preferred brand, and non-preferred brand. It just became tier one, tier two, tier three, because they realized that by being able to put brand prescriptions in tier one that have huge rebates or spread prices, they can generate more profits.
If they lower your out-of-pocket cost and put their more expensive prescriptions into the lower copay, you will fill more of them. You will get less pushback. That is just human nature. There is the Patsy, the employer, and the employees, funding the system, absorbing the cost, living with the outcomes. Your health plan, that is the vault. The money moving through it, the claims, that is the target. We have been so focused on the insurance premiums that we have taken our eyes off of what you are actually purchasing.
You are not buying insurance. You are financing the healthcare cost of your employees with insurance in the same way that you do not buy a mortgage. You purchase a house, and you go out, and you figure out the best way to finance it. There are many ways to do that, just as there are many ways to finance your healthcare risk. Fully insured, partially self-insured, self-insured, ICRAs, PEOs, you name it.
Pushing The Healthcare Heist To Its Breaking Point
There are so many different options that you have, and you need to know about all of them. Your benefit partners should be sharing all of them with you. Determining what is right and what is wrong based on your company, your culture, and your members. We all love a good heist movie. Ocean’s Eleven and The Inside Man. What if that heist is not fiction? What if it is happening right now, and your company is part of it? It is not a stick-up. It is slower. It is more sophisticated. There are no ski masks, no getaway cars. Those are bank robberies.
Heists are quiet. In this case, the heist is contracts, jargon, and trusted partners telling you this is how it works. Why have you not seen it? Why has this not been obvious? The focus was always on the premiums while the real money moved through your claims. We were taught to believe costs are inevitable, outcomes do not matter, and transparency is impossible. Those are not facts. Those are tactics. The good news is the system is starting to crack. Whistleblowers, insiders, upset companies, and business owners just know something is not right.
Regulations have resulted in more transparency, better data, new partners, and forward-thinking employers are already reducing costs, improving care, lowering out-of-pocket expenses, not by luck, but by deliberate, smart healthcare designs. If you are listening and thinking, have we not done anything about this? It is important to understand something. It is not your HR person’s fault. It is not your CFO’s fault. The system was designed to keep you from seeing it clearly.
Now you do. Every renewal you sign without understanding claims funds the machine. Every month you wait, more capital disappears, and more employees struggle quietly. You do not need to tear everything down. You just need to know where to look because most companies do not lose because of competition. They lost because they never realized where the money was leaking. Healthcare is one of the biggest leaks there is. That changes now.
Every renewal you sign without understanding claims funds the Machine. Every month you wait, more capital disappears and more employees struggle quietly. Share on XJust think about this. How much is your company spending on health insurance? What does 20% to 25% of that represent? Is that enough of an incentive? Could you put that money to good use somewhere else in your company to generate more growth, to acquire top talent, to increase valuations, to get a jump on the competition? I can tell you, if you are not looking to do that and you are just sitting back and paying more, staying on that same hamster wheel, your competition will beat you to this. That is the real danger.
Discussion Wrap-up And Closing Words
If they find the money before you do, if they realize there is a better way of doing business than you do, they will win the war for talent. They will invest that money into growth, and they will leave you in the dust. Thanks for tuning in to the show. I have a tough time saying that. I hope you learned a thing or two. More importantly, I hope it helps you get the results you and your people deserve. You need to take action. You do not need to become an expert. You just need some simple resources. You need to be able to take your innate consumer abilities and apply them to healthcare and health insurance. That is all we are talking about.
Knowing enough to ask the right questions, sniff out the misaligned incentives, and get the data that you need to make smart decisions. Until next time, do not settle for a health plan that is not working as hard as it should for you and your team. This is called a benefit. If it is not benefiting you, your people, and your company, it is time to look elsewhere. Thank you, and have a great day. I look forward to seeing you on the next episode.
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